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

Form 20-F

 
¨ 	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934	
OR
 
x 	ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
FOR THE FISCAL YEAR ENDED ON DECEMBER 31, 2012
OR
 
¨ 	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
FOR THE TRANSITION PERIOD FROM                      TO                     
OR
 
¨ 	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
Date of event requiring this shell company report                     
COMMISSION FILE NUMBER: 001-35575

Cencosud S.A.
(Exact name of Registrant as specified in its charter)

N/A
(Translation of Registrant’s name into English)
Republic of Chile
(Jurisdiction of incorporation or organization)
Av. Kennedy 9001, Piso 6
Las Condes, Santiago, Chile
+56 (2) 959-0000
(Address of principal executive offices)
Maria Soledad Fernandez / Natalia Nacif
Av. Kennedy 9001 6 th Floor
Email: IR@cencosud.cl / Mariasoledad.fernandez@cencosud.cl
Tel: +56229590545 / +56229590368
(Name, Telephone, E-Mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of Each Class	 	Name of Each Exchange on Which Registered	
American Depositary Shares	 	New York Stock Exchange	
Common Shares, no par value	 	New York Stock Exchange	
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None

The number of outstanding shares of each of the issuer’s classes of capital stock as of December 31, 2012: 2,806,792,161 Common Shares, no par value
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act    Yes   ¨     No   x
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934    Yes   ¨     No   x
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes   x     No   ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   ¨     No   ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer   ¨                 Accelerated filer   ¨                 Non-accelerated filer   x
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP   ¨	  	International Financial Reporting Standards as issued
by the International Accounting Standards Board   x	  	Other   ¨	
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the Registrant has elected to follow:    Item 17   ¨     Item 18   ¨
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ¨     No   x

 

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 TABLE OF CONTENTS

 	  	 	 	  	 	  	Page	 	
		
Forward-Looking Statements	  	 	i	  	
		
Presentation of Financial and Other Information	  	 	ii	  	
			
Item 1.	  	  	Identity of Directors, Senior Management and Advisers	  	 	1	  	
Item 2.	  	  	Offer Statistics and Expected Timetable	  	 	1	  	
Item 3.	  	  	Key Information	  	 	1	  	
	  	 	A.	  	  	Selected financial data	  	 	1	  	
	  	 	B.	  	  	Capitalization and indebtedness	  	 	13	  	
	  	 	C.	  	  	Reasons for the offer and use of proceeds	  	 	13	  	
	  	 	D.	  	  	Risk factors	  	 	13	  	
Item 4.	  	  	Information on the Company	  	 	43	  	
	  	 	A.	  	  	History and development of the company	  	 	43	  	
	  	 	B.	  	  	Business overview	  	 	48	  	
	  	 	C.	  	  	Organizational structure	  	 	98	  	
	  	 	D.	  	  	Property, plants and equipment	  	 	100	  	
Item 4A.	  	  	Unresolved Staff Comments	  	 	100	  	
Item 5.	  	  	Operating and Financial Review and Prospects	  	 	100	  	
	  	 	A.	  	  	Operating results	  	 	100	  	
	  	 	B.	  	  	Liquidity and capital resources	  	 	123	  	
	  	 	C.	  	  	Research and development, patents and licenses, etc.	  	 	130	  	
	  	 	D.	  	  	Trend information	  	 	130	  	
	  	 	E.	  	  	Off-balance sheet arrangements	  	 	130	  	
	  	 	F.	  	  	Tabular disclosure of contractual obligations	  	 	131	  	
	  	 	G.	  	  	Safe harbor	  	 	131	  	
Item 6.	  	  	Directors, Senior Management and Employees	  	 	132	  	
	  	 	A.	  	  	Directors and senior management	  	 	132	  	
	  	 	B.	  	  	Compensation	  	 	134	  	
	  	 	C.	  	  	Board practices	  	 	135	  	
	  	 	D.	  	  	Employees	  	 	136	  	
	  	 	E.	  	  	Share ownership	  	 	138	  	
Item 7.	  	  	Major Shareholders and Related Party Transactions	  	 	138	  	
	  	 	A.	  	  	Major shareholders	  	 	138	  	
	  	 	B.	  	  	Related party transactions	  	 	140	  	
	  	 	C.	  	  	Interests of experts and counsel	  	 	141	  	
Item 8.	  	  	Financial Information	  	 	141	  	
	  	 	A.	  	  	Consolidated statements and other financial information	  	 	141	  	
	  	 	B.	  	  	Significant changes	  	 	142	  	
Item 9.	  	  	The Offer and Listing	  	 	142	  	
	  	 	A.	  	  	Offer and listing details	  	 	142	  	
	  	 	B.	  	  	Plan of distribution	  	 	143	  	
	  	 	C.	  	  	Markets	  	 	143	  	
	  	 	D.	  	  	Selling shareholders	  	 	146	  	
	  	 	E.	  	  	Dilution	  	 	146	  	

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	  	F.	  	Expenses of the issue	  	 	146	  	
Item 10.	  	Additional Information	  	 	147	  	
	  	A.	  	Share capital	  	 	147	  	
	  	B.	  	Memorandum and articles of association	  	 	147	  	
	  	C.	  	Material contracts	  	 	153	  	
	  	D.	  	Exchange controls	  	 	153	  	
	  	E.	  	Taxation	  	 	160	  	
	  	F.	  	Dividends and paying agents	  	 	166	  	
	  	G.	  	Statement by experts	  	 	166	  	
	  	H.	  	Documents on display	  	 	166	  	
	  	I.	  	Subsidiary information	  	 	166	  	
Item 11.	  	Quantitative and Qualitative Disclosures About Market Risk	  	 	166	  	
Item 12.	  	Description of Securities Other than Equity Securities	  	 	167	  	
	  	A.	  	Debt Securities	  	 	167	  	
	  	B.	  	Warrants and Rights	  	 	167	  	
	  	C.	  	Other Securities	  	 	167	  	
	  	D.	  	American Depositary Shares	  	 	167	  	
Item 13.	  	Defaults, Dividend Arrearages and Delinquencies	  	 	175	  	
Item 14.	  	Material Modifications to the Rights of Security Holders and Use of Proceeds	  	 	175	  	
Item 15.	  	Controls and Procedures	  	 	175	  	
	  	A.	  	Disclosure Controls and Procedures	  	 	175	  	
	  	B.	  	Management’s Annual Report on Internal Control Over Financial Reporting	  	 	176	  	
	  	C.	  	Attestation Report of the Registered Public Accounting Firm	  	 	176	  	
	  	D.	  	Changes in Internal Control Over Financial Reporting	  	 	176	  	
Item 16A.	  	Audit Committee Financial Expert	  	 	176	  	
Item 16B.	  	Code of Ethics	  	 	176	  	
Item 16C.	  	Principal Accountant Fees and Services	  	 	176	  	
Item 16D.	  	Exemptions from the Listing Standards for Audit Committees	  	 	177	  	
Item 16E.	  	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	  	 	177	  	
Item 16F.	  	Change in Registrant’s Certifying Accountant	  	 	177	  	
Item 16G.	  	Corporate Governance	  	 	177	  	
Item 16H.	  	Mine Safety Disclosure	  	 	179	  	
Item 17.	  	Financial Statements	  	 	180	  	
Item 18.	  	Financial Statements.	  	 	180	  	
Item 19.	  	Exhibits	  	 	180	  	

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 FORWARD-LOOKING STATEMENTS
This annual report contains forward-looking statements that are based on our current expectations, assumptions, estimates and projections about us and our industry. These forward-looking statements can be identified by words or phrases such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “is/are likely to,” “may,” “plan,” “should,” “would,” or other similar expressions. The forward-looking statements included in this annual report relate to, among others:
 
 	•	 	changes in general economic, business or political or other conditions in Chile, Argentina, Brazil, Peru, Colombia or elsewhere in Latin America or the global markets;	
 
 	•	 	changes in capital markets in general that may affect policies or attitudes towards investing in Chile, Argentina, Brazil, Peru, Colombia or securities issued by companies in such countries;	
 
 	•	 	the monetary and interest rate policies of the Central Banks of Chile, Argentina, Brazil, Peru and Colombia; or elsewhere in Latin American or global markets.	
 
 	•	 	high levels of inflation or deflation;	
 
 	•	 	unanticipated increases in financing and other costs or our inability to obtain additional debt or equity financing on attractive terms;	
 
 	•	 	movements in interest and/or foreign exchange rates, and movements in equity prices or other rates or prices;	
 
 	•	 	changes in, or failure to comply with, applicable regulations, or changes in taxes;	
 
 	•	 	loss of market share or changes in competition and pricing environments in the industries in which the company operates;	
 
 	•	 	difficulties in successfully integrating recent and future acquisitions into the company’s operations;	
 
 	•	 	the Company’s inability to hedge certain risks economically;	
 
 	•	 	changes in consumer spending and saving habits;	
 
 	•	 	implementation of new technologies;	
 
 	•	 	limitations on our ability to open new stores and operate them profitably;	
 
 	•	 	difficulties in completing proposed store openings, expansions or remodelings;	
 
 	•	 	difficulties in acquiring and developing land in Chile, Argentina, Brazil, Peru or Colombia, and restrictions on opening new large stores in any such countries; and	
 
 	•	 	the factors discussed under the section entitled “Risk Factors” in this annual report as well as risks included in the Company’s other filings and submissions with the United States Securities and Exchange Commission.	
These forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations may turn out to be incorrect. Our actual results could be materially different from our expectations. In light of the risks and uncertainties described above, the estimates and forward-looking statements discussed in this annual report might not occur, and our future results and our performance may differ materially from those expressed in these forward-looking statements due to, inclusive, but not limited to, the factors mentioned above. Because of these uncertainties, you should not make any investment decision based on these estimates and forward-looking statements.
 
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The forward-looking statements made in this annual report relate only to events or information as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events.
 PRESENTATION OF FINANCIAL AND OTHER INFORMATION
Certain Defined Terms
In this annual report, unless otherwise specified or if the context so requires:
 
 	•	 	References to the terms “Cencosud S.A.,” “we,” “us,” “our” and “our company” refer to the registrant, Cencosud S.A., a corporation organized under the form of a sociedad anónima under the laws of Chile, and its consolidated subsidiaries, unless otherwise indicated.	
 
 	•	 	References to “$,” “U.S.$,” “U.S. dollars,” “dollars” and “USD” are to U.S. dollars.	
 
 	•	 	References to “Chilean pesos” or “Ch$” are to Chilean pesos, the official currency of Chile.	
 
 	•	 	References to “Argentine pesos” or “Ar$” are to Argentine Pesos, the official currency of Argentina.	
 
 	•	 	References to “Brazilian Real,” “Real,” “Reais” or “R$” are to the Brazilian real, the official currency of Brazil.	
 
 	•	 	References to “Nuevo Sol,” “Nuevos Soles” or “S/.” are to Peruvian nuevos soles, the official currency of Peru.	
 
 	•	 	References to “Colombian pesos” or “Col$” are to Colombian pesos, the official currency of Colombia.	
 
 	•	 	References to “Carrefour” refer to Carrefour Société Anonyme	
 
 	•	 	References to “Acquired Companies” refer to the companies we acquired on November 30, 2012 from Carrefour in connection with our purchase of Carrefour’s operations in Colombia.	
References to “UF” are to Unidades de Fomento . The UF is an inflation-indexed Chilean monetary unit with a value in Chilean pesos that is adjusted daily to reflect changes in the official Consumer Price Index (“CPI”) of the Instituto Nacional de Estadísticas (the Chilean National Institute of Statistics). The UF is adjusted in monthly cycles. Each day in the period beginning on the tenth day of the current month through the ninth day of the succeeding month, the nominal peso value of the UF is indexed up (or down in the event of deflation) in order to reflect a proportionate amount of the change in the Chilean consumer price index during the prior calendar month. As of December 31, 2012, UF1.00 was equivalent to U.S.$47.59 and Ch$22,840.75, in each case based on the observed exchange rates reported by the Central Bank of Chile.
This annual report contains translations of certain Chilean peso amounts into U.S. dollars at specified rates solely for the convenience of the reader. These translations should not be construed as representations that the Chilean peso amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rates indicated, at any particular rate or at all. Unless otherwise indicated, the exchange rate used in converting Chilean pesos into U.S. dollars for amounts presented is based on the observed exchange rate ( dólar observado ) reported by the Central Bank of Chile (the “Chilean Central Bank”) for December 31, 2012 , which was Ch$479.96 per U.S.$1.00. The rates reported by the Chilean Central Bank for December 30, 2011 (the latest available date for the month of December 2011 as December 31, 2011 was not a business days in Chile) and December 31st 2010 are based upon the observed exchange rate published by the Chilean Central Bank on the first business day following the respective period. The Federal Reserve Bank of New York does not report a noon buying rate for Chilean pesos.
 
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Financial Statements
The financial information contained in this annual report includes our audited consolidated financial statements as of December 31, 2012 and 2011 and for the years ended December 31, 2012, 2011 and 2010, together with the notes thereto, prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (the “IASB”), which we refer to in this annual report as our “Audited Consolidated Financial Statements.” Our date of adoption of IFRS was January 1, 2010.
Our Audited Consolidated Financial Statements have been audited by PricewaterhouseCoopers Consultores, Auditores y Compañia Limitada , an independent registered public accounting firm, whose report on our Audited Consolidated Financial Statements appears elsewhere in this annual report. We maintain our books and records in Chilean pesos and prepare consolidated financial statements in accordance with IFRS.
Unless otherwise noted, the financial data presented herein as of and for the years ended December 31, 2012, 2011, and 2010 is stated in Chilean pesos, our functional and reporting currency.
Our Audited Consolidated Financial Statements have been prepared on the accrual basis of accounting, except for those items accounted for at fair value (for example, investment properties and certain financial assets, such as options and derivative financial instruments), and include the accounts of the Company and its subsidiaries, including Banco Paris. Our historical consolidated financial statements previously available do not consolidate the operations of Banco Paris. All significant inter-company balances and transactions have been eliminated in consolidation.
The financial statements as of and for the year ended December 31, 2012 presented in this Form 20-F differ from the local financial statements as of and for the year ended December 31, 2012 published in Chile on March 1, 2013, and furnished to the SEC on Form 6K on March 5, 2013, due to the inclusion in this report of a Ch$ 20,000 million lawsuit provision related to the April 24, 2013 ruling from the Chilean Supreme Court on the class action suit filed by the Servicio Nacional del Consumidor (the National Consumer Service) against Cencosud Administradora de Tarjetas S.A. (“CAT”). For further information on this matter, please see “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal and Administrative Proceedings” in this report.
Special Note Regarding Non-IFRS Financial Measures
This annual report makes reference to certain non-IFRS measures, namely EBIT, EBITDA and Adjusted EBITDA. These non-IFRS measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS.
EBIT represents profit attributable to controlling shareholders before net interest expense and income taxes. EBITDA represents EBIT plus depreciation and amortization expense. Adjusted EBITDA represents EBITDA as further adjusted to reflect items set forth in the table below. We have included EBIT, EBITDA and Adjusted EBITDA to provide investors with a supplemental measure of our operating performance.
We believe EBIT, EBITDA and Adjusted EBITDA are an important supplemental measure of operating performance because they eliminate items that have less bearing on our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. We also believe that securities analysts, investors and other interested parties frequently use EBITDA in the evaluation of issuers, many of which present EBITDA when reporting their results.
Our management also uses EBITDA and Adjusted EBITDA in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets, assess our ability to meet our future debt service, capital expenditure and working capital requirements and assess our ability to pay dividends on our capital stock.
EBIT, EBITDA and Adjusted EBITDA have important limitations as analytical tools. For example, neither EBIT, EBITDA nor Adjusted EBITDA reflect (a) our cash expenditures, or future requirements for capital expenditures or contractual commitments; (b) changes in, or cash requirements for, our working capital needs; (c) the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt; and (d) tax payments or distributions to our parent to make payments with respect to taxes attributable to us that represent a reduction in cash available to us. Although we consider the items excluded in the calculation of non-IFRS measures to be less relevant to evaluate our performance, some of these items may continue to take place and accordingly may reduce the cash available to us.
 
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We believe that the presentation of the non-IFRS measures described above is appropriate. However, these non-IFRS measures have important limitations as analytical tools, and you should not consider them in isolation, or as substitutes for analysis of our results as reported under IFRS. Because of these limitations, we primarily rely on our results as reported in accordance with IFRS and use EBIT, EBITDA and Adjusted EBITDA only supplementally. In addition, because other companies may calculate EBITDA and Adjusted EBITDA differently than we do, EBITDA may not be, and Adjusted EBITDA as presented in this report is not, comparable to similarly titled measures reported by other companies.
 
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A reconciliation of our profit (loss) attributable to controlling shareholders, the most directly comparable IFRS financial measure, to EBITDA and to Adjusted EBITDA is set forth below:

 	  	Year ended December 31,	 	
 	  	2012	 	 	2012	 	 	2011	 	 	2010	 	
 	  	(in millions of U.S.$)	 	 	(in millions of Ch$)	 	
Profit attributable to controlling shareholders	  	 	521	  	 	 	249,959	  	 	 	274,333	  	 	 	296,261	  	
Profit attributable to non-controlling shareholders	  	 	6	  	 	 	2,850	  	 	 	10,559	  	 	 	10,220	  	
Net Income	  	 	527	  	 	 	252,809	  	 	 	284,892	  	 	 	306,481	  	
Financial expense (net)	  	 	(423	) 	 	 	(202,912	) 	 	 	(133,152	) 	 	 	(69,807	) 	
Income tax charge	  	 	(227	) 	 	 	(109,190	) 	 	 	(119,556	) 	 	 	(76,830	) 	
EBIT	  	 	1,177	  	 	 	564,911	  	 	 	537,599	  	 	 	453,119	  	
Depreciation and amortization	  	 	(295	) 	 	 	(141,450	) 	 	 	(120,174	) 	 	 	(102,310	) 	
EBITDA	  	 	1,472	  	 	 	706,361	  	 	 	657,774	  	 	 	555,429	  	
Exchange differences	  	 	(6	) 	 	 	(2,680	) 	 	 	(9,876	) 	 	 	(2,053	) 	
Increase on revaluation of investment properties (1)	  	 	206	  	 	 	98,633	  	 	 	72,798	  	 	 	37,573	  	
Losses from indexation	  	 	(54	) 	 	 	(25,915	) 	 	 	(31,289	) 	 	 	(15,657	) 	
					
Adjusted EBITDA	  	 	1,326	  	 	 	636,323	  	 	 	626,141	  	 	 	535,565	  	
As a % of revenues	  				 				 				 				
Profit (loss)	  	 	2.76	% 	 	 	2.76	% 	 	 	3.7	% 	 	 	4.9	% 	
Financial income (expenses)	  	 	(2.2	%) 	 	 	(2.2	%) 	 	 	(1.8	%) 	 	 	(1.1	%) 	
Income tax charge	  	 	(1.2	%) 	 	 	(1.2	%) 	 	 	(1.6	%) 	 	 	(1.2	%) 	
EBIT	  	 	6.2	% 	 	 	6.2	% 	 	 	7.1	% 	 	 	7.3	% 	
Depreciation and amortization	  	 	(1.5	%) 	 	 	(1.5	%) 	 	 	(1.6	%) 	 	 	(1.6	%) 	
EBITDA	  	 	7.7	% 	 	 	7.7	% 	 	 	8.6	% 	 	 	8.9	% 	
Exchange differences	  	 	0.0	% 	 	 	0.0	% 	 	 	(0.1	%) 	 	 	0.0	% 	
Increase on revaluation of investment properties (1)	  	 	1.1	% 	 	 	1.1	% 	 	 	1.0	% 	 	 	0.6	% 	
Losses from indexation	  	 	(0.3	%) 	 	 	(0.3	%) 	 	 	(0.4	%) 	 	 	(0.3	%) 	
Adjusted EBITDA	  	 	7.0	% 	 	 	7.0	% 	 	 	8.2	% 	 	 	8.6	% 	
 
(1)	Represents a fair value adjustment of investment properties, through the application of discounted cash flows.	
 
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A reconciliation of our profit (loss) attributable to controlling shareholders, the most directly comparable IFRS financial measure, to EBITDA and to Adjusted EBITDA per business segment is included below:

Information by segment	  	Supermarkets	 	 	Shopping
centers	 	 	Home
improvement	 	 	Department
stores	 	 	Financial
services	 	 	Other	 	 	Consolidated
total	 	
 	  	Year ended December 31, 2012 (in millions of Ch$)	 	
Profit (loss) attributable to controlling shareholders	  	 	310,320	  	 	 	215,927	  	 	 	73,646	  	 	 	20,231	  	 	 	55,808	  	 	 	(425,973	) 	 	 	249,959	  	
Profit attributable to non-controlling shareholders	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	2,850	  	 	 	2,850	  	
Net Income	  	 	310,320	  	 	 	215,927	  	 	 	73,646	  	 	 	20,231	  	 	 	55,808	  	 	 	(423,122	) 	 	 	252,809	  	
Financial Expense (net)	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(202,912	) 	 	 	(202,912	) 	
Income tax charge	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(109,190	) 	 	 	(109,190	) 	
EBIT	  	 	310,320	  	 	 	215,927	  	 	 	73,646	  	 	 	20,231	  	 	 	55,808	  	 	 	(111,020	) 	 	 	564,911	  	
Depreciation and amortization	  	 	(89,454	) 	 	 	(2,606	) 	 	 	(17,740	) 	 	 	(22,896	) 	 	 	(3,464	) 	 	 	(5,290	) 	 	 	(141,450	) 	
EBITDA	  	 	399,774	  	 	 	218,533	  	 	 	91,386	  	 	 	43,127	  	 	 	59,272	  	 	 	(105,731	) 	 	 	706,361	  	
Exchange differences	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(2,680	) 	 	 	(2,680	) 	
Increase on revaluation of investment properties (1)	  	 	—  	  	 	 	98,633	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	98,633	  	
Losses from indexation	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(25,915	) 	 	 	(25,915	) 	
Adjusted EBITDA	  	 	399,774	  	 	 	119,900	  	 	 	91,386	  	 	 	43,127	  	 	 	59,272	  	 	 	(77,136	) 	 	 	636,323	  	
As a % of revenues	  	 	5.9	% 	 	 	72.5	% 	 	 	8.6	% 	 	 	4.9	% 	 	 	21.0	% 	 	 	(549.8	%) 	 	 	7.0	% 	
 
(1)	Represents a fair value adjustment of investment properties, through the application of discounted cash flows.	

Information by segment	  	Supermarkets	 	 	Shopping
centers	 	 	Home
improvement	 	 	Department
stores	 	 	Financial
services	 	 	Other	 	 	Consolidated
total	 	
 	  	Year ended December 31, 2011 (in millions of Ch$)	 	
Profit (loss) attributable to controlling shareholders	  	 	299,605	  	 	 	170,391	  	 	 	67,291	  	 	 	29,698	  	 	 	91,418	  	 	 	(384,070	) 	 	 	274,333	  	
Profit attributable to non-controlling shareholders	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	10,559	  	 	 	10,559	  	
Net Income	  	 	299,605	  	 	 	170,391	  	 	 	67,291	  	 	 	29,698	  	 	 	91,418	  	 	 	(373,511	) 	 	 	284,892	  	
Financial Expense (net)	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(133,152	) 	 	 	(133,152	) 	
Income tax charge	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(119,556	) 	 	 	(119,556	) 	
EBIT	  	 	299,605	  	 	 	170,391	  	 	 	67,291	  	 	 	29,698	  	 	 	91,418	  	 	 	(120,804	) 	 	 	537,599	  	
Depreciation and amortization	  	 	(76,559	) 	 	 	(2,344	) 	 	 	(16,501	) 	 	 	(17,292	) 	 	 	(2,937	) 	 	 	(4,541	) 	 	 	(120,174	) 	
EBITDA	  	 	376,164	  	 	 	172,735	  	 	 	83,792	  	 	 	46,990	  	 	 	94,355	  	 	 	(116,263	) 	 	 	657,774	  	
Exchange differences	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(9,876	) 	 	 	(9,876	) 	
Increase on revaluation of investment properties (1)	  	 	—  	  	 	 	72,798	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	72,798	  	
Losses from indexation	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(31,289	) 	 	 	(31,289	) 	
								
Adjusted EBITDA	  	 	376,164	  	 	 	99,937	  	 	 	83,792	  	 	 	46,990	  	 	 	94,355	  	 	 	(75,097	) 	 	 	626,141	  	
As a % of revenues	  	 	6.8	% 	 	 	77.0	% 	 	 	8.8	% 	 	 	6.8	% 	 	 	35.2	% 	 	 	(651.9	%) 	 	 	8.2	% 	
 
(1)	Represents a fair value adjustment of investment properties, through the application of discounted cash flows.	

Information by segment	  	Supermarkets	 	 	Shopping
centers	 	 	Home
improvement	 	 	Department
stores	 	 	Financial
services	 	 	Other	 	 	Consolidated
total	 	
 	  	Year ended December 31, 2010 (in millions of Ch$)	 	
Profit (loss) attributable to controlling shareholders	  	 	249,364	  	 	 	122,349	  	 	 	53,352	  	 	 	24,584	  	 	 	74,039	  	 	 	(227,427	) 	 	 	296,261	  	
Profit attributable to non-controlling shareholders	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	10,220	  	 	 	10,220	  	
Net Income	  	 	249,364	  	 	 	122,349	  	 	 	53,352	  	 	 	24,584	  	 	 	74,039	  	 	 	(217,207	) 	 	 	306,481	  	
Financial Expense (net)	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(69,807	) 	 	 	(69,807	) 	
Income tax charge	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(76,830	) 	 	 	(76,830	) 	
EBIT	  	 	249,364	  	 	 	122,349	  	 	 	53,352	  	 	 	24,584	  	 	 	74,039	  	 	 	(70,570	) 	 	 	453,119	  	
Depreciation and amortization	  	 	(58,347	) 	 	 	(4,300	) 	 	 	(16,435	) 	 	 	(16,211	) 	 	 	(3,231	) 	 	 	(3,786	) 	 	 	(102,310	) 	
 
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Information by segment	  	Supermarkets	 	 	Shopping
centers	 	 	Home
improvement	 	 	Department
stores	 	 	Financial
services	 	 	Other	 	 	Consolidated
total	 	
EBITDA	  	 	307,711	  	 	 	126,649	  	 	 	69,787	  	 	 	40,795	  	 	 	77,271	  	 	 	(66,784	) 	 	 	555,429	  	
Exchange differences	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(2,053	) 	 	 	(2,053	) 	
Increase on revaluation of investment properties (1)	  	 	—  	  	 	 	37,573	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	37,573	  	
Losses from indexation	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(15,657	) 	 	 	(15,657	) 	
Adjusted EBITDA	  	 	307,711	  	 	 	89,076	  	 	 	69,787	  	 	 	40,795	  	 	 	77,271	  	 	 	(49,075	) 	 	 	535,565	  	
As a % of revenues	  	 	6.9	% 	 	 	76.1	% 	 	 	8.5	% 	 	 	6.6	% 	 	 	35.0	% 	 	 	(1,342.0	%) 	 	 	8.6	% 	
 
(1)	Represents a fair value adjustment of investment properties, through the application of discounted cash flows.	
 
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Rounding
Certain figures included in this annual report and in our financial statements have been rounded for ease of presentation. Percentage figures included in this annual report have not in all cases been calculated on the basis of such rounded figures but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this annual report may vary from those obtained by performing the same calculations using the figures in our financial statements. Certain other amounts that appear in this annual report may not sum due to rounding.
Operating Data
Calculations of revenues from ordinary activities for our shopping centers presented in this annual report exclude inter-company lease payments to our shopping centers from stores owned by us. Unless otherwise noted, calculations of gross leasable area for our shopping centers do not include the square meters occupied by our stores.
As used herein, the term “same-store sales” reflects the sales of our stores operating throughout the same months of both financial periods being compared. If a store did not operate for a full month of either of the financial periods being compared, we exclude its sales for such month from both financial periods. For example, if a new store was opened on July 1, 2010 and operated throughout the last six months of 2010, (i) our “same-store sales” data would include the sales of that store for the last six months of 2010 and the last six months of 2011 and (ii) we would account for the sales of the new store during the first six months of 2011 as sales from a newly opened store. Our calculations of same-store sales data may differ from same-store sales calculations of other retailers. Unless otherwise noted, we have presented calculations of same-store sales in nominal local currency.
Industry and Market Data
None of the Argentine, Brazilian, Chilean, Peruvian or Colombian governments publish definitive data regarding the supermarket, home improvement store, department store, shopping center or financial services industries.
General
This annual report contains data related to the economic conditions in the markets in which we operate. Unless otherwise indicated, information in this annual report concerning economic conditions is based on publicly available information from third-party sources which we believe to be reasonable. The economic conditions in the markets in which we operate may deteriorate, and those economies may not grow at the rates projected by market data, or at all. The deterioration of the economic conditions in the markets in which we operate may have a material adverse effect on our business, results of operations, financial condition and the market price of our shares of common stock and American Depositary Shares (“ADSs”).
Chile
Market data and other statistical information (other than with respect to our financial results and performance) used throughout this annual report are based on independent industry publications, government publications, reports by market research firms or other published independent sources, such as the Instituto National de Estadísticas (the Chilean National Institute of Statistics, or “INE”), a governmental agency that publishes information based on its independent data, the Asociación Gremial de Supermercados de Chile (the Chilean Supermarkets Association, or “ASACH”), which publishes certain data with respect to supermarkets in Chile, and A.C. Nielsen Chile S.A., which publishes data with respect to the supermarket industry in Chile. Certain other shopping center statistics for Chile are published by the International Council for Shopping Centers.
Argentina
Market data and other statistical information (other than with respect to our financial results and performance) used throughout this annual report are based on independent industry publications, government publications, reports by market research firms or other published independent sources, such as the Instituto Nacional de Estadísticas y Censos (the Argentine National Institute of Statistics and Census, or “INDEC”), a governmental agency that publishes information based on its independent data, and A.C. Nielsen Argentina, which publishes market share data
 
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with respect to the supermarket industry in Argentina. In addition, the Camara Argentina de Shopping Centers (the Argentine Chamber of Shopping Centers, or “CASC”) currently publishes market share data with respect to shopping centers in Argentina. Certain other shopping center statistics for Argentina are published by the International Council for Shopping Centers.
Brazil
We have included certain information with respect to Brazil based on reports prepared by established public sources, such as the Central Bank of Brazil, the Instituto Brasileiro de Geografia e Estatística (the Brazilian Institute of Geography and Statistics, or “IBGE”), the Instituto de Pesquisa Econômica Aplicada (the Institute of Applied Economic Research, or “IPEA”), the Associação Brasileira de Supermercados (the Brazilian Association of Supermarkets, or “ABRAS”), and the Fundação Getúlio Vargas (the Getúlio Vargas Foundation). Unless otherwise indicated, all macroeconomic information relating to Brazil was obtained from the Central Bank of Brazil, IBGE and the Getúlio Vargas Foundation.
Peru
Macroeconomic data from Peru included in this annual report is derived from public entities, such as the Central Bank of Peru, the Instituto Nacional de Estadísitcas e Informática (the National Institute of Statistics and Computing, or “INEI”), Corporación de Compañías de Research (Research Companies Corporation, or “CCR”) or by Apoyo Consulting. Some data are also based on our estimates, which are derived from our review of internal surveys, as well as independent sources. Although we believe these sources are reliable, we have not independently verified the information provided by third parties. In addition, these sources may use different definitions of the relevant markets than those we present. Data regarding our industry are intended to provide general guidance but are inherently imprecise.
Colombia
Market and certain other data relating to Colombia used in this annual report was obtained from our own research, surveys or studies conducted by third parties and industry or general publications and other publicly available sources. Industry and general publications and surveys generally state that they have obtained information from sources believed to be reliable, but do not guarantee the accuracy and completeness of such information. Certain data is based on published information made available by the Colombian government and its agencies, such as the Departamento Administrativo Nacional de Estadística (the National Administrative Department of Statistics, or “DANE”) and the Banco de la Republica (“Colombian Central Bank”). Although we believe these sources to be reliable, we do not guarantee the accuracy of the information.
Information Regarding the Acquired Companies
This annual report uses publicly available information regarding the Acquired Companies (as defined below), such as its number of stores and lines of business. The operating information of the Acquired Companies should not be relied upon for any purpose related to an investment in the common stock or ADSs. In addition, we describe in this annual report the main terms of the acquisition of the Acquired Companies. Investors should also bear in mind, before making an investment decision, the risk factors related to the acquisition of the Acquired Companies, such as the likelihood of undisclosed liabilities, the fact that the audited and unaudited financial information of the Acquired Companies was not subject to our review and the risk that we may incur a substantial increase in our indebtedness, which could cause us to breach certain financial covenants. For further information on the risks involved in the acquisition of the Acquired Companies, see “Item 3. Key Information—D. Risk Factors.”
Other Information
We conduct our supermarket operations primarily through the following trade names: Bretas, Jumbo, Santa Isabel, Disco, Vea, Wong, Metro, GBarbosa, Perini and Prezunic .
According to the ASACH, “ hypermarkets ” are defined as retail stores with more than 10,000 square meters of selling space, offering more than 25,000 products and having more than 40 cashiers. ASACH defines “ supermarkets ” as retail stores having up to 6,000 square meters of selling space, between 400 and 10,000 products
 
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and ten to 25 cashiers. Although some of our Jumbo hypermarkets have less than 10,000 square meters, we refer to all of our Jumbo stores as hypermarkets. We consolidate the results of our supermarkets and hypermarkets under our “supermarkets” segment. Therefore, unless otherwise noted, our discussions of “supermarkets” in this annual report include our Santa Isabel supermarkets and Jumbo hypermarkets and supermarkets in Chile; Disco and Super Vea supermarkets and Jumbo hypermarkets and supermarkets in Argentina; Bretas, GBarbosa, Mercantil Rodrigues, Perini and Prezunic supermarkets in Brazil; and Wong and Metro supermarkets and hypermarkets in Peru. In Colombia most our supermarkets are still operating under the Carrefour brand while we expect to complete their migration to Jumbo and Prezunic during 2013 in accordance to our agreement with Carrefour.
In addition, we conduct our home improvement operations through the Easy and Blaisten trade names and our department store operations through the Paris and Johnson trade names. By “home improvement” stores we mean retail establishments that sell a wide assortment of building materials and home improvement and lawn and garden products and provide certain related services. Our “home improvement stores” refer to our home improvement stores operated under the Easy and Blaisten brand names, including our Easy stores in Chile, Argentina and Colombia.
References to “stores” refer collectively to our hypermarkets, supermarkets, department stores and home improvement stores.
One meter equals approximately 3.3 feet or 1.1 yards and one square meter equals approximately 10.8 square feet.
We own or have rights to use the trademarks, service marks and trade names that we use in conjunction with the operation of our business. Some of the more important trademarks that we own or have rights to use that appear in this annual report include: Jumbo ® , Jumbo Más ® , Easy ® , Más Easy ® , Santa Isabel ® , Disco ® , Vea ® , Super Vea ® , Blaisten ® , Johnson ® , Paris ® , Más Paris ® , Paris Corredores de Seguros ® , Banco Paris ® , Circulo Más ® , Wong ® , Metro ® , GBarbosa ® , Perini ® , Bretas ®, Nectar ® , Tarjeta Cencosud ® , Banco Cencosud ® , Costaner Center ®, Vive Chevere ® and Prezunic ® , each of which may be registered or trademarked in any of Argentina, Brazil, Chile, Colombia, Peru or other jurisdictions. Solely for convenience, we may refer to our trademarks, service marks and trade names in this annual report without the ™ and ® symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent permitted under applicable law, our rights to our trademarks, service marks and trade names. Each trademark, trade name or service mark of any other company appearing in this annual report is, to our knowledge, owned by such other company.
 
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PART I
 
 Item 1.	Identity of Directors, Senior Management and Advisers	
Not applicable.
 
 Item 2.	Offer Statistics and Expected Timetable	
Not applicable.
 
 Item 3.	Key Information	
 
 A.	SELECTED FINANCIAL DATA	
Selected Financial and Operating Data
The following tables set forth our summary consolidated financial information under IFRS. You should read the information contained in these tables in conjunction with “Item 5. Operating and Financial Review and Prospects,” “Item 8. Financial Information,” “Item 18. Financial Statements.” and the consolidated financial statements and the accompanying notes included elsewhere in this annual report.
The financial information as of December 31, 2012 and 2011 and for the years ended December 31, 2012, 2011 and 2010 has been derived from our Audited Consolidated Financial Statements included elsewhere in this annual report, which have been audited by PricewaterhouseCoopers Consultores, Auditores y Compañia Limitada , an independent registered public accounting firm. We maintain our books and records in Chilean pesos and prepare consolidated financial statements in accordance with IFRS. Our date of adoption of IFRS was January 1, 2010. The following financial and operating information should be read in conjunction with, and is qualified in its entirety by reference to, our Audited Consolidated Financial Statements included elsewhere in this annual report.
Unless otherwise noted, U.S. dollar amounts have been translated from Chilean pesos based on the dólar observado , or observed exchange rate of Ch$479.96 per U.S.$1.00 as of December 31, 2012, as reported by the Chilean Central Bank. We make no representation that the Chilean peso or the U.S. dollar amounts referred to herein actually represent, could have been or could be converted into U.S. dollars or Chilean pesos, as the case may be, at the rates indicated, at any particular rate or at all.
In our opinion, the summary consolidated financial data presented in the tables below includes all adjustments necessary to present fairly in all material respects our financial condition and results of operations at the dates and the periods presented. The results of operations for the years ended December 31, 2012, 2011 and 2010 are not necessarily indicative of future performance.

 	  	Year ended December 31,	 	
Income statement data:	  	2012	 	  	2012	 	  	2011	 	  	2010	 	
 	  	(in millions of
U.S.$)	 	  	(in millions of Ch$)	 	
Revenues from ordinary activities:	  				  				  				  				
Supermarkets	  	 	14,039.0	  	  	 	6,738,171	  	  	 	5,556,271	  	  	 	4,452,759	  	
Home improvement stores	  	 	2,214.9	  	  	 	1,063,086	  	  	 	948,641	  	  	 	819,838	  	
Department stores	  	 	1,846.1	  	  	 	886,075	  	  	 	690,772	  	  	 	622,719	  	
Shopping Centers	  	 	344.7	  	  	 	165,462	  	  	 	129,727	  	  	 	116,991	  	
Financial Services	  	 	588.1	  	  	 	282,254	  	  	 	267,874	  	  	 	221,010	  	
Other (1)	  	 	29.2	  	  	 	14,030	  	  	 	11,521	  	  	 	3,657	  	
Total revenues from ordinary activities	  	 	19,062.2	  	  	 	9,149,077	  	  	 	7,604,806	  	  	 	6,236,974	  	

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 	  	Year ended December 31,	 	
Income statement data:	  	2012	 	 	2012	 	 	2011	 	 	2010	 	
 	  	(in millions of
U.S.$)	 	 	(in millions of Ch$)	 	
Cost of sales:	  				 				 				 				
Supermarkets	  	 	(10,543.4	) 	 	 	(5,060,408	) 	 	 	(4,177,664	) 	 	 	(3,355,796	) 	
Home improvement stores	  	 	(1,482.4	) 	 	 	(711,500	) 	 	 	(647,337	) 	 	 	(561,006	) 	
Department stores	  	 	(1,343.2	) 	 	 	(644,668	) 	 	 	(499,413	) 	 	 	(446,769	) 	
Shopping Centers	  	 	(49.5	) 	 	 	(23,772	) 	 	 	(19,449	) 	 	 	(17,858	) 	
Financial Services	  	 	(218.6	) 	 	 	(104,901	) 	 	 	(85,632	) 	 	 	(70,458	) 	
Other (1)	  	 	(5.4	) 	 	 	(2,583	) 	 	 	(5,421	) 	 	 	(5,343	) 	
Total cost of sales	  	 	(13,642.5	) 	 	 	(6,547,832	) 	 	 	(5,434,917	) 	 	 	(4,457,229	) 	
					
Gross margin:	  				 				 				 				
Supermarkets	  	 	3, 495.6	  	 	 	1,677,762	  	 	 	1,378,607	  	 	 	1,096,963	  	
Home improvement stores	  	 	732.5	  	 	 	351,586	  	 	 	301,303	  	 	 	258,832	  	
Department stores	  	 	503.0	  	 	 	241,407	  	 	 	191,359	  	 	 	175,950	  	
Shopping Centers	  	 	295.2	  	 	 	141,691	  	 	 	110,278	  	 	 	99,133	  	
Financial Services	  	 	369.5	  	 	 	177,353	  	 	 	182,242	  	 	 	150,552	  	
Other (1)	  	 	23.8	  	 	 	11,447	  	 	 	6,099	  	 	 	(1,686	) 	
Total gross margin	  	 	5, 419.7	  	 	 	2,601,245	  	 	 	2,169,890	  	 	 	1,779,745	  	
Administrative expenses, distribution costs and other expenses	  	 	(4,420.8	) 	 	 	(2,121,821	) 	 	 	(1,669,374	) 	 	 	(1,371,074	) 	
Other revenues by function	  	 	223.2	  	 	 	107,110	  	 	 	85,128	  	 	 	43,871	  	
Participation in earnings of associates	  	 	11.8	  	 	 	5,640	  	 	 	5,779	  	 	 	7,514	  	
Financial income	  	 	16.9	  	 	 	8,110	  	 	 	10,984	  	 	 	16,922	  	
Financial expenses	  	 	(439.7	) 	 	 	(211,022	) 	 	 	(144,136	) 	 	 	(86,730	) 	
Other earnings	  	 	2.8	  	 	 	1,332	  	 	 	(12,659	) 	 	 	10,772	  	
Exchange differences	  	 	(5.6	) 	 	 	(2,680	) 	 	 	(9,876	) 	 	 	(2,053	) 	
Losses from indexation	  	 	(54.0	) 	 	 	(25,915	) 	 	 	(31,289	) 	 	 	(15,657	) 	
Income (loss) before taxes	  	 	754.2	  	 	 	361,999	  	 	 	404,448	  	 	 	383,311	  	
Income tax charge	  	 	(227.5	) 	 	 	(109,190	) 	 	 	(119,556	) 	 	 	(76,830	) 	
Net income	  	 	526.7	  	 	 	252,809	  	 	 	284,892	  	 	 	306,481	  	
Profit attributable to non-controlling shareholders	  	 	5.9	  	 	 	2,851	  	 	 	10,559	  	 	 	10,220	  	
Profit attributable to controlling shareholders	  	 	520.8	  	 	 	249,959	  	 	 	274,333	  	 	 	296,261	  	
					
Net earnings attributable to shareholders per share:	  				 				 				 				
Basic (2)	  	 	0.22	  	 	 	107.39	  	 	 	121.2	  	 	 	130.9	  	
Diluted (2)	  	 	0.22	  	 	 	106.36	  	 	 	120.0	  	 	 	129.6	  	
Capital Stock	  				 				 				 				
	  	 	1,551,811,762	  	 	 	1,551,811,762	  	 	 	927,804,431	  	 	 	927,804,431	  	
Number of Shares	  				 				 				 				
Total number of Shares	  	 	2,507,103,215	  	 	 	2,507,103,215	  	 	 	2,264,103,215	  	 	 	2,264,103,215	  	
					
Dividends per share:	  				 				 				 				
Basic (2)	  	 	0.0478	  	 	 	22.88	  	 	 	34.66	  	 	 	24.26	  	
Diluted (2)	  	 	0.0472	  	 	 	22.66	  	 	 	34.32	  	 	 	24.02	  	
 
(1)	Includes the results of our Aventura entertainment centers, our loyalty programs and corporate back-office operations. See “Item 4. Information on the Company—B. Business Overview—Our Company.”	
(2)	In U.S. dollars U.S. dollars and Chilean pesos.	
In November 2012, we completed the acquisition of Carrefour’s supermarket operations in Colombia See “Item 4. Information on the Company—A. History and Development of the Company—History.”

 	  	As of December 31,	 	
Balance sheet data:	  	2012	 	  	2012	 	  	2011	 	  	2010	 	
 	  	(in millions
of U.S.$)	 	  	(in millions of Ch$)	 	
Total current assets	  	 	4864.1	  	  	 	2,334,567	  	  	 	2,085,636	  	  	 	1,582,309	  	
Property, plant, equipment and investment property net	  	 	9,269.9	  	  	 	4,449,182	  	  	 	3,538,672	  	  	 	2,913,644	  	
Other assets	  	 	6,021.9	  	  	 	2,890,251	  	  	 	22,019,780	  	  	 	1,839,516	  	
Total assets	  	 	20,155.8	  	  	 	9,674,000	  	  	 	7,644,088	  	  	 	6,335,469	  	
Total current liabilities	  	 	6,936.1	  	  	 	3,329,041	  	  	 	2,331,280	  	  	 	1,919,094	  	
 
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 	  	As of December 31,	 	
Balance sheet data:	  	2012	 	  	2012	 	  	2011	 	  	2010	 	
Total non-current liabilities	  	 	6,139.6	  	  	 	2,946,747	  	  	 	2,362,201	  	  	 	1,726,781	  	
Total liabilities	  	 	13,075.6	  	  	 	6,275,788	  	  	 	4,693,482	  	  	 	3,645,876	  	
Non-controlling interest	  	 	1.4	  	  	 	678	  	  	 	87,750	  	  	 	74,886	  	
Net equity attributable to controlling shareholders	  	 	7,078.8	  	  	 	3,397,534	  	  	 	2,862,856	  	  	 	2,614,707	  	
Total net equity and liabilities	  	 	20,155.8	  	  	 	9,674,000	  	  	 	7,644,088	  	  	 	6,335,469	  	

																	
 	  	Year ended December 31,	 	
Other financial data:	  	2012	 	 	2012	 	 	2011	 	 	2010	 	
 	  	(in millions of
U.S.$)	 	 	(in millions of Ch$) (1)	 	
Cash Flow Data	  				 				 				 				
Net cash provided by (used in):	  				 				 				 				
Operating activities	  	 	1,497.4	  	 	 	718,715	  	 	 	567,739	  	 	 	407,174	  	
Investing activities	  	 	(4,409.2	) 	 	 	(2,116,249	) 	 	 	(623,753	) 	 	 	(413,676	) 	
Financing activities	  	 	3,101.9	  	 	 	1,488,759	  	 	 	89,607	  	 	 	5,086	  	
					
Other Financial Information	  				 				 				 				
Capital expenditures	  	 	(1,218.5	) 	 	 	(575,228	) 	 	 	(616,336	) 	 	 	(349,793	) 	
Depreciation and amortization	  	 	(294.7	) 	 	 	(141,450	) 	 	 	(120,174	) 	 	 	(102,310	) 	
Adjusted EBITDA (2)	  	 	1,325.8	  	 	 	636,323	  	 	 	626,141	  	 	 	535,565	  	
					
Financial Ratios	  				 				 				 				
Gross margin (3)	  	 	28.4	% 	 	 	28.4	% 	 	 	28.5	% 	 	 	28.5	% 	
Net margin (4)	  	 	2.8	% 	 	 	2.8	% 	 	 	3.7	% 	 	 	4.9	% 	
Current ratio (5)	  	 	0.70x	  	 	 	0.70x	  	 	 	0.90x	  	 	 	0.82x	  	
 
(1)	Except financial ratios.	
(2)	See “Presentation of Financial and Other Information” for the definition of Adjusted EBITDA and the reconciliation of Adjusted EBITDA to IFRS measures.	
(3)	Consolidated gross margin divided by consolidated revenues from ordinary activities.	
(4)	Consolidated net income divided by consolidated revenues from ordinary activities.	
(5)	Consolidated current assets divided by consolidated current liabilities.	

 	  	Year ended December 31,	 	
Comprehensive income:	  	2012	 	 	2012	 	 	2011	 	  	2010	 	
 	  	(in millions of
U.S.$)	 	 	(in millions of Ch$)	 	
Comprehensive income attributable to controlling shareholders	  	 	70.8	  	 	 	34,002	  	 	 	357,049	  	  	 	201,686	  	
Comprehensive (loss) income attributable to non-controlling shareholders	  	 	(11.2	) 	 	 	(5,354	) 	 	 	12,865	  	  	 	253	  	
Total comprehensive income	  	 	56.7	  	 	 	28,648	  	 	 	369,913	  	  	 	201,939	  	

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 	  	Year ended December 31,	 	
Operating data:	  	2012	 	  	2011	 	  	2010	 	
 	  	 	 	  	(unaudited)	 	  	 	 	
Number of Stores	  				  				  				
Supermarkets:	  				  				  				
Chile	  	 	214	  	  	 	189	  	  	 	163	  	
Argentina	  	 	288	  	  	 	269	  	  	 	256	  	
Brazil	  	 	205	  	  	 	152	  	  	 	130	  	
Peru	  	 	86	  	  	 	74	  	  	 	64	  	
Colombia	  	 	100	  	  				  				
Supermarkets subtotal	  	 	893	  	  	 	684	  	  	 	613	  	
		
Home Improvement Stores:	  				
Chile	  	 	31	  	  	 	29	  	  	 	29	  	
Argentina	  	 	47	  	  	 	48	  	  	 	49	  	
Colombia	  	 	4	  	  	 	4	  	  	 	4	  	
Home improvement stores subtotal	  	 	82	  	  	 	81	  	  	 	82	  	
				
Department Stores:	  				  				  				
Chile	  	 	78	  	  	 	35	  	  	 	34	  	
Department stores subtotal	  	 	78	  	  	 	35	  	  	 	34	  	
				
Shopping Centers:	  				  				  				
Chile	  	 	11	  	  	 	9	  	  	 	9	  	
Argentina	  	 	15	  	  	 	14	  	  	 	14	  	
Peru	  	 	3	  	  	 	2	  	  	 	2	  	
Shopping centers subtotal	  	 	29	  	  	 	25	  	  	 	25	  	
Total	  	 	1,082	  	  	 	825	  	  	 	754	  	
		
Total Selling Space (1)	  	(in square meters)	 	
Supermarkets:	  				  				  				
Chile	  	 	524,677	  	  	 	463,834	  	  	 	406,555	  	
Argentina	  	 	522,416	  	  	 	502,682	  	  	 	455,808	  	
Brazil	  	 	505,898	  	  	 	391,485	  	  	 	332,626	  	
Peru	  	 	258,762	  	  	 	233,331	  	  	 	209,642	  	
Colombia	  	 	454,980	  	  				  				
Supermarkets subtotal	  	 	2,266,733	  	  	 	1,591,332	  	  	 	1,404,631	  	
 
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 	  	Year ended December 31,	 	
Operating data:	  	2012	 	  	2011	 	  	2010	 	
 	 	  	(unaudited)	 	  	 	 	
Home Improvement Stores:	  				  				  				
Chile	  	 	299,806	  	  	 	276,325	  	  	 	273,625	  	
Argentina	  	 	388, 878	  	  	 	391,485	  	  	 	392,645	  	
Colombia	  	 	34,309	  	  	 	35,360	  	  	 	34,309	  	
Home improvement stores subtotal	  	 	722,993	  	  	 	703,170	  	  	 	700,579	  	
				
Department Stores:	  				  				  				
Chile	  	 	377,190	  	  	 	272,388	  	  	 	234,489	  	
Department stores subtotal	  	 	377,190	  	  	 	272,388	  	  	 	234,489	  	
				
Shopping Centers: (2) 	  				  				  				
Chile	  	 	430,621	  	  	 	282,693	  	  	 	273,983	  	
Argentina	  	 	236,414	  	  	 	227,369	  	  	 	214,002	  	
Peru	  	 	50,348	  	  	 	54,750	  	  	 	54,750	  	
Shopping centers subtotal	  	 	717,383	  	  	 	564,839	  	  	 	542,735	  	
Total	  	 	4,102,283	  	  	 	3,131,729	  	  	 	2,882,434	  	
		
Average Selling Space per Store (3) 	  	(in square meters)	 	
Supermarkets:	  				  				  				
Chile	  	 	2,452	  	  	 	22,454	  	  	 	2,494	  	
Argentina	  	 	1,814	  	  	 	1,869	  	  	 	1,781	  	
Brazil	  	 	2,556	  	  	 	2,576	  	  	 	2,559	  	
Peru	  	 	3,009	  	  	 	3,153	  	  	 	3,276	  	
Colombia	  	 	4,505	  	  				  				
Supermarkets subtotal	  	 	2,307	  	  	 	2,327	  	  	 	2,291	  	
				
Home Improvement Stores:	  				  				  				
Chile	  	 	9,671	  	  	 	9,528	  	  	 	9,435	  	
Argentina	  	 	8,274	  	  	 	8,156	  	  	 	7,435	  	
Colombia	  	 	9,265	  	  	 	8,840	  	  	 	8,577	  	
Home improvement stores subtotal	  	 	8,851	  	  	 	8,681	  	  	 	8,198	  	
				
Department Stores:	  				  				  				
Chile	  	 	4,836	  	  	 	7,783	  	  	 	6,897	  	
Department stores subtotal	  	 	4,836	  	  	 	7,783	  	  	 	6,897	  	
				
Shopping Centers:	  				  				  				
Chile	  	 	39,147	  	  	 	31,410	  	  	 	30,443	  	
Argentina	  	 	15,761	  	  	 	16,243	  	  	 	15,286	  	
Peru	  	 	16,783	  	  	 	27,375	  	  	 	27,375	  	
Shopping centers subtotal	  	 	24,737	  	  	 	22,594	  	  	 	21,709	  	
		
Average Sales per Store (4) 	  	(in millions of Ch$)	 	
Supermarkets:	  				  				  				
Chile	  	 	9,617	  	  	 	9,662	  	  	 	10,371	  	
Argentina	  	 	6,083	  	  	 	5,776	  	  	 	5,352	  	
Brazil	  	 	10,220	  	  	 	10,211	  	  	 	6,484	  	
Peru	  	 	8,333	  	  	 	8,439	  	  	 	8,744	  	
Colombia	  	 	1,154	  	  				  				
Supermarkets subtotal	  	 	7,537	  	  	 	8,123	  	  	 	7,276	  	
 
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Table of Contents

 	  	Year ended December 31,	 	
Operating data:	  	2012	 	 	2011	 	 	2010	 	
 	  	 	 	 	(unaudited)	 	 	 	 	
 	  	(in millions of Ch$)	 	
				
Home Improvement Stores:	  				 				 				
Chile	  	 	12,915	  	 	 	12,672	  	 	 	11,577	  	
Argentina	  	 	13,191	  	 	 	11,287	  	 	 	9,205	  	
Colombia	  	 	10,682	  	 	 	9,845	  	 	 	8,272	  	
Home improvement stores subtotal	  	 	12,964	  	 	 	11,712	  	 	 	9,998	  	
				
Department Stores:	  				 				 				
Chile	  	 	11,360	  	 	 	19,736	  	 	 	18,315	  	
Department stores subtotal	  	 	11,360	  	 	 	19,736	  	 	 	18,315	  	
				
Shopping Centers:	  				 				 				
Chile	  	 	8,463	  	 	 	7,167	  	 	 	6,095	  	
Argentina	  	 	4,365	  	 	 	4,262	  	 	 	3,810	  	
Peru	  	 	2,301	  	 	 	2,783	  	 	 	4,401	  	
Shopping centers subtotal	  	 	5,706	  	 	 	5,189	  	 	 	4,680	  	
		
Increase (Decrease) in Same-Store Sales (5) 	  	(%)	 	
Supermarkets:	  				 				 				
Chile	  	 	4.8	% 	 	 	4.8	% 	 	 	5.9	% 	
Argentina	  	 	18.5	% 	 	 	22.5	% 	 	 	25.2	% 	
Brazil	  	 	0.5	% 	 	 	1.4	% 	 	 	7.1	% 	
Peru	  	 	4.2	% 	 	 	6.5	% 	 	 	(2.3	%) 	
				
Home Improvement Stores:	  				 				 				
Chile	  	 	6.3	% 	 	 	4.9	% 	 	 	23.7	% 	
Argentina	  	 	26.6	% 	 	 	31.1	% 	 	 	27.8	% 	
Colombia	  	 	4.1	% 	 	 	11.8	% 	 	 	(3.6	%) 	
				
Department Stores:	  				 				 				
Chile	  	 	5.3	% 	 	 	5.2	% 	 	 	19.7	% 	
		
Sales per Square Meter (6) 	  	(in millions of Ch$)	 	
Supermarkets:	  				 				 				
Chile	  	 	3.92	  	 	 	3.94	  	 	 	4.13	  	
Argentina	  	 	3.35	  	 	 	3.09	  	 	 	3.01	  	
Brazil	  	 	4.00	  	 	 	4.08	  	 	 	2.53	  	
Peru	  	 	2.77	  	 	 	2.68	  	 	 	2.67	  	
Colombia	  	 	0.26	  	 				 				
Supermarkets subtotal	  	 	2.97	  	 	 	3.52	  	 	 	3.17	  	
				
Home Improvement Stores:	  				 				 				
Chile	  	 	1.34	  	 	 	1.33	  	 	 	1.23	  	
Argentina	  	 	1.34	  	 	 	1.38	  	 	 	1.24	  	
Colombia	  	 	1.59	  	 	 	1.11	  	 	 	0.96	  	
Home improvement stores subtotal	  	 	1.25	  	 	 	1.35	  	 	 	1.22	  	
				
Department Stores:	  				 				 				
Chile	  	 	2.35	  	 	 	2.54	  	 	 	2.66	  	
Department stores subtotal	  	 	2.35	  	 	 	2.54	  	 	 	2.66	  	
				
Shopping Centers:	  				 				 				
Chile	  	 	0.22	  	 	 	0.23	  	 	 	0.20	  	
Argentina	  	 	0.28	  	 	 	0.26	  	 	 	0.25	  	
Peru	  	 	0.14	  	 	 	0.10	  	 	 	0.16	  	
Shopping centers subtotal	  	 	0.23	  	 	 	0.23	  	 	 	0.22	  	
Total number of store employees (7)	  	 	157,967	  	 	 	131,505	  	 	 	126,485	  	
 
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(1)	In square meters at period end.	
(2)	Total leasable space for shopping centers does not include selling space occupied by our Jumbo, Paris and Easy stores in our shopping centers.	
(3)	Total square meters of selling space or leasable space, as applicable, at period end divided by the total number of stores or shopping centers, as applicable, at period end.	
(4)	Sales for the period divided by the number of stores or shopping centers, as applicable, at the end of the period.	
(5)	Reflects the sales of our stores operating throughout the same months of both financial periods being compared. If a store did not operate for a full month of either of the financial periods being compared, we exclude its sales for such month from both financial periods. For example, if a new store was opened on July 1, 2010 and operated throughout the last six months of 2010, (i) “same-store sales” would include the sales of that store for the last six months of 2010 and the last six months of 2011 and (ii) we would consider the sales of the new store during the first six months of 2011 as sales from a newly opened store. Calculated in local currency.	
(6)	Sales for the period divided by the square meters of selling space or leasable space, as applicable, at the end of each month during the period.	
(7)	Number of full-time employee equivalents at period end.	
*	Data for sales in Colombia only reflect the operational result for the month of December 2012 as the former operations of Carrefour in the country were consolidated onto Cencosud’s financial statements as of November 30, 2012.	
 
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Table of Contents
Exchange Rates
Chile
Chile has two currency markets, the Mercado Cambiario Formal (the “Formal Exchange Market”) and the Mercado Cambiario Informal (the “Informal Exchange Market”). The Formal Exchange Market is comprised of banks and other entities authorized by the Chilean Central Bank. The Informal Exchange Market is comprised of entities that are not expressly authorized to operate in the Formal Exchange Market, such as certain foreign exchange houses and travel agencies, among others. The Chilean Central Bank is empowered to require that certain purchases and sales of foreign currencies be carried out on the Formal Exchange Market. See also “Item 10. Additional Information—D. Exchange Controls—Foreign Exchange Controls—Chile.”
Both the Formal and Informal Exchange Markets are driven by free market forces. Current regulations require that the Chilean Central Bank be informed of certain transactions and that they be effected through the Formal Exchange Market.
The U.S. dollar observed exchange rate ( dólar observado ), which is reported by the Chilean Central Bank and published daily in the Official Gazette ( Diario Oficial ), is the weighted average exchange rate of the previous business day’s transactions in the Formal Exchange Market. The Chilean Central Bank has the power to intervene by buying or selling foreign currency on the Formal Exchange Market to attempt to maintain the observed exchange rate within a desired range. During the past few years the Chilean Central Bank has attempted to keep the observed exchange rate within a certain range only under special circumstances. Although the Chilean Central Bank is not required to purchase or sell dollars at any specific exchange rate, it generally uses spot rates for its transactions. Other banks generally carry out authorized transactions at spot rates as well.
The Informal Exchange Market reflects transactions carried out at an informal exchange rate (the “informal exchange rate”). There are no limits imposed on the extent to which the rate of exchange in the Informal Exchange Market can fluctuate above or below the observed exchange rate. In recent years, the variation between the observed exchange rate and the informal exchange rate has not been significant.
The following table sets forth the annual low, high, average and period end observed exchange rate for U.S. dollars for the periods presented, as reported by the Chilean Central Bank. The Federal Reserve Bank of New York does not report a noon buying rate for Chilean pesos.

 	  	Daily observed exchange rate Ch$ per U.S.$	 	
 	  	High (1)	 	  	Low (1)	 	  	Average (2)	 	  	Period end (3)	 	
Year ended December 31,	  				  				  				  				
2008	  	 	676.75	  	  	 	431.22	  	  	 	522.25	  	  	 	636.45	  	
2009	  	 	643.87	  	  	 	491.09	  	  	 	559.15	  	  	 	507.10	  	
2010	  	 	549.17	  	  	 	468.01	  	  	 	510.20	  	  	 	468.01	  	
2011	  	 	533.74	  	  	 	455.91	  	  	 	483.57	  	  	 	519.20	  	
2012	  	 	519.60	  	  	 	469.65	  	  	 	486.58	  	  	 	479.96	  	
					
Month end	  				  				  				  				
October 31, 2012	  	 	481.980	  	  	 	471.540	  	  	 	475.673	  	  	 	480.590	  	
November 30, 2012	  	 	484.480	  	  	 	476.200	  	  	 	480.561	  	  	 	480.390	  	
December 31, 2012	  	 	481.280	  	  	 	470.670	  	  	 	473.629	  	  	 	479.960	  	
January 31, 2013	  	 	475.470	  	  	 	470.670	  	  	 	472.281	  	  	 	471.440	  	
February 28, 2013	  	 	473.600	  	  	 	470.670	  	  	 	472.421	  	  	 	472.960	  	
March 31, 2013	  	 	474.820	  	  	 	471.100	  	  	 	472.438	  	  	 	472.030	  	
April 30, 2013	  	 	477.740	  	  	 	466.500	  	  	 	472.105	  	  	 	471.310	  	
May 2013 (through May 6, 2013)	  	 	472.440	  	  	 	469.730	  	  	 	471.085	  	  	 	469.730	  	
Source: Chilean Central Bank.
(1)	Exchange rates are the actual low and high, on a daily basis for each period.	
(2)	The yearly average rate is calculated as the average of the exchange rates on the last day of each month during the period.	
(3)	Each year period ends on December 31, and the respective period-end exchange rate is published by the Chilean Central Bank on the first business day of the following year. Each month period ends on the last calendar day of such month, and the respective period end exchange rate is published by the Chilean Central Bank on the first business day of the following month.	
 
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Table of Contents
Argentina
From April 1, 1991 until the end of 2001, the Convertibility Law No. 23,928 and Regulatory Decree No. 529/91 (together, the “Convertibility Law”) established a fixed exchange rate under which the Central Bank of Argentina was obliged to sell U.S. dollars at a fixed rate of one Argentine peso per U.S. dollar. On January 6, 2002, the Argentine Congress enacted the Public Emergency Law, which suspended certain provisions of the Convertibility Law, including the fixed exchange rate of Ar$1.00 to U.S.$1.00, and granted the executive branch of the Argentine government the power to set the exchange rate between the Argentine peso and foreign currencies and to issue regulations related to the foreign exchange market. Following a brief period during which the Argentine government established a temporary dual exchange rate system, pursuant to the Public Emergency Law, the Argentine peso has been allowed to float freely against other currencies since February 2002. The Argentine government has intervened occasionally to control unstable fluctuations in foreign exchange rates. See also “Item 10. Additional Information—D. Exchange Controls—Foreign Exchange Controls—Argentina.”
The following table sets forth the annual high, low, average and period-end exchange rates for the periods indicated, expressed in Argentine pesos per U.S. dollar and not adjusted for inflation. The Federal Reserve Bank of New York does not report a noon buying rate for Argentine pesos.

 	  	Daily observed exchange rate Ar$ per U.S.$	 	
 	  	High	 	  	Low	 	  	Average (1)	 	  	Period end	 	
Year ended December 31,	  				  				  				  				
2008	  	 	3.468	  	  	 	3.014	  	  	 	3.163	  	  	 	3.453	  	
2009	  	 	3.854	  	  	 	3.449	  	  	 	3.731	  	  	 	3.800	  	
2010	  	 	3.988	  	  	 	3.794	  	  	 	3.913	  	  	 	3.976	  	
2011	  	 	4.304	  	  	 	3.972	  	  	 	4.131	  	  	 	4.304	  	
2012	  	 	4.917	  	  	 	4.304	  	  	 	4.552	  	  	 	4.917	  	
					
Month end	  				  				  				  				
October 31, 2012	  	 	4.766	  	  	 	4.699	  	  	 	4.730	  	  	 	4.766	  	
November 30, 2012	  	 	4.834	  	  	 	4.770	  	  	 	4.797	  	  	 	4.834	  	
December 31, 2012	  	 	4.917	  	  	 	4.840	  	  	 	4.880	  	  	 	4.917	  	
January 31, 2013	  	 	4.977	  	  	 	4.923	  	  	 	4.949	  	  	 	4.977	  	
February 28, 2013	  	 	5.045	  	  	 	4.983	  	  	 	5.011	  	  	 	5.045	  	
March 31, 2013	  	 	5.122	  	  	 	5.048	  	  	 	5.084	  	  	 	5.122	  	
April 30, 2013	  	 	5.184	  	  	 	5.048	  	  	 	5.121	  	  	 	5.184	  	
May 2013 (through May 3, 2013)	  	 	5.197	  	  	 	5.190	  	  	 	5.193	  	  	 	5.197	  	
Source: Central Bank of Argentina.
(1)	Represents the daily average exchange rate during each of the relevant periods.	
 
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Brazil
The Central Bank of Brazil allows the real/U.S. dollar exchange rate to float freely and has intervened occasionally to control unstable fluctuations in foreign exchange rates. We cannot predict whether the Central Bank of Brazil or the Brazilian government will continue to let the real float freely or will intervene in the exchange rate market through a currency band system or otherwise. The Brazilian real may depreciate or appreciate substantially against the U.S. dollar in the future. Exchange rate fluctuations may adversely affect our financial condition. See also “Item 10. Additional Information—D. Exchange Controls—Foreign Exchange Controls—Brazil.”
Prior to March 14, 2005, under Brazilian regulations, foreign exchange transactions were carried out on either the commercial rate exchange market or the floating rate exchange market. Rates in the two markets were generally the same. On March 14, 2005, the National Monetary Council of Brazil ( Conselho Monetário Nacional ) unified the two markets.
The following table sets forth the exchange selling rates expressed in Brazilian reais per U.S. dollar for the periods indicated, as reported by the Central Bank of Brazil through the Central Bank System (Sistema do Banco Central) using PTAX 800, option 5.

 	  	Daily observed exchange rate R$ per U.S.$	 	
 	  	High	 	  	Low	 	  	Average	 	  	Period end	 	
Year ended December 31,	  				  				  				  				
2008	  	 	2.5004	  	  	 	1.5593	  	  	 	1.8375	  	  	 	2.3370	  	
2009	  	 	2.4218	  	  	 	1.7024	  	  	 	1.9935	  	  	 	1.7412	  	
2010	  	 	1.8811	  	  	 	1.6554	  	  	 	1.7607	  	  	 	1.6662	  	
2011	  	 	1.9016	  	  	 	1.5345	  	  	 	1.6746	  	  	 	1.8758	  	
2012	  	 	2.1121	  	  	 	1.7054	  	  	 	1.9550	  	  	 	2.0435	  	
					
Month end	  				  				  				  				
October 31, 2012	  	 	2.03820	  	  	 	2.02240	  	  	 	2.02985	  	  	 	2.03130	  	
November 30, 2012	  	 	2.10740	  	  	 	2.03120	  	  	 	2.06775	  	  	 	2.10740	  	
December 31, 2012	  	 	2.11210	  	  	 	2.04350	  	  	 	2.07784	  	  	 	2.04350	  	
January 31, 2013	  	 	2.04710	  	  	 	1.98830	  	  	 	2.03108	  	  	 	1.98830	  	
February 28, 2013	  	 	1.98930	  	  	 	1.95700	  	  	 	1.97325	  	  	 	1.97540	  	
March 31, 2013	  	 	2.01850	  	  	 	1.95280	  	  	 	1.98284	  	  	 	2.01380	  	
April 30, 2013	  	 	2.02440	  	  	 	1.97360	  	  	 	2.00210	  	  	 	2.00170	  	
May 2013 (through May 3, 2013)	  	 	2.00950	  	  	 	2.00930	  	  	 	2.00940	  	  	 	2.00930	  	
Source: Central Bank of Brazil.
(1)	Represents the daily average exchange rate during each of the relevant periods.	
 
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Peru
Currently, Peruvian law does not impose any restrictions on the ability of companies having operations in Peru to transfer foreign currencies from Peru to other countries, to convert nuevos soles into any foreign currency or to convert any foreign currency into nuevos soles. Companies may freely remit interest and principal payments abroad and investors may repatriate capital from liquidated investments. We cannot assure you, however, that Peruvian law will continue to permit such payments, transfers, conversions or remittances without restrictions. Exchange rates for the Peruvian nuevo sol have been relatively stable in recent years. See also “Item 10. Additional Information—D. Exchange Controls—Foreign Exchange Controls—Peru.”
The following table sets forth the Central Bank of Peru’s period-average and period-end buying rates for U.S. dollars for the periods indicated.

 	  	Daily observed exchange rate S/. per U.S.$	 	
 	  	High	 	  	Low	 	  	Average (1)	 	  	Period end	 	
Year ended December 31,	  				  				  				  				
2008	  	 	3.1540	  	  	 	2.6920	  	  	 	2.9238	  	  	 	3.1370	  	
2009	  	 	3.2580	  	  	 	2.8510	  	  	 	3.0108	  	  	 	2.8880	  	
2010	  	 	2.8800	  	  	 	2.7860	  	  	 	2.8244	  	  	 	2.8080	  	
2011	  	 	2.8320	  	  	 	2.6930	  	  	 	2.7537	  	  	 	2.6950	  	
2012	  	 	2.7090	  	  	 	2.5490	  	  	 	2.6384	  	  	 	2.5490	  	
					
Month end	  				  				  				  				
October 31, 2012	  	 	2.601	  	  	 	2.577	  	  	 	2.587	  	  	 	2.592	  	
November 30, 2012	  	 	2.614	  	  	 	2.578	  	  	 	2.598	  	  	 	2.578	  	
December 31, 2012	  	 	2.579	  	  	 	2.549	  	  	 	2.566	  	  	 	2.549	  	
January 31, 2013	  	 	2.579	  	  	 	2.539	  	  	 	2.551	  	  	 	2.579	  	
February 28, 2013	  	 	2.587	  	  	 	2.567	  	  	 	2.578	  	  	 	2.587	  	
March 31, 2013	  	 	2.603	  	  	 	2.584	  	  	 	2.593	  	  	 	2.589	  	
April 30, 2013	  	 	2.645	  	  	 	2.576	  	  	 	2.597	  	  	 	2.643	  	
May 2013 (through May 3, 2013)	  	 	2.647	  	  	 	2.626	  	  	 	2.637	  	  	 	2.626	  	
Source: Central Bank of Peru.
(1)	Calculated as the average of the month-end exchange rates during the relevant period.	

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Colombia
Since September 1999, the Central Bank of Colombia has allowed the Colombian peso to float freely, intervening only when there are steep variations in the Colombian peso’s value relative to the U.S. dollar (referred to as the “representative market rate”) to control volatility. Different mechanisms have been used for this purpose. Currently, the Central Bank is intervening by directly purchasing up to USD$30 million daily, having been approved to do so until the end of May 2013, although it is expected that these purchases may be extended until August 2013.
This intervention mechanism is only used to control the international reserves of Colombia or in case the average of a specified rate (referred to as the “representative market rate”) for the preceding twenty days exceeds 5% of that day’s representative market rate. Upon the occurrence of such an event, the Central Bank of Colombia sells call options, whereby the purchaser is entitled to buy from the Central Bank of Colombia, on a future date, a specified amount of U.S. dollars at a pre-established exchange rate, thus reducing the volatility of the exchange rate. As of October 28, 2009, the call option mechanism can only be used to control the international reserves of Colombia. See also “Item 10. Additional Information—D. Exchange Controls—Foreign Exchange Controls—Colombia.”
During 2004, 2005, 2006 and 2007, the Colombian peso appreciated against the U.S. dollar by 14%, 4%, 2%, 9.9%, respectively, depreciated by 11.4% in 2008 and appreciated by 9.1% in 2009. Although the foreign exchange market is allowed to float freely, there are no guarantees that the Central Bank of Colombia or the Colombian government will not intervene in the exchange market in the future. The Federal Reserve Bank of New York does not report a rate for Colombian pesos. The Superintendencia Financiera de Colombia calculates the representative market rate based on the weighted averages of the buy/sell foreign exchange rates quoted daily by certain financial institutions for the purchase and sale of foreign currency.
The following table sets forth the average Colombian peso/U.S. dollar representative market rate for the periods indicated, calculated by using the average of the exchange rates on the last day of each month during the period.

 	  	Daily observed exchange rate Col$ per U.S.$	 	
 	  	High	 	  	Low	 	  	Average (1)	 	  	Period end	 	
Year ended December 31,	  				  				  				  				
2008	  	 	2,392.28	  	  	 	1,652.41	  	  	 	1,967.11	  	  	 	2,243.59	  	
2009	  	 	2,596.37	  	  	 	1,825.68	  	  	 	2,153.30	  	  	 	2,044.23	  	
2010	  	 	2,044.23	  	  	 	1,786.20	  	  	 	1,902.50	  	  	 	1,913.98	  	
2011	  	 	1,972.76	  	  	 	1,748.41	  	  	 	1,846.97	  	  	 	1,942.70	  	
2012	  	 	1,942.70	  	  	 	1,754.89	  	  	 	1,797.65	  	  	 	1,768.23	  	
					
Month end	  				  				  				  				
October 31, 2012	  	 	1,830.45	  	  	 	1,795.40	  	  	 	1,804.40	  	  	 	1,829.89	  	
November 30, 2012	  	 	1,831.25	  	  	 	1,814.21	  	  	 	1,821.01	  	  	 	1,817.93	  	
December 31, 2012	  	 	1,813.73	  	  	 	1,768.23	  	  	 	1,792.49	  	  	 	1,768.23	  	
January 31, 2013	  	 	1,779.84	  	  	 	1,758.45	  	  	 	1,769.67	  	  	 	1,773.24	  	
February 28, 2013	  	 	1,818.54	  	  	 	1,775.65	  	  	 	1,790.55	  	  	 	1,816.42	  	
March 31, 2013	  	 	1,832.20	  	  	 	1,797.28	  	  	 	1,813.75	  	  	 	1,832.20	  	
April 30, 2013	  	 	1,847.02	  	  	 	1,813.11	  	  	 	1,830.23	  	  	 	1,828.79	  	
May 2013 (through May 6, 2013)	  	 	1,836.34	  	  	 	1,825.83	  	  	 	1,832.61	  	  	 	1,835.88	  	
Source: Central Bank of Colombia.
(1)	Calculated as the average of the month-end exchange rates during the relevant period.	
 
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 B.	CAPITALIZATION AND INDEBTEDNESS	
Not Applicable.
 
 C.	REASONS FOR THE OFFER AND USE OF PROCEEDS	
Not Applicable.
 
 D.	RISK FACTORS	
You should carefully consider the risks and uncertainties described below and the other information in this annual report. The risks described below are not the only ones facing our company or investments in the countries in which we operate. Our business, financial condition or results of operations could be materially and adversely affected by any of these risks. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. This annual report also contains forward-looking statements that involve risks and uncertainties. See “Forward-Looking Statements.” The market price of our common shares and ADSs may decrease due to any of these risks or other factors, and you may lose all or part of your investment. Our actual results could differ materially and adversely from those anticipated in these forward-looking statements as a result of certain factors, including the risks facing our company described below and elsewhere in this annual report.
Risks Related to Our Business and Our Industries
Economic conditions that impact consumer spending could materially affect us.
Ongoing economic uncertainty in the world economy could negatively affect consumer confidence and spending, including discretionary spending. We may be materially affected by changes in economic conditions in the markets or in the regions in which we operate that impact consumer confidence and spending, including discretionary spending. This risk may be exacerbated if customers choose lower-cost alternatives to our product offerings in response to economic conditions. In particular, a decrease in discretionary spending could materially and adversely impact sales of certain of our high-margin product offerings. Future economic conditions affecting disposable consumer income, such as employment levels, business conditions, changes in housing market conditions, the availability of credit, interest rates, tax rates and fuel and energy costs, could also reduce overall consumer spending or cause consumers to shift their spending to lower-priced competitors. In addition, inflation or deflation can impact our business. Deflation in food prices could reduce sales growth and earnings, while inflation in food prices, combined with reduced consumer spending, could reduce our margins. Accordingly, we cannot assure you that in the event of an increase in inflation we will be able to pass on a price increase to our customers, which could have a material adverse effect on us.
We face intense competition in each of our markets.
The retail industry in Chile, Argentina, Brazil, Peru and Colombia is characterized by intense competition and increasing pressure on profit margins. The number and type of competitors and the degree of competition experienced by individual stores varies by location. Competition occurs on the basis of price, location, quality of products and service, product variety and store conditions. We face strong competition from international and domestic operators of supermarkets, home improvement stores, department stores and shopping centers, including Carrefour, Wal-Mart, Falabella and Casino, and providers of financial services, and it is possible that in the future other large international retailers or financial services providers may enter the markets in which we compete, either through joint ventures or directly. Some of our competitors have significantly greater financial resources than we do and could use these resources to take steps that could have a material and adverse effect on us. We also compete with numerous local and regional supermarket and retail store chains, as well as with small, family-owned neighborhood stores, informal markets, and street vendors. See “Item 4. Information on the Company—B. Business Overview—Competition” and “—Industry Overview and Competition.”
 
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Increasing competition may cause us to lower our prices, increase expenditures and take other actions that could have a material adverse effect on us or compel us to reduce our planned growth, acquisitions and capital expenditures. As other retailers expand their operations in Chile, Argentina, Brazil, Peru and Colombia, and other international retailers enter these markets, competition will continue to intensify. Our inability to respond effectively to competitive pressures and changes in the retail markets could have a material adverse effect on us, including as a result of our losing market share.
Our traditional retail stores, supermarkets and shopping centers face increasing competition from internet sales which may negatively affect sales of traditional channels.
In recent years, retail sales of food, clothing and home improvement products over the internet have increased significantly in each of the countries in which we operate. Internet retailers are able to sell directly to consumers, diminishing the importance of traditional distribution channels such as supermarkets and retail stores. Certain internet food retailers have significantly lower operating costs than traditional hypermarkets and supermarkets because they do not rely on an expensive network of retail points of sale or a large sales force. As a result, such internet food retailers are able to offer their products at lower costs than we do and in certain cases are able to bypass retailing intermediaries and deliver particularly high quality, fresh products to consumers. We believe that our consumers are increasingly using the internet to shop electronically for food and other retail goods, and that this trend is likely to continue. If internet sales continue to grow, consumers’ reliance on traditional distribution channels such as our supermarkets, home improvement stores, department stores and shopping centers could be materially diminished, which could have a material adverse effect on us.
Our markets are undergoing rapid consolidation.
Over the last several years, the food, department store and home improvement retail sectors in Chile, Argentina, Brazil, Peru and Colombia have been undergoing consolidation as large retail chains have gained market share at the expense of small, independently owned and operated stores, and large local and international supermarket chains have consolidated. We believe that further consolidation will likely occur in all of these markets as competition intensifies and economies of scale become increasingly important. Some of our competitors are larger and better capitalized than we are and as a result are likely to be better positioned to take advantage of strategic acquisition opportunities. We cannot assure you that such market consolidation will not occur to the material detriment of our market position or that such developments will not have a material adverse effect on us.
Our growth in recent years has been due to a series of significant acquisitions which are not likely to be repeated in future periods.
We may not be able to successfully execute our growth strategy through acquisitions as done in the past. As a result of the consolidation that has occurred in the retail industry, a significant component of our growth in recent years has occurred through acquisitions. In particular, we acquired various supermarket and department store chains in recent years, including Paris in Chile in 2005, GBarbosa in Brazil in 2007, Wong in Peru in 2008, Perini, Super Familia and Bretas in Brazil in 2010, Cardoso in Brazil and Johnson in Chile in 2011, Prezunic in Brazil and most recently, on November 30, 2012 we completed the acquisition of Carrefour’s supermarket operations in Colombia. See “Item 4. Information on the Company—A. History and Development of the Company—History.” As noted above, we believe that further consolidation is likely to occur in the industries in which we operate. However, some of our principal competitors are larger than we are and are likely to be better positioned to take advantage of strategic acquisition and consolidation opportunities. We cannot assure you that in the future there will be continued availability of suitable acquisition candidates at favorable prices and upon advantageous terms and conditions or that we will be able to compete with our competitors for any future acquisitions. As a result, our growth rate is likely to be significantly lower than it has been in recent years, which may have a material adverse effect on us.
A failure to successfully integrate acquired businesses may have a material adverse effect on us.
Over the past several years, we have completed a number of important acquisitions and may continue to make acquisitions in the future. We believe that these acquisitions provide strategic growth opportunities for us. Achieving the anticipated benefits of these acquisitions will depend in part upon our ability to integrate these businesses in an efficient and effective manner. The challenges involved in successfully integrating acquisitions include: we may find that the acquired company or assets do not further our business strategy, that we overestimated the expected
 
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benefits to be derived from the acquisitions, we discover new contingencies not identified through the due diligence process, or that economic conditions have changed, all of which may result in a future impairment charge; we may have difficulty integrating the operations and personnel of the acquired business and may have difficulty retaining the customers and/or the key personnel of the acquired business; we may have difficulty incorporating and integrating acquired technologies into our business; our ongoing business and management’s attention may be disrupted or diverted by transition or integration issues and the complexity of managing diverse locations; we may have difficulty maintaining uniform standards, controls, procedures and policies across locations; an acquisition may result in litigation from terminated employees of the acquired business or third parties; and we may experience significant problems or liabilities associated with technology and legal contingencies of the acquired business. These factors could have a material adverse effect on us, particularly in the case of a larger acquisition or multiple acquisitions in a short period of time. Our inability to successfully integrate our acquisitions could have a material adverse effect on us.
The expansion of our business through acquisitions poses risks that may reduce the benefits we anticipate from these transactions.
As part of our business strategy, we have grown significantly through acquisitions. Our decision to pursue an acquisition is based on our belief that such acquisition will complement our business strategy and grow our business. However, our management is unable to predict whether or when any prospective acquisitions will occur, or the likelihood of a certain transaction being completed on favorable terms and conditions. Our ability to continue to expand our business successfully through acquisitions depends on many factors, including our ability to identify acquisitions, the ability to negotiate favorable transaction terms and our ability to finance any such acquisition from internal or external sources. Even if we are able to identify acquisition targets and obtain the necessary financing to make these acquisitions, it is possible that the cost of doing so, taken together with possible adverse market conditions and resulting loss of revenues or net income, could financially overextend us.
Acquisitions also expose us to the risk of successor liability relating to litigation, tax claims or other actions involving an acquired company, its management or contingent liabilities incurred before the acquisition. The due diligence we conduct in connection with an acquisition, and any contractual guarantees or indemnities that we receive from the sellers of acquired companies, may not be sufficient to protect us from, or compensate us for, actual or potential liabilities. Any material liability associated with an acquisition could have a material adverse effect on us, including our reputation, and reduce the benefits of such acquisition.
Antitrust laws in Chile, Argentina, Brazil, Peru or Colombia could limit our ability to expand our business through acquisitions or joint ventures.
Chilean, Argentine, Brazilian, and Colombian antitrust laws contain provisions that require authorization by the antitrust authorities in those countries for the acquisition of, or entering into joint venture agreements with, companies with a relevant market share. Such authorizations have been denied in some cases involving the industries in which we operate, as occurred in Chile with the denial by the Tribunal de Defensa de la Libre Competencia (the Chilean Antitrust Court) of the merger between Distribucion y Servicio D&S S.A. (“D&S”) and Falabella in January 2008. Peru does not currently apply such controls, but we cannot assure you that it will not impose them in the future. Accordingly, our ability to expand our business through acquisitions in Chile, Argentina, Brazil, Peru and Colombia may be limited.
Currently, Cencosud is restricted from acquiring any supermarkets in Chile, as a consequence of a settlement it reached in 2008 with the antitrust authorities. As part of the settlement, Cencosud needs prior authorization from the Chilean Antitrust Court before engaging in any supermarket acquisition. This restriction can only be lifted by means of a consultation before the Chilean Antitrust Court.
Moreover, on December 14, 2011, the Chilean antitrust authority ( Fiscalía Nacional Económica , or “FNE”) announced an investigation into anti-competitive practices in the food retail industry. The investigation includes several local operators, including Cencosud, Wal-Mart Chile, SMU and Tottus. In accordance with Chilean regulations, FNE has not disclosed the details of the investigation to the public, but it appears to be focused on private label groceries, fresh poultry and beef. Without additional detail it is difficult to determine the full impact of this investigation. If the FNE concludes that we engaged in anti-competitive practices we could face a maximum sanction of up to U.S.$30 million. We cannot assure you that this investigation, or future investigations, will not result in a material adverse effect on us, including financial and reputational harm.
 
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We may not be able to generate or obtain the capital we need for further expansion.
We expect to continue to have substantial liquidity and capital resource requirements to finance our business. We intend to rely upon internally generated cash from our operations and, if necessary, the proceeds of debt and/or equity offerings in the domestic and international capital markets and bank debt. We cannot assure you, however, that we will be able to generate sufficient cash flows from operations or obtain sufficient funds from external sources to fund our capital expenditure requirements.
Our future ability to access financial markets in sufficient amounts and at acceptable costs and terms to finance our operations, fund our proposed capital expenditures and pay dividends will depend to a large degree on prevailing capital and financial market conditions over which we have no control, and accordingly we cannot assure you that we will be able to do so. The Eurozone crisis and general market volatility has had a negative impact on the liquidity of financial markets in recent months, as was the case in the 2008-2009 financial crisis. Our failure to generate sufficient cash flows from operations or to be able to obtain third-party financing could cause us to delay or abandon some or all of our planned expansion, including capital expenditures, which, in turn, could have a material adverse effect on us.
Our controlling shareholders are able to exercise significant control over our company, and also own a significant minority interest in many of our international subsidiaries which could result in conflicts of interest.
We are currently controlled by our founder, Mr. Horst Paulmann, and his family, who together have a 60.8% ownership stake in us, through Inversiones Quinchamali Ltda., Inversiones Latadía Ltda. and Inversiones Tano Ltda, as of March 31, 2013. Our controlling shareholders are in a position to direct our management and to determine the result of substantially all matters to be decided by majority vote of our shareholders, including the election of a majority of the members of our board of directors, determining the amount of dividends distributed by us (subject to the legally mandated minimum of 30% of net income set forth in Article 79 of the Chilean Corporations Law), adopting certain amendments to our Bylaws, enforcing or waiving our rights under existing agreements, leases and contractual arrangements and entering into certain agreements with entities affiliated with us. As a result, circumstances may occur in which our controlling shareholders’ interests could be in conflict with your interests as noteholders.
Our operating income is sensitive to conditions that affect the cost of the products we sell in our stores.
Our business is characterized by relatively high inventory turnover with relatively low profit margins. We make a significant portion of our sales at prices that are based on the cost of products we sell plus a percentage markup. As a result, our profit levels may be materially affected during periods of decreasing prices. In addition, our business could be materially and adversely affected by other factors, including inventory control, competitive price pressures, severe weather conditions and unexpected increases in fuel or other transportation related costs which increase the cost of the products we sell in our stores. If we are unable to pass along these cost increases to our customers, our profit margin will decrease resulting in a material adverse effect on us.
Our retail results are highly seasonal and therefore any circumstance that negatively impacts our retail business during our seasons of high demand may materially and adversely affect us.
We have historically experienced seasonality in our retail sales in Chile, Argentina, Brazil, Peru and Colombia, principally due to stronger sales during the Christmas and New Year holiday season and during the beginning of each school year in March, and reduced sales during the months of January and February due to the summer holidays. For example, in 2012, 2011 and 2010, 28.5%, 29.3% and 29.8% of our consolidated revenues (excluding the revenues from Banco Paris) were generated during the fourth quarter, respectively. Any economic slowdown, interruption to our business or to the business of our suppliers, or the occurrence of any other circumstance that may impact our business during the first or last quarter of any fiscal year may therefore have a material adverse effect on us.
In addition, in preparation for our seasons of high demand, we must increase inventory to levels substantially higher than those maintained during the rest of the year, and hire temporary staff for our stores. Any unforeseen reduction in demand, mistake in our demand forecasts or product selection, or delay by our suppliers in meeting our demand during these seasons could force us to sell inventory at significantly lower prices, which would also materially and adversely affect us.
 
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The clothing retail industry is negatively affected by decreases in the purchasing power of middle- and low-income consumers resulting from unfavorable economic cycles.
The success of our department stores operations depends largely on factors relating to the stability or increase of consumer spending, especially by members of middle- and low-income socioeconomic groups. Historically, the purchasing power of such groups has been significantly correlated with factors that affect income, such as interest rates, inflation, availability of consumer credit, taxation, employment levels, consumer confidence and salary levels. Therefore, in times of economic downturns, the purchasing power of such group decreases as their income decreases. In addition, our middle- and low-income customers are likely to consider clothing purchases superfluous during periods of reduced income which would most likely lead to a decrease in demand for our clothing products from this group. Such a decrease in the demand of our middle- and low-income customers coupled with a general decrease in their purchasing power could materially and adversely affect us.
Changes in suppliers’ allowances and promotional incentives could impact profitability and have a material adverse effect on us.
We derive a significant portion of our revenues from ordinary activities from allowances and promotional incentives granted by our suppliers. For example, our revenues from ordinary activities include fees from suppliers for the sale of their products in our stores, supplier rebates and bonuses, supplier promotional allowances and fees, and fees from publicity activities carried out for third parties using our proprietary customer information. We cannot assure you that we will be able to obtain a similar level of such fees, rebates, bonuses or allowances in the future. Should any of our key suppliers reduce or otherwise eliminate these arrangements, our profit margin for the affected products could be impacted, which could in turn have a material adverse effect on us.
Our current strategy may not have the expected results on our profitability.
Our strategy aims to provide our customers with a superior shopping experience, delivering a greater variety of quality products and services than our competitors. This strategy is based on savings achieved through operational efficiencies that are transferable to the customer. We couple this strategy with a focus on expanding our position both in Chile and other markets in Latin America that we believe offer attractive prospects for growth. The long-term success of our strategy is subject to significant risks, including failure to generate the expected number of additional sales volume and to reduce selling and administrative expenses; price reductions by competitors; difficulties in obtaining additional vendor allowances from suppliers in the expected amounts and necessary timeframe; difficulties in expanding operations due to adverse economic scenarios; difficulties in finding employees and delays in implementing our strategy. Any one of these factors could have a material adverse effect on us.
We are subject to risks affecting shopping centers which may materially and adversely affect us.
Our operation of our shopping centers (which lease spaces to third parties) is subject to various factors that affect their development, administration and profitability. These factors include the accessibility and the attractiveness of the area where the shopping center is located and of the shopping center itself; the flow of people and the level of sales of each shopping center rental unit; oversupply of retail space or a reduction in demand for retail space which could result in lower rent prices and lower revenues; increases in competition from other shopping centers which drive down our prices and profits; our inability to collect rents due to bankruptcy, insolvency of tenants or otherwise; the ability of our tenants to provide adequate maintenance and insurance; and fluctuations in occupancy levels in our shopping centers.
Many of our hypermarket, supermarket, department stores and home improvement stores are located in shopping centers, and as a result a substantial portion of our revenues is sensitive to factors affecting these and other shopping centers. Also, an economic downturn in the countries or regions in which our shopping centers are located could lead to the bankruptcy of our tenants and a reduction in our shopping center sales due to a decrease in disposable income, which could have a material adverse effect on us.
 
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We are subject to risks that changing shopping trends that could materially and adversely affect us.
In developed markets consumers have begun to express a preference for small-box stores shunning away from traditional big-box outlets. This trend in markets such as the US and the UK has been more evident in fresh, on-the-go foods and the grocery channel. As a consequence retailers in these markets such as Walmart, Tesco and Target have responded by turning to small-box stores as drivers for growth, as a means to target a more urban consumer and as an engine for revenue expansion. This has led to the rolling out of new formats such as Walmart Express, Tesco Express and Fresh and Easy Express in formats of 1,400 square meters distancing themselves from the traditional big-box 10,000 square meters outlets. We have not observed this trend in the markets in which we operate. Nevertheless we are currently undertaking a strategy that includes all types of formats in order to cater to a wide range of consumers. If such trend favoring small-box stores were to materialize in the markets in which we operate, it could materially and adversely affect our results of operations and financial condition.
Our development activities depend on finding attractive real estate locations at reasonable prices.
An important part of our growth strategy rests on our ability to develop and open new stores. We face intense competition from both other retail operators and also real estate developers for new sites for our stores. Accordingly, we may be unable to find attractive real estate locations at reasonable prices to sustain our growth, which could have a material adverse effect on us.
We are subject to risks associated with development and construction activities.
The development, renovation and construction of our hypermarkets, supermarkets, department stores, home improvement stores and shopping centers involve certain risks such as failure to correctly anticipate construction costs, lower than anticipated occupancy rates and rents at newly completed projects, failure to obtain financing on favorable terms, delays in construction and lease-up, and failure to obtain necessary zoning, land use, building, occupancy and other required governmental permits and authorizations.
We are currently in the process of constructing several projects, including the towers of Costanera Center in Santiago, Chile, that we believe will be the tallest building in South America. We face certain risks associated with the large-scale nature of the project, such as occupancy rates and rents not being sufficient to make the project profitable and the fact that we may be unable to obtain or may face delays in obtaining all necessary approvals for a necessary transit mitigation program. Any such delays, or other substantial unanticipated delays or expenses related to the Costanera Center office tower or other future construction or renovation projects may reduce our net income for the relevant periods and could have a material adverse effect on us. For example, the office tower at the Costanera Center was originally scheduled to open in 2013 and is now expected to open in 2014.
Our development activities depend on our ability to obtain and maintain zoning, environmental, land-use and other governmental approvals which we may not be able to get.
Our activities are subject to national, federal, state and municipal laws, and to regulations, authorizations and licenses required with respect to construction, zoning, use of the soil, environmental protection and historical heritage, consumer protection and other requirements in Chile, Argentina, Brazil, Peru and Colombia, all of which affect our ability to acquire land, develop and build projects and negotiate with customers. In the case of non-compliance with such laws, regulations, licenses and authorizations, we may face fines, project shutdowns, cancellation of licenses and revocation of authorizations.
In addition, the regulation of matters relating to the protection of the environment is not as well developed in Argentina, Brazil, Chile, Peru and Colombia as in the United States and certain other countries. Accordingly, we anticipate that additional laws and regulations should be enacted over time in these countries with respect to environmental matters. If public authorities issue new and stricter standards, or enforce or interpret existing laws and regulations in a more restrictive manner, we may be forced to make expenditures to comply with such new rules.
Our credit card and banking operations expose us to increased credit and financial risks which may have a material adverse effect on us.
Although not a part of our core business, our credit card and consumer finance operations in Chile, Argentina, Peru and Brazil are a growing segment of our business. We currently bear all of the credit risk associated with our credit cards in Chile, Argentina and Peru. In Brazil, where we operate our credit card through a joint venture with
 
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Brazil’s Banco Bradesco, we bear 50% of the credit risk associated with our cards, including defaults in payment and losses with Banco Bradesco bearing the remaining risk. In Colombia we are currently engaged in a joint venture with Colombia´s Banco Colpatria through which we bear 50% of the credit risk associated with issued credit cards. Results of our financial business in Colombia for the year ended December 31, 2012 were included in the supermarket segment. See “Item 4. Information on the Company—B. Business Overview—Financial Services—Brazil” for additional details related to our joint venture with Banco Bradesco.
Our credit card and consumer finance business can be materially and adversely affected by delinquency on credit card accounts, defaults in payments by credit card holders, extensive judicial processes enforcing the collection of payments, doubtful accounts or losses on receivables. Furthermore, the actual rates of delinquency, collection proceedings and losses on receivables may vary and be affected by numerous factors, which among others include:
 
 	•	 	adverse changes in regional economies;	
 
 	•	 	acceptance of applicants with poor credit records;	
 
 	•	 	inability to predict future charge-offs;	
 
 	•	 	changes in credit card use;	
 
 	•	 	political instability;	
 
 	•	 	increase of unemployment; and	
 
 	•	 	loss of value of actual salaries.	
These and other factors may have a negative effect on present rates of delinquency, collection proceedings and losses, any one or more of which could have a material adverse effect on us. In particular, our credit card business has grown significantly in recent years and in connection with such growth, our past due credit card receivables have also grown. We cannot assure you that our present rates of delinquency will not increase, and if they do, that it would not have a material adverse effect on us.
Further, to boost our retail volume sales, one of our business goals is to promote greater use of our credit cards and other financing activities in Chile, Argentina, Peru, Colombia and Brazil and introduce our own credit card in Peru (under which we would assume all credit risk). As a result, our exposure to the credit risk of our cardholders and banking customers is likely to increase in the near future. We cannot assure you that any expansion of our credit card operations (including the assumption of account approval and credit risk by us) or our other lending operations, such as the cash advances and consumer loans we offer to our credit card customers, will not result in an impairment of the credit portfolio of our credit card and banking business in Chile, Argentina and Brazil. Any such impairment would have a material adverse effect on us. See “Item 4. Information on the Company—B. Business Overview—Financial Services” for additional details related to our credit card and consumer loan operations.
Our credit card and banking activities depend on our ability to comply with current or future government regulations, as well as our ability to obtain and maintain governmental approvals.
Our credit card and banking operations are subject to substantial regulation. We must comply with national, state and municipal laws, and with regulations, authorizations and licenses required with respect to credit card and banking activities. We invest financial and managerial resources to comply with these laws and related permit requirements.
Our failure to comply with credit card and banking laws and related permit requirements could subject us to investigations, enforcement actions, fines or penalties. For Example, on April 24, 2013, the Supreme Court of Chile ruled on the class action suit filed by the Servicio Nacional del Consumidor (the National Consumer Service, or “SERNAC”), a Chilean government entity. The court ruled for the plaintiff and at this junction no further appeals are available. In the ruling, the court ordered Cencosud Administradora de Tarjetas S.A. (“CAT”) to reimburse certain cardholders for excess monthly maintenance fees charged since 2006 plus adjustments for inflation and interests. We have provisioned Ch$ 20,000 million for this ruling in our 2012 financial statements, which represents 0.2% of our 2012 consolidated net revenues and 3.1% of our 2012 adjusted EBITDA. This provision is an estimated value that still needs to be ratified by the Supreme Court of Chile after subsequent filings for interpretation, rectification and amendment are addressed by the court.
Moreover, if applicable laws and regulations, or the interpretation or enforcement thereof, become more stringent in the future, our capital or operating costs could increase beyond what we currently anticipate, and the process of obtaining or renewing licenses for our activities could be hindered or even opposed by the competent authorities. We cannot assure you that regulators will not impose more restrictive limitations on the activities of our credit card or bank operations in the future than those currently in effect. Any such change could have a material adverse effect on us.
 
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Our food retail business sources fresh products from local producers. climate changes may affect their ability to produce, and consequently may affect our capacity to offer such products.
There are indicators of a current climate change happening worldwide. Changes in temperatures and precipitation patterns may negatively affect the capacity of certain regions to produce fresh products such as fresh fruits and vegetables and dairy products. As of January 2012, Chile is suffering one of its worst droughts in decades, which has resulted in substantial loss of crops and livestock.
We have a significant focus on perishable products. Sales of perishable products accounted for approximately 36.8% and 30.0% of our total sales in 2012 and 2011, respectively. As we source part of our fresh products from local producers, such changes in climate could impair or limit our ability to source such products, thus affecting our capacity to offer the full assortment of products that we normally carry. Any such disruption could have a material adverse effect on us.
We are dependent on key personnel.
Our and our subsidiaries’ development, operation and growth have depended significantly upon the efforts and experience of our board of directors (particularly our chairman, Mr. Horst Paulmann Kemna) and our senior management. If for any reason, including retirement, the services of such persons, particularly Mr. Horst Paulmann Kemna, were to become unavailable and we fail to find and retain an adequate replacement for such persons on a timely basis, there could be a material adverse effect on our operations.
Certain of our debt instruments impose significant operating and financial restrictions and in the event of a default, all of our borrowings could become immediately due and payable.
The terms of our financial indebtedness impose, and the terms of our future financial indebtedness may impose, significant operating and other restrictions on us and many of our subsidiaries. The agreements governing our credit facilities and corporate bond issuances contain restrictive covenants and a requirement that we comply with a number of financial “maintenance” covenants, including ratios of total debt to equity, total liabilities to net worth, net financial debt to equity, net financial debt to EBITDA, and EBITDA to financial expenses, as well as minimum levels of total assets, unencumbered assets and equity. Our ability to comply with these ratios may be affected by events beyond our control. These restrictions and financial ratios could limit our ability to plan for or react to market conditions, otherwise restrict our activities or business plans and could have a material adverse effect on us, including our ability to finance ongoing operations or strategic investments or to engage in other business activities.
A significant portion of our financial indebtedness is also subject to cross default provisions. Our breach of any of these restrictive covenants or our inability to comply with the financial maintenance ratios would result in a default under other applicable debt instruments. If any such default occurs, the lenders may elect to declare all outstanding borrowings, together with accrued interest and other fees, to be immediately due and payable. If we are unable to repay outstanding borrowings when due, the lenders will have the right to exercise their rights and remedies against us, and we cannot assure you that our assets would be sufficient to repay in full our obligations. Our inability to repay our obligations could have a material adverse effect on us.
A Downgrade in our credit rating could materially and adversely affect our obligations under existing credit support commitments.
We have entered into ten credit support agreements in connection with derivative transactions with different international and local financial intuitions. Each credit support agreement provides collateral obligations between swap counterparties to mitigate the existing credit risk inherent to operation. If a credit downgrade event occurs, it could result in our having to post additional collateral in connection with a “Margin Call” and us having to pay cash or any other eligible collateral to cover the incurred liabilities at a given valuation date. As of December 31, 2012, notional amounts in cross currency swaps with different counterparties stand at approximately more than USD 1.3 billion.
 
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A downgrade in our credit rating could negatively impact our cost of and ability to access capital.
Our credit ratings are an important part of maintaining our liquidity. Any downgrade in credit ratings could potentially increase our borrowing costs, or, depending on the severity of the downgrade, substantially limit our access to capital markets, require us to make cash payments or post collateral and permit termination by counterparties of certain significant contracts. Factors that may impact our credit ratings include, among others, debt levels, planned asset purchases or sales, and near-term and long-term growth opportunities. Factors such as liquidity, asset quality, cost structure, product mix, and others are also considered by the rating agencies. A ratings downgrade could adversely impact our ability to access debt markets in the future, increase the cost of future debt, and potentially require us to post letters of credit for certain obligations.
We have a significant amount of financial indebtedness outstanding with instruments maturing every year
As part of our financial strategy we fund our assets with a combination of both equity and debt. Our portfolio of financial indebtedness has maturities and amortizations applicable every year. As we devote a significant portion of our free cash flow to finance our capital expenditures, we are required to refinance these obligations and therefore we face refinancing risk, especially in times of liquidity restrictions in the financial markets.
Furthermore, our major market for funding is Chile, including both the debt capital market and the local banks,. As we are among the largest corporations in Chile and among the largest local issuers, we have become one of the largest investments (in terms of equity and debt holdings) in the local institutional investors’ portfolio, limiting our ability for further issuances in the local market. Likewise, some local banks in Chile have large loan exposure to Cencosud, and have reached the legal limits of maximum exposure to us, limiting our ability to secure future funding from them in the future.
Although we believe we have a sound financial strategy and we have structured our maturities and amortizations in a way that reduces the refinancing needs in a single year we cannot assure you that we will be able to obtain funding in the future to fulfill our financial obligations. If we are unable to obtain such funding, we will need to reduce our capital expenditures to devote a larger portion of our free cash flow to serve our financial obligations, thus reducing our growth prospects, and possibly face a potential event of default with respect to our financial obligations.
If any such default occurs, the lenders may elect to declare all outstanding borrowings, together with accrued interest and other fees, to be immediately due and payable. If we are unable to repay outstanding borrowings when due, the lenders will have the right to exercise their rights and remedies against us, and we cannot assure you that our assets would be sufficient to repay in full our obligations. Our inability to repay our obligations could have a material adverse effect on us.
We are subject to risks associated with real estate investments.
Our real estate investments are subject to risks common to commercial and residential properties in general, many of which are not within our control. For example, the yields available from equity investments in real estate depend on the level of sales or rental income generated and expenses incurred. In addition, our ability to generate sufficient income from our properties to service our debt and cover other expenses may be materially and adversely affected by the following factors, among others, some of which we cannot control:
 
 	•	 	downturns in a national, regional and local economic climate;	
 
 	•	 	changes in interest rates and availability of financing;	
 
 	•	 	civil disturbances, earthquakes and other natural disasters, or terrorist acts or acts of war which may result in uninsured or underinsured losses;	
 
 	•	 	changes in our ability or our tenants’ ability to provide for adequate maintenance and insurance, possibly decreasing the useful life of and revenue from property;	
 
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 	•	 	law reforms and governmental regulations (such as those governing usage, zoning and real property taxes);	
 
 	•	 	oversupply of retail space or a reduction in demand for retail space, which could result in lower rent prices and lower revenues for us;	
 
 	•	 	increased competition from other real estate operators which might drive down our prices and profits;	
 
 	•	 	increased operating costs due to inflation and other factors such as insurance expense, utilities, real estate taxes, state and local taxes and heightened security and cleaning costs;	
 
 	•	 	the inability to collect rents due to bankruptcy or insolvency of tenants or otherwise;	
 
 	•	 	the need to periodically renovate, repair and release space, and the higher costs thereof;	
 
 	•	 	the inability to revise the commercial terms of our lease agreements to reflect high inflation or exchange rates fluctuations in markets where our leases are based on local nominal currency or in foreign currency;	
 
 	•	 	bankruptcy of tenants and reduction in shopping center sales due to lower disposable income;	
 
 	•	 	exercise by our tenants of their legal right to terminate their leases early; and	
 
 	•	 	the inability to find new tenants as leases on our properties expire or terminate early.	
The occurrence of any combination of the factors listed above could significantly decrease the income we receive from our real estate investments, which in turn could have a material adverse effect on us.
Eviction proceedings in Chile, Argentina, Colombia and Peru are difficult and time consuming, and as a result we may not be able to evict defaulting tenants from our shopping centers.
In our shopping center business, we hold several commercial leases with third party lessees. Although Chilean, Argentine and Peruvian laws allow a summary proceeding to collect unpaid rent and a special proceeding to evict tenants, eviction proceedings in these countries are difficult and time-consuming. Eviction proceedings generally take between six months and two years from the date of filing of the suit to the time of actual eviction, as the heavy workload of the courts and the numerous procedural steps required have generally delayed landlords’ efforts, including ours, to evict tenants. Historically, delinquency regarding our office rental space has been low, and we have usually attempted to negotiate the termination of lease agreements with defaulting tenants after the first few months of non-payment in order to avoid legal proceedings.
We cannot assure you, however, that delinquency rates in the future will not increase significantly, or that our negotiations with tenants will prove to be as successful as they have been in the past, which could have a material adverse effect on us.
Any disruption in the operations of our distribution centers may have a material adverse effect on us.
A substantial part of the products we sell in our stores are distributed through our distribution centers. Should any of these distribution centers experience an interruption in operations, we may not be able to effectively distribute the products we sell, which may have a material adverse effect on us.
Additionally, our growth strategy contemplates the opening of new stores in the countries where we operate, which may require an increase in the capacity of our distribution centers, the reorganization of our existing distribution centers or the establishment of new distribution centers. Should we fail to locate adequate properties on which to build new distribution centers, or fail to effectively integrate new, or expand existing, distribution centers, we may not be able to deliver inventory to our stores in a timely manner, which may have a material adverse effect on us.
 
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Certain of our stores rely heavily on sales of perishable products, and ordering errors or product supply disruptions may have a material adverse effect on us.
Our hypermarkets and supermarkets have a significant focus on perishable products. Sales of perishable products accounted for approximately 36.8% and 30.0% of our total sales in 2012 and 2011, respectively. We rely on various suppliers and vendors to provide and deliver our product inventory on a continuous basis. We could suffer significant perishable product inventory losses in the event of the loss of a major supplier or vendor, disruption of our distribution network, extended power outages, natural disasters or other catastrophic occurrences. We have implemented certain systems to ensure our ordering is in line with demand. We cannot assure you, however, that our ordering systems will always work efficiently, in particular in connection with the opening of new stores, which have no, or a limited, ordering history. If we were to over-order, we could suffer inventory losses, which could have a material adverse effect on us.
An increase in export or import duties and controls may have a material adverse effect on us.
Our future success depends on our ability to select and purchase quality merchandise at attractive prices. While we have historically been able to locate and purchase quality merchandise at good prices, such merchandise may become subject to higher import taxes than currently apply. The Argentine government requires importers to maintain a balance of payments requiring them to export equivalent amounts of merchandise. In response to that we have succeeded in placing Argentine made products throughout our stores in the markets in which we operate. Since 2002 the Argentine government has imposed duties on the exports of various primary and manufactured products, including some of those that are sold in our stores. Such duties have undergone significant increases, reaching a maximum of 35% for certain items. We cannot assure you that there will not be further increases in the export taxes or the new export or import taxes or quotas will not be imposed by the government of Argentina or that similar measure could be taken by other countries in which we operate.
In addition, foreign trade policies, tariffs and other impositions and requirements on imported goods, which may depend on the product’s place of origin or on the product’s nature and specifications, as well as other factors relating to the foreign trade of the countries in which we operate are beyond our control and could result in difficulties in obtaining quality, low-cost merchandise from these countries and consequently could have a material adverse effect on us.
Labor relations may have a material adverse effect on us.
As of December 31, 2012, approximately 32% of our retail store employees were represented by unions under several collective bargaining agreements. Although we currently enjoy good relations with our employees and their unions, we have experienced labor strikes in the past and we cannot assure you that labor relations will continue to be positive or that a deterioration in labor relations will not have a material adverse effect on us. See “Item 4. Information on the Company—B. Business Overview” and “Item 6. Directors, Senior Management and Employees—D. Employees.”
We could be harmed by a failure or interruption of our information technology or administrative systems.
We rely on our information technology and administrative systems to effectively manage our business data, communications, supply chain, pricing, order entry and fulfillment and other business processes. We use different world-class IT platforms in our retail and financial services segments in all countries in which we operate. Even advanced technology systems, however, are subject to defects, interruptions and breakdowns. The failure of our information technology or administrative systems to perform as we anticipate could disrupt our business and result in transaction errors, processing inefficiencies and the loss of sales and customers, which in turn could result in decreased revenue, increased overhead costs and excess or out-of-stock inventory levels resulting in a material adverse effect on us.
In addition, our information technology and administrative systems may be vulnerable to damage or interruption from circumstances beyond our control, including fire, natural disasters, systems failures, viruses and security breaches, including breaches of our transaction processing or other systems that could result in the compromise of confidential customer data. Any such damage or interruption could have a material adverse effect on us, including as a result of our facing significant fines, customer notice obligations or costly litigation, harming our reputation with our customers or requiring us to expend significant time and expense developing, maintaining or upgrading our information technology or administrative systems, or preventing us from paying our suppliers or employees, receiving payments from our customers or performing other information technology or administrative services on a timely basis.
 
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We are currently in the process of upgrading our IT infrastructure, during the implementation and transition period, we could face delays and unexpected challenges that could affect our operations.
Further, while we have some backup data-processing systems that could be used in the event of a catastrophe or a failure of our primary systems, we do not yet have an integrated disaster recovery plan nor a backup data center that covers all regions in which we operate. While we endeavor to prepare for failures of our network by providing backup systems and procedures, we cannot guarantee that our current backup systems and procedures will operate satisfactorily in the event of a regional emergency. Any substantial failure of our back-up systems to respond effectively or on a timely basis could have a material and adverse effect on us.
If we experience a data security breach and confidential customer information is disclosed, we may be subject to penalties and experience negative publicity, which could affect our customer relationships and have a material adverse effect on us.
We and our customers could suffer harm if customer information were accessed by third parties due to a security failure in our systems. The collection of data and processing of transactions require us to receive and store a large amount of personally identifiable data. This type of data is subject to legislation and regulation in various jurisdictions. Recently, data security breaches suffered by well-known companies and institutions have attracted a substantial amount of media attention, prompting U.S. state and federal legislative proposals addressing data privacy and security. If similar proposals are adopted in the countries in which we operate, we may be subject to more extensive requirements to protect the customer information that we process in connection with the purchases of our products. We may become exposed to potential liabilities with respect to the data that we collect, manage and process, and may incur legal costs if our information security policies and procedures are not effective or if we are required to defend our methods of collection, processing and storage of personal data. Future investigations, lawsuits or adverse publicity relating to our methods of handling personal data could have a material adverse effect on our business, results of operations, financial condition and cash flows due to the costs and negative market reaction relating to such developments.
Chile, Argentina, Peru and Colombia are located in a seismically active region.
Chile, Argentina, Peru and Colombia are prone to earthquakes due to their location in the proximity of several major fault lines. A major earthquake, like the one that struck Chile in 2010, could have significant negative consequences for our operations and for the general infrastructure in Chile or any of the other countries that were abovementioned,, such as roads, rail and access to goods. Even though we maintain insurance policies standard for this industry with earthquake coverage, we cannot assure you that a future seismic event will not have a material adverse effect on us. See “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Trends and Factors Affecting Our Results of Operations—Impact of the 2010 Earthquake and Tsunami.”
Our growth in recent years has been due to a series of significant acquisitions and strong organic CAPEX, imposing pressure on our procedures, controls and systems
In recent years we have grown our business through a series of acquisitions and strong organic CAPEX, expanding our geographical business scope and increasing the size and complexity of our operations. As a consequence, our internal controls, systems and procedures may not be appropriate to support the scope and complexity of our operations. The existence of multiple legacy systems from the acquired operations and the complexities of the business integration process may adversely affect the Company. As part of the process of integrating the operations, systems, processes and controls that are part of the acquired businesses, we are working to strengthen existing control mechanisms in accordance with the provisions of Section 404 of the Sarbanes Oxley Act, and the focus of the work has concentrated on the following:
 
 	•	 	The implementation of a new credit card sales reconciliation system that will provide support for a strong internal control environment in this area.	
 
 	•	 	The improvement of the procedures for the reconciliation of accounts.	
 
 	•	 	A deep review of the role definitions and segregation of duties included in systems, and the implementation of applications for monitoring critical users.	
If we are not able to upgrade our procedures, controls and systems to properly address these control deficiencies, or if these control deficiencies result in our non compliance with Section 404 of the Sarbanes Oxley Act, there could be a negative reaction in the financial markets due to a loss of investor confidence in us and in the reliability of our financial statements, and we may have to incur increased costs in connection with hiring additional staff or implementing controls to remediate these control deficiencies. Additionally, if the aforementioned control deficiencies cause us to become unable to report our financial data on a timely basis, we may be subject to adverse regulatory consequences, including sanctions by the SEC, or violations of applicable stock exchange listing rules.
Risks Related to Chile
Our growth and profitability depend on the level of economic activity in Chile and other markets.
        40.0% and 41.7% of our revenues from ordinary activities in the years ended December 31, 2012 and 2011, respectively, were derived from revenues in Chile. Accordingly, our results of operations and financial condition are dependent to a significant extent on the level of economic activity in Chile. The Chilean economy has been influenced, to varying degrees, by economic conditions in other emerging market countries. We cannot assure you that the Chilean economy will continue to grow in the future or that future developments in or affecting the Chilean economy, including further consequences of economic difficulties in Brazil, Argentina and other emerging markets, will not have a material adverse effect on us.
In September 2008, the housing crisis in the United States sparked a series of financial institution failures throughout the globe. This resulted in a liquidity crisis and a reduction in growth of the global economy as financial institutions tightened risk policies and reduced lending to banks, corporations and individuals. Consequently, Chile
 
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was adversely affected by a strong decrease in growth during the fourth quarter of 2008 and during 2009 as its trading partners entered into recession, which affected local sales, employment levels, plans for investment and the price of exports. Lingering negative effects of the global recession may continue to adversely affect the Chilean economy and unfavorable general economic conditions could negatively affect the affordability of and demand for some of our products and services and our ability to access the capital markets. In difficult economic conditions, consumers may seek to reduce discretionary spending by forgoing purchases of some of our products, electing to use fewer higher-margin services or obtaining products and services under lower-cost programs offered by competitors. If any of these events were to occur, it could have a material adverse effect on us.
In spite of the recent growth of the Chilean economy, we cannot assure you that Chile’s economy will continue to grow in the future, nor can we assure you that future developments in or affecting the Chilean economy will not impair our ability to proceed with our business plan or have a material adverse effect on us.
Economic and political problems encountered by other countries may adversely affect the Chilean economy, and, as a result, our business and results of operations and the market value of our securities.
The prices of securities issued by Chilean companies are to varying degrees influenced by economic and market considerations in other countries. We cannot assure you that future developments in or affecting the Chilean economy, including consequences of economic difficulties in other markets, will not have a material adverse effect on us.
We are also directly exposed to risks related to the weakness and volatility of the economic and political situation in Asia, the United States, Europe, Brazil, Argentina and other nations. If these nations’ economic conditions deteriorate, the economy in Chile, as either a neighboring country or a trading partner, could also be affected and could experience slower growth than in recent years with possible adverse impact on our customers and suppliers. The crises and political uncertainties in other Latin American countries could also have an adverse effect on the Chilean economy, and, as a result, our results of operations and the market value of our securities.
Chile is also involved in an international litigation with Peru regarding maritime borders and has had other conflicts with neighboring countries in the past. We cannot assure you that crisis and political uncertainty in other Latin American countries will not have a material adverse effect on the Chilean economy, and, as a result, our results of operations and the market value of our securities.
The Chilean supermarket and department store industries show signs of saturation which could impair our ability to grow profitably in Chile.
We believe that the Chilean supermarket industry shows certain signs of saturation. As a result newly opened stores cannibalize the sales of existing stores to some extent. Our growth prospects in the Chilean food retailing sector are likely to depend to a large extent on future growth in Chilean GDP or acquisitions of other supermarket chains, and we cannot assure you that either will in fact occur. As a result, we cannot assure you that in the future we will be able to achieve real growth in same-store sales in Chile. We believe that the Chilean department store industry has also shown signs of saturation as a result of a very aggressive expansion in past years by the industry’s main participants.
In addition, good locations are increasingly difficult to find, particularly for our big-box stores. Most major retailers have locked up key mall properties and control large land banks, and as a result we have faced difficulties in finding acceptable sites because we are more likely to open mid- to large-size supermarkets. We may be vulnerable to the expansion by “small box” supermarkets, such as convenience stores, who may more readily find suitable properties.
Increases in the corporate tax rate in Chile to finance part of the reconstruction effort may be extended or further increased and such extension or further increase may have a material adverse effect on us.
As a result of the February 2010 earthquake and tsunami, the Chilean government raised the corporate income tax rate in order to pay for reconstruction following the earthquake and tsunami. Such legislation increased the general corporate tax rate from its historic rate of 17.0% to 20.0% for the income accrued in the 2011 commercial year ( año comercial), which is declared and paid in the 2012 tax year ( año tributario ). On September 26 ,
 
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2012, Law No. 20,630 introduced new amendments to existing tax legislation. Among the amendments introduced, the corporate income tax was permanently maintained at 20% effective as of the 2013 tax year. For tax year 2013, this is estimated to result in approximately U.S.$10 million of additional taxes. There is no assurance that the corporate income tax rate will not be raised in the future resulting in a material adverse effect on us.
Inflation and government measures to curb inflation may adversely affect the Chilean economy and have a material adverse effect on us.
Chile has experienced high levels of inflation in the past, including increases in the Chilean consumer price index of 7.8%, 7.1%, -1.4%, and 3.0% in 2007, 2008, 2009 and 2010, respectively. Chile experienced deflation of 1.4% during 2009, inflation of 3.0% during 2010 and inflation of 4.4% during 2011 and 1.58% in 2012 according to the Central Bank of Chile. We cannot assure you that this trend will continue.
The measures taken by the Chilean Central Bank to control inflation have often included maintaining a tight monetary policy with high interest rates, thereby restricting the availability of credit and retarding economic growth. Inflation, measures to combat inflation and public speculation about possible additional actions have also contributed materially to economic uncertainty in Chile and to heightened volatility in its securities markets. Periods of higher inflation may also slow the growth rate of the Chilean economy, which could lead to reduced demand for our products and services and decreased sales. Inflation is also likely to increase some of our costs and expenses, given that the majority of our supply contracts are denominated in Unidades de Fomento or are indexed to the Chilean consumer price index, and we may not be able to fully pass any such increases on to our customers, which could have a material adverse effect on us. Furthermore, at December 31, 2012, approximately 21% of our outstanding debt was UF-denominated. As a result, severe increases in inflation could affect the Chilean economy and could have a material adverse effect on us.
Currency devaluations and foreign exchange fluctuations may have a material adverse effect on us.
The Chilean peso has been subject to large devaluations and appreciations in the past and could be subject to significant fluctuations in the future. The main driver of exchange rate volatility in the past years was the significant devaluations in other Latin American countries, mainly Brazil, as well as general uncertainty and trade imbalances in the global markets. In 2007, the Chilean peso appreciation was driven by an improvement in Chilean economic indicators and record commodities prices, together with a weak performance of the U.S. dollar. More recently, the primary driver of exchange rate volatility has been the substantial appreciation of Latin American currencies, including the Chilean peso, against the U.S. dollar. The value of the Chilean peso against the U.S. dollar may continue to fluctuate significantly in the future. See “Item 10. Additional Information—D. Exchange Controls—Foreign Exchange Controls—Chile” and “Item 3. Key Information—A. Selected Financial Data—Exchange Rates—Chile.”
Historically, a significant portion of our indebtedness has been denominated in U.S. dollars, while a substantial part of our revenues and operating expenses has been denominated in Chilean pesos. If the Chilean peso’s value declines against the dollar, we will need more Chilean pesos to repay the same amount of dollar-denominated debt. As a result, fluctuations in the Chilean peso to U.S. dollar exchange rate may affect us. As of December 31, 2012, 57% of our financial debt (bank loans and bonds) was denominated in U.S. dollars, and 21% of such debt was fully hedged against exchange rate variations between the Chilean peso and the U.S. dollar through financial instruments such as forward exchange agreements and cross-currency swaps. The remainder of our interest-bearing debt is primarily UF- or Chilean peso-denominated and therefore not subject to exchange rate risk. Our hedging policy against foreign exchange fluctuations is disclosed in “Item 11. Quantitative and Qualitative Disclosure About Market Risk—Foreign Currency Risk.” We cannot assure you that our hedging policies will avoid future losses related to exchange rate variations.
Any significant currency devaluation or foreign exchange fluctuation in the future may adversely affect the performance of the Chilean economy and have a material adverse effect on us.
Chile has different corporate disclosure and accounting standards than those you may be familiar with in the United States.
Financial reporting and securities disclosure requirements in Chile differ in certain significant respects from those required in the United States. There are also material differences between IFRS and U.S. GAAP. Accordingly,
 
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the information about Cencosud S.A. available to you will not be the same as the information available to holders of shares issued by a U.S. company. In addition, the Chilean Securities Market Law, which governs open or publicly listed companies, such as us, imposes disclosure requirements that are more limited than those in the United States in certain important respects. In addition, although Chilean law imposes restrictions on insider trading and price manipulation, applicable Chilean laws are different from those in the United States, and the Chilean securities markets are not as highly regulated and supervised as the U.S. securities markets.
Risks Related to Argentina
Argentine economic and political conditions and perceptions of these conditions in international markets may have a direct impact on our business and our access to international capital markets, and could have a material and adverse effect on us.
27.2% and 28.9% of our revenues from ordinary activities in the years ended December 31, 2012 and 2011, respectively, were derived from revenues in Argentina and an important share of our land bank is located in Argentina. Accordingly, our results of operations and financial condition are affected to a significant extent by the level of economic activity in Argentina. The Argentine economy has experienced significant volatility in recent decades, characterized by periods of low or negative growth, high and variable levels of inflation and currency devaluation. Argentina’s sovereign credit default swap (CDS) spreads are currently among the highest in the world. Between 2001 and 2003 Argentina experienced a period of severe political, economic and social crisis. In 2002, enactment of Law No. 25,561 (the “Public Emergency Law”) ended more than a decade of uninterrupted Argentine peso/U.S. dollar parity and the Argentine peso has fluctuated significantly since then. See “Item 10. Additional Information—D. Exchange Controls—Foreign Exchange Controls—Argentina” and “Item 3. Key Information—A. Selected Financial Data—Exchange Rates—Argentina.”
Although general economic conditions in Argentina have recovered significantly during recent years, there is uncertainty as to whether this growth is sustainable. This is mainly because the economic growth was initially dependent on a significant devaluation of the Argentine peso and a high excess production capacity derived after a long period of deep recession, and was favored by high commodity prices. The global economic crisis of 2008 has led to a sudden deceleration of the economy, accompanied by political and social unrest, inflationary and Argentine peso depreciation pressures and lack of consumer and investor confidence. According to the Instituto National de Estadísticas y Censos (the Argentine National Institute of Statistics and Census, or “INDEC”), Argentina’s gross domestic product, in real terms, grew by 8.7% in 2007, 6.8% in 2008, 0.9% in 2009, 9.2% in 2010 and is estimated to have grown 9.3% and 2.1% in 2011 and 2012 respectively. We cannot assure you that GDP will increase or remain stable in the future. Even though during 2010 and the first three quarters of 2011, the Argentine economy had begun to overcome the economic slowdown, showing strong growth levels of 9.3% (annualized) during 2012, the aforementioned economic slowdown has become more evident with the INDEC estimating GDP growth at 2.1%, there is uncertainty as to whether Argentina may sustain prolonged economic growth. The recent economic crisis in Europe and the uncertainties of the political future in Argentina, among other factors, may affect the development of the Argentine economy and have a material adverse effect on us.
Argentina’s limited ability to obtain financing from international markets and limited economic growth could have a material adverse effect on us.
Argentina’s 2001 default and its failure to fully restructure its sovereign debt and fully negotiate with the holdout creditors may limit Argentina’s ability to reenter the international capital markets. Litigation initiated by holdout creditors as well as claims with the International Centre for Settlement of Investment Disputes (ICSID) have resulted and may continue to result in judgments against the Argentine government which, if not paid, could prevent Argentina from obtaining credit from multilateral organizations. Judgment creditors have sought and may continue to seek attachment orders or injunctions relating to assets of Argentina that the government intended for other uses. As a result, the government may not have the financial resources necessary to implement reforms and foster economic growth, which, in turn, could have a material adverse effect on Argentina’s economy and, consequently, on us. Furthermore, Argentina’s inability to obtain credit could have a material adverse effect on our Argentine subsidiaries, including their ability to access international credit markets, either for working capital requirements or to repay their debt at maturity.
 
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Adverse court rulings in the United States could have a material and adverse impact in the Argentine economy and us.
In 2012, holdouts from the 2001 Argentine debt-swap commenced legal proceedings against the Argentine Republic demanding full repayment of the principal amount owed under the issued notes and have made attempts to seize assets of Argentina held offshore. These holdouts were given a favorable court ruling on November 22, 2012 from the United States District Court for the Southern District of New York, who ordered Argentina to make repayments at the same pace it is repaying those who agreed to enter the 2001 debt-swap by enforcing the pari passu provision under the issued notes. Argentina and holders who participated in the debt-swap are appealing the ruling. We cannot predict when or in what form a final decision will be granted. Accordingly, a resolution of this dispute in a manner adverse to Argentina may further increase its borrowing cost and have a negative effect on the Argentine economy and us.
Inflation may continue to increase, causing adverse effects on the Argentine long-term credit markets as well as the Argentine economy, its growth and our activities in Argentina.
After several years of price stability, the devaluation of the Argentine peso in January 2002 created pressures on the domestic price system that generated high inflation in 2002 before substantially stabilizing in 2003. However, consumer prices increased by 9.8% in 2006, 8.5% in 2007, 7.2% in 2008, 7.7% in 2009, 10.9% in 2010 and 9.5% in 2011 and 10.8% in 2012 according to the INDEC, and private institutes estimate that consumer prices have increased significantly more than official estimates. A return to a high inflation environment would also undermine Argentina’s foreign competitiveness in international trade by diluting the effects of the Argentine peso devaluation and could have a material adverse effect on us.
Significant devaluation or appreciation of the Argentine peso against the U.S. dollar and other foreign currencies may adversely affect the Argentine economy, its growth and our activities in Argentina.
The depreciation of the Argentine peso in 2002 had positive effects on the competitiveness of certain sectors of the Argentine economy, but it also had a negative impact on the financial condition of Argentine businesses and individuals. The devaluation adversely affected the Chilean peso and the U.S. dollar value of our assets and earnings in Argentina and, thus, has had a negative effect on our financial condition. Moreover, the devaluation of the Argentine peso had a negative impact on the ability of Argentine businesses to honor their foreign currency-denominated debt, led to very high inflation initially, significantly reduced real wages, had a negative impact on businesses whose success is dependent on domestic market demand, and adversely affected the federal and provincial governments’ ability to honor their foreign debt obligations. If the Argentine peso experiences another significant devaluation, it may have a materially adverse effect on the local economy and on our business.
Furthermore, a substantial increase in the value of the Argentine peso against foreign currencies would adversely affect exports and could have a negative effect on the Argentine economy, with material and adverse consequences on us.
There are concerns about the accuracy of the Argentine INDEC’s measurements and thus its impact on us.
In January 2007, the INDEC modified its methodology used in calculating the consumer price index. At the same time, the Argentine government also replaced several key personnel at the INDEC, prompting complaints of government interference from the technical staff at the INDEC. In addition, the IMF requested that the government clarify its inflation rates. In June 2008, the INDEC published a new consumer price index that eliminated nearly half of the items included in previous surveys and introduced adjustable weightings for fruit, vegetables and clothing, which have seasonal cost variations.
The new index has been criticized by economists and investors after its initial report found prices rising well below expectations. These events have affected the credibility of the consumer price index published by INDEC, as well as other index published by INDEC that use the consumer price index in their calculation, including the poverty index, the unemployment index and real GDP. If it is determined that it is necessary to correct the consumer price index and other INDEC index, there could be a significant decrease in confidence in the Argentine economy, which could, in turn, have a material adverse effect on us. On February 1, 2013 Argentina became the first member nation
 
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of the IMF to be censured due to concerns that it may be underreporting inflation and GDP figures. The IMF gave Argentina a deadline of September 29 , 2013 to take “remedial measures” to boost the accuracy of the data provided. If this deadline is not met, Argentina could face further sanctions such as suspended voting rights, the impossibility of accessing IMF special drawing rights or even a compulsory withdrawal of its membership.
Intervention by the Argentine government in the Argentine economy has increased and may have a direct impact on our prices and sales.
The Argentine government has in the past set certain industry market conditions and prices. In March 2002, the Argentine Government fixed the price for milk after a conflict among producers. Further government intervention in the economy could have an adverse effect on the levels of foreign investment in Argentina, Argentine companies’ access to international capital markets and trade and diplomatic relations between Argentina and other countries, which in turn could result in a material adverse effect on Argentina’s economy and, therefore, our business, financing capabilities, results of operations and financial condition. We cannot assure you that the Argentine government will not interfere in other areas in the retail industry in which we operate by setting prices or regulating other market conditions. Accordingly, we cannot assure you that the prices or other market conditions that the Argentine government might impose will allow us to freely negotiate the prices of our products, all of which could have a material adverse effect on us.
On February 1, 2013, the Argentine government required retailers to impose price limits on certain staple products for a period of 60 days. On March 29, 2013 the government of Argentina announced that retailers would have to continue to abide by agreed upon price limits for an additional 60-day period.
Government measures to address economic and social unrest may adversely affect the Argentine economy and thereby have a material adverse effect on us.
Despite the economic recovery and relative stabilization since 2003, social and political tensions and high levels of poverty and unemployment continue. Future government policies to preempt, or respond to, social unrest may include expropriation, nationalization, forced renegotiation or modification of existing contracts, suspension of the enforcement of creditors’ rights and shareholders’ rights, increase in export taxes, new taxation policies, including royalty and tax increases and retroactive tax claims, and changes in laws, regulations and policies affecting foreign trade and investment. For example, on April 16, 2012, the Argentine government announced its intention to expropriate YPF S.A. (“YPF”), the largest oil and gas company in Argentina, which is controlled by Repsol YPF S.A., a Spanish integrated oil and gas company. On May 4, 2012 the Argentine Congress approved the expropriation of 51% of YPF’s capital stock. The nationalized capital stock was distributed as follows: 49% to certain Argentine provinces and the remaining 51% to the national government. These policies could destabilize the country, both socially and politically, and have a material adverse effect on the Argentine economy and other Latin American economies and, consequently, on us.
The Argentine government may order salary increases to be paid to employees in the private sector, which would increase our operating costs.
In the past, the Argentine government has passed laws, regulations and decrees requiring companies in the private sector to maintain minimum wage levels and provide specified benefits to employees and may do so again in the future. In the aftermath of the Argentine economic crisis, employers both in the public and private sectors have experienced significant pressure from their employees, unions and labor organizations to increase wages and to provide additional employee benefits. Due to the high levels of inflation, the employees and labor organizations have begun again demanding significant wage increases. It is possible that the Argentine government could adopt measures mandating salary increases and/or the provision of additional employee benefits, including mandatory profit sharing, in the future. Any such measures could have a material adverse effect on us.
Argentine lease laws impose restrictions that limit our flexibility.
Argentine laws governing leases impose certain restrictions, including prohibition of inflation adjustment clauses, mandatory minimum and maximum duration, and statutory tenants’ rights to rescind commercial lease agreements after the initial six months. These restrictions could have a material adverse effect on our Argentine operations.
 
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In the past, in response to housing shortages, high rates of inflation and difficulties in obtaining credit, the Argentine government imposed more strict and burdensome regulations regarding leases. Such regulations limited or prohibited increases on rental prices and prohibited eviction of tenants, even for failure to pay rent. We cannot assure you that the Argentine government will not impose similar or more stringent regulations in the future, any of which could have a material and adverse effect on us.
Exchange controls could restrict the inflow and outflow of funds in Argentina and may have a material adverse effect on us.
In 2001 and 2002, the Argentine government implemented a number of monetary and currency exchange control measures that included restrictions on the withdrawal of funds deposited with banks and stringent restrictions on the outflow of foreign currency from Argentina, including funds for purposes of paying principal and interest on debt and distributing dividends.
Although many of these restrictions have been eased in some respects, some restrictions on the transfer of funds from Argentina (e.g., to make payments of principal and interest) still remain in effect and other controls on capital inflows have been established. Further, similar or new restrictions relating to the purchase of foreign currency and its transfer abroad for the payment of dividends, which were significantly eased in 2003, could be reinstated in the future. If that were to occur, we may default in the payment of external debt obligations from Argentina, we may not be able to fund and/or finance our operations in Argentina, and/or we may not be able to distribute dividends from Argentina, which could have a material adverse effect on us. These existing controls and restrcitions on the foreign exchange market in Argentina, as well as any additional restrictions that may be imposed in the future, could impair our ability to transfer funds generated by our Argentine operations in U.S. dollars outside Argentina to fund the payment of dividends or other amounts, including payments required to be made by our Argentine subsidiaries to foreign creditors in respect of the guarantee of outstanding obligations denominated in U.S. dollars.
In addition, pursuant to Resolutions AFIP N° 3210/2011 and N° 3212/2011 and Communication “A” 5245, enacted in late 2011, prior to authorizing the sale of foreign currency to make portfolio investments abroad or similar investments, the local bank must obtain prior clearance from an online database run by the Argentina federal tax authority ( Administración Federal de Ingresos Públicos , or “AFIP”). This database must confirm whether an individual or entity has sufficient declared assets or funds to make the purchase of foreign currency. In the event that such declared assets or funds are not sufficient, the bank may not sell foreign currency to such individual or entity. However, the regulations fail to explain how this calculation is carried out. This requirement may affect the ability of our Argentine subsidiaries to make or manage their foreign currency investments or to transfer funds abroad. Our Argentine subsidiaries represented 28.9% of our revenues for 2011 and 27.2% of our revenues for 2012. See also “Item 10. Additional Information—D. Exchange Controls—Foreign Exchange Controls—Argentina” and “Item 3. Key Information—A. Selected Financial Data—Exchange Rates—Argentina.”
We may experience significant adverse effects from delays or restrictions on our ability to receive imported products imports.
The National Industry Ministry recently issued several resolutions implementing various governmental measures to restrict imports, including the application of non-tariff barriers to imports, such as non-automatic licenses (which are not subject to an obligation of being granted) introducing the obligation to file import products certificates.
Pursuant to General Resolution 3252, the Administración Federal de Ingresos Públicos (AFIP) implemented (effective from February 1, 2012) a system whereby, prior to issuing purchase orders (or any similar document), importers must complete a Declaración Jurada Anticipada de Importación (“Advanced Sworn Import Affidavit”), so that information is available in a registry of imports in order to comply with import requirements for companies and foreign trade operators. As a result of these and other measures, certain sectors have experienced difficulties or delays in importing products into Argentina. Such restrictions or delays could have a material adverse effect on the domestic Argentine market, production, consumption levels and the Argentine economy.
 
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Risks Related to Brazil
Brazilian economic and political conditions and perceptions of these conditions in international markets have a direct impact on our business and our access to international capital and debt markets and could have a material adverse effect on us.
In the years ended December 31, 2012 and 2011, our operations in Brazil represented 22.9% and 20.5% of our consolidated revenues from ordinary activities for such periods, respectively. These percentages, however, will increase in future periods when our Prezunic operations are fully integrated. Accordingly, our financial condition and results of operations are dependent on economic conditions in Brazil. The Brazilian economy has experienced significant volatility in recent decades, characterized by periods of low or negative growth, high and variable levels of inflation and currency devaluation. Brazil’s gross domestic product, in real terms, grew by 6.1% in 2007, 5.2% in 2008, decreased 0.3% in 2009, grew 7.5% in 2010 and 2.9% in 2011, according to the Central Bank of Brazil. The Brazilian central bank currently estimates 2012 gross domestic product expansion of approximately 1.0%. We cannot assure you that GDP will increase or remain stable in the future. Future developments in the Brazilian economy may affect Brazil’s growth rates and, consequently, the consumption of our products. As a result, these developments could have a material adverse effect on us.
Historically, Brazil’s political situation has influenced the performance of the Brazilian economy, and political crises have affected the confidence of investors and the general public, which resulted in economic deceleration and heightened volatility in the securities issued abroad by Brazilian companies. Future developments in policies of the Brazilian government and/or the uncertainty of whether and when such policies and regulations may be implemented, all of which are beyond our control, could have a material adverse effect on us.
Changes in Brazilian tax laws may increase our tax burden.
The Brazilian government frequently implements changes to tax regimes that may affect us and our customers. These changes include changes in prevailing tax rates and, occasionally, enactment of temporary taxes, the proceeds of which are earmarked for designated governmental purposes. Some of these changes may result in increases in our tax payments, which could adversely affect industry profitability and increase the prices of our products, restrict our ability to do business in our existing and target markets and have a material adverse effect on us. We cannot assure you that we will be able to maintain our projected cash flow and profitability following any increases in Brazilian taxes applicable to us.
The Brazilian government has exercised, and continues to exercise, significant influence over the Brazilian economy.
The Brazilian government frequently intervenes in the Brazilian economy and occasionally makes significant changes in policies and regulations. The Brazilian government’s actions to control inflation and other policies and regulations have often involved, among other measures, increases in interest rates, changes in tax policies, price controls, currency devaluations, capital controls and limits on export and imports. We may be materially and adversely affected by changes in policies or regulations involving or affecting factors such as:
 
 	•	 	interest rates;	
 
 	•	 	monetary policy;	
 
 	•	 	exchange controls and restrictions on remittances abroad;	
 
 	•	 	currency fluctuations;	
 
 	•	 	inflation;	
 
 	•	 	liquidity of domestic capital and financial markets;	
 
 	•	 	tax policy; and	
 
 	•	 	other political, social and economic policies or developments in or affecting Brazil.	
 
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Uncertainty over whether the Brazilian government will implement changes in policies or regulations affecting these or other factors in the future may contribute to economic uncertainty in Brazil. As a result, these uncertainties and other future developments in the Brazilian economy may have a material adverse effect on us.
Inflation, and the Brazilian government’s measures to combat inflation, may generate economic uncertainty in Brazil.
Brazil has historically experienced high rates of inflation. In the recent past, inflation, as well as government efforts to combat inflation, have had significant negative effects on the Brazilian economy and contributed to heightened volatility in the Brazilian securities market. The Brazilian government’s measures to control inflation have often included maintaining a tight monetary policy with high interest rates, thereby restricting the availability of credit and reducing economic growth. As a result, interest rates have fluctuated significantly. The Special System for Settlement and Custody ( Sistema Especial de Liquidação e Custódia , or “SELIC”) interest rate in Brazil at December 31 was 8.75% in 2009, 10.75% in 2010, 11.0% in 2011 and 7.25% in 2012, as determined by the Central Bank of Brazil’s Monetary Policy Committee ( Comitê de Política Monetária do Banco Central ).
Brazilian government actions, including interest rate changes, intervention in the foreign exchange market, fiscal policy expansion and actions to adjust or fix the value of the Real, may trigger increases in inflation. If Brazil experiences substantial inflation in the future, the consequences may include greater economic uncertainty and increased costs for us, which may have a material adverse effect on us.
Furthermore, we currently owe an aggregate amount of R$250 million in connection with our acquisition of Bretas that is indexed to inflation in Brazil. In addition, we also owe an aggregate amount of R$215 million in connection with our acquisition of Prezunic that is indexed to inflation in Brazil. If our cash generation in local currency does not grow in line with inflation, our capacity to pay for these obligations may be negatively affected.
Exchange rate instability may adversely affect the Brazilian economy and us.
The Brazilian currency has historically suffered frequent fluctuations. In the past, the Brazilian government has implemented various economic plans and adopted a number of exchange rate policies, including sudden devaluations, periodic mini-devaluations (during which the frequency of adjustments has ranged from daily to monthly), floating exchange rate systems, exchange controls and dual exchange rate markets. There have often been significant fluctuations in the exchange rate between the Brazilian currency, the U.S. dollar, the euro and other currencies. However, in the last four years, the Real depreciated (against the U.S. dollar) by 15.26%, from R$1.77 per U.S. dollar at December 31, 2007 to R$2.05 per U.S. dollar at December 31, 2012, except in 2008 when it reached R$2.34 per U.S. dollar. This volatility may affect our consolidated financial statements, due to the growing importance of our Brazilian operations in our business portfolio, which could have a material adverse effect on us. See “Item 10. Additional Information—D. Exchange Controls—Foreign Exchange Controls—Brazil” and “Item 3. Key Information—A. Selected Financial Data—Exchange Rates—Brazil.”
Our business in Brazil is subject to governmental regulation.
Our Brazilian operations are subject to a variety of national, state, and local laws and regulations, including environmental, agricultural, health and safety and labor laws. We invest financial and managerial resources to comply with these laws and related permit requirements. Our failure to do so could subject us to fines or penalties, enforcement actions, claims for personal injury or property damages, or obligations to investigate and/or remediate damage or injury. Moreover, if applicable laws and regulations, or the interpretation or enforcement thereof, become more stringent in the future, our capital or operating costs could increase beyond what we currently anticipate, and the process of obtaining or renewing licenses for our activities could be hindered or even opposed by the competent authorities.
 
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Risks Related to Peru
Economic, social and political developments in Peru, including political instability, inflation and unemployment, could have a material adverse effect on us.
During 2012, operations in Peru generated revenues from ordinary activities representing 8.0% of our consolidated revenues from ordinary activities. Our results of operations and financial condition may be affected by changes in economic and other policies of the Peruvian government, which has exercised and continues to exercise substantial influence over many aspects of the private sector, and by other economic, social and political developments in Peru, including devaluation, currency exchange controls and economic growth. Previous Peruvian governments have imposed controls on prices, exchange rates, local and foreign investment and international trade, restricted the ability of companies to dismiss employees, expropriated private sector assets and prohibited the remittance of profits to foreign investors.
In the past, Peru has suffered through periods of high inflation, which materially undermined the Peruvian economy and the government’s ability to create conditions that would support economic growth. A return to a high inflation environment would also undermine Peru’s foreign competitiveness, with negative effects on the level of economic activity and employment and on us.
In addition, President Humala’s political party does not have a majority of the congressional seats which may potentially lead to a gridlock in the Peruvian Congress and create further political uncertainty.
A devaluation of the Peru’s currency or unexpected changes in exchange controls could have a material adverse effect on us.
The Peruvian currency has historically experienced a significant number of devaluations and, as a result, the Peruvian government has adopted and operated under various exchange rate control practices and determination policies, ranging from strict control to market determination of exchange rates. The Nuevo Sol depreciated against the U.S. dollar by 4.8% in 2008, appreciated against the U.S. dollar by 8.0% in 2009, appreciated against the U.S. dollar by 2.8% in 2010, appreciated against the U.S. dollar by 4.1% in 2011 and appreciated against the U.S. dollar by 5.72% in 2012. As the Peruvian economy is partially dollarized, devaluation of the Nuevo Sol against the U.S. dollar could have a negative impact on the economy. Therefore, any significant devaluation of the Nuevo Sol against the U.S. dollar could have a material adverse effect on us.
Risks Related to Colombia
We are highly dependent on economic and political conditions in Colombia in connection with our supermarket and retail operations in Colombia.
As a result of our acquisition of Carrefour’s supermarket operation in Colombia, the Colombian market has become a significant part of our supermarket business and related results of operations. Colombia has suffered periods of significant economic and political instability in the past.
Our revenues earned from our operations in Colombia depend to a significant extent on macroeconomic and political conditions in Colombia. Decreases in the growth rate, periods of negative growth, changes in law, increases in inflation, changes in regulation or policy, or future judicial rulings and interpretations of policies involving exchange controls and other matters, such as (but not limited to) currency depreciation, interest rates, inflation, taxation, banking laws and regulations and other political or economic developments, in or affecting Colombia may affect the overall business environment and could, in turn, impact our financial condition and results of operations.
Colombia’s fiscal deficit and growing public debt could adversely affect the Colombian economy. The Colombian fiscal deficit was 0.1% of GDP in 2008, 2.7% of GDP in 2009, 3.2% of GDP in 2010 and 2.0% of GDP in 2011.
Despite the recovery of Colombia’s economy over the past several years, we cannot assure you that such growth and relative stability will be sustained. If the condition of the Colombian economy were to deteriorate, we would likely be adversely affected.
The Colombian government frequently intervenes in Colombia’s economy and from time to time makes significant changes in monetary, fiscal and regulatory policy. Our business and results of operations and financial
 
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condition may be adversely affected by changes in government or fiscal policies, and other political, diplomatic, social and economic policies that may affect Colombia. We cannot predict what policies will be adopted by the Colombian government and whether those policies would have a negative impact on the Colombian economy or our business and financial performance.
The Colombian government and the Colombian Central Bank may seek to implement new policies aimed at controlling further fluctuation of the Colombian peso against the U.S. Dollar and fostering domestic price stability. The Colombian Central Bank may impose certain mandatory deposit requirements in connection with foreign-currency denominated loans obtained by Colombian residents, including us. Although no mandatory deposit requirement is currently in effect, a mandatory deposit requirement was set at 40% in 2008 after the Colombian peso appreciated against foreign currencies. We cannot predict or control future actions by the Colombian Central Bank in respect of such deposit requirements, which may involve the establishment of a different mandatory deposit percentage. The use of such measures by the Colombian Central Bank may be a disincentive for us to obtain loans denominated in a foreign currency. We cannot predict the effects that such policies will have on the Colombian economy. In addition, we cannot assure you that the Colombian peso will not depreciate or appreciate relative to other currencies in the future.
Our assets located in Colombia are subject to various risks associated with emerging market countries, such as Colombia.
Asset ownership in Colombia, as is the case in other emerging market countries, is subject to political, economic and other uncertainties, including expropriation, nationalization, renegotiation or nullification of existing contracts, currency exchange restrictions and international monetary fluctuations. We cannot assure you that our operating results will not be affected by the occurrence of any such events.
Colombian government policies will likely significantly affect the economy and, as a result, our business and operations in Colombia.
The Colombian government has historically exercised substantial influence over the Colombian economy, and its policies are likely to continue to have an important effect on our operations in Colombia. Our business in Colombia could be adversely affected by changes in policy, or future judicial interpretations of such policies, involving exchange controls and other matters such as currency devaluation, inflation, interest rates, taxation, regulations and other political or economic developments in or affecting Colombia.
Although Colombia has maintained stable economic growth since 2003 and an inflation rate below 8% during the last 10 years, in the past, economic growth has been negatively affected by lower foreign direct investment and high inflation rates and the perception of political instability. We cannot assure you that growth achieved in recent years by the Colombian economy will continue in future periods. If the perception of improved overall stability in Colombia deteriorates or if foreign direct investment declines, the Colombian economy may face a downturn, which could negatively affect our results of operations.
Colombia’s economy remains vulnerable to external shocks that could be caused by its major regional trading partners experiencing significant economic difficulties or by more general “contagion” effects, which could have a material adverse effect on Colombia’s economic growth and its ability to service its debt.
Colombia has recently experienced slower growth and other adverse economic and financial effects as a result of the global financial crisis. The Colombian government has indicated that tightening credit conditions in financial markets could have a potential, although limited, negative impact on Colombian economy mainly through lower foreign direct investment flows. A significant decline in the economic growth of any of Colombia’s major trading partners, such as the United States and Venezuela, could have a material adverse impact on Colombia’s balance of trade and adversely affect Colombia’s economic growth. According to the Colombian Ministry of Commerce, the United States is Colombia’s largest export market. In 2010, the United States accounted for 42% of Colombia’s total exports. Accordingly, a new decline in U.S. demand could have a material adverse effect on Colombian exports and Colombia’s economic growth, which could, in turn, likely have detrimental results on our business activities. Colombia’s recent diplomatic crisis with Venezuela, Colombia’s major trading partner of non-traditional products, may adversely affect the levels of Colombian exports to Venezuela.
 
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Colombia has experienced several periods of violence and instability and such violence instability could affect the economy and our operations.
Colombia has experienced several periods of severe criminal violence over the past four decades, primarily due to the activities of guerilla, paramilitary groups and drug cartels. In remote regions of the country, where governmental presence is minimal, these groups have exerted influence over the local population and funded their activities by protecting and rendering services to drug traffickers. In response, the Colombian government has implemented various security measures and has strengthened its military and police forces, including the creation of specialized units. Despite these efforts, drug-related crime and guerrilla and paramilitary activity continue to exist in Colombia. Any possible escalation in the violence associated with these activities may have a negative impact on the Colombian economy in the future. In the context of any political instability, allegations have been made against members of the Colombian government concerning possible ties with paramilitary groups. These allegations may have a negative impact on the Colombian government’s credibility, which could in turn have a negative impact on the Colombian economy or our operations there in the future.
Colombia’s diplomatic relations with Venezuela and Ecuador may affect the Colombian economy and, consequently, our results of operations and financial condition.
Diplomatic relations with Venezuela and Ecuador, two of Colombia’s main trading partners, have from time to time been tense, and have been affected by events surrounding the armed conflict with the Revolutionary Armed Forces of Colombia, or the FARC (Fuerzas Armadas Revolucionarias de Colombia), particularly on Colombia’s borders with Venezuela and Ecuador. Any further deterioration in relations of Colombia with Venezuela and Ecuador may result in the closing of borders, the imposition of trade barriers or a breakdown of diplomatic ties, any of which could have a negative effect on Colombia’s trade balance, economy and national security, which may adversely affect our results of operations.
Natural disasters in Colombia could disrupt our business and affect our results of operations in Colombia.
We are exposed to natural disasters in Colombia, such as earthquakes, volcanic eruptions, floods, tropical storms and hurricanes. In the event of a natural disaster, our disaster recovery plans may prove to be ineffective, which could have a material adverse effect on our ability to conduct our business in Colombia, particularly if such an occurrence affects computer-based data processing, transmission, storage and retrieval systems or destroys customer or other data. In addition, if a significant number of our employees and senior managers were unavailable because of a natural disaster, our ability to conduct our business could be compromised. Natural disasters or similar events could also result in substantial volatility in our results of our Colombian operations for any fiscal quarter or year.
Our Colombian operations are subject to regulation.
The supermarket business in Colombia is mainly regulated by the Colombian Consumer Protection Bureau and the free market. Nevertheless, the Colombian Superintendence of Industry and Commerce (the “ Superintendencia de Industry y Comercio”) acts as the supervisory agency for the enforcement of regulations issued by the Colombian Consumer Protection Bureau. The Colombian Ministry of Industry and Tourism also plays an import role in the industry as it has within its reach ability to take any required measure to ensure the protection of the local market for domestic industry. In the past the ministry has relied on a wide array of measures to achieve this goal which have included the creation of product specific duties or price controls.
Furthermore, all corporations are regulated by the Colombia Superintendence of Corporations (“Superintendencia de Sociedades”). This government body oversees and approves corporate events such as mergers, acquisitions and bankruptcies. All corporations under the scope of this body in Colombia must file annual financial statements therewith.
 
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New or higher taxes resulting from changes in tax laws and regulations in Colombia or the interpretation thereof could adversely affect our results of operations in Colombia.
The enactment of new tax laws and regulations, and uncertainties with respect to the application or interpretation of future tax policies, pose risks to us. In recent years, Colombian tax authorities have imposed additional taxes in a variety of areas, such as taxes on financial transactions and other taxes on net worth, have modified income tax withholding rates and have eliminated certain tax benefits.
The Colombian government could seize or expropriate our assets under certain circumstances.
Pursuant to Article 58 of the Colombian constitution, the Colombian government may exercise its eminent domain powers in respect of our assets in the event such action is required in order to protect the public interest. According to Law 388 of 1997, the eminent domain power may be exercised through: (i) an ordinary expropriation proceeding (expropiación ordinaria), (ii) an administrative expropriation proceedings (expropriación administrativa) or (iii) an expropriation for war reasons (expropiación en caso de guerra). In all cases, we would be entitled to a fair indemnification for the expropriated assets as described below. Also, as a general rule, indemnification must be paid before the asset is effectively expropriated.
Under an ordinary expropriation proceeding, the Colombian government may expropriate any asset. Before expropriating, the Colombian government must offer to purchase the asset from its owner at market value as determined by an independent appraiser. If no agreement is reached by the parties after 30 days of such offering, the Colombian government may initiate a judicial procedure. Under the procedure, the relevant court would decide on the validity of the expropriation and the amount of the indemnification.
An administrative expropriation proceedings may occur when the factors supporting the expropriation represent an imminent risk affecting public interest. Before conducting an administrative expropriation, the Colombian government must offer to purchase the asset from its owner at market value as determined by an independent appraiser. If no agreement is reached by the parties after 30 days of such offering, the Colombian government may expropriate the asset directly (i.e., without having to conduct a judicial proceeding) and establish the indemnification amount based on the asset’s market value. After the expropriation, the parties may challenge the validity of the expropriation and the amount of the indemnification granted through a judicial process.
In an expropriation by reason of war, the Colombian government may expropriate personal property without the need to pay any indemnification prior to the expropriation and temporarily occupy real property for as long as national security matters require. Possession of real property expropriated must be returned to its original owner once the necessity for expropriation by reason of war ceases to exist.
Exchange rate fluctuations could adversely affect the Colombian economy, and therefore, us.
The Colombian peso is a highly volatile currency that has been subject to significant devaluations and appreciations in the past and may be subject to similar fluctuations in the future. A significant devaluation or appreciation of the Colombian peso in relation to the U.S. dollar could adversely affect the Colombian economy and, as a result, our operating results.
High rates of inflation may have an adverse impact us.
Rates of inflation in Colombia have been historically high, and we cannot assure you that inflation will not return to high levels. Inflation rates were 2.0%, 3.2% and 3.7% for 2009, 2010 and 2011 and 2.44% for 2012. Inflationary pressures may, among other things, reduce consumers’ purchasing power and we cannot assure you that measures taken by the Colombian government and Colombian Central Bank will suffice to curb inflation. A return to high inflation in Colombia may harm our results of operations.
 
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We may not achieve the expected strategic objectives and financial benefits from the acquisition of Carrefour’s supermarket operations in Colombia.
We expect to realize strategic and financial benefits as a result of the completed acquisition of Carrefour’s supermarket operations in Colombia, including potential synergies. Our ability to realize these benefits, however, is subject to risks and uncertainties, including, among others:
 
 	•	 	we may not be successful in retaining senior management;	
 
 	•	 	we may be unable to anticipate or manage risks that are unique to the Colombian businesses; and	
 
 	•	 	we may be unable to compete successfully in the Colombian market as a result of our limited familiarity with Colombia in general and its customer demographics in particular.	
Our growth strategy includes expanding the supermarket business in Colombia, both in existing markets and by opening stores in new markets. Our future growth is dependent, in part, on the ability to build, buy or lease new stores. Local land use, local zoning issues, environmental and other regulations applicable to the types of stores we desire to construct may impact our ability to find suitable locations, and increase the cost of building, buying or leasing stores.
Our failure to manage these risks, or other risks related to the announced acquisition of the Colombian businesses that are not currently known to us, could prevent us from realizing the expected benefits of acquiring Carrefour’s supermarket operations in Colombia.
We have limited knowledge of the liabilities of the Acquired Companies.
As part of our acquisition of the Acquired Companies, we have carried out, and are in the process of carrying out, legal and accounting due diligence on the Acquired Companies. The purchase agreement that we have entered into with Carrefour allows us to recover only for certain breaches of representations and warranties, and we may not be able to recover from Carrefour for liabilities that we may discover following the closing of the acquisition. We may incur significant losses in connection with liabilities of the Acquired Companies, which may have a material adverse effect on us and on our ability to meet our obligations under the notes.
The operating information related to the Acquired Companies in this annual report may be imprecise and incomplete.
We describe in this annual report for informational purposes only certain operating information of the Acquired Companies, which we have obtained from Carrefour and other publicly-available sources and which represents our best understanding and our management’s expectations regarding this information. However, not all of this information has been independently verified. Therefore, you should not rely on this information as an indication of the Acquired Companies’ businesses and results of operations or of our future business and results of operations once the acquisition is completed. The operating information of the Acquired Companies included in this annual report may significantly differ from the actual operating information of the Acquired Companies.
Risks Related to our Shares and the ADSs
Our ADSs have a limited trading history.
Our ADSs began to trade on the New York Stock Exchange on June 22 nd , 2012, and as a result have a limited trading history. We cannot predict the extent to which investor interest in our company will maintain an active trading market on the NYSE, or how liquid that market will be in the future. The market price of our ADSs may be volatile and may be influenced by many factors, some of which are beyond our control, including:
 
 	•	 	the failure of financial analysts to cover the ADSs or our common stock or changes in financial estimates by analysts;	
 
 	•	 	actual or anticipated variations in our operating results;	
 
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 	•	 	changes in financial estimates by financial analysts, or any failure by us to meet or exceed any such estimates, or changes in the recommendations of any financial analysts that elect to follow the ADSs or shares of common stock or the shares of common stock of our competitors;	
 
 	•	 	announcements by us or our competitors of significant contracts or acquisitions;	
 
 	•	 	future sales of the ADSs and shares of common stock; and	
 
 	•	 	investor perceptions of us and the industries in which we operate.	
In addition, the stock market in general has experienced substantial price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of particular companies affected. These broad market and industry factors may materially harm the market price of the ADSs and shares of common stock, regardless of our operating performance. In the past, following periods of volatility in the market price of certain companies’ securities, securities class-action litigation has been instituted against these companies. Such litigation, if instituted against us, could have a material adverse effect on us.
There may be a lack of liquidity and market for our shares of common stock and the ADSs in Chile.
Our shares of common stock are listed and traded on the Santiago Stock Exchange, the Chile Electronic Stock Exchange and the Valparaíso Stock Exchange, which we collectively refer to as the “Chilean Stock Exchanges.” Although ADS holders are entitled to withdraw shares of common stock underlying the ADSs from The Bank of New York Mellon (the “Depositary”) at any time, the Chilean Stock Exchanges are substantially smaller, less liquid and more volatile than major securities markets in the United States. Although our shares of common stock are traded on the Chilean Stock Exchanges, there can be no assurance that a liquid trading market for our shares of common stock will continue to exist. As of the date of this annual report, our non-controlling shareholders hold approximately 39% of our outstanding shares of common stock. A limited trading market in general and our concentrated ownership in particular may impair the ability of an ADS holder to sell in the Chilean market any shares of common stock obtained upon withdrawal of such shares from the ADS facility in the amount and at the price and time such holder desires, and could increase volatility of the price of the ADSs.
Holders of ADSs may find it difficult to exercise voting rights at our shareholders’ meetings.
Holders of ADSs will not be direct shareholders of our company and will be unable to enforce directly the rights of shareholders under our estatutos (“Bylaws”) and the laws of Chile. Holders of ADSs may exercise voting rights with respect to the shares of common stock represented by ADSs only in accordance with the deposit agreement governing the ADSs. Holders of ADSs will face practical limitations in exercising their voting rights because of the additional steps involved in our communications with ADS holders. Holders of our shares of common stock will be able to exercise their voting rights by attending a shareholders’ meeting in person or voting by proxy. By contrast, holders of ADSs will receive notice of a shareholders’ meeting by mail from the Depositary following our notice to the Depositary requesting the Depositary to do so. To exercise their voting rights, holders of ADSs must instruct the Depositary on a timely basis on how they wish to vote. This voting process necessarily will take longer for holders of ADSs than for holders of our common stock. If the Depositary fails to receive timely voting instructions for all or part of the ADSs, the Depositary will assume that the holders of those ADSs are instructing it to give a discretionary proxy to a person designated by us to vote with respect to their ADSs, except in limited circumstances.
Holders of ADSs also may not receive the voting materials in time to instruct the Depositary to vote the common stock underlying their ADSs. In addition, the Depositary and its agents are not responsible for failing to carry out voting instructions of the holders of ADSs or for the manner of carrying out those voting instructions. Accordingly, holders of ADSs may not be able to exercise voting rights, and they will have little, if any, recourse if the shares of common stock underlying their ADSs are not voted as requested.
The significant share ownership of our controlling shareholders may have a material adverse effect on the future market price of the ADSs and our shares of common stock.
We are currently controlled by our founder, Mr. Horst Paulmann, and his family, who together have a 60.8% ownership stake in us, through Inversiones Quinchamali Ltda., Inversiones Latadía Ltda. and Inversiones Tano Ltda, as of the date of this annual report. A disposition by our controlling shareholder of a significant number of our shares, or the perception that such a disposition might occur, could materially and adversely affect the trading price of our shares of common stock on the Santiago Stock Exchange as well as the market price of the ADSs on the New York Stock Exchange.
 
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Our controlling shareholders are able to exercise significant control over our company, and also own a significant minority interest in many of our international subsidiaries which could result in conflicts of interest.
Our controlling shareholders are in a position to direct our management and to determine the result of substantially all matters to be decided by majority vote of our shareholders, including the election of a majority of the members of our board of directors, determining the amount of dividends distributed by us (subject to the legally mandated minimum of 30% of net income), adopting certain amendments to our Bylaws, including the issuance of new shares, enforcing or waiving our rights under existing agreements, leases and contractual arrangements and entering into agreements with entities affiliated with us. As a result, circumstances may occur in which our controlling shareholders’ interests could be in conflict with your interests as holder of the ADSs. Our controlling shareholders may have interests in pursuing or preventing acquisitions, divestitures or other transactions where, in their judgment, such action would be in our best interests, even though such action may not be in the best interests of our minority shareholders.
Our status as a foreign private issuer exempts us from certain of the corporate governance standards of the NYSE, limiting the protections afforded to investors.
We are a “foreign private issuer” within the meaning of the NYSE corporate governance standards. Under the NYSE listing rules, a foreign private issuer may elect to comply with the practice of its home country and not to comply with certain NYSE corporate governance requirements, including the requirements that (1) a majority of the board of directors consist of independent directors, (2) a nominating and corporate governance committee be established that is composed entirely of independent directors and has a written charter addressing the committee’s purpose and responsibilities, (3) a compensation committee be established that is composed entirely of independent directors and has a written charter addressing the committee’s purpose and responsibilities, and (4) an annual performance evaluation of the nominating and corporate governance and compensation committees be undertaken. Therefore, you will not have the same protections afforded to shareholders of companies that are subject to all New NYSE corporate governance requirements.
For example, in reliance on the foreign private issuer exemption to the NYSE listing rules a majority of our board of directors may not consist of independent directors; our board’s approach may therefore be different from that of a board with a majority of independent directors, and as a result, the management oversight of our Company may be more limited than if we were subject to the NYSE listing rules.
U.S. securities laws do not require us to disclose as much information to investors as a U.S. issuer is required to disclose, and you may receive less information about us than you might otherwise receive from a comparable U.S. company.
The corporate disclosure requirements applicable to us may not be equivalent to the requirements applicable to a U.S. company and, as a result, you may receive less information about us than you might otherwise receive in connection with a comparable U.S. company. We are subject to the periodic reporting requirements of the Exchange Act of 1934, as amended (the “Exchange Act”) that apply to “foreign private issuers.” The periodic disclosure required of foreign private issuers under the Exchange Act is more limited than the periodic disclosure required of U.S. issuers. For example, we will be required only to file an annual report on Form 20-F, but we are not required to file any quarterly reports. A U.S. registrant must file an annual report on Form 10-K and three quarterly reports on Form 10-Q. In addition, we will be required to file current reports on Form 6-K, but the information that we must disclose in those reports is governed primarily by Chilean law disclosure requirements and may differ from Form 8-K’s current reporting requirements imposed on a U.S. issuer. Finally, we are not subject to the proxy requirements of Section 14 of the Exchange Act and our officers, directors and principal shareholders are not subject to the short swing insider trading reporting and recovery requirements under Section 16 of the Exchange Act.
Chilean law provides for fewer and less well-defined shareholders’ rights.
Our corporate affairs are governed by our Bylaws (which serve the combined function of the articles of incorporation and the bylaws of a U.S. corporation), and the laws of Chile. Under such laws and our Bylaws, our shareholders may have fewer or less well-defined rights than they might have as shareholders of a corporation incorporated in a U.S. jurisdiction. For example, our shareholders would not be entitled to redemption rights in the event of a merger or other business combination undertaken by us. Persons or entities who seek to acquire control of
 
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a publicly-held Chilean corporation through a tender offer ( oferta pública de adquisición de acciones ), must make an offer to any and all shareholders of such company. See “Item 10. Additional Information—B. Memorandum and Articles of Association—Right of dissenting shareholders to tender their shares” and “—Dividend and liquidation rights.”
Our recent transformation as a U.S. public company may increase our costs and disrupt the regular operations of our business.
Our recent initial public offering has had a significant transformative effect on us. We have incurred and expect to incur additional legal, accounting, reporting and other expenses as a result of having an ADS program. We will also incur costs which we have not incurred previously, including, but not limited to, increased costs and expenses for directors’ fees, increased directors and officers insurance, increased investor relations, and various other incremental costs related to having an ADS program traded in the United States.
We also anticipate that we will incur costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002, as amended, as well as rules implemented by the Securities and Exchange Commission (the “SEC”) and NYSE. We expect these rules and regulations to increase our legal and financial compliance costs and make some management and corporate governance activities more time-consuming and costly. These rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. This could have a material adverse impact on our ability to recruit and bring on a qualified independent board. We cannot predict or estimate the amount of additional costs we may incur as a result of these requirements or the timing of such costs.
Chile imposes controls on foreign investment and repatriation of investments that may affect your investment in, and earnings from, the ADSs, and may impose additional controls or restrictions in the future.
Equity investments into Chile from abroad are subject to the requirement that investors provide Chile’s Central Bank with information related to such equity investments and conduct any operations in connection with the repatriation of investments and earnings on them within Chile’s Mercado Cambiario Formal, or Formal Exchange Market. See “Item 10. Additional Information—D. Exchange Controls—Foreign Exchange Controls—Chile.”
Holders of ADSs are entitled to receive dividends on the underlying shares to the same extent as the holders of shares. Dividends received by holders of ADSs will be converted into U.S. dollars and distributed net of foreign currency exchange fees and expenses and fees of the Depositary and will be subject to Chilean withholding tax, currently imposed at a rate of 35% (subject to credits in certain cases as described under “Item 10. Additional Information—E. Taxation—General—Material United States Federal Income Tax Considerations”). If for any reason, including changes in Chilean laws or regulations, the Depositary were unable to convert Chilean pesos to U.S. dollars, investors may receive dividends and other distributions, if any, in Chilean pesos.
Additional Chilean restrictions applicable to the holders of the ADSs and other foreign investors in Chile could be imposed in the future. The Central Bank of Chile has the authority to impose at any time certain controls, restrictions or obligations on foreign investors in Chile. Such restrictions could include, but are not limited to, the requirement to obtain the Central Bank of Chile’s prior approval for the repatriation of the proceeds from the disposition of shares underlying the ADSs or the payment of dividends. We cannot advise you as to the duration or impact of any such restrictions if imposed.
Currency devaluations, foreign exchange fluctuations and foreign currency conversion costs may have a material adverse effect on the U.S. dollar value of any cash distributions made to ADS holders in respect of ADSs.
If the value of the Chilean peso falls relative to the U.S. dollar, the value of the ADSs and any distributions to be received from the Depositary for the ADSs could be materially and adversely affected. Cash distributions made in respect of the ADSs are received by the Depositary in Chilean pesos, are then converted by the Depositary into U.S. dollars at the then prevailing exchange rate and distributed to the holders of ADSs. In addition, the Depositary will incur foreign currency conversion costs (to be borne by the holders of the ADSs) in connection with the foreign currency conversion and subsequent distribution of dividends or other payments with respect to ADSs.
 
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ADS holders may not be able to effect service of process on, or enforce judgments or bring original actions against, us, our directors or our executive officers, which may limit the ability of holders of ADSs to seek relief against us.
We are a Chilean corporation. None of our directors are residents of the United States and most of our executive officers reside outside the United States. In addition, a substantial portion of our assets and the assets of our directors and executive officers are located outside the United States. As a result, it may be difficult for ADS holders to effect service of process outside Chile upon us or our directors and executive officers or to bring an action against us or such persons in the United States or Chile to enforce liabilities based on U.S. federal securities laws. It may also be difficult for ADS holders to enforce in the United States or in Chilean courts money judgments obtained in United States courts against us or our directors and executive officers based on civil liability provisions of the U.S. federal securities laws. If a U.S. court grants a final money judgment in an action based on the civil liability provisions of the federal securities laws of the United States, enforceability of this money judgment in Chile will be subject to the obtaining of the relevant “exequatur” (i.e., recognition and enforcement of the foreign judgment) according to Chilean civil procedure law currently in force, and consequently, subject to the satisfaction of certain factors. The most important of these factors are the existence of reciprocity, the absence of a conflicting judgment by a Chilean court relating to the same parties and arising from the same facts and circumstances and the Chilean courts’ determination that the U.S. courts had jurisdiction, that process was appropriately served on the defendant and that enforcement would not violate Chilean public policy. Failure to satisfy any of such requirements may result in non-enforcement of your rights.
Preemptive rights may be unavailable to ADS holders or U.S. holders of shares in certain circumstances and, as a result, U.S. owners of shares or ADSs would be subject to potential dilution.
The Ley sobre Sociedades Anónimas No. 18,046 and the Reglamento de Sociedades Anónimas , which we refer to in this document collectively as the “Chilean Corporations Law,” require us, whenever we issue new shares for cash and sell treasury shares, to grant preemptive rights to all of our shareholders (including shares represented by ADSs), giving them the right to purchase a sufficient number of shares to maintain their existing ownership percentage. It is possible that, in connection with any future issuances of shares, we may not be able to offer shares to U.S. holders of shares or ADSs pursuant to preemptive rights granted to our shareholders and, as a result such U.S. holders of shares or ADSs would be subject to potential dilution.
We will not be able to offer shares to ADS holders or U.S. holders of shares pursuant to preemptive rights that we grant to our shareholders in connection with any future issuance of shares or sale of treasury shares unless a registration statement under the U.S. Securities Act of 1933, as amended (the “Securities Act”), is effective with respect to such rights and shares, or an exemption from the registration requirements of the Securities Act is available.
Such a registration statement may not be filed and an exemption from the registration requirements of the Securities Act may not be available. If owners of ADSs are unable to exercise preemptive rights because a registration statement has not been filed, the Depositary will attempt to sell such owners’ preemptive rights and distribute the net proceeds of the sale (net of the depositary’s fees and expenses) to the holders of the ADSs, provided that a secondary market for such rights exists and a premium can be recognized over the cost of any such sale. It is possible that a secondary market in preemptive rights may not develop in connection with any future issuance of shares or, if such a market does develop, a premium may not be able to be realized on their sale.
If preemptive rights cannot be sold, they will expire, and holders of ADSs will not realize any value from the grant of such preemptive rights. In either case, the equity interest in us of the holders of ADSs would be diluted proportionately.
ADS holders may not be able to exercise redemption rights that are granted by the Chilean corporations Law to registered shareholders of publicly traded Chilean corporations.
Under Ley sobre Sociedades Anónimas No. 18,046 , as amended (the “Chilean Corporations Law”), if any of the following resolutions is adopted by our shareholders at any extraordinary shareholders meeting, dissenting shareholders have the right of redemption and can require us to repurchase their shares, subject to the fulfillment of certain terms and conditions. A dissenting shareholder is a shareholder who either attends the shareholders meeting and votes against a resolution which results in a redemption right or, if absent from the shareholders meeting, a shareholder who notifies the company in writing within 30 days of the shareholders meeting of his opposition to the resolution and that he is exercising his redemption right.
 
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The resolutions that result in a shareholder’s redemption right are the following:
 
 	•	 	our transformation into a different type of legal entity;	
 
 	•	 	our merger with or into another company;	
 
 	•	 	the disposition of 50% or more of our assets, whether or not that sale includes our liabilities or the proposal or amendment of any business plan involving the transfer of more than 50% of our assets; the sale of 50% or more of the assets of an affiliate which represents at least 20% of the assets of the corporation, as well as any sale of its shares which would result in us ceasing to be in control of such subsidiary;	
 
 	•	 	the granting of security interests or personal guarantees to secure or guarantee third parties’ obligations exceeding 50% of our assets, except with regard to security interests or personal guarantees are granted to secure or guarantee obligations of our subsidiaries;	
 
 	•	 	the creation of preferential rights for a class of shares or an amendment to those already existing, in which case the redemption right only accrues to dissenting shareholders of the class or classes of shares adversely affected;	
 
 	•	 	the amendment of our Bylaws to correct any formal defect in our incorporation, which might cause our Bylaws to be null and void, or any amendment of our Bylaws that grants a shareholder a redemption right;	
 
 	•	 	the approval by our shareholders of our ceasing to be subject to the regulations applicable to publicly held corporations in the event we no longer meet the requirements under Chilean law to qualify as such a corporation; and	
 
 	•	 	any other causes as may be established by Chilean law and our Bylaws (our Bylaws currently do not establish any instances).	
In addition, shareholders of a publicly held corporation have a redemption right if a person acquires two-thirds or more of the outstanding voting stock of the company and does not make a tender offer for the remaining shares within 30 days of that acquisition at a price not lower than the price that would be paid shareholders exercising their redemption rights. However, the right of redemption described in the previous sentence does not apply in the event the company reduces its capital as a result of not having fully subscribed and paid an increase of capital within the statutory term.
Finally, shareholders of a publicly held corporation have the right of redemption within 30 days after the date when the controller acquires more than 95% of the shares of the company. These redemption rights must be exercised within 30 days.
ADS holders own a beneficial interest in shares held by the Depositary and, accordingly, they are not shareholders of the Company. The Depositary will not exercise redemption rights on behalf of ADS holders. Accordingly, in order to ensure a valid exercise of redemption rights, an ADS holder would have to cancel his ADSs and become a registered shareholder of the Company no later than the date which is five Chilean business days before the shareholders’ meeting at which the vote which would give rise to redemption rights is taken, or the applicable record date for redemption rights that arise other than as a result of a shareholder vote. Redemption rights must then be exercised in the manner prescribed in the notice to shareholders that is required to be sent to shareholders of Chilean public companies advising such holders of their right of redemption. If an event occurs that gives rise to redemption rights, ADS holders will have a limited time to cancel their ADSs and to become registered shareholders of the Company prior to the record date for the shareholders meeting or other event giving rise to such redemption rights. If an ADS holder does not become a registered shareholder of the Company prior to such record date he will not be able to exercise the redemption rights available to registered shareholders.
 
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Market volatility may affect our stock price and the value of your investment.
The market price of our common stock may fluctuate significantly in response to a number of factors, most of which we cannot predict or control, including:
 
 	•	 	announcements of new initiatives, commercial relationships, acquisitions or other events by us or our competitors;	
 
 	•	 	failure of any of our initiatives to achieve commercial success;	
 
 	•	 	fluctuations in stock market prices and trading volumes of securities of similar companies;	
 
 	•	 	general market conditions and overall fluctuations in U.S. equity markets;	
 
 	•	 	variations in our operating results, or the operating results of our competitors;	
 
 	•	 	changes in our financial guidance to investors and analysts or our failure to achieve such expectations;	
 
 	•	 	delays in, or our failure to provide, financial guidance;	
 
 	•	 	changes in securities analysts’ estimates of our financial performance or our failure to achieve such estimates;	
 
 	•	 	sales of large blocks of our common stock, including sales by our controlling shareholders;	
 
 	•	 	additions or departures of any of our key personnel;	
 
 	•	 	changes in accounting principles or methodologies;	
 
 	•	 	changing legal or regulatory developments in the United States and other countries, including the companies in which we operate; and	
 
 	•	 	discussion of us or our stock price by the financial press and in online investor communities.	
In addition, the stock market in general has experienced substantial price and volume volatility that is often seemingly unrelated to the operating performance of particular companies. These broad market fluctuations may cause the trading price of our common stock to decline. In the past, securities class action litigation has often been brought against a company after a period of volatility in the market price of its common stock. We may become involved in this type of litigation in the future. Any securities litigation claims brought against us could result in substantial expenses and the diversion of our management’s attention from our business.
Exchange rate fluctuations may affect our stock price.
As our operations are denominated in local currencies (Chilean Peso, Brazilian Real, Peruvian Sol, Argentinian Peso and Colombian Peso), changes in the currency parities may affect our recognition of results. Furthermore, as our stocks are primarily traded at the Santiago Stock Exchange, our stock is traded and listed in Chilean pesos. Therefore, changes in the Chilean Peso versus the U.S. Dollar parity may affect the value of your investment when measured in U.S. Dollars.
 
 Item 4.	Information on the Company	
 
 	 A.	HISTORY AND DEVELOPMENT OF THE COMPANY	
General Information
We are a publicly-held stock corporation ( sociedad anónima abierta ) organized under the laws of Chile and have an indefinite corporate duration. We were incorporated by a public deed dated November 10, 1978. This abstract is recorded on page 13808 No. 7412 of the Registro de Comercio de Santiago (Commercial Registry of Santiago) for the year 1978. Our legal name is “Cencosud S.A.” Our registered office is located at Av. Kennedy 9001, Piso 6, Las Condes, Santiago, Chile and our main telephone number is 56 (2) 959-0000.
 
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History
Our history has been one demonstrating organic growth as well as significant, ongoing acquisitions designed to enhance our footprint in the industries in which we operate and increase our market share and brand recognition.
1960—2001
We trace our origins to the opening in 1960 of our first supermarket, with a selling area of 160 square meters, in Temuco, Chile. In the mid-1970s, we expanded our business by opening the first Jumbo hypermarket in Chile, with a selling space of 7,000 square meters, located on Kennedy Avenue in Santiago.
In 1982, we began our operations in Argentina with the opening of Argentina’s first Jumbo hypermarket which had a selling space of 9,282 square meters. We continued to expand in Argentina with the construction of Unicenter in 1988, Argentina’s largest shopping center which today has a selling space of 91,771 square meters. In 1993, we opened Lomas Center, the first shopping center in the south of the Buenos Aires metropolitan area. In 1994, we opened San Martin Factory (an outlet shopping center). In 1996, we opened Palermo shopping center in Buenos Aires. Between 1997 and 2003, we opened Quilmes Factory (an outlet shopping center), Palmas de Pilar and El Portal de Escobar, all of which are located in Greater Buenos Aires.
In 1993, we expanded our shopping center business in Chile by opening Alto Las Condes, at that time Chile’s most modern shopping center with a selling space of 115,258 square meters. In the same year, we expanded our line of business by opening Easy home improvement stores in Chile and Argentina which offer products required to improve and maintain a home, as well as construction materials and design and decoration products. That year, we opened our first Easy home improvement stores in the Alto Las Condes shopping center in Chile and in the Parque Brown Factory shopping center in Argentina.
2002—2006
In 2002, we continued our expansion in Chile by opening three new Jumbo hypermarkets, four new Easy home improvement stores and the Portal La Reina shopping center. In November 2002, we significantly expanded our presence in the Chilean home improvement sector through the acquisition of Proterra, a small chain of do-it-yourself stores in southern Chile, and converted its seven stores to our Easy home improvement stores. In 2002, we acquired the operations of Home Depot (Argentina).
In 2003, we acquired the supermarket chain Santa Isabel making us the second-largest supermarket operator in Chile in terms of revenues according to our estimations. We also opened two new shopping centers, the Florida Center and Portal La Dehesa, both in Santiago. We also started our credit card business with the incorporation of our Cencosud Administradora de Tarjetas de Crédito S.A. subsidiary, and the launching of the Jumbo Más credit card.
In April 2004, we acquired Las Brisas supermarket chain, which enhanced our geographical coverage in several areas including Valparaíso and Concepción through the addition of 17 new stores. In May 2004, we completed our initial public offering in Chile and were listed on the Santiago Stock Exchange. At the same time, we issued ADSs in the international capital markets in a private offering pursuant to Rule 144A and Regulation S, raising over U.S.$330 million. In November 2004, through the acquisition of the supermarket chain Montecarlo, we consolidated our position as the second-largest supermarket operator in Chile. In November 2004, we also acquired the supermarket chain Disco in Argentina, one of Argentina’s largest supermarket chains, which we believe consolidated our position as the second-largest supermarket operator in that country in terms of revenues. Moreover, in October 2004, we opened a new shopping center in Argentina, Portal de Rosario, which we believe currently is the largest in the Rosario area in terms of revenues.
In March 2005, we entered into the department stores business through the acquisition of Empresas Almacenes Paris S.A., one of Chile’s most important department stores chains and which also operated a travel agency, an insurance broker, Banco Paris and Administradora de Créditos Comerciales ACC S.A. In September 2005, we rebranded our Las Brisas and Montecarlo brands under Santa Isabel brand, in order to consolidate and enhance our supermarket business.
 
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2007—Present
In June 2007, we acquired other two supermarket chains in Chile, Infante which operates in the city of Antofagasta and Economax with a significant presence in Santiago’s downtown, adding in total 16 new stores to our supermarket business. Likewise, we expanded our retail department store business by acquiring the Foster and Eurofashion clothing store chain which sells the popular clothing brands Foster, JJO and Maritimo. In November 2007, we acquired the GBarbosa supermarket and hypermarket chain which operated both formats in the northeast region of Brazil with a total of 46 stores.
In December 2007, we entered into an agreement to acquired GSW S.A., the operator of the Wong chain of supermarkets, hypermarkets and shopping centers in Peru. Pursuant to this agreement the Wong family acquired a percentage of our shares and consequently became one of our main shareholders.
In May 2007, we entered into a joint venture agreement with Casino Guichard-Perrachon S.A. (“Casino”) in order to develop the home improvement store business in Colombia. Pursuant to the joint venture, initially we had a 70% interest in the joint venture and were in charge of the operational administration of Easy Colombia S.A., with Casino owning the remaining 30%. In April 2009, we acquired Casino’s shares in the joint venture, increasing our ownership stake to 100%.
In 2008, we entered the financing business in Argentina, with the launch of the Cencosud credit card and the opening of an insurance brokerage company in Argentina. By the end of 2008, over 200,000 cards had already been issued and around 55,000 policies had been sold in Argentina. In September 2008, we acquired Blaisten, a professional do-it-yourself store in Argentina.
In 2010, we expanded our footprint in the Brazilian market through the acquisition of three supermarket chains. In March 2010, we acquired the four-store Super Familia supermarket chain which we estimate to be the third-largest in the city of Fortaleza. In April 2010, we entered the high-end retail market in Brazil with the acquisition of Perini Comercial do Alimento Ltda., operator of the four-store chain of Perini supermarkets in the city of Salvador. Perini is a well-known brand in Brazil with 46 years in the market and complements our existing operations in Brazil. In October 2010, we acquired what we estimated to be the largest supermarket chain in the Brazilian state of Minas Gerais, Bretas, with 62 stores in three Brazilian states at the time of acquisition: Minas Gerais, Goias and Bahia. With the Bretas acquisition, we consolidated our position as Brazil’s fourth-largest supermarket operator in terms of revenues, as measured by ABRAS.
At the beginning of 2011 we issued U.S.$750 million aggregate principal amount of bonds due 2021 in a 144A/Reg-S offering in the international capital market, with a fixed interest rate of 5.50%. Additionally, in June 2011 we issued a local bond in Chilean pesos, for the amount of Ch$54,000 million aggregate principal amount of bonds due 2031 in the local Chilean market, with a fixed interest rate of 7.40%. This was the first bond issued by a local company, both public and private, in Chilean pesos with a term to maturity of 20 years.
In March 2011, UBS AG London Branch (“UBS”) executed a shareholders agreement to purchase from certain investors a 38.636% stake in Cencosud’s subsidiary Jumbo Retail Argentina, which operates our supermarkets in Argentina, for U.S.$442 million.
In August 2011, Cencosud Brasil Comercial Ltda. (“Cencosud Brasil Comercial”), Irmãos Bretas, Filhos e Cia. Ltda. (“Bretas”), Mercantil Rodrigues Comercial, Ltda. (“Mercantil Rodrigues”), Perini Comercial de Alimentos Ltda. (“Perini”) and Cencosud Brasil entered into an agreement with Banco Bradesco pursuant to which Banco Bradesco agreed to render financial services in Cencosud stores in Brazil, particularly regarding the exclusive issuance and operation of the Cencosud Card credit card ( Cartão Cencosud ), as well as the offer, within Cencosud stores in Brazil, of consumer loans, purchase financing and insurance products. Prezunic is currently not included in this venture.
In 2011, we continued expanding into the Brazilian market through the acquisition of Cardoso. Cardoso is a three-store supermarket chain in the state of Bahia, with net sales of approximately R$60 million (U.S.$35.9 million) in 2011. Cencosud paid the purchase price of U.S.$11.3 million or Ch$5,429 million in three installments, 60% on the closing of the transaction, 20% on the 6-month anniversary of the closing date and the remaining 20% on the first year anniversary of the closing date. We have converted the acquired stores to the GBarbosa format and are now operating under this brand.
 
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In December 2011, we acquired 85.58% of the capital stock of in Johnson’s S.A. for an aggregate purchase price of Ch$32,606 million. Johnson is a department store with 39 stores throughout Chile using the Johnson brand and 13 stores using the FES brand totaling 117,569 square meters of selling space. In 2011, Johnson registered sales of Ch$118,447 million from its retail operations. Johnson’s retail financing arm has been migrated to our Cencosud format and all clients have been brought on to Tarjeta Cencosud. Clients of former Johnson’s retail financing arm are now offered the same services as all other Cencosud clients. With the acquisition of Johnson we are able to target low and middle income market segments, in a similar fashion as with the acquisition of Santa Isabel in the supermarkets division, as Johnson stores are smaller, targeted to low and mid income consumers and better located to target that market segment.
On January 2, 2012, we acquired 100% of the capital stock of Prezunic. The aggregate purchase price of the operation was R$875 million (or approximately Ch$242,690 million), payable as follows: R$580 million on the closing date of the transaction (January 2, 2012), with the balance to be paid as follows: R$80 million, R$85 million, R$80 million and R$50 million, on the first, second, third and fourth anniversary of the closing date, respectively. We estimate that Prezunic is the third-largest supermarket chain in Rio de Janeiro with 31 stores and net sales of approximately R$2.2 billion in 2011.
On June 13, 2012, we opened Costanera Center shopping mall, the largest shopping center in Chile and will include an office tower that we believe will be the tallest building in South America, a landmark development for the city of Santiago. On June 29, 2012, we repurchased 38.636% of the capital stock of Jumbo Retail Argentina from UBS. On July 3, 2012, we completed our SEC-registered initial public equity offering of 105,000,000 common shares in the form of common shares and ADSs listed on the New York Stock Exchange.
On November 30, 2012, we took over what formerly represented the operations of Carrefour in the Colombian market. With this move, we believe to have become the second largest player in Colombia’s supermarket industry. Through this acquisition, we acquired over 98 stores in different cities and regions of Colombia. In December 2012, we issued U.S.$1,200 million aggregate principal amount of bonds due 2023 in a 144A/Reg-S offering in the international capital markets, with a fixed interest rate of 4.875%.
In February 2013, we announced a preemptive rights offering in the Chilean market pursuant to a capital increase for the amount of U.S.$1,600 million. Proceeds of this offering were used for the prepayment of the outstanding bridge loan facility we incurred to finance our acquisition of Carrefour’s operations in Colombia in the amount of US$1,500 million, with the remainder to repay other short term liabilities, including debt facilities related to our Brazilian operations. This offering was completed on March 14, 2013, raising Ch$770,647 million (98.9% subscription). The remainder of the offered shares were successfully auctioned at the Santiago stock exchange.
Acquisition of Carrefour’s Operations in Colombia
On November 30, 2012, we completed the acquisition of the former operation of Carrefour Colombia for a total purchase price equal to €2 billion subject to adjustments pursuant to the stock purchase agreement related thereto. The Acquired Companies operate supermarkets under the “Carrefour” and “Maxi” brand names in Colombia.
The acquisition included the purchase of 92 total stores, including 72 hypermarket stores, 16 convenience stores, and four cash and carry stores and gas stations. The stores acquired are located in nine of the ten largest cities in Colombia. Colombia is the second most populous country in South America, with solid macroeconomic indicators and what we believe to be good growth prospects. We believe this transaction has placed Cencosud as the second largest supermarket operator in Colombia in terms of sales and consolidates the existing presence of the Company’s Easy stores in Colombia We expect to migrate all the acquired stores to a Cencosud format by the end of 2013.
To finance the acquisition of Carrefour’s Colombian operations, on October 17, 2012, the Company entered into a bridge loan agreement with a syndicate of banks in the amount of U.S.$2,500 million (the “Bridge Loan Agreement”). The Bridge Loan Agreement has a maturity date of April 15, 2014 and bears an interest rate of LIBOR plus a margin of 1.50% for the first sixth months, 1.75% for the following three months, 2.20% for the following three months, 2.25% for the following three months, and 2.75% thereafter. The full amount under the Bridge Loan Agreement was disbursed on October 17, 2012 and used by us to fund the purchase of Carrefour’s Colombian operations in escrow. On December 6, 2012, the Company issued U.S.$1,200 million aggregate principal amount of
 
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bonds due 2023 in a Rule 144A and Regulation S offering in the international capital markets. The bonds due 2023 accrue interest at a fixed rate of 4.875%. The proceeds of that offering were used to repay in part amounts outstanding under the Bridge Loan Agreement. The remaining outstanding amount of our Bridge loan facility was repaid with proceeds of the capital increase that was successfully completed on March 14, 2013.
Principal Capital Expenditures for Organic Expansion
Capital expenditures totaled Ch$575,228 million, Ch$616,336 million and Ch$349,793 million for the years ended December 31, 2012, 2011 and 2010, respectively. For a discussion of our capital expenditures and future projections, see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Capital Expenditures and permanent investments.”
 
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 	 B.	BUSINESS OVERVIEW	
Our Company
We believe we are one of the leading multi-brand retailers in South America, based on revenues, selling space, number of stores and gross leasable area in the sectors and countries in which we operate. See “—Industry Overview and Competition” for more explanation on the methodology we use to calculate our market position in such sectors and countries. We operate through a number of formats, including supermarkets, home improvement stores, shopping centers and department stores. We are headquartered in Chile and have operations in Chile, Argentina, Brazil, Colombia and Peru. Our business consists of five segments, including four retail segments, which allows us to reach a wide range of customers offering various combinations of products, price, quality and service. We seek to increase operations through organic growth and acquisitions in Brazil, Peru and Colombia, which the Company believes are high growth and underpenetrated markets due to their favorable demographics, sustainable household consumption growth, low formal retail penetration, and strong macroeconomic environments, as described in herein and in “—Industry Overview and Competition.” As a complement to our core retailing business, we are actively involved across the region in the commercial real estate development business, particularly in Chile, Argentina and Peru, with 30 shopping malls representing 717,383 square meters of gross leasable area as of December 31, 2012, and we also offer private label credit cards, consumer loans and limited financial services to our retail customers.
For the year ended December 31, 212, we had 1,082 stores and shopping centers with an aggregate of 4,102,283 square meters selling space and had assets of Ch$ 9,674,000 million, liabilities of Ch$ 6,275,787,849 million, net earnings attributable to controlling shareholders of Ch$ 269,959 million, and shareholders’ equity of Ch$ 3,412,212 million.
Throughout our 35-year history of growth we have developed, acquired, integrated and expanded several retail businesses with strong brands in the various markets where we operate. Since January 1, 2005, we have grown our total number of stores and shopping centers from 425 to 1,082 as of December 31, 2012 and the total selling space of our retail stores and shopping centers from 1,433,838 to 4,102,283 square meters as of December 31, 2012. In addition, over the same period, we completed several strategic acquisitions that have significantly increased the size and geographic scope of our operations.
On November 30, 2012, we acquired the operations in Colombia of Carrefour, a leading French multinational retailer, including its 72 hypermarket stores, 16 convenience stores, and four cash and carry stores and gas stations in Colombia. According to the Colombian Superintendency of Companies. See “—A. History and Development of the Company—History—Acquisition of Carrefour’s Operations in Colombia.”

We believe that our strategy of operating as an integrated multi-format and multi-brand retailer, combined with our broad product offering and portfolio of brands has been one of the key strategic advantages in the successful growth of our businesses. Today we operate a diversified operational and geographic footprint across South American markets with highly attractive demographics and strong macroeconomic fundamentals. We believe that our broad presence and our competitive position across key markets will continue to allow us to consolidate the retail market and to benefit from the expected strong growth in underpenetrated retail markets such as Brazil and Peru.
 
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The following table presents our total number of stores and shopping centers by country as of December 31, 2012:

 	  	Chile	 	  	Argentina	 	  	Brazil	 	  	Peru	 	  	Colombia (1)	 	  	Total	 	
Supermarkets	  	 	214	  	  	 	288	  	  	 	205	  	  	 	86	  	  	 	100	  	  	 	893	  	
Home improvement stores	  	 	31	  	  	 	47	  	  	 	—  	  	  	 	—  	  	  	 	4	  	  	 	82	  	
Department stores	  	 	78	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	78	  	
Shopping centers	  	 	11	  	  	 	15	  	  	 	—  	  	  	 	3	  	  	 	—  	  	  	 	29	  	
Total	  	 	334	  	  	 	350	  	  	 	205	  	  	 	89	  	  	 	104	  	  	 	1,082	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
In summary, highlights of our commercial activities include:
 
 	•	 	1,802 stores and shopping centers as of December 31, 2012, an increase of 155% compared to 425 stores and shopping centers as of January 1, 2005.	
 
 	•	 	4.102 million square meters of selling space as of December 31, 2012, an increase of 186% compared to 1.4 million square meters as of January 1, 2005.	
 
 	•	 	A total of 4.7 million credit cards issued and U.S.$ 1.8 billion in credit card operations as of December 31, 2012	
The following table indicates the percentages of revenues from ordinary activities, gross margin and Adjusted EBITDA, as defined below, that each of our geographical markets represented, for the period indicated:

 	  	Year Ended December 31, 2012	 	
 	  	Chile	 	  	Argentina	 	  	Brazil	 	  	Peru	 	  	Colombia (1)	 	
 	  	(in millions of Ch$)	 	
Revenues from ordinary activities	  	 	3,662,368	  	  	 	2,489,148	  	  	 	2,098,780	  	  	 	739,457	  	  	 	159,325	  	
Gross margin	  	 	1,079,769	  	  	 	831,629	  	  	 	458,988	  	  	 	189,288	  	  	 	41,572	  	
Adjusted EBITDA (2)	  	 	320,083	  	  	 	181,763	  	  	 	69,438	  	  	 	51,379	  	  	 	13,660	  	
 
(1)	Not including Carrefour	
(2)	See “Presentation of Financial and Other Information” for the definition of Adjusted EBITDA and the reconciliation of Adjusted EBITDA to IFRS measures.	
We are organized in six business segments: supermarkets, home improvement stores, department stores, shopping centers and financial services, plus complementary activities described as “Other.”
Supermarkets . We operate 893 supermarkets throughout Chile, Argentina, Brazil, Peru and Colombia as of December 31, 2012, selling a wide variety of name brand and private label products. We believe that we are the second-largest supermarket operator in Chile, in terms of revenues, based on our comparisons against information from public filings of our main competitors as of December 31, 2011, and the largest in Argentina and Peru, based also on information provided by third-party market researcher, Planet Retail. We pioneered the hypermarket format in Chile with the opening of our first Jumbo hypermarket in 1976. Since then, we have expanded and grown our supermarkets division, and as of December 31, 2012 we owned a total of 43 Jumbo hypermarkets and supermarkets and 171 Santa Isabel supermarkets in Chile. We operate 24 Jumbo hypermarkets and supermarkets and 264 Disco and Super Vea supermarkets in Argentina, as of December 31, 2012. In Brazil, as a result of recent acquisitions, we are now the fourth-largest supermarket operator in terms of revenues, according to the ABRAS. We believe we are the largest operator in the state of Minas Gerais, the second-largest in the northeast of Brazil, and we estimate we are the third-largest in the state of Rio de Janeiro (after the acquisition of Prezunic in January 2012), all in terms of
 
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sales. In October 2011, we acquired the Cardoso supermarket chain of three stores in the state of Bahia and in January 2012 we acquired Prezunic, the operator of a supermarket chain of 31 stores in the state of Rio de Janeiro, in Brazil, thus further expanding our presence in the Brazilian market. According to Apoyo, a Peruvian Rating Agency associated with Fitch, Inc., we are the largest supermarket operator in Peru in terms of sales, with 86 stores as of December 31, 2012.
On November 30, 2012, we completed the acquisition of Carrefour’s operations in Colombia, including 72 hypermarket stores, 16 convenience stores, and four cash and carry stores and gas stations. Through this acquisition, we believe we became the second largest supermarket operator in Colombia in terms of sales. See “—A. History and Development of the Company—History.”
Home improvement stores . We believe we are the second-largest home improvement store operator in Chile and the largest in Argentina in terms of revenues based on our comparison against publically filed information from our main competitors as of December 31, 2012. We sell a wide variety of building and other materials, including name brand and private label products. As of December 31, 2012, we have 31 Easy home improvement stores and 299,806square meters of home improvement store selling space in Chile and 47 Easy and Blaisten home improvement stores and 388,878 square meters of home improvement store selling space in Argentina. In October 2008, we opened the first home improvement store in Colombia and as of December 31, 2012 we have 4 Easy home improvement stores and 34,309 square meters of selling space in Colombia.
Department stores . We believe that we are the second-largest department store operator in Chile, in terms of revenues based on our comparison against information from public filings of our main competitors as of December 31, 2012. We also believe we have the largest selling space for department stores in Chile. We operate 39 Paris and 39 Johnson department stores in Chile with 377,190 square meters of total selling space as of December 31, 2012. Our Paris stores sell a wide variety of merchandise such as apparel, home furnishings, electronics and sporting goods, including name brand and private label products. In December 2011, we acquired an 85.58% interest in Johnson, a department store with 39 stores throughout Chile under the Johnson brand and an additional 13 stores using the FES brand with a total of 117,569 square meters or an additional 43.2% of selling space over our existing Paris stores.
Shopping centers . We believe that we are the second-largest operator of shopping centers in each of Chile and Argentina, in terms of total leasable area based on our comparisons against publically filed information from our main competitors as of December 31, 2012. As of December 31, 2012, we own and manage 11 shopping centers in Chile, 15 in Argentina and 3 in Peru with a total gross leasable area of 717.382 square meters. In Chile and Argentina, each of our shopping centers contains a Jumbo hypermarket, an Easy home improvement store and, in Chile, a Paris department store as well as other third-party-owned businesses intended to attract customers and enhance their overall shopping experience.
Financial services . We established our financial services division in 2003 when we launched our “Jumbo Más” credit card to facilitate in-store purchases and, since then, have significantly increased our credit card operations in Chile, Argentina, Brazil and Peru. We have grown both through our own private-label cards and joint ventures with third party bank issuers of credit cards, primarily to finance customers’ purchases in our stores. We also own Banco Paris, a specialty retail consumer bank in Chile, which provides a wide range of consumer and financial services. In August 2010, we launched our own private label credit card in Peru and we are expanding our offerings of financial services. In 2011, we established Banco Cencosud in Peru and in June 2012 we received the operation license from the banking superintendence ( Superintendencia de Bancos y Seguros ), and started operations in August 2012 through our Cencosud credit card. Recently, we entered into an agreement with a major Brazilian bank, Banco Bradesco, to offer financial services for all our stores in Brazil, namely the exclusive issuance and operation of the Cencosud Card credit card ( Cartão Cencosud ), as well as the offer, within Cencosud stores in Brazil, of consumer loans, purchase financing and insurance products. Prezunic is currently not a participant in the abovementioned joint venture.
As of December 31, 2012, we had a total of 4.7 million credit cards and other accounts in Chile, Argentina, Brazil and Peru. As of December 31, 2012, we also had U.S.$ 1.77 billion in customer loans outstanding. Our financial services segment also includes our insurance brokerage services in Argentina, Chile, Brazil and Peru.
 
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Other . In our “Other” segment we include the results of our Chile-based Aventura entertainment centers, which offer families the ability to enjoy different entertainment activities, such as electronic games, bowling and birthday parties; our frequent purchaser loyalty programs, which provide discounts and other promotions for our customers; and our corporate back-office, treasury and other operations.
For the years ended December 31, 2012, 2011 and 2010, results from our “Other” segment represented 0.2%, 0.2% and 0.1%, respectively, of our consolidated revenues.
See also, “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Trends and Factors Affecting Our Results of Operations—Impact of Acquisitions” for additional details regarding our acquisition activities in recent years.

 	  	Year Ended December 31, 2012	 	
 	  	Supermarkets	 	  	Home
improvement	 	  	Department
stores	 	  	Shopping
centers	 	  	Financial
services	 	  	Other (1) 	 	
 	  	(in millions of Ch$)	 	
Revenues from ordinary activities	  	 	6,738,171	  	  	 	1,063,086	  	  	 	886,075	  	  	 	165,462	  	  	 	282,253	  	  	 	14,030	  	
Gross margin	  	 	1,677,762	  	  	 	351,586	  	  	 	241,407	  	  	 	141,691	  	  	 	177,353	  	  	 	11,447	  	
Adjusted EBITDA (2)	  	 	399,774	  	  	 	91,386	  	  	 	43,127	  	  	 	119,900	  	  	 	59,272	  	  	 	(77,136	) 	
 
(1)	See “—Our Company” for a description of our “Other” segment.	
(2)	See “Presentation of Financial and Other Information” for the definition of Adjusted EBITDA and the reconciliation of Adjusted EBITDA to IFRS measures.	
We serve several markets through our extensive network of stores and shopping centers in South America under six diversified business segments. Our five principal segments are: supermarkets, home improvement stores, department stores, shopping centers and financial services. As of December 31, 2012, we operated 1,083 stores and shopping centers in Chile, Argentina, Brazil, Peru and Colombia with a total selling area of 4,102,283 square meters. Through our various store formats and our numerous brands, we offer a full range of products intended to appeal to all types of consumers. The merchandise we carry includes one or more of the leading manufacturers in each category complemented by our offerings of our own private label brands. We believe the diversity and strength of our brands and our varied store formats allows us to compete effectively against our competitors, which range from traditional independent grocery stores and food specialists to mass market retailers.
As of December 31, 2012, our brand portfolio includes the following principal brands:

 	 	S UPERMARKETS	 	H OME
I MPROVEMENT	  	D EPARTMENT
S TORES	  	S HOPPING
C ENTERS	  	F INANCIAL
S ERVICES	
Argentina	 		 		  		  	  	  	  	
						
Brazil	 		 		  		  		  	  	
						
Chile	 		 		  	  	  	  	  	  	
						
Colombia	 		 		  		  		  		
						
Peru	 		 		  		  	  	  	  	
 
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We believe we have established a positive record in the operation of our businesses. The following table sets forth certain performance metrics related to our consolidated growth for the periods presented:

 	  	Year Ended December 31,	 	
 	  	2012	 	  	2011	 	  	2010	 	
 	  	(in millions of Ch$) (1) 	 	
Number of retail stores (2)	  	 	1,051	  	  	 	800	  	  	 	729	  	
Total store area (square meters) (2)	  	 	3,387,184	  	  	 	2,566,890	  	  	 	2,339,699	  	
Net sales (2)	  	 	8,687,332	  	  	 	7,195,685	  	  	 	5,895,316	  	
Adjusted EBITDA (3)	  	 	636,323	  	  	 	626,141	  	  	 	535,565	  	
 
(1)	Except numbers of stores and selling space.	
(2)	Excluding shopping centers.	
(3)	See “Presentation of Financial and Other Information” for the definition of Adjusted EBITDA and the reconciliation of Adjusted EBITDA to IFRS measures.	
Supermarkets
General
We pioneered the hypermarket format in Chile with the opening of our first Jumbo hypermarket in 1976. Since then, we have expanded and grown our supermarkets division, and at December 31, 2012 we owned a total of 43 Jumbo hypermarkets and 171 Santa Isabel supermarkets in Chile. We opened our first Jumbo hypermarket in Argentina in 1982 and in 2004 acquired the Disco supermarket chain, significantly enhancing our presence in Argentina and at December 31, 2012 we operated 24 Jumbo hypermarkets and 264 Disco and Super Vea supermarkets in Argentina. We estimate that we are each of Chile and Argentina’s second-largest supermarket operator in terms of sales.
In recent years, we have expanded beyond our traditional supermarket presence in Chile and Argentina and have made sizeable acquisitions in Brazil and Peru. As a result, at December 31, 2012 we operated 205 supermarket and hypermarket stores in Brazil under the brands GBarbosa, Mercantil Rodrigues, Perini,Bretas and Prezunic. With our acquisition of Prezunic in January 2012, we consolidated our position as Brazil’s fourth-largest supermarket operator, in terms of revenues, according to ABRAS. Regionally, we estimate that we are the second-largest operator in the northeast of Brazil, the largest operator in Minas Gerais in Brazil and, following the recent acquisition of Prezunic, the third-largest operator in Rio de Janeiro, in terms of sales. In Peru we operated 86 Metro and Wong hypermarkets and supermarkets at December 31, 2012. According to Apoyo, we are the largest supermarket operator in Peru in terms of sales. For the year ended December 31, 2012, our supermarkets generated revenues from ordinary activities, gross margin and Adjusted EBITDA of Ch$6,738,170 million, Ch$1,677,762 million and Ch$399,774 million, respectively.
 
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As noted under “Item 4. Information on the Company—A. History and Development of the Company—History” above, our supermarket operations have expanded through organic growth and several acquisitions over the past three years. The following table sets forth, for the periods indicated, the effect of the expansion of our supermarket operations:

 	  	Year ended December 31,	 	
 	  	2012	 	  	2011	 	  	2010	 	
 	  	(in millions of Ch$) (1) 	 	
Number of stores	  	 	893	  	  	 	684	  	  	 	613	  	
Total selling space (square meters)	  	 	2,266,733	  	  	 	1,591,332	  	  	 	1,404,631	  	
Average sales per store	  	Ch$	7,537	  	  	Ch$	8,123	  	  	Ch$	7,276	  	
Sales per square meter	  	Ch$	2.97	  	  	Ch$	3.52	  	  	Ch$	3.17	  	
 
(1)	Except numbers of stores and selling space.	
The following table sets forth, for the periods indicated, the revenues from ordinary activities of our supermarkets per country:

 	  	Year ended December 31,	 	
Revenues from ordinary activities	  	2012	 	  	2011	 	  	2010	 	
 	  	(in millions of Ch$)	 	
Chile	  	 	2,057,976	  	  	Ch$	 1,826,056	  	  	Ch$	 1,680,022	  	
Argentina	  	 	1,751,869	  	  	 	1,553,663	  	  	 	1,370,236	  	
Brazil	  	 	2,095,104	  	  	 	1,552,064	  	  	 	842,901	  	
Peru	  	 	716,624	  	  	 	624,488	  	  	 	559,600	  	
Colombia	  	 	116,598	  	  	 	—  	  	  	 	—  	  	
Total	  	Ch$	 6,738,171	  	  	Ch$	5,566,271	  	  	Ch$	4,452,759	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Chile
At December 31, 2012, we operated 214 supermarkets in Chile, which together had 524,677 square meters of total selling space. Of our 214 supermarkets in Chile, 43 were Jumbo hypermarkets and supermarkets, and 171 were Santa Isabel supermarkets.
The following table sets forth certain information regarding our supermarkets in Chile as of and for the periods indicated:

 	  	Year ended December 31,	 	
 	  	2012	 	 	2011	 	 	2010	 	
 	  	(in millions of Ch$) (1) 	 	
Number of stores	  	 	214	  	 	 	190	  	 	 	163	  	
Total selling space (square meters)	  	 	524,677	  	 	 	463,834	  	 	 	406,555	  	
Average sales per store	  	Ch$	9,617	  	 	Ch$	9,662	  	 	Ch$	10,371	  	
Sales per square meter	  	Ch$	3.92	  	 	Ch$	3.94	  	 	Ch$	4.13	  	
Increase (decrease) in same-store sales	  	 	4.8	% 	 	 	4.777	% 	 	 	5.9	% 	
 
(1)	Except numbers of stores, selling space and same-store sales.	
Jumbo . Our Jumbo hypermarkets and supermarkets are our largest stores in Chile and have selling areas ranging from 1,405 square meters to 11,816 square meters. At December 31, 2012, we operated 43 Jumbo hypermarkets and supermarkets in Chile which generated revenues from ordinary activities of ch$1,191,085 million representing 13.0% of our consolidated revenues from ordinary activities for such period.
The following table sets forth certain performance metrics related to our Jumbo hypermarkets in Chile for the periods presented:

 	  	Year ended December 31,	 	
 	  	2012	 	  	2011	 	  	2010	 	
Number of stores	  	 	43	  	  	 	32	  	  	 	28	  	
Total selling space (square meters)	  	 	286,664	  	  	 	241,439	  	  	 	217,414	  	
 
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Our Jumbo hypermarkets and supermarkets are primarily oriented towards middle and upper-middle income consumers and designed to provide a “one-stop” shopping experience by offering a wide selection of quality products with a high level of service. We tailor the product mix of each Jumbo hypermarket according to the preferences of consumers of each specific community. In recent years, we believe Chilean consumers have shown an increasing preference for food stores that offer not only a wide variety of traditional food and non-food items, but also an expanded assortment of prepared items and fresh fruits and vegetables. To respond to this trend, we have decided to upgrade, and continue to upgrade existing departments with product categories, such as the textiles, electronics and home appliance departments. This strategy allows us to provide consumers with a wider selection of food products and services, while shifting our sales mix toward higher-margin products.
Santa Isabel . At December 31, 2012, we operated 171 Santa Isabel supermarkets in Chile, which have selling areas ranging from 350 square meters to 4,780 square meters. For the year ended December 31, 2012, our Santa Isabel stores generated revenues from ordinary activities of Ch$866,891 million, representing 9.5% of our consolidated revenues from ordinary activities.
The following table sets forth certain performance metrics related to our Santa Isabel supermarkets in Chile for the periods presented:

 	  	Year ended December 31,	 	
 	  	2012	 	  	2011	 	  	2010	 	
Number of stores	  	 	171	  	  	 	157	  	  	 	135	  	
Total selling space (square meters)	  	 	238,013	  	  	 	222,395	  	  	 	190,905	  	
The target market of our Santa Isabel stores is primarily the low- to middle-income segment of the Chilean population. Our Santa Isabel stores sell a wide variety of food products and general merchandise items similar to that offered by our Jumbo hypermarkets; however, Santa Isabel stores also offer higher quality merchandise, and convenient locations. In addition, certain Santa Isabel stores feature higher margin specialty departments such as prepared foods, fresh seafood and bakery departments. Santa Isabel also offers products such as alcohol, cosmetics, household and other non-food items. For the year ended December 31, 2012, food products represented approximately 42.1% of the revenues from ordinary activities of our Santa Isabel stores.
Argentina
General
We operated 288 supermarkets in Argentina at December 31, 2012, which together had 522,416 square meters of total selling space. Of our 288 supermarkets in Argentina, 24 were Jumbo stores and 264 were Disco and Super Vea stores at December 31, 2012.
The following table sets forth certain information regarding our supermarkets in Argentina as of and for the periods indicated:

 	  	Year ended December 31,	 	
 	  	2012	 	 	2011	 	 	2010	 	
 	  	(in millions of Ch$) (1) 	 	
Number of stores	  	 	288	  	 	 	269	  	 	 	256	  	
Total selling space (square meters)	  	 	522,416	  	 	 	502,682	  	 	 	455,808	  	
Average sales per store	  	 	6,083	  	 	Ch$	5,776	  	 	Ch$	5,352	  	
Sales per square meter	  	Ch$	3.35	  	 	Ch$	3.09	  	 	Ch$	3.01	  	
Increase (decrease) in same-store sales	  	 	18.5	% 	 	 	22.5	% 	 	 	25.2	% 	
 
(1)	Except numbers of stores, selling space and same-store sales.	
Jumbo . We opened our first Jumbo hypermarket in Argentina in 1982. Our Jumbo hypermarkets and supermarkets are our largest stores in Argentina and have selling areas ranging from 849 square meters to 12,223 square meters, with an average of 7,015 square meters of selling space. As of December 31, 2012, we operated 24 Jumbo hypermarkets in Argentina, 18 of which are located in the Buenos Aires metropolitan area. For the year ended December 31, 2012, our Jumbo hypermarkets in Argentina generated revenues from ordinary activities of Ch$420,448 million, representing 4.6% of our consolidated revenues from ordinary activities for such period.
 
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The following table sets forth certain performance metrics related to our Jumbo hypermarkets in Argentina for the periods presented:

 	  	Year ended December 31,	 	
 	  	2012	 	  	2011	 	  	2010	 	
Number of stores	  	 	24	  	  	 	21	  	  	 	17	  	
Total selling space (square meters)	  	 	162,499	  	  	 	163,902	  	  	 	149,991	  	
As in Chile, the target market of our Jumbo hypermarkets in Argentina is primarily the middle to upper-middle income segment of the Argentine population. Our Jumbo hypermarkets are generally open 14 to 15 hours per day, depending on location, and have flexible closing hours to accommodate the requirements of the local community. In recent years, upper- and middle-class consumers have shown an increasing preference for food stores that offer not only a wide variety of traditional food and non-food items, but also an expanded assortment of prepared items and fresh fruits and vegetables. Thus, we choose our product mix according to the socioeconomic make-up of the customers at each hypermarket. Each of our Jumbo hypermarkets in Argentina has an area dedicated to customer parking.
As in Chile, our Jumbo hypermarkets in Argentina offer a wide range of food and non-food items, including fresh fruits and vegetables, baked goods, fresh meats and other grocery items. We select our products according to quality and value rather than looking to offer the lowest price products in the market.
Disco and Super Vea . Disco was founded in 1961 as a small grocery store and was acquired by Ahold in 1998. We acquired Disco on November 1, 2004 for approximately U.S.$315 million. This acquisition added 234 strategically located supermarkets to our operations in Argentina, thus adding an important presence in the city of Buenos Aires. Disco’s strategy has been to segment its stores into “service-oriented” (Disco) and “price-oriented” (Super Vea) formats. Disco also operates a virtual supermarket (Disco Virtual) which allows customers to place orders by telephone and over the internet for home delivery in the Buenos Aires and Córdoba metropolitan areas. For the year ended December 31, 2012, our Disco and Super Vea stores generated revenues from ordinary activities of Ch$1,331,420 million, representing 14.6% of our consolidated revenues from ordinary activities for such period.
The following table sets forth certain performance metrics related to our Disco and Super Vea supermarkets in Argentina for the periods presented:

 	  	Year ended December 31,	 	
 	  	2012	 	  	2011	 	  	2010	 	
Number of stores	  	 	264	  	  	 	250	  	  	 	240	  	
Total selling space (square meters)	  	 	359,917	  	  	 	338,780	  	  	 	264,772	  	
The target market of our Disco stores is primarily the middle- and high-income segment of the Argentine population. Disco has a service-oriented format and offers a wide variety of products and services to our customers. This format caters to more affluent customers who are willing to pay a premium for higher quality products, a more personalized service and a broader product assortment. To emphasize the service concept, Disco offers a wide variety of services, including internet purchasing options (Disco Virtual), photo developing services (Disco Foto), an in-store credit card (Discocard or Válida), a loyalty program (Discoplus) and a system for customers to pay their utility bills at the checkout (Discopago).
Disco also operates price-oriented stores under the Super Vea brand, which target primarily the low- and middle-income segment of the Argentine population Super Vea stores are primarily concentrated in the Cuyo (San Juan and Mendoza) and Northwest (Tucumán, Salta, Catamarca and Santiago del Estero) regions of Argentina and offer a lower level of services with a higher proportion of secondary brands and private labels.
Disco offers a wide range of food and non-food items, including fresh fruits and vegetables, baked goods, fresh meats, cleaning, health and beauty products and other grocery and supermarket items. In addition to general food and non-food items, Super Vea also sells a variety of home appliances, including televisions and refrigerators, as well as other household consumer products.
 
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Brazil
In November 2007, we expanded our supermarket operations into Brazil with the acquisition of the GBarbosa chain of hypermarkets, supermarkets and electronics stores in the North-East region of Brazil, specifically in the states of Alagoas, Bahia and Sergipe. GBarbosa traces its origins to the opening of its first store in the city of Aracaju in July 1955 by its founder, Mr. Gentil Barbosa.
In 2010, we further expanded our operations in Brazil with the acquisitions of the Super Familia supermarket chain and the Perini supermarket chain. Our expansion continued in 2011, with the acquisition of Cardoso, a three-store supermarket chain in the state of Bahia. In 2012, we acquired Prezunic which we estimate is the third-largest supermarket chain in Rio de Janeiro.
As of December 31, 2012, we operated 205 stores in Brazil which together had 505,898 square meters of total selling space. Of these 205 stores, we operate 79 GBarbosa supermarkets, 84 Bretas stores, 5 Perini stores, 6 Mercantil Rodrigues stores and 31 Prezunic stores. In addition, to these, we also operate 155 locations in numerous formats such as Eletro-show stores, pharmacies, gas station and delicatessen under our GBarbosa, Bretas and Perini brands in Brazil. For the year ended December 31, 2012, our supermarkets in Brazil generated revenues from ordinary activities of Ch$2,095,104 million, representing 22.9% of our consolidated revenues from ordinary activities for such period.
The following table sets forth certain performance metrics related to our supermarkets in Brazil for the periods presented:

 	  	Year ended December 31,	 	
 	  	2012	 	 	2011	 	 	2010	 	
 	  	(in millions of Ch$) (1) 	 	
Number of stores	  	 	205	  	 	 	152	  	 	 	130	  	
Total selling space (square meters)	  	 	505,898	  	 	 	391,485	  	 	 	332,626	  	
Average sales per store	  	Ch$	 10,220.02	  	 	Ch$	10,211	  	 	Ch$	6,484	  	
Sales per square meter	  	Ch$	4.00	  	 	Ch$	4.08	  	 	Ch$	2.53	  	
Increase (decrease) in same-store sales	  	 	0.5	% 	 	 	1.4	% 	 	 	7.1	% 	
 
*	Excluding Eletro-show stores and pharmacies operating under the GBarbosa brand. See “—Other Operations—Electronic Stores” and “—Other Operations—Pharmacies.”	
(1)	Except numbers of stores, selling space and same-store sales.	
GBarbosa . As of December 31, 2012, we operated 79 GBarbosa supermarkets in Brazil. Additionally, under the GBarbosa brand we also offer financial services to our customers in Brazil.
Our GBarbosa supermarkets represent our largest store format in Brazil. Our GBarbosa supermarkets have selling areas ranging from 400 to 8,000 square meters. GBarbosa supermarkets sell products such as fresh fruit and vegetables, meat, poultry, dairy products, alcoholic beverages, textiles, cosmetics and cleaning products, in addition to more gourmet items, such as delicatessen products, fresh fish and bakery items. Our GBarbosa supermarkets also offer a wide range of non-food products, such as electronics, home appliances and textiles, which represent an important share of its sales.
Mercantil Rodrigues . At December 31, 2012, we also owned and operated 6 Mercantil Rodrigues cash and carry in Brazil. Mercantil Rodrigues offer a wide range of food items, including fresh fruits and vegetables, baked goods, fresh meats and other grocery items.
Super Familia . On March 23, 2010, we acquired 100% of the outstanding shares of Super Família Comercial de Alimentos Ltda., operator of the Super Familia supermarket chain in Brazil, for approximately U.S.$33.1 million (approximately Ch$17,396 million). We acquired four Super Familia stores in the city of Fortaleza, with a total sales area of 7,000 square meters, and two distribution centers. In 2011, we rebranded the Super Familia stores into the GBarbosa brand.
 
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Perini . On July 5, 2010, we acquired 100% of the outstanding shares of Perini Comercial do Alimento Ltda., operator of the four-store chain of Perini supermarkets in the city of Salvador da Bahia in Brazil, for approximately U.S.$27.7 million (approximately Ch$14,899 million). Perini is a well-known brand in Brazil with 47 years in the market that targets the high-end retail customer segment and complements our business portfolio in Brazil. In addition to the four Perini stores in the city of Salvador da Bahia, we also acquired four additional points of sales inside shopping centers, with a total sales area of 4,900 square meters, and two distribution centers. We recently opened a new Perini store in the city of Recife inside the Riomar shopping center and closed one distribution center. Selling space for our Perini stores currently stands at 6,520 square meters and all stores are serviced by a single distribution center.
Bretas . On October 31, 2010, we acquired 100% of the outstanding shares of Irmaos Bretas Filhos e Cía. Ltda., operator of the 63-store chain of Bretas supermarkets in the state of Minas Gerais in Brazil, for approximately U.S.$705 million (approximately Ch$336,630 million). Bretas is a well-known brand in Brazil with 56 years in the supermarket industry. In addition to the 63 Bretas stores, we also acquired 10 additional gas stations, and two distribution centers.
Cardoso . In October 2011, we acquired Cardoso, a three-store supermarket chain in the state of Bahia, with annual net sales of approximately R$60 million (U.S.$35.9 million) in 2011. We agreed to pay the purchase price of R$18 million (approximately U.S.$11.3 million or Ch$5,429 million) in three installments, 60% on the closing of the transaction, 20% on the six-month anniversary of the closing date and the remaining 20% on the first year anniversary of the closing date. We have converted the acquired stores to the GBarbosa format and are now operating them under that brand.
Prezunic . On January 2, 2012, pursuant to a stock purchase agreement executed on November 16, 2011, Cencosud Brasil acquired from the Dias Da Cunha family 100% of the capital stock of Prezunic. We estimate that Prezunic is the third-largest supermarket chain in Rio de Janeiro with 31 stores and net sales of approximately R$2.2 billion in 2011. The aggregate purchase price of the operation was R$875 million (or approximately Ch$242,690 million), payable as follows: R$580 million on the closing date of the transaction (January 2, 2012), from which R$190 million were deducted as working capital adjustments. The balance will be paid as follows: R$80 million, R$85 million, R$80 million and R$50 million, on the first, second, third and fourth anniversary of the closing date, respectively. Pursuant to the stock purchase agreement, Cencosud Brasil was also granted a preferential right from third-party landowners to acquire or lease two supermarket properties that were not owned by Prezunic at the time of the transaction, but were instead leased. Under the terms of this agreement, Cencosud S.A. serves as guarantor of Cencosud Brazil.
Peru
On January 31, 2008, we acquired 100% of the shares of GSW S.A., operating under the brand name Wong in Peru, for approximately U.S.$467 million (approximately Ch$217,295 million). As of December 31, 2012, we operated 86 Wong and Metro hypermarkets and supermarkets in Peru which together had 258,762 square meters of total retail selling space. For the year ended December 31, 2012, our stores in Peru generated revenues from ordinary activities of Ch$716,624 million, representing 7.8% our consolidated revenues from ordinary activities for such period.
The following table sets forth certain performance metrics related to our Wong and Metro supermarkets and hypermarkets in Peru for the periods presented:

 	  	Year ended December 31,	 	
 	  	2012	 	 	2011	 	 	2010	 	
 	  	(in millions of nominal Ch$) (1) 	 	
Number of stores	  	 	86	  	 	 	74	  	 	 	64	  	
Total selling space (square meters)	  	 	258,762	  	 	 	233,331	  	 	 	209,642	  	
Average sales per store	  	Ch$	8,332	  	 	Ch$	8,439	  	 	Ch$	8,744	  	
Sales per square meter	  	Ch$	2.77	  	 	Ch$	2.68	  	 	Ch$	2.67	  	
Increase (decrease) in same-store sales	  	 	4.2	% 	 	 	6.5	% 	 	 	(2.3	%) 	
 
(1)	Except numbers of stores, selling space and same-store sales.	
 
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Wong . As of December 31, 2012 we operated 14 Wong supermarkets in Peru, which had an average selling area of 3,173square meters. Our Wong stores carry our full line of products and brands, at a variety of price points. In addition, some Wong stores contain separate specialty retail facilities operated by third parties. The target market of our Wong stores is primarily the middle- and high-income segment of the Peruvian population.
Metro . As of December 31, 2012 we operated 72 Metro stores (hypermarkets and supermarkets) in Peru, which had an average selling area of 2,962 square meters. Metro stores carry our full line of products and brands, at a variety of price points. The target market of our Wong stores is primarily the middle- and low-income segment of the Peruvian population.
Colombia
On November 30, 2012, completed the acquisition of Carrefour, for a total purchase price equal to €2 billion The Acquired Companies operate supermarkets under the “Carrefour” and “Maxi” brand names in Colombia, including 72 hypermarket stores, 16 convenience stores, and four cash and carry stores and gas stations. See “Item 4. Information on the Company—A. History and Development of the Company—History.”
The following table sets forth certain performance metrics related to our supermarkets and hypermarkets in Colombia for the periods presented:

 	  	Year ended December 31,	 	
 	  	2012	 	 	2011	 	  	2010	 	
 	  	(in millions of Ch$) (1) 	 	
Number of stores	  	 	100	  	 	 	—  	  	  	 	—  	  	
Total selling space (square meters)	  	 	454,980	  	 	 	—  	  	  	 	—  	  	
Average sales per store	  	 	4,505	  	 	 	—  	  	  	 	—  	  	
Sales per square meter	  	Ch$	0.26	  	 	 	—  	  	  	 	—  	  	
Increase (decrease) in same-store sales	  	 	 	* 	 	 	—  	  	  	 	—  	  	
 
*	No same store sales data is available for supermarkets in Colombia as no comparable stores were part of operations in 2011	
(1)	Except number of stores, selling space and same-store sales.	
As of December 31, 2012 the hypermarkets we operated in Colombia had an average selling space 5,701 square meters. These stores carry a varied assortment of goods at a variety of price points.
Home improvement stores
General
In 1993 we opened our first Easy home improvement store segment in Chile and, since 2002, we have rapidly expanded our home improvement operations. As of December 31, 2012 we operated 82 Easy home improvement stores in Argentina, Chile and Colombia dedicated to home improvement, hobbies and construction. We believe we are the second-largest home improvement store operator in Chile and the largest in Argentina in terms of selling space, based on our comparisons against information from public filings of our main competitors as of December 31, 2012, and on information provided in the report by Planet Retail, a third-party research company, dated as of that date. In October 2008, we opened the first home improvement store in Colombia, where we operate 4 stores and 34,309 square meters of selling space at December 31, 2012. For the year ended December 31, 2012, our home improvement stores generated revenues from ordinary activities, gross margin and Adjusted EBITDA of Ch$1,063,086 million, Ch$351,586 million and Ch$91,386 million, respectively.
 
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Our home improvement operations have expanded through organic growth and several acquisitions over the past three years. The following table sets forth, for the periods indicated, information regarding the expansion of our home improvement operations:

 	  	Year ended December 31,	 	
 	  	2012	 	  	2011	 	  	2010	 	
 	  	(in millions of Ch$) (1) 	 	
Number of stores	  	 	82	  	  	 	81	  	  	 	82	  	
Total selling space (square meters)	  	 	722,993	  	  	 	703,170	  	  	 	700,579	  	
Average sales per store	  	Ch$	12,964	  	  	Ch$	11,712	  	  	Ch$	9,998	  	
Sales per square meter	  	Ch$	1.25	  	  	Ch$	1.35	  	  	Ch$	1.22	  	
 
(1)	Except numbers of stores, selling space and same-store sales.	
The following table sets forth, for the periods indicated, the revenues from ordinary activities of our home improvement stores per country:

 	  	Year ended December 31,	 	
 	  	2012	 	  	2011	 	  	2010	 	
 	  	(in millions of Ch$)	 	
Revenues from ordinary activities	  				
Chile	  	 	400,375	  	  	 	367,483	  	  	 	335,727	  	
Argentina	  	 	619,985	  	  	 	541,778	  	  	 	451,021	  	
Colombia	  	 	42,727	  	  	 	39,380	  	  	 	33,089	  	
Total	  	 	1,063,086	  	  	 	948,641	  	  	 	819,838	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Chile
In Chile, we operate our home improvement store business through 31 Easy home improvement stores, of which 11 are located in the Santiago metropolitan region and the rest throughout the various regions of Chile. For the years ended December 31, 2012 and 2011, Easy home improvement stores in Chile generated revenues from ordinary activities of Ch 400,375 million and Ch$367,483 million, respectively, representing 4.4% and 4.8% of our consolidated revenues from ordinary activities during those periods.
The following table sets forth certain performance metrics related to our Easy home improvement stores in Chile for the periods presented:

 	  	Year ended December 31,	 	
 	  	2012	 	 	2011	 	 	2010	 	
 	  	(in millions of Ch$) (1) 	 	
Number of stores	  	 	31	  	 	 	29	  	 	 	29	  	
Total selling space (square meters)	  	 	299,806	  	 	 	276,325	  	 	 	273,625	  	
Average sales per store	  	Ch$	12,915	  	 	Ch$	12,672	  	 	Ch$	11,577	  	
Sales per square meter	  	Ch$	1.34	  	 	Ch$	1.33	  	 	Ch$	1.23	  	
Increase (decrease) in same-store sales	  	 	6.3	% 	 	 	4.9	% 	 	 	23.7	% 	
 
(1)	Except numbers of stores, selling space and same-store sales.	
Our Easy home improvement stores are oriented toward three groups of consumers: professionals constructors and home improvement professionals, people interested in “do-it-yourself” projects and hobby enthusiasts. Each store is designed to provide customers with a “one-stop” shopping experience for home improvement needs. Our Easy home improvement stores offer a wide variety of home improvement items, including hardware, tools, construction and plumbing materials, electrical products, sporting goods, gardening supplies and other household wares. To complement our products and enhance service, each of our Easy home improvement stores also provides for free, or at a nominal charge, technical advice, home delivery, recommended contractors or builders, and cutting of wood and steel. Additionally, Easy allows customers to return unused products for any reason within a certain period of time.
Easy has a centralized purchasing model based on demand forecasting. However, each store can generate its own supplementary purchases. Price and commercial terms are overseen by different business managers in charge of negotiating with major providers. The product mix is determined based on the needs of the particular community that the store serves. Each year a commercial agreement is signed with each of our suppliers. These commercial agreements are standard for all suppliers and cover the terms on which goods are bought by Easy including volume, discounts, marketing expenses born by the supplier, fees charged for the use of space in the store, logistics expenses,
 
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and space in new stores. At December 31, 2012, our Easy home improvement stores in Chile have an average selling area of ranging from 1,500 square meters to 14,469 square meters, with an average of 9,671 square meters of selling area. Each of our Easy home improvement stores has easily accessible car parking and many are located at our shopping centers. Our Easy home improvement stores offer a variety of products, including (i) flooring, paints, bath and kitchen materials; (ii) home, furniture, garden and hobby materials; (iii) hardware, electrical and plumbing materials; (iv) building and wholesale construction materials; and (v) agricultural products.
Argentina
In Argentina, we operate our home improvement store business through 47 Easy and Blaisten home improvement stores, which had 388,878 square meters of total selling space as of December 31, 2012. For year ended December 31, 2012, our home improvement stores in Argentina generated revenues from ordinary activities of Ch$619,985 million, representing 6.8% of our consolidated revenues from ordinary activities during such period.
The following table sets forth certain performance metrics related to our Easy home improvement stores in Argentina for the periods presented:

 	  	Year ended December 31,	 	
 	  	2012	 	 	2011	 	 	2010	 	
 	  	(in millions of Ch$) (1) 	 	
Number of stores	  	 	47	  	 	 	48	  	 	 	49	  	
Total selling space (square meters)	  	 	388,878	  	 	 	391,485	  	 	 	392,645	  	
Average sales per store	  	Ch$	13,191	  	 	Ch$	11,287	  	 	Ch$	9,205	  	
Sales per square meter	  	Ch$	1.59	  	 	Ch$	1.38	  	 	Ch$	1.24	  	
Increase (decrease) in same-store sales	  	 	26.6	% 	 	 	32.3	% 	 	 	27.8	% 	
 
(1)	Except numbers of stores, selling space and same-store sales.	
Our home improvement business in Argentina has expanded rapidly over the past few years, primarily through the acquisition of four former Home Depot stores in 2002 and nine Blaisten stores in 2008. Our home improvement stores are located in 13 provinces of Argentina and include 12 stores in the Buenos Aires federal district and 23 in the Buenos Aires province. At December 31, 2012, our Easy and Blaisten home improvement stores in Argentina have an average of 8,274 square meters of selling space. Each of our Easy home improvement stores in Argentina has easily accessible car parking and many are located at our shopping centers.
Our Easy home improvement stores in Argentina offer a variety of products, including (i) flooring, paints, bath and kitchen materials; (ii) home, furniture, garden and hobby materials; (iii) hardware, electrical and plumbing materials and (iv) building and wholesale construction materials.
Colombia
In May 2007, we entered into a joint venture with Casino to develop the home improvement store business in Colombia, and subsequently acquired 100% ownership of the joint venture. In October 2008, we opened our first Easy home improvement store in Bogota, and as of December 31, 2012 we operated 4 Easy home improvement stores. For the year ended December 31, 2012, our Easy home improvement stores in Colombia generated revenues from ordinary activities of Ch$42,727 million, representing 0.5% of our consolidated revenues from ordinary activities for such period. All four of our Easy home improvement stores are located in Bogota.
The following table sets forth certain performance metrics related to our Easy home improvement stores in Colombia for the periods presented:

 	  	Year ended December 31,	 	
 	  	2012	 	 	2011	 	 	2010	 	
 	  	(in millions of Ch$) (1) 	 	
Number of stores	  	 	4	  	 	 	4	  	 	 	4	  	
Total selling space (square meters)	  	 	34,309	  	 	 	35,360	  	 	 	34,309	  	
Average sales per store	  	Ch$	 10,682	  	 	Ch$	9,845	  	 	Ch$	8,272	  	
Sales per square meter	  	Ch$	1.59	  	 	Ch$	1.11	  	 	Ch$	0.96	  	
Increase (decrease) in same-store sales	  	 	4.1	% 	 	 	11.8	% 	 	 	(3.6	%) 	
 
(1)	Except numbers of stores, selling space and same-store sales.	
 
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Our Easy home improvement stores in Colombia have selling areas ranging from 8,168 square meters to 9,895 square meters, with an average selling area of 8,577 square meters. Each of our Easy home improvement stores has easily accessible car parking.
Our Easy home improvement stores in Colombia offer a variety of products, including (i) flooring, paints, bath and kitchen materials; (ii) home, furniture, garden and hobby materials; (iii) hardware, electrical and plumbing materials; (iv) building and wholesale construction materials and (v) agricultural products.
Department Stores
We entered the department store business in March 2005 through the acquisition of Empresas Almacenes Paris S.A., one of Chile’s leading department stores in terms of sales and number of stores. The principal activity of Paris is the retail sale of clothing products (including clothes for women, men and children, shoes and accessories) which represent approximately 55,1% of Paris’ sales, as well as of household goods, electronics and technology products which represent the other 44,9% of Paris’ sales, each as of December 31, 2012. As of December 31, 2012, we estimate that we were the second-largest department store operator in Chile, in terms of sales. Based on our comparison against information from public filings of our main competitors as of December 31, 2012, we also believe we have the largest selling space for department stores in Chile.
As of December 31, 2012, we operated 39 Paris department stores and 39 Johnson department stores in Chile, which together had 377,190 square meters of total selling space. For the years ended December 31, 2012, 2011, and 2010, our department stores generated revenues from ordinary activities of Ch$886,075, Ch$690,772 million and Ch$622,719 million, respectively, representing 9.7%, 9.1% and 10.0% of our consolidated revenues from ordinary activities for such periods.
The following table sets forth certain performance metrics related to our department stores in Chile for the periods presented:

 	  	Year ended December 31,	 	
 	  	2012	 	 	2011	 	 	2010	 	
 	  	(in millions of Ch$) (1) 	 	
Number of stores	  	 	78	  	 	 	35	  	 	 	34	  	
Total selling space (square meters)	  	 	377,190	  	 	 	272,388	  	 	 	234,489	  	
Average sales per store	  	Ch$	11,360	  	 	Ch$	19,736	  	 	Ch$	18,315	  	
Sales per square meter	  	Ch$	2.35	  	 	Ch$	2.54	  	 	Ch$	2.66	  	
Increase (decrease) in same-store sales	  	 	5.3	% 	 	 	5.2	% 	 	 	19.7	% 	
 
(1)	Except numbers of stores, selling space and same-store sales.	
Our Paris department stores in Chile have selling areas ranging from 2,568 square meters to 11,872 square meters, with an average selling area of 6,704 square meters. Currently, the largest of these is the Paris department store in Plaza Oeste which has 11,872 square meters of selling area. In our Johnson format in Chile, we have selling areas ranging from 454 square meters to 5,718 square meters, with an average selling area of 2,967. Currently, the largest store is located in the Chilean city of La Serena, with 5,718 square meters of selling area.
Our Paris department stores carry a variety of products, including (i) clothing, (ii) accessories and cosmetics, (iii) home décor, (iv) electronic and household appliances, (v) sporting goods, and (vi) footwear. Our Paris department stores currently carry private label products under the brands Opposite, Alaniz, Tribu, Attimo, Rainforest, Greenfield, Suburbia, Muv, Fes, Yoko and Aussie, among others. During the year ended December 31, 2012, our private label products in the department store segment represented 28.6% of our department store revenues.
 
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Shopping Centers
General
We entered the shopping center business in 1988 when we opened Unicenter in Argentina and have grown to be one of the largest owners and managers of shopping centers in South America. We operated 29 shopping centers at December 31, 2012, which together had 717,382 square meters of total leasable space. Of our 30 shopping centers, 11 are in Chile, 15 are in Argentina, 3 are in Peru and 1 in Colombia. We believe that we are the second-largest operator of shopping centers in Chile and Argentina, in terms of revenues, based on our comparison against information from public filings of our main competitors as of December 31, 2012, and information provided by third-party research company, Planet Retail. Many of our shopping centers contain a Jumbo hypermarket and an Easy home improvement store, and 11 of these have an Aventura family entertainment center. For the year ended December 31, 2012, our shopping centers generated revenues from ordinary activities, gross margin and Adjusted EBITDA of Ch$165,462,046 million, Ch$141,690,585 million and Ch$119,899,880 million, respectively.
Shopping center segment revenues are derived principally from lease payments charged to tenants. Lease payments are calculated based on a variable percentage of net sales from each store, but may be no less than the fixed minimum lease payment as specified in the terms of the lease. The percentage of revenues upon which each store’s lease payments are calculated is set forth in the respective lease agreement and is fixed through the term of the contract. These percentages vary among the type of business conducted by each retailer. In addition, each tenant pays a percentage of common area costs and mall publicity. According to our experience, a new shopping center takes an average of three or four years in consolidating its incomes level.
Over the past year we have opened four new shopping centers in the region. In Chile we opened Costanera Center, with a leasable area of approximately 140,000 square meters and, Portal Osorno with a leasable area of 8,362 square meters. In Argentina we opened Shopping Salta in Argentina and in Peru we opened Bajada Balta with a leasable area of 1,026 square meters.
Our shopping centers have expanded through organic growth over the past three years. The following table sets forth, for the periods indicated, information regarding the expansion of our shopping centers:

 	  	Year ended December 31,	 	
 	  	2012	 	  	2011	 	  	2010	 	
 	  	(in millions of Ch$) (1) 	 	
Number of stores	  	 	29	  	  	 	25	  	  	 	25	  	
Total leasable area (square meters)	  	 	717,383	  	  	 	564,839	  	  	 	542,735	  	
Average sales per store	  	Ch$	5,705	  	  	Ch$	5,189	  	  	Ch$	4,680	  	
Sales per square meter	  	Ch$	0.23	  	  	Ch$	0.23	  	  	Ch$	0.22	  	
 
(1)	Except numbers of stores and leasable area.	
The following table sets forth, for the periods indicated, the revenues from ordinary activities of our shopping centers per country:

 	  	Year ended December 31,	 	
 	  	2012	 	  	2011	 	  	2010	 	
 	  	(in millions of Ch$)	 	
Revenues from ordinary activities	  				  				  				
Chile	  	 	93,091	  	  	 	64,501	  	  	 	54,852	  	
Argentina	  	 	65,468	  	  	 	59,661	  	  	 	53,337	  	
Peru	  	 	6,903	  	  	 	5,565	  	  	 	8,802	  	
Total	  	 	165,462	  	  	 	129,727	  	  	 	116,991	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Chile
We owned and operated 11 shopping centers in Chile at December 31, 2012, which together had 430,621 square meters of total leasable area (excluding space leased to our Jumbo and Easy stores and square meters of spaces leased to third parties within our supermarkets). Our Chilean shopping center business generated Ch$93,091 million.
 
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million in revenues from ordinary activities during the year ended December 31, 2012 (after eliminating inter-company sales which generally include revenue from rental payments by Jumbo, Easy and Paris stores), representing 1.0% of our consolidated revenues from ordinary activities for such period. This revenue takes into consideration our nine shopping centers, as well as space rented to third parties in our stores.
We seek to “anchor” shopping centers around Paris, Jumbo and Easy stores and to promote the flow of consumers to such destinations by including other tenants that complement the services and merchandise offered by the “anchor” tenants. Since 2002, we have also actively worked to promote this flow with the launch of our Aventura family entertainment centers. As of December 31, 2012, we operated 5 Aventura centers in our shopping centers in Chile at Alto Las Condes, Florida Center, Portal Temuco, Portal Osorno and Portal Nuñoa. The Aventura centers offer families the ability to enjoy different entertainment activities, such as electronic games, bowling and birthday parties.
The following table shows certain information regarding the shopping centers we own in Chile as of and for the year ended December 31, 2012.

 	  	Location	 	  	Opening
year	 	  	Gross leasable
area (1) 	 	
 	  	 	 	  	 	 	  	(square meters)	 	
Florida Center	  	 	Santiago	  	  	 	2003	  	  	 	75,797	  	
Alto Las Condes	  	 	Santiago	  	  	 	1993	  	  	 	76,110	  	
Portal La Reina	  	 	Santiago	  	  	 	2002	  	  	 	9,087	  	
Portal Rancagua	  	 	Rancagua	  	  	 	2000	  	  	 	6,981	  	
Portal El Belloto	  	 	Quilpue	  	  	 	2011	  	  	 	23,332	  	
Portal La Dehesa	  	 	Santiago	  	  	 	2003	  	  	 	46,407	  	
Portal Temuco	  	 	Temuco	  	  	 	2005	  	  	 	29,534	  	
Portal Valparaíso	  	 	Valparaíso	  	  	 	2006	  	  	 	755	  	
Portal Nuñoa	  	 	Santiago	  	  	 	2011	  	  	 	14,690	  	
Costanera Center	  	 	Santiago	  	  	 	2012	  	  	 	139,566	  	
Portal Osorno	  	 	Osorno	  	  	 	2012	  	  	 	8,362	  	
Total	  				  				  	 	430,621	  	

(1)	Excludes space leased to our Jumbo and Easy stores and our 30,377 square meters of space leased to third parties within our supermarket.	
Our four largest shopping centers in Chile are Costanera Center, Alto Las Condes, Florida Center and Portal La Dehesa. Alto Las Condes opened in 1993 and Florida Center and Portal La Dehesa opened in the second half of 2003.
Alto Las Condes, our second-largest shopping center, is a 250-store shopping center located in the commercial area of Las Condes, an affluent suburb of Santiago. As of December 31, 2012, the occupancy rate in Alto Las Condes was 100%. It has three department stores, Paris, Falabella and Ripley and offers a complete range of services including cinemas, food courts, an Aventura entertainment center, a medical center, ample parking and a wide-variety of stores.
Florida Center, our third-largest shopping center, is a 184-store shopping center located in La Florida in the southern area of Santiago. As of December 31, 2012, the occupancy rate in Florida Center was 96.7%. Florida Center has three department stores, Paris, Ripley and La Polar and a complete range of services, as well as an Aventura entertainment center. We own the land on which the Florida Center was constructed.
Portal La Dehesa, our fourth-largest shopping center, is a 114-store shopping center located in Lo Barnechea, one of Santiago’s most affluent neighborhoods. As of December 31, 2012, the occupancy rate in Portal La Dehesa was 98.2%. It has two department stores, Falabella and Ripley, and offers a complete range of services including cinemas, food courts, a medical center, ample parking and a wide-variety of stores.
On June 13, 2012, we opened Costanera Center shopping mall which is the largest shopping center in Chile, with approximately 139,566 meters square of gross leasable area and 313 stores. It is located in Providencia, Santiago, near a recently developed area of office and apartment buildings, in the heart of Santiago’s financial district. The Costanera Center is the largest multi-purpose commercial complex in Chile and contains Jumbo, Paris, and Easy stores, as well as an enclosed six-story shopping center, movie cinemas, a four- and a five-star hotel, office towers and five levels of underground parking spaces with capacity for approximately 6,000 cars. We own the land
 
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where the Costanera Center is being built. We believe that the Costanera Center office tower will be the highest building in South America, and was designed by world-renowned architect Cesar Pelli. As of December 31, 2012, the shopping center had a occupancy rate of approximately 94.2%.
Argentina
As of December 31, 2012, we owned and operated 15 shopping centers in Argentina, which together had 236,414 square meters of total leasable area. Of our 15 shopping centers, nine are located in the greater Buenos Aires metropolitan area, and one each in Mendoza, Neuquén, Rosario, Tucumán and Trelew. We operate 7 Aventura family entertainment centers in our shopping centers in Argentina. Our shopping center business in Argentina generated Ch$65,468 million in revenues from ordinary activities during the year ended December 31, 2012 (after eliminating inter-company sales which generally include revenue from rental payments by Jumbo and Easy stores), representing 0.7% of our consolidated revenues from ordinary activities for such period. As in Chile, this revenue takes into consideration our 15 shopping centers, as well as space rented to third parties in our hypermarkets, supermarkets and home centers. Revenues from our Argentine shopping center operations are derived in the same manner as in Chile, using variable percentage leases with fixed minimum payments. Each tenant also pays a percentage of common area costs and mall publicity.
Each of our shopping centers in Argentina has a Jumbo hypermarket or a Disco or Super Vea supermarket, and all except Unicenter have an Easy home improvement store. We seek to “anchor” shopping centers around Jumbo and Easy stores and to promote the flow of consumers to such destinations by including other tenants that complement the services and merchandise offered by Jumbo and Easy stores. Since 2002, we have also actively worked to promote this flow with the launch of our Aventura family entertainment centers. Unlike Chilean shopping centers, shopping centers in Argentina typically do not have anchor department store tenants.
The following table presents certain information regarding the shopping centers we own in Argentina as of December 31, 2012.

 	  	Location	 	  	Opening
year	 	  	Gross leasable
area (1)	 	
 	  	 	 	  	 	 	  	(square meters)	 	
Unicenter	  	 	Buenos Aires	  	  	 	1988	  	  	 	72,193	  	
Las Palmas de Pilar	  	 	Buenos Aires	  	  	 	1998	  	  	 	32,880	  	
Quilmes	  	 	Buenos Aires	  	  	 	1997	  	  	 	11,687	  	
Portal Rosario	  	 	Rosario	  	  	 	2004	  	  	 	26,923	  	
Plaza Oeste	  	 	Buenos Aires	  	  	 	1997	  	  	 	19,659	  	
Portal Tucuman	  	 	Tucuman	  	  	 	2007	  	  	 	10,240	  	
El Portal de la Patagonia	  	 	Neuquen	  	  	 	2000	  	  	 	11,424	  	
Lomas Center	  	 	Buenos Aires	  	  	 	1993	  	  	 	8,359	  	
El Portal de Escobar	  	 	Buenos Aires	  	  	 	2000	  	  	 	4,328	  	
San Martín	  	 	Buenos Aires	  	  	 	1994	  	  	 	5,283	  	
El Portal de los Andes	  	 	Mendoza	  	  	 	2001	  	  	 	5,979	  	
Portal de Palermo	  	 	Buenos Aires	  	  	 	2009	  	  	 	4,037	  	
Parque Brown	  	 	Buenos Aires	  	  	 	1982	  	  	 	12,051	  	
Trelew	  	 	Trelew	  	  	 	2010	  	  	 	5,718	  	
Shopping Salta	  	 	Salta	  	  	 	2012	  	  	 	5,653	  	
Total	  				  				  	 	236,414	  	

(1)	Excludes space leased to our Jumbo, Disco, Super Vea and Easy stores.	
Our largest shopping centers in Argentina are Unicenter and Portal Rosario which opened in 1988 and 2004, respectively. Unicenter is located in Buenos Aires and Portal Rosario in Santa Fe; each provides a complete range of services including cinemas, food courts, ample parking and a wide-variety of stores. Unicenter, a 271-store shopping center, was our first shopping center in Argentina. Unicenter is strategically located 25 kilometers from the center of Buenos Aires to take advantage of neighboring areas as well as to attract people from the affluent areas of the city. As of December 31, 2012, the occupancy rate in Unicenter was 100%. Portal Rosario, our second-largest shopping center in Argentina, is a 144-store shopping center with an occupancy rate of 96%, as of December 31, 2012.
 
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Peru
We own and operate 3 shopping centers in Peru, which together had 50,348 square meters of total leasable area. Our shopping center business in Peru generated Ch$6,903 million and revenues from ordinary activities during the year ended December 31, 2012 (after eliminating inter-company sales). As in Chile, this revenue takes into consideration our two shopping centers, as well as space rented to third parties in our hypermarkets and supermarkets. Revenues from our Peru shopping center operations are derived in the same manner as in Chile, using variable percentage leases with fixed minimum payments. Each tenant also pays a percentage of common area costs and mall publicity.
The following table presents certain information regarding the shopping centers we own in Peru as of December 31, 2012:

 	  	Location	 	  	Opening
year	 	  	Gross leasable
area (1)	 	
 	  	 	 	  	 	 	  	(square meters)	 	
Plaza Lima Sur	  	 	Lima	  	  	 	2007	  	  	 	40,160	  	
Plaza Camacho	  	 	Lima	  	  	 	2007	  	  	 	9,162	  	
Bajada Balta	  	 	Lima	  	  	 	2012	  	  	 	1,026	  	
Total	  				  				  	 	50,348	  	

(1)	Excludes space occupied by Wong stores.	
Plaza Lima Sur provides a complete range of services including cinemas, food courts, ample parking and a wide-variety of stores. On June 2012, we opened the Bajada Balta shopping mall in the sector of Miraflores in Lima with an occupancy rate note of 100% and 1,026 square meter of gross leasable area.
Financial Services
General
Our financial services division was established in 2003 when we launched our “Jumbo Más” credit card. With our acquisition of Paris in 2005, we obtained our predecessor’s credit card accounts and thus significantly expanded our credit card business. We rolled out a single Cencosud brand for our credit cards throughout our operations in South America, which will allow us to take a greater advantage of the “Cencosud” brand as well as to achieve greater operational efficiencies, and will make us able to consolidate under one common database all relevant information for our customers. Through this strategy, we expect to achieve higher penetration of our credit card business as we encourage consumers to use our credit cards rather than third-party cards, such as Visa or MasterCard. In Chile, during the year ended December 31, 2012, 41.6% of total sales in department stores, 14.3% in supermarkets and 25.2% in home improvement stores, were paid with one of our credit cards. As of December 31, 2012, we had over 4.7 million active credit card accounts. Our financial services operations also include joint ventures in Brazil and Colombia and an insurance brokerage in Chile.
The following table sets forth, for the periods indicated, the revenues from ordinary activities from our financial services operations per country, with 79.3% of such revenues from ordinary activities coming from Chile, as of December 31, 2012:

 	  	Year ended December 31,	 	
 	  	2012	 	  	2011	 	  	2010	 	
 	  	(in millions of Ch$)	 	
Revenues from ordinary activities	  				  				  				
Chile	  	 	223,726	  	  	 	222,560	  	  	 	199,727	  	
Argentina	  	 	41,238	  	  	 	31,915	  	  	 	12,654	  	
Brazil (1)	  	 	3,676	  	  	 	4,657	  	  	 	5,776	  	
Peru	  	 	13,614	  	  	 	8,741	  	  	 	2,853	  	
Total	  	 	282,253	  	  	 	267,874	  	  	 	221,010	  	

(1)	Joint venture with Banco Bradesco	
Credit Risk from the credit card business.
Given the relative importance of our exposure to the credit card business as compared to total maximum credit risk exposure, Cencosud has targeted its credit risk management toward developing a management model for its own
 
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credit cards as well as the banking business that is consistent with the Company’s strategic guidelines and the profiles of its credit transactions. The model takes into consideration the large-scale and fragmented nature of the cardholder portfolio and is structured in terms of cardholder selection, portfolio management and recovery of cardholders in default.
Business Definition
The financial services business is defined as one more element of Cencosud’s value offering, which complements the comprehensive product and service offerings the Company provides through each of its retail business units and is aimed at building long-term relationships with our customers. The largest percentage of the financial retail business corresponds to the Cencosud Credit Card in Chile, which has been operating for more than 20 years. The card’s market penetration is less pronounced in other countries, such as Peru where it has been available for 2 years and 6 months under the name of Banco Cencosud Peru. In addition, the Company is working with Banco Bradesco in Brazil to develop its financial business in that country, and with Banco Colpatria in another joint venture to offer financial services to clients in Colombia.
Risk Model
Foundations:
The Risk Management Model is tightly linked to the large-scale and fragmented nature of the retail cardholder portfolio with a very large volume of cardholders (more than 4,000,000 in the region) and average debt per cardholder of around US$460.
In this context, the challenge lies in managing the cardholder portfolio and its associated risk, building long-term relationships with cardholders and making the value proposition and the retail business sustainable over time. Risk management is structured to ensure:
 
•	 	Optimum cardholder selection.	
 
•	 	Optimum portfolio management, which involves activating, strengthening, retaining, reducing and containing the portfolio card holders.	
 
•	 	Optimum collections management for cardholders in default, maximizing recovery with high standards of quality and service, without affecting the comprehensive bond with Cencosud’s customers.	
Cardholder management efforts are broadly targeted to include all customers, from our target market to prospective customers, including those with or without retail purchases, with or without credit card movements and with or without payments in default.
 
a.	Key Risk Management Factors	
The large-scale and fragmented nature of the business determines portfolio management, in which the following key risk management factors are key:
 
•	 	Automation and centralization of decision making.	
 
•	 	Customer segmentation.	
 
•	 	Management of information and earnings projections.	
 
•	 	Collections management.	
 
•	 	Large-scale and selective control model for credit and collections circuit.	
 
•	 	Provision models to cover portfolio risk in line with Basel II standards.	
Automation and centralization of decision making: credit and collections decisions are large-scale and automated and only specific cases are analyzed by very specialized personnel. The Company features world class risk management and collections systems, including Capstone Decision Accelerator (CDA), TRIAD, Model Builder (from Fair Isaac Corporation - FICO) and Cyber Financial (from Inffinix), among others.
Customer segmentation: processes are segmented, differentiated by strategy and action tactics per risk profile, activity level and likelihood of occurrence, among others.
 
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Management of information and earnings projections: the Company manages comprehensive information and statistical models on all relevant business and customer variables, which allows it to make timely, prognostic decisions.
Collections management: the Company has one sole collections model for managing collections for retail cards, which uses an outsourcing collection model to efficiently recover debt through quality management of debtors.
Large-scale and selective control model for credit and collections circuit: the Company has large-scale controls over all phases of the credit and collections process, from its centralized processes to its point-of-sale and collections processes.
Provision models to cover portfolio risk in line with Basel II standards: the Company has different provisions models that adhere to local regulations in each country as well as Basel II standards, in order to most adequately reflect cardholder portfolio risk. External variables which affect payment behavior are also included in statistical models for estimating provisions. The Company is making progress in each country on implementing anti-cyclical provisions based on industry best practices, having started with Chile and Peru and, in 2012, Argentina. It also uses back testing to periodically monitor the sufficiency of the provisions it establishes.
Lastly, the Company has a corporate governance strategy that includes, among others, local Risk Committees for each country and a Corporate Risk Committee in which directors and senior executives participate. These committees have the following objectives, among others:
 
•	 	Monitor the business’s main risk indicators.	
 
•	 	Monitor the correct functioning of policies and credit and collections processes.	
 
•	 	Authorize entry into new markets and/or new products that impact risk.	
 
•	 	Authorize provisions models and monitor sufficiency.	
Chile
Credit cards
We are engaged in the credit card business in Chile through the issuance of our Cencosud credit cards, which have a strong presence in our stores and can be used in more than 290 affiliated businesses. As of December 31, 2012, we had approximately 2,168,591 active credit card accounts in Chile. Through our Cencosud card, we have increased the purchasing power of our middle- and low-income clients, who generally do not have credit offers with other institutions, and are generally unable to bear the fixed costs charged by other credit cards.
In addition to increasing sales and traffic in our stores, we also seek to achieve a financial return by facilitating access to credit for an underserved segment of the population. We target all customers of our stores as well as customers in affiliated businesses. Many of our credit card customers also have access to cash advances they can access from tellers at Jumbo, Santa Isabel, Paris, Easy and Turbus stores or from the ATM network of Banco Santander, allowing them to make cash withdrawals in many points of Chile.
Our Cencosud credit cards offer a single credit card with features including monthly payments of minimum charge, revolving credit and installment loans. In addition, when using our Cencosud credit cards, customers also receive added benefits such as access to discounts and special offers and accumulation of points, which are usable in our loyalty program and can later be used to make purchases in our stores. Cardholders are charged with administration fees, and interest charges are based on individual extensions of credit. The average monthly interest rate charged to cardholders as of December 31, 2012, 2011 and 2010 was 3.14%, 2.88% and 3.27%, respectively. We adjust the interest rates on our credit cards regularly in response to costs of funding and standard rates in the industry. The revolving interest rates charged to cardholders are floating.
 
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The following table sets forth the credit cards sales by Jumbo, Santa Isabel, Easy and Paris in Chile and the percentage that such sales represent of each store’s total sales for the periods presented:

 	  	Year ended December 31,	 	
 	  	2012	 	 	2011	 	 	2010	 	
 	  	Sales	 	  	%	 	 	Sales	 	  	%	 	 	Sales	 	  	%	 	
 	  	(in millions of Ch$) (1)	 	
Jumbo	  	 	264,586	  	  	 	18.6	% 	 	 	248,094	  	  	 	20.5	% 	 	 	228,701	  	  	 	21.1	% 	
Santa Isabel	  	 	83,146	  	  	 	8.0	% 	 	 	78,491	  	  	 	8.1	% 	 	 	76,358	  	  	 	8.3	% 	
Easy	  	 	95,518	  	  	 	20.0	% 	 	 	91,231	  	  	 	20.8	% 	 	 	85,416	  	  	 	21.4	% 	
Paris (2)	  	 	430,019	  	  	 	49.4	% 	 	 	425,599	  	  	 	53.3	% 	 	 	391,022	  	  	 	54.3	% 	
Total (3)	  	 	873,270	  	  	 	22.9	% 	 	 	843,415	  	  	 	24.7	% 	 	 	781,497	  	  	 	25.0	% 	

(1)	Except percentages.	
(2)	Does not include Johnson in Paris item	
(3)	Includes value added taxes.	
The table below sets forth information with respect to our credit card receivables in Chile:

 	  	Year ended December 31,	 	
 	  	2012	 	 	2011	 	 	2010	 	
 	  	(in millions of Ch$) (1)	 	
Portfolio Status	  				 				 				
Performing (2)	  	 	401,360.72	  	 	 	394,817	  	 	 	370,324	  	
Past due:	  				 				 				
31-89 days	  	 	25,116.28	  	 	 	26,732	  	 	 	25,749	  	
90-180 days	  	 	20,923.66	  	 	 	25,247	  	 	 	19,313	  	
181-365 days	  	 	—  	  	 	 	—  	  	 	 	—  	  	
Total	  	 	447,400.67	  	 	 	446,795	  	 	 	415,386	  	
Over 365 days and legal proceedings (3)	  	 	—  	  	 	 	—  	  	 	 	—  	  	
Loan loss allowance as % of past due loans	  	 	67.2	% 	 	 	61.7	% 	 	 	70.3	% 	
Loan loss allowance as % of all loans	  	 	6.9	% 	 	 	7.2	% 	 	 	7.6	% 	
 
(1)	Except percentages.	
(2)	Performing loans not past due more than 30 days.	
(3)	Entire portfolio written off. These claims are subject to a 100% allowance.	
The following table sets forth certain information regarding our non-performing loans and write-offs, for the periods indicated:

 	  	Year ended December 31,	 	
 	  	2012	 	 	2011	 	 	2010	 	
 	  	(in millions of Ch$) (1)	 	
Non-performing loans as % of total loans	  	 	10	% 	 	 	11.6	% 	 	 	10.8	% 	
Total write-offs	  	 	69,979	  	 	 	56,329	  	 	 	62,016	  	
Average monthly write-offs as % of total loans	  	 	1.0	% 	 	 	1.1	% 	 	 	1.2	% 	
 
(1)	Except percentages.	
Insurance brokerage
We entered into the insurance business to complement our credit card offerings, offering extended warranties for certain of the electronic products sold at our stores. We also offer other attractive insurance plans to our existing retail customers. Our insurance activities focus on the sale of life, medical, unemployment, home and car insurance, in simple formats and at accessible rates focusing on underserved socio-economic segments. Our insurance products are sold through our distribution channels and are supported by telemarketing and personalized marketing to customers in Paris and Jumbo stores. During the years ended December 30, 2012, 2011 and 2010, our insurance activities in Chile generated revenues from ordinary activities of Ch$15,164 million, Ch$26,553 million and Ch$24,126 million, respectively, representing less than 1.0% of our consolidated revenues from ordinary activities for such periods. These figures do not include extended warranty proceeds, which are booked in the retail division.
 
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Argentina
Credit cards
In Argentina we operate a credit card business for each of our retail brands. The Argentine market for financial services is served by domestic and foreign private banks, public sector banks, credit card operators and retailers. In April 2007, we entered the financial services and insurance markets in Argentina through the launch of our “Tarjeta Más.” As of December 31, 2012, we had issued 963,419 Cencosud credit cards. As of December 31, 2012, sales from our proprietary cards represented 1.9% of net sales, compared to 0.4% as of the same period in 2011. Through our Cencosud credit card, we have increased the purchasing power of our middle and low-income clients, who generally do not have credit with other institutions, and are generally unable to bear the fixed costs charged by other credit cards.
The following table sets forth the credit cards sales by Jumbo, Disco and Vea, and Easy in Argentina and the percentage that such sales represent of each store’s total sales for the periods presented:

 	  	Year ended December 31,	 	
 	  	2012	 	 	2011	 	 	2010	 	
 	  	Sales	 	  	%	 	 	Sales	 	  	%	 	 	Sales	 	  	%	 	
 	  	(in millions of Ch$) (1)	 	
Jumbo	  	 	116,142	  	  	 	21.40	% 	 	 	98,863	  	  	 	20.3	% 	 	 	67,805	  	  	 	17.0	% 	
Disco and Vea	  	 	75,455	  	  	 	3.9	% 	 	 	59,369	  	  	 	3.9	% 	 	 	35,786	  	  	 	2.7	% 	
Easy (2)	  	 	113,925	  	  	 	18.00	% 	 	 	110,030	  	  	 	16.0	% 	 	 	60,608	  	  	 	11.9	% 	
Total	  	 	305,522	  	  	 	10.90	% 	 	 	268,262	  	  	 	9.9	% 	 	 	164,198	  	  	 	7.4	% 	
 
(1)	Except percentages.	
(2)	Does no include Blaisten	
The following table sets forth certain information regarding our non-performing loans and write-offs in Argentina, for the periods indicated.

 	  	Year ended December 31,	 	
 	  	2012	 	 	2011	 	 	2010	 	
 	  	(in millions of Ch$) (1)	 	
Non-performing loans as % of total loans	  	 	6.38	% 	 	 	7.8	% 	 	 	5.9	% 	
Total write-offs	  	 	7,251	  	 	 	1,928	  	 	 	—  	  	
Average monthly write-offs as % of total loans	  	 	0.47	% 	 	 	0.1	% 	 	 	—  	  	
 
(1)	Except percentages.	
The table below sets forth information with respect to our credit card receivables in Argentina:

 	  	Year ended December 31,	 	
 	  	2012	 	 	2011	 	 	2010	 	
 	  	(in millions of Ch$) (1)	 	
Portfolio Status	  				 				 				
Performing (2)	  	 	120,956	  	 	 	115,998	  	 	 	77,898	  	
Past due:	  				 				 				
31-89 days	  	 	4,619	  	 	 	4,571	  	 	 	1,154	  	
90-180 days	  	 	2,137	  	 	 	1,792	  	 	 	649	  	
181-365 days	  	 	1,487	  	 	 	1,316	  	 	 	706	  	
Total	  	 	129,199	  	 	 	125,781	  	 	 	82,763	  	
Over 365 days and legal proceedings (3)	  	 	84	  	 	 	2,104	  	 	 	2,355	  	
Loan loss allowance as % of past due loans	  	 	99.1	% 	 	 	124.3	% 	 	 	244.7	% 	
Loan loss allowance as % of all loans	  	 	6.3	% 	 	 	7.6	% 	 	 	7.4	% 	
 
(1)	Except percentages.	
(2)	Performing loans not past due more than 30 days.	
(3)	Entire portfolio written off. These claims are subject to a 100% allowance.	
Insurance brokerage
We entered into the insurance business to complement our credit card offerings, offer extended warranties for certain of the electronic products sold at our stores and to offer other attractive insurance plans to our existing retail customers. In Argentina we offer insurance brokerage in the following areas: personal coverage, life insurance,
 
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homeowners and renters insurance, auto insurance, fraud insurance, health insurance, unemployment insurance, extended warranty coverage, pet insurance and others. The products are sold in our own retail chains and are also available via telemarketing through our call center. The insurance business has experienced substantial growth in recent years, and we believe it will continue to grow as new products are introduced and use of insurance in Argentina becomes more widespread. At December 31, 2012, our insurance brokerage operations in Argentina accounted for less than 1.0% of our consolidated revenues from ordinary activities.
Brazil
In Brazil we operate our financial services through a joint venture with Brazil’s Banco Bradesco, under which they operate our Credi-Hiper card, one of the largest private label credit cards in the northern region of Brazil. Recently, we also granted Banco Bradesco the exclusive right to issue and operate our Cencosud Card ( Cartão Cencosud ), which will soon replace Credi-Hiper, as well as to offer, within our stores in Brazil, consumer loans, purchase financing and insurance products.
Our relationship with Banco Bradesco began in May 2006, when GBarbosa entered into a five-year operating agreement with Banco Bradesco to jointly operate Credi-Hiper. Credi-Hiper was developed 29 years ago and is a key tool to maintaining the loyalty of GBarbosa’s clients, as well as to generating a significant portion of its revenues. In August 2011, GBarbosa amended and restated the agreement with Banco Bradesco and expanded its scope.
Pursuant to the amended and restated agreement, Cencosud Brasil Comercial, which operates our GBarbosa stores in Brazil, Bretas, Mercantil Rodrigues, Perini and Cencosud Brasil entered into a joint venture agreement with Banco Bradesco pursuant to which Banco Bradesco agreed to offer financial services in Cencosud stores in Brazil. Banco Bradesco was also granted a right of first refusal, subject to certain limitations, if we decide to offer certain additional financial services in its stores in Brazil. Banco Bradesco also has the right to require Cencosud Brasil to engage Banco Bradesco to manage all of its payroll processing and related services, as long as the price, terms and conditions of such payroll services are competitive, as assessed by us. Additionally, the parties agreed to enter into an agreement setting forth terms and conditions for our stores to operate as Banco Bradesco representatives for processing payment of credit card bills. We also granted to Banco Bradesco a limited, non-assignable, trademark license, for the use of certain of our trademarks on the Cencosud Card.
As consideration for Banco Bradesco’s rights under this agreement, Banco Bradesco agreed to pay up to R$300,000,000, including an upfront payment of R$100,000,000 and two other R$100,000,000 payments that are subject to reaching certain goals with respect to Cencosud credit card revenues. Additionally, with the exception of certain fees charged by Banco Bradesco from customers, the net revenue from the Cencosud credit card operation and the provision of certain other financial services, is to be shared equally between Banco Bradesco and us, and we bear 50% of the credit risk associated with the credit cards operated pursuant to this agreement, including defaults in payment and losses. The term of this agreement is 16 years from the execution date, but it can be terminated at any time subject to the payment of certain penalties.
We believe our long-term partnership with Banco Bradesco facilitates the sustainable growth of our financial services segment in Brazil by providing a number of competitive financing alternatives and affordable financial services products to our clients. As of December 31, 2012, we had approximately 1,012,114 active credit card accounts in Brazil.
In the year ended December 31, 2012, 15% of our gross revenues in Brazil were derived from purchases made with our Credi-Hiper and Cartão Cencosud cards. Through these cards, we have increased the purchasing power of our income middle- and low-income clients, who generally do not have credit with other institutions, and are generally unable to bear the fixed costs charged by other credit cards. These cards do not currently have administration fees, are accepted only in our stores and allow our clients to purchase food and non-food products. We believe that without access to these cards, many of our clients would not be able to afford purchases of higher-priced non-food items. Despite the poor credit background of some of our clients, these cards have low delinquency rates. As of December 31, 2012, 6.2% of our receivable accounts were outstanding for more than 90 days.
 
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Colombia
In Colombia we operate our financial services through a joint venture with Colombia’s Banco Colpatria “Colpatria”. Under this agreement, Colpatria is entitled to market private label and cobranded cards in all of Colombia. Private label cards are only accepted in Cencosud Colombia stores while those that are co-branded are internationally accepted. This agreement commenced prior to our acquisition of Carrefour’s supermarket operation in Colombia. Pursuant to the agreement, Colpatria is given selling space in all of our stores to market its financial services to store costumers. Promotional and marketing efforts for this joint venture are carried out by both parties.
Colpatria is responsible for all administrative processes related to the execution of the business such as the approval and upkeep of all credit facilities granted to clients and collection of receivables. Handling of the loan portfolio is the responsibility of Colpatria and all related efforts must be carried out in compliance with rules and under the supervision of the Superintendencia Finaciera de Colombia (“SuperFinanciera”) or any other regulatory body governing the business being carried out. Results from the financial business in Colombia for the year ended December 31, 2012 were included in the supermarket segment.
Profits or losses derived from this joint venture are distributed equally between the parties on a quarterly basis. This joint venture has a term of 5 years, being automatically extendable for an additional one year if neither party notifies the other 6 months prior to the original termination date.
Peru
We aim to provide financial solutions to our customers in order to make our private label cards the primary form of payment used in our supermarkets in Peru.
In August 2011, we launched our own private label credit card in Peru and we are expanding our offerings of financial services. The credit cards are operated through our supermarkets in Peru. In 2011, Cencosud created Banco Cencosud in Peru. In June 2012, we received the operation license from the SBS, and started operations in August 2012 through our Cencosud credit card. Our financial services segment also includes insurance brokerage services in Argentina, Chile, Brazil and Peru.
The following table sets forth the credit cards sales by Metro and Wong in Peru and the percentage that such sales represent of each store’s total sales for the periods presented:

 	  	Year ended December 31,	 	
 	  	2012	 	 	2011	 	 	2010	 	
 	  	Sales	 	  	%	 	 	Sales	 	  	%	 	 	Sales	 	  	%	 	
 	  	(in millions of Ch$) (1)	 	
Metro	  	 	64,183	  	  	 	12.45	% 	 	 	49,799	  	  	 	10.5	% 	 	 	36,740	  	  	 	10.1	% 	
Wong	  	 	2,901	  	  	 	0.99	% 	 	 	2,158	  	  	 	0.7	% 	 	 	2,553	  	  	 	1.1	% 	
Total (2)	  	 	67,084	  	  	 	8.28	% 	 	 	51,957	  	  	 	6.8	% 	 	 	39,292	  	  	 	6.7	% 	

(1)	Except percentages.	
(2)	Includes value added taxes.	
Other Operations
Electronic stores
As of December 31, 2012 we also operated 73 Eletro-show electronic goods stores in the state of Sergipe in Brazil, through which we sell non-food items. The first Eletro-show store was opened in December 2005. Our Eletro-show stores are operated in small cities where the opening of a traditional store is unjustified. This original and cheap format of store contributes to the enhancement of the GBarbosa brand in cities where we do not have other GBarbosa stores.
Our Eletro-show stores consist of small show rooms with up to a dozen products on display plus an online catalogue accessible at the store through in-store computers. Eletro-show stores have an average selling space per store of less than 100 square meters. The main target market is low- and middle-income classes of consumers, who do not have access to internet at home, are not used to making virtual purchases, and do not reside near one of our traditional stores. The store has a number of computers where potential clients can access a wide range of products.
 
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Our salesmen are available to support the customers in the selection and purchase of desired products. We only sell non-food products in the kiosk. Once a customer places an order for products, we assure delivery within 48 hours. The Eletro-show stores have a separate space for community activities, which enables us to attract more customers. We intend to continue installing kiosks in select locations where there is appropriate demand. At December 31, 2012, our Eletro-show stores accounted for less than 1.0% of our consolidated revenues from ordinary activities.
The following table sets forth certain performance metrics related to our Eletro-show in Brazil for the periods presented:

 	  	Year ended December 31,	 	
 	  	2012	 	  	2011	 	  	2010	 	
Number of stores	  	 	73	  	  	 	55	  	  	 	40	  	
Total selling space (square meters)	  	 	8,099	  	  	 	5,516	  	  	 	3,891	  	
The results of our Eletro-show stores are reported under our “supermarkets” segment in our financial statements.
Pharmacies
We also operated 64 pharmacies in Brazil under the GBarbosa brand as of December 31, 2012, which are located inside or adjacent to our GBarbosa supermarkets. At December 31, 2012, our GBarbosa pharmacies accounted for less than 1% of our consolidated revenues from ordinary activities. The results of our GBarbosa pharmacies are reported under our “supermarkets” segment in our financial statements.
As of December 31, 2012, we operated 47 pharmacies in Peru under the Punto Farma Wong and Punta Farma Metro brands, which are located inside or adjacent to our Wong and Metro supermarkets. At December 31, 2012, our Punto Farma pharmacies accounted for less than 0.2% of our consolidated revenues from ordinary activities. The results of our Punto Farma pharmacies are reported under our “supermarkets” segment in our financial statements.
As of December 31, 2012, we operated 39 pharmacies in Colombia under the FarmaSanitas brand, which are located inside or adjacent to our supermarkets acquired from Carrefour in Colombia. At December 31, 2012, our FarmaSanitas pharmacies accounted for less than 0.2% of our consolidated revenues from ordinary activities. The results of our FarmaSanitas pharmacies are reported under our “supermarkets” segment in our financial statements.
Gas stations
We also operate 12 gas stations in Brazil, under the Bretas brand, which are located inside or adjacent to our Bretas supermarkets. At December 31, 2012, our Bretas gas stations accounted for less than 1.0% of our consolidated revenues from ordinary activities. The results of our Bretas gas stations are reported under our “supermarkets” segment in our financial statements.
We also operate 44 gas stations in Colombia, under the Terpel, Chevron and Biomax brands, which are located inside or adjacent to our supermarkets in Colombia. At December 31, 2012, our gas stations in Colombia accounted for less than 1.0% of our consolidated revenues from ordinary activities. The results of our gas stations in Colombia are reported under our “supermarkets” segment in our financial statements.
Entertainment centers
In Chile and Argentina, we operate ten family entertainment centers under the Aventura brand. Our Aventura entertainment centers offer arcade games, mechanical games, bowling lines, 3D games and even an indoor roller coaster in our Aventura center at Florida Center in Santiago. At December 31, 2012, our Aventura entertainment centers accounted for less than 1.0% of our consolidated revenues from ordinary activities. The results of our Aventura entertainment centers are reported under our “Other” segment in our financial statements.
 
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Loyalty programs
General
We have invested for the last 13 years in loyalty programs designed to reward, retain and attract new customers. Our loyalty programs allow us to develop customer consumption databases which enable us to enhance our merchandise selection and to more effectively target our marketing efforts. Further, our loyalty programs allow us to enhance customer retention by improving our understanding of the buying patterns and preferences of our customers.
Our loyalty programs allow customers to benefit by accumulating points from the purchases they make in our different stores as well as purchases they make with our affiliates, which can then be used to acquire products listed in special catalogues and sold in our stores. In 1999, we started with Jumbo Más and, in 2006, after significant growth in our operations due to several acquisitions, we migrated to a multi-sponsor program named Circulo Más. In 2010, we launched the Nectar loyalty program through a partnership with Groupe Aeroplan Inc. (“Groupe Aeroplan”), a leading loyalty management and customer insights company.
Nectar was created in the United Kingdom in 2002 and has become one of the largest loyalty programs in the world. Through our partnership with Groupe Aeroplan, we are able to utilize some of the most sophisticated loyalty and customer intelligence experience from over 15 countries provided by leading retailers like Sainsbury’s, one of the United Kingdom’s leading food retailer, Auchan, the Italian hypermarkets operator, and CVS Caremark, one of the largest pharmacy health care provider in the United States. Nectar allows us to enhance our customers’ experience by providing a generous, flexible, every-day rewards program, reduces our overall operating costs as some costs are shared by the group of businesses that participate in the program, and provides us with a large and rich customer consumption database that allows us to better understand a large number of our customers.
We believe that our loyalty programs, particularly Nectar, strengthen our relationship with our customers and believe that a substantial majority of our sales come from loyalty clients.
The results of our loyalty programs are reported under our “Other” segment in our financial statements.
Chile
We offer our Nectar loyalty programs in Chile. As of December 31, 2012, we had issued approximately 2,816,083 million active loyalty members in Chile, and as of the same date, 76% of our sales in Chile came from loyalty club members.
The following table sets forth certain information regarding our loyalty program sales by each of our divisions in Chile, for the periods indicated.

 	  	Year ended December 31,	 	
 	  	2012	 	 	2011	 	 	2010	 	
 	  	Sales
(W/tax)	 	  	% (1)	 	 	Sales
(W/tax)	 	  	% (1)	 	 	Sales
(W/tax)	 	  	% (1)	 	
 	  	(in millions of Ch$, except percentages)	 	
Jumbo	  	Ch$	1,428,399	  	  	 	84	% 	 	Ch$	 1,211,609	  	  	 	85.3	% 	 	Ch$	 1,082,538	  	  	 	84	% 	
Santa Isabel	  	 	1,034,326	  	  	 	63	% 	 	 	967,724	  	  	 	62.6	% 	 	 	909,138	  	  	 	54	% 	
Easy	  	 	381,974	  	  	 	66	% 	 	 	351,647	  	  	 	67.7	% 	 	 	318,919	  	  	 	66	% 	
Paris	  	 	875,538	  	  	 	80	% 	 	 	799,122	  	  	 	81.6	% 	 	 	719,635	  	  	 	82	% 	
Total	  	Ch$	3,720,237	  	  	 	76	% 	 	Ch$	3,335,146	  	  	 	75.8	% 	 	Ch$	3,030,230	  	  	 	73	% 	

(1)	Percentage that such sales represent of total sales by each of our stores in Chile.	
Argentina
In Argentina we also offer our Jumbo Más and Vea Ahorro loyalty programs. As of December 31, 2012, we had 1,543,607 active loyalty club members in Argentina and, as of the same date, 61.0% of our supermarket sales in Argentina came from loyalty club members.
 
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The following table sets forth certain information regarding our loyalty program sales by each of our divisions in Argentina, for the periods indicated.

 	  	Year ended December 31,	 	
 	  	2012	  	2011	 	 	2010	 	
 	  	Sales
(W/tax)	 	  	% (1)	  	Sales
(W/tax)	 	  	% (1)	 	 	Sales
(W/tax)	 	  	% (1)	 	
 	  	(in millions of nominal Ar$, except percentages)	 	
Jumbo	  	Ar$	3,333	  	  		  	Ar$	2,585	  	  	 	66	% 	 	Ar$	2,162	  	  	 	68	% 	
Disco & Vea	  	Ar$	4,216	  	  		  	Ar$	3,885	  	  	 	70	% 	 	Ar$	2,987	  	  	 	66	% 	
Total	  	Ar$	7,549	  	  		  	Ar$	6,470	  	  	 	68	% 	 	Ar$	5,149	  	  	 	67	% 	

(1)	Percentage that such sales represent of total sales by each of our stores in Argentina.	
Peru
In Peru, we are members of the Bonus loyalty program, with a 42.5% ownership. Bonus is a leading multi-participant loyalty program that develops and manages loyalty and incentives programs through a system that rewards customers by giving them points for their purchases in any of our stores that later can be exchanged for other products. At the same time, it allows us to administer a database for marketing campaigns directed to specific segments.
The following table sets forth certain information regarding our loyalty program sales by each of our divisions in Peru, for the periods indicated.

 	  	Year ended December 31,	 	
 	  	2012	 	 	2011	 	 	2010	 	
 	  	Sales
(W/tax)	 	  	% (1)	 	 	Sales
(W/tax)	 	  	% (1)	 	 	Sales
(W/tax)	 	  	% (1)	 	
 	  	(in millions of S/., except percentages)	 	
Wong	  	 	1.30	  	  	 	81	% 	 	 	1.24	  	  	 	81.0	% 	 	 	1.08	  	  	 	81.0	% 	
Metro	  	 	2.23	  	  	 	79	% 	 	 	2.00	  	  	 	79.0	% 	 	 	1.72	  	  	 	79.0	% 	
Total	  	 	3.53	  	  	 	80	% 	 	 	3.24	  	  	 	80.0	% 	 	 	2.80	  	  	 	80.0	% 	

(1)	Percentage that such sales represent of total sales by each of our stores in Peru.	
Retail Consumer Banking
Banco Paris
Since 2005, we have owned Banco Paris, a specialty retail consumer bank in Chile. Banco Paris was formerly the Santiago Express division of Banco Santander Santiago, which we acquired in 2005 and registered as a separate bank under the Banco Paris brand with the Superintendencia de Bancos e Instituciones Financieras (the Superintendency of Banks and Financial Institutions, or “SBIF”). As of December 31, 2012, Banco Paris’ network included 29 branches throughout the city of Santiago and various regions of Chile and 39 retail promotional stands within Cencosud retail stores, and is ranked 18th in terms of total loans and accounts receivables among all private sector banks in Chile according to the Chilean Central Bank. At December 31, 2012, Banco Paris accounted for approximately 0.3% of our net revenues.
Banco Paris’ lending and credit activities are primarily aimed at satisfying the demands for financial services of individuals. Banco Paris offers its individual customers a range of products and services aimed at satisfying their financial service needs, including consumer loans, credit cards and residential mortgage loans. In keeping with its orientation to the retail banking market, Banco Paris offers a range of traditional deposit instruments, including savings and time deposits. Banco Paris also offers its customers life and homeowner’s insurance.
As of December 31, 2012, Banco Paris served more than 430,000 individual customers, with loans outstanding to approximately 412,000 debtors, including approximately 408,000 consumer loans and 4,000 credit card accounts. At the same date, Banco Paris had 49,000 savings accounts and 1,800 time deposits related to individuals.
To evaluate a customer’s credit risk, Banco Paris uses scoring and other automated systems to determine the customer’s profile and payment capacity in terms of income, education, family obligations, other financial obligations and other factors.
 
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To evaluate a customer’s credit risk, Banco Paris uses scoring and other automated systems to determine the customer’s profile and payment capacity in terms of income, education, family obligations, other financial obligations and other factors.
The table below sets forth information with respect to our Banco Paris loan portfolio:

 	  	Year ended December 31,	 	
 	  	2012	 	 	2011	 	 	2010 (1)	 	
 	  	(in millions of Ch$) (2)	 	
Portfolio Status	  				
Performing (3)	  	 	195,293	  	 	 	164,784	  	 	 	166,879	  	
Past due:	  				 				 				
31-89 days	  	 	6,719	  	 	 	6,467	  	 	 	7,988	  	
90-180 days (4)	  	 	5,354	  	 	 	5,421	  	 	 	6,133	  	
+ 180 days	  	 	660	  	 	 	838	  	 	 	964	  	
Total	  	 	208,025	  	 	 	177,510	  	 	 	181,964	  	
Loan loss allowance as % of past due loans	  	 	84	% 	 	 	88	% 	 	 	107	% 	
Loan loss allowance as % of all loans	  	 	5	% 	 	 	6	% 	 	 	9.0	% 	
 
(1)	Includes activities from postponed commissions.	
(2)	Except percentages.	
(3)	Performing loans not past due more than 30 days. Excludes Chilean credit card portfolio.	
(4)	Entire portfolio written off. These claims are subject to a 100% allowance.	
Banco Cencosud
In 2011, we established Banco Cencosud in Peru and in June 2012 we received the operation license from the SBS, and started operations in August 2012 through our Cencosud credit card. Banco Cencosud is regulated by the banking, insurance and pensions superintendence of Peru ( Superintendencia de Bancos, Seguros y Pensiones ).
Prices
Our price strategy varies depending on the format, market and business unit. For our high-end formats, we seek to offer quality and service while for our mid- and low-income formats, we seek to offer competitive prices without compromising service and quality. In addition, for seasonal items, our strategy is to periodically markdown these items until we have sold all seasonal stock. To ensure the maintenance of competitive market prices, we monitor periodically the prices of our competitors and position our prices to keep our competitiveness. Finally, we also support our prices with special offers and also with discounts through our private label credit cards.
Purchasing
We purchase our products from approximately 13,000 suppliers. No single supplier or group of related suppliers accounts for more than 3.1% of the total products purchased by us in 2012 on a consolidated basis. In addition to local and regional suppliers, we are also able to import products directly from Asia, where we are able to obtain more favorable pricing, and which in turn allows us to negotiate improved purchasing terms with certain suppliers. We believe that the sources and availability of materials for our retail store operations are adequate and will continue to be so for the foreseeable future. We have not experienced any difficulty in obtaining the types or quantities of the merchandise we require on a timely basis and believe that, if any of our current sources of supplies were to become unavailable, alternative sources could be obtained without any material disruption to our business.
 
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Private Label Business
Private label products are those manufactured by one company for offer under another company’s brand. We carry our own private label program in both our food-retail and non-food-retail businesses, which allows us to offer a variety of products using our own portfolio of brands rather than third-party brands. The main objectives of our private label program are:
 
 	•	 	to provide differentiation and uniqueness to our stores by offering a unique set of products available only in our stores; and	
 
 	•	 	to achieve incremental margin versus the national brands.	
Our strategy is to develop a portfolio of private brands shared across all countries and business units and to cover the most important categories and developing value added (70%) and first price (30%) brands. To do this in 2009 we assembled a corporate private label team consisting of former employees of consumer goods companies, such as L’Oreal, Unilever, P&G and Nestlé. In 2008, we started to optimize and streamline our brand portfolio from 70 to 53 brands. We also established a private brand development process, a key performance index (KPI), toured retailers worldwide searching for benchmarks, and created network of suppliers, agencies, consultants and research companies to help develop our private label brands. Our Paris department stores currently carry private label products under the brands Tribu, Opposite, Aussy, Greenfield and Alaniz. We have also developed the URB and NEXT brands for our supermarket and home improvement operations.
As a result of these actions, our private label brands have grown two to three times faster than the rest of our business and we expect this trend to continue, with private label shares over sales growing from 6.9% of total sales in 2009 to 7.5% of total sales in 2012.
Distribution
General
Some of our products are delivered directly to our stores by our major suppliers and others are sent to our distribution centers. The use of our own distribution centers allows us to achieve operational efficiencies as suppliers can deliver their products to centralized locations rather than to our many store locations and we can benefit from economies of scale. In the event we experience significant growth outside our current geographic area, however, we may choose to lease additional facilities under similar terms or seek alternatives in order to recognize certain cost efficiencies.
Supermarkets
Chile
For fast-moving and high-volume sales merchandise, national suppliers distribute products directly to each store. For slow-moving groceries, perishable fruits and vegetables and imported products and meat, distribution is centralized through our distribution centers and delivered by third-party transportation companies. Sales from products delivered to our distribution centers accounted for approximately 38.8% of our sales at December 31, 2012.
We operate in three distribution sites in the Santiago metropolitan region from which we conduct all centralized deliveries to our Jumbo and Santa Isabel stores, including:
 
 	•	 	A 41,000 square meters distribution center that operates in three shifts six days a week and is used to deliver non-perishable products, perishable fruits, vegetables and other refrigerated food categories to Santa Isabel and Jumbo stores. We use a cross-docking system for fresh products, that allows fresh products to reach stores in 24 hours. Cross-docking is the practice of receiving goods at a distribution center, which are immediately consolidated with other goods for quick distribution to stores.	
 
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 	•	 	A 90,000 square meters distribution site used to deliver non-perishable, non-food and textile products. Three quarters of the distribution center are dedicated to imported products and the remainder is used for a cross-docking system of national products that allows products to be shipped in less than 24 hours.	
 
 	•	 	A 2,500 square meters distribution center that is used to store and delivery of imported fresh meat.	
Frozen products (imported and national) are stored and delivered using a third-party-logistic provider.
In order to achieve operational efficiencies, during 2011 we increased the use of our centralized distribution system for Jumbo stores in the Santiago metropolitan region, primarily for non-perishable products and fruit and vegetables. During the first quarter of 2012 we commenced a “Lean Logistics Project,” with McKinsey & Company consultants, in order to review our procedures. We use a SAP-based automatic replenishment system for all products stored in our distribution centers with the goal of increasing availability of products and maintaining lower inventories.
Deliveries are made using external carriers. Freight contracts are generally signed for three- or four-year periods, and include a rate adjustment based on changes in oil prices, exchange rates and other factors.
Argentina
Distribution to our stores in Argentina is centralized from three distribution centers located in Buenos Aires, Cuyo and Córdoba, and a transfer site in Tucuman totaling 153,000 square meters, which together accounted for 80.0% of our supermarket sales in Argentina in 2012, including meat and bakery products. Approximately 20% of our products are distributed to our stores directly by our suppliers.
Each distribution center supports between 60 and 120 specific stores in a five to six days a week basis, running both a stock operation of national and imported products and a cross-docking operation for fresh vegetable and fruits, and a share of groceries received from national suppliers. All operations are supported by a warehouse management system and radio frequency technology (consisting of a special chip attached to our products which can be later detected by antennas, allowing real time knowledge about the location of our products).
Real-time order information is transmitted from stores to distribution centers and subsequently to suppliers via our intranet site. This real-time system allows us to optimize product availability and delivery time. In addition, our distribution centers in Argentina have an automatic replenishment system to manage all non-perishable goods, including discount and seasonal goods, which helps maintain proper inventory levels and avoid shortages.
In order to increase our capacity and productivity, during 2011 we implemented a new voice automated system in our Buenos Aires and Cordoba sites. The roll-out to Mendoza is on-going. This technology gives our employees free use of their hands, thus improving their productivity and safety.
All trucks are provided by third-party companies pursuant to one to three years contracts.
Brazil
We currently use three distribution centers for our GBarbosa stores in the north east of Brazil, totaling approximately 51,000 square meters. They are located in Aracaju (32,000 square meters), Salvador da Bahia (11,000 square meters) and Fortaleza (8,000 square meters). Our distribution centers accounted for approximately 75.3% of our sales as of Decembre 31, 2012. The GBarbosa distribution centers run a dry and fresh goods stock operation. In 2011, we increased cross-docking operations in order to manage sales growth and improve productivity. We currently expect to increase our operations in Salvador da Bahia in 2012, in order to satisfy the growing demand in Bahia and reduce transportation costs. Deliveries to GBarbosa stores are made primarily through external carriers although we do own a small fleet of delivery vehicles. Home deliveries are handled entirely by external carriers.
Bretas stores in central Brazil are supported by two distribution centers, totaling approximately 40,000 square meters. They are located in Belo Horizonte (30,000 square meters) and Goiania (10,000 square meters). Both distribution centers store dry goods, vegetables and fresh goods operations. Both distribution centers have staple stock (storage) and cross-docking capabilities, which enable goods received at the distribution center to be stocked
 
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and distributed at a later time or distributed immediately to our stores. Currently the distribution centers include electronic goods for store and home delivery. Products stored in our distribution centers accounted for approximately 60% of our sales in 2012. Distribution to stores and home deliveries are made entirely by external carriers.
Perini stores in Salvador da Bahia also have their own distribution center located in one store, because of their smaller scale and the higher-quality fresh products offered, Perini stores also receive direct deliveries from suppliers. Perini does own a small fleet of vehicles for distribution to its stores.
Mercantil Rodrigues are stores with high rotation food goods, such as fresh fruits and vegetables, meat and poultry, dairy and others. These stores receive direct deliveries from suppliers.
Our 31 Prezunic stores in the city of Rio de Janeiro were served by a rented distribution center. This distribution center is located in that city’s center, has an area of 45,000 square meters and has both stock and cross-docking operations. It has facilities for dry goods, chilled goods and frozen goods. The distribution to stores are made by a standardized fleet of 21 trucks, which we own, with a complete GPS monitoring system.
Peru
We operate three distribution centers and three warehouses, which supports both Wong and Metro supermarkets and hypermarket stores. The main distribution center is a 26,248 square meter site, owned and used for the cross-docking of fresh vegetables, meat and other food products. Additional rented distribution centers add 29,200 square meters of storage area, for non-food, textile, imported goods, and for home delivery operations of home appliances and other large sized items.
Two of the other facilities are situated on the northern coast, and the last one is situated in Lima for storage of frozen and refrigerated goods. Centralized distribution accounts for approximately 76% of Peru supermarkets sales.
Cross-docking of national groceries and fresh-products represents approximately 78% of centralized distribution while a regular in-stock operation is used for distribution of imported products and some categories of national non-food products. We use a SAP-based warehouse management system for our operations. Deliveries are made using external carriers, delivery contracts are negotiated periodically.
Colombia
Our distribution operations in Colombia are conducted through a third party who offers storage services and handling of products. Approximately, 60% of our goods sold are handled through one of the three different platforms used by our third party contractor.
Cross docking is used in the cities of Bogota, Cali, Bucaramanga, Barranquilla and Medellin. This service has no charge for Cencosud as suppliers carry the cost of these operations and each negotiates on an ad hoc basis. Both perishable and non-food items are handled through this platform. Cencosud assumes logistical costs associated with the handling of perishable goods. Imported goods are handled by a specific platform in Bogota from which goods are distributed to our stores.
Imported goods are handled by a specific platform in Bogota from which goods are distributed to stores.
Department stores
We operate one 80,137 square meter distribution center located in Santiago that services all our Paris department stores in Chile. Centralized distribution accounts for nearly all of our Paris sales. We use a warehouse management system, RF technology and an automated sorter for cases and certain textiles. In addition, we have another operation in the same distribution center for internet sales and offer special value-added services (packing, gift wrapping and gift cards and others) and deliver the products directly to our customers’ homes.
Deliveries are made using external carriers. We have different contracts for each distribution zone and type of service required. Contracts are generally negotiated on a two to three year basis.
 
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For the new Johnson department store chain, we operate a 21,175 square meter rented distribution center located in Santiago. Centralized distribution accounts for all sales. The distribution is made by third-party contractors, and there are first initiatives underway to share home delivery with Paris stores.
Home improvement stores
Chile
Our 80,000 square meters distribution center is located in Santiago and accounted for approximately 70% of our Easy sales in 2012. Centralized distribution is mainly supported by a cross-docking system that operates with more than 450 vendors and accounts for two thirds of the distribution operations, while the rest arises from imported stored goods, which represented approximately 18.0% of Easy sales in 2012.
Transportation is handled by external carriers. Home delivery transportation contracts are signed for a one- to two-year period. Distribution center-to-store transportation contracts are signed for four years because of the high investment required to customize trucks for optimal load capacity. Special two-floor trucks with side load compartments are designed to transport irregular-shape products that are commonly sold in our Easy stores.
An automatic replenishment system manages the stock levels in stores in order to maximize service level and optimize inventory turnover.
Argentina
We operate three distribution centers located in Buenos Aires, totaling 59,000 square meters, which accounted for 42.0% of our Easy sales in Argentina in 2012. Easy Argentina also relies on direct deliveries from suppliers to stores, which accounted for 58.0% of our Easy sales in 2012.
Centralized distribution includes a regular warehouse operation from stocked merchandise (imported and domestic goods) which represented approximately 20.0% of sales in 2012, and a growing cross-docking operation with more than 600 vendors that accounted for approximately 22.0% of sales in 2012. There is also a home delivery operation which accounted for approximately 15.0% of sales in 2012.
Transportation is handled by external carriers. Distribution center-to-store transportation and home delivery transportation contracts are negotiated every two years.
Colombia
Due to the small size of our operations in Colombia, distribution and deliveries are handled by a third-party.
Marketing
During 2012, we worked to further develop our Cencosud brand, with two main objectives: (i) consolidating Cencosud as a strong brand, widely recognized across socioeconomic groups and across regions, and (ii) creating a family of brands recognized and valued by our customers, with the endorsement of Cencosud as a seal of quality and reliability.
To achieve these objectives, we updated and redesigned our logos in order to reflect the familiarity between our brands and their association with a retail leader in South America.
Our aim is to develop strong brands prepared for competition with global brands, but with an appeal to local consumers. For this, we have an internal consumer research unit that allows us to better understand our consumers’ behaviors, attitudes, demographics and trends, providing us with important and valuable information necessary to adjust our marketing strategy in each of our business units in all the countries in which we operate.
 
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Supermarkets
Chile
Consistent with our business strategy, our marketing plan is directed at projecting our image as a hypermarket and supermarket chain which offers value through a combination of high-quality service and competitive prices. In Chile, Jumbo is one of the most valued brands, mainly for its association with quality, variety and service. Our principal marketing themes for our Jumbo hypermarkets are “ Jumbo te da más ” in Chile and Argentina (“ Jumbo gives you more ”). Santa Isabel is a supermarket based on the concept of familiarity and closeness with our customers. Our principal marketing theme for our Santa Isabel supermarkets is “ Santa Isabel te Conoce ” (“ Santa Isabel knows you ”).
We operate separate, marketing programs for our Jumbo hypermarkets and Santa Isabel supermarkets. Our primary advertising outlets, in addition to point-of-sale marketing, are mass marketing, mainly television and radio, nationwide and regional press, brochures and magazine-type inserts in major newspapers, and we are investing strongly and steadily in digital marketing, including social networks and email marketing. We receive fees from our Chilean suppliers for access to selling space in our hypermarkets and supermarkets and in connection with special promotions and other marketing programs.
Argentina
As in Chile, our marketing strategy in Argentina is directed primarily at increasing net sales and projecting our image as a hypermarket chain which offers high-quality service and competitive prices. Our marketing efforts for Jumbo and Disco in Argentina are, however, aimed more at consumers in the middle and higher income levels. For lower income levels, we operate Super Vea supermarkets. Located mainly in the provinces, Super Vea supermarkets are focused on the concept of value priced products and, consequently, financial saving to the retail customer.
Our primary advertising outlets in Argentina, in addition to point of sale marketing, are mass marketing, mainly television and radio, nationwide and regional press, brochures and magazine-type inserts in major newspapers, and we are investing strongly and steadily in digital marketing, and email marketing. As in Chile, we receive fees from our Argentine suppliers for access to selling space in our Argentine hypermarkets and in connection with special promotions and other marketing programs.
Brazil
We believe we have a very positive image in the eyes of our clients in the locations we operate, due to our low prices, the high quality of services we offer, and the wide range and superior quality of products.
Our marketing department and external advertising agencies meet on a periodic basis to analyze and develop our marketing strategies, product development and advertising campaigns. As a result, we are able to customize and adjust our marketing strategy to local traditions and ethnical backgrounds, adding significant value. Our GBarbosa Brand sponsors traditional Brazilian northeastern celebrations of “Sao Joao” (St. John’s Day) and “Carnaval” (summer carnival).
For higher income consumers, we operate Perini supermarkets, offering a wide variety of delicatessen and premium products, and in-store produced food and pastries. Perini communication is mainly direct. Each client segment receives tailored communication, with activities and events of interest. We focus our marketing and advertising efforts on regional television advertisements, local press and also on the distribution of promotional flyers in our stores. Since a significant number of our clients are from middle- and low-income segments, and the majority are middle-aged housewives, television advertising is our main marketing tool.
We have included Tarjeta GBarbosa in our advertising campaigns, as it is one of the main drivers of our clients’ loyalty. As part of our roll-out of a single Cencosud brand for our credit cards, we will soon launch “Tarjeta Cencosud,” which will also facilitate the purchase of more expensive products, such as electronics and home appliances.
 
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Peru
Our marketing strategy in Peru is segmented. Our marketing strategy for our Wong brand, which primarily targets the upper-income consumer, relies heavily on well-known newspapers and sponsors and promotes Peruvian products and festivities such as “El Corso,” “Evento del Pisco” and others. Our marketing strategy for the Metro brand relies more on mass media, mainly television, which allows us to broadly communicate our offers and value proposition to middle-income families, a growing segment in the Peruvian market. As in Chile, we receive fees from our Peruvian suppliers for access to selling space in our Peruvian stores and in connection with special promotions and other marketing programs.
Home improvement stores
Chile
Our home improvement marketing efforts are directed at projecting our image as provider of everything necessary for small to large construction projects under one roof to the general population, including professional contractors and homeowners. Our marketing strategy reinforces our commitment to offer the best solutions for our customers at the best prices. Our marketing strategy relies heavily on mass media and recently, but with growing importance, on digital media. Consistent with our policy of customer satisfaction, we guaranty the lowest price in the market and accept returned products if the client is not satisfied.
Argentina
In Argentina, in addition to traditional mailings and catalogues similar to Chile, we conduct programming through our website, www.easy.com.ar, television and radio that teaches our clients how to use our products, and also through practical classes at our store locations. Our television and radio programming runs continuously on local channels. In Argentina, we also guarantee customer satisfaction and accept any returns within the timeframes established by the consumer protection guidelines currently in place.
Department stores
Our Paris department stores have a complete marketing calendar, with a strong and consistent investment in mass media as well as digital media. The Paris Facebook page has more than 1 million fans, and Paris was a pioneer in creating special events for its fans. Paris has advertising contracts with well-known celebrities in the local community, positioning Paris as a fashionable, modern and women-oriented brand.
Since 2010, Paris has presented the “Paris Parade,” an event similar to the Macy’s Thanksgiving Day Parade in New York, where people and large inflatable balloons parade through Santiago’s main avenue.
Shopping centers
Marketing activities and programs for our shopping centers are conducted by each individual shopping center. Our principal marketing objective is to attract customers to our shopping centers through traditional publicity on television, radio and in newspaper announcements as well as through special events at the shopping centers, including fashions shows, concerts, theater productions, wine tastings, cooking classes and aerobics classes. In addition, we regularly give away gifts through lotteries that customers can enter by purchasing a product from one of our shopping center retailers.
All shopping center promotional and marketing costs are paid by our tenants as part of their monthly maintenance fees. Each tenant’s contribution is proportional to its sales.
Competition
The retail industry is highly competitive and characterized by high inventory turnover, controlled operating expenses and small profit margins as a percentage of sales. Earnings primarily depend upon the maintenance of high per-store sales volumes, efficient product purchasing and distribution and cost-effective store operations and inventory management. Advertising and promotional expenses are necessary to maintain our competitive position in
 
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our major markets. We compete principally on the basis of price and, to a lesser extent, location, selection of merchandise, quality of merchandise (in particular perishables), service, store conditions and promotions. We face strong competition from international and domestic operators of supermarkets, department stores, home improvement stores and shopping centers, including Casino, Carrefour, Wal-Mart, and Falabella.
The following table provides a brief overview of our competitive position in each of our principal markets as of December 31, 2012:

 	  	Chile	 	  	Argentina	 	  	Brazil	 	  	Peru	 	  	Colombia	 	
Supermarkets	  	 	2 nd	  	  	 	2 nd	  	  	 	4 th	  	  	 	1 st	  	  	 	2 nd	  	
Department stores	  	 	2 nd	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
Home improvement	  	 	2 nd	  	  	 	1 st	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
Shopping centers	  	 	2 nd	  	  	 	2 nd	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
Source: ASACH, ABRAS, Nielsen, competitors’ press releases, and company estimates.
See “—Industry Overview and Competition” below for more information about the markets in which we compete.
Management Information Systems
Our management information systems include technology that permits us to automate our back office, distribution and checkout operations. Our technology department is responsible for technical support, operations, development and maintenance of our management information systems. Our team specializes in providing company-wide business intelligence according to our business strategy to achieve a competitive advantage.
We have made significant investments in maintaining and updating our technology infrastructure and systems applications and business solutions. The current customized information systems have contributed significantly to our competitiveness and growth to date, however, they are also diverse, complicated, increasingly expensive and of limited flexibility in respect of evolving technology and growth of our business. Therefore, we are simplifying our systems architecture. For example, we have integrated the operations of our Jumbo and Disco supermarkets in Argentina, resulting in operating efficiencies and cost savings. We have also been working on the integration of SAP FICO on a regional level in Argentina and Colombia in 2012. We expect to complete this system in Peru in 2013, while in 2015 we expect that have completed its implementation in Brazil and Chile. Finally, all acquired entities are operating over the same data network, sharing network services, IP phone and video conferencing services, as well as information technology security tools and protocols, allowing us to operate at lower costs and setting the ground for wide-scale Information Technology (“IT”) integration across the regions in which we operate.
We are in the process of a company-wide roll out of single business solutions for each of our business segments, which will simplify the current processes and further enable our growth strategy. The business solutions are based in technology obtained through a strategic agreement with SAP A.G. These projects are expected to improve financial control, inventory optimization, store operations and supply chain planning and execution. Furthermore, it will facilitate and simplify the incorporation of new stores, allowing us to maintain competitiveness and quickly adapt to trends and our customers’ needs. In our supermarket division, considerable resources are being applied for the SAP migration in Brazil with plans to have the entire division on a single SAP platform by the end of 2013. This project would include the interaction of the recently acquired Prezunic operations. We expect to have the totality of our supermarket division on a single regional SAP platform by 2016. For our home improvement stores segment, the platform roll-out began in 2011 in Chile and was completed for Argentina and Colombia in 2012. We estimate to have concluded the same process for our department store segment in 2014 with SAP for Paris Peru being implemented in 2013. For the department stores in Chile in 2014. In Peru, we have rolled out the necessary systems to support the opening of Banco Cencosud and provide the necessary systems to support the daily operations of our financial arm in the country.
As part of the process of integrating the operations, systems, processes and controls that are part of the businesses we have acquired, we are working to strengthen existing control mechanisms in accordance with the provisions of Section 404 of the Sarbanes Oxley Act. In connection therewith, we created a new area in our IT department whose role is to lead all IT initiatives related to upgrading our internal controls and complying with the requirements and standards of the Sarbanes Oxley Act. Currently, the work is focused on the implementation of a new credit card sales reconciliation system that will provide support for a strong internal control environment in this area, the improvement of the procedures for the reconciliation of accounts, and a deep review of the role definitions and segregation of duties included in systems, and the implementation of applications for monitoring critical users.
 
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In the case of logistics, we plan to implement a single home delivery module for all business units.
We have also selected a credit card application architecture that will include risk management, credit approval, customer relationship management, collections and transaction processing for our credit card operations in each region. This new solution will be implemented in Peru first, and will then be rolled-out to Chile, Argentina and Brazil.
While we have some backup data processing systems that could be used in the event of a catastrophe or a failure of our primary systems, we do not yet have an integrated disaster recovery plan or a backup data center that covers all regions. We are currently in the process of centralizing our data centers in order to process all applications for each region in a single location. We plan to do the same with our business intelligence and management control information. We expect to roll-out two backup data centers in Santiago and Buenos Aires, supported by global service providers and state-of-the-art equipment, which will provide support to all our regions.
Cyber security
Our security platform allows us to manage user identities, allocate resources to users and secure access to corporate resources. Our Information Security Department and Corporate Audit Department review segregation of duties. We have an access management process for all the key applications that support business units based in Chile, Argentina, Peru and Colombia. Companies we acquired in Brazil are currently developing similar systems.
Cyber attack detection systems are currently in place, including firewalls and intrusion prevention systems. We have deployed antivirus solutions for endpoints and servers, antispam and antivirus for corporate e-mail and a web filtering solution to secure internet access. Security infrastructure is deployed in Chile, Argentina, Peru and Colombia, and is in progress in Brazil.
All policies, procedures and tools described above are also used in credit card and banking operations. Additionally, in 2011 we initiated a program to ensure our compliance with the Payment Card Industry Data Security Standard (PCI DSS), an information security standard for organizations that handle cardholder information for the major debit, credit, prepaid, e-purse, ATM, and POS cards. Defined by the Payment Card Industry Security Standards Council, the standard was created to increase controls around cardholder data to reduce credit card fraud via its exposure. Validation of compliance is done annually—by an external Qualified Security Assessor (QSA) for organizations handling large volumes of transactions, or by a Self-Assessment Questionnaire (SAQ) for companies handling smaller volumes.
All of our distribution centers have a backup network link, uninterruptible power supply and emergency power systems in order to be protected from link cuts and main power disruptions. We also use a daily data backup system and have service contracts in place to repair any hardware failures.
In April 2009, the home page for our Unicenter Shopping Center in Argentina was hacked. As a result, our customers were unable to access the home page for a brief period. There were no material disruptions to our business operations. In response to this event, and to prevent any future disruptions, we have defined more stringent security recommendations for software development. Software is subjected to an exhaustive security test before the application is moved to the production environment and ethical hacking activities are performed periodically to ensure security.
Property, Plants and Equipment
Our properties include hypermarkets, supermarkets, home improvement stores, department stores, shopping centers and land reserves for the construction of stores and shopping centers. All of our properties are located in Argentina, Brazil, Chile, Colombia and Peru. We believe that all of our facilities are adequate for our present need and suitable for their intended purposes.
We own our headquarters, located at Av. Kennedy 9001, Las Condes, Santiago, Chile.
 
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The following table sets forth certain information with respect to our facilities at December 31, 2012:

Segment	  	Country	  	Number of
stores	 	  	Area (1)	 	  	% Leased	 	
Supermarkets	  	Chile	  	 	171	  	  	 	238	  	  	 	63	% 	
Hypermarkets	  	Chile	  	 	43	  	  	 	287	  	  	 	19	% 	
Supermarkets	  	Peru	  	 	86	  	  	 	259	  	  	 	50	% 	
Supermarkets	  	Argentina	  	 	288	  	  	 	522	  	  	 	49	% 	
Supermarkets	  	Brazil	  	 	205	  	  	 	505	  	  	 	95	% 	
Supermarkets	  	Colombia	  	 	100	  	  	 	454	  	  	 	16	% 	
Home Improvement	  	Argentina	  	 	47	  	  	 	389	  	  	 	30	% 	
Home Improvement	  	Chile	  	 	31	  	  	 	300	  	  	 	23	% 	
Home Improvement	  	Colombia	  	 	4	  	  	 	34	  	  	 	75	% 	
Department Stores	  	Chile	  	 	78	  	  	 	377	  	  	 	73	% 	
Shopping Centers	  	Argentina	  	 	15	  	  	 	236	  	  	 	13	% 	
Shopping Centers	  	Chile	  	 	11	  	  	 	431	  	  	 	27	% 	
Shopping Centers	  	Peru	  	 	3	  	  	 	50	  	  	 	0	% 	
Distribution Centers	  	Argentina	  	 	14	  	  	 	227	  	  	 	29	% 	
Distribution Centers	  	Brazil	  	 	12	  	  	 	147	  	  	 	100	% 	
Distribution Centers	  	Chile	  	 	9	  	  	 	334	  	  	 	78	% 	
Distribution Centers	  	Colombia	  	 	9	  	  	 	33	  	  	 	100	% 	
Distribution Centers	  	Peru	  	 	6	  	  	 	55	  	  	 	100	% 	
 
(1)	In thousands of square meters.	
In addition, we routinely purchase undeveloped properties that we hope to use for future construction supermarkets, home improvement stores and shopping centers. As of December 31, 2012, we had the following undeveloped properties:

Country	  	Number  of
properties (1)	 	  	Total area
(in thousands
of square
meters)	 	
Argentina	  	 	61	  	  	 	2,701	  	
Brazil	  	 	6	  	  	 	170	  	
Chile	  	 	51	  	  	 	2,602	  	
Colombia	  	 	2	  	  	 	68	  	
Peru	  	 	37	  	  	 	212	  	
 
(1)	Includes properties where construction is ongoing.	
Intellectual Property
The principal trade names and service marks used in our business are Jumbo, Jumbo Más, Easy, Más Easy, Santa Isabel, Disco, Vea, Paris, Más Paris, Paris Corredores de Seguros, Banco Paris, Johnson, Nectar, Wong, Metro, GBarbosa, and Prezunic among others, and their respective logos, covering all major South American markets. We own or have the rights to use the trade names and service marks and the respective logos related to all our marks. We believe that our trademarks, trade names and service marks are valuable assets to us which successfully differentiate us from our competitors.
Insurance
We maintain insurance policies covering, among other things, fires, earthquakes, floods, acts of terrorism and general business liability. Business interruption insurance is not currently available in Chile on terms we consider commercially attractive. Management believes that our insurance coverage is adequate for our business.
 
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Material Agreements
For a description of the material agreements relating to our indebtedness, please see “Item 5.—Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Indebtedness.”
On November 30, 2012, Cencosud S.A. completed the acquisition of Carrefour supermarket operations in Colombia, for a total purchase price equal to €2 billion. The company is expected to migrate all acquired stores to the Cencosud format in 2013. See “Item 4. Information on the Company—A. History and Development of the Company—History.”
Industry Overview and Competition
Our countries of operation—Argentina, Brazil, Chile, Colombia and Peru—represent a combined population of approximately 332.0 million, according to the IMF as of 2012. Chile, our largest market in terms of revenues from ordinary activities, has a population of approximately 17.4 million and experienced GDP growth of 6.1% in 2010, 6.0% in 2011 and is estimated to have grown 5.5% in 2012, as reported by the Central Bank of Chile. Argentina, our second-largest market in terms of revenues from ordinary activities, has a population of approximately 41.0 million and, according to the Central Bank of Argentina, experienced annual GDP growth of 9.2% in 2010, 8.9% in 2011 and is estimated to have grown 5.1% in 2012, as reported by the Argentine Ministry of Economy. Brazil, our third-largest market in terms of revenues from ordinary activities, has a population of approximately 196.5 million and, according to the Central Bank of Brazil, experienced annual GDP growth of approximately 7.5% in 2010, 2.7% in 2011 and 0.9% in 2012.
We have supermarkets in Argentina, Brazil, Chile, Peru and Colombia; home improvement stores in Argentina, Chile and Colombia; shopping centers in Argentina, Chile and Peru; and department stores in Chile. During the year ended December 31, 2012, 73.6% of our revenues from ordinary activities came from our supermarket operations, 11.6% came from home improvement operations, 9.7% from our department stores, 1.8% from our shopping centers and 3.1% from our financial services.

 	  	Year Ended December 31, 2012	 	
 	  	Supermarkets	 	 	Home
improvement	 	 	Department
stores	 	 	Shopping
centers	 	 	Financial
services	 	 	Other (1)	 	
Revenues from ordinary activities	  	 	6,738,171	  	 	 	1,063,086	  	 	 	886,075	  	 	 	165,462	  	 	 	282,253	  	 	 	14,030	  	
Gross margin	  	 	24.9	% 	 	 	33.1	% 	 	 	27.2	% 	 	 	85.6	% 	 	 	62.8	% 	 	 	81.6	% 	
Adjusted EBITDA (2)	  	 	399,774	  	 	 	91,386	  	 	 	43,127	  	 	 	119,900	  	 	 	59,272	  	 	 	(77,136	) 	
 
(1)	See “Item 4. Information on the Company—B. Business Overview” for a description of our “Other” segment.	
(2)	See “Presentation of Financial Information” for the definition of Adjusted EBITDA and the reconciliation of Adjusted EBITDA to IFRS measures.	
The Supermarket Industry
Chile
As of December 31, 2012, we estimate that the Chilean supermarket industry is composed of approximately 1,319 stores nationwide, including hypermarkets and supermarkets. INE estimates the size of industry at Ch$7,563 billion in 2012. According to BMI, in 2012 supermarkets accounted for approximately 26.5% of net retail sales in Chile and according to INE approximately 43.3% of such net sales in the Santiago metropolitan region. As of December 31, 2012, total net sales by supermarkets in Chile grew by 12.8% as compared to the same period in 2011, according to the Chilean National Institute of Statistics. During the last three years, same-store sales at our supermarkets grew by 4.8%, 4.7% and 5.9%, in 2012, 2011 and 2010, respectively.
In recent years, the Chilean supermarket industry has been characterized by the construction of larger stores (including more hypermarkets), both on a free-standing basis and within shopping centers and other commercial developments, and consolidation of ownership in fewer, larger supermarket chains. Current trends in the industry include increased differentiation among competitors, with some supermarket chains emphasizing a low price/low service strategy, while others have pursued a strategy of moderate or higher prices with higher levels of service. Other recent trends in the Chilean supermarket industry have include the development of specialized internet sale
 
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channels by major players, increased funding of marketing costs by suppliers, expansion by chains outside the Santiago metropolitan region and to urban areas with lower purchasing power, the growth of private label products, and increased demand for organic products and prepared foods.
As noted above, we believe that the Chilean supermarket industry shows certain signs of saturation, and as a result newly opened stores to some extent cannibalize the sales of existing stores. As of December 31, 2012, we estimate that the three largest supermarket operators in Chile represented approximately 94.1% of the industry in terms of net revenues. Our growth prospects in the Chilean food retailing sector are likely to depend to a large extent on future growth in Chilean GDP or acquisitions of other supermarket chains, and we cannot assure you that either will in fact occur.
Our competitors include hypermarkets, supermarkets, hard discount stores, self-service stores, traditional, family-owned neighborhood grocers and open markets. Although competition is already intense in many locations, we believe that competition is likely to intensify further as existing competitors expand the number of their stores and improve the quality of their operations and as new competitors enter the market. Competition is based on price, quality, variety, customer service and store location, with various competitors emphasizing these factors to varying degrees.
The following table presents certain information about us and our principal competitors in the Chilean supermarket industry as of December 31, 2012:

 	  	Wal-Mart
Chile (1)	 	 	Cencosud	 	 	SMU	 	 	Falabella
(Tottus)	 	
Number of stores	  	 	327	  	 	 	214	  	 	 	478	  	 	 	43	  	
Total selling space (square meters)	  	 	748,000	  	 	 	524,677	  	 	 	786,726	  	 	 	154,908	  	
Market share (2)	  	 	36.3	% 	 	 	27.2	% 	 	 	24.5	% 	 	 	6.1	% 	
Source: Public filings, INE, ASACH, Planet Retail.
(1)	Formerly known as D&S	
(2)	As of December 31, 2012, based on reported net revenues from supermarket operations in Chile.	
We estimate that Wal-Mart Chile, formerly known as D&S, is the largest supermarket chain in Chile in terms of net revenues and, at December 31, 2012, it operated 327 stores in Chile. Wal-Mart Chile operates four different sizes of stores under different brands, allowing it to target different segments of the market offering a combination of every day low prices, service and proximity. In 2003, D&S initiated a promotional program of “everyday low prices” which increased pressure on our operating margins. D&S was acquired by Wal-Mart in January 2008, and due to its association with Wal-Mart, we believe it has greater leverage with its suppliers than us or its other competitors. As a result, it is able to obtain more favorable purchasing terms than us.
Recent efforts by Chilean retail holding company SMU S.A. (“SMU”) to consolidate over 50 regional food retailers in Chile into a single integrated rival threaten to increase competition in the Chilean supermarket industry. Additionally, in September 2011 SMU announced it had acquired rival Supermercados del Sur, which we estimate was the fourth-largest supermarket chain in Chile in terms of revenues at the time. These consolidation efforts have not yet had a material impact, but we perceive increased risk over the intermediate-to-longer term. We see similar consolidation efforts targeting smaller hardware stores and “do-it-yourself” retailers in the home improvement industry, such as the SMU’s acquisition of Construmart, the third-largest retailer in the Chilean home improvement industry in terms of revenues in our estimation. We expect other regional rivals to emerge in the future. Peru’s second-largest supermarket retailer according to Apoyo y Asociados (“Apoyo”) is also expanding into markets historically dominated by Wong. In Brazil, improved offerings by Wal-Mart appear to be leveraging international procurement more effectively and are therefore able to compete more strongly in terms of price.
Moreover, on December 14, 2011, the Chilean antitrust authority ( Fiscalía Nacional Económica , or “FNE”) announced an investigation into anti-competitive practices in the food retail industry. The investigation includes several local operators, including Cencosud, Wal-Mart Chile, SMU and Tottus. In accordance with Chilean regulations, FNE has not disclosed the details of the investigation to the public, but it appears to be focused on private label groceries, fresh poultry and beef. Without additional detail it is difficult to determine the full impact of this investigation. If the FNE concludes that we engaged in anti-competitive practices we could face a maximum sanction of up to U.S.$30 million.
 
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We generally perceive homogeneity in retail pricing and terms. Chile’s vendor base is largely consolidated, and characterized by oligopoly and monopoly structures that have generally limited procurement power among retailers, despite their perceived scale advantages.
Argentina
Historically, the Argentine supermarket industry was dominated by traditional, family-owned neighborhood grocers ( almacenes ). In the 1980s, supermarkets began to proliferate and the first hypermarkets appeared, a trend that accelerated in the early 1990s with significant expansion of modern supermarket operations, including minimarkets, supermarkets and hypermarkets in urban areas. During the 1990s, consumer grocery purchases at almacenes declined. Since 1999, the level of market penetration has remained relatively stable. In 2012, consumer grocery purchases at supermarkets accounted for approximately 33% of total consumer grocery expenditures based on net sales according to BMI.
The Argentine supermarket industry is highly competitive and fragmented, and we estimate that the four largest supermarket chains in Argentina account for approximately 69.9% of total supermarket net sales as of December 31, 2012. In Argentina, where foreign food retailers have an established presence and we are a smaller competitor, we face a very different competitive atmosphere than in Chile. We believe that some of these food retail companies have substantially greater financial resources than us. In addition, there is strong competition from small independent stores and individual, non-chain stores that represent a significant and growing part of the food and grocery business in Argentina.
For many years, large international retail chains, such as Wal-Mart, the largest U.S. retailer based on market capitalization, have operated in the Argentine market. When Wal-Mart entered the Argentine retail market in 1995, it implemented a strategy of low food prices that was aimed at capturing market share from large hypermarkets such as Carrefour. As a result, the rate of industry consolidation increased substantially during recent years, as larger store formats have been increasing their market share at the expense and through the purchase of smaller store formats. Further, we believe that the Argentine supermarket sector continues to suffer from excess square footage, and that it is reasonably likely that there will continue to be considerable competitive pressure on our operating margins for the foreseeable future.
The following table presents certain information about us and our principal competitors in Argentina as of December 31, 2012:

 	  	Cencosud	 	 	Carrefour	 	 	Wal-Mart	 	 	Coto	 	
Number of stores	  	 	288	  	 	 	438	  	 	 	111	  	 	 	123	  	
Market share (1)	  	 	17.3	% 	 	 	22.5	% 	 	 	15.3	% 	 	 	14.8	% 	
Source: Public Filings, INDEC, Planet Retail.
(1)	In terms of sales.	
Our principal competitor in Argentina is Carrefour. At December 31, 2012, Carrefour operated 438 stores. Part of Carrefour’s competitive advantage arises from its low prices and aggressive promotional campaigns around special seasonal events.
We expect this highly competitive environment to continue to exert pressure on our results of operations in this market.
Brazil
The Brazilian supermarket industry represented approximately 4.1% of Brazil’s GDP in 2012, as reported by BMI. According to ABRAS, the food retail industry in Brazil had gross revenues of R$183 billion in 2011, representing a 22% increase compared to 2010.
 
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The Brazilian food retail industry is highly fragmented. Despite consolidation within the Brazilian food retail industry, according to ABRAS, in 2011, the twenty largest supermarket chains represented only approximately 76% of the food retail industry. According to ABRAS our stores accounted for approximately 3.1% of the gross sales of the entire Brazilian food retail industry in 2011. We believe that future acquisitions will mainly involve smaller-sized stores. Another trend in the retail food industry is large chains migrating to smaller local, such as Tesco Express and Sainsbury’s Local.
We believe the cash and carry segment ( atacarejo ), a wholesale segment in the retail food industry is one of the fastest growing market segments in Brazil in terms of new store openings. This segment was created in order to serve customers within a market niche that was neither reached by self-service retail nor by wholesale.
The following table sets forth key statistics from the Brazilian retail food market by geographic region in 2012:

 	  	Gross revenues	 	 	Stores	 	
Region	  	R$ millions	 	  	%	 	 	Number	 	  	%	 	
Southeast	  	 	81,293	  	  	 	54.1	% 	 	 	3,915	  	  	 	51.9	% 	
South	  	 	29,027	  	  	 	19.3	% 	 	 	1,857	  	  	 	24.6	% 	
North/Northeast	  	 	29,691	  	  	 	19.7	% 	 	 	1,350	  	  	 	17.9	% 	
Middle West	  	 	10,374	  	  	 	6.9	% 	 	 	428	  	  	 	5.7	% 	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Total	  	 	150,385	  	  	 	100.0	% 	 	 	7,550	  	  	 	100.0	% 	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Source: ABRAS.
As set forth in the following table, according to ABRAS data, in 2011, the ten largest retailers recorded revenues of approximately R$103.3 billion, conducting business in approximately 3,143 stores

Company	  	 
Gross revenues	 	 	Number of
checkouts	 	  	Space
available
for sales
(square meters)	 	  	Number of
stores	 	  	Employees	 	
	  	(R$ million)	 	  	%	 	 			  			  			  			
Companhia Brasileira de Distribuição	  	 	36,144	  	  	 	35.0	% 	 	 	15,007	  	  	 	2,811,103	  	  	 	1,647	  	  	 	144,914	  	
Carrefour Comércio e Indústria Ltda.	  	 	29,000	  	  	 	28.1	% 	 	 	8,497	  	  	 	1,509,186	  	  	 	654	  	  	 	78,057	  	
Wal-Mart Brasil Ltda.	  	 	22,334	  	  	 	21.6	% 	 	 	8,632	  	  	 	1,390,943	  	  	 	479	  	  	 	86,992	  	
GBarbosa Comercial*	  	 	3,501	  	  	 	3.4	% 	 	 	1,396	  	  	 	172,110	  	  	 	131	  	  	 	13,000	  	
Cia. Zaffari Comércio e Indústria	  	 	2,490	  	  	 	2.4	% 	 	 	815	  	  	 	126,938	  	  	 	29	  	  	 	9,060	  	
Total —five largest	  	 	93,470	  	  	 	90.5	% 	 	 	34,347	  	  	 	6,010,280	  	  	 	2,940	  	  	 	332,023	  	
Prezunic Comercial Ltda.*	  	 	2,449	  	  	 	2.4	% 	 	 	777	  	  	 	68,919	  	  	 	30	  	  	 	7,305	  	
DMA—Distribuidora S.A.—EPA	  	 	1,930	  	  	 	1.9	% 	 	 	904	  	  	 	124,605	  	  	 	92	  	  	 	9,966	  	
Irmãos Bretas Filhos e Cia.*	  	 	1,926	  	  	 	1.9	% 	 	 	741	  	  	 	91,163	  	  	 	30	  	  	 	6,326	  	
A. Angeloni & Cia. Ltda.	  	 	1,813	  	  	 	1.8	% 	 	 	566	  	  	 	82,317	  	  	 	21	  	  	 	6,881	  	
COOP—Cooperativa de Consumo	  	 	1,729	  	  	 	1.7	% 	 	 	679	  	  	 	100,381	  	  	 	30	  	  	 	6,597	  	
Total —ten largest	  	 	103,317	  	  	 	100.0	% 	 	 	38,014	  	  	 	6,477,665	  	  	 	3,143	  	  	 	369,098	  	
Source: ABRAS.
*	Denotes companies owned and controlled by us, as of January 2012.	
The following table sets forth key statistics from the Brazilian retail food market by geographic region in 2011:

 	  	Gross revenues	 	 	Stores	 	
Region	  	R$ millions	 	  	%	 	 	Number	 	  	%	 	
Southeast	  	 	81,293	  	  	 	54.1	% 	 	 	3,915	  	  	 	51.9	% 	
South	  	 	29,027	  	  	 	19.3	% 	 	 	1,857	  	  	 	24.6	% 	
North/Northeast	  	 	29,691	  	  	 	19.7	% 	 	 	1,350	  	  	 	17.9	% 	
Middle West	  	 	10,374	  	  	 	6.9	% 	 	 	428	  	  	 	5.7	% 	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Total	  	 	150,385	  	  	 	100.0	% 	 	 	7,550	  	  	 	100.0	% 	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Source: ABRAS.
 
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Our main competitor in Brazil is Bompreço, a company controlled by Wal-Mart. It ranks third in sales in Brazil, according to ABRAS. Bompreço is the largest retailer in the Northeast of Brazil, where we believe we hold the number two position in terms of sales, and is our competitor in the states of Sergipe, Bahia and Alagoas, with six, 54 and eight stores, respectively. We also compete against Companhia Brasileira de Distribuição, which operates three Extra stores in the city of Salvador, one Extra store in the city of Aracajú, and two Extra stores in city of Maceió. In Minas Gerais, we compete against DMA Distribuidora S/A (“DMA”), which operates 92 stores where we believe we hold the number one position in terms of sales. In Rio de Janeiro, where we believe we hold the number three position in terms of sales, we compete against Guanabara and Mundial, which operate 22 and 19 stores, respectively. We also compete against open fairs and small- and medium-sized retailers that buy their products from informal distribution networks to obtain prices lower than the prices charged by our suppliers.
Peru
As of December 31, 2012, we estimate that the Peruvian supermarket industry was composed of approximately 202 stores nationwide, including hypermarkets and supermarkets, with over 75.0% of the stores located in the Lima metropolitan area. In 2012, the estimated size of the Peruvian food industry was U.S.$21 billion per year, with 17.9% served by the three main supermarket players. However, the supermarket industry in Peru is becoming more attractive and competitive. According to CCR, in 2012, supermarket penetration for the Lima metropolitan area was approximately 33.0% resulting in a country average of less than 20.0%.
A large percentage of consumption in Peru is still served by informal trade. Smaller grocery stores, convenience stores and open air markets play an important role in this industry with more than 82.0% of the market share according to CCR. The level of competition and the identity of competitors have changed over the last four years. Between 2007 and 2012, supermarket total net sales in Peru grew at an average annual rate of approximately 16%, according to CCR.
The following table presents certain information about us and our principal competitors in Peru as of September 30, 2012

 	  	Cencosud	 	 	Supermercados
Peruanos	 	 	Tottus
(Falabella)	 	
Number of stores	  	 	77	  	 	 	78	  	 	 	31	  	
Total selling space (square meters)	  	 	244,332	  	 	 	207,407	  	 	 	123,980	  	
Market share (1)	  	 	42.3	% 	 	 	33.5	% 	 	 	24.2	% 	
Source: Public filings.
(1)	As of September30, 2012, based on reported net revenues from supermarket operations in Peru; market share estimates based solely on reported sales from the three major operators, and does not take into account the market participation of other smaller participants.	
For the three quarters ended September 30, 2012, we believe we were the largest operator of supermarkets in Peru in terms of net sales based on our comparisons against information from public filings of our main competitors as of September 30, 2012. Our principal competitors in the hypermarket format are Supermercados Peruanos, controlled by the Rodriguez Pastor family, who also control the Peruvian financial group Intergroup, and Tottus, controlled by Falabella.
Colombia
The Colombian retail market is driven principally by the general level of economic activity and the growth of per capita available income in Colombia. Since emerging from recession in the early 2000s, the Colombian economy has experienced significant growth, and improved security conditions. According to DANE, real GDP growth in 2009, 2010 and 2011 was 1.7%, 4.0% and 5.9%, respectively. Real GDP is expected to have grown 3.5% in 2012 according to Global Insight. This positive macroeconomic environment has resulted in an expansion in domestic consumption, which has benefited the Colombian retail market. According to DANE, total retail sales
 
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including formal and informal trade and other channels, such as on-premise food outlets and drugstores, increased by 51.4% to Col$82,694 billion in 2011 from Col$54,605 billion in 2006. We believe future growth in the retail sector will be driven by, among other things, economic expansion and increasing credit availability to consumers in Colombia.
The Colombian retail food sector comprises various types of stores, including privately-owned supermarkets, limited assortment stores and convenience stores, government-subsidized merchandising cooperatives known as cajas de compensación , specialty stores (such as butcher shops and bakeries) and delivery operations. A large number of Colombians also shop through informal channels, such as neighborhood grocery stores and outdoor food markets.
The positive macroeconomic environment in recent years has contributed to the growth of both the formal and informal markets. In the past several years, the formal market has grown at a faster pace than the informal market driven mainly by increased purchasing power, aggressive penetration strategies by well-capitalized formal retailers which has reduced the proximity advantage of informal outlets, greater packaging options in the formal channels including better presentations at competitive prices, and growing credit product offerings by large retailers. The formal retail market is expected to continue growing in the medium term due to the strong macroeconomic outlook, increasing market consolidation and relatively low penetration when compared with other countries. We believe the growth of the formal market will also be driven by the increasing concentration of Colombia’s population in urban centers. Colombia has a population of approximately 47 million, 46% of which is 25 years old or younger. The food and merchandise retail business in Colombia is highly competitive and is characterized by increasing pressure on profit margins. The number and type of competitors and the degree of competition experienced by each of our stores vary by location. Competition occurs principally on the basis of price, location, selection of merchandise, quality of merchandise (in particular for perishables such as produce), service, store conditions and promotions.
The following table presents certain information about us and our principal competitors in Colombia as of December 31, 2012:

 	  	Cencosud (1)	 	  	Exito	 	  	Olimpica	 	  	La	 	
Number of stores	  	 	100	  	  	 	427	  	  	 	242	  	  	 	26	  	
Total selling space (square meters)	  	 	454,980	  	  	 	739,540	  	  	 	282,980	  	  	 	150,933	  	
Source: Public filings.
(1)	In November 2012, we completed the acquisition of Carrefour’s supermarket operations in Colombia See “Item 4. Information on the Company—A. History and Development of the Company—History.”	
The Home Improvement Industry
Chile
We believe the Chilean home improvement industry is the most developed in South America with nearly 50 thousand households per big-box store in 2011, as compared to 430 thousand in Peru, 200 thousand in Argentina or 440 thousand in Colombia. Nevertheless, the U.S.$10.8 billion size industry is still highly fragmented among big-box operators and several hardware stores (some of which have teamed up in associations such as MTS and Chilemat), according to our estimates. Growth of the industry’s main players has been based on expansion of Chile’s construction and housing industries, as well as sector consolidation.
The Chilean home improvement industry is highly competitive and has recently been subject to increased consolidation. In 1998, Home Depot entered the Chilean market and was subsequently acquired by Falabella, through its Home Store subsidiary in 2001. In November 2002, we purchased the Chilean home improvement stores and agricultural product chain, Proterra. In January 2011, the Chilean retail holding company SMU acquired the entire share capital of the hardware store chain Construmart, operating 23 stores under the brand Construmart with an average size of 2,500 square meters.
 
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The home improvement industry caters to home improvement, repairs and maintenance, and new construction. Customers in this sector include homeowners, small contractors and large construction companies seeking building materials for new projects. The sector is characterized by high price sensitivity and demand for high levels of product variety.
The following table presents certain information about us and our major competitors in Chile, as of December 31, 2012:

 	  	Sodimac	 	  	Cencosud	 	  	Construmart (1)	 	
Number of stores	  	 	80	  	  	 	31	  	  	 	100	  	
Total selling space (square meters)	  	 	648,768	  	  	 	299,806	  	  	 	67,800	  	
Source: Public filings, Planet Retail, Internal estimates.
(1)	Includes Construmart and Ferrexperto Construmart stores.	
For the year ended December 31, 2012, we estimate that we were the second-largest operator of home improvement stores in Chile in terms of net sales based on our comparison against publically filed information from our main competitors as of December 31, 2012. At December 31, 2012, Sodimac operated 80 home improvement stores with a total of 648,768 square meters of selling space. Its competitive advantage arises from its multi-format structure, with its Sodimac Homecenter stores that are similar to our Easy home improvement stores, as well as its Sodimac Constructor stores that cater to professional builders and its Sodimac Empresas warehouses that facilitate efficient delivery of construction materials in Antofagasta, Viña del Mar, Santiago and Talcahuano primarily used for large construction companies. Sodimac also accepts Falabella’s widely-used store credit card CMR that has significant more penetration in the market than our Cencosud credit card.
Argentina
We believe the Argentine home improvement industry is composed of more than 70 home improvements stores nationwide, of which we operated 47 as of December 31, 2012. The remaining stores are operated by Sodimac, Hiper Tehuelche and Barugel Azulay. There are also various small more specialized hardware and construction supply stores. Prior to 2002, we faced competition from Home Depot (Argentina) until our acquisition of its Argentine operations in February 2002. We face strong competition from other hardware stores and specialty stores dedicated to specific areas of construction and home improvement. Until 2007, when Sodimac entered the market, we were the sole big-box home improvement chain in Argentina, with 17% market share, according to our estimates. We believe that the Argentinean home improvement market still offers plenty of room for consolidation, leaving enough space for us to grow over the coming years.
The following table presents certain information about us and Sodimac, our main competitor in Argentina, as of December 31, 2012:

 	  	Cencosud	 	  	Sodimac	 	
Number of stores	  	 	47	  	  	 	7	  	
Total selling space (square meters)	  	 	388,878	  	  	 	74,785	  	
Source: Falabella’s public filings, internal estimates.
For the year ended December 31, 2012, we estimate we were the largest operator of home improvement stores in Argentina in terms of net sales based on our comparison against publically filed information from our main competitors as of December 31, 2012. Our principal competitor in Argentina is also Sodimac, which operated 7 home improvement stores with a total of 74,785 square meters of selling space at December 31, 2012.
Colombia
We believe the Colombian home improvement industry is the most underdeveloped in the countries where we compete. For the year ended December 31, 2012, there were 33 home improvement stores. Hence, the industry is highly fragmented and composed of both general and specialized retailers.
 
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Our main competitor is Sodimac Home Center, which is a joint venture between Colombian Grupo Corona (51%) and Chilean Falabella (49%), competing in the home improvement market in Colombia since 1993. Total sales for Sodimac Home Center in 2012 were U.S.$1,290 million, according to their public filings.
The following table presents certain information about us and Home Center, our main competitor in Colombia, as of December 31, 2012:

 	  	Sodimac
Home Center	 	  	Cencosud	 	
Number of stores	  	 	29	  	  	 	4	  	
Total selling space (square meters)	  	 	295,616	  	  	 	34,309	  	
Source: Falabella’s public filings, internal estimates.
The Chilean Department Store Industry
The department store industry in Chile traces its origins to 1958, when Falabella opened its first department store in Chile. Since then, other companies have entered the Chilean market and the industry has experienced intense consolidation, as larger operators acquired smaller stand-alone stores. We entered the department store business in March 2005, with our acquisition of Empresas Almacenes Paris S.A.
Our principal competitor in Chile is Falabella, which is substantially larger than Paris and Johnson. The department store industry in Chile is very mature and highly competitive. We compete for customers with specialty retailers, traditional and high-end department stores, national apparel chains, vendor-owned proprietary boutiques, individual specialty apparel stores and direct marketing firms. We compete for customers principally on the basis of quality and fashion, customer service, value, assortment and presentation of merchandise, marketing and customer loyalty programs. Many of these competitors have greater financial resources than we do.
The following table presents certain information about us and our main competitors as of September 30, 2012:

 	  	Falabella	 	 	Cencosud (1)	 	 	Ripley	 	 	La Polar	 	
Number of stores	  	 	38	  	 	 	78	  	 	 	40	  	 	 	42	  	
Total selling space (square meters)	  	 	260,183	  	 	 	377,190	  	 	 	255,042	  	 	 	161,000	  	
Market share (2)	  	 	37.1	% 	 	 	30.1	% 	 	 	22.9	% 	 	 	9.9	% 	
Number of stores	  	 	36	  	 	 	35	  	 	 	38	  	 	 	42	  	
Total selling space (square meters)	  	 	242,806	  	 	 	239,531	  	 	 	235,520	  	 	 	161,000	  	
Market share (2)	  	 	39.3	% 	 	 	26.5	% 	 	 	23.5	% 	 	 	10.7	% 	
Source: Falabella’s public filings, Ripley’s public filings and internal estimates.
(1)	Not including Johnson stores.	
(2)	As of September 30, 2012, based on reported net revenues from department store operations in Chile; market share estimates based solely on reported sales from the four major operators, and does not take into account the market participation of other smaller participants.	
For the three quarters ended September 30, 2012, we believe we were the second-largest operator of department stores in Chile in terms of net sales based on our comparison against publically filed information from our main competitor as of September 30, 2012. Based on that comparison, we estimate that Falabella is the largest department store operator in Chile and, at September 30, 2012, operated 38 department stores with a total of 260,183 square meters of selling space. Falabella’s credit cards and loyalty programs are well-known in the market. On the same basis, we believe Ripley is the third-largest department store operator and, at September 30, 2012, operated 40 department stores with a total of 255,042 square meters of selling space. Many of our competitors have active financial services divisions that support their retail activities, and both Falabella and Ripley operate banks focused on consumer lending.
The Shopping Center Industry
Chile
The first shopping center in Chile, Cosmocentro Apumanque, opened in 1981. Shopping center sales as a percentage of total retail sales in the country have increased continuously since then, according to the Chilean
 
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Council of Shopping Centers. However, a majority of retail sales in Chile still take place in stand alone stores, according to the International Council of Shopping Centers. We entered the shopping mall industry in Chile in the early 1990s with the Alto Las Condes shopping mall.
The Chilean shopping center industry is highly competitive and, at December 31, 2012, was composed of more than 45 shopping centers nationwide, the majority of which are operated by us, Grupo Plaza (controlled by Falabella), Parque Arauco and Saitec (controlled by Walmart Chile), according to public and internal estimates. Shopping centers not only compete with other shopping centers, but also with an increasing number of individual retail stores.
The following table provides certain information about us and our competitors in Chile at December 31, 2012:

 	  	Gross
leasable
area (1)	 	  	Market
share	 	
Grupo Plaza	  	 	980	  	  	 	33	% 	
Saitec (2)	  	 	700	  	  	 	23	% 	
Cencosud (2)	  	 	431	  	  	 	14	% 	
Parque Arauco S.A. (3)	  	 	355	  	  	 	12	% 	
Source: Chilean Council of Shopping Centers and public filings by Falabella, Parque Arauco and Walmart Chile, as well as internal estimates.
(1)	In thousands of square meters.	
(2)	Includes area leased to related companies.	
(3)	Gross leasable area adjusted to reflect proportional ownership participation in each shopping center.	
At December 31, 2012, we were the third-largest shopping center operator in Chile in terms of gross leasable space based on our comparison against publically filed information from our main competitor as of December 31, 2012. As noted in the table above, our principal competitors include Grupo Plaza, Saitec and Parque Arauco. Parque Arauco’s shopping center Parque Arauco is located close to and directly competes with one of our largest shopping center, Alto Las Condes. Parque Arauco offers many of the same services as Alto Las Condes including ample parking and major department stores.
On June 13, 2012, we opened the Costanera Center shopping mall, a land mark development for the city of Santiago, with a total gross leasable of 140,000 square meters. In July 2012, we opened Portal Osorno Shopping Mall in the city of Osorno. We believe that with these new openings, we increased significantly our market share in the Chilean shopping center market.
Argentina
In 2012, the Argentine shopping center industry was composed of more than 36 shopping centers, the majority of which are operated by IRSA Inversiones Representaciones S.A. (“IRSA”) and Cencosud. As in Chile, shopping centers are relatively new to the market in Argentina, and most retail sales still take place at individual retail stores, according to the International Council of Shopping Centers.
The following table presents certain information about us and our main competitor in Argentina, IRSA, as of December 31, 2012:

 	  	Market
share (1)	 	 	Number of
shopping
centers	 	
IRSA	  	 	56.7	% 	 	 	13	  	
Cencosud (2)	  	 	43.3	% 	 	 	15	  	
Source: CASC, IRSA and INDEC.
(1)	Based on gross leasable area and including only the two largest operators.	
(2)	Does not include area used by affiliate companies.	
At December 31, 2012, we were the second-largest shopping center operator in Argentina in terms of gross leasable space, with a market share of 43% based on our comparison against publically filed information from our main competitor as of December 31, 2012. Our principal competitor in Argentina’s shopping center market is IRSA which owns and operates the Abasto Shopping Center, Alto Palermo, Alto Avellandeda, Paseo Alcorta and Patio Bullrich, among others. At December 31, 2012, IRSA had a 57% share of the Argentine shopping center market.
 
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Peru
In 2012, we estimate the Peruvian shopping center industry was composed of more than 30 shopping centers, the majority of which are operated by Real Plaza (associated with the Interbank Group that also operates Supermercados Peruanos), Falabella, Aventura Plaza, Parque Arauco and Jokey Plaza. The shopping centers industry is relatively new to the market in Peru, and most retail sales still take place at individual retail stores.
The following table sets forth the market shares held by the major shopping center operators in Peru as of December 31, 2012:

 	  	Gross
leasable
area (1)	 	  	Market
share (2)	 	
Real Plaza (Interbank)	  	 	350	  	  	 	33.1	% 	
Aventura Plaza	  	 	234	  	  	 	22.1	% 	
Falabella	  	 	203	  	  	 	19.3	% 	
Jockey Plaza	  	 	117	  	  	 	11.1	% 	
Parque Arauco	  	 	102	  	  	 	9.6	% 	
Cencosud	  	 	50	  	  	 	4.8	% 	
Source: Company filings
(1)	In thousands of square meters.	
(2)	Based on gross leasable area and including only the operators shown.	
Our principal shopping center in Peru is Plaza Lima Sur with a supermarket and leasable area of 40,160 square meters, resulting in a market share of approximately 4.6% of the shopping center market, based on gross leasable area at December 31, 2012. We believe that the shopping center market in Peru has a high potential for growth, and we are currently developing additional shopping centers in Peru.
On June 2012, we opened an additional shopping center in Peru, located in the Miraflores section of Lima, with a 100% occupancy rate, 19 stores and a gross leasable area of 1,196 square meters.
Environmental Regulations and Compliance
In each of Argentina, Brazil, Chile, Colombia and Peru, we are subject to the full range of governmental regulation and supervision generally applicable to companies engaged in business in each country, including labor laws, social security laws, public health, consumer protection and environmental laws, securities laws and antitrust laws. These include regulations to ensure sanitary and safe conditions in facilities for the sale and distribution of foodstuffs and requirements to obtain construction permits for our new facilities. We believe that we are in compliance in all material respects with all applicable statutory and administrative regulations with respect to our business in each of the countries in which we operate, including applicable environmental regulations.
The regulation of matters relating to the protection of the environment is not as well developed in Argentina, Brazil, Chile, Colombia and Peru as in the United States and certain other countries. Accordingly, we anticipate that additional laws and regulations will be enacted over time in these countries with respect to environmental matters. We believe that there are no material judicial or administrative proceedings pending against us with respect to any environmental matter and that we are in compliance in all material respects with all applicable environmental regulations in Argentina, Brazil, Chile, Colombia and Peru. We cannot assure you that future legislative or regulatory developments will not impose restrictions on us that would be material.
Chile
We and all of our subsidiaries with operations in Chile are subject to the Ley de Protección al Consumidor . Compliance with the  Ley de Protección al Consumidor is enforced by SERNAC. Other than as described in “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal and Administrative Proceedings,” we do not have any material proceedings arising from the Ley de Protección al Consumidor , and we believe we are in compliance with all material aspects of such law.
 
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Our supermarkets are subject to inspection by the corresponding Secretaría Regional Ministerial de Salud (the Regional Sanitary Authority or “SEREMI de Salud”) which inspects supermarkets on a regular basis and takes samples for analysis. We regularly hire a private inspection company to undertake private inspections of our facilities to ensure that they meet or surpass all Chilean health standards. Our supermarkets are also subject to inspection by the Servicio Agrícola y Ganadero (the Agricultural and Livestock Service or “SAG”). Concessionaires that operate pharmacies within some of our supermarkets are also subject to licensing and inspection by the SEREMI de Salud. Except for government licenses required for the sale of alcoholic beverages, baked goods, pharmaceuticals, seafood and vegetables and customary business licenses required by local governmental authorities, there are no special governmental licenses or permits required for the sale and distribution of foodstuffs or other products sold by us.
Additionally, the Chilean antitrust authorities have broad regulatory powers and have authority to deny acquisitions which they consider will have adverse competitive effects on the relevant market or will promote anticompetitive behavior. The antitrust authorities have, from time to time, denied authorization for certain acquisitions, such as the denial of the proposed Falabella acquisition by D&S in January 2008.
Banco Paris and CAT are under the supervision of the SBIF, and Paris Corredores de Seguros Limitada is under the supervision of the SVS. Additionally, Banco Paris is subject to the Ley General de Bancos (the General Banking Law) and its regulations, and is inspected by the SBIF at least once a year. The inspection includes a review of the bank’s credit risk policies and procedures, operational risks and control policies and other issues such as customer service, accounting rules, interest rates, information and technology and financial operations. Banco Paris is in compliance in all material respects to the regulations to which it is subject.
CAT started its credit card operations in 2003 and until 2006 was not subject to any special regulation. In 2006 the SBIF issued a set of special regulations targeting the credit card business and placing under its supervision companies engaged in the issuance or operation of credit cards, including CAT, or any other similar systems, where the operator assumes monetary obligations to the public. Moreover the SERNAC regulates credit cards issued by retailers in matters related to consumers’ protection. There is a maximum interest rate that can be charged, but there are certain other fees that are not considered for such purposes which allow retail credit card issuers to increase margins.
Cencosud Administradora de Tarjetas S.A. (“CAT”) was recently a defendant in a class action suit filed by SERNAC. On April 24, 2013, the Supreme Court of Chile ruled for SERNAC and at this junction no further appeals are available. In the ruling, the court ordered CAT to reimburse certain cardholders for excess maintenance fees charged since 2006 plus adjustments for inflation and interests. We have provisioned Ch$ 20,000 million for this ruling in our 2012 financial statements, which represents 0.2% of our 2012 consolidated net revenues and 3.1% of our 2012 adjusted EBITDA. This provision is an estimated value that still needs to be ratified by the Supreme Court of Chile after subsequent filings for interpretation, rectification and amendment are addressed by the court.
Paris Corredores de Seguros Limitada obtained in 1998 an insurance brokerage company authorization with the SVS and is subject to its supervision and regulations. Paris Corredores de Seguros Limitada is in compliance in all material respects with the regulations to which it is subject.
We are required to obtain a series of permits and authorizations to operate our shopping centers, which include the approval of the corresponding Dirección de Obras Municipales (Municipal Works Bureau), among others. Additionally, we are required to obtain for every new project a construction permit and be in compliance with a series of land use, commercial real estate and environmental regulations.
Argentina
We and all of our subsidiaries with operations in Argentina are subject to the Consumer Protection Law. Compliance with the said law is enforced by the Secretaría de Comercio Interior on a national level. On the provincial and municipal level, there are numerous agencies that also enforce violations. We do not have any material proceedings arising from the Ley de Proteccion al Consumidor , and we believe we are in compliance with all material aspects of such law.
Our supermarkets are subject to inspection by national, provincial and municipal authorities, including the Servicio Nacional de Sanidad y Calidad Agroalimentaria, Administración Nacional de Medicamentos, Alimentos y Tecnología Médica (“ANMAT”) and the Secretaría de Comercio Interior . We regularly hire a private inspection company to undertake private inspections of our facilities to ensure that we meet or surpass all Argentine health standards. Concessionaires that operate pharmacies within some of our supermarkets are also subject to licensing and inspection by the ANMAT. Except for government licenses required for the sale of alcoholic beverages, baked goods, pharmaceuticals, meat, seafood and vegetables and customary business licenses required by local governmental authorities, there are no special governmental licenses or permits required for the sale and distribution of foodstuffs or other products sold in our stores.
 
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Our supermarkets, shopping centers and home improvement stores in Argentina are required to have a series of authorizations and permits to operate. As well, our new projects in the province of Buenos Aires are required to comply with law 12.573 on major commercial areas to obtain the necessary authorizations. All existing and projected supermarkets are required to comply with the regulations concerning land use, commercial real estate and the environment.
Our credit card operations are subject to the Credit Card Law and its regulations, enforced by the Secretaría de Comercio Interior . We are also subject to regulations issued by the Central Bank of Argentina.
Additionally, the Argentine Antitrust Commission has broad regulatory powers and has authority to deny acquisitions which it considers will have adverse competitive effects on the relevant market or will promote anticompetitive behavior.
Brazil
We are subject to a wide range of governmental regulation and supervision generally applicable to companies engaged in business in Brazil, including federal, state and municipal regulations, such as labor laws, public health and environmental laws. In order to open and operate our stores in Brazil, we need a business permit and site approval, an inspection certificate from the local fire department as well as health and safety permits. Our stores are subject to inspection by municipal authorities. We believe that we are in compliance in all material respects with all statutory and administrative regulations applicable to our business.
Our business operations in Brazil are primarily affected by a set of consumer protection rules regulating matters such as advertising, labeling and consumer credit. We believe we are in compliance in all material respects with these consumer protection regulations.
As a result of significant inflation during long periods in the past, it was common practice in Brazil not to label individual items. However, a federal regulation establishes that products exposed to consumers must contain information about prices (for instance price tags, signs or bar codes which can be read with scanners) in order to facilitate the identification of prices of each product by the consumer. Pursuant to these new rules, pricing information must be physically attached or adjacent to the product. When bar codes are used, the commercial establishment is required to provide easily accessible scanners. We believe that we are in compliance with these provisions in all material aspects.
The Brazilian Congress is discussing a bill requiring a prior assessment of the impact of the construction of a hypermarket in excess of 1,000 square meters on the relevant neighborhood. The proposed regulation is intended to protect traditional family-owned retailers that have increasingly lost market share in Brazil to the larger chains and hypermarkets. Regulations of this type already exist at the municipal level. For example, governmental authorities in the city of Porto Alegre in the State of Rio Grande do Sul issued a city ordinance in January 2001 prohibiting the construction of food retail stores with a selling area greater than 1,500 square meters, which in May 2005, was amended as to increase from 1,500 to 2,500 squares meters the selling area of food retail stores. Other Brazilian regions may adopt similar laws, and, if the bill pending before the Brazilian Congress becomes law, our future expansion and growth may be subject to significant constraints.
Additionally, the Brazilian antitrust authorities have broad regulatory powers and have authority to deny acquisitions which they consider will have adverse competitive effects on the relevant market or will promote anticompetitive behavior.
Pharmacies . Pharmacies owned or operated by us are subject to the control and monitoring of the Brazilian National Health Surveillance Agency (“ANVISA”) and public state and municipal health authorities. According to Law No. 6,360, of September 23, 1976, and Decree No. 79,049, of January 5, 1977, ANVISA has the power to control, monitor and issue authorizations to companies to legally extract, produce, pack, import, export, and store medications, pharmaceutical items, drugs and related products, cosmetics, personal hygiene products, perfumes and similar products, domestic cleaning products and beauty products. The authorization issued by ANVISA enable
 
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those kinds of companies to have operations in Brazil, as a whole, during an indeterminate period of time. The ANVISA authorization must be renewed whenever there is a change in a company’s activities, shareholders, officers or managers. Moreover, each establishment selling therapeutic, pharmaceutical, cosmetic and/or personal hygiene products, or developing any of the above-mentioned activities must also be licensed by the competent state or municipal sanitary authority, and have a technically responsible person duly authorized by the Pharmacy Regional Committee. On August 17, 2009, ANVISA enacted Regulation No. 44, which made significant changes to existing regulations establishing the (i) types of products that can be commercialized; (ii) how such product are displayed; (iii) pharmaceutical services offered; and (iv) internet sales.
Peru
Our subsidiaries with operations in Peru are subject to the Antitrust Law and the Consumer Protection Law. Compliance with these laws is enforced by the Instituto Nacional de Defensa de la Competencia y de la Protección de la Propiedad Intelectual (“INDECOPI”), the Peruvian public antitrust and consumer protection agency. Acquisitions are not subject to authorization from INDECOPI.
In addition to government licenses required for the sale of alcoholic beverages, baked goods, pharmaceuticals, seafood and vegetables and customary business licenses required by governmental authorities, such as the Agriculture Ministry, there are special governmental licenses or permits required for the sale and distribution of foodstuffs or other products sold at our stores. Our supermarkets are subject to inspection by the Dirección General de Salud (the General Health Office), a governmental office of the Health Ministry, which verifies the quality of our products. The sanitary inspection of our supermarkets is in charge of the local municipality. Concessionaires that operate pharmacies within some of our supermarkets are also subject to licensing and inspection by the Dirección Regional de Medicamentos, Insumos y Drogas . We believe that we are in compliance in all material respects with all applicable statutory and administrative regulations with respect to our business.
Our shopping centers are required to obtain a series of authorizations, such as an operation license from the local municipality, to operate. Additionally, we are required to obtain for every new project a construction permit and license from the local authority. We believe that we are in compliance in all material respects with these requirements.
Colombia
In Colombia, we are subject to laws that regulate competition and consumer protection. These laws include the Ley de Protección al Consumidor (Consumer Protection Law), which is enforced by the Superintendencia de Industria y Comercio (Superintendency of Industry and Commerce).
Additionally, mergers and acquisitions are reviewed by the Superintendency of Industry and Commerce and by the Colombian Superintendency of Companies for compliance with antitrust and general corporate law requirements.
We are required to obtain a series of permits and authorizations to operate our businesses depending on the type of products and services that are offered to the public, but generally we are required to seek the approval of local and national agencies for sales of pet supplies, personal consumer products whether imported or of domestic origin, and compliance with noise and energy regulations. Each business we operate is also required to obtain environmental approvals. In addition, we are also subject to environmental regulation in respect of waste disposal at each of our stores. Consumer finance and credit card operations are also subject to approval by the Superintendencia Financiera de Colombia (Colombian Financial Superintendency).
Pharmacies .
Pharmacies owned or operated by us are subject to the control and monitoring of the Superintendencia Nacional de Salud (“SUPERSALUD”) through the Insituto Nacional de Vigilancia de Medicamentos y Alimentos (“INVIMA”) and city health authorities. According to Law No. 100, of 1993, art. 245, INVIMA has the power to control, monitor and issue authorizations to companies to legally extract, produce, pack, import, export, and store medications, pharmaceutical items, drugs and related products, cosmetics, personal hygiene products, perfumes and
 
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similar products, domestic cleaning products and beauty products. The authorization issued by INVIMA enables those kinds of companies to have operations in Colombia, as a whole, during an indeterminate period of time. The INVIMA authorization must be renewed whenever there is a change in a company’s activities, shareholders, officers or managers.
 
 	 C.	ORGANIZATIONAL STRUCTURE	
Organizational Structure
The following is a simplified organizational chart showing our company and our principal operating divisions as of the date of this annual report.

Our Subsidiaries
The following are our direct and indirect majority-owned subsidiaries as of December 31, 2012:

Company	  	Country	  	Percentage
owned	 	
ACC Alto las Condes Ltda.	  	Chile	  	 	44.9	% 	
Administradora de Servicios Paris Ltda.	  	Chile	  	 	99.7	% 	
Administradora TMO S.A.	  	Chile	  	 	99.7	% 	
Banco Paris S.A.	  	Chile	  	 	99.9	% 	
Banparis Corredores de Seguros Ltda.	  	Chile	  	 	99.9	% 	
Cencosud Administradora de Procesos S.A.	  	Chile	  	 	99.9	% 	
Cencosud Administradora de Tarjetas S.A.	  	Chile	  	 	99.9	% 	
Cencosud Argentina SpA	  	Chile	  	 	99.9	% 	
Cencosud Corredores de Seguros y Servicios Ltda.	  	Chile	  	 	99.7	% 	
Cencosud Internacional Argentina SpA	  	Chile	  	 	99.9	% 	
Cencosud Internacional Ltda.	  	Chile	  	 	99.9	% 	
Cencosud Retail S.A.	  	Chile	  	 	99.7	% 	
Cencosud Retail Administradora Ltda.	  	Chile	  	 	99.6	% 	
Cencosud Servicios Integrales S.A.	  	Chile	  	 	99.9	% 	
Cencosud Shopping Centers S.A.	  	Chile	  	 	99.9	% 	
Cencosud Tiendas S.A.	  	Chile	  	 	85.6	% 	
 
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Company	  	Country	  	Percentage
owned	 	
Circulo Más S.A.	  	Chile	  	 	99.9	% 	
Comercial Food and Fantasy Ltda.	  	Chile	  	 	90.0	% 	
Comercializadora Costanera Center S.p.A	  	Chile	  	 	99.9	% 	
Costanera Center S.A.	  	Chile	  	 	99.9	% 	
Easy Administradora Norte S.A.	  	Chile	  	 	99.6	% 	
Easy S.A.	  	Chile	  	 	99.6	% 	
Eurofashion Ltda.	  	Chile	  	 	99.7	% 	
Inmobiliaria Bilbao Ltda.	  	Chile	  	 	99.9	% 	
Inmobiliaria Mall Vina Del Mar S.A.	  	Chile	  	 	33.3	% 	
Inmobiliaria Santa Isabel S.A.	  	Chile	  	 	99.9	% 	
Johnson’s Mega San Bernardo S.A.	  	Chile	  	 	99.7	% 	
Jumbo Administradora Norte S.A.	  	Chile	  	 	99.7	% 	
Jumbo Administradora S.A.	  	Chile	  	 	99.7	% 	
Jumbo Administradora Temuco S.A.	  	Chile	  	 	99.7	% 	
Jumbo Argentina SpA	  	Chile	  	 	99.9	% 	
Jumbo Supermercados Administradora Ltda.	  	Chile	  	 	99.6	% 	
Logistica y Distribución Paris Ltda.	  	Chile	  	 	99.7	% 	
MegaJohnson’s Administradora S.A.	  	Chile	  	 	99.7	% 	
MegaJohnson’s Maipu S.A.	  	Chile	  	 	99.7	% 	
MegaJohnson’s Puente Alto S.A.	  	Chile	  	 	99.7	% 	
MegaJohnson’s Puente S.A.	  	Chile	  	 	99.7	% 	
MegaJohnson’s S.A.	  	Chile	  	 	99.7	% 	
MegaJohnson’s Vina del Mar S.A.	  	Chile	  	 	99.7	% 	
MegaJohnson’s Quilin S.A.	  	Chile	  	 	99.9	% 	
Meldar Capacitación Ltda.	  	Chile	  	 	98.3	% 	
Mercado Mayorista P y P Ltda.	  	Chile	  	 	90.0	% 	
Paris Administradora Centro Ltda.	  	Chile	  	 	99.6	% 	
Paris Administradora Ltda.	  	Chile	  	 	99.6	% 	
Paris Administradora Sur Ltda.	  	Chile	  	 	99.6	% 	
Paris Administradora Norte Ltda.	  	Chile	  	 	99.6	% 	
Santa Isabel Administradora Norte Ltda.	  	Chile	  	 	99.6	% 	
Santa Isabel Administradora S.A.	  	Chile	  	 	99.6	% 	
Santa Isabel Administradora Sur Ltda.	  	Chile	  	 	99.6	% 	
Sociedad Comercial de Tiendas S.A.	  	Chile	  	 	99.9	% 	
Sociedad Comercializadora de Vestuario FES Ltda.	  	Chile	  	 	99.7	% 	
Viajes Paris S.A.	  	Chile	  	 	99.6	% 	
Agrojumbo S.A.	  	Argentina	  	 	87.4	% 	
Agropecuaria Anjullon S.A.	  	Argentina	  	 	99.9	% 	
Blaisten S.A.	  	Argentina	  	 	99.9	% 	
Cavas y Viñas El Acequion S.A.	  	Argentina	  	 	99.9	% 	
Carnes Huinca S.A.	  	Argentina	  	 	50	% 	
Cencosud S.A.	  	Argentina	  	 	99.9	% 	
Corminas S.A.	  	Argentina	  	 	99.9	% 	
Invor S.A.	  	Argentina	  	 	99.9	% 	
Jumbo Retail Argentina S.A.	  	Argentina	  	 	99.9	% 	
Pacuy S.A.	  	Argentina	  	 	99.9	% 	
Supermercados Davi S.A.	  	Argentina	  	 	99.9	% 	
Unicenter S.A.	  	Argentina	  	 	99.9	% 	
SUDCO Servicios Regionales S.A.	  	Uruguay	  	 	100	% 	
Easy Colombia S.A.	  	Colombia	  	 	99.9	% 	
Grandes Superficies de Colombia S.A.	  	Colombia	  	 	99.9	% 	
Supermercados Mayoristas S.A.	  	Colombia	  	 	99.9	% 	
Colombia Holdings Alpha BV	  	Netherlands	  	 	99.9	% 	
Thalie BV	  	Netherlands	  	 	99.9	% 	
Uranie BV	  	Netherlands	  	 	99.9	% 	
Calliope BV	  	Netherlands	  	 	99.9	% 	
Coledim BV	  	Netherlands	  	 	99.9	% 	
 
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Company	  	Country	  	Percentage
owned	 	
Cencosud Brasil S.A.	  	Brazil	  	 	99.9	% 	
Cencosud Brasil Comercial Ltda.	  	Brazil	  	 	99.9	% 	
GBarbosa Holding S.A.	  	Brazil	  	 	99.9	% 	
Mercantil Rodriguez Comercial Ltda.	  	Brazil	  	 	99.9	% 	
Perini Comercial de Alimentos Ltda.	  	Brazil	  	 	99.9	% 	
GBarbosa Holding LLC	  	U.S.	  	 	99.9	% 	
Almacenes Metro S.A.	  	Peru	  	 	99.9	% 	
Banco Cencosud S.A.	  	Peru	  	 	99.9	% 	
Cencosud Perú S.A.	  	Peru	  	 	99.9	% 	
Cinco Robles SAC	  	Peru	  	 	99.9	% 	
E. Wong S.A.	  	Peru	  	 	99.9	% 	
Hipermercados Metro S.A.	  	Peru	  	 	99.9	% 	
ISMB Supermercado S.A.	  	Peru	  	 	99.6	% 	
Las Hadas Inversionistas S.A.	  	Peru	  	 	99.9	% 	
Teledistribución S.A.	  	Peru	  	 	42.5	%	
Loyalty Perú SAC	  	Peru	  	 	99.9	% 	
Travel International Partners Peru S.A.	  	Peru	  	 	99.9	% 	
Tres Palmeras S.A.	  	Peru	  	 	99.9	% 	
Banco Cencosud S.A.	  	Peru	  	 	99.9	% 	
Cencosud (Shanghai) Trading Co., Ltd.	  	China	  	 	100	% 	
 
 	 D.	PROPERTY, PLANTS AND EQUIPMENT	
See “—B. Business Overview—Property, Plants and Equipment.”
 
 Item 4A.	Unresolved Staff Comments	
Not applicable.
 
 Item 5.	Operating and Financial Review and Prospects	
We believe we are one of the leading multi-brand retailers in South America, based on revenues, selling space, number of stores and gross leasable area in the sectors and countries in which we operate. We operate through a number of formats, including supermarkets, home improvement stores, shopping centers and department stores. We seek to increase operations through organic growth and acquisitions in Brazil, Peru and Colombia, which the Company believes are high growth and underpenetrated markets due to their favorable demographics, sustainable household consumption growth, low formal retail penetration, and strong macroeconomic environments, as described in “Item 4. Information on the Company—B. Business Overview—Our Company” and “—Industry Overview and Competition.” As a complement to our core retailing business, we are actively involved across the region in the commercial real estate development business, particularly in Chile, Argentina and Peru, with 29 shopping malls representing 717,383 square meters of gross leasable area as of December 31, 2012, and we also offer private label credit cards, consumer loans and limited financial services to our retail customers.
 
 	 A.	OPERATING RESULTS	
Trends and Factors Affecting Our Results of Operations
Our results of operations have been influenced and will continue to be influenced by the following factors:
Developments in the Chilean economy
Our operations in Chile accounted for 40% of our consolidated revenues from ordinary activities for the year ended December 31, 2012. Consequently, our financial condition and results of operations are substantially
 
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dependent on economic conditions prevailing in Chile. In 2010, the Chilean economy began to recover following the 2009 recession. As reported by the Central Bank of Chile, GDP contracted 1.0% in 2009, but increased by 6.1% in 2010, 6.0% in 2011 and is estimated to have grown 5.5% in 2012, as reported by the Central Bank of Chile. According to ILACAD World Retail (“ILACAD”), an international consulting company which monitors the retail industry, the Chilean formal retail sector, which consists of business that are taxed and that employ formal labor, accounts for 63% of the retail sector, a relatively high number in comparison to the other countries in which we operate, but low in comparison to the United States, where the formal sector accounts for 91% of the retail sector, according to the U.S. Census Bureau, as of 2011.
In February 2010, Chile was struck by an 8.8 magnitude earthquake and a tsunami, which mainly affected the mid-southern regions of Chile. As a result of these developments, economic activity in Chile was adversely affected in 2010. However, the growth of private and public sector investments and the rebound of consumption have partially offset the negative effects of the earthquake and tsunami. As reported by the Central Bank of Chile, in 2010, internal demand increased 15.7%, private investment increased 18.5% and private consumption increased 9.3% compared to the same period in 2009. Unemployment rates have been decreasing and the unemployment rate as of December 31, 2012 declined to 6.1% compared to 6.6% as of December 2011, 7.1% as of December 2010 and 10.0% as of December 2009, according to the Central Bank of Chile. See “—Impact of the 2010 Earthquake and Tsunami” below.
The recovery of the Chilean economy in 2010 was led in part by a recovery of the prices of Chile’s exports, which accounted for 40% of GDP in 2010, according to Global Insight, a consulting company for country and industry forecasting. As a result of the economic recovery, the Consumer Price Index (“CPI”) inflation increased 1.5% in 2012, compared with an increase of 4.4% in 2011, an increase of 3.0% in 2010 and a decrease of 1.4% in 2009, according to the Central Bank of Chile. As a result of rising price levels and higher economic activity, interest rates increased during 2011 and decreased during 2012. The nominal overnight rate set by the Chilean Central Bank has decreased 5 basis points since December 2011 from 5.1% to 5.0% as of December 31, 2012. See “Item 3. Key Information—D. Risk Factors—Risks Related to Chile.”
Chile maintains one of the highest credit ratings in Latin America, currently rated AA+ by Standard & Poor’s Financial Services LLC, (“S&P”), Aa3 by Moody’s Investors Service, Inc. (“Moody’s”) and A+ by Fitch, Inc. (“Fitch”), as of December 31, 2012. The future economic, social and political developments in Chile, over which we have no control, could have a material adverse effect on us, including impairing our business, financial condition or results of operations. Credit ratings are subject to periodic review and we cannot assure you that the current ratings will not be revised or lowered in the future. See “Item 3. Key Information—D. Risk Factors —Risks Related to Chile.”
Developments in the Argentine economy
Our operations in Argentina accounted for 27.2% of our consolidated revenues from ordinary activities for the year ended December 31, 2012, and thus the Company is also sensitive to macroeconomic conditions in Argentina.
From late 1998 to 2002, the Argentine economy went through an economic recession marked by reduced levels of consumption and investment and an elevated unemployment rate. As reported by the INDEC (Statistics and Census National Bureau), Argentina’s GDP decreased by 0.8% in 2000, 4.4% in 2001 and 10.9% in 2002. In December 2001, a deep economic and political crisis forced Argentina to declare a suspension on payment of its foreign debt. In early 2002, the government released the Argentine peso from its one-to-one peg to the U.S. dollar and allowed the exchange rate to float, resulting in a 49.6% devaluation of the Argentine peso from January 1, 2002 to December 31, 2002, according to the Central Bank of Argentina. From 2003 to 2010, economic indicators showed signs of recovery, guided by a competitive exchange rate, a healthier international context, higher commodity prices and expansionary fiscal and monetary policies. In 2005, Argentina completed the restructuring of most of its 2001 defaulted public debt, which in turn reduced significantly the risk premium on its outstanding bonds. The government also is under negotiations to serve the remaining debt owed to the Paris Club. As a consequence, Argentina was able to decrease its public-to-GDP ratio from 139% in 2003 to below 42% in 2011, as reported by the Ministry of Economy.
According to the INDEC, the Argentine economy grew by 9.2% in 2005, 8.5% in 2006, 8.7% in 2007 and 6.8% in 2008. Due to the global financial crisis, Argentina’s GDP expanded by only 0.9% in 2009. In 2010 and 2011, the
 
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Argentine economy showed strong signs of recovery, growing by 9.2% and 8.9% in 2010 and 2011, respectively, and is estimated to have grown 5.1% in 2012 according to the Ministry of Economy. Unemployment levels also improved, from 8.4% and 7.3% in the fourth quarter of 2009 and 2010, respectively, to 6.7% and 6.9% in the fourth quarter of 2011 and 2012, as reported by INDEC. Both public and private consumption and investment were among the leading contributors to the economic growth. As reported by the Ministry of Economy, consumption and investment increased 9.1% and 21.2% in real terms in 2010, respectively. Consumption was supported by local conditions as well as wider access to consumer credit, as represented in the retail or automobile sector. Argentina’s retail market is an underpenetrated sector, as the formal retail sector accounts for 42% of the retail sector, according to ILACAD, as of 2011. As reported by INDEC, supermarkets sales increased 29% in 2010, 28% in 2011 and 26% in 2012. Car sales, on the other hand, also recovered rapidly from the negative impact of the financial crisis. Although car sales decreased in 2009 by 20%, they grew by 43% and 26% in 2010 and 2011, respectively, according to INDEC. As an effect of high consumption, however, the country has experienced inflation of 11% in 2010, 10% in 2011 and 11% for 2012, as reported by INDEC, exceeding that of other countries in South America, according to Global Insight. Regarding the balance of payments, exports and imports increased 22% and 46% in 2010, respectively and 24% and 31% in 2011, the growth in the imports being a reflection of the recovery in household consumption levels according to Global Insight. As per the Central Bank of Argentina, international reserves reached a record-high of over U.S.$52 billion in 2010, U.S.$46 billion in 2011 and US$43 billion in 2012.
After several years of price stability, the devaluation of the Argentine peso in January 2002 created pressures on the domestic price system that generated high inflation in 2002 before substantially stabilizing in 2003. However, consumer prices increased by 8.5% in 2007, 7.2% in 2008, 7.7% in 2009, 10.9% in 2010, 9.5% in 2011, and 10.8% for 2012, according to the INDEC, and private institutes estimate that consumer prices have increased significantly more than official estimates. The local interest rate, the BAIBAR was 9.45%, 10.11%, 9.08% and 12.75% on December 30, 2009, December 30, 2010, December 30, 2011 and December 31, 2012, respectively, as reported by the Central Bank.
Argentina is rated B- by S&P, B3 by Moody’s and CC by Fitch, as of December 31, 2012. The future economic, social and political developments in Argentina, over which we have no control, could impair business, financial condition or results of operations. Credit ratings are subject to periodic review and we cannot assure you that the current ratings will not be revised or lowered in the future. See “Item 3. Key Information—D. Risk Factors—Risks Related to Argentina.”
On October 30, 2012, S&P cut Argentina’s credit rating to B- from B adding that Argentine’s outlook is negative and that it may face another ratings downgrade over the next twelve months.
Developments in the Brazilian economy
Our operations in Brazil accounted for 23% of our consolidated revenues from ordinary activities for the year ended December 31, 2012, and thus the Company is also sensitive to macroeconomic conditions in Brazil.
In recent years, we have benefited from Brazil’s reasonably stable economic environment, with average annual GDP growth of 4.5% from 2004 to 2010, as reported by the Central Bank of Brazil. The downward trend in inflation in recent years has allowed the Central Bank of Brazil to ease the short-term benchmark interest rate 7.5% as of December 31, 2012, from 17.75% at December 2004. In 2009, the Brazilian economy stagnated in the wake of the global economic and financial crisis; however, by the second quarter of 2009 the Brazilian economy had emerged from recession and started to regain its growth momentum. To mitigate the impact of the global economic and financial crisis, the Central Bank of Brazil responded in 2009 with a number of measures. Besides reducing the SELIC rate, the Central Bank of Brazil deployed part of its international reserves to replace international credit lines impacted by the Lehman bankruptcy and reduced reserve requirements with the specific purpose of acquiring assets from small banks and increasing the insurance limit for small banks’ time deposits. These initiatives, along with fiscal measures, contributed to keeping the recession relatively brief (mostly concentrated between the fourth quarter of 2008 and the first quarter of 2009) and ensured a strong recovery in the second half of 2009, as reported by the Central Bank of Brazil.
The unemployment rate in Brazil has decreased significantly in the past decade from 10.5% at December 2002 to 4.6% as of December 31, 2012, as reported by the Central Bank of Brazil. At the end of 2012, the unemployment rate was at the lowest level in ten years at 4.6%. At the same time, private consumption has followed a similar
 
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positive trend. As reported by the IBGE, private consumption in Brazil grew by 4.4%, 6.9% and 4.1% in 2009, 2010, 2011, respectively, and 1.94% in 2012 according to Global Insight. The decrease in unemployment and increase in private consumption have driven the growth of the retail sector as illustrated by the growth of 14.7% in 2012, according to Global Insight. The Brazilian retail market is an underpenetrated sector as 58% of the sector is informal according to ILACAD, as of 2011.
On September 22, 2009, Moody’s raised the nation’s sovereign rating to Baa3 from Ba1. Credit ratings are subject to periodic review and we cannot assure you that the current ratings will not be revised or lowered in the future. We believe that these upgrades contributed to further increases in the inflow of foreign capital, which in turn strengthened the real. As a result of the recovery of the economy, GDP growth was 7.5% for 2010, as compared to 2009 when it contracted -0.3% as reported by the Central Bank of Brazil. Nonetheless, the growth of the Brazilian economy slowed down leading to a GDP growth of 2.7% for 2011 and 0.9% in 2012 according to the Central Bank of Brazil. The future economic, social and political developments in Brazil, over which we have no control, could impair our business, financial condition or results of operations. See “Risk Factors—Risks Related to Brazil.”
In early 2011, the Central Bank of Brazil, through its Monetary Policy Committee, raised the SELIC from 10.75% at December 31, 2010 up to 12.50% on July 20, 2011 in order to control inflation. Later that year, as the European debt crisis worsened, the Monetary Policy Committee changed its monetary policy focusing on economical growth rather than inflation control. As a consequence, since mid-2011, the SELIC rate was reduced several times by that Committee reaching 7.5% on December 31, 2012, as reported by the Central Bank of Brazil. Annual inflation rates are measured in Brazil through the Brazilian Extended Consumer Price Index ( Índice de Preços ao Consumidor Amplo ), or IPCA, as calculated by the IBGE. The IPCA inflation rate was 5.9% in 2008, 4.3% in 2009, 5.9% in 2010, 6.5% in 2011 and 5.8% in 2012, as measured by the IPCA. According to “Boletim focus do Banco Central,” the IPCA is estimated to be around 5.7% in 2013. See “Item 3. Key Information—D. Risk Factors—Risks Related to Brazil.”
Developments in the Peruvian economy
Our operations in Peru accounted for 8.0% of our consolidated revenues from ordinary activities for the year ended December 31, 2012, and thus the Company is also sensitive to macroeconomic conditions in Peru.
According to the Central Bank of Peru, Peruvian GDP grew 6.3%, 6.9% and 8.8% in 2012, 2011 and 2010, respectively, returning to the growth rates seen in 2007 and 2008 (8.9% and 9.8%, respectively). The Peruvian government adopted fiscal and monetary stimulus to mitigate the global financial and economic crisis and, as a result, growth recovered in the fourth quarter of 2009, as reported by the Central Bank of Peru. Internal demand grew 7.4% with public and private investment leading the recovery with growth rates of 20.9% and 13.6% according to the Central Bank of Peru. Production of non primary and labor intensive sectors like construction and manufacturing helped to boost employment and private consumption. Urban unemployment rates have remained at stable and low levels during recent years. According to the INEI, in 2009, 2010, 2011 and 2012 unemployment rate was 5.3%, 5.9%, 7.0% and 5.6% respectively. In this context the Central Bank of Peru started a progressive withdrawal of monetary stimulus raising the reserve ratios and reference interest rate from 3.25% to 4.25% during the first and fourth quarter of 2011 and has maintained the rate at 4.25% as of December 2012. CPI index increased from 2.1% in 2010 to 4.7% in 2011 and decreased to 2.8% in 2012, as reported by INEI. The formal sector represents only 30% of the retail sector in Peru according to ILACAD, as of 2011.
As reported by the Central Bank of Peru, the Peruvian economy kept growing, although to a lesser extent, at a similar pace observed in 2011, with GDP growing by nearly 6.0% in the first quarter, 6.4% in the second quarter, 6.8% in the third quarter and 5.9% in the fourth quarter of 2012. The main drivers of Peru’s economic performance have been strong domestic demand and private investment. As reported by the Central Bank of Peru, private investment increased 13.6% in 2012.
In the second half of 2011 the Peruvian economy started to show signs of slowdown driven by the uncertainty in connection with the election of President Humala and expectations of a recession in Europe and the United States. As reported by the Central Bank of Peru, internal demand slowed down in 2011 compared to 2010, which had year over year growth of 13.6% compared to 5.2% growth in the fourth quarter of 2011. However, internal demand shows signs of recovery as it had year over year growth of 7.6% in the fourth quarter of 2012. The Peruvian government’s commitment to the current economic, fiscal and monetary policies supported economic growth in
 
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2011 and stabilized the country’s economy, which led to S&P upgrading Peru’s credit rating from BBB- to BBB in August 2011. In October 2011, Fitch upgraded Peru’s credit rating from BBB- to BBB. In August 2012, Moody’s upgraded Peru’s credit rating from Baa3 to Baa2. Credit ratings are subject to periodic review and we cannot assure you that the current ratings will not be revised or lowered in the future. See “Risk Factors—Risks Related to Peru.”
The reductions on fiscal spending implemented during 2010 by the Peruvian government have improved fiscal reserves from U.S.$33 billion in 2009 to U.S.$64.0 billion in 2012 as reported by the Central Bank of Peru. The withdrawal of the monetary stimulus was taken up by the Central Bank of Peru in 2011, which gradually raised its reference interest rate from 3.25% to 4.25% between January and May of 2011. Reserve ratio requirements for banks are 100 bps higher than in December 2010 and have remained unchanged since May 2011. As reported by the Central Bank of Peru, the current average reserve levels in Nuevos Soles and U.S. dollars (17.8% and 40.0% respectively) reflects higher levels of liquidity in the financial system, which in the event of a severe liquidity crisis or global economic crisis can be used to alleviate the impact. The future economic, social and political developments in Peru, over which we have no control, could have a material adverse effect on us. See “Item 3. Key Information—D. Risk Factors—Risks Related to Peru.”
Developments in the Colombian economy
In March 2011, Colombia recovered its investment-grade ratings from Moody’s and S&P, 11 years after its rating was cut to junk status when insurgent violence and a banking crisis triggered six straight quarters of economic contraction between 1998 and 1999.
Beginning in 2007 the nation grew rapidly, attracting a record U.S.$10.6 billion in foreign direct investment in 2008 according to the World Bank. However, Colombia’s credit rating was not raised to investment grade by Moody’s and S&P until 2011, when economic growth accelerated and the threat posed by guerrilla groups and organized crime receded. Moody’s upgraded Colombia from Ba1 to Baa3, the lowest level of investment grade. Credit ratings are subject to periodic review and we cannot assure you that the current ratings will not be revised or lowered in the future.
The credit upgrade put Colombia’s rating on par with Brazil, Peru and Panama. Security concerns, historically a major issue for Colombia, have not disappeared, but have been waning after several major government wins against domestic guerrilla groups. Colombia has cut its intentional homicide rate by almost half since 2002, when former President Alvaro Uribe took office, according to the World Bank, and increased investor confidence by sustaining moderate fiscal deficits, maintaining inflation stable and increasing economic growth according to Moody’s.
In October 2012 the US granted congressional approval to the implementation of the United States-Colombia Trade Promotion Agreement under which 80% of tariffs on imported goods would be eliminated with remainder being phased out over a 20 year period. We believe this to be a favorable agreement for the Colombian economy, having a positive effect on activity in Colombia in 2013, as it would grant tariff free access to a large amount of Colombian products.
We believe Colombia will be able to respond with both fiscal and monetary countercyclical policies if the international outlook further deteriorates. The most severe risks to the Colombian economy continue to be external; the consequences on the real economy of the sovereign debt crisis in Europe coupled with moderate growth in the United States may affect commodity prices and foreign investment inflows to emerging markets. Domestically, the most significant risk is the failure to execute important public works that are part of the set of infrastructure projects the country desperately needs and for which resources are available. See “Item 3. Key Information—D. Risk Factors—Risks Related to Colombia.”
GDP is expected to grow 3.5% in 2012 and industrial production (“IP”) IP is expected to grow 1.6% year over year while retail sales are estimated to have increased 4.7% in the same period according to Global Insight. In addition, the labor market has continued to improve, taking the national unemployment figure to 10.4% as of December 31, 2012. For 2013, we believe the dynamics of economic activity should depend critically on the outcome of international events in Europe and the U.S. In particular, the government is expected to be the main driver of growth especially through its participation in civil work construction projects. The retail sector in Colombia is underpenetrated with 52% of the retail sector being informal according to ILACAD, as of 2011.
 
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Unemployment has gradually decreased in the last few years. According to the Central Bank of Colombia, the unemployment rate was 11.3%, 11.1%, 10.8% and 10.4% in 2009, 2010, 2011 and 2012, respectively. Private consumption has recovered since 2009 as illustrated by the real growth rates of 0.9% and 5.0% in 2009 and 2010, respectively, and estimated growth rates of 4.3% and 2.9% in 2011 and 2012, according to Global Insight. We believe this increase in real growth rate has been a key driver in retail growth in Colombia.
Given the sound fundamentals of the Colombian economy, we expect that, independent of the outcome observed in 2012, growth should resume by 2013.
Regarding external accounts, we expect foreign direct investment is expected to continue growing, even more after the recently approved United States-Colombia Trade Promotion Agreement, and important advances regarding safety that could allow more oil and mining exploration projects. The main risk to the forecasts comes from any external shock that could end up affecting commodity prices and foreign investment inflows.
One factor which differentiates the Colombian recovery from its Latin American peers we believe has been the favorable behavior of inflation, which up until recently was well within the inflation target band of 2-4% set up by the Central Bank of Colombia. More recently, however, headline inflation ended at 3.73% for 2011 and 2.44% for 2012.
On the fiscal front, we expect that 2012 to have finished with a fiscal deficit of 2.4% in line government estimates and beating the end of year result of 2011 which stood at a deficit of 2.8%. This lower deficit is expected to have improved government debt to GDP ratios which stood at 34.7% in 2011. Governement estimates currently place the 2013 government deficit of 2.6%.
The future economic, social and political developments in Colombia, over which we have no control, could impair our business, financial condition or results of operations. See “Item 3. Key Information—D. Risk Factors—Risks Related to Colombia.”
Expansion activities
A significant proportion of our expected revenue growth is based on our expansion activities, including acquisitions and organic growth. We forecast that our revenue for 2013 will be U.S.$22.5 billion, based on expected revenue growth of approximately U.S.$3.4 billion or 17.8%, due primarily to our expansion activities and growing same store sales. We expect organic growth to amount to an increase of 5% in total selling space with 58 new stores opening in 2013.Our organic expansion is described in greater detail in “—Liquidity and Capital Resources—Capital Expenditures and Permanent Investments” below. Historical information regarding our acquisitions and organic growth is presented below.
Impact of acquisitions
In each of 2010, 2011 and 2012 we made the following significant acquisitions:
Acquisition of Super Familia Stores in Brazil . In 2010, we acquired 100% of the outstanding shares of Super Família Comercial de Alimentos Ltda., operator of the Super Familia supermarket chain in Brazil, for U.S.$33.1 million (approximately Ch$17,396 million). Our acquisition consisted of four Super Familia stores in the city of Fortaleza, with a total sales area of 7,000 square meters, and two distribution centers. We consolidate the results of Super Familia into our results of operation since the date of acquisition and we rebranded the stores under our GBarbosa brand in 2011.
Acquisition of Perini Stores in Brazil . In 2010, we acquired 100% of the outstanding shares of Perini Comercial do Alimento Ltda., operator of the four-store chain of Perini supermarkets in the city of Salvador in Brazil, for U.S.$27.7 million (approximately Ch$14,899 million). Perini is a well-known brand in Brazil with 46 years in the market that targets the high-end retail customer segment, which complements our business portfolio in Brazil. In addition to the four Perini stores in the city of Salvador, we also acquired four additional points of sales inside shopping centers, with a total sales area of 4,900 square meters, and two distribution centers. We consolidated the results of Perini into our results of operation since the date of acquisition.
 
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Acquisition of Bretas Stores in Brazil . On October 29, 2010, pursuant to a stock purchase agreement executed on October 15, 2010, through our subsidiary GBarbosa Comercial Ltda. (“GBarbosa”), we acquired 100% of the outstanding shares of Fag Participaçoes Ltda. and Bretas, Filhos e Cia Ltda. (the “Sellers”), which together owned and operated the Brazilian supermarket chain Bretas, which operates 81 supermarkets, 2 distribution centers and 12 gas stations in Central and northern Brazil as of December 31, 2012. The aggregate purchase price of the acquisition was R$1.17 billion (approximately U.S.$705 million or Ch$336,630 million), payable as follows: R$820 million on October 29, 2010 (the closing date of the transaction) and R$100 million on December 30, 2011. The balance of R$250 million will be paid on December 30, 2014. Pursuant to the stock purchase agreement, the Sellers committed to make their best efforts to maintain, for a period of 20 years from the closing date of the transaction, the leases of premises to be opened during the end of 2010 and beginning of 2011 as well as the leases of properties that were leased by the Sellers at the time of the transaction. Under the terms of the acquisition transaction, Bretas is expected to open 30 new supermarkets by 2013. Cencosud S.A. serves as guarantor of GBarbosa in the acquisition transaction, the acquisition was financed with internal cash resources and bank debt totaling U.S.$290 million.
Through this strategic acquisition we entered the Brazilian state of Rio de Janeiro. The acquisition of Prezunic consolidated our position as Brazil’s fourth-largest supermarket operator in terms of revenues, as measured by ABRAS. We consolidated the results of Prezunic into our results of operations since the date of acquisition.
Acquisition of Cardoso Stores in Brazil . In October 2011, we continued expanding into the Brazilian market through the acquisition of Cardoso. Cardoso is a three-store supermarket chain in the state of Bahia, with net sales of approximately R$60 million (U.S.$35.9 million) in 2011. Cencosud negotiated the payment of the purchase price of R$18 million (approximately U.S.$11.3 million or Ch$5,429 million) in three installments, 60% on the closing of the transaction, 20% on the 6-month anniversary of the closing date and the remaining 20% will be paid on the first year anniversary of the closing date. We have converted the acquired stores to the GBarbosa format and are now operating those stores under this brand. We consolidated the results of Cardoso into our results of operation since the date of acquisition.
Acquisition of Johnson Stores in Chile . In December 2011, we entered into an agreement with Johnson’s Inversiones S.A. (“Johnson Inversiones”) and Inversiones Bujorico Limitada (“Bujorico” and together with Johnson Inversiones, the “Johnson Entities”), who together owned Johnson. Pursuant to this agreement we acquired an 85.58% interest in Johnson for an aggregate purchase price of Ch$32,606 million.
Johnson is a department store with 39 stores throughout Chile under the Johnson brand and an additional 13 stores under the FES brand, with a total of 117,569 square meters of selling space. In 2011, Johnson registered sales of Ch$118,447 million from its retail operations.
During 2012 all former clients of Johnson’s consumer financing arm were migrated to our Tarjeta Cencosud format. With the acquisition of Johnson we are now able to target the low- and middle-income market segments in Chile.
Acquisition of Prezunic in Brazil . On January 2, 2012, pursuant to a stock purchase agreement executed on November 16, 2011, Cencosud Brasil S.A. (“Cencosud Brasil”) acquired from the Dias Da Cunha family 100% of the capital stock of Prezunic. We estimate that Prezunic is the third-largest supermarket chain in Rio de Janeiro, with 31 stores and net sales of approximately R$2.2 billion in 2011.
The aggregate purchase price of the operation was R$875 million (or approximately Ch$242,690 million), payable as follows: R$580 million on the closing date of the transaction (January 2, 2012), from which R$190 million were deducted as working capital adjustments. The balance will be paid as follows: R$80 million, R$85 million, R$80 million and R$50 million, on the first, second, third and fourth anniversary of the closing date, respectively. Pursuant to the stock purchase agreement, Cencosud Brasil, considered a national supermarket operator, therefore able to get better terms from suppliers, was also granted a preferential right from third-party landowners to acquire or lease two supermarket properties that were not owned by Prezunic at the time of the transaction, but were instead leased. Under the terms of this agreement, Cencosud S.A. serves as guarantor of Cencosud Brasil.
 
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Acquisition of Carrefour Colombia . On November 30, 2012, Cencosud S.A. completed the acquisition of Carrefour supermarket operations in Colombia, for a total purchase price equal to €2 billion. The acquired companies operate supermarkets under the “Carrefour” and “Maxi” brand names in Colombia, including 72 hypermarket stores, 16 convenience stores, and four cash and carry stores and gas stations. We expect to migrate acquired stores into the Jumbo and Prezunic formats during 2013. See “Item 4. Information on the Company—A. History and Development of the Company—History”
In order to finance the purchase of the acquisition of Carrefour’s operations in Colombia, on October 17, 2012, the Company entered into the Bridge Loan Agreement with a syndicate of banks in the amount of U.S.$2,500 million. See “—B. Liquidity and Capital Resources—Indebtedness, and B. Liquidity and Capital Resources—Recent Acquisitions” below.
Impact of organic expansion
During the year ended December 31, 2012, we opened 20 supermarkets in Argentina, 25 in Chile, 12 in Peru and 22 in Brazil. We opened 4 department stores in Chile and 2 shopping centers in Chile and 1 in Peru. During the year ended December 31, 2012, we also opened 2 home improvement stores in Chile.
During the year ended December 31, 2011, we opened 14 supermarkets in Argentina, 30 in Chile, 10 in Peru and 22 in Brazil. We opened one Easy home improvement store in Chile. Further, during the year ended December 31, 2011, we opened one new Paris department store in Chile. During the same period, we closed four supermarket stores, three Santa Isabel stores in Chile and one Disco store in Argentina. We also closed one Blaisten home improvement store in Argentina.
During the year ended December 31, 2010, we opened one Jumbo hypermarket in Argentina, four Santa Isabel supermarkets in Chile, four Wong and Metro stores in Peru, four Disco stores in Argentina, two Easy home improvement stores in Chile, two Easy and two Blaisten home improvement stores in Argentina and two Easy home improvement stores in Colombia. Further, during the year ended December 31, 2010, we opened four new Paris department stores in Chile. The addition of this new department store increased our sales space by 7.7% to 234,489, from 217,698 square meters as of December 31, 2010. During the same period, we closed six Santa Isabel stores in Chile, one Disco store in Argentina and one Blaisten store in Argentina.
As a general matter, we believe that a period of several years is frequently required after opening or inauguration for a store or shopping center to mature and achieve its full potential to generate sales. As a result, the increasing maturation of a newly opened store may need to be taken into account when comparing period-to-period store sales.
The following tables present a breakdown of our store and shopping center expansion activities for the periods indicated:

 	  	2012	 	
 	  	Total 2011	 	  	Openings	 	  	Closings	 	  	Acquisitions	 	  	Total 2012	 	
Chile	  				  				  				  				  				
Supermarkets	  	 	189	  	  	 	28	  	  	 	3	  	  	 	0	  	  	 	214	  	
Home Improvement	  	 	29	  	  	 	3	  	  	 	1	  	  	 	0	  	  	 	31	  	
Department Stores	  	 	35	  	  	 	4	  	  	 	0	  	  	 	39	  	  	 	78	  	
Shopping Centers	  	 	9	  	  	 	2	  	  	 	0	  	  	 	0	  	  	 	11	  	
Total Chile	  	 	262	  	  	 	36	  	  	 	3	  	  	 	39	  	  	 	334	  	
Argentina	  				  				  				  				  				
Supermarkets	  	 	269	  	  	 	21	  	  	 	2	  	  	 	0	  	  	 	288	  	
Home Improvement	  	 	48	  	  	 	0	  	  	 	1	  	  	 	0	  	  	 	47	  	
Shopping Centers	  	 	14	  	  	 	1	  	  	 	0	  	  	 	0	  	  	 	15	  	
Total Argentina	  	 	331	  	  	 	22	  	  	 	3	  	  	 	0	  	  	 	350	  	
Brazil	  				  				  				  				  				
Supermarkets	  	 	152	  	  	 	22	  	  	 	0	  	  	 	31	  	  	 	205	  	
Total Brazil	  	 	152	  	  	 	22	  	  	 	0	  	  	 	31	  	  	 	205	  	
Peru	  				  				  				  				  				
Supermarkets	  	 	74	  	  	 	13	  	  	 	1	  	  	 	0	  	  	 	86	  	
 
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 	  	2012	 	
 	  	Total 2011	 	  	Openings	 	  	Closings	 	  	Acquisitions	 	  	Total 2012	 	
Shopping Centers	  	 	2	  	  	 	1	  	  	 	0	  	  	 	0	  	  	 	3	  	
Total Peru	  	 	76	  	  	 	14	  	  	 	1	  	  	 	0	  	  	 	89	  	
Colombia	  				  				  				  				  				
Home Improvement	  	 	4	  	  	 	0	  	  	 	0	  	  	 	0	  	  	 	4	  	
Supermarkets	  	 	0	  	  	 	0	  	  	 	0	  	  	 	100	  	  	 	101	  	
Total Colombia	  	 	4	  	  	 	0	  	  	 	0	  	  	 	100	  	  	 	105	  	
Total	  	 	825	  	  	 	94	  	  	 	7	  	  	 	171	  	  	 	1082	  	

																					
 	  	2011	 	
 	  	Total 2010	 	  	Openings	 	  	Closings	 	  	Acquisitions	 	  	Total 2011	 	
Chile	  				  				  				  				  				
Supermarkets	  	 	163	  	  	 	26	  	  	 	3	  	  	 	4	  	  	 	190	  	
Home Improvement	  	 	29	  	  	 	1	  	  	 	1	  	  	 	—  	  	  	 	29	  	
Department Stores	  	 	34	  	  	 	1	  	  	 	—  	  	  	 	—  	  	  	 	35	  	
Shopping Centers	  	 	9	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	9	  	
Total Chile	  	 	235	  	  	 	28	  	  	 	4	  	  	 	4	  	  	 	263	  	
Argentina	  				  				  				  				  				
Supermarkets	  	 	256	  	  	 	14	  	  	 	1	  	  	 	—  	  	  	 	269	  	
Home Improvement	  	 	49	  	  	 	—  	  	  	 	1	  	  	 	—  	  	  	 	48	  	
Shopping Centers	  	 	14	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	14	  	
Total Argentina	  	 	319	  	  	 	14	  	  	 	2	  	  	 	—  	  	  	 	331	  	
Brazil	  				  				  				  				  				
Supermarkets	  	 	130	  	  	 	15	  	  	 	—  	  	  	 	7	  	  	 	152	  	
Total Brazil	  	 	130	  	  	 	15	  	  	 	—  	  	  	 	7	  	  	 	152	  	
Peru	  				  				  				  				  				
Supermarkets	  	 	64	  	  	 	11	  	  	 	1	  	  	 	—  	  	  	 	74	  	
Shopping Centers	  	 	2	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	2	  	
Total Peru	  	 	66	  	  	 	11	  	  	 	1	  	  	 	—  	  	  	 	76	  	
Colombia	  				  				  				  				  				
Home Improvement	  	 	4	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	4	  	
Total Colombia	  	 	4	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	4	  	
Total	  	 	754	  	  	 	68	  	  	 	7	  	  	 	11	  	  	 	826	  	

																					
 	  	2010	 	
 	  	Total 2009	 	  	Openings	 	  	Closings	 	  	Acquisitions	 	  	Total 2010	 	
Chile	  				  				  				  				  				
Supermarkets	  	 	162	  	  	 	8	  	  	 	7	  	  	 	—  	  	  	 	163	  	
Home Improvement	  	 	25	  	  	 	4	  	  	 	—  	  	  	 	—  	  	  	 	29	  	
Department Stores	  	 	30	  	  	 	4	  	  	 	—  	  	  	 	—  	  	  	 	34	  	
Shopping Centers	  	 	8	  	  	 	1	  	  	 	—  	  	  	 	—  	  	  	 	9	  	
Total Chile	  	 	225	  	  	 	16	  	  	 	7	  	  	 	—  	  	  	 	235	  	
Argentina	  				  				  				  				  				
Supermarkets	  	 	250	  	  	 	8	  	  	 	2	  	  	 	—  	  	  	 	256	  	
Home Improvement	  	 	46	  	  	 	3	  	  	 	—  	  	  	 	—  	  	  	 	49	  	
Shopping Centers	  	 	13	  	  	 	1	  	  	 	—  	  	  	 	—  	  	  	 	14	  	
Total Argentina	  	 	309	  	  	 	12	  	  	 	2	  	  	 	—  	  	  	 	319	  	
Brazil	  				  				  				  				  				
Supermarkets	  	 	52	  	  	 	5	  	  	 	—  	  	  	 	73	  	  	 	130	  	
Total Brazil	  	 	52	  	  	 	5	  	  	 	—  	  	  	 	73	  	  	 	130	  	
Peru	  				  				  				  				  				
Supermarkets	  	 	58	  	  	 	7	  	  	 	1	  	  	 	—  	  	  	 	64	  	
Shopping Centers	  	 	2	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	2	  	
Total Peru	  	 	60	  	  	 	7	  	  	 	1	  	  	 	—  	  	  	 	66	  	
Colombia	  				  				  				  				  				
Home Improvement	  	 	2	  	  	 	2	  	  	 	—  	  	  	 	—  	  	  	 	4	  	
Total Colombia	  	 	2	  	  	 	2	  	  	 	—  	  	  	 	—  	  	  	 	4	  	
Total	  	 	648	  	  	 	42	  	  	 	10	  	  	 	73	  	  	 	754	  	

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Impact of exchange rate fluctuations
The Chilean peso has been subject to large volatility in the past and could be subject to significant fluctuations in the future. During 2010 and 2011, the value of the Chilean peso relative to the U.S. dollar appreciated approximately 3.14% and depreciated 5.71% in nominal terms, respectively; relative to the Argentine Peso, it appreciated approximately 0.21% and depreciated 13.43% in nominal terms, respectively; relative to the Brazilian Real, it depreciated approximately 0.21% and 6.84% in nominal terms, respectively; relative to the Peruvian Sol, it appreciated approximately 1.35% and 5.67% and relative to the Colombian peso, it appreciated approximately 4.05% and 1.24% in nominal terms, respectively. The observed exchange rate on December 28, 2012 was Ch$478.60 per U.S.$1.00. See “Item 3. Key Information—A. Selected Financial Data—Exchange Rates” and “Item 10. Additional Information—D. Exchange Controls.”
Our sales in each of our countries of operations are priced in local currencies. To the extent that the Chilean peso depreciates against the U.S. dollar or the currencies of any of our countries of operation, our revenues may be adversely affected when expressed in Chilean pesos. The effect of exchange rate fluctuations is partially offset by the fact that certain of our operating expenses are denominated in Chilean pesos (such as our corporate overhead) and a significant part of our indebtedness is denominated in Chilean pesos. As of December 31, 2012, 21% of our interest-bearing debt was denominated in U.S. dollars, after taking into account cross-currency swaps, and the remainder of our interest-bearing debt was primarily UF- or Chilean peso-denominated.
Impact of the 2010 earthquake and tsunami
On February 27, 2010, an 8.8 magnitude earthquake struck the central and central south regions of Chile. The quake epicenter was located 200 miles southwest of Santiago and 70 miles north of Concepción, Chile’s second-largest city. The regions of Bío Bío and Maule were the most severely affected regions especially in the coastal area, which, shortly after the earthquake, was hit by a tsunami that significantly damaged cities and port facilities. The regions of Valparaíso and the Santiago Metropolitan area were also severely affected. At least 1,500,000 homes were damaged and more than 500 people were killed. According to an initial assessment by the government of Chile, the repair of the resulting damage, excluding damage to port facilities, is likely to take between three and four years and the preliminary assessments of reconstruction costs indicate that they could total approximately U.S.$30 billion.
The February 2010 earthquake and tsunami’s primary impact on us was Ch$32,919 million relating primarily to damage to infrastructure, inventory destruction and business interruptions. Our insurance policies cover losses arising from the earthquake and tsunami, amounting to Ch$21,893 million. The primary financial impact of the earthquake and tsunami on our results of operations was Ch$4,865 million. The difference between the impact and the claim is related to the depreciation of certain assets at the time of the earthquake, resulting in a claim that is higher than the book value of such assets.
Conversely, following the February 2010 earthquake, during the second and third quarter of 2010 we experienced a 29.4% increase in revenues in our home improvement stores segment, as compared to second and third quarter of 2009.
As a result of the February 2010 earthquake and tsunami, the Chilean government raised the corporate income tax rate in order to pay for reconstruction following the earthquake and tsunami. Such legislation increased the general corporate tax rate from its historic rate of 17.0% to 20.0% for the income accrued in the 2011 commercial year ( año comercial), which is declared and paid in the 2012 tax year ( año tributario ). On September 27, 2012, Law No. 20,630 introduced new amendments to existing tax legislation. Among the amendments introduced, the corporate income tax was permanently maintained at 20% effective as of the 2013 tax year.
Impact of the April 24, 2013 Supreme Court ruling on litigation on credit card fees.
On April 24, 2013, the Supreme Court of Chile ruled on the class action suit filed by SERNAC against Cencosud Administradora de Tarjetas S.A. (“CAT”). The court ruled for the plaintiff and at this junction no further appeals are available. In its ruling, the court determined that CAT included certain clauses in its 2006 contracts that were abusive to consumers. Said clauses allowed CAT to charge an incremental maintenance fee of Ch$530 per month to credit cardholders with a card usage under Ch$50 thousand per month, without written consent from cardholders as required by the Ley de Proteccion al Consumidor . In the ruling the court ordered CAT to pay a fine of approximately Ch$ 2 million and to reimburse certain cardholders for the excess maintenance fees charged since 2006 plus adjustments for inflation and interests. We have provisioned Ch$ 20,000 million for this ruling in our 2012 financial statements, which represents 0.2% of our 2012 consolidated net revenues and 3.1% of our 2012 adjusted EBITDA. This provision is an estimated value that still needs to be ratified by the Supreme Court of Chile after subsequent filings for interpretation, rectification and amendment are addressed by the court.
Seasonality
Historically, we have experienced distinct seasonal sales patterns at our supermarkets due to heightened consumer activity throughout the Christmas and New Year holiday season, as well as during the beginning of each school year in March. During these periods, we promote the sale of non-food items particularly by discounting imported goods, such as toys throughout the Christmas holiday season, and school supplies during the back-to-school
 
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period. Conversely, we usually experience a decrease in sales during the summer vacation months of January and February. Our sales for the first and fourth quarters of 2012 represented 23.7% and 28.2% respectively, of our total same-store sales for such year.
We do not experience significant seasonality in the home improvement sector. Home improvement store sales for the first six months of 2012 represented 48% of our total home improvement sales.
Our department stores have also experienced historically distinct seasonal sales patterns due to heightened consumer activity throughout the Christmas and New Year holiday season. As a result, the strongest quarter in terms of sales is the fourth quarter, which represented 32.4% of total sales for the year 2012, while the first, second and third quarters, each represented 20.8%, 23.8% and 22.8% of total annual sales, respectively.
Our shopping center revenues generally increase during the Christmas and New Year holiday season, reflecting the seasonal sales peak for our shopping centers. For example, during the fourth quarter of 2012 our Chile shopping center revenues represented 30% of total Chile shopping center revenues for the year. We generally charge our shopping center tenants double rent for the month of December which is payable in February of the following year when they will have realized collections in respect of most holiday season sales.
Cost of Sales
Cost of sales reflects the costs of goods sold. Gross margin, defined as revenues from ordinary activities less cost of sales, is lower in our supermarkets segment due to higher turnover of our supermarket inventory, which includes primarily basic and staple goods. In our other segments, namely department stores and home improvement stores, we do not experience high inventory turnover and therefore have higher gross margins.
Loan Provisioning
Provision models to cover portfolio risk in line with Basel II standards: the Company has different provisions models that adhere to local regulations in each country as well as Basel II standards in order to most adequately reflect cardholder portfolio risk. External variables which affect payment behavior are also included in statistical models for estimating provisions. The Company is making progress in each country on implementing anti-cyclical provisions based on industry best practices, having started with Chile and Peru and, in 2012, Argentina. It also uses back testing to periodically monitor the sufficiency of the provisions it establishes.
Critical Accounting Policies and Estimates
A summary of our significant accounting policies is included in Note 2 to our Audited Consolidated Financial Statements included elsewhere in this annual report. We believe that the consistent application of these policies enables us to provide readers of our consolidated financial statements with more useful and reliable information about our operating results and financial condition.
The following policies are the accounting policies that we believe to be the most important in the portrayal of our financial condition and results of operations and require management’s most difficult, subjective or complex judgments.
Estimate of impairment of assets with indefinite useful lives
We assess whether goodwill has experienced any impairment on an annual basis, or more frequently if events or changes in circumstances indicate a potential impairment. The recoverable balances of the cash generating units have been determined from the base of their value in use. We apply the methodology of discounting cash flows at a real discount rate calculated for each country. The assets measured correspond mainly to trademarks and goodwill arising from past business combinations. The measurements are performed for each business segment and for each
 
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cash generating unit. The projected cash flows in each segment are allocated initially to identifiable tangible and intangible assets and the exceeding portion is allocated to goodwill. The valuation review of the trademarks incorporates among other factors the market analysis, financial projections and the determination of the role the brand under review has in the generation of sales. Changes in these assumptions may have a material impact on our financial results. As of December 31, 2012, the recoverable amount of our cash generating units is substantially in excess of their carrying value. As such, there are no cash generating units at risk of impairment.
Useful life of property, plant and equipment
We review the estimated useful lives of our property, plant and equipment at the end of each annual period. For the year ended December 31, 2012, we have established that there are no significant changes in the useful lives estimated during the period.
Impairment of accounts receivable
We assesses the impairment of accounts receivable when there is objective evidence that we will not be able collect all the amounts according to the original terms of the account receivable. For further information on our accounts receivable, please see Note 8 to our Audited Consolidated Financial Statements.
Investment property
For investment property, we use the discounted cash flows methodology using a country-specific weighted average cost of capital after tax, measured in real terms (8.0% in Chile, 14.8% in Argentina and 8.2% in Peru). To this effect, we calculate the revenues from ordinary activities that correspond to the lease income minus direct costs and operating expenses. Additionally, the projected cash flows use recent annual historical information and the projected macroeconomic variables expected to affect each country. The cash flows are calculated in a scenario of moderated growth for those investment properties that have reached the expected maturity level. Changes in these assumptions may have a material impact on results.
Estimate of Impairment of property, plant and equipment
For property, plant and equipment, we applied a methodology of discounting future cash flows using a pre-tax nominal discount rate, differentiated by country (7.5% in Chile; 16.8% in Argentina, 8% in Peru, 8% in Brazil and 7.8% in Colombia). We performed cash flow projections for each country and business segment. We used the functional currency of each country and the projection considers a five-year outlook plus perpetuity. The projections are based on historical information from recent years and the main macroeconomic variables that affect markets. In addition, the projections consider moderate organic growth and the recurring investments necessary to maintain the cash flow generating capacity of each segment.
Financial assets-options
In order to determine the fair value of call options (a financial asset), we consider the net present value of the discounted cash flows of the underlying asset and an analysis of market comparables, incorporating variables like EBITDA multiples, sales valuations, etc. See Note 16.4 to our Audited Consolidated Financial Statements.
Operating Segments
For purposes of our Audited Consolidated Financial Statements and our Unaudited Interim Consolidated Financial Statements, IFRS 8 “Operating Segments” requires an entity to report financial and descriptive information about its reportable segments, which are operating segments or aggregations of operating segments that meet specified criteria. Operating segments are components of an entity about which separate financial information is available that is evaluated regularly by the chief operating officer in deciding how to allocate resources and in assessing performance.
 
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For management purposes, we are organized into six operating segments:
 
 	•	 	“supermarkets,” which includes the results of our: Jumbo, Santa Isabel, Disco, Vea, Wong, Metro, GBarbosa, Perini, Bretas and Prezunic supermarkets and hypermarkets in Chile, Argentina, Brazil and Peru, and our Eletro-show stores, GBarbosa pharmacies in Brazil and Bretas gas stations in Brazil;	
 
 	•	 	“shopping centers,” which includes the results of our shopping centers in Chile, Argentina and Peru;	
 
 	•	 	“home improvement stores,” which includes the results of our Easy and Blaisten home improvement stores in Chile, Argentina and Colombia;	
 
 	•	 	“department stores,” which includes the results of our Paris and Johnson department stores in Chile;	
 
 	•	 	“financial services,” which primarily includes the results of our credit card businesses and consumer loans, as well as our limited insurance brokerage operations in Chile, Argentina, and Peru and in Brazil through our joint venture with Banco Bradesco; and	
 
 	•	 	“other,” which includes the results of our entertainment centers, loyalty programs and our corporate back-office operations.	
We base operations and resource allocation decisions on these six segments. The operating segments are disclosed in a coherent way consistent with the presentation of internal reports we use in our internal controls and disclosure processes. These operating segments derive their revenues primarily from the sale of products and rendering of services to retail consumers.
Year ended December 31, 2012 as compared to year ended December 31, 2011
The following table presents, for the periods indicated, certain items of our statement of income:

 	  	Year ended
December 31,	 	  	 	 	
 	  	2012	 	  	2011	 	  	% Change	 	
 	  	(in millions of Ch$)	 	  	 	 	
				
Revenues from ordinary activities:	  				  				  				
Supermarkets	  	 	6,738,171	  	  	 	5,556,271	  	  	 	21.3	% 	
Home improvement stores	  	 	1,063,086	  	  	 	948,641	  	  	 	12.1	% 	
Department stores	  	 	886,075	  	  	 	690,772	  	  	 	28.3	% 	
Shopping centers	  	 	165,462	  	  	 	129,727	  	  	 	27.5	% 	
Financial services	  	 	282,253	  	  	 	267,874	  	  	 	5.4	% 	
Other	  	 	14,030	  	  	 	11,521	  	  	 	21.8	% 	
Total revenues from ordinary activities	  	 	9,149,077	  	  	 	7,604,806	  	  	 	20.3	% 	
				
Cost of sales:	  				  				  				
Supermarkets	  	 	-5,060,408	  	  	 	-4,177,664	  	  	 	21.1	% 	
Home improvement stores	  	 	-711,500	  	  	 	-647,337	  	  	 	9.9	% 	
Department stores	  	 	-644,668	  	  	 	-499,413	  	  	 	29.1	% 	
Shopping centers	  	 	-23,771	  	  	 	-19,449	  	  	 	22.22	% 	
Financial services	  	 	-104,901	  	  	 	-85,632	  	  	 	22.5	% 	
Other	  	 	-2,583	  	  	 	-5,421	  	  	 	52.4	% 	
Total cost of sales	  	 	-6,547,832	  	  	 	-5,434,917	  	  	 	20.5	% 	
				
Gross margin:	  				  				  				
Supermarkets	  	 	1,677,762	  	  	 	1,378,607	  	  	 	21.7	% 	
Home improvement stores	  	 	351,586	  	  	 	301,303	  	  	 	16.7	% 	
Department stores	  	 	241,407	  	  	 	191,359	  	  	 	26.2	% 	
Shopping centers	  	 	141,691	  	  	 	110,278	  	  	 	28.5	% 	
Financial services	  	 	177,353	  	  	 	182,242	  	  	 	-2.7	% 	
Other	  	 	11,447	  	  	 	6,099	  	  	 	87.7	% 	
 
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 	  	Year ended
December 31,	 	  	 	 	
 	  	2012	 	  	2011	 	  	% Change	 	
 	  	(in millions of Ch$)	 	  	 	 	
Total gross margin	  	 	2,601,245	  	  	 	2,169,890	  	  	 	19.9	% 	
Administrative expenses, distribution costs and other expenses	  	 	-2,121,821	  	  	 	-1,669,374	  	  	 	27.1	% 	
Other revenues by function	  	 	107,110	  	  	 	85,128	  	  	 	25.8	% 	
Participation in earnings of associates	  	 	5,640	  	  	 	5,779	  	  	 	-2.4	% 	
Other earnings	  	 	1,332	  	  	 	-12,659	  	  	 	110.5	% 	
Net financial expenses	  	 	-202,912	  	  	 	-133,152	  	  	 	52.4	% 	
Exchange differences	  	 	-2,680	  	  	 	-9,876	  	  	 	72.9	% 	
Losses from indexation	  	 	-25,915	  	  	 	-31,289	  	  	 	17.2	% 	
Income tax charge	  	 	-109,190	  	  	 	-119,556	  	  	 	-8.7	% 	
Profit attributable to controlling shareholders	  	 	249,959	  	  	 	274,333	  	  	 	-8.9	% 	
Revenues from ordinary activities
Our consolidated revenues from ordinary activities increased 20.3%, or Ch$1,544,271 million, to Ch$9,149,077 million for the year ended December 31, 2012 from Ch$7,604,806 million for the same period in 2011, as a result of (i) an increase of Ch$1,181,900 million resulting from growth in revenues from ordinary activities of 21.3% in our supermarkets segment, (ii) an increase of Ch$114,445 million resulting from growth in revenues from ordinary activities of 12.1% in our home improvement stores segment, (iii) an increase of Ch$195,303 million resulting from growth in revenues from ordinary activities of 28.3% in our department stores segment, (iv) an increase of Ch$35,735 million resulting from growth in revenues from ordinary activities of 27.5% in our shopping centers segment, and (v) an increase of Ch$14,379 million resulting from growth in revenues from ordinary activities of 5.4% in our financial services segment,
Supermarkets
Our consolidated revenue from ordinary activities from our supermarkets expanded 21.3% or Ch$1,181,900 million, to Ch$6,738,171 million for the year ended December 31, 2012 from Ch$5,556,271 million for the same period in 2011, primarily due to (i) an increase of Ch$542,058 million or 35% in sales in Brazil driven by the consolidation of Prezunic (ii) the consolidation of Carrefour´s former Colombian operations with revenues of Ch$116,598 million, (iii) the opening of 78 new supermarkets across the region, (iv) positive same store sales in Chile, Argentina and Peru of 4.8%, 18.5% and 4.2% respectively in local currency, accompanied by increases in average tickets.
Home improvement stores
Our consolidated revenues from ordinary activities from our home improvement stores increased 12.1% or Ch$114,445 million, to Ch$1,063,086 million for the year ended December 31, 2012 from Ch$948,641 million for the same period in 2011, primarily due to (i) an increase of Ch$78,207 million resulting from an higher revenues in the order of 14.4% in Argentina driven by an increase in same-store sales in local currency of 26.6%, partially offset by the closure of one store and by the devaluation of the Argentine peso against the Chilean peso, (ii) an increase of Ch$32,892 million resulting from an increase in revenues of 9.0% in Chile driven by an increase in same-store sales in local currency of 6.3% and an expansion in sales resulting from the opening of 2 new stores (iii) an increase of Ch$3,347 million resulting from an increase in revenues of 8.5% in Colombia driven by an expansion of 4.1% in same stores sales in local currency partially offset by devaluation of the Colombian peso against the Chilean peso.
Department stores
Our consolidated revenues from ordinary activities from our department stores in Chile increased 28.3%, or Ch$195,303 million, to Ch$886,075 million for the year ended December 31, 2012 from Ch$690,772 million for the same period in 2011, primarily due to an increase in same stores sales of 5.3%, the consolidation of Johnson, and the opening of four new Paris stores in the period.
 
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Shopping centers
Our consolidated revenues from ordinary activities from our shopping centers increased 27.5%, or Ch$35,735 million, to Ch$165,462 million for the year ended December 31, 2012 from Ch$129,727 million for the same period in 2011, primarily due to: (i) an increase of Ch$28,590 million resulting from growth in revenues of 44.3% in Chile due to an increase in selling space of 52.3% as a result of the opening of Costanera Center, with total selling space of 140,000 square meters, and Portal Osorno, and (ii) an increase of Ch$5,807 million resulting from growth in revenues of 9.7% in Argentina due to an increase in selling space of 4.0%, (iii) revenue growth in Peru in the segment of 24% for the year ended in December 2012 as a consequence of the opening of a shopping center in the city of Lima.
Financial services
Our consolidated revenues from ordinary activities from our financial services increased 5.4%, or Ch$14,379 million, to Ch$282,253 million for the year ended December 31, 2012 from Ch$267,874 million for the same period in 2011, as a result of (i) an increase of Ch$9,322 million resulting from an expansion in revenues of 29.2% in Argentina driven by a larger loan portfolio, (ii) an increase of Ch$4,873 million resulting from rising revenues in the order of 55.7% in Peru driven by a larger loan portfolio due to higher card usage and the buildup of our operations in the market. This growth was partially offset by a contraction of 21.1% in Brazil or Ch$982 million.
Cost of sales
Our consolidated cost of sales increased 20.5%, or Ch$1,112,915 million, to Ch$6,547,832 million for the year ended December 31, 2012 from Ch$5,434,917 million for the same period in 2011, primarily due to an increase in sales of 20.3%. Cost of sales as a percentage of sales climbed from 71.5% to 71.6% when comparing December 31, 2012 and 2011.
Supermarkets
Our consolidated cost of sales in our supermarkets increased 21.1%, or Ch$882,744 million, to Ch$5,060,408 million for the year ended December 31, 2012 from Ch$ 4,177,664 million for the same period in 2011. Costs as percentage of sales decreased by 0.1%, primarily due to (i) an increase of cost of sales in Brazil of 36.2% or Ch$435,406 million resulting from an increase of 35.0% in sales and lower cost of sales as a percentage of sales of 0.9%, due to the consolidation of Prezunic into our operations (which contributed Ch$491,080 to the increase in costs of sales), which allowed us to negotiate better terms with our suppliers in Brazil, (ii) an increase of Ch$345,885 million resulting from an increase of 12.7% or Ch$231,920 million in sales in Chile while cost of sales as a percentage of sales dropped from 76.3% to 75.8%, (iii) an increase of Ch$167,297 million resulting from an increase of 12.8% in sales in Argentina and lower cost of sales as a percentage of sales of 0.6%, due to inflation and better terms resulting from negotiations with our suppliers, and (iv) an increase of Ch$65,040 million resulting from an increase of 13.7% in sales in Peru and cost of sales as a percentage of sales of 0.7%.
Home improvement stores
Our consolidated cost of sales in home improvement stores increased 9.9%, or Ch$64,163 million, to Ch$711,500 million for the year ended December 31, 2012 from Ch$647,337 million for the same period in 2011, primarily due to (i) an increase of cost of sales in Chile of Ch$19,379 million resulting from an increase of 9% in sales and (ii) an increase of cost of sales in Argentina of Ch$42,257 million resulting from an increase of 14.4% in sales and lower cost of sales as a percentage of sales of 1.4% due to better terms resulting from negotiations with our suppliers. Costs as percentage of sales decreased by 1.3% primarily because our Argentine operations, which have lower cost of sales as percentage of sales as compared to Chile, represented a higher percentage of our home improvement sales than in the prior period, increasing to 57.1% of total home improvement stores segment revenues in 2012 from 55.0% of the total revenues of the home improvement stores segment in 2011.
 
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Department stores
Our consolidated cost of sales in our department stores in Chile increased 29.1% or Ch$145,255 million, to Ch$644,668 million for the year ended December 31, 2012 from Ch$499,413 million for the same period in 2011, primarily due to an increase in sales in the period of 28.2%. Costs as percentage of sales increased by 0.5% primarily due to higher revenues and the integration of Johnson into our department store division.
Shopping centers
Our consolidated cost of sales, primarily depreciation and expenses, from our shopping centers increased 22.2%, or Ch$4,322 million, to Ch$23,771 million for the year ended December 31, 2012 from Ch$19,449 million for the same period in 2011, primarily due to the opening of 4 new shopping centers in the region, mainly Costanera center in Chile and the expansion in revenue that it entailed.
Financial services
Our consolidated cost of sales, primarily provisions for bad debts and collection and processing costs, from our financial services division jumped 22.5%, or Ch$19,269 million, to Ch$104,901 million for the year ended December 31, 2012 from Ch$85,632 million for the same period in 2011, primarily due to an expansion in our loan portfolio in Argentina and Peru.
Gross margin
Our consolidated gross margin increased 19.90%, or Ch$431,355 million, to Ch$2,601,245 million for the year ended December 31, 2012 from Ch$2,169,890 million for the same period in 2011, primarily due improved margins in all our divisions.
Our consolidated gross margin as a percentage of revenues from ordinary activities decreased 0.1% to 28.4% for the year ended December 31, 2012 from 28.5% for the same period in 2011.
Supermarkets
Our consolidated gross margin in our supermarkets increased 21.7%, or Ch$299,155 million, to Ch$1,677,762 million for the year ended December 31, 2012 from Ch$1,378,607 million for the same period in 2011, primarily due to improvements in gross margins in Peru, Argentina and Chile and the addition of Colombian operations. As a result of the foregoing factors, our consolidated gross margin as a percentage of revenues from ordinary activities increased by 0.1% to 24.9% for the year ended December 31, 2012 from 24.8% for the same period in 2011.
Home improvement stores
Our consolidated gross margin in our home improvement stores increased 16.7%, or Ch$ 50,283 million, to Ch$351,586 million for the year ended December 31, 2012 from Ch$301,303 million for the same period in 2011, primarily due to lower expenses and costs of sales in Chile because of higher volume discounts from suppliers, reduced inventory, logistic efficiencies in Argentina and greater bargaining power with Colombian suppliers along with lower costs from logistics.
 
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As a result of the foregoing factors, our consolidated gross margin as a percentage of revenues from ordinary activities in our home improvement stores increased by 1.3% to 33.1% during the year ended December 31, 2012 from 31.8% for the same period in 2011.
Department stores
Our consolidated gross margin in our department stores in Chile increased 26.2%, or Ch$50,048 million, to Ch$241,407 million for the year ended December 31, 2012 from Ch$191,359 million for the same period in 2011, primarily due to better inventory management and sales mix. As a result of the consolidation of Johnson´s , our consolidated gross margin as a percentage of revenues from ordinary activities in our department stores decreased by 0.5% to 27.2% for the year ended December 31, 2012 from 27.7% for the same period in 2011.
Shopping centers
Our consolidated gross margin in our shopping centers increased 28.5%, or Ch$31,413 million, to Ch$141,691 million for the year ended December 31, 2012 from Ch$110,278 million for the same period in 2011, primarily due to the fact that the Chilean shopping operations, with a higher gross margin than Argentina and Peru, increased its participation in overall shopping revenues to more than 55% of the division
As a result of the foregoing factors, our consolidated gross margin as a percentage of revenues from ordinary activities in our shopping centers increased to 85.6% for the year ended December 31, 2012 from 85.0% for the same period in 2011.
Financial services
Our consolidated gross margin in our financial services segment decreased 2.7%, or Ch$4,889 million, to Ch$177,353 million for the year ended December 31, 2012 from Ch$182,242 million for the same period in 2011, as a result of higher costs of sales due to a larger portfolio in Chile because of the integration of Johnson credit card, and higher costs in Peru due to the building up of the operation.
Other revenues by function
Our consolidated other revenues by function increased by Ch$21,982 million, to Ch$107,110 million for the year ended December 31, 2012 from Ch$85,128 million for the same period in 2011, as a result of a higher revaluation of investment properties in 2012 compared to the same period in 2011.
Administrative expenses, distribution costs and other expenses
Our consolidated administrative expenses, distribution costs and other expenses increased 27.0%, or Ch$452,448 million to Ch$ 2,121,821 million for the year ended December 31, 2012 from Ch$ 1,669,374 million for the same period in 2011, in line with higher revenues from ordinary activities of 20.5%.
Under this line we have recorded the effect of provisions that were a direct consequence of the unfavorable outcome of a class action initiated by SERNAC against our subsidiary, CAT. We have included provisions in the amount of Ch$ 20,000 million, or 0.9% of all expenses added to the line in the period.
Provisions were made under our financial services segments, as Cencosud S.A. was not a party to the litigation.
 
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Results from financial and other activities
The following table presents, for the periods indicated, a breakdown of our consolidated results from financial, tax and other activities, as well as the percentage variation from period to period:

 	  	Year ended December 31,	 	 	 	 	
 	  	2012	 	 	2011	 	 	% Change	 	
 	  	(in millions of Ch$)	 	 	 	 	
Other earnings (losses)	  	 	1,332	  	 	 	(12,659	) 	 	 	110.5	% 	
Financial income	  	 	8,110	  	 	 	10,984	  	 	 	-26.2	% 	
Financial expenses	  	 	(211,022	) 	 	 	(144,136	) 	 	 	46.4	% 	
Exchange differences	  	 	(2,680	) 	 	 	(9,876	) 	 	 	72.9	% 	
Losses from indexation	  	 	(25,915	) 	 	 	(31,289	) 	 	 	17.2	% 	
Total losses from financial and other activities	  	 	(230,174	) 	 	 	(186,975	) 	 	 	23.1	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Our consolidated losses from financial and other activities increased by Ch$43,199 million, to a loss of Ch$230,174 million for the year ended December 31, 2012 from a loss of Ch$186,975 million for the same period in 2011. This increase was primarily due to the following factors:
 
 	•	 	An increase in financial expenses of Ch$66,886 million, resulting in a loss of Ch$211,022 million for the year ended December 31, 2012 compared to Ch$144,136 million for the same period in 2011, as a result of less cash on hand, higher financial debt used to fund the growth of the company, mainly related to recent acquisitions; partially offset by	
 
 	•	 	A decrease in exchange differences of Ch$7,196 million, resulting in a loss of Ch$2,680 million for the year ended December 31, 2012 from a loss of Ch$9,876 million for the same period in 2011, as a result of the devaluation of local currencies against U.S. dollar; and	
 
 	•	 	A decrease in losses from indexation, of Ch$5,374 million, resulting in a loss of Ch$25,915 million for the year ended December 31, 2012 from a loss of Ch$31,289 million for the same period in 2011 as a result of a lower inflation rate in Chile.	
Income tax charge
For the year ended December 31, 2012, we had an income tax expense of Ch$109,190 million, compared to an income tax expense of Ch$119,556 million for the same period in 2011. This decrease of Ch$10,366 million was due to tax losses that originated in 2012, consolidation of Banco Paris and Carrefour Colombia (not consolidated in 2011), the change in the income tax rate in Chile, from 17% to 20% (impact on deferred taxes), and the changes in ARS/CLP and BRL/CLP exchange rate.
Profit (loss) attributable to controlling shareholders
As a result of the above factors, our net earnings decreased 8.9%, or Ch$24,374 million, to Ch$249,959 million for the year ended December 31, 2012 from Ch$ 274,333 million for the same period in 2011. Our net earnings, as a percentage of revenues from ordinary activities, decreased to 2.7% for the year ended December 31, 2012 from 3.6% for the same period in 2011.
 
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Year ended December 31, 2011 as compared to year ended December 31, 2010
The following table presents, for the periods indicated, certain items of our statement of income:

 	  	Year ended
December 31,	 	 	 	 	
 	  	2011	 	 	2010	 	 	% Change	 	
 	  	(in millions of Ch$)	 	 	 	 	
Revenues from ordinary activities:	  				 				 				
Supermarkets	  	 	5,556,271	  	 	 	4,452,759	  	 	 	24.8	% 	
Home improvement stores	  	 	948,641	  	 	 	819,838	  	 	 	15.7	% 	
Department stores	  	 	690,772	  	 	 	622,719	  	 	 	10.9	% 	
Shopping centers	  	 	129,727	  	 	 	116,991	  	 	 	10.9	% 	
Financial services	  	 	267,874	  	 	 	221,010	  	 	 	21.2	% 	
Other	  	 	11,521	  	 	 	3,657	  	 	 	215.0	% 	
Total revenues from ordinary activities	  	 	7,604,806	  	 	 	6,236,974	  	 	 	21.9	% 	
				
Cost of sales:	  				 				 				
Supermarkets	  	 	(4,177,664	) 	 	 	(3,355,796	) 	 	 	24.5	% 	
Home improvement stores	  	 	(647,337	) 	 	 	(561,006	) 	 	 	15.4	% 	
Department stores	  	 	(499,413	) 	 	 	(446,769	) 	 	 	11.8	% 	
Shopping centers	  	 	(19,449	) 	 	 	(17,858	) 	 	 	8.9	% 	
Financial services	  	 	(85,632	) 	 	 	(70,458	) 	 	 	21.5	% 	
Other	  	 	(5,421	) 	 	 	(5,343	) 	 	 	1.5	% 	
Total cost of sales	  	 	(5,434,917	) 	 	 	(4,457,229	) 	 	 	21.9	% 	
				
Gross margin:	  				 				 				
Supermarkets	  	 	1,378,607	  	 	 	1,096,963	  	 	 	25.7	% 	
Home improvement stores	  	 	301,303	  	 	 	258,832	  	 	 	16.4	% 	
Department stores	  	 	191,359	  	 	 	175,950	  	 	 	8.8	% 	
Shopping centers	  	 	110,278	  	 	 	99,133	  	 	 	11.2	% 	
Financial services	  	 	182,242	  	 	 	150,552	  	 	 	21.0	% 	
Other	  	 	6,099	  	 	 	(1,686	) 	 	 	(461.8	%) 	
Total gross margin	  	 	2,169,890	  	 	 	1,779,745	  	 	 	21.9	% 	
Administrative expenses, distribution costs and other expenses	  	 	(1,669,374	) 	 	 	(1,371,074	) 	 	 	21.8	% 	
Other revenues by function	  	 	85,128	  	 	 	43,871	  	 	 	94.0	% 	
Participation in earnings of associates	  	 	5,779	  	 	 	7,514	  	 	 	(23.1	%) 	
Other earnings	  	 	(12,659	) 	 	 	10,772	  	 	 	(124.7	%) 	
Net financial expenses	  	 	(133,152	) 	 	 	(69,807	) 	 	 	90.7	% 	
Exchange differences	  	 	(9,876	) 	 	 	(2,053	) 	 	 	(381.1	%) 	
Losses from indexation	  	 	(31,289	) 	 	 	(15,657	) 	 	 	99.8	% 	
Income tax charge	  	 	(119,556	) 	 	 	(76,830	) 	 	 	55.6	% 	
Profit attributable to controlling shareholders	  	 	274,333	  	 	 	296,261	  	 	 	(7.4	%) 	
Revenues from ordinary activities
Our consolidated revenues from ordinary activities increased 21.9%, or Ch$1,367,833 million, to Ch$7,604,806 million for the year ended December 31, 2011 from Ch$6,236,974 million for the same period in 2010, as a result of (i) an increase of Ch$1,103,512 million resulting from growth in revenues from ordinary activities of 24.8% in our supermarkets segment, (ii) an increase of Ch$128,803 million resulting from growth in revenues from ordinary activities of 15.7% in our home improvement stores segment, (iii) an increase of Ch$68,054 million resulting from growth in revenues from ordinary activities of 10.9% in our department stores segment, (iv) an increase of Ch$12,737 million resulting from growth in revenues from ordinary activities of 10.9% in our shopping centers segment, and (v) an increase of Ch$46,864 million resulting from growth in revenues from ordinary activities of 21.2% in our financial services segment.
Supermarkets
Our consolidated revenues from ordinary activities from our supermarkets increased 24.8% or Ch$1,103,512 million, to Ch$5,566,271 million for the year ended December 31, 2011 from Ch$4,452,759 million for the same period in 2010, primarily due to (i) an increase of Ch$709,163 million resulting from an increase of 84.1% in sales in Brazil driven by the consolidation of Bretas into our operations, which contributed Ch$623,745 million to the increase in revenues, the opening of 22 new stores in Brazil and an increase of 1.3% in same-store sales in local currency, (ii) an increase of Ch$146,035 million resulting from an increase of 8.7% in sales in Chile driven by the opening of 30 new stores in Chile and an increase in same-store sales of 4.8%, (iii) an increase of Ch$183,427
 
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million resulting from an increase of 13.4% in sales in Argentina driven by the opening of 14 new stores in Argentina, an increase in same-stores sales in local currency of 22.5%, explained partially by high inflation and offset in part by devaluation of the Argentinean Peso against the Chilean Peso and the closure of one store, and (iv) an increase of Ch$64,888 million resulting from an increase of 11.6% in sales in Peru driven by the openings of 10 new stores in Peru and an increase in same-stores sales in local currency of 6.5%.
Home improvement stores
Our consolidated revenues from ordinary activities from our home improvement stores increased 15.7% or Ch$128,803 million, to Ch$948,641 million for the year ended December 31, 2011 from Ch$819,838 million for the same period in 2010, primarily due to (i) an increase of Ch$90,757 million resulting from an increase in revenues of 20.1% in Argentina driven by an increase in same-store sales in local currency of 31.1% driven by inflation, partially offset by the closure of one store and by the devaluation of the Chilean Peso against the Argentine Peso, (ii) an increase of Ch$31,755 million resulting from an increase in revenues of 9.5% in Chile driven by an increase in same-store sales in local currency of 4.9% and an increase in sales from stores operating for less than one year and opened in 2010, and (iii) an increase of Ch$6,291 million resulting from an increase in revenues of 19.0% in Colombia driven by an increase in same stores sales in local currency of 11.8%, partially offset by devaluation of the Chilean Peso against the Colombian Peso.
Department stores
Our consolidated revenues from ordinary activities from our department stores in Chile increased 10.9%, or Ch$68,054 million, to Ch$690,772 million for the year ended December 31, 2011 from Ch$622,719 million for the same period in 2010, primarily due to an increase in same stores sales of 5.2% and one new store opening.
Shopping centers
Our consolidated revenues from ordinary activities from our shopping centers increased 10.9%, or Ch$12,736 million, to Ch$129,727 million for the year ended December 31, 2011 from Ch$116,991 million for the same period in 2010, primarily due to: (i) an increase of Ch$9,649 million resulting from growth in revenues of 17.6% in Chile due to an increase in selling space of 3.2%, and (ii) an increase of Ch$6,325 million resulting from growth in revenues of 11.9% in Argentina due to an increase in selling space of 6.3%. This increase was partially offset by a decrease of Ch$3,237 million resulting from a decrease in revenues of 36.8% in Peru driven by the devaluation of the Peruvian currency.
Financial services
Our consolidated revenues from ordinary activities from our financial services segment increased 21.2%, or Ch$46,864 million, to Ch$267,874 million for the year ended December 31, 2011 from Ch$221,010 million for the same period in 2010, as a result of (i) an increase of Ch$22,833 million resulting from an increase in revenues of 11.4% in Chile driven by a larger loan portfolio as a result of improving economic conditions, (ii) an increase of Ch$19,262 million resulting from an increase in revenues of 152.2% in Argentina driven by a larger loan portfolio that almost doubled due to higher card usage, and (iii) an increase of Ch$5,888 million resulting from an increase in revenues of 206.4% in Peru driven by the start-up of our own local credit card. This increase was partially offset by the revaluation of the Chilean peso against the Argentinean peso and Peruvian Soles.
Cost of sales
Our consolidated cost of sales increased 21.9%, or Ch$977,688 million, to Ch$5,434,917 million for the year ended December 31, 2011 from Ch$4,457,229 million for the same period in 2010, primarily due to an increase in sales of 21.9%. Cost of sales as a percentage of sales remained unchanged at 71.5% for both years ended December 31, 2011 and 2010.
Supermarkets
Our consolidated cost of sales in our supermarkets increased 24.5%, or Ch$821,869 million, to Ch$4,177,664 million for the year ended December 31, 2011 from Ch$3,355,796 million for the same period in 2010. Costs as
 
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percentage of sales decreased by 0.2%, primarily due to (i) an increase of cost of sales in Brazil of Ch$542,578 million resulting from an increase of 84.1% in sales in Brazil and lower cost of sales over sales of 0.9%, due to the consolidation of Bretas into our operations (which contributed Ch$491,080 to the increase in costs of sales), which allowed us to negotiate better terms with our suppliers in Brazil, (ii) an increase of Ch$112,060 million resulting from an increase of 8.7% in sales in Chile while cost of sales over sales remained relatively unchanged, (iii) an increase of Ch$117,033 million resulting from an increase of 13.4% in sales in Argentina and lower cost of sales as a percentage of sales of 1.0%, due to inflation and better terms resulting from negotiations with our suppliers, and (iv) an increase of Ch$50,198 million resulting from an increase of 11.6% in sales in Peru and higher cost of sales over sales of 0.2%.
Home improvement stores
Our consolidated cost of sales in home improvement stores increased 15.4%, or Ch$86,332 million, to Ch$647,337 million for the year ended December 31, 2011 from Ch$561,006 million for the same period in 2010, primarily due to (i) an increase of cost of sales in Chile of Ch$25,290 million resulting from an increase of 9.5% in sales and higher cost of sales over sales of 0.7% due to the extraordinary events of 2010, namely the February 2010 earthquake and tsunami in Chile which increases sales and allowed us to negotiate better terms with our suppliers and (ii) an increase of cost of sales in Argentina of Ch$55,584 million resulting from an increase of 20.1% in sales and lower cost of sales over sales of 0.8% due to better terms resulting from negotiations with our suppliers. Costs as percentage of sales decreased by 0.2% primarily because our Argentine operations, which have lower cost of sales as percentage of sales as compared to Chile, represented a higher percentage of our home improvement sales than in the prior period, increasing from 55.0% of total home improvement stores segment revenues in 2010 to 57.1% of the total revenues of the home improvement stores segment in 2011.
Department stores
Our consolidated cost of sales in our department stores in Chile increased 11. 8%, or Ch$52,644 million, to Ch$499,413 million for the year ended December 31, 2011 from Ch$446,769 million for the same period in 2010, primarily due to higher sales of 10.9% as a result of an increase in same stores sales of 5.2% and one new store openings. Costs as percentage of sales increased by 0.6% primarily due to promotions and discounts offered in 2011 with respect to locally sourced and imported goods to compensate in part for the increase in sales in 2010, which was driven by the extraordinary events of 2010, namely the February 2010 earthquake and tsunami in Chile and the Soccer World Cup.
Shopping centers
Our consolidated cost of sales, primarily depreciation and expenses, from our shopping centers increased 8.9%, or Ch$1,591 million, to Ch$19,449 million for the year ended December 31, 2011 from Ch$17,858 million for the same period in 2010, primarily due to an increase in cost of sales of Ch$2,750 million in Argentina due to an increase in cost of sales of 25.4% as a result of inflation, partially offset by a decrease of Ch$1,343 million in Peru due to a 63.4% decrease in cost of sales resulting from the reclassification of certain assets between our shopping center and supermarket operations.
Financial services
Our consolidated cost of sales, primarily provisions for bad debts and collection and processing costs, from our financial services division increased 21.5%, or Ch$15,174 million, to Ch$85,632 million for the year ended December 31, 2011 from Ch$70,458 million for the same period in 2010, primarily due to (i) an increase of cost of sales in Chile of Ch$7,247 million resulting from an increase of 11.4% in sales due to larger loan portfolios driven by improving economic conditions and higher sales, (ii) an increase of cost of sales in Argentina of Ch$3,594 million resulting from an increase of 152.2% in sales and lower cost of sales over sales of 16.2% due to larger loan portfolios driven by higher sales, and (iii) an increase of cost of sales in Peru of Ch$4,332 million resulting from an increase of 206.4% in sales and higher cost of sales over sales of 41.3% due to the start-up of our own local credit card.
 
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Gross margin
Our consolidated gross margin increased 21.9%, or Ch$390,145 million, to Ch$2,169,890 million for the year ended December 31, 2011 from Ch$1,779,745 million for the same period in 2010, primarily due to (i) an increase of gross margin in Chile of Ch$83,749 million resulting from an increase of 9.7% in sales while gross margin over sales remained relatively unchanged, (ii) an increase of gross margin in Argentina of Ch$125,341 million resulting from an increase of 16.1% in sales and higher gross margin over sales of 1.4%, (iii) an increase of gross margin in Brazil of Ch$165,466 million resulting from an increase of 83.4% in sales and higher gross margin over sales of 0.6%, and (iv) an increase of gross margin in Peru of Ch$14,755 million resulting from an increase of 11.9% in sales and lower gross margin over sales of 0.4%.
Our consolidated gross margin as a percentage of revenues from ordinary activities remained unchanged at 28.5% for the year ended December 31, 2011 from 28.5% for the same period in 2010.
Supermarkets
Our consolidated gross margin in our supermarkets increased 25.7%, or Ch$281,644 million, to Ch$1,378,607 million for the year ended December 31, 2011 from Ch$1,096,963 million for the same period in 2010, primarily due to (i) an increase of gross margin in Chile of Ch$33,975 million resulting from an increase of 8.7% while gross margin over sales remained relatively unchanged, (ii) an increase of gross margin in Argentina of Ch$66,394 million resulting from an increase of 13.4% in sales and higher gross margin over sales of 1.0%, (iii) an increase of gross margin in Brazil of Ch$166,585 million resulting from an increase of 84.1% in sales, primarily from the consolidation of Bretas into our operations, which contributed Ch$132,665 to the increase in gross margin, and higher gross margin over sales of 0.9%, and (iv) an increase of gross margin in Peru of Ch$14,690 million resulting from an increase of 11.6% in sales and lower gross margin over sales of 0.2%. As a result of the foregoing factors, our consolidated gross margin as a percentage of revenues from ordinary activities increased by 0.2% to 24.8% for the year ended December 31, 2011 from 24.6% for the same period in 2010.
Home improvement stores
Our consolidated gross margin in our home improvement stores increased 16.4%, or Ch$42,471 million, to Ch$301,303 million for the year ended December 31, 2011 from Ch$258,832 million for the same period in 2010, primarily due to (i) an increase of gross margin in Chile of Ch$6,465 million resulting from an increase of 9.5% in sales and lower gross margin over sales of 0.7%, and (ii) an increase of gross margin in Argentina of Ch$35,173 million resulting from an increase of 20.1% in sales and higher gross margin over sales of 0.8%.
As a result of the foregoing factors, our consolidated gross margin as a percentage of revenues from ordinary activities in our home improvement stores increased by 0.2% to 31.8% during the year ended December 31, 2011 from 31.6% for the same period in 2010.
Department stores
Our consolidated gross margin in our department stores in Chile increased 8.8%, or Ch$15,409 million, to Ch$191,359 million for the year ended December 31, 2011 from Ch$175,950 million for the same period in 2010, primarily due to higher sales primarily due to an increase in same stores sales of 5.2% and one new store openings
As a result of the foregoing factors, our consolidated gross margin as a percentage of revenues from ordinary activities in our department stores decreased by 0.6% to 27.7% for the year ended December 31, 2011 from 28.3% for the same period in 2010.
Shopping centers
Our consolidated gross margin in our shopping centers increased 11.2%, or Ch$11,145 million, to Ch$110,278 million for the year ended December 31, 2011 from Ch$99,133 million for the same period in 2010, primarily due to (i) an increase of gross margin in Chile of Ch$9,465 million resulting from an increase of 17.6% in sales and higher gross margin over sales of 1.1%, (ii) an increase of gross margin in Argentina of Ch$3,574 million resulting from an increase of 11.9% in sales and lower gross margin over sales of 2.5%, and (iii) a decrease of gross margin in Peru of Ch$1,894 million resulting from a decrease of 36.8% in sales and due to higher gross margin over sales of 10.1%.
 
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As a result of the foregoing factors, our consolidated gross margin as a percentage of revenues from ordinary activities in our shopping centers increased to 85.0% for the year ended December 31, 2011 from 84.7% for the same period in 2010.
Financial services
Our consolidated gross margin in our financial services segment increased 21.0%, or Ch$31,690 million, to Ch$182,242 million for the year ended December 31, 2011 from Ch$150,552 million for the same period in 2010, as a result of to (i) an increase of gross margin in Chile of Ch$15,586 million resulting from an increase of 11.4% in sales, (ii) an increase of gross margin in Argentina of Ch$15,667 million resulting from an increase of 152.2% in sales and higher gross margin over sales of 16.2%, (iii) an increase of gross margin in Peru of Ch$1,556 million resulting from an increase of 206.4% in sales and lower gross margin over sales of 41.3%.
Other revenues by function
Our consolidated other revenues by function increased by Ch$41,257 million, to Ch$85,128 million for the year ended December 31, 2011 from Ch$43,871 million for the same period in 2010, as a result of an increase in the fair value of investment properties in our shopping centers and land located in Chile, Argentina and Peru. The increase in fair value of investment properties was due primarily to two factors: (i) inflation, as revenues are positively affected by inflation, (ii) higher fair values from the new shopping center Trelew in Argentina that opened with higher occupancy rates, (iii) higher gross leasable area in the Palermo Shopping in Argentina, and (iv) improved revenues associated with the growth, maturity and lower vacancy rates of our shopping centers’ operations in general.
Administrative expenses, distribution costs and other expenses
Our consolidated administrative expenses, distribution costs and other expenses increased 21.8%, or Ch$298,300 million, to Ch$1,669,374 million for the year ended December 31, 2011 from Ch$1,371,074 million for the same period in 2010, in line with higher revenues from ordinary activities of 21.9%.
As a percentage of revenues from ordinary activities, our consolidated administrative expenses, distribution costs and other expenses remained virtually unchanged at 22.0% for both years ended December 31, 2011 and 2010.
Results from financial and other activities
The following table presents, for the periods indicated, a breakdown of our consolidated results from financial, tax and other activities, as well as the percentage variation from period to period:

 	  	Year ended December 31,	 	 	 	 	
 	  	2011	 	 	2010	 	 	% Change	 	
 	  	(in millions of Ch$)	 	 	 	 	
Other earnings (losses)	  	Ch$	(2,659	) 	 	Ch$	10,772	  	 	 	(124.7	%) 	
Financial income	  	 	10,984	  	 	 	16,922	  	 	 	(35.1	%) 	
Financial expenses	  	 	(144,136	) 	 	 	(86,730	) 	 	 	66.2	% 	
Exchange differences	  	 	(9,876	) 	 	 	(2,053	) 	 	 	(381.1	%) 	
Losses from indexation	  	 	(31,289	) 	 	 	(15,657	) 	 	 	99.8	% 	
Total gains (losses) from financial and other activities	  	Ch$	(176,976	) 	 	Ch$	(76,746	) 	 	 	130.6	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Our consolidated losses from financial and other activities increased by Ch$100,230 million, to a loss of Ch$176,976 million for the year ended December 31, 2011 from a loss of Ch$76,746 million for the same period in 2010. This increase was primarily due to the following factors:
 
 	•	 	An increase in financial expenses of Ch$57,406 million, resulting in a loss of Ch$144,136 million for the year ended December 31, 2011 compared to Ch$86,730 million for the same period in 2010, as a result of less cash on hand, higher financial debt used to fund the growth of the company and higher variable interest rates, partially offset by the gains from hedging positions associated with the 144A/Reg-S Bond (as defined below); and	
 
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 	•	 	A decrease in other earnings of Ch$13,431 million to Ch$(2,659) million for the year ended December 31, 2011, compared to Ch$10,772 million for the same period in 2010. This result was primarily due to losses in the amount of Ch$18,768 million associated with the variation in the fair value of the UBS Call Option.	
 
 	•	 	A decrease in exchange differences of Ch$7,823 million, resulting in a loss of Ch$9,876 million for the year ended December 31, 2011 from a loss of Ch$2,053 million for the same period in 2010, as a result of the devaluation of local currencies against U.S. dollar;	
Income tax charge
For the year ended December 31, 2011, we had an income tax expense of Ch$119,556 million, compared to an income tax expense of Ch$76,830 million for the same period in 2010. This increase of Ch$42,726 million primarily reflected (i) higher taxable income of Ch$416,515 million for the year ended December 31, 2011, compared to Ch$383,311 million for the same period in 2010, (ii) a higher income tax rate in Chile of 20% in 2011 (up from 17% in 2010), which was increased to fund reconstruction initiatives related to the 2010 earthquake and tsunami, (iii) higher deferred tax expenses of Ch$9,468 million due to taxes arising from the changes in tax rates; and (iv) the increase in our taxable income due to the growth of our operations in Brazil, which has a higher tax rate than Chile.
Profit (loss) attributable to controlling shareholders
As a result of the above factors, our net earnings decreased 3.9%, or Ch$21,928 million, to Ch$274,333 million for the year ended December 31, 2011 from Ch$296,261 million for the same period in 2010. Our net earnings, as a percentage of revenues from ordinary activities, decreased to 3.8% for the year ended December 31, 2011 from 4.8% for the same period in 2010.
 
 	 B.	LIQUIDITY AND CAPITAL RESOURCES	
General
Our principal sources of liquidity have historically been:
 
 	•	 	cash generated by operations;	
 
 	•	 	short-term credit extended by suppliers;	
 
 	•	 	cash from borrowings and financing arrangements; and	
 
 	•	 	financing provided to us by sellers of businesses we have acquired.	
Our principal cash requirements or uses (other than in connection with our operating activities) have historically been:
 
 	•	 	acquisition of, or investments in, companies engaged in the retail business; and	
 
 	•	 	capital expenditures for property, plant and equipment.	
At December 31, 2012 we had a negative working capital (defined as total current assets, excluding cash and cash equivalents and other financial assets, minus total short-term liabilities, excluding other current financial liabilities) of Ch$121,229 million.
At December 31, 2011, we had a negative working capital (defined as total current assets, excluding cash and cash equivalents and other financial assets, minus total short-term liabilities, excluding other current financial liabilities) of Ch$14,758 million.
At December 31, 2010, we had negative working capital of Ch$50,373 million. This reflects a common source of liquidity within the retail business where non-interest bearing credit is extended by suppliers in the form of deferred payment terms to finance the retailer’s operations, including inventories and account receivables.
 
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We believe that our cash from operations, current financing initiatives and cash and cash equivalents are sufficient to satisfy our capital expenditures and debt service obligations in 2013. We anticipate financing any future acquisitions or capital expenditures for property, plant and equipment with cash from operations and additional indebtedness.
Leverage
Our objective regarding capital management is to safeguard our capacity to continue ensuring appropriate returns for our shareholders and benefits for other stakeholders, and maintaining an optimum capital structure while reducing capital costs.
In line with the industry, we monitor our capital using a leverage ratio calculation. This ratio is calculated by dividing net financial debt by total capital. Net financial debt corresponds to total indebtedness (including current and non-current debt) less cash and cash equivalents. Total capital corresponds to total equity as shown in the consolidated statement of financial position plus net debt.
In accordance with the above, we combine different financing sources, such as: capital increases, operating cash flows, bank loans and bonds.
Seasonality
Historically, we have experienced distinct seasonal patterns to our liquidity needs, which are highest in the first and second quarters of our fiscal year. Liquidity needs are higher in the first quarter primarily because payment becomes due for goods purchased in the previous quarter for the Christmas and New Year holidays. We also experience greater liquidity needs in the second quarter, as dividends and taxes are paid during this period.
During the periods when we have increased liquidity needs, we obtain funding primarily through short-term bank borrowings, overdraft lines of credit and by reducing our cash outflows, primarily by reducing or suspending advance payments to suppliers.
Indebtedness
At December 31, 2012, our total consolidated short-term financial debt was Ch$1,060,900 million, and our total consolidated long-term debt was Ch$3,099,101 million.
Our total financial debt includes both fixed-rate and variable-rate debt. Taking into account the effects of cross currency swaps, excluding Banco Paris indebtedness, at December 31, 2012, approximately 49% of our debt was variable-rate, and the remainder was fixed-rate. At December 31, 2012, approximately 21% of our debt was denominated in U.S. dollars, approximately 21% in UF, approximately 55% in Chilean pesos, approximately 1% in Argentine pesos, approximately 3% in Peruvian nuevos soles and approximately 3% in Brazilian reais. As part of our financial management policies, from time to time we enter into swaps and other derivative transactions to hedge our interest rate and exchange rate risk. See “Item 11. Quantitative and Qualitative Disclosures About Market Risk.” Our strategy is to hold the majority of our debt in local currencies, with a target ratio of debt denominated in foreign currency of 10% of our total debt.
In order to fund our growth plans, improve our amortization profile and reduce our cost of debt, in 2011 we issued bonds with an aggregate principal amount of US$750 million due 2021 in a 144A/Reg-S offering in the international capital market, with a fixed interest rate of 5.5% (the “2011 144A/Reg-S Bond”). We have hedged the currency risk associated with this issuance through cross-currency swaps with a nominal amount of U.S. $535 million. Additionally, in June 2011, we issued in the Chilean debt capital market bonds due 2031 with an aggregate principal amount of Ch$54,000, with a fixed interest rate of 7.40%. This was the first bond issuance in the Chilean market in Chilean pesos with a term of maturity of 20 years, the longest term ever in the history of the Chilean debt capital markets to date. As a result of these issuances, we were able to extend the duration of our debt (from approximately 4.8 years at the end of 2010 to over 7.5 years at the end of 2011) and streamline our debt amortization schedule. In addition, in 2009 and 2008 we issued in the local Chilean market UF15.0 million of bonds due between 2015 and 2030 with fixed interest rates ranging from 3.5% to 5.7% per annum and Ch$30.0 billion of bonds due on 2014 with a fixed interest rate of 7.0%. We also issued in the Peruvian market S/.410.0 million of bonds due 2017 and 2018 with fixed interest rates ranging from 7.19% to 7.63%.
 
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During 2011, we made payments and pre-payments of approximately U.S.$754 million on our outstanding debt. We used funds from our 2011 international bond offering to refinance our amortizations due in 2011, 2012 and 2013.
In December 2012, we issued bonds with an aggregate principal amount of U.S.$1,200 million due 2023 in a 144A/Reg-S offering in the international capital market, with a fixed interest rate of 4.875% (the “2023 144A/Reg-S Bond”). The proceeds from the 2023 144A/Reg-S Bond were used to repay in part the Bridge Loan Agreement. We have hedged the currency risk associated with this issuance through cross-currency swaps with a nominal amount of U.S.$410 million.
At December 31, 2012, our principal bank credit facilities and bonds (including interest) consisted of the following:

 	  	As of December 31, 2012	 	
 	  	Currency	  	Interest Rate Structure	  	Amount
Outstanding	 	  	Maturity
Date	  	Amount
Outstanding	 	
 	  	 	  	 	  	(in US$)	 	  	 	  	(in $M)	 	
Banks:	  	 	  	 	  	 	 	  	 	  	 	 	
Chile	  		  		  				  		  				
Banco del Estado de Chile	  	CLP	  	TAB 90 + 0.35%	  	 	165,717,248	  	  	06/29/2015	  	 	79,537,651	  	
Banco Bilbao Vizcaya Argentaria Chile	  	CLP	  	TAB 180 + 0.35%	  	 	74,506,740	  	  	08/02/2015	  	 	35,760,255	  	
Banco ITAU	  	CLP	  	TAB 180 + 0.45%	  	 	52,951,027	  	  	10/07/2014	  	 	25,414,375	  	
Banco ITAU	  	CLP	  	TAB 180 + 0.45%	  	 	52,951,027	  	  	10/07/2014	  	 	25,414,375	  	
Banco del Chile	  	CLP	  	TAB 180 + 0.30%	  	 	102,628,714	  	  	10/12/2015	  	 	49,257,678	  	
Banco de Credito e Inversiones	  	CLP	  	TAB 180 + 0.55%	  	 	52,898,737	  	  	10/13/2015	  	 	25,389,278	  	
Banco Bilbao Vizcaya Argentaria Chile	  	CLP	  	TAB 180 + 0.40%	  	 	148,990,280	  	  	09/07/2017	  	 	71,509,375	  	
Banco BICE	  	CLP	  	TAB 180 + 0.60%	  	 	40,428,640	  	  	09/14/2016	  	 	19,404,130	  	
Banco Santander Chile	  	CLP	  	ICP + 1.85% (TNA)	  	 	69,864,802	  	  	09/20/2016	  	 	33,532,310	  	
Banco BICE	  	UF	  	TAB 180 + 0.60%	  	 	2,128,903	  	  	12/29/2017	  	 	1,021,789	  	
Banco Rabobank	  	USD	  	3.86%	  	 	50,472,083	  	  	10/04/2018	  	 	24,224,581	  	
Banco Scotiabank	  	USD	  	LIBOR 180 + 1.5%	  	 	100,399,758	  	  	10/21/2017	  	 	48,187,868	  	
Banco JP Morgan Bridge Long	  	USD	  	LIBOR 180 + 1.5%	  	 	1,500,997,500	  	  	04/17/2014	  	 	720,418,760	  	
						
Peru	  		  		  				  		  				
Banco Bilbao Vizcaya New York	  	USD	  	Libor 90+ 2.00%	  	 	25,072,234	  	  	11/16/2015	  	 	12,033,670	  	
Banco Bilbao Vizcaya New York	  	USD	  	Libor 90+ 2.00%	  	 	15,043,341	  	  	11/16/2015	  	 	7,220,202	  	
BBVA Banco Continental	  	USD	  	5.15%	  	 	20,340,472	  	  	09/04/2017	  	 	9,762,613	  	
BBVA Banco Continental	  	USD	  	5.15%	  	 	20,340,472	  	  	09/04/2017	  	 	9,762,613	  	
 
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The Bank of Tokyo - Mitsubishi UFJ, Ltd.	  	USD	  	Libor 90 + 2.60%	  	 	35,008,482	  	  	03/28/2017	  	 	16,802,671	  	
Banco Interamericano de Finanzas (Leasing)	  	S/.	  	8.80%	  	 	493,222	  	  	09/02/2013	  	 	236,727	  	
BBVA Banco Continental (Leasing)	  	S/.	  	4.30%	  	 	1,291,538	  	  	04/28/2014	  	 	619,887	  	
BBVA Banco Continental (Leasing)	  	S/.	  	4.30%	  	 	157,761	  	  	10/28/2013	  	 	75,719	  	
BBVA Banco Continental (Leasing)	  	S/.	  	3.30%	  	 	1,597,251	  	  	08/30/2013	  	 	766,617	  	
Banco de Crédito del Perú	  	S/.	  	7.71%	  	 	27,737,350	  	  	01/07/2019	  	 	13,312,819	  	
BBVA Banco Continental (Leasing)	  	S/.	  	4.30%	  	 	1,376,901	  	  	02/28/2014	  	 	660,857	  	
BBVA Banco Continental (Leasing)	  	S/.	  	4.30%	  	 	1,115,481	  	  	04/30/2014	  	 	535,386	  	
BBVA Banco Continental (Leasing)	  	S/.	  	4.30%	  	 	1,170,382	  	  	04/30/2014	  	 	561,737	  	
BBVA Banco Continental (Leasing)	  	S/.	  	4.30%	  	 	597,782	  	  	05/30/2014	  	 	286,911	  	
BBVA Banco Continental (Leasing)	  	S/.	  	4.30%	  	 	559,314	  	  	06/26/2014	  	 	268,448	  	
BBVA Banco Continental (Leasing)	  	S/.	  	4.30%	  	 	939,264	  	  	09/22/2014	  	 	450,809	  	
Banco Interamericano de Finanzas (Leasing)	  	S/.	  	5.90%	  	 	772,574	  	  	10/02/2014	  	 	370,804	  	
Banco Interamericano de Finanzas (Leasing)	  	S/.	  	5.90%	  	 	1,311,560	  	  	12/02/2014	  	 	629,496	  	
Banco Scotiabank	  	S/.	  	4.30%	  	 	16,471,914	  	  	12/27/2017	  	 	7,905,860	  	
Banco Interamericano de Finanzas (Leasing)	  	S/.	  	5.90%	  	 	1,254,980	  	  	03/02/2015	  	 	602,340	  	
Banco de Crédito del Perú	  	S/.	  	7.34%	  	 	10,584,083	  	  	03/19/2018	  	 	5,079,937	  	
Banco Interamericano de Finanzas (Leasing)	  	S/.	  	5.90%	  	 	1,611,913	  	  	06/02/2015	  	 	773,654	  	
Banco Interamericano de Finanzas (Leasing)	  	S/.	  	5.90%	  	 	828,830	  	  	12/02/2015	  	 	397,805	  	
				
Brazil	  			  		  				
Banco Nordeste	  	R$	  	7.50%	  	 	4,450,418	  	  	12/16/2018	  	 	2,136,023	  	
Banco Nacional de Desenvolvimento Economico e Social (BNDES)	  	R$	  	TJLP + 3.28%	  	 	4,929,776	  	  	09/16/2013	  	 	2,366,095	  	
Banco Nacional de Desenvolvimento Economico e Social (BNDES)	  	R$	  	TJLP + 2.30%	  	 	823,431	  	  	09/16/2013	  	 	395,214	  	
Banco Nacional de Desenvolvimento Economico e Social (BNDES)	  	R$	  	IPCA + 1.30%	  	 	5,137,092	  	  	03/17/2014	  	 	2,465,599	  	
Banco Nacional de Desenvolvimento Economico e Social (BNDES)	  	R$	  	TJLP + 5.30%	  	 	2,053,498	  	  	09/16/2013	  	 	985,597	  	
Banco Nacional de Desenvolvimento Economico e Social (BNDES)	  	R$	  	TJLP + 2.80%	  	 	7,043,963	  	  	09/15/2014	  	 	3,380,820	  	
Banco Nacional de Desenvolvimento Economico e Social (BNDES)	  	R$	  	TJLP + 2.30%	  	 	1,969,793	  	  	09/15/2014	  	 	945,422	  	
Banco Nordeste	  	R$	  	8.50%	  	 	2,696,098	  	  	01/25/2014	  	 	1,294,019	  	
Banco Bradesco	  	R$	  	CDI + 5%	  	 	3,671,790	  	  	11/07/2016	  	 	1,762,313	  	
Banco Bradesco	  	R$	  	CDI + 5%	  	 	5,874,865	  	  	11/07/2016	  	 	2,819,700	  	
Banco Bradesco	  	R$	  	CDI + 5%	  	 	6,364,437	  	  	11/07/2016	  	 	3,054,675	  	
Banco do Brasil	  	R$	  	TR + 11.51%	  	 	26,563,722	  	  	06/18/2013	  	 	12,749,524	  	
Banco HSBC	  	R$	  	CDI + 0.842%	  	 	7,539,655	  	  	09/27/2013	  	 	3,618,733	  	
Banco HSBC	  	R$	  	CDI + 0.842%	  	 	34,972,792	  	  	09/27/2013	  	 	16,785,541	  	
Banco HSBC	  	R$	  	CDI + 0.842%	  	 	4,996,113	  	  	09/27/2013	  	 	2,397,934	  	
Banco HSBC	  	R$	  	CDI + 0.842%	  	 	7,494,170	  	  	09/27/2013	  	 	3,596,902	  	
Banco HSBC	  	R$	  	CDI + 0.842%	  	 	11,491,060	  	  	09/27/2013	  	 	5,515,249	  	
Banco HSBC	  	R$	  	CDI + 0.842%	  	 	8,493,392	  	  	09/27/2013	  	 	4,076,489	  	
Banco HSBC	  	R$	  	CDI + 0.842%	  	 	1,348,951	  	  	09/27/2013	  	 	647,442	  	
Banco HSBC	  	R$	  	CDI + 0.842%	  	 	1,249,028	  	  	09/27/2013	  	 	599,484	  	
Banco HSBC	  	R$	  	CDI + 0.842%	  	 	1,049,184	  	  	09/27/2013	  	 	503,566	  	
Banco HSBC	  	R$	  	CDI + 0.842%	  	 	1,648,717	  	  	09/27/2013	  	 	791,318	  	
Banco HSBC	  	R$	  	CDI + 0.842%	  	 	22,482,509	  	  	09/27/2013	  	 	10.790,705	  	
Banco HSBC	  	R$	  	CDI + 0.842%	  	 	4,230,998	  	  	09/27/2013	  	 	2,030,710	  	
Banco HSBC	  	R$	  	CDI + 0.842%	  	 	9,742,421	  	  	09/27/2013	  	 	4,675,972	  	
 
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Banco HSBC	  	R$	  	CDI + 0.842%	  	 	2,248,251	  	  	09/27/2013	  	 	1,079,071	  	
Banco HSBC	  	R$	  	CDI + 0.842%	  	 	2,198,290	  	  	09/27/2013	  	 	1,055,091	  	
Banco HSBC	  	R$	  	CDI + 0.842%	  	 	6,087,067	  	  	09/27/2013	  	 	2,921,549	  	
Banco HSBC	  	R$	  	CDI + 0.842%	  	 	15,733,566	  	  	09/27/2013	  	 	7,551,483	  	
Banco Bradesco	  	R$	  	CDI + 1.450%	  	 	24,632,412	  	  	03/28/2013	  	 	11,822,573	  	
						
Argentina	  		  		  				  		  				
IFC A	  	USD	  	Libor 180 + 1.55%	  	 	31,034,819	  	  	06/15/2013	  	 	14,895,472	  	
IFC B	  	USD	  	Libor 180 + 1.10%	  	 	38,061,541	  	  	08/16/2016	  	 	18,268,017	  	
Galicia	  	USD	  	FIJA 15.01%	  	 	10,547,322	  	  	08/16/2013	  	 	5,062,293	  	
						
Colombia	  		  		  				  		  				
Banco de Bogota	  	COP	  	FIJA 6.50%	  	 	44,499,175	  	  	03/26/2013	  	 	21,357,824	  	
Banco de Bogota	  	COP	  	DTF + 3.5%	  	 	3,826,977	  	  	04/10/2013	  	 	1,836,796	  	
Corpbanca	  	COP	  	FIJA 7.00%	  	 	58,970,686	  	  	03/08/2013	  	 	28,303,570	  	
Banco Bilbao Vizcaya Argentaria Chile	  	COP	  	FIJA 6.80%	  	 	38,279,035	  	  	03/20/2013	  	 	18,372,406	  	
Citibank	  	COP	  	FIJA 6.65%	  	 	10,835,157	  	  	03/13/2013	  	 	5,200,442	  	
Banco Popular	  	COP	  	FIJA 6.28%	  	 	14,218,753	  	  	03/30/2013	  	 	6,824,433	  	
Corpbanca	  	COP	  	FIJA 7.00%	  	 	2,290,124	  	  	03/30/2013	  	 	1,099,168	  	
						
Bonds:	  		  		  				  		  				
Chile	  		  		  				  		  				
BCENC A	  	UF	  	4.25%	  	 	192,690,510	  	  	03/15/2027	  	 	92,483,737	  	
BCENC C	  	UF	  	4.10%	  	 	218,471,712	  	  	07/01/2027	  	 	104,857,683	  	
BCENC D	  	UF	  	4.00%	  	 	72,789,106	  	  	07/03/2028	  	 	34,935,859	  	
BCENC E	  	UF	  	3.50%	  	 	95,663,921	  	  	05/07/2018	  	 	45,914,856	  	
BCENC F	  	UF	  	4.00%	  	 	215,398,623	  	  	05/08/2028	  	 	103,382,723	  	
BCENC J	  	UF	  	5.70%	  	 	144,438,441	  	  	10/15/2029	  	 	69,324,674	  	
BCENC K	  	$	  	7.00%	  	 	63,927,047	  	  	03/01/2014	  	 	30,682,425	  	
BCENC L	  	UF	  	4.10%	  	 	47,760,554	  	  	05/28/2015	  	 	22,923,155	  	
BCENC N	  	UF	  	4.70%	  	 	215,034,268	  	  	05/28/2030	  	 	103,207,847	  	
BCENC O	  	$	  	3.44%	  	 	113,133,073	  	  	06/01/2031	  	 	54,299,350	  	
BCENC J, Series B1 and B2	  	UF	  	6.50%	  	 	107,133,747	  	  	09/01/2026	  	 	51,419,913	  	
Incabond 1	  	S/.	  	7.19%	  	 	110,966,137	  	  	05/07/2018	  	 	53,259,307	  	
Incabond 2	  	S/.	  	7.625% + tax	  	 	52,441,656	  	  	08/14/2017	  	 	25,169,897	  	
5.5% Senior Notes due 2021 (144A/Reg-S)	  	USD	  	5.50%	  	 	768,185,484	  	  	01/20/2021	  	 	368,698,305	  	
4.875% Senior Notes due 2023 (144A/Reg-S)	  	USD	  	4.88%	  	 	1,204,062,500	  	  	01/20/2023	  	 	577,901,838	  	
						
Peru	  		  		  				  		  				
BONOS TITULIZADOS 6	  	S/.	  	6.50%	  	 	629,243	  	  	12/13/2016	  	 	302,012	  	
BONOS TITULIZADOS 5	  	S/.	  	6.50%	  	 	2,516,973	  	  	12/13/2016	  	 	1,208,047	  	
Credit facilities (Banks loans and bonds)
At December 31, 2012 we had Ch$122,300 million in uncommitted lines of credit with the regional banks that we work with. We deal with a wide diversity of banks around the world. We believe, if necessary, we can reopen our existing international bonds or issue one or more new series of bonds as appropriate, or can obtain commercial paper in the Chilean market.
 
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Our loan agreements and outstanding bonds contain a number of covenants requiring us to comply with certain financial ratios and other tests. The most restrictive financial covenants under these loan agreements and bonds require us to maintain:
 
 	•	 	a ratio of consolidated Net Financial Debt to consolidated net worth not exceeding 1.2 to 1;	
 
 	•	 	a ratio of consolidated Net Financial Debt to EBITDA (as defined in the relevant credit agreements) for the most recent four consecutive fiscal quarters for such period of less than 5.25 to 1;	
 
 	•	 	a ratio of EBITDA (as defined in the relevant credit agreements) for the most recent four consecutive fiscal quarters to consolidated financial expense for such period of at least 3.0 to 1;	
 
 	•	 	unencumbered assets in an amount equal to at least 120% of the outstanding principal amount of total liabilities;	
 
 	•	 	minimum consolidated assets of at least UF50.5 million; and	
 
 	•	 	minimum consolidated net worth of at least UF28.0 million.	
As of the date of this annual report, we are in compliance with all of our loan and debt instruments.
On December 23, 2010, Cencosud Peru S.A. (“Cencosud Peru”) entered into a U.S.$70 million medium-term loan with Banco de Crédito del Perú (“BCP”), as lender. The loan bears an annual interest rate of 7.34% and has a maturity period of six years (the “BCP Loan”). According to the terms of the BCP Loan, if (i) an event of default exists, (ii) a dividend payment would cause an event of default, or (iii) certain financial ratios are not maintained, Cencosud Peru is prohibited from distributing dividends or any other similar distribution to its parent without the previous authorization of BCP.
On October 17, 2012, the Company entered into the Bridge Loan Agreement with a syndicate of banks, which included the initial purchasers and/or affiliates of the initial purchasers of the Company’s note offering, in the amount of U.S.$2,500 million to finance the purchase of the Acquired Companies. The Bridge Loan Agreement has a maturity date of April 15, 2014 and bears an interest rate of LIBOR plus a margin of 1.75% for the first sixth months, 2.00% for the following three months, 2.25% for the following three months, and 2.75% thereafter. The full amount under the Bridge Loan Agreement was disbursed on October 17, 2012 and used by us to fund the purchase of Carrefour’s Colombian operations. The Company applied part of the proceeds of the 2023 144A/Reg-S Bond to repay $ 1,000 million outstanding under the Bridge Loan Agreement. On March, 2013 we completed a preemptive rights offering in the Chilean market that raised $1,600 million, and used the proceeds from that capital increase to prepay the outstanding amount of the bridge loan agreement of $1,500 million. The rest of the proceeds of the capital increase will be used to pay other short term liabilities.
Leases
We have significant operating lease obligations. At December 31, 2012, 63%, 53%, 51% and 93% of the selling space in Chile, Argentina, Peru and Brazil, respectively, was located on leased properties. Our store leases typically have a term ranging from 10 to 32 years and provide for both monthly fixed and variable lease payments. Our shopping center leases typically have terms of more than 30 years and provide for fixed monthly rent payments.
Recent acquisitions
On January 2, 2012, we acquired 100% of the capital stock of Prezunic. In order to finance our acquisition of Prezunic, on January 2, 2012 we entered into a Ch$127.73 billion short-term facility with Banco Santander Chile, as lender, bearing interest at an annual rate of the TAB plus 0.4% with a maturity date of December 28, 2012, which we repaid with proceeds of our SEC-registered public offering.
On October 18, 2012, Cencosud S.A. signed the Stock Purchase Agreement with the Seller in respect of the purchase of 100% of the capital stock of the Acquired Companies, for a total purchase price equal to €2 billion subject to adjustments pursuant to the Stock Purchase Agreement. The Acquired Companies operate supermarkets
 
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under the “Carrefour” and “Maxi” brand names in Colombia. See “Item 4. Information on the Company—A. History and Development of the Company—History—Acquisition of Carrefour’s Operations in Colombia.” In order to finance the purchase of the acquisition of Carrefour’s operations in Colombia, on October 17, 2012, the Company entered into the Bridge Loan Agreement with a syndicate of banks in the amount of U.S.$2,500 million.
Analysis of cash flows
The following table summarizes our generation and use of cash for the periods presented.

 	  	Year ended December 31,	 	
 	  	2012	 	 	2011	 	 	2010	 	
 	  	(in millions of Ch$)	 	
Net cash from operating activities	  	Ch$	718,715	  	 	Ch$	567,739	  	 	Ch$	407,174	  	
Net cash used in investing activities	  	Ch$	(2,116,249	) 	 	Ch$	(623,499	) 	 	Ch$	(413,676	) 	
Net cash from financing activities	  	Ch$	1,488,759	  	 	Ch$	89,607	  	 	Ch$	5,086	  	
Cash flows for year ended December 31, 2012 compared to year ended December 31, 2011
Taking into account our cash flows from operations, cash flows from financing activities and cash used in investing activities, we had a net cash flow of Ch$91,224 million for the year ended December 31, 2012 compared to a net cash outflow of Ch$33,593 million for the year ended December 31, 2011.
Operating activities . Our net cash flows from operations increased 26% to Ch$718,715 million for the year ended December 31, 2012 from Ch$567,739 million for the year ended December 31, 2011. This change was primarily due to an increase in cash product of higher sales during the period in the supermarket, shopping centers and home improvement divisions partially offset by financial services and department stores.
Investing activities . Our net cash flows from investing activities increased 239% to Ch$2,116,249 million for the year ended December 31, 2012 from Ch$623,753 million for the year ended December 31, 2011. This change was primarily due to inorganic expansion in our supermarket division during the 2012 period.
Financing activities . Our net cash flows from financing activities increased 1,561% to Ch$1,488,755 million for the year ended December 31, 2012 from Ch$89,607 million for the year ended December 31, 2011. This change was primarily due to higher proceeds from loans and bond issuances related to the payment of acquisitions.
Cash flows for year ended December 31, 2011 compared to year ended December 31, 2010
Taking into account our cash flows from operations, cash flows from financing activities and cash used in investing activities, we had a net cash flow of Ch$33,847 million for the year ended December 31, 2011 compared to a net cash outflow of Ch$1,417 million for the year ended December 31, 2010.
Operating activities . Our net cash flows from operations increased 39.4% to Ch$567,739 million for the year ended December 31, 2011 from Ch$407,174 million for the year ended December 31, 2010. This change was primarily due to an increase in cash sales of Ch$1,786,619 million, offset by (i) an increase in payments to suppliers of Ch$1,381,558 million, (ii) an increase in payments to and on behalf of personnel of Ch$186,173 million, and (iii) an increase of Ch$32,590 million in cash tax payments.
Investing activities . Our net cash flows from investing activities increased 50.7% to Ch$(623,499) million for the year ended December 31, 2011 from Ch$(413,676) million for the year ended December 31, 2010. This change was primarily due to an increase in capital expenditures of Ch$266,543 million related to the opening of 76 new stores. This increase was partially offset as a result of higher outflows related to our acquisition activities in 2010 and by lower cash from the liquidation of short-term investments.
Financing activities . Our net cash flows from financing activities increased 1,662% for the year ended December 31, 2011 to Ch$89,607 million from Ch$5,086 million for the year ended December 31, 2010. This change was primarily due to an increase of Ch$978,550 million in proceeds from borrowings, partially offset by an increase of Ch$836,281 million in debt repayments and, to a lesser extent, to higher dividends paid and higher cash interest paid.
 
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Capital expenditures and permanent investments
The following table presents our capital expenditures for the periods indicated:

 	  	Years ended December 31,	 	
 	  	2012	 	 	2011	 	 	2010	 	
 	  	(in millions of Ch$)	 	
Capital expenditures (1)	  	Ch$	(575,228	) 	 	Ch$	(616,336	) 	 	Ch$	(349,793	) 	
Permanent investments (2)	  	Ch$	(1,535,105	) 	 	 	(21,576	) 	 	 	(299,092	) 	
Total	  	Ch$	(2,119,922	) 	 	Ch$	(637,912	) 	 	Ch$	(648,885	) 	

(1)	Purchase of property, plant and equipment.	
(2)	Primarily investments in acquired companies. See “—A. Trends and Factors Affecting Our Results of Operations—Impact of Acquisitions” above for additional details regarding our acquisition activities in recent years.	
Our total capital expenditures were approximately Ch$575,228 million, Ch$616,336 million in 2011 and Ch$349,793 million in 2010. In each of these years, our capital expenditures were made primarily to develop and expand our stores and shopping centers. In addition to our capital expenditures, we invested in permanent investments Ch$1.535.105 million in 2012, Ch$21,576 million in 2011 and Ch$299,092 million in 2010. These investments were primarily related to acquisitions. See “—A. Trends and Factors Affecting Our Results of Operations—Impact of Acquisitions” above for additional details regarding our acquisition activities in recent years.
In 2013, we expect to invest approximately U.S.$731 million to open new supermarkets, department stores, home improvement stores and shopping centers. In Chile, we expect will invest U.S.$242 million in 19 new stores and U.S.$80 million in the completion of Costanera Center in areas where we still see opportunity for growth. In Brazil, we plan to invest U.S.$116 million for the opening of 15 new stores. In Peru, the investment plan totals U.S.$80 million and includes the opening of 10 new supermarkets, 5 Paris stores and the development of a new shopping center. In Argentina, we plan to invest U.S.$23 million for the opening of 7 new stores. In Colombia, we plan to invest U.S.$80 million for the opening of one supermarket, one Easy store and rebranding of existing locations. In addition, we plan to invest U.S.$100 million in information technology projects to improve operating efficiency.
Our projected capital expenditures may vary substantially from the numbers set forth above as a result of a variety of factors including competition and the cost and availability of the necessary funds.
We expect to finance our future capital expenditures with our operating cash flow and with bank loans.
 
 	 C.	RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.	
We have not had significant research and development activities for the past three years. See “Item 4. Information on the Company—B. Business Overview—Our Company—Intellectual Property” for a brief discussion of our trade names and service marks.
 
 	 D.	TREND INFORMATION	
See “—A. Operating Results—Trends and Factors Affecting Our Results of Operations.”
 
 	 E.	OFF-BALANCE SHEET ARRANGEMENTS	
For any of the periods presented, we did not have any off-balance sheet transactions, arrangements or obligations with unconsolidated entities or otherwise that are reasonably likely to have a material effect on our financial condition, results of operations or liquidity.
 
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 	 F.	TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS	
The following table summarizes our significant contractual obligations and commitments as of December 31, 2012:

 	  	Less than
one year	 	  	One to
three years	 	  	Three to
five years	 	  	Thereafter	 	  	Total	 	
 	  	(in millions of Ch$)	 	
Long-term debt obligations (1)	  	 	0	  	  	 	595,533	  	  	 	404,234	  	  	 	2,099,335	  	  	 	3,099,101	  	
Short-term debt obligations (1)	  	 	1,060,900	  	  	 	0	  	  	 	0	  	  	 	0	  	  	 	1,060,900	  	
Time deposits and other bank balances (2)	  	 	130,300	  	  	 	54,740	  	  	 	2,009	  	  	 	11,139	  	  	 	198,188	  	
Lease obligations and other financial liabilities (3)	  	 	196,995	  	  	 	529,486	  	  	 	31,327	  	  	 	21,260	  	  	 	779,069	  	
Commercial loans	  	 	1,987,687	  	  	 	78,320	  	  	 	0	  	  	 	1,155,042	  	  	 	3,221,049	  	
Tax liabilities	  	 	46,798	  	  	 	0	  	  	 	0	  	  	 	0	  	  	 	46,798	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	3,422,681	  	  	 	1,258,079	  	  	 	437,569	  	  	 	3,286,777	  	  	 	8,405,106	  	

(1)	Short-term obligations include the short-tern portion of the long-term debt and accrued interest expenses.	
(2)	Includes pending installments from the purchase of Bretas.	
(3)	Namely, the UBS put option.	
 
 	 G.	SAFE HARBOR	
See section entitled “Forward-Looking Statements” in this annual report for forward-looking statement safe harbor provisions.
 
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 Item 6.	Directors, Senior Management and Employees	
 
 	 A.	DIRECTORS AND SENIOR MANAGEMENT	
Board of Directors
The following table sets forth information for our directors as of the date of this annual report:

Name	  	Position	  	Age	 	  	Years at  Cencosud (1)	 	
Horst Paulmann Kemna (2)	  	Chairman of the Board	  	 	78	  	  	 	34	  	
Heike Paulmann Koepfer (2)	  	Director	  	 	43	  	  	 	13	  	
Peter Paulmann Koepfer (2)	  	Director	  	 	44	  	  	 	18	  	
David Gallagher Patrickson	  	Director	  	 	68	  	  	 	2	  	
Erasmo Wong Lu Vega	  	Director	  	 	69	  	  	 	4	  	
Roberto Oscar Philipps	  	Director	  	 	66	  	  	 	11	  	
Cristián Eyzaguirre Johnston	  	Director	  	 	64	  	  	 	8	  	
Richard Büchi Buc	  	Director	  	 	60	  	  	 	—  	  	
Julio Moura	  	Director	  	 	61	  	  	 	1	  	
 
(1)	Including years in other positions at Cencosud.	
(2)	Horst Paulmann Kemna is the father of Heike Paulmann Koepfer and Peter Paulmann Koepfer.	
A description of the main tasks currently performed by each director as well as a description of each director’s employment history and education follows:
Horst Paulmann Kemna . Mr. Paulmann is our Chairman of the Board and founder of Cencosud S.A. He has served on our Board since November 1978. He has served as a Director of the Chilean—German Chamber of Commerce (CAMCHAL) and the Chilean Chamber of Commerce. Mr. Paulmann currently serves as President of the Chilean chapter of the Argentina—Chile Permanent Binational Business Board and is a member of the Argentine Business Association (AEA).
Heike Paulmann Koepfer . Mrs. Paulmann has been a member of our Board of Directors since April 1999 and currently serves as Director of our Aventura Center family entertainment division. She has a degree in business from the Universidad de Chile and an MBA from Universidad Adolfo Ibañez .
Peter Paulmann Koepfer . Mr. Paulmann has been a member of our Board of Directors since September 1996. Mr. Paulmann currently is the Chief Officer for Importadora y Comercial Regen Ltda. and has also served as Director of our shopping center division in Chile since 2002. He has a degree in business from the Pontificia Universidad Católica de Chile .
David Gallagher Patrickson . David Gallagher has been a member of the Board of Directors since April 2011. He has an MA in Modern Languages from Oxford University. He is Chairman and Founding Partner of ASSET Chile S.A, and is a director and Executive Committee member of the Centro de Estudios Publicos . Prior to founding ASSET Chile in 1984, Mr. Gallagher spent 10 years at Morgan Grenfell, where he became head of Latin American investment banking and director of Morgan Grenfell International.
Erasmo Wong Lu Vega . Mr. Wong has been a member of our Board of Directors since 2008. Mr. Wong has a civil engineering degree from the National University of Engineering and post graduate degrees from the High Management Program and the First Program for Presidents, both from the University of Piura. He has been President of GSI Association (Formerly EAN Peru) and is currently Vice-president of the Marketing Association of Peru and the Retail and Department Stores Association. Prior to joining Cencosud, Mr. Wong was the president for Supermercados Wong in Peru until 2008, when it was acquired by Cencosud.
 
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Roberto Oscar Philipps . Mr. Philipps has been a member of our Board of Directors since 2003. He has held several executive positions with the Techint Organization and previously with Exxon Corporation. He is a former President of the Argentine Financial Executives Association and serves on the board of companies in Chile and Argentina. Mr. Philipps has a degree in business administration and accounting from the Universidad de Buenos Aires and AEP in Kellogg, Northwestern University.
Cristián Eyzaguirre Johnston . Mr. Eyzaguirre has been a member of our Board of Directors since 2005. He has an economics degree from Universidad de Chile and a Master of Arts in Economics from The University of California, Berkeley. Mr. Eyzaguirre is the former Chief Executive Officer of Banco Bice and Chief Financial Officer of Empresas CMPC S.A., and was a professor of Economics at the Universidad de Chile . He is currently a Director of Besalco, E-CL, Agunsa, Grupo GTD Teleductos, Teléfonica del Sur, Telefónica de Coyhaique and Wenco.
Julio Moura . Mr. Moura has been a member of our Board of Directors since September 2011. Mr. Moura also serves as a director of Natura Cosméticos, Adecoagro and Brinox and as Chairman of Instituto Arapyaú. Prior to joining Cencosud, Mr. Moura served as Chairman of Masisa from 2002 to 2007 and as Executive Vice President of Schindler Group, Switzerland, from 1992 to 1997. Mr. Moura holds a Master’s Degree from M.I.T.’s Sloan School of Management and an Engineering Degree from the Swiss Federal Institute of Technology (ETH).
Richard Büchi Buc , was elected an independent member of the board on April 26, 2013. He holds a civil engineering degree from Universidad de Chile and an MBA from the Wharton School of Business from the University of Pennsylvania. On March 2013 he took over the executive vice-presidency of ENTEL’s mobile phone division after having acted as the company’s CEO for 18 years. Additionally Mr. Büchi was chairman of the board of Entel PCS and Entelphone.
Executive Officers
The following table shows certain information with respect to our senior management as of the date of this annual report:

Name	  	Position	  	Age	 	  	Years at  Cencosud (1)	 	
Daniel Rodríguez	  	Chief Executive Officer	  	 	47	  	  	 	5	  	
Juan Manuel Parada	  	Chief Financial Officer	  	 	39	  	  	 	6	  	
Rodrigo Hetz	  	Human Resources Managing Director	  	 	38	  	  	 	2	  	
Mauricio Soto	  	Customer and Digital Sales Managing
Director	  	 	43	  	  	 	6	  	
Carlos Mechetti	  	General Counsel	  	 	42	  	  	 	19	  	
Andrés Artigas	  	Chief Information Officer	  	 	46	  	  	 	8	  	
Bronislao Jandzio	  	Audit Managing Director	  	 	58	  	  	 	15	  	
Pablo Castillo	  	Supermarkets Managing Director	  	 	45	  	  	 	12	  	
Carlos Wulf	  	Home Improvement Stores Managing Director	  	 	59	  	  	 	9	  	
Jaime Soler	  	Department Stores Managing Director	  	 	40	  	  	 	8	  	
Patricio Rivas	  	Financial Retail Managing Director	  	 	49	  	  	 	10	  	
Marcelo Reyes	  	Corporate Risk Managing Director	  	 	46	  	  	 	10	  	
Nicolás Larco	  	M&A and Investment Managing Director	  	 	36	  	  	 	6	  	
Pietro Illuminati	  	Procurement Managing Director	  	 	49	  	  	 	2	  	
Renato Fernandez	  	Corporate Affairs Managing Director	  	 	39	  	  	 	2	  	
 
(1)	Including years in other positions at Cencosud.	
 
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 	 B.	COMPENSATION	
Compensation of Directors and Executive Officers
In accordance with Article 33 of the Chilean Corporations Law and our Bylaws, the compensation of our directors is approved once a year at our annual shareholders meeting. See Note 9 to our Audited Consolidated Financial Statements included elsewhere in this annual report.
Total compensation to members of our Board of Directors during 2012 was Ch$ 578,085 million. For 2012, the aggregate amount of compensation we paid to executive officers was Ch$5,999 million. We do not disclose to our shareholders or otherwise make public information as to the compensation of any individual executive officers.
None of our non-executive directors has a service contract with us that provides for benefits upon termination of employment.
The following table presents information relating to directors’ fees paid to all our directors during the periods shown:

 	  	Year ended December 31,	 	
 	  	2012	 	  	2011	 	  	2010	 	
 	  	(in thousands of Ch$)	 	
Horst Paulmann Kemna	  	 	104,146	  	  	 	87,730	  	  	 	85,994	  	
Manfred Paulmann Koepfer	  	 	57,292	  	  	 	—  	  	  	 	77,777	  	
Heike Paulmann Koepfer	  	 	52,072	  	  	 	58,193	  	  	 	50,654	  	
Peter Paulmann Koepfer	  	 	69,453	  	  	 	43,854	  	  	 	42,426	  	
Bruno Philippi Irarrázabal	  	 	—  	  	  	 	21,774	  	  	 	35,354	  	
Erasmo Wong Lu Vega	  	 	69,453	  	  	 	44,673	  	  	 	84,013	  	
Roberto Oscar Philipps	  	 	52,072	  	  	 	50,739	  	  	 	44,299	  	
Cristián Eyzaguirre Johnston	  	 	52,072	  	  	 	57,483	  	  	 	53,813	  	
Sven von Appen Behrmann	  	 	69,453	  	  	 	43,936	  	  	 	31,879	  	
Julio Moura Neto	  	 	52,072	  	  	 	—  	  	  	 	—  	  	
David Gallagher Patrickson	  	 	104,146	  	  	 	43,973	  	  	 	—  	  	
Executive stock option plans
In September 2010, we implemented two executive stock option plans, the 2013 Plan and the Incentive Plan, pursuant to which approximately 290 executives would be entitled to acquire up to 22 million unsubscribed shares of our common stock, 8 million under the 2013 Plan and 14 million under the Incentive Plan.
The 2013 Plan was aimed at rewarding loyalty and retaining our executives. Therefore executives who wished to exercise their options under the 2013 Plan must have had a current employment contract with us and their employment relationship with us must have been uninterrupted from the date the options were granted.
The objective of our Incentive Plan is to motivate executive performance, thereby increasing the long-term value of the Company, as measured by the Company’s EBITDA. Executives could only exercise their options under the Incentive Plan if the Company’s EBITDA (as defined in the Incentive Plan) had increased 100% at December 31, 2012, using the company’s EBITDA at December 31, 2009 as the basis for measurement. This requirement is in addition to the conditions applicable in the 2013 Plan, described above.
In March 2013, our Board of Directors approved changes to the Incentive Plan. Under the updated Incentive Plan, the number of shares of common stock in respect of the grants thereunder was to be the equivalent of 78.4% of the number of shares under the original Incentive Plan. In addition, the vesting schedule for the Incentive Plan was changed to 50% in 2013, 25% in 2014 and 25% in 2015.
In March 2013, our Board of Directors also approved a Retention Plan granting part of the undistributed shares arising from the capital increase of the company in 2008, equivalent to 3,781,951 shares, with a vesting schedule of 66% in 2013, 17% in 2014 and 17% in 2015. All the other terms of the Retention Plan are similar to those of the Incentive Plan and the 2013 Plan. The Retention Plan also allows approximately 360 of our executives to subscribe for shares reserved for future issuances under our incentive plans, as further described below.
 
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All three stock option plans are funded by the remaining unsubscribed shares from the 2008 capital increase. The subscription of shares under these plans can only be made between the filing of our audited financial statements for the 2012 year and April 22, 2013. The stock options under these plans allow executives to acquire shares at a preferential value of Ch$1,750 per share.
The following table sets forth, as of March 31, 2013, the total number of shares of common stock to be issued upon exercise of the options granted to each of our executive officers under our 2013 Plan, our Incentive Plan and our Retention Plan, the exercise price of such options, the date of grant and the date of expiration:

Plan under which options were awarded	  	Number of
options	 	  	Exercise
price	 	  	Date of
grant	  	Expiration date	
2013 Plan	  	 	8,206,419	  	  	Ch$	1,750	  	  	March 10, 2010	  	April 22, 2013	
Incentive Plan	  	 	9,991,489	  	  	Ch$	1,750	  	  	March 10, 2010	  	April 22, 2013	
Retention Plan	  	 	3,781,951	  	  	Ch$	1,750	  	  	March 22, 2013	  	April 22, 2013	
	  	 	 	 	  	 	 	 	  	 	  	 	
Total	  	 	21,979,859	  	  	Ch$	1,750	  	  		  	April 22, 2013	
Separately, on April 29, 2011, at the shareholders’ meeting, a capital increase of 270,000,000 shares was approved, of which 27,000,000 shares, or 10%, were reserved to fund future incentive plans. Additionally, on November 20, 2012, at the extraordinary shareholders’ meeting, a further capital increase of 332,987,717 shares was approved, of which 33,298,771, or 10%, were reserved to fund future incentive plans. As of the date of this filing, no stock options or incentive plans have been granted or implemented with respect to these shares, nor have the conditions, exercise prices or number of options to be granted in respect thereof been set.
 
 	 C.	BOARD PRACTICES	
Board practices
Our Bylaws provide that shareholders elect nine regular directors. Directors are elected at the annual shareholders’ meeting for terms of three years. The legal responsibilities of each board member are established in accordance with the Chilean Corporations Law.
Directors’ Committee
As required under Chilean law, we have established a Directors’ Committee composed of three directors. The following are the current members of our Directors’ Committee: David Gallagher Patrickson (President), Roberto Philipps (Secretary) and Richard Büchi Buc. The Directors’ Committee has the following principal duties:
 
 	•	 	reviewing external audit reports and financial statements and providing its opinion regarding such items prior to their submission to the shareholders for approval;	
 
 	•	 	proposing to the board of directors the names of independent external auditors and credit rating agencies that will be submitted for approval at the annual shareholders’ meeting;	
 
 	•	 	reviewing related party transactions for potential conflict of interest and providing reports as required in certain defined cases;	
 
 	•	 	reviewing the salary and compensation benefits for officers and senior management;	
 
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preparing an annual report of the board’s activities, which will include its main recommendations to shareholders;
 
 	•	 	advising the board as to the hiring of external auditors to perform non-audit services, particularly whether such services might be prohibited in accordance with article 242 of the Chilean Securities Market Law as such services could jeopardize the independence of such external auditor; and	
 
 	•	 	performing any other responsibility entrusted to the Directors’ Committee by the Chilean Corporations Law, our Bylaws, the shareholders’ meeting or the board of directors.	
Audit Committee
We have established an audit committee, comprised of three non-management members of our Board of Directors. The members of the audit committee are David Gallagher Patrickson, Roberto Oscar Philipps and Cristián Eyzaguirre Johnston, each of whom is independent within the meaning of the SEC corporate governance rules. Our board of directors has determined that Roberto Oscar Philipps is “audit committee financial expert” as defined by the SEC.
The audit committee’s primary responsibilities shall be:
 
 	•	 	Assist the Board of Directors in fulfilling its oversight responsibilities relating to the integrity of the Company’s financial statements, including periodically reporting to the Board of Directors on its activity and the adequacy of the Company’s systems of internal controls over financial reporting;	
 
 	•	 	Make recommendations for the appointment, compensation, retention and oversight of, and consider the independence of, the Company’s external auditors;	
 
 	•	 	Review material transactions between the Company or its subsidiaries with related parties to determine whether their terms are consistent with market conditions or are otherwise fair to the Company and its subsidiaries; and	
 
 	•	 	Perform such other duties imposed on it by the laws and regulations of the regulated market(s) on which the shares of the Company are listed, applicable to the Company, as well as any other duties entrusted to it by the Board of Directors.	
The audit committee’s purpose and responsibilities, including those outlined above, will be set forth in the charter of the audit committee.
 
 	 D.	EMPLOYEES	
General
At December 31, 2012, we had a total of 157,967 employees, of which 40.8% were in Chile, 18.8% in Argentina, 10% in Peru, 23.3% in Brazil and 7.8% in Colombia. Approximately 32% of our store employees were represented by unions under several collective bargaining agreements. We do not employ a significant number of temporary employees.
We operate a merit-based bonus program for our managers both at the headquarters and store levels as well as for department heads at each store. In general, the bonus fluctuates between one and six monthly salaries and is determined in accordance with clearly defined criteria, including our overall performance, the performance of the employee’s store, the employee’s performance relative to specific targets established at the beginning of the year and more subjective standards such as fostering an open, constructive working environment.
 
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Chile
At December 31, 2012, we had a total of 64,476 employees in Chile. Of these employees, 57,799 were employed in our stores, 2,953 were employed in the distribution facilities (our distribution center, warehouses and transportation), and 3,724 were employed in our headquarters.
At December 31, 2012, approximately 53% of our Chile employees were represented by 106 independent unions currently party to 113 different collective bargaining contracts. In addition, some of these independent unions have collective contracts with non-unionized employees of the company which generally have a term of two to four years.
Our Chile employees receive benefits established by the collective bargaining agreements and salaries in accordance with our own policies, benefits provided for by Chilean law (including disability insurance) and certain additional benefits provided by us. Among these benefits, we provide educational training for our employees and opportunities for their families (including educational scholarships for children of employees).
Argentina
At December 31, 2012, we had a total of 28,586 employees in Argentina. Of these employees, 25,254 were employed in our stores, 1.337 were employed in the distribution facilities (the distribution center, warehouses and transportation), and 1.995 were employed in the headquarters.
At December 31, 2012, approximately 86.6% of our Argentina employees were under a single collective bargaining agreement with the Sindicato de Comercio (“Commerce Union”), but only 41.75% of such employees are members of the Commerce Union. There is only one collective bargaining agreement (mandatory by law) for all the non-management employees which has been in effect since 1975. We have experienced two strikes at our Jumbo stores, each lasting less than one day. However, none of these strikes have materially affected our overall operations.
Our Argentina employees receive benefits established by this collective bargaining agreement and salaries established according to our policies, benefits provided for by Argentinean law (including disability insurance) and certain additional benefits provided by us, including educational training. In 2012, our personnel expenses in Argentina increased 24% in USD terms compared to the same period in 2011 as a result of collective bargaining between us and union representatives and the hiring of additional employees in connection with the opening of new stores.
Brazil
At December 31, 2012, we had a total of 36,829 employees in Brazil. Of these employees 32,288 were employed in our stores, 1,683 were employed in the distribution facilities (the distribution center, warehouses and transportation), and 2,257 were employed in the headquarters.
Our employees in Brazil are represented by different trade unions. Although less than 3% of our employees are affiliated with these trade unions, all employees are entitled to the benefits set forth in our collective labor agreements, as determined by applicable labor legislation. We believe that all 10 of the largest supermarket chains in Brazil are bound by the same collective labor agreements entered into with their respective trade unions. We believe that we have a good relationship with our employees and related trade unions, and our Brazilian operations have not recorded any significant strikes or stoppages over the last three years.
Peru
At December 31, 2012, we had a total of 15,815 employees in Peru. Of these employees, 13,462 were employed in our stores, 1,182 were employed in the distribution facilities (the distribution center, warehouses and transportation), and 1.171 were employed in the headquarters.
None of our employees in Peru are represented by unions or are party to collective bargaining agreements. We have not had any strikes that have materially affected our operations in Peru.
 
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Our Peru employees receive standard benefits and salaries established according to our policies, benefits provided for by Peruvian law (including disability insurance) and certain additional benefits provided by us, including discounts on products purchased at our stores, educational training and certain merit-based bonuses.
Colombia
At December 31, 2012, we had a total of 12,261 employees in Colombia. Of these employees, 11,222 were employed in our stores, 727 were employed in the headquarters and 312 in distribution facilities. Currently approximately 3680 employees in Colombia are unionized We have not had any strikes that have materially affected our operations in Colombia.
Our Colombia employees receive standard benefits and salaries established according to our policies, benefits provided for by Colombia law (including disability insurance) and certain additional benefits provided by us, including discounts on products purchased at our stores and educational training for our employees.
 E. SHARE OWNERSHIP
See table in “Item 7. Major Shareholders and Related Party Transactions” for information regarding share ownership by our directors and executive officers.
 
 Item 7.	Major Shareholders and Related Party Transactions	
 
 	 A.	MAJOR SHAREHOLDERS	
The following table sets forth information with respect to the beneficial ownership of our shares of common stock, as of the date of this annual report, for:
 
 	•	 	each person known to us to own beneficially more than 5% of our shares of common stock; and	
 
 	•	 	our directors and executive officers as a group.	

Shareholder	  	Number of Shares
of Common Stock	 	 	Percentage Beneficial
Ownership	 	
			
Principal Shareholders (1) 	  				 				
Inversiones Quinchamali Limitada (2)	  	 	581,754,802	  	 	 	20.7	% 	
Inversiones Latadia Limitada (3)	  	 	550,823,211	  	 	 	19.6	% 	
Inversiones Tano Limitada (4)	  	 	457,879,800	  	 	 	16.3	% 	
Manfred Paulmann Koepfer (5)	  	 	394,672,167	  	 	 	14.1	% 	
			
Directors and Executive Officers	  				 				
Horst Paulmann Kemna (6)	  	 	511,591,540	  	 	 	18.2	% 	
Peter Paulmann Koepfer (7)	  	 	394,600,840	  	 	 	14.1	% 	
Heike Paulmann Koepfer (8)	  	 	394,444,560	  	 	 	14.1	% 	
David Gallagher Patrickson	  	 	—  	  	 	 	—  	  	
Erasmo Wong Lu Vega	  	 	—  	  	 	 	—  	  	
Roberto Oscar Philipps	  	 	—  	  	 	 	—  	  	
Cristián Eyzaguirre Johnston	  	 	—  	  	 	 	—  	  	
Richard Büchi Buc	  	 	 	* 	 	 	 	* 	
Julio Moura	  	 	—  	  	 	 	—  	  	
Daniel Rodríguez	  	 	 	* 	 	 	 	* 	
Juan Manuel Parada	  	 	—  	  	 	 	—  	  	
Rodrigo Hetz	  	 	—  	  	 	 	—  	  	
Mauricio Soto	  	 	—  	  	 	 	—  	  	
 
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Shareholder	  	Number of Shares
of Common Stock	 	 	Percentage Beneficial
Ownership	 	
Carlos Mechetti	  	 	—  	  	 	 	—  	  	
Andrés Artigas	  	 	—  	  	 	 	—  	  	
Bronislao Jandzio	  	 	—  	  	 	 	—  	  	
Pablo Castillo	  	 	 	* 	 	 	 	* 	
Carlos Wulf	  	 	—  	  	 	 	—  	  	
Jaime Soler	  	 	 	* 	 	 	 	* 	
Patricio Rivas	  	 	 	* 	 	 	 	* 	
Marcelo Reyes	  	 	 	* 	 	 	 	* 	
Nicolás Larco	  	 	—  	  	 	 	—  	  	
Pietro Illuminati	  	 	—  	  	 	 	—  	  	
Renato Fernandez	  	 	—  	  	 	 	—  	  	
Total shares of common stock issued and outstanding (9)	  	 	2,806,792,161	  	 	 	100.0	% 	

*	Represents beneficial ownership of less than one percent of ordinary shares outstanding.	
(1)	Our principal shareholders do not have different voting rights than other shareholders. All holders of our shares of common stock are entitled to one vote per share of common stock in all shareholders’ meetings.	
(2)	Inversiones Quinchamali Limitada is a Chilean company majority owned by Horst Paulmann Kemna, our Chairman of the Board, with the remainder owned by members of the Paulmann family. Members of the Paulmann family include Horst Paulmann Kemna, Helga Koepfer Schoebitz, Manfred Paulmann Koepfer, Peter Paulmann Koepfer and Heike Paulmann Koepfer. The address for Inversiones Quinchamali Limitada is Avenida Kennedy 9001, Piso 7, Las Condes, Santiago, Chile.	
(3)	Inversiones Latadia Limitada is a Chilean company majority owned by Inversiones Quinchamali Limitada, with the remainder owned indirectly by members of the Paulmann family. Its address is Avenida Kennedy 9001, Piso 7, Las Condes, Santiago, Chile.	
(4)	Inversiones Tano Limitada is a Chilean company majority owned by Inversiones Quinchamali Limitada, with the remainder owned by Inversiones Latadia Limitada. Its address is Avenida Kennedy 9001, Piso 7, Las Condes, Santiago, Chile.	
(5)	Manfred Paulmann Koepfer owns 0.6% of our shares of common stock directly and the remaining amount through direct and indirect ownership in Inversiones Quinchamali Limitada, Inversiones Latadia Limitada and Inversiones Tano Limitada. Manfred Paulmann Koepfer is the son of Horst Paulmann Kemna, our Chairman of the Board.	
(6)	Horst Paulmann Kemna owns 2.2% of our shares of common stock directly and the remaining amount through direct and indirect ownership in Inversiones Quinchamali Limitada, Inversiones Latadia Limitada and Inversiones Tano Limitada.	
Horst Paulmann Kemna, our Chairman of the Board, is the father of Heike Paulmann Koepfer and Peter Paulmann Koepfer, who both serve on our Board of Directors. See “Item 6. Directors, Senior Management and Employees.”
 
(7)	Peter Paulmann Koepfer owns 0.6% of our shares of common stock directly and the remaining amount through direct and indirect ownership in Inversiones Quinchamali Limitada, Inversiones Latadia Limitada and Inversiones Tano Limitada.	
Horst Paulmann Kemna, our Chairman of the Board, is the father of Heike Paulmann Koepfer and Peter Paulmann Koepfer, who both serve on our Board of Directors. See “Item 6. Directors, Senior Management and Employees.”
 
(8)	Heike Paulmann Koepfer owns 0.6% of our shares of common stock directly and the remaining amount through direct and indirect ownership in Inversiones Quinchamali Limitada, Inversiones Latadia Limitada and Inversiones Tano Limitada.	
Horst Paulmann Kemna, our Chairman of the Board, is the father of Heike Paulmann Koepfer and Peter Paulmann Koepfer, who both serve on our Board of Directors. See “Item 6. Directors, Senior Management and Employees.”
 
(9)	Members of the Paulmann family, including Helga Koepfer Schoebitz, wife of Horst Paulmann Kemna, our Chairman of the Board, own, directly and indirectly approximately 60.8% of our shares of common stock.	
Differences in Voting Rights
Our major shareholders do not have different voting rights.
Significant Changes in Ownership by Major Shareholders
We have recently experienced significant changes in the percentage ownership held by major shareholders as a result of our initial public offering and follow-on offering. Prior to our initial public offering, our founder, Mr. Horst Paulmann, and his family, together had a 64.9% ownership stake in us, through Inversiones Quinchamali Ltda., Inversiones Latadía Ltda. and Inversiones Tano Ltda. As of the date of this annual report, Mr. Horst Paulmann and his family together have a 60.8% ownership stake in us. See “—Major Shareholders” above.
Securities Held in Host Country
As of December 31st, 2012, the most recent practicable date, 7,562,150 ADSs (equivalent to 22,686,450 shares, or 0.9% of the total outstanding shares of our common stock) were outstanding and held of record by 1 holder. We are aware that many ADSs are held of record by brokers and other nominees, and accordingly the above numbers are not necessarily representative of the actual number of U.S. persons who are beneficial holders of ADSs or the number of ADSs beneficially held by such persons.
 
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 	 B.	RELATED PARTY TRANSACTIONS	
Chilean Regulations
In the ordinary course of our business, we may incur related party indebtedness in the future on fair market terms. Articles 146 et seq of the Chilean Corporations Law regulate related party transactions to be incurred by publicly held corporations and its subsidiaries. Article 147 of the Chilean Corporations Law requires our transactions with related parties be on similar terms to those customarily prevailing in the market and to be beneficial to the interest of the company. Article 147 requires us to compare the terms of any such transaction to those prevailing in the market at the date the transaction is approved. For a related party transaction to be entered into, the approval of the board of directors is required. Directors of companies that violate Article 147 are jointly and severally liable for damages and losses resulting from such violation. In addition, Article 147 of the Chilean Corporations Law provides that any transaction in which a director has a personal interest or is participating in negotiations leading to a related party transaction must be previously approved by the board of directors, with the exclusion of the interested director. The board of directors will approve the transaction only when it has been informed of such director’s interest, the transaction is beneficial to the company and the terms of such transaction are similar to those prevailing in the market. All resolutions approving such transactions must be reported to the Company’s shareholders at the next annual shareholders meeting. If the majority of the directors are interested parties, the transaction may be entered into if approved unanimously by non-interested directors, or by two-thirds or more of the votes at a special shareholders’ meeting. If a special shareholders’ meeting is called, the board shall appoint two independent evaluators, who will inform the shareholders of the terms and conditions of the transaction, its effects and the potential impact in the Company. The evaluators’ final conclusions must be made available to shareholders and directors the day after the company receives such report. The report will be available for a period of at least 15 business days following the company’s receipt of the evaluator’s report and notice shall be provided to the shareholders by means of an hecho esencial .
General
The following related party transactions may be entered into without complying with the aforementioned requirements and with only the approval of the board of directors:
 
 	•	 	The transaction does not involve an amount considered to be material. A transaction involves a material amount if:	
 
 	•	 	the transaction amount is more than 1% of the company’s net worth, provided such transaction amount exceeds the equivalent of 2,000 UF, or	
 
 	•	 	the transaction amount exceeds the equivalent to 20,000 UF.	
 
 	•	 	The transaction is in the ordinary course of business, as determined by the corporation’s policies regarding such matters.	
 
 	•	 	The transaction is with a related party which the company owns at least 95% of, either directly or indirectly.	
Violation of Article 146 et seq may result in administrative or criminal sanctions and civil liability to shareholders or third parties who suffer losses as a result of such violation. We believe that we have complied with the requirements of Articles 146 et seq in all transactions with related parties. See “Item 10.—B. Memorandum and Articles of Association—Director Requirements.”
 
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Related Party Transactions
Below is a description of the outstanding transactions between us and our related parties, including the respective outstanding amounts since January 1, 2010:
Purchase and sale agreements
During 2012, 2011 and 2010, we purchased general merchandise in the amount of Ch$ 2,272 million, Ch$2,119 million and Ch$1,883 million, respectively, from Wenco S.A. (“Wenco”), a Chilean plastic goods manufacturer on whose board Cristián Eyzaguirre Johnston, one of our directors, serves as a director. In 2012, 2011 and 2010, we also sold general merchandise in the amount of Ch$ 401 million, Ch$261 million and Ch$160 million, respectively, to Wenco.
Leases
We lease space in various of our shopping centers in Chile to Maxi Kioskos Chile, S.A., a Chilean convenience store operator on whose board Manfred Paulmann Koepfer, one of our principal shareholders, serves as a director. Lease payments during 2012, 2011 and 2010 amounted to Ch$ 149 million, Ch$361 million and Ch$395 million, respectively.
We also lease space in various of our shopping centers in Chile to Automotora Globus Atv Chile Ltda. (“Globus”), a Chilean automotive retailer controlled by Manfred Paulmann Koepfer, one of our principal shareholders. No lease transactions took place during 2012, while in 2011 lease payments to Globus amounted to Ch$154 million. There were no lease payments made to Globus in 2010. In 2012 no general merchandise was sold to Globus while in 2011 those purchases amounted to Ch$31 million. There were no sales of general merchandise to Globus in 2010.
In addition, we lease space in various of our shopping centers in Chile to Importadora y Comercial Regen Ltda., a Chilean retailer of imported toys controlled by Peter Paulmann Koepfer, one of our directors. Lease payments during the 2012, 2011 and 2010 amounted to Ch$141 million, Ch$106 million and Ch$98 million, respectively. We also purchased general merchandise from Importadora y Comercial Regen Ltda. in the amount of Ch$ 499 million, Ch$520 million and Ch$387 million for the years 2012, 2011 and 2010, respectively.
The above described transactions were entered into pursuant to our Bylaws and applicable Chilean laws and regulations.
For information concerning other transactions, see Note 9.1.3 to our Audited Consolidated Financial Statements.
 
 	 C.	INTERESTS OF EXPERTS AND COUNSEL	
Not applicable.
 
 Item 8.	Financial Information	
 
 	 A.	CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.	
Financial Statements
See “Item 18. Financial Statements” and pages F-1 through F-167 for our consolidated financial statements prepared in accordance with IFRS.
 
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Legal and Administrative Proceedings
We are party to certain legal proceedings in Argentina, Brazil, Chile, Colombia and Peru arising in the normal course of our business, which we believe are routine in nature and incidental to the operation of our business. We do not believe that the outcome of the proceedings to which we currently are party will have a material effect upon our operations or financial condition.
Our subsidiary, Cencosud Administradora de Tarjetas S.A. (“CAT”), was a defendant in a class action suit initiated by SERNAC. On April 24, 2013, the Supreme Court of Chile ruled for the plaintiff and at this junction no further appeals are available. In its ruling, the court determined that CAT included certain clauses in its 2006 contracts that were abusive to consumers. Said clauses allowed CAT to charge an incremental maintenance fee of Ch$530 per month to cardholders with a usage under Ch$50 thousand per month, without written consent from cardholders as required by the Ley de Proteccion al Consumidor . In the ruling the court ordered CAT to pay a fine of approximately Ch$ 2 million and to reimburse certain cardholders for the excess maintenance fees charged since 2006 plus adjustments for inflation and interests. We have provisioned Ch$20,000 million for this ruling in our 2012 financial statements, which represents 0.2% of our 2012 consolidated net revenues and 3.1% of our 2012 adjusted EBITDA. This provision is an estimated value that still needs to be ratified by the Supreme Court of Chile after subsequent filings for interpretation, rectification and amendment are addressed by the court.
Dividends and Dividend Policy
Our dividend policy is determined from time to time by our board of directors. It is the Company’s general practice to pay interim and annual dividends in November and May. Dividends are paid to shareholders of record on the fifth Chilean business day preceding the date for the payment of the dividend.
As required by the Chilean Corporations Law, unless otherwise approved by unanimous vote of holders of all of our issued and subscribed shares, we must distribute a cash dividend in an amount no less than 30% of the Company’s consolidated net income for that year, unless and except to the extent we have a deficit in retained earnings. We may distribute a cash dividend in an amount greater than 30% if approved by a majority vote of shareholders.
Shareholders who are not residents of Chile must register as foreign investors under one of the foreign investment regimes contemplated by Chilean law to receive dividends, sale proceeds or other amount with respect to their shares remitted outside Chile through the Formal Market Exchange. See “Item 10. Additional Information—D. Exchange Controls.” Dividends received in respect of shares of common shares by holders are subject to Chilean withholding tax. See “Item 10. Additional Information—E. Taxation.”
 
 	 B.	SIGNIFICANT CHANGES	
Except as otherwise disclosed in this annual report, there has been no undisclosed significant change since the date of the annual financial statements.
 
 Item 9.	The Offer and Listing	
 
 	 A.	OFFER AND LISTING DETAILS	
Our ADSs have been listed on the NYSE under the symbol “CNCO” since June 22 nd , 2012. The table below sets forth the trading volume and the high and low closing prices in U.S. dollars of our ADSs on the New York Stock Exchange as reported by the New York Stock Exchange.
 
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 	  	New York Stock Exchange
(in U.S.$ per ADS) (1)	 	
 	  	Trading volume	 	  	High	 	  	Low	 	
Year	  				  				  				
2012	  	 	16,315,454	  	  	 	20.99	  	  	 	15.10	  	
				
Quarter	  				  				  				
Second Quarter, 2012 (since June 22, 2012)	  	 	1,850,374	  	  	 	18.00	  	  	 	15.10	  	
Third Quarter, 2012	  	 	9,280,268	  	  	 	20.99	  	  	 	16.40	  	
Fourth Quarter, 2012	  	 	5,184,812	  	  	 	18.48	  	  	 	15.27	  	
First Quarter, 2013	  	 	6,424,704	  	  	 	19.76	  	  	 	16.47	  	
				
Month	  				  				  				
October 2012	  	 	1,874,163	  	  	 	18.48	  	  	 	15.74	  	
November 2012	  	 	1,517,708	  	  	 	16.35	  	  	 	15.27	  	
December 2012	  	 	1,792,941	  	  	 	17.03	  	  	 	15.58	  	
January 2013	  	 	1,910,452	  	  	 	18.62	  	  	 	16.47	  	
February 2013	  	 	2,278,061	  	  	 	19.39	  	  	 	17.92	  	
March 2013	  	 	2,236,191	  	  	 	19.76	  	  	 	18.22	  	
April 2013	  	 	1,873,486	  	  	 	18.43	  	  	 	16.56	  	
Source: New York Stock Exchange.
(1)	Except trading volume.	
 
 	 B.	PLAN OF DISTRIBUTION	
Not applicable.
 
 	 C.	MARKETS	
Our common stock is currently traded on the Santiago Stock Exchange, the Chile Electronic Stock Exchange and the Valparaíso Stock Exchange under the symbol “CENCOSUD.” The Santiago Stock Exchange accounted for approximately 89%, 90% and 91% of the trading volume of our common stock in Chile in 2012, 2011 and 2010, respectively. On April 19, 2013, the last reported sale price of the shares on the Santiago Stock Exchange and the Bolsa Electronica de Chile was Ch$2696.2 and Ch$2690.1 per share, respectively, and on April 19, 2013, on the Valparaiso Stock Exchange, was Ch$2,690 per share.
Price history of our common shares
The table below sets forth the trading volume and the high and low closing sales prices for our common shares on the Santiago Stock Exchange for the periods indicated.

 	  	Santiago stock exchange
(in Ch$ per common share) (1)	 	
 	  	Trading volume	 	  	High	 	  	Low	 	
Year	  				  				  				
2008	  	 	708,321,649	  	  	 	2,049	  	  	 	831.6	  	
2009	  	 	706,805,501	  	  	 	1,725	  	  	 	903.1	  	
2010	  	 	735,020,230	  	  	 	3,900	  	  	 	1,700	  	
2011	  	 	577,949,277	  	  	 	3,745	  	  	 	2,450	  	
2012	  	 	690,328,658	  	  	 	3,256	  	  	 	2,490	  	
				
Quarter	  				  				  				
First Quarter, 2011	  	 	157,683,999	  	  	 	3,745	  	  	 	2,900	  	

 
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 	  	Santiago stock exchange
(in Ch$ per common share) (1)	 	
 	  	Trading volume	 	  	High	 	  	Low	 	
Second Quarter, 2011	  	 	107,073,291	  	  	 	3,660	  	  	 	3,125	  	
Third Quarter, 2011	  	 	183,113,316	  	  	 	3,390	  	  	 	2,450	  	
Fourth Quarter, 2011	  	 	130,078,380	  	  	 	3,278	  	  	 	2,501	  	
First Quarter 2012	  	 	102,539,491	  	  	 	3,256	  	  	 	2,745	  	
Second Quarter, 2012	  	 	258,157,754	  	  	 	3,250	  	  	 	2,600	  	
Third Quarter, 2012	  	 	172,089,033	  	  	 	2,899	  	  	 	2,600	  	
Fourth Quarter, 2012	  	 	157,542,380	  	  	 	2,894	  	  	 	2,490	  	
First Quarter, 2013	  	 	173,486,388	  	  	 	3,085	  	  	 	2,594	  	
				
Month	  				  				  				
October 2012	  	 	69,881,162	  	  	 	2,894	  	  	 	2,500	  	
November 2012	  	 	29,817,154	  	  	 	2,635	  	  	 	2,490	  	
December 2012	  	 	57,844,064	  	  	 	2,650	  	  	 	2,499	  	
January 2013	  	 	76,769,487	  	  	 	2,934	  	  	 	2,594	  	
February 2013	  	 	66,938,449	  	  	 	2,965	  	  	 	2,855	  	
March 2013	  	 	49,725,058	  	  	 	2,903	  	  	 	2,645	  	
April 2013	  	 	67,791,739	  	  	 	2,958	  	  	 	2,645	  	
Source: Santiago Stock Exchange.
(1)	Except trading volume.	
 
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The table below sets forth the high and low closing sales prices for our common shares on the Bolsa Electronica de Chile for the periods indicated.

 	  	Chile electronic stock exchange
(in Ch$ per common share) (1)	 	
 	  	Trading volume	 	  	High	 	  	Low	 	
Year	  				  				  				
2008	  	 	155,403,697	  	  	 	2,070	  	  	 	870	  	
2009	  	 	83,245,426	  	  	 	1,720	  	  	 	932.9	  	
2010	  	 	66,025,944	  	  	 	3,870	  	  	 	1,700	  	
2011	  	 	63,461,270	  	  	 	3,740	  	  	 	2,530	  	
2012	  	 	80,841,749	  	  	 	5,569	  	  	 	1,365	  	
				
Quarter	  				  				  				
First Quarter, 2011	  	 	18,643,106	  	  	 	3,740	  	  	 	2,934	  	
Second Quarter, 2011	  	 	10,120,787	  	  	 	3,655	  	  	 	3,131	  	
Third Quarter, 2011	  	 	22,174,771	  	  	 	3,378	  	  	 	2,460	  	
Fourth Quarter, 2011	  	 	12,522,606	  	  	 	3,270	  	  	 	2,530	  	
First Quarter 2012	  	 	8,821,459	  	  	 	3,254	  	  	 	1,365	  	
Second Quarter, 2012	  	 	41,118,025	  	  	 	3,249	  	  	 	2,600	  	
Third Quarter, 2012	  	 	20,270,023	  	  	 	2,895	  	  	 	2,600	  	
Fourth Quarter, 2012	  	 	10,444,909	  	  	 	5,569	  	  	 	2,495	  	
First Quarter, 2013	  	 	22,232,169	  	  	 	3,080	  	  	 	2,590	  	
				
Month	  				  				  				
October 2012	  	 	4,273,326	  	  	 	2,837	  	  	 	2,514	  	
November 2012	  	 	2,043,285	  	  	 	2,567	  	  	 	2,467	  	
December 2012	  	 	4,438,598	  	  	 	2,606	  	  	 	2,488	  	
January 2013	  	 	8,966,137	  	  	 	2,921	  	  	 	2,590	  	
February 2013	  	 	8,752,832	  	  	 	2,966	  	  	 	2,880	  	
March 2013	  	 	4,513,200	  	  	 	3,080	  	  	 	2,590	  	
April 2013	  	 	17,781,440	  	  	 	2,935	  	  	 	2,635	  	
Source: Bolsa Electronica de Chile.
(1)	Except trading volume.	
 
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The table below sets forth the high and low closing sales prices for our common shares on the Valparaíso Stock Exchange for the periods indicated.

 	  	Valparaíso stock exchange
(in Ch$ per common share) (1)	 	
 	  	Trading volume	 	  	High	 	  	Low	 	
Year	  				  				  				
2008	  	 	1,715,418	  	  	 	2,000	  	  	 	840	  	
2009	  	 	2,288.596	  	  	 	1,700	  	  	 	949	  	
2010	  	 	2,532,894	  	  	 	3,890	  	  	 	1,710	  	
2011	  	 	691,132	  	  	 	3,735	  	  	 	2,480	  	
2012	  	 	1,163,635	  	  	 	3,244	  	  	 	2,500	  	
				
Quarter	  				  				  				
First Quarter, 2011	  	 	195,423	  	  	 	3,735	  	  	 	3,000	  	
Second Quarter, 2011	  	 	216,079	  	  	 	3,615	  	  	 	3,160	  	
Third Quarter, 2011	  	 	169,524	  	  	 	3,345	  	  	 	2,480	  	
Fourth Quarter, 2011	  	 	110,106	  	  	 	3,250	  	  	 	2,575	  	
First Quarter 2012	  	 	85,440	  	  	 	3,240	  	  	 	2,775	  	
Second Quarter, 2012	  	 	272,729	  	  	 	3,244	  	  	 	2,715	  	
Third Quarter, 2012	  	 	157,892	  	  	 	2,870	  	  	 	2,688	  	
Fourth Quarter, 2012	  	 	647,574	  	  	 	2,885	  	  	 	2,500	  	
First Quarter, 2013	  	 	272,729	  	  	 	3,244	  	  	 	2,715	  	
				
Month	  				  				  				
October 2012	  	 	387,356	  	  	 	2,885	  	  	 	2,575	  	
November 2012	  	 	147,138	  	  	 	2,790	  	  	 	2,500	  	
December 2012	  	 	113,080	  	  	 	2,640	  	  	 	2,510	  	
January 2013	  	 	70,228	  	  	 	6,833	  	  	 	2,633	  	
February 2013	  	 	8,566	  	  	 	2,955	  	  	 	2,905	  	
March 2013	  	 	66,899	  	  	 	3,055	  	  	 	2,900	  	
April 2013	  	 	97,855	  	  	 	2,854	  	  	 	2,660	  	
Source: Valparaíso Stock Exchange.
(1)	Except trading volume.	
 
 	 D.	SELLING SHAREHOLDERS	
Not applicable.
 
 	 E.	DILUTION	
Not applicable.
 
 	 F.	EXPENSES OF THE ISSUE	
Not applicable.
 
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 Item 10.	Additional Information	
 
 	 A.	SHARE CAPITAL	
Not applicable.
 
 	 B.	MEMORANDUM AND ARTICLES OF ASSOCIATION	
Set forth below is material information concerning our share capital and a brief summary of the significant provisions of our Bylaws and Chilean law. As explained above, our Bylaws effectively serve the purpose of both the articles or certificate of incorporation and the bylaws of a company incorporated in the United States. This description contains all material information concerning shares of our common stock, including summaries of certain provisions of our Bylaws and applicable Chilean law in effect on the date of this annual report. They do not, however, describe every aspect of our shares of common stock, our Bylaws or Chilean law. You are encouraged to review our estatutos (an English translation of which has been filed as an exhibit to this annual report), the Chilean Corporations Law and the Securities Market Law, each referred to below.
For more information regarding our share capitalization, see “Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders,” elsewhere in this annual report. There were 2,806,792,161 shares of our common stock, no par value, issued and outstanding as of the date of this annual report.
Memorandum and articles of association
Set forth below is certain information concerning Cencosud S.A.’s capital stock and a brief summary of certain significant provisions of our Bylaws and Chilean law. You are encouraged to review our Bylaws, which are filed as Exhibit 1.1 of this annual report.
Organization and register
We are a publicly-held stock corporation ( sociedad anónima abierta ) organized under the laws of Chile and have an indefinite corporate duration. We were incorporated by a public deed dated November 10, 1978. This abstract is recorded on page 13808 No. 7412 of the Registro de Comercio de Santiago (Commercial Registry of Santiago) for the year 1978. Our corporate purpose, as stated in our Bylaws, is broadly defined to include the purchase, sale, distribution and marketing of goods, as more fully set forth in our Bylaws.
Shareholder rights
Shareholder rights in Chilean companies are governed generally by a company’s bylaws (which effectively serve the purpose of both the articles, or certificate, of incorporation, and the bylaws of a United States company). Additionally, the Chilean Corporations Law governs the operation of Chilean stock corporations and provides for certain shareholder rights.
Shareholder rights can be amended through an agreement adopted in an extraordinary shareholders meeting, which shall subsequently agree upon the corresponding amendment to the bylaws. However, there are certain provisions of Chilean law that cannot be waived by the shareholders, such as the legal formalities prescribed by the Chilean Corporations Law for the organization and validity of a corporation or for the amendment of its bylaws; provisions dealing with the protection of minority shareholders, including the minimum number of board members, the existence of a committee of directors, the list of matters that shareholders may decide upon in an ordinary and/or extraordinary shareholders meeting of the company, the quorum required for the approval of certain supermajority matters; and other public policy provisions, such as the rules for the liquidation of a company, tender offer rules and, generally, all securities market regulations.
The Chilean securities markets are principally regulated by the Superintendencia de Valores y Seguros (the Chilean Securities and Insurance Commission) (“SVS”) under the Securities Market Law and the Chilean
 
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Corporations Law. These two laws provide for disclosure requirements, restrictions on insider trading and price manipulation, and protection of minority investors. The Chilean Corporations Law clarifies rules and requirements for establishing publicly-held stock corporations while eliminating government supervision of privately-held companies. The Securities Market Law establishes requirements for public offerings, stock exchanges and brokers, and outlines disclosure requirements for companies that issue publicly offered securities.
Under Articles 12 and 54 and Title XV of the Securities Market Law, certain information regarding transactions in shares of publicly-held corporations must be reported to the SVS and the Chilean exchanges on which such shares are listed. Holders of shares of publicly-held corporations are required to report to the SVS and the Chilean exchanges:
 
 	•	 	any acquisition or sale of shares that results in the holder’s acquiring or disposing of 10% or more of the corporation’s capital; and	
 
 	•	 	any acquisition or sale of shares or options to buy or sell shares, in any amount, if made by a holder of 10% or more of the corporation’s capital or if made by a director, liquidator, main officer, general manager or manager of such corporation.	
 
 	•	 	In addition, majority shareholders must include in their report whether their purpose is to acquire control of the company or if they are making a financial investment. A beneficial owner of ADSs representing 10.0% or more of our share capital will be subject to these reporting requirements under Chilean law.	
Persons or entities intending to acquire control of a publicly-held corporation, through means other than through a tender offer ( oferta pública de adquisición de acciones ), are also required to inform the public of such acquisition at least 10 business days before the date on which the transaction is to be completed, but in any case, as soon as negotiations regarding the change of control begin (i.e., when information and documents concerning the target are delivered to the potential acquirer) through a notice published in two Chilean newspapers, which must disclose, among other information, the person or entity purchasing or selling and the price and conditions of any negotiations. Prior to such publication, a written communication to such effect must be sent to the SVS and the Chilean exchanges.
In addition to the foregoing, Article 54A of the Chilean Securities Market Law requires that within two business days of the completion of the transactions pursuant to which a person has acquired control of a publicly traded company, a notice shall be published in the same newspapers in which the notice referred to above was published and notices shall be sent to the same persons mentioned in the preceding paragraphs.
Chilean law does not contain any provision that discriminates against shareholders or prospective shareholders who own a substantial number of shares. However, a special public offering procedure applies should the controlling shareholder of a company decide to increase its stock in the company, according to which the offer must be made to all shareholders on a pro rata basis in proportion to their respective stock.
Capitalization
Under Chilean law, a corporation increases its capital as soon as the shareholders authorize both the capital increase and the issuance of new stock, provided that the minutes of the corresponding shareholders meeting are put into a public deed, and an abstract of said deed is published in the Official Gazette and registered in the Commercial Registry corresponding to the company’s domicile. In addition, in the case of publicly-held stock corporations, the new shares must be registered in the Securities Registry of the SVS before they may be offered to the public. When a shareholder subscribes for shares, the shares are transferred to such shareholder’s name, and the shareholder is treated as a shareholder for all purposes, except receipt of dividends in the proportion corresponding to the unpaid price of such shares, unless otherwise stipulated in the bylaws of the corporation. The shareholder becomes eligible to receive dividends once such shareholder has paid for the shares. If a shareholder does not pay for shares for which such shareholder has subscribed on or prior to the date agreed upon for payment, the corporation is entitled to auction the shares on the stock exchange, and has a cause of action against the shareholder for the difference between the subscription price and the price received at auction. However, until such shares are sold at auction, the shareholder continues to exercise all the rights of a shareholder (except the right to receive dividends). Authorized shares which have not been paid for within the period ending three years from the date when the capital increase agreement was made at the shareholders’ meeting, are deemed cancelled under Chilean law and are no longer available for sale by the Chilean corporation. At that time, the capital of the corporation is automatically reduced to the amount effectively paid within such period.
 
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The Bylaws authorize a single series of common stock, without par value.
Director requirements
Our Bylaws require the board to consist of nine directors. The entire board is elected every three years. There is no requirement that a director be a shareholder of our Company.
Our Bylaws do not contain any provision regarding a mandatory retirement age for directors, nor does Chilean law contain any provision in this respect.
According to Chilean Corporations Law, a publicly-held stock corporation (sociedad anónima abierta) can only execute a transaction with a related party whenever such transaction is for the benefit of the corporation, and conforms to price terms and conditions prevailing in the market at the time of its approval.
Directors, managers, administrators, main executives or liquidators who have an interest in a related party transaction must immediately inform the board of directors or its proxy of such interest and the transaction must first be approved in accordance with the procedures described below. Non-compliance with these requirements will result in joint and several liability for the damages the transaction causes to both the corporation and its shareholders.
If the transaction involves a relevant amount (more than 1% of the company’s equity, provided such transaction exceeds the equivalent of 2,000 UF, or in any case if it exceeds the equivalent to 20,000 UF) and the board of directors is not able to determine if it is an arm’s-length transaction, the Board may approve or reject the execution of the transaction, with the abstention of the interested director, or appoint two independent evaluators.
If the board of directors approves the transaction, the relevant resolution will be disclosed in the subsequent shareholders’ meeting. The resolution should expressly enumerate the directors that approved the operation.
Alternatively, in the case that evaluators are appointed, such evaluators will draft a report to inform the shareholders of the terms and conditions of the transaction, as well as its effect and potential impact on the corporation. The evaluators’ report shall be made available to the shareholders. If shareholders representing at least 5% of the company’s voting stock consider that the transaction is not in the company’s best interest, or if the evaluators’ report differ considerably, they may request that the Board call for an extraordinary shareholders meeting in order to approve or reject the execution of such transaction, in the former case by at least two-thirds of the company’s voting stock. The related party that intends to carry out the operation with the company must provide to the Board all relevant information pertaining to such operation.
Notwithstanding the applicable sanctions, the violation of these rules will not affect the validity of the transaction, but will entitle the corporation or the shareholders to request that the defender disgorge profits obtained from the transaction.
The following transactions with related parties can be carried out without compliance with the foregoing requirements, after approval by the board of directors:
 
 	•	 	Transactions that do not involve a significant amount, as described above. All transactions carried out in a 12 month period through one or more acts that are similar or complementary and in which the parties, including related parties, or the purpose are the same will be considered a single transaction.	
 
 	•	 	Transactions which are in the ordinary course of business, as determined by the corporation’s policies regarding such matters. In this case, the resolution that establishes such policies or their amendments will be made available to the shareholders at the corporation’s offices and on their web site, if applicable.	
 
 	•	 	Transactions between corporations in which the company owns, either directly or indirectly, at least 95% of its counterparty.	
Borrowings by a director are treated under Chilean law as related party transactions and are subject to the rules set forth above.
Pursuant to the Chilean Corporations Law, if the bylaws of a company establish compensation for directors, such compensation must be agreed to in a shareholders meeting. Our Bylaws establish that the directors will be compensated in an amount determined by the annual shareholders meeting, notwithstanding the right of the Board to agree to compensate a director for the performance of any other duty different from his or her duty as a director.
 
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Preemptive rights and increases of share capital
The Chilean Corporations Law grants certain preemptive rights to shareholders of all Chilean companies. The Chilean Corporations Law generally requires Chilean companies to offer to shareholders the right to purchase a sufficient number of shares or convertible securities to maintain their existing ownership percentage in the company whenever it issues new shares or convertible securities and prior to any sale in the market of its treasury shares of common stock.
Pursuant to this requirement, preemptive rights in connection with any future issue of shares will be offered by us to the depositary as the registered owner of the shares underlying the ADSs. However, the depositary will not be able to make such preemptive rights available to holders of ADSs unless a registration statement under the Securities Act is effective with respect to the underlying shares or an exemption from the registration requirements thereunder is available.
We intend to evaluate, at the time of any preemptive rights offering after the date hereof, the practicality under Chilean law in effect at the time of making such rights available to our ADS holders, as well as the costs and potential liabilities associated with registration of such rights and the related shares of common stock under the Securities Act, and the indirect benefits to us of thereby enabling the exercise by all or certain holders of ADSs of their preemptive rights and any other factors we consider appropriate at the time, and then to make a decision as to whether to file such registration statement. We cannot assure you that any registration statement would be filed. If we do not file a registration statement and no exemption from the registration requirements under the Securities Act is available, the Depositary will sell such holders’ preemptive rights and distribute the proceeds thereof if a premium can be recognized over the cost of such sale. In the event that the Depositary is not able, or determines that it is not feasible, to sell such rights at a premium over the cost of any such sale, all or certain holders of ADSs may receive no value for such rights. Non-U.S. holders of ADSs may be able to exercise their preemptive rights regardless of whether a registration statement is filed. The inability of all or certain holders of ADSs to exercise preemptive rights in respect of shares of common stock underlying such ADSs could result in such holders not maintaining their percentage ownership of the common stock following such preemptive rights offering unless such holder made additional market purchases of ADSs or shares of common stock.
Under Chilean law, preemptive rights are exercisable or freely transferable by shareholders during a period that cannot be less than 30 days following the grant of such rights. During such period, and for an additional 30-day period thereafter, a Chilean corporation is not permitted to offer any unsubscribed shares for sale to third parties on terms which are more favorable than those offered to its shareholders. At the end of such additional 30-day period, a Chilean open stock corporation is authorized to sell unsubscribed shares to third parties on any terms, provided they are sold on a Chilean stock exchange. Unsubscribed shares that are not sold on a Chilean stock exchange can be sold to third parties only on terms no more favorable for the purchaser than those offered to shareholders.
Dividend and liquidation rights
In accordance with Chilean law, we must distribute mandatory cash dividends of 30% of our consolidated net income unless otherwise decided by a unanimous vote of the holders of the Shares. See “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Dividends and Dividend Policy.”
At our option, the portion of any dividend which exceeds the mandatory limits established pursuant to Chilean law may be paid in cash, in our shares or in shares of corporations owned by us. Shareholders who do not expressly elect to receive a dividend other than in cash are legally presumed to have decided to receive the dividend in cash. Our ADS holders may, in the absence of an effective registration statement under the Securities Act or an available exemption from the registration requirement thereunder, effectively be required to receive a dividend in cash. See “—Preemptive rights and increases of share capital” above.
Those dividends not collected by the shareholders entitled thereto lapse five years after the payment date, with the funds going to the Chilean Treasury.
In the event of a liquidation of our company, the holders of fully paid shares of common stock would participate in the assets available after payment of all creditors in proportion to the number of shares held by them.
 
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Shareholders’ meetings and voting rights
We hold our annual shareholders meeting during the first fourth months of each year. Extraordinary shareholders meetings may be called by the board of directors when deemed appropriate or when requested by shareholders representing at least 10% of the issued voting shares or by the SVS. Notice to convene the annual shareholders meeting or an extraordinary shareholders meeting is given by means of a notice in a newspaper published in Cencosud’s corporate domicile (currently Santiago) or in the Official Gazette in a prescribed manner. Notice must also be mailed to each shareholder and given to the SVS 15 days in advance of the meeting.
The quorum for a shareholders’ meeting is established by the presence, in person or by power of attorney, of shareholders representing at least the absolute majority of our issued voting shares. If a quorum is not present at the first meeting, the meeting can be reconvened and upon the meeting being reconvened, shareholders present at the reconvened meeting are deemed to constitute a quorum regardless of the percentage of the shares represented. However, if a shareholders’ meeting is called for the purpose of considering:
 
 	•	 	a change of our organization, merger or division,	
 
 	•	 	an amendment to the term of duration or early dissolution,	
 
 	•	 	a change in our corporate domicile,	
 
 	•	 	a decrease of our corporate capital,	
 
 	•	 	approval of capital contributions in assets other than cash and their assessments,	
 
 	•	 	modification of the authority reserved to shareholders meetings or limitations on the Board of Directors,	
 
 	•	 	reduction in the number of members of our Board of Directors,	
 
 	•	 	the sale, transfer or disposition of 50% or more of assets, either including or excluding its corresponding liability, or the formulation or modification of any business plan which contemplates the sale, transfer or disposition of our assets in such amount, the sale of 50% or more of the assets of an affiliate that represents at least 20% of the assets of the corporation, as well as any sale of its shares which would result in us ceasing to be in control of such subsidiary,	
 
 	•	 	the form of distributing corporate benefits,	
 
 	•	 	the granting of a guaranty by us of liabilities of any third-party other than a subsidiary, in an amount exceeding 50% of our total assets,	
 
 	•	 	our purchase of our issued stock in accordance with articles 27A and 27B of Law No. 18,046,	
 
 	•	 	the amendment of any formal defects in our Bylaws which may nullify our incorporation, or any amendment of the Bylaws referring to one or more of the matters indicated above,	
 
 	•	 	the approval of our ceasing to be subject to the regulations applicable to publicly held corporations in the event we no longer meet the requirements under Chilean law to qualify as such a corporation, or the establishment of the right for our controller to acquire the shares of minority shareholders after a tender offer, in the terms set forth in paragraph 2 of article 71 bis of Law No. 18,046,	
 
 	•	 	the approval or ratification of contracts or agreements with related parties, in accordance with articles 44 and 147 of Law No. 18,046, or	
 
 	•	 	other matters as may be set forth in our Bylaws.	
The vote required at such meeting is a two-thirds majority of the issued common stock.
Additionally, the amendment of our Bylaws aimed at the creation, modification, extension or suppression of preferential rights, must be approved with the favorable vote of two-thirds of the shares of the affected series.
Chilean law does not require a publicly-held Chilean company to provide the level and type of information that United States securities laws require a reporting company to provide to its shareholders in connection with a solicitation of proxies. Under Chilean law, a notice of a shareholders’ meeting listing the matters to be addressed must be mailed to shareholders and the SVS not fewer than 15 days prior to the date of a meeting. In cases of an Annual Shareholders’ Meeting, an annual report of our activities, which includes our audited financial statements, must also be mailed to shareholders.
 
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The Chilean Corporations Law provides that whenever shareholders representing 10% or more of the issued voting shares so request, a Chilean company’s annual report must include within the materials dispatched by the board of directors to shareholders, the comments and proposals of such shareholders in relation to the company’s affairs. Similarly, the Chilean Corporations Law provides that whenever the board of directors of a publicly-held company convenes a meeting of shareholders and solicits proxies for the meeting, information supporting its decisions or other similar materials, it is obligated to include the pertinent comments and proposals that may have been made by shareholders owning 10% or more of the company’s voting shares who request that such comments and proposals be so included.
Only shareholders registered in the Shareholders’ Registry as such at least five Chilean business days prior to the date of a shareholders meeting are entitled to attend and vote their shares. A shareholder may appoint by power of attorney another individual (who need not be a shareholder) as its attorney-in-fact to attend and vote on its behalf. Every shareholder entitled to attend and vote at a shareholders meeting shall have one vote for every share subscribed.
Right of dissenting shareholders to tender their shares
The Chilean Corporations Law provides that upon the adoption at an extraordinary shareholders meeting of any of the resolutions enumerated below, dissenting shareholders acquire a right of redemption to force the company to repurchase their shares, subject to the fulfillment of certain terms and conditions.
“Dissenting” shareholders are defined as those which vote against a resolution which results in the redemption right, or if absent at such a meeting, those who state in writing to the company their opposition to the respective resolution. Dissenting shareholders must perfect their redemption rights by tendering their stock to the company within 30 days of the resolution (except in the case of pension fund shareholders as discussed below).
The price paid to a dissenting shareholder of a publicly-held company for such shares is the weighted average of the closing sales prices for the shares as reported on the stock exchanges for the two-month period preceding the event giving rise to the redemption right.
The resolutions that result in a shareholder’s redemption right are the following:
 
 	•	 	our transformation into a different type of legal entity;	
 
 	•	 	our merger with or into another company;	
 
 	•	 	the disposition of 50% or more of our assets, whether or not that sale includes our liabilities or the proposal or amendment of any business plan involving the transfer of more than 50% of our assets; and the sale of 50% or more of the assets of an affiliate which represents at least 20% of the assets of the corporation, as well as any sale of its shares which would result in us ceasing to be in control of such subsidiary;	
 
 	•	 	the granting of security interests or personal guarantees to secure or guarantee third parties’ obligations exceeding 50% of our assets, except with regard to security interests or personal guarantees, which are granted to secure or guarantee obligations of our subsidiaries;	
 
 	•	 	the creation of preferential rights for a class of shares or an amendment to those already existing, in which case the redemption right only accrues to the dissenting shareholder of the class or classes of shares adversely affected;	
 
 	•	 	the amendment of our Bylaws to correct any formal defect in our incorporation, which might cause our Bylaws to become null and void, or any amendment of our Bylaws that grants a shareholder a redemption right;	
 
 	•	 	the approval by our shareholders of our ceasing to be subject to the regulations applicable to publicly held corporations in the event we no longer meet the requirements under Chilean law to qualify as such a corporation; and	
 
 	•	 	any other causes as may be established by Chilean law and our Bylaws (our Bylaws currently do not establish any instances).	
 
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In addition, shareholders of a publicly held corporation have a redemption right if a person acquires two-thirds or more of the outstanding voting stock of the company and does not make a tender offer for the remaining shares within 30 days of that acquisition at a price not lower than the price that would be paid shareholders exercising their redemption rights.
However, the right of redemption described in the previous sentence does not apply in the event the company reduces its capital as a result of not having fully subscribed and paid an increase of capital within the statutory term.
Finally, shareholders of a publicly held corporation have the right of redemption within 30 days after the date when the controller acquires more than 95% of the shares of the company. These redemption rights must be exercised within 30 days.
 
 	 C.	MATERIAL CONTRACTS	
See “Item 4. Information on the Company—B. Business Overview—Material Agreements.”
 
 	 D.	EXCHANGE CONTROLS	
Foreign Exchange Controls
Chile
The Chilean Central Bank is the entity responsible for monetary policies and exchange controls in Chile. Chilean issuers are authorized to offer securities internationally provided they comply with, among other things, the provisions of Chapter XIV of the Compendium of Foreign Exchange Regulations of the Chilean Central Bank (the “Chilean Central Bank Compendium”).
Pursuant to the provisions of Chapter XIV of the Chilean Central Bank Compendium, it is not necessary to seek the Chilean Central Bank’s prior approval in order to acquire shares in a Chilean market. The Chilean Central Bank only requires that (i) the remittance of funds for the acquisition of the shares in Chile be made through the Formal Exchange Market and disclosed to the Chilean Central Bank as described below; and (ii) all remittances of funds from Chile to the foreign investor upon the sale of shares or from dividends or other distributions made in connection therewith be made through the Formal Exchange Market and disclosed to the Chilean Central Bank as described below.
The proceeds of the placement of the shares abroad may be brought into Chile or held abroad. If we remit the funds obtained from the placement of the shares in Chile, such remittance must be made through the Formal Exchange Market and we must deliver to the Department of Statistics Information of the Chilean Central Bank directly or through an entity participating in the Formal Exchange Market an annex providing information about the transaction, together with a letter instructing such entity to deliver us the foreign currency or the Chilean peso equivalent thereof. If we do not remit the funds obtained from the placement of the shares in Chile, we have to provide the same information to the Department of Statistics Information of the Chilean Central Bank directly or through an entity of the Formal Exchange Market, within the first 10 days of the month following the date on which we received the funds. All payments from dividends or other distributions in connection with the shares made from Chile must be made through the Formal Exchange Market. Pursuant to Chapter XIV of the Chilean Central Bank Compendium, no prior authorization from the Chilean Central Bank is required for such payments in U.S. dollars. The participant of the Formal Exchange Market involved in the transfer must provide certain information to the Chilean Central Bank on the banking business day following the day of payment. In the event payments are made outside Chile using foreign currency held abroad, we must provide the relevant information to the Chilean Central Bank directly or through an entity of the Formal Exchange Market within the first 10 days of the month following the date on which the payment was made.
Under Chapter XIV of the Chilean Central Bank Compendium, payments and remittances of funds from Chile are governed by the rules in effect at the time the payment or remittance is made. Therefore, any change made to Chilean laws and regulations after the date hereof will affect foreign investors who have acquired the shares. We cannot assure you that further Chilean Central Bank regulations or legislative changes to the current foreign exchange control regime in Chile will not restrict or prevent us from acquiring U.S. dollars or that further restrictions applicable to us will not affect our ability to remit U.S. dollars for payment of dividends or other distributions in connection with the shares.
 
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The above is a summary of the Chilean Central Bank’s regulations with respect to the issuance of securities, including the shares, as in force and effect as of the date of this annual report. We cannot assure you that restrictions will not be imposed in the future, nor can there be any assessment of the duration or impact of such restrictions if imposed. This summary does not purport to be complete and is qualified in its entirety by reference to the provisions of Chapter XIV of the Chilean Central Bank Compendium, a copy of which is available from us upon request at the following address Avenida Kennedy 9001, Piso 6, Las Condes, Santigo, Chile.
Argentina
Prior to December 1989, the Argentine foreign exchange market was subject to exchange controls. From December 1989 until April 1991, Argentina had a freely floating exchange rate for all foreign currency transactions, and the transfer of dividend payments in foreign currency abroad and the repatriation of capital were permitted without prior approval of the Central Bank of Argentina. From April 1, 1991, when the Convertibility Law became effective, until December 21, 2001, when the Central Bank of Argentina decided to close the foreign exchange market, the Argentine currency was freely convertible into U.S. dollars.
On December 3, 2001, the Argentine government imposed a number of monetary and currency exchange control measures through Decree 1570/01, which included restrictions on the free disposition of funds deposited with banks and tight restrictions on transferring funds abroad without the Central Bank of Argentina’s prior authorization subject to specific exceptions for transfers related to foreign trade. Beginning in January 2003, the Central Bank of Argentina has gradually eased these restrictions and expanded the list of transfers of funds abroad that do not require its prior authorization. However, in June 2003 the Argentine government instituted restrictions on capital flows into Argentina, which mainly consisted of a prohibition against the transfer abroad of any funds until 180 days after their entry into the country.
In June 2005, the Argentine government issued Decree 616/05, which established additional restrictions over all capital flows that could result in the decreased availability of international credit. Pursuant to the decree, all private sector indebtedness of physical persons or corporations in Argentina are required to be agreed upon and repaid not prior to 365 days from the date of entry of the funds into Argentina, regardless of the form of repayment. The decree outlines several types of transactions that are exempt from its requirements, including foreign trade financings, foreign trade balances of those entities authorized to carry out foreign exchange, and primary offerings of debt securities issued pursuant to a public offering and listed on a self-regulated market.
In addition, the decree, as supplemented by subsequent regulations, stipulates that all capital inflows of residents exceeding U.S.$2 million per month, as well as all capital inflows of non-residents settled in the local exchange market destined for local money holdings, acquisition of active or passive private sector financings and investments in securities issued by the public sector that are acquired in secondary markets (excluding foreign direct investment, which includes capital contributions to local companies of direct investments (namely, a company in which the foreign direct investor holds at least 10% of ordinary shares or voting rights, or its equivalent), and primary offerings of debt securities issued pursuant to a public offering and listed on a self-regulated market), must meet certain requirements, including those outlined below:
 
 	•	 	such funds may be transferred only outside the local exchange market after a 365-day period from the date of entry of the funds into Argentina;	
 
 	•	 	any Argentine Pesos resulting from the exchange of such funds are to be credited to an account within the Argentine banking system; and	
 
 	•	 	except for certain type of capital inflows, a non-transferable, non-interest-bearing U.S. Dollar-denominated mandatory deposit must be maintained for a term of 365 calendar days, in an amount equal to 30% of any such inflow of funds to the local foreign exchange market (which mandatory deposit may not be used as collateral or guaranty for any transaction).	
In addition, on November 16, 2005, the Ministry of Economy and Production issued Resolution 637/05, pursuant to which Decree 616/05 was regulated, providing that any inflow of funds to the local exchange market in connection with an initial public offering of securities, bonds or certificates issued by a trustee under a trust, whether or not such trust is publicly offered and listed in a self-regulated market, shall comply with all requirements provided for section 4 of Decree 616/05 whenever such requirements are applicable to the inflow of funds to the local exchange market in connection with the acquisition of any of the assets under the trust.
 
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The transfer abroad of dividend payments is currently authorized by applicable regulations to the extent such dividend payments are made in connection with audited financial statements approved by a shareholders’ meeting. Any breach of the provisions of Decree No. 616/05 or any other foreign exchange regulation is subject to criminal penalties of the laws governing the Argentine exchange market.
In addition, pursuant to Resolutions AFIP N° 3210/2011 and N° 3212/2011 and Communication “A” 5245, enacted in late 2011, prior to authorizing the sale of foreign currency to make portfolio investments abroad or similar investments, the local bank must obtain prior clearance from an online database run by the federal tax authority (AFIP). This database must confirm whether an individual or entity has sufficient declared assets or funds to make the purchase of foreign currency. In the event that declared assets or funds are not sufficient, the bank may not sell foreign currency to such individual or entity. However, the regulations fail to explain how this calculation is carried out. This clearance requirement may affect the ability of our Argentine subsidiaries to make or manage its foreign currency investments or to transfer funds abroad.
Repatriation of investments by non-argentine residents
Repatriation of funds by non-Argentine residents is subject to the prior approval of the Central Bank; however, various exceptions exist to this general principle, including, among others:
 
 	•	 	Repatriation of direct investments resulting from the sale of investments, the process of wind-up or liquidation of a company, capital reduction or the repayment of capital contributions. In these instances, the foreign investor must demonstrate that it has held the Argentine investment for at least 365 days. In addition, investments made after October 28, 2011 (capital contributions or acquisition of interests in Argentine companies) may be repatriated only if it can be demonstrated that the funds invested in the Argentine company were brought into Argentina at least 365 days prior to repatriation; a certificate from a financial institution or foreign exchange firm must be provided that states the amount of the funds and the date on which such funds were transferred into Argentina for the purpose of making the investment. However, in the event that the investor is organized or domiciled in a country which, pursuant to Argentine law, is considered to be of low or no taxation, repatriation must be approved by the Central Bank.	
 
 	•	 	Repatriation of portfolio investments (and the related income), provided that the aggregate amount of such repatriation does not exceed U.S.$500,000 per month. Repatriation in this instance is permitted provided the investor can demonstrate that the funds used to make such investment were brought into Argentina at least 365 days prior to repatriation; a certificate from a financial institution or foreign exchange firm must be provided that states the amount of the funds and the date on which such funds were transferred into Argentina for the purpose of making the investment. However, in the event that the investor is organized or domiciled in a country which, pursuant to Argentine law, is considered to be of low or no taxation, repatriation must be approved by the Central Bank.	
These repatriation exceptions are available provided the financial institution through which a funds transfer is made is capable of determining (among other things) that “ from the date of collection of the funds (…) to the date of the foreign exchange transaction, the funds received were not allocated to other investments in Argentina. ”
Any transactions not covered by the preceding paragraphs (or any other exception) are subject to prior Central Bank approval.
Foreign investments by argentine residents
As a general matter, individuals and legal entities (excluding private trusts and non-registered civil and commercial companies, associations and foundations) are authorized to buy or transfer foreign currency in an amount of up to U.S.$2 million per month (provided they do not have due and unpaid debts of any nature owing to foreign creditors). However, in practice, certain regulations have restricted the ability to purchase or transfer foreign currency for general savings or investment purposes (such practice is referred to as “accumulation” or “ atesoramiento ”):
 
(a)	Pursuant to Communication “A” 5236 (as amended) of the Central Bank, in the event that the aggregate amount of foreign currency purchases (including transfers) during a calendar year exceeds U.S.$250,000:	
 
 	(i)	in the case of individuals, the total amount of foreign currency purchases may not exceed the sum of: (i) the investments in Argentine financial assets and the amount of Argentine currency declared in the	
 
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 	individual’s most recent personal tax return filed with Argentine tax authorities, (ii) the funds resulting from the sale in Argentina of recordable assets and foreign currency declared in the individual’s most recent personal tax return filed with Argentine tax authorities, (iii) the individual’s earnings for the current year which are subject to income tax withholding, (iv) other sources of income collected by the individual during the year that are not subject to income tax and (v) amounts received by the individual through an inheritance; and	
 
 	(ii)	in the case of legal entities, the total amount of foreign currency purchases may not exceed: (i) the entity’s net worth (per the financial statements corresponding to the immediately preceding fiscal year), plus (ii) the entity’s earnings generated after the end of the immediately preceding fiscal year, plus (iii) the entity’s proceeds from the sale of foreign currency in the foreign exchange market, minus (iv) the entity’s investments in external assets (including foreign currency) as of the date of purchase, minus (v) deposits in Argentina of foreign currency, minus (vi) investments in Argentine companies, minus (vii) distributions by the entity of dividends approved after the end of the immediately preceding fiscal year.	
 
(b)	Pursuant to Resolutions AFIP No. 3210/2011 and No. 3212/2011 and Communication “A” 5245, prior to authorizing the sale of foreign currency to a given client, the bank handling such sale must consult an online database maintained by the Argentine federal tax authority to confirm whether the client desiring to make such purchase has met the requirements outlined above. In the event that the requirements are not met by the client, the bank may not carry out the sale of foreign currency. However, the regulations fail to provide detail as to how the required calculations are to be made.	
In addition, purchases of foreign currency for purposes of accumulation are subject to the following conditions:
 
(a)	The Argentine resident must not have due and unpaid debts owing to foreign creditors (whether financial or commercial in nature). This requirement will not apply if the purchase of foreign currency does not exceed U.S.$10,000 per calendar month.	
 
(b)	If the purpose of the purchase and transfer of funds is to purchase Argentine securities, including ADRs, the purchase of such securities may only be carried out 20 business days following the transfer of funds.	
 
(c)	In the case of foreign portfolio investments, the funds must be transferred from an Argentine bank account of the Argentine resident to a different bank account opened with:	
 
 	(i)	a foreign bank established in any country member of the OECD whose foreign indebtedness has an international rating of at least “BBB” or that consolidates its financial statements in Argentina with an Argentine bank; or	
 
 	(ii)	foreign banks of the country of permanent residence of individuals authorized to remain in Argentina as “temporary residents” under the provisions of section 23 of Argentine Immigration Law No. 25,871; or	
 
 	(iii)	a financial entity regularly engaged in investment banking activities, established in any country member of the OECD whose foreign indebtedness has an international rating of at least “BBB”.	
Repatriation of funds by argentine residents
Repatriation of funds by Argentine residents up to U.S.$2 million per month is exempt from the deposit ( encaje ) requirement. If the funds repatriated by an Argentine resident exceed this monthly cap, the deposit requirement will apply in an amount equal to 30% of the excess funds.
Criminal foreign exchange regime
Pursuant to the provisions of Central Bank Communication “A” 3471, foreign exchange transactions may only be carried out through financial institutions authorized to do so by the Central Bank (e.g., financial institutions and foreign exchange bureaus). Central Bank Communication “A” 3471 further provides that any transactions that fail to comply with the applicable requirements will be subject to the penalties set forth in the Criminal Foreign Exchange Regime set by Law No. 19,359.
For a complete detail of all foreign exchange restrictions, investors should consult with their own legal and financial advisors. Additionally, the review of Executive Order No. 616/2005, MEP Resolution No. 365/2005, Law No. 19,359 and their amending and supplementing regulations is suggested.
 
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Brazil
General rules
The basic law regulating foreign investment was enacted in 1962 (Law No. 4131) and was amended in 1964 (Law No. 4390). Foreign investment is not subject to government approvals or authorizations, and there are no requirements regarding minimum investment or local participation in capital (except in very limited cases such as in financial institutions, insurance companies and other entities subject to the regulating authority of the Central Bank of Brazil). Foreign participation, however, is limited or prohibited in limited areas of activities, including those detailed below.
The Central Bank of Brazil is the agency responsible for: (i) managing the day-today control over foreign capital flow in and out of Brazil (risk capital and loans under any form); (ii) setting forth the administrative rules and regulations for registering investments; (iii) monitoring foreign currency remittances; and (iv) allowing repatriation of funds. It has no jurisdiction over the quality of the investment and cannot restrict the remittances of funds resulting from the risk capital or loan, which are based on a registration with the Central Bank, through its Electronic System of Registration.
In the event of a serious balance of payment deficit, the Central Bank may limit profit remittances and prohibit remittances as capital repatriation for a limited period of time. This limitation, however, has never been applied even during Brazil’s most difficult balance of payments problems.
Foreign investments in currency must be officially channeled through financial institutions duly authorized to deal in foreign exchange (e.g. commercial banks). Foreign currency must be converted into Brazilian currency and vice-versa through the execution of an exchange contract with a commercial bank. Foreign investments may also be made through the contribution of assets and equipment intended for the local production of goods or services.
Foreign exchange market
Brazil previously operated with two official exchange rate markets, the commercial and floating rate markets, both of which were regulated and monitored by the Central Bank. Participation in a particular market was determined by the nature of the remittance of funds to be made.
In March, 2005 the Central Bank unified both markets and enacted more flexible exchange rules. As a consequence, remittances of funds in and out of Brazil now flow through one single exchange market regardless of the nature of the payments.
Foreign investment registration
Foreign investments in currency or in assets and equipment must be registered with the Central Bank of Brazil. Such registration grants the foreign investor the right to remit dividends and interest and to repatriate the investment. As of August 2000, foreign investments in capital must be registered with the Electronic System of Registration of the online data system of the Central Bank of Brazil (the “SISBACEN Data System”). Since February 2001, foreign loans are also subject to registration in the SISBACEN Data System.
The amount registered with the Central Bank of Brazil as foreign investment includes the sum of (i) the original investment (whether in cash or in kind); (ii) subsequent additional investments (including the capitalization of credits); and (iii) eventual profit reinvestments. This aggregate amount constitutes the basis for repatriation of capital and computation of any eventual capital gain tax, as explained below.
Profit remittance
Since January 1996, profits paid by a Brazilian company to a foreign investor are not subject to any withholding tax. The foreign currency to be remitted must be purchased in the exchange market directly from any commercial bank, upon presentation of the corporate act declaring the dividends, the pertinent financial statements, proof of the tax payment and the registration in the SISBACEN Data System. No further approval or consent of the Central Bank is necessary and there is no limitation on the amounts to be remitted if the original investment has been registered with the Central Bank as described above.
 
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Repatriation of capital
Foreign capital invested in Brazil may be repatriated at any time and there is no minimum period of investment. Repatriation of the investment within the amount stated in the SISBACEN Data System may be made free of any tax or authorization. In principle, any excess over the registered amount will be treated as a capital gain, subject to a 15% withholding tax (such rate is increased to 25% in case of investors residing in tax havens) and prior (and discretionary) approval of the Central Bank.
In accordance with an common practice of the Central Bank of Brazil, whenever the total or partial repatriation of capital is sought upon the sale of an investment, the book value of the foreign investment (based on the financial statements of the company which received the investment) will be compared against the amount registered in foreign currency. If the book value is lower than the registered foreign investment, the remittance abroad of any amount exceeding the book value may be understood by the Central Bank as a capital gain, and, as such, subject to a 15% tax.
Other forms of funding Brazilian subsidiaries
The Brazilian foreign debt challenges, combined with other circumstances, forced the market to find various ways to fund Brazilian companies through the issuance of notes and bonds, as well as commercial paper placed outside Brazil under private and public placements. In recent years, the Central Bank has authorized a great volume of issues of bonds, fixed rate notes, floating rate notes, commercial papers and fixed or floating rate certificates of deposit, to be traded abroad. Nonetheless, foreign loans with maturity of less than ninety days are currently subject to a financial transactions tax. Interest paid to foreigners is subject to a 15% withholding tax (such rate is increased to 25% in case of creditors residing in tax heavens). Another source of funding has been the issue of ADRs—American Depositary Receipts and IDRs—International Depositary Receipts.
Peru
At the beginning of the 1990s, former President Alberto Fujimori liberalized price and wage controls in the private sector and eliminated all restrictions on capital flows. Since March 1991, there have been no exchange controls in Peru and all foreign exchange transactions are based on market rates. Prior to March 1991, the Peruvian foreign exchange market consisted of several alternative exchange rates. During the last two decades, the Peruvian currency has experienced a significant number of large devaluations and Peru has consequently adopted and operated under various exchange rate control practices and exchange rate determination policies, ranging from strict control over exchange rates to market-determination of rates. Current Peruvian regulations on foreign investment allow the foreign holders of equity shares and fixed income instruments to receive and repatriate 100% of the proceeds of the investment. Such investors are allowed to purchase foreign exchange at free market exchange rates through any member of the Peruvian banking system.
Colombia
Foreign Investment and Exchange Controls in Colombia
Although the exchange market flows freely, there are exchange regulations that establish those exchange operations that must be channeled through the exchange market, the procedures and penalties for infringement.
The rules applicable on exchange matters are issued jointly by Congress, the Government and the Central Bank. The main regulations on foreign investment and international exchange (“Exchange Regulations”) are set forth in Law 9 of 1991, Decree 2080 of 2000, External Resolution No. 8 of 2000 and Regulation DCIN-83. The law requires all foreign investment to be registered at the Central Bank.
The Central Bank is responsible for Exchange Regulations and managing, recording and authorizing changes in foreign investment. In turn, the Superintendency of Companies is responsible for overseeing compliance with the provisions on foreign investment set forth in the Exchange Regulations. Such foreign investment is divided into (1) direct foreign investment, and (2) portfolio foreign investment.
 
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The foreign investment registered with the Central Bank grants the investor the following rights, known as “exchange rights”:
a. The possibility of repatriating the profits from the registered investment.
b. The possibility of reinvesting such profits in Colombia.
c. The possibility of repatriating sums resulting from the transfer of the investment within the country, the liquidation of the company or the portfolio and/or the reduction of the equity of the recipient company.
Foreign Indebtedness
The foreign currency received or paid as a consequence of a credit operation must be channeled through the exchange market. In addition, prior to or simultaneously with the disbursement, it will be required to report the foreign debt to the Central Bank through the exchange market intermediaries.
Up until October 28, 2011, Colombian residents could only obtain credits in foreign currency from foreign financial institutions, foreign market intermediaries or through the placement of securities in international capital markets. Since that date, Banco de la Republica allowed indebtedness with any foreign third party, including related parties. These modalities are considered liability credits since the debtor is a Colombian resident.
On the other hand, Colombian residents may grant loans in foreign currency to non residents and this modality is called active credits since the creditor is a Colombian resident.
 
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 	 E.	TAXATION	
General
The following discussion summarizes the material Chilean tax and U.S. federal income tax consequences to beneficial owners arising from the purchase, ownership and disposition of the common stock and ADSs. The summary does not purport to be a comprehensive description of all potential Chilean tax and U.S. federal income tax considerations that may be relevant to a decision to purchase, own or dispose of the common stock and ADSs and is not intended as tax advice to any particular investor. This summary does not describe any tax consequences arising under the laws of any state, locality or other taxing jurisdiction other than Chile and the United States. There is currently no income tax treaty between the United States and Chile.
Prospective purchasers of the common stock and ADSs should consult their own tax advisors as to the Chilean, United States or other tax consequences of the purchase, ownership and disposition of the common stock and ADSs in their particular circumstances, as well as the application of state, local, foreign or other tax laws.
Chilean tax considerations
The following section is the opinion of Morales y Besa Abogados Limitada as to the material Chilean income tax laws presently in force, including Ruling No. 324 of January 29, 1990 of the Chilean Internal Revenue Service and other applicable regulations and rulings. The discussion summarizes the material Chilean income tax consequences of an investment in the ADSs or shares of common stock received in exchange for ADSs by an individual who is not domiciled in or a resident of Chile or a legal entity that is not organized under the laws of Chile and does not have a permanent establishment located in Chile, which we refer to as a foreign holder. For purposes of Chilean law, an individual holder is a resident of Chile if he or she has remained in Chile for more than six months in one calendar year or for a total of more than six months in two consecutive tax years. An individual holder is domiciled in Chile if he or she resides in Chile with the purpose of staying in Chile (such purpose to be evidenced by circumstances such as the acceptance of employment within Chile or the relocation of his or her family to Chile). This discussion is not intended as tax advice to any particular investor, which can be rendered only in light of that investor’s particular tax situation.
Under Chilean law, provisions contained in statutes such as tax rates applicable to foreign holders, the computation of taxable income for Chilean purposes and the manner in which Chilean taxes are imposed and collected may be amended only by another statute. In addition, the Chilean tax authorities issue rulings and regulations of either general or specific application interpreting the provisions of Chilean tax law. Pursuant to Article 26 of the Chilean Tax Code, Chilean taxes may not be assessed retroactively against taxpayers who in good faith relied on such rulings, regulations and interpretations, but Chilean tax authorities may change such rulings, regulations and interpretations prospectively. On February 4, 2010, a comprehensive income tax treaty between the United States and Chile (the “Proposed U.S.-Chile Treaty”) was signed, however such treaty has not yet been ratified by each country and therefore is not yet effective. It is unclear at this time when such treaty will be ratified by both countries. You should consult your tax adviser regarding the ongoing status of this treaty, and if ratified the impact such treaty would have on the consequences described in this annual report.
Cash dividends and other distributions
Cash dividends paid by us with respect to the ADSs or shares of common stock held by a Foreign Holder will be subject to a 35.0% Chilean withholding tax, which is withheld and paid over by us to the Chilean Treasury. We refer to this as the Chilean withholding tax. A credit against the Chilean withholding tax is available based on the level of corporate income tax, or first category tax, actually paid by us on the taxable income to which the dividend is imputed; however, this credit does not reduce the Chilean withholding tax on a one-for-one basis because it also increases the base on which the Chilean withholding tax is imposed. In addition, distribution of book income in excess of retained taxable income is subject to the Chilean withholding tax, but such distribution is not eligible for the credit. Under Chilean income tax law, for purposes of determining the level of the first category tax that has been paid by us, dividends generally are assumed to have been paid out of our oldest retained taxable profits. From the year 2004, the first category tax rate was 17.0%, resulting in an effective dividend withholding tax rate of approximately 21.69%. As a way to obtain additional funds for the country’s reconstruction plan after the earthquake in February 2010, the first category tax rate was increased to 20.0%, for fiscal year 2011 and for fiscal year 18.5% during 2012, returning fiscal year 2013 to the permanent first category tax rate of 17.0% (Circular Letter No. 95, of
 
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2001 and 63, of 2010). However, on September 24, 2012 Congress passed Law Nº 20,630, which increased the first category tax rate to 20% as from fiscal year 2013 in order to collect funds for financing the Educational Reform The foregoing tax consequences apply to cash dividends paid by us. Dividend distributions made in property (other than shares of common stock) will be subject to the same Chilean tax rules as cash dividends.
Capital gains
Gains realized on the sale, exchange or other disposition by a foreign holder of ADSs (or ADRs evidencing ADSs) will not be subject to Chilean taxation, provided that such disposition occurs outside Chile. The deposit and withdrawal of shares of common stock in exchange for ADRs will not be subject to any Chilean taxes.
Gains recognized on a sale or exchange of shares of common stock received in exchange for ADSs (as distinguished from sales or exchanges of ADSs representing such shares of common stock) by a foreign holder will be subject to both the first category tax and the Chilean withholding tax (the former being creditable against the latter) if (1) the foreign holder has held such shares of common stock for less than one year since exchanging ADSs for the shares of common stock, (2) the foreign holder acquired and disposed of the shares of common stock in the ordinary course of its business or as a regular trader of stock or (3) the sale is made to a company in which the foreign holder holds an interest as partner or shareholder (in the case of open stock corporations such interest must be 10.0% or more of the shares). A 15% withholding will be made on account of the seller’s final taxes. In all other cases, gain on the disposition of shares of common stock will be subject only to the first category tax levied as a sole tax. However, in these latter cases, if it is impossible to determine the taxable capital gain, a 5.0% withholding will be imposed on the total amount to be remitted abroad without any deductions as a provisional payment of the total tax due.
The tax basis of shares of common stock received in exchange for ADSs will be the acquisition value of such shares, adjusted according to the domestic inflation variation between the month preceding the acquisition and the month preceding the sale. The valuation procedure set forth in the Deposit Agreement, which values shares of common stock that are being exchanged at the highest price at which they trade on the Santiago Stock Exchange on the date of the exchange, generally will determine the acquisition value for this purpose. Consequently, the conversion of ADSs into shares of common stock and sale of such shares of common stock for the value established under the Deposit Agreement will not generate a capital gain subject to taxation in Chile, as long as the sale price is equal to the acquisition price fixed at the moment of the conversion. In the event that the sale price is greater than the acquisition price, said capital gain will be subject to the first category tax and the withholding taxes mentioned above.
The distribution and exercise of preemptive rights relating to the shares of common stock will not be subject to Chilean taxation. Amounts received in exchange for the shares or assignment of preemptive rights relating to the shares will be subject to both the first category tax and the Chilean withholding tax (the former being creditable against the latter to the extent described above).
If the Proposed U.S.-Chile Treaty becomes effective, it may further restrict the amount of Chilean tax, if any, imposed on gains derived from the sale or exchange of shares of common stock by U.S. residents eligible for the benefits of the treaty. If the Proposed U.S.-Chile Treaty becomes effective, U.S. investors should consult their tax advisorsadvisors as to the applicability of the TreatyTreaty in their particular circumstances.
The Chilean Internal Revenue Service has not enacted any rule nor issued any ruling about the applicability of the following norms to the foreign holders of ADRs.
Pursuant to an amendment to the Chilean Income Tax Law published on November 7, 2001 (Law No. 19,768, amended by Law 20,448, dated August 13, 2010), the sale and disposition of shares of Chilean public corporations which are actively traded on stock exchanges is exempted from Chilean taxes on capital gains if the sale or disposition was made on a local stock exchange so long as the shares were purchased on a public stock exchange. However, Law N°20,448 limited this benefit to shares acquired and sold on a local stock exchange, with which it is unlikely that it will apply to the sale of share resulting from an exchange of ADSs. Investors who request delivery of ADSs in the form of shares of common stock should consult with their tax advisoradvisor to determine whether such shares will be eligible for the foregoing exemption.
 
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Exempt capital gains—article 106 of the Chilean income tax law
According to Article 106 of the Chilean Income Tax law, the sale and disposition of shares of Chilean public corporations which are significantly traded on a Chilean stock exchange by foreign institutional investors, such as mutual funds, pension funds and others, is exempted of any Chilean tax on capital gains if the sale or disposition was made through a Chilean stock exchange or a tender offer.
A foreign institutional investor is an entity that is either:
 
 	•	 	a fund that makes public offers of its shares in a country in which public debt has been rated investment grade by an international risk classification agency qualified by the local exchange regulator (“SVS”);	
 
 	•	 	a fund that is registered with a regulatory entity of a country in which public debt has been rated investment grade by an international risk classification agency qualified by the SVS, provided that the investments in Chile, including securities issued abroad that represent Chilean securities, held by the fund represent less than 30% of its share value;	
 
 	•	 	a fund whose investments in Chile, including securities issued abroad representing Chilean securities, represent less than 30% of its portfolio, provided that no more than 10% of the equity or right to the profits of the fund is directly or indirectly owned by Chilean residents;	
 
 	•	 	a pension fund that is exclusively formed by individuals that receive their pension on account of capital accumulated in the fund or its main purpose is to finance the funds of individuals and it is regulated and supervised by the competent foreign authority;	
 
 	•	 	a fund regulated by Chilean Law Nº 18,657 (referred to as Foreign Capital Investment Funds Law), in which case all holders of its shares must reside abroad or be qualified as local institutional investors; or	
 
 	•	 	another kind of institutional foreign investor that complies with the characteristics defined by a regulation with the prior report of the SVS and the Chilean Internal Revenue Service.	
In order to be entitled to the exemption, foreign institutional investors, during the time in which they operate in Chile must:
 
 	•	 	be organized abroad and not be domiciled in Chile;	
 
 	•	 	prove their qualification as foreign institutional investors as mentioned above;	
 
 	•	 	not participate, directly or indirectly, in the control of the issuers of the securities in which it invests and not hold, directly or indirectly, 10% or more of such companies’ capital or profits;	
 
 	•	 	execute an agreement in writing with a Chilean bank or securities broker in which the intermediary is responsible for the execution of purchase and sale orders and for the verification, at the time of the respective remittance, that such remittances relate to capital gains that are exempt from income tax in Chile or, if they are subject to income tax, that the applicable withholdings have been made; and	
 
 	•	 	register in a special registry with the Chilean Internal Revenue Service.	
Exempt capital gains—article 107 of the Chilean income tax law
According to article 107 of the Chilean Income Tax Law, gains derived from the sale or transfer of shares of publicly-traded companies organized in Chile that are actively traded in a stock exchange, as defined in the relevant regulation, are exempt of taxes in Chile, provided that the following requirements are met:
 
 	•	 	The seller must have acquired the shares: (a) in a Chilean stock exchange authorized by the Chilean Superintendency of Securities and Insurance; (b) pursuant to a regulated tender offer carried out according to Title XXV of the Chilean Securities Market Law; (c) at the time of incorporation of the corporation or pursuant to a capital increase; (d) pursuant to the exchange of public traded securities convertible in shares (in this case the acquisition cost of the shares corresponds to the exchange price), or (e) in a redemption of securities from certain mutual funds;	
 
 	•	 	The shares must be sold: (a) in a stock exchange authorized by the Chilean Superintendency of Securities and Insurance; (b) pursuant to a regulated tender offer, or (c) in a contribution of securities on certain mutual funds.	
 
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The exemption under analysis also applies if the sale or transfer of shares is executed within 90 days following the day in which they were no longer considered as actively traded. In such case, the profit exempted from Chilean taxes will be up to the average price of shares within the last 90 days in which they were actively traded. Any profit above the average price will be subject to the general tax regime applicable to the transfer of shares.
For these purposes, shares are considered to be significantly traded on a Chilean stock exchange (presencia bursátil) when they (1) are registered in the securities registry kept by the SVS, (2) are registered in a Chilean Stock Exchange; and (3) fulfill at least one of the following requirements: (i) have an adjusted presence equal to or above 25%; or (ii) have a “Market Maker”, as such term is defined in the Norma de Carácter General No. 327, issued by the SVS on January 17, 2012. Accordingly, shares are considered to have a “Market Maker” if the issuer thereof has entered into an agreement with at least one stock broker, and such agreement complies with the requirements set forth in the aforementioned Norma de Carácter General No. 237. Currently, our shares are considered to be significantly traded on a Chilean stock exchange.
Other Chilean taxes
No Chilean inheritance, gift or succession taxes apply to the transfer or disposition of the ADSs by a foreign holder but such taxes generally will apply to the transfer at death or by a gift of shares of common stock by a foreign holder. No Chilean stamp, issue, registration or similar taxes or duties apply to foreign holders of ADSs or shares of common stock.
Withholding tax certificates
Upon request, we will provide to foreign holders appropriate documentation evidencing the payment of the Chilean withholding tax.
Material United States Federal Income Tax Considerations
The following is a discussion as to the material U.S. federal income tax consequences of the acquisition, ownership and disposition of our ADSs under currently applicable law. It does not address any aspect of U.S. federal gift or estate tax, Medicare tax on net investment income, or the state, local or foreign tax consequences of an investment in our ADSs. This discussion applies to you only if you hold and beneficially own our ADSs as capital assets for tax purposes (generally, property held for investment). This discussion does not apply to you if you are a member of a class of holders subject to special rules, such as:
 
 	•	 	dealers in securities or currencies;	
 
 	•	 	traders in securities that elect to use a mark-to-market method of accounting for securities holdings;	
 
 	•	 	banks or other financial institutions;	
 
 	•	 	insurance companies;	
 
 	•	 	tax-exempt organizations;	
 
 	•	 	partnerships and other entities treated as partnerships for U.S. federal income tax purposes or persons holding ADSs through any such entities;	
 
 	•	 	real estate investment trusts;	
 
 	•	 	regulated investment companies;	
 
 	•	 	persons that hold ADSs as part of a hedge, straddle, constructive sale, conversion transaction or other integrated investment;	
 
 	•	 	U.S. holders (as defined below) whose functional currency for tax purposes is not the U.S. dollar;	
 
 	•	 	persons liable for alternative minimum tax; or	
 
 	•	 	persons who actually or constructively own 10.0% or more of the total combined voting power of all classes of our shares (including ADSs) entitled to vote.	
 
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This discussion is based on the U.S. Internal Revenue Code of 1986, as amended, or the Code, its legislative history, existing and proposed regulations promulgated thereunder, published rulings and court decisions, all as currently in effect. These laws are subject to change, possibly on a retroactive basis. In addition, this discussion relies in part on our assumptions regarding the projected value of our shares and the nature of our business. Finally, this discussion is based in part upon the representations of the depositary and the assumption that each obligation in the deposit agreement and any related agreement will be performed in accordance with its terms.
You should consult your own tax advisor concerning the particular U.S. federal income tax consequences to you of the purchase, ownership and disposition of our ADSs, as well as the consequences to you arising under the laws of any other taxing jurisdiction.
For purposes of the U.S. federal income tax discussion below, you are a “U.S. holder” if you beneficially own our ADSs and are:
 
 	•	 	an individual who is a citizen or resident of the United States for U.S. federal income tax purposes;	
 
 	•	 	a corporation, or other entity taxable as a corporation, that was created or organized in or under the laws of the United States, any state thereof or the District of Columbia;	
 
 	•	 	an estate the income of which is subject to U.S. federal income tax regardless of its source; or	
 
 	•	 	a trust, if (a) a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (b) the trust has a valid election in effect to be treated as a U.S. person.	
Except where specifically described below, this discussion assumes that we are not a not a “passive foreign investment company” (a “PFIC”) for U.S. federal income tax purposes. For U.S. federal income tax purposes, income earned through a foreign or domestic partnership or other flow-through entity is attributed to its owners. Accordingly, if a partnership or other flow-through entity holds ADSs, the tax treatment of the holder will generally depend on the status of the partner or other owner and the activities of the partnership or other flow-through entity.
U.S. Holders
ADSs . If you hold ADSs, for U.S. federal income tax purposes, you generally will be treated as the owner of the underlying shares that are represented by such ADSs. Accordingly, deposits or withdrawals of shares for ADSs will not be subject to U.S. federal income tax.
Distributions on our ADSs . Cash distributions (including amounts withheld to pay Chilean withholding taxes) made by us to or for the account of a U.S. Holder with respect to ADSs generally will be taxable to such U.S. Holder as ordinary dividend income when such distribution is paid, actually or constructively, out of our current or accumulated earnings and profits (as determined for U.S. federal income tax purposes). Distributions in excess of our current or accumulated earnings and profits will be treated first as a non-taxable return of capital reducing such U.S. Holder’s adjusted tax basis in the ADSs. Any distribution in excess of such U.S. Holder’s adjusted tax basis will be treated as capital gain and will be long-term capital gain if the U.S. Holder held the ADSs for more than one year. Because we do not expect to maintain calculations of our earnings and profits in accordance with U.S. federal income tax principles, U.S. Holders should expect that a distribution will generally be treated as a dividend for U.S. federal income tax purposes. As used below, the term “dividend” means a distribution that constitutes a dividend for U.S. federal income tax purposes.
A U.S. Holder will be entitled, subject to a number of complex limitations and conditions (including a minimum holding period requirement), to claim a U.S. foreign tax credit in respect of any Chilean withholding taxes imposed on dividends received on our ADSs. U.S. Holders who do not elect to claim a foreign tax credit with regard to any foreign income taxes paid or accrued during the taxable year may instead claim a deduction in respect of such withholding taxes. Dividends received with respect to the ADSs will be treated as foreign source income, which may be relevant in calculating such U.S. Holder’s U.S. foreign tax credit limitation. For purposes of the U.S. foreign tax credit limitation, foreign source income is separated into different “baskets,” and the credit for foreign taxes on income in any basket is limited to the U.S. federal income tax allocable to such income. Dividends paid with respect to ADSs should generally constitute “passive category income” for most U.S. Holders. Holders are urged to consult their tax advisors regarding the availability of the foreign tax credit in their particular circumstances.
 
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The U.S. Treasury has expressed concerns that intermediaries in the chain of ownership between the holder of an ADS and the issuer of the security underlying the ADS may be taking actions that are inconsistent with the claiming of foreign tax credits for U.S. holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax, described below, applicable to dividends received by certain non-corporate holders. Accordingly, the analysis of the creditability of foreign taxes and the availability of the reduced tax rate for dividends received by certain non-corporate holders, each described below, could be affected by actions taken by intermediaries in the chain of ownership between the holder of an ADS and our Company.
Dividends paid by us generally will not be eligible for the dividends received deduction available under the Code to certain U.S. corporate shareholders. Subject to the above-mentioned concerns by the U.S. Treasury and certain exceptions for short-term and hedged positions, the U.S. dollar amount of dividends received by certain U.S. Holders (including individuals) prior to January 1, 2013 with respect to the ADSs will be subject to taxation at a maximum rate of 15% if the dividends represent “qualified dividend income.” Beginning in taxable years after December 31, 2012, the maximum rate of taxation on dividends received by an individual U.S. Holder will increase. Dividends paid on the ADSs will be treated as qualified dividend income if (i) the ADSs are readily tradable on an established securities market in the United States and (ii) we were not in the year prior to the year in which the dividend was paid, and are not in the year in which the dividend is paid, a PFIC. Based upon the nature of our current and projected income, assets and activities, we do not expect the ADSs to be shares of a PFIC for U.S. federal income tax purposes.
Sales and other dispositions of ADSs . A U.S. Holder generally will recognize capital gain or loss upon the sale, exchange or other taxable disposition of ADSs measured by the difference between the amount realized and the U.S. Holder’s adjusted tax basis in ADSs. Any gain or loss will be long-term capital gain or loss if the ADSs have been held for more than one year. Long-term capital gains of certain U.S. Holders (including individuals) generally are eligible for reduced rates of U.S. federal income taxation. The deductibility of capital losses is subject to certain limitations under the Code.
If a Chilean income tax is withheld on the sale, exchange or other taxable disposition of our ADS, the amount realized by a U.S. Holder will include the gross amount of the proceeds of that sale, exchange or other taxable disposition before deduction of the Chilean income tax. Capital gain or loss, if any, realized by a U.S. Holder on the sale, exchange or other taxable disposition of ADS generally will be treated as U.S. source income or loss for U.S. foreign tax credit purposes. Consequently, in the case of a gain from the sale, exchange or other taxable disposition of our ADS that is subject to Chilean income tax, the U.S. Holder may not be able to benefit from the foreign tax credit for that Chilean income tax ( i.e. , because the gain from the disposition would be U.S. source), unless the U.S. Holder can apply the credit against U.S. federal income tax payable on other income from foreign sources. Alternatively, the U.S. Holder may take a deduction for the Chilean income tax, provided that the U.S. Holder elects to deduct all foreign income taxes paid or accrued for the taxable year.
Passive foreign investment company rules
Based on current estimates of our gross income and gross assets, the nature of our business and our current business plans (all of which are subject to change), we believe that we were not a PFIC for U.S. federal income tax purposes for our 2012 taxable year and we do not expect to become one in the foreseeable future. However, because the application of the regulations is not entirely clear and because PFIC status depends on the composition of a company’s income and assets and the market value of its assets from time to time, there can be no assurance that we will not be a PFIC for any taxable year. Our U.S. counsel has not rendered an opinion as to our PFIC classification. Rendering such an opinion would be impracticable because it involves an inherently factual test which will depend on our future circumstances. Also, we do not maintain our records in accordance with the U.S. federal income tax accounting principles required to permit a formal opinion to be rendered.
If we were a PFIC for any taxable year during which a U.S. Holder held ADSs, gain recognized by a U.S. Holder on a sale or other taxable disposition (including certain pledges) of the ADSs, and certain “excess distributions,” would be allocated ratably over the U.S. Holder’s holding period for the ADSs. The amounts allocated to the taxable year of the sale, other taxable disposition, or receipt of the excess distribution and to any year before we became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for that taxable
 
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year, and an interest charge would be imposed on the amount allocated to that taxable year. Certain elections may be available that would result in alternative treatments (such as mark-to-market treatment) of the ADSs. U.S. Holders are encouraged to consult their tax advisers to discuss the consequences to them if we were, or were to become a PFIC.
U.S. Information reporting and backup withholding rules
In general, dividend payments with respect to the ADSs and the proceeds received on the sale or other disposition of those ADSs may be subject to information reporting to the IRS, and to backup withholding (currently imposed at a rate of 28.0%). Backup withholding will not apply, however, if you (1) are a corporation or come within certain other exempt categories and, when required, can demonstrate that fact or (2) provide a taxpayer identification number, certify as to no loss of exemption from backup withholding and otherwise comply with the applicable backup withholding rules. To establish your status as an exempt person, you will generally be required to provide certification on IRS Form W-9, W-8BEN or W-8ECI, as applicable. Backup withholding is not an additional tax. Any amounts withheld from payments to you under the backup withholding rules will be allowed as a refund or a credit against your U.S. federal income tax liability, provided that you furnish the required information to the IRS.
In addition, U.S. Holders should be aware that recently enacted legislation imposes new reporting requirements with respect to the holding of foreign financial assets, including stock of foreign issuers, which is not held in an account maintained by a U.S. financial institution, if the aggregate value of all of such assets exceeds U.S.$50,000. U.S. Holders should consult their own tax advisors regarding the possible implications of this legislation on your investment in the ADSs.
Prospective purchasers should consult their own tax advisors regarding the application of the U.S. federal income tax laws to their particular situations as well as any additional tax consequences resulting from purchasing, holding or disposing of ADSs, including the applicability and effect of the tax laws of any state, local or foreign jurisdiction, including estate, gift, and inheritance laws.
 
 	 F.	DIVIDENDS AND PAYING AGENTS	
Not applicable.
 
 	 G.	STATEMENT BY EXPERTS	
Not applicable.
 
 	 H.	DOCUMENTS ON DISPLAY	
We are required to file annual and special reports and other information with the SEC. You may read and copy any documents filed by the Company at the SEC’s public reference room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. The SEC also maintains a website at http://www.sec.gov which contains reports and other information regarding registrants that file electronically with the SEC.
 
 	 I.	SUBSIDIARY INFORMATION	
Not applicable.
 Item 11. Quantitative and Qualitative Disclosures About Market Risk
Market risk generally represents the risk that losses may occur in the values of financial instruments as a result of movements in interest rates, foreign currency exchange rates or commodity prices. We are exposed to changes in financial market conditions in the normal course of business due to our use of certain financial instruments as well as transactions incurred in various foreign currencies and translating our foreign subsidiaries’ financial statements into Chilean pesos. For further information on our market risks, please see Note 3.2.1.8 to our Audited Consolidated Financial Statements.
 
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Interest rate risk
Our primary interest rate exposures relate to our Chilean peso-denominated and U.S. dollar-denominated long-term fixed and floating rate bond and bank liabilities. Since a portion of our outstanding debt bears interest at variable rates, we are sensitive to changes in interest rates. Taking into account the effects of cross-currency swaps, at December 31, 2012, we had total financed debt outstanding (bank loans and bonds) of Ch$ 3,175,636 million, of which Ch$ 1,610,325 million, or 51%, bore interest at variable interest rates. Interest rate changes would result in gains or losses in the market value of our debt portfolio due to differences in market interest rates and the rates in the debt agreements. We frequently monitor our exposure to interest rate fluctuations. We regularly examine our strategy with regard to hedging.
Foreign currency risk
At December 31, 2012, a portion of our long-term interest-bearing debt is exposed to exchange rate fluctuations between the Chilean peso and the U.S. dollar. From time to time we enter into physical and cash settled foreign exchange contracts to cover the foreign exchange risk inherent in the actual cash disbursements related to amortizations of foreign currency denominated debt. Including the effect of cross currency swaps, at December 31, 2012, we had outstanding foreign exchange contracts with notional amounts of U.S. $2,745 million dollars to hedge future debt payments denominated in U.S. dollars. At December 31, 2012, approximately 14% of our debt was denominated in U.S. dollars, 21% in UF, 55% in Chilean pesos, 1% in Argentine pesos, 3% in Peruvian nuevos soles, 3% in Brazilian reais (including hedges) and 3% in Colombian pesos.
 Item 12. Description of Securities Other than Equity Securities
 
 	 A.	DEBT SECURITIES	
Not applicable.
 
 	 B.	WARRANTS AND RIGHTS	
Not applicable.
 
 	 C.	OTHER SECURITIES	
Not applicable.
 
 	 D.	AMERICAN DEPOSITARY SHARES	
The Bank of New York Mellon, a New York banking corporation, is the Depositary under our Deposit Agreement dated April 11, 2012.
Each ADS represents three shares (or a right to receive three shares) deposited with the principal Santiago office of Banco Santander Chile, as custodian for the Depositary. Each ADS may also represent any other securities, cash or other property which may be held by the Depositary from time to time. The depositary’s corporate trust office at which the ADSs are administered is located at 101 Barclay Street, New York, New York 10286. The Bank of New York Mellon’s principal executive office is located at One Wall Street, New York, New York 10286.
You may hold ADSs either (A) directly (i) by having an American Depositary Receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (ii) by having ADSs registered in your name in the Direct Registration System, or (B) indirectly by holding a security entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as an ADS holder.
As an ADS holder, we will not treat you as one of our shareholders and you will not have shareholder rights. Chilean law governs shareholder rights. The Depositary is the holder of the shares underlying the ADSs. The deposit agreement among us, the Depositary and holders of ADSs, and all other persons indirectly holding ADSs sets out ADS holder rights as well as the rights and obligations of the depositary. New York law governs the deposit agreement and the ADSs.
 
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Share dividends and other distributions
The Depositary is required, to the extent that in its judgment it can convert Chilean pesos on a reasonable basis into U.S. dollars and transfer the U.S. dollars to the United States, and subject to Chilean law, to convert all cash dividends and other cash distributions that it receives in respect of the deposited shares of Cencosud common stock into U.S. dollars and to distribute the amount thus received (net of the fees and any conversion expenses of the Depositary) to the holders of ADSs in proportion to the number of ADSs representing such shares held by each of them. See “Item 10.—D. Exchange Controls.” The amount distributed also will be reduced by any amounts required to be withheld by us, the Depositary or the Custodian on account of taxes or other governmental charges. If the Depositary determines that in its judgment any currency received by it cannot be so converted on a reasonable basis and transferred, the Depositary may distribute, or in its discretion hold, such foreign currency, without liability for interest thereon, for the respective account of the ADS holders entitled to receive the same.
If a distribution upon the deposited shares of Cencosud common stock by us consists of a dividend in, or a free distribution of, shares of Cencosud common stock, upon receipt by or on behalf of the Depositary of such additional shares of Cencosud common stock from us, the Depositary may or shall, if we so request, distribute to the holders of ADSs, in proportion to their holdings, additional ADSs representing the number of shares of Cencosud common stock so received as such dividend or distribution, in either case after deduction or payment of the fees and expenses of the Depositary. If such additional ADSs are not so issued, each ADS shall thereafter also represent the additional shares of Cencosud common stock distributed with respect to the shares of Cencosud common stock represented thereby. In lieu of delivering fractions of ADSs, in any such case, the Depositary will sell the amount of shares of Cencosud common stock represented by the aggregate of such fractions and distribute the net proceeds in dollars, all in the manner and subject to the conditions set forth in the Deposit Agreement.
If we offer or cause to be offered to the holders of shares of Cencosud common stock any rights to subscribe for additional shares of Cencosud common stock or any rights of any other nature, the Depositary, after consultation with us, shall have discretion as to the procedure to be followed in making such rights available to holders of ADSs or in disposing of such rights and distributing the net proceeds thereof as in the case of a distribution received in cash. If at the time of the offering of any such rights the Depositary determines that it is lawful and feasible to do so, the Depositary may, after consultation with us, distribute such rights available to holders by means of warrants or otherwise. To the extent the Depositary determines, in its discretion, that it is not lawful or feasible to make the rights available, it may sell such rights, warrants or other instruments, if a market is available therefor, at public or private sale, at such place or places and upon such terms as the Depositary may deem proper and allocate the net proceeds of such sales, net of the fees and expenses of the Depositary, for the accounts of the holders of ADSs otherwise entitled thereto upon an averaged or other practicable basis without regard to any distinctions among such holders of ADSs because of exchange restrictions or the date of delivery of any ADRs or otherwise. If, by the terms of the rights offering or by reason of applicable law, the Depositary may neither make such rights available to the holders nor dispose of such rights and distribute the net proceeds thereof, the Depositary shall allow the rights to lapse.
The Depositary will not offer such rights to the holders of ADSs unless both the rights and the securities to which the rights relate are either exempt from registration under the Securities Act or are registered under the Securities Act. If a holder of ADSs requests a distribution of warrants or other instruments, notwithstanding that there has been no such registration under the Securities Act, the Depositary will not effect the distribution unless it has received an opinion of our United States counsel satisfactory to the Depositary upon which the Depositary may rely that the distribution is exempt from registration under the provisions of the Securities Act. However, we will have no obligation to file a registration statement under the Securities Act to make available to holders of ADSs any right to subscribe for or to purchase any securities. If an exemption from registration is not available and a registration statement is not filed, holders of ADSs will not be permitted to purchase such securities or otherwise exercise such rights and the Depositary may sell such rights for the account of such holders of ADSs as described in the preceding paragraph. Such a disposal of rights may reduce the proportionate equity interest in us of the holders of ADSs.
 
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The Depositary will send to holders of ADSs anything else we distribute on deposited securities by any means it thinks is legal, fair and practical. If it cannot make the distribution in that way, the Depositary has a choice. It may decide to sell what we distributed and distribute the net proceeds, in the same way as it does with cash. Or, it may decide to hold what we distributed, in which cash ADSs will also represent the newly distributed property. However, the Depositary is not required to distribute any securities (other than ADSs) to holders of ADSs unless it receives satisfactory evidence from us that it is legal to make that distribution.
Issuance of ADSs
The Depositary has agreed that, upon deposit with the Custodian of the requisite number of shares of Cencosud common stock and receipt of evidence satisfactory to it that the conditions to deposit described below have been met, and subject to the terms of the Deposit Agreement, the Depositary will deliver to, or upon the order of, the person or persons specified by the Depositary upon payment of the fees, governmental charges and taxes provided in the Deposit Agreement, the number of ADSs issuable in respect of such deposit.
Cancellation and withdrawal of ADSs
Upon surrender of ADSs at the Corporate Trust Office of the Depositary and payment of the fees of the Depositary and of the taxes and governmental charges, if any, provided for in the Deposit Agreement and subject to the terms thereof, ADS holders are entitled to delivery of the deposited shares of Cencosud common stock, any other property or documents of title at the time represented by the surrendered ADSs.
Subject to the terms and conditions of the Deposit Agreement and any limitations established by the Depositary, the Depositary may deliver ADSs prior to the receipt of shares of Cencosud common stock (a “Pre-Release”) and may receive ADSs in lieu of shares of Cencosud common stock. Each Pre-Release shall be:
 
 	•	 	preceded or accompanied by a written representation and agreement from the person to whom ADSs are to be delivered that such person, or its customer,	
 
 	•	 	owns the shares of Cencosud common stock or ADSs to be remitted, as the case may be,	
 
 	•	 	assigns all beneficial right, title and interest in such shares of Cencosud common stock to the Depositary for the benefit of the owners of the ADSs, and	
 
 	•	 	agrees in effect to hold such shares of Cencosud common stock for the account of the Depositary until delivery of the same upon the Depositary’s request,	
 
 	•	 	at all times fully collateralized (such collateral marked to market daily) with cash or such other collateral as the Depositary deems appropriate,	
 
 	•	 	terminable by the Depositary on not more than five business days’ notice, and	
 
 	•	 	subject to such further indemnities and credit regulations as the Depositary reasonably deems appropriate.	
The Depositary will limit the number of ADSs involved in such Pre-Release transactions so that the number of ADSs represented thereby will not, at any one time, exceed 30 percent of the total number of ADSs then outstanding; however, the Depositary reserves the right to change or disregard such limit from time to time as it deems appropriate.
The Depositary shall not be required to accept for deposit any shares of Cencosud common stock unless it receives evidence satisfactory to the Depositary that any approval, if required, has been granted by any governmental body in Chile that is then performing the function of the regulation of currency exchange.
 
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If the person proposing to deposit shares of Cencosud common stock is not domiciled or resident in Chile, the Custodian shall not accept those shares of Cencosud common stock unless it receives from or on behalf of that person sufficient evidence that the shares of Cencosud common stock were purchased in full compliance with the foreign exchange regulations applicable to investments in Chile (either Chapter XIV of the Compendium of Foreign Exchange Regulation of the Central Bank or Decree Law 600 of 1974, as amended, and related agreements with the Foreign Investment Committee) and, if applicable, an instrument whereby that person assigns and transfers to the Depositary any rights it may have under Chilean regulations relating to currency exchange. Pursuant to Chapter XIV of the Compendium of Foreign Exchange Regulations of the Central Bank, the Custodian and/or the Depositary must give notice to the Central Bank of Chile that the shares of Cencosud common stock have been deposited in exchange for ADSs.
If required by the Depositary, shares of Cencosud common stock presented for deposit at any time, whether or not our transfer books or the transfer books of the Foreign Registrar, if applicable, are closed, must also be accompanied by an agreement or assignment, of other instrument satisfactory to the Depositary, which will provide for the prompt transfer to the Custodian of any dividend, or right to subscribe for additional shares of Cencosud common stock or to receive other property which any person in whose name the shares of Cencosud common stock are or have been recorded may thereafter receive upon or in respect of such deposited shares of Cencosud common stock, or in lieu thereof, such agreement of indemnity or other agreement as shall be satisfactory to the Depositary.
At the request, risk and expense of any person proposing to deposit shares of Cencosud common stock, and for the account of such person, the Depositary may receive certificates for shares of Cencosud common stock to be deposited, together with the other instruments herein specified, for the purpose of forwarding such share certificates to the Custodian for deposit hereunder.
Upon each delivery to a Custodian of a certificate or certificates for shares of Cencosud common stock to be deposited hereunder, together with the other documents above specified, such Custodian must, as soon as transfer and recordation can be accomplished, present such certificate or certificates to us or the Foreign Registrar, if applicable, for transfer and recordation of the shares of Cencosud common stock being deposited in the name of the Depositary or its nominee or such Custodian or its nominee.
In the event that Shares are to be redeemed and, as a result, Shares registered in the name of the Custodian are called for redemption by the us, the Depositary will call for the redemption of ADSs (in aggregate number representing the number of Shares registered in the name of the Custodian called for redemption) and may adopt such method as it may deem equitable and practicable to select the ADSs called for redemption.
Voting rights
As soon as practicable after receipt of notice of any meeting or solicitation of consents or proxies of holder of shares of Cencosud common stock, as defined in the Deposit Agreement, if we so request, the Depositary has agreed to mail to holders of ADRs registered on the books of the Depositary a notice in English containing
 
 	•	 	such information as is contained in such notice,	
 
 	•	 	a statement that each holder of ADSs at the close of business on a specified record date will be entitled, subject to any applicable provisions of Chilean law and our Bylaws to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the amount of Cencosud common stock represented by such holders’ ADSs, and	
 
 	•	 	a statement as to the manner in which such instructions may be given, including an express indication that instructions may be given to the Depositary to give a discretionary proxy to a person designated by us.	
Upon the written request of a holder of ADSs on such record date, received on or before the date established by the Depositary for such purpose, the Depositary has agreed to endeavor insofar as practicable to vote or cause to be voted the amount of shares of Cencosud common stock
 
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represented by the ADSs in accordance with any instruction set forth in such request. If no instructions are received by the Depositary from a holder of ADSs with respect to any of the shares of Cencosud common stock represented by such holder’s ADSs on or before the date established by the Depositary for such purpose, the Depositary will give a discretionary proxy to a person designated by us to vote the amount of shares of Cencosud common stock represented by those ADSs, unless we have notified the Depositary that (i) we do not wish such proxy given, (ii) we believe substantial shareholder opposition exists, or (iii) we believe the matter to be voted on would have a material and adverse effect on the rights of holders of our shares.
There are no legal or practical impediments to an ADS holder’s ability to vote that are not faced by holders of our shares of common stock except that there can be no assurance that we have request the Depositary to send the notice or that ADS holders will receive notice of meetings in time to instruct the Depositary before the applicable cutoff date.
Record dates
Whenever any cash dividend or other cash distribution shall become payable or any distribution other than cash shall be made, or whenever rights shall be issued with respect to shares of Cencosud common stock or whenever the Depositary shall receive notice of any meeting of holders of shares of Cencosud common stock or shareholders generally, the Depositary will fix a record date that will be the same as, or as near as practicable to the record date fixed by us with respect to the Cencosud common stock for the determination of the holders of ADSs who are entitled to receive such dividend, distribution or rights, or net proceeds of the sale thereof, or to give instructions for the exercise of voting rights at any such meeting, subject to the provisions of the Deposit Agreement. Subject to the Deposit Agreement, only such holders of ADSs at the close of business on such record date shall be entitled to receive or be affected by any such dividend, distribution, proceeds, exchange or other matter or to give such voting instructions.
In the event that the record date determined by the Depositary (the “ADS Record Date”) and that established by us (the “Common Stock Record Date”) are not the same, ADS holders on the Common Stock Record Date who dispose of their ADSs prior to the ADS Record Date will not receive dividends paid in respect of the shares of Cencosud common stock represented by such holder’s ADSs on the Common Stock Record Date.
Reports and other communications
The Depositary will maintain at its transfer office in the Borough of Manhattan, the City of New York, facilities for the execution and delivery, registration of transfers and surrender of ADSs, in accordance with the provisions of the Deposit Agreement, which at reasonable times will be open for our inspection and inspection by the holders of ADSs, provided that such inspection shall not be for the purpose of communication with holders of ADSs in the interest of a business or object other than our business or a matter related to the Deposit Agreement or the ADSs.
We will transmit to the Depositary copies (translated into English) of any communications generally distributed to holders of Cencosud common stock. The Depositary will make available for inspection by ADS holders at the Corporate Trust Office of the Depositary any reports and communications, including any material soliciting voting instructions, received from us that are both
 
 	•	 	received by the Depositary or the Custodian or the nominee of either as a holder of shares of Cencosud common stock and	
 
 	•	 	made generally available to the holders of shares of Cencosud common stock by us.	
The Depositary will also send to ADS holders copies of such reports when furnished by us as provided in the Deposit Agreement.
 
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On or before the first date on which we give notice, by publication or otherwise, of any meeting of the holders of shares of Cencosud common stock or shareholders generally, or of any adjourned meeting of such holders, or of the taking of any action in respect of any cash or other distributions or offering of any rights, we shall transmit to the Depositary and the Custodian a written English-language version of the notice thereof in the form given or to be given to holders of shares of Cencosud common stock. The Depositary will, if we request, at our expense, arrange for the mailing of such notices to all ADR holders.
Payment of taxes
If any tax or governmental charge becomes payable with respect to any ADS or any shares of Cencosud common stock represented by any ADSs, including without limiting the generality of the foregoing any Chilean tax on a gain realized, or deemed to be realized, upon the withdrawal or sale of shares of Cencosud common stock, such tax or other governmental charge will be payable to the Depositary by the holder of the ADSs, who must pay the amount thereof to the Depositary upon demand. The Depositary may refuse to effect any transfer of such ADSs or any withdrawal of the shares of Cencosud common stock represented by such ADSs until such payment is made, and may withhold any dividends or other distributions, or may sell for the account of the holder of the ADS thereof any part or all of the shares of Cencosud common stock represented by such ADSs, and may apply such dividends or other distributions or the proceeds of any such sale in payment of such tax or other governmental charge and the holder of such ADSs shall remain liable for any deficiency. In the event the Depositary determines that there is a reasonable possibility that a tax would be imposed upon the withdrawal of shares in exchange for surrendered ADSs the Depositary may require, as a condition to such exchange, that the withdrawing investor provide satisfactory security to the Depositary in an amount sufficient to cover the estimated amount of such tax.
Amendment and termination
The form of the ADRs and the Deposit Agreement may at any time be amended by written agreement between us and the Depositary. Any amendment that imposes or increases any fees or charges (other than taxes and other governmental charges, registration fees, cable, telex, or facsimile transmission costs, delivery costs or other such expense) or that otherwise prejudices any substantial existing right of ADS holders, will not take effect as to outstanding ADSs until the expiration of 30 days after notice of such amendment has been given to the record holders of outstanding ADSs. Every holder of ADSs at the time such amendment so becomes effective will be deemed, by continuing to hold such ADSs, to consent and agree to such amendment and to be bound by the Deposit Agreement or the ADRs as amended thereby. In no event may any amendment impair the right of any ADS holder to surrender its ADSs and receive therefor the shares of Cencosud common stock represented thereby, except in order to comply with mandatory provisions of applicable law.
Whenever we direct, the Depositary has agreed to terminate the Deposit Agreement by mailing notice of such termination to the holders of ADSs at least 30 days prior to the date fixed in such notice for such termination. The Depositary may likewise terminate the Deposit Agreement at any time 60 days after the Depositary shall have delivered to us its written resignation provided that a successor depositary shall not have been appointed and accepted its appointment before the end of such 60-day period. If any ADSs remain outstanding after the date of termination, the Depositary thereafter will discontinue the registration of transfers of ADSs, will suspend the distribution of dividends to the holders thereof and will not give any further notices or perform any further acts under the Deposit Agreement, except that the Depositary will continue the collection of dividends and other distributions pertaining to the shares of Cencosud common stock, the sale of property and rights as provided in the Deposit Agreement and the delivery of shares of Cencosud common stock, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, in exchange for surrendered ADSs. At any time after the expiration of four months from the date of termination, the Depositary may sell the shares of Cencosud common stock and hold the net proceeds, together with any other cash then held, unsegregated and without liability for interest, for the pro rata benefit of the holders of ADSs that have not theretofore been surrendered.
 
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Limits on our obligations and the obligations of the depositary; limits on liability to ADS holders
Neither we nor the Depositary assume any obligation nor will we be subject to any liability under the Deposit Agreement to holders of ADSs, except that we agree to perform our obligations specifically set forth in the Deposit Agreement without negligence or bad faith. Neither we nor the Depositary will be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or in respect of the ADRs on behalf of any holder of ADSs or other person, and the Custodian will not be under any obligation whatsoever with respect to such proceedings, the responsibility of the Custodian being solely to the Depositary. The Depositary will not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations without negligence or bad faith while it acted as Depositary. The Depositary will not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any such vote is cast or the effect of any such vote, provided that any such action or non-action is without negligence and in good faith. None of the limitations described in this section will affect investor rights under U.S. federal securities laws.
Disclosure of interest in ADSs
Holders of ADSs are subject to certain provisions of the rules and regulations promulgated under the Exchange Act relating to the disclosure of interests in the shares of Cencosud common stock. Any holder of ADSs who is or becomes directly or indirectly interested in five percent (or such other percentage as may be prescribed by law or regulation) or more of the outstanding shares of Cencosud common stock must within ten days after becoming so interested and thereafter upon certain changes in such interests notify us as required by such rules and regulations. In addition, holders of ADSs as a matter of Chilean law are subject to the reporting requirements contained in Articles 12 and 54 and Title XV of Law 18,045 of Chile, which provision may apply when a holder beneficially owns ten percent or more of the Cencosud common stock or has the intention of taking control of Cencosud. See “Item 10. B. Memorandum and Articles of Association.”
Requirements for depositary actions
As a condition precedent to the delivery, registration of transfer or surrender of any ADSs or any split up or combination of ADR or withdrawal of any shares of Cencosud common stock, we, the Depositary or the Custodian may require from the holder or the presenter of the ADR or the depositor of the shares.
 
 	•	 	payment of a sum sufficient to pay or reimburse the Depositary, the Custodian or us for any tax or other governmental charge and any stock transfer or registration fee or any charge of the Depositary upon delivery of the ADS or upon surrender of the ADS, as set forth in the Deposit Agreement, and	
 
 	•	 	the production of proof satisfactory to the Depositary or Custodian of the identity or genuineness of any signature and proof of citizenship, residence, exchange-control approval, legal or beneficial ownership, compliance with all applicable laws and regulations, compliance with all other applicable provisions governing the shares of Cencosud common stock and the terms of the Deposit Agreement or other information as the Depositary may deem necessary or proper or as we may require by written request to the Depositary or the Custodian.	
The delivery, registration, registration of transfer of ADSs or split-up or combination of ADRs, or the deposit or withdrawal of shares of other property represented by ADSs, in particular instances or generally, may be suspended during any period when the transfer books of the Depositary are closed, or if any such action is deemed necessary or advisable by the Depositary or us at any time or from time to time.
The Depositary will act as ADS registrar or appoint a registrar or one or more co-registrars for registration of the ADSs in accordance with any requirements of the New York Stock Exchange or of any other stock exchange on which the ADSs may be listed or quoted.
The Depositary may appoint one or more co-transfer agents for the purpose of effecting transfers of ADSs or combinations and split-ups of ADRs at designated transfer offices on behalf of the Depositary. In carrying out its
 
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functions, a co-transfer agent may require evidence of authority and compliance with applicable laws and other requirements by holders of ADSs or persons entitled to ADSs and will be entitled to protection and indemnity to the same extent as the Depositary.
Books of depositary
The transfer of the ADSs is registrable on the books of the Depositary, provided, however, that the Depositary may close the transfer books at any time or from time to time when deemed expedient by it in connection with the performance of its duties.
Valuation of underlying shares for Chilean law purposes
For all purposes of valuation under Chilean law, the Deposit Agreement provides that the acquisition value of the shares of Cencosud common stock delivered to any holder upon surrender of ADSs shall be the highest reported sales price of the Cencosud common stock on the Santiago Stock Exchange for the day on which the transfer of the Cencosud common stock is recorded under the name of such holder on our books. In the event that no such sales price is reported by the Santiago Stock Exchange or another organized securities market during that day, the value shall be deemed to be the highest sale price on the day during which the last trade took place. However, if more than 30 days have lapsed since the last trade, such value shall be adjusted in accordance with the variation of the Chilean Consumer Price Index for the corresponding term.
Depositary Fees and Expenses
Pursuant to the Deposit Agreement, holders of our ADSs may have to pay to The Bank of New York Mellon, either directly or indirectly, fees or charges up to the amounts set forth in the table below:

Persons depositing or withdrawing shares or
ADS holders must pay:	  	    For:	
			
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)	  	•   	  	Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property	
			
	  	•   	  	Cancellation of ADSs for the purpose of withdrawal, including if the Deposit Agreement terminates or if ADSs are redeemed	
			
$.05 (or less) per ADS	  	•   	  	Any cash distribution to ADS holders	
			
A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of ADSs	  	•   	  	Distribution of securities distributed to holders of deposited securities which are distributed by the Depositary to ADS holders	
			
$.05 (or less) per ADSs per calendar year	  	•   	  	Depositary services	
			
Registration or transfer fees	  	•   	  	Transfer and registration of shares on our share register to or from the name of the Depositary or its agent when you deposit or withdraw shares	
			
Expenses of the Depositary	  	•   	  	Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement)	
			
	  	•   	  	converting foreign currency to U.S. dollars	
			
Taxes and other governmental charges the depositary or the custodian have to pay on any ADS or share underlying an ADS, for example, stock transfer taxes, stamp duty or withholding taxes	  	•   	  	As necessary	
 
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Persons depositing or withdrawing shares or
ADS holders must pay:	  	    For:	
Any charges incurred by the Depositary or its agents for servicing the deposited securities	  	•    	  	As necessary	
The Depositary collects its fees for delivery and surrender of ADSs directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The Depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The Depositary may collect its annual fee for depositary services by deduction from cash distributions or by directly billing investors or by charging the book-entry system accounts of participants acting for them. The Depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.
From time to time, the Depositary may make payments to us to reimburse and / or share revenue from the fees collected from ADS holders, or waive fees and expenses for services provided, generally relating to costs and expenses arising out of establishment and maintenance of the ADS program. In performing its duties under the Deposit Agreement, the Depositary may use brokers, dealers or other service providers that are affiliates of the Depositary and that may earn or share fees or commissions.
Depositary Payments
No fees or other payments, direct or indirect, were received by Cencosud from the Depositary in connection with its American Depositary Shares program.
PART II
 Item 13. Defaults, Dividend Arrearages and Delinquencies
Not applicable.
 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
 
 	A.	USE OF PROCEEDS	
Not applicable.
 Item 15. Controls and Procedures
 
 	 A.	DISCLOSURE CONTROLS AND PROCEDURES	
As of December 31, 2012, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we performed an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2012. Disclosure controls and procedures means controls and other procedures that are designed to ensure that information we are required to disclose in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
 
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 	 B.	MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING	
This annual report does not include a report of management’s assessment regarding internal control over financial reporting due to a transition period established by rules of the SEC for newly public companies.
 
 	 C.	ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM	
This annual report does not include an attestation report of the company’s registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.
 
 	 D.	CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING	
During the period covered by this report, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 
 
 Item 16A.	Audit Committee Financial Expert	
The members of the audit committee are David Gallagher Patrickson, Roberto Oscar Philipps and Cristián Eyzaguirre Johnston, each of whom is independent within the meaning of the SEC corporate governance rules. Our Board Of Directors has determined that Roberto Oscar Philipps is “audit committee financial expert” as defined by the SEC.
 
 Item 16B.	Code of Ethics	
We have adopted a code of ethics and business conduct that applies to our directors, executive officers and all employees. The text of our code of ethics is posted on our web site at: www.cencosud.com/inversionistas/ under the “informacion de interes” tab. The information on our website is not incorporated by reference into this document.
 
 Item 16C.	Principal Accountant Fees and Services	
The following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered by PricewaterhouseCoopers Consultores, Auditores y Compañia Limitada (“PwC”), an independent registered public accounting firm and our principal external auditors, for the periods indicated. Except as set forth below, we did not pay any other fees to our auditors during the periods indicated below.

 	  	For the year ended December 31, 2012	 	
 	  	(in millions of Ch$)	 	
 	  	2012	 	  	2011	 	  	2010	 	
Audit Fees (1)	  	 	5,859,442	  	  	 	4,788,969	  	  	 	3,960,532	  	
Audit- Related Fees (2)	  	 	277,914	  	  	 	883,778	  	  	 	0	  	
Tax Fees (3)	  	 	393,073	  	  	 	344,392	  	  	 	711,520	  	
Total	  	 	6,530,429	  	  	 	6,017,139	  	  	 	4,672,052	  	
 
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(1)	“Audit fees” means the aggregate fees billed for professional services rendered by our principal auditors for the audit of our annual financial statements as well as in connection with audit services for SEC or other regulatory filings, including the IPO.	
(2)	“Audit-related fees” represents aggregate fees billed for professional services rendered by our principal auditors for the assurance and related services.	
(3)	“Tax Fees” in the above table are fees billed for tax compliance and tax consultations in Argentina, Brazil, Chile, Peru and Colombia.	
Our audit committee pre-approves all audit and non-audit services provided by our independent auditor pursuant to the Sarbanes-Oxley Act of 2002.
 
 Item 16D.	Exemptions from the Listing Standards for Audit Committees	
Not applicable.
 
 Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	
Not applicable.
 
 Item 16F.	Change in Registrant’s Certifying Accountant	
During the years ended December 31, 2012, 2011 and 2010 and through the date of this annual report, the principal independent accountant engaged to audit our financial statements, PwC, has not resigned, indicated that it has declined to stand for re-election after the completion of its current audit or been dismissed. For each of the years ended December 31, 2012, 2011 and 2010, PwC has not expressed reliance on another accountant or accounting firm in its report on our audited annual financial statements for such periods.
During the years ended December 31, 2012, 2011 and 2010 and through the date of this annual report, we have not engaged a new independent accountant as either the principal accountant to audit the our financial statements, or as an independent accountant to audit a significant subsidiary and on whom the principal accountant is expected to express reliance in its report.
 
 Item 16G.	Corporate Governance	
General Summary of Significant Differences With Regard To Corporate Government Standards
As a foreign private issuer, we may follow our home country’s corporate governance practices in lieu of most of the NYSE’s corporate governance listing standards, or the NYSE Standards. Our corporate governance practices differ in certain significant respects from those that U.S. companies must adopt in order to maintain NYSE listing and, in accordance with Section 303A.11 of the NYSE Listed Company Manual, a brief, general summary of those differences is provided as follows.
Composition of the Board of Directors; Independence . The NYSE listing standards provide that listed companies must have a majority of independent directors and that certain board committees must consist solely of independent directors. Under NYSE rule 303A.02, a director qualifies as independent only if the board affirmatively determines that such director has no material relationship with the company, either directly or indirectly. In addition, the NYSE listing standards enumerate a number of relationships that preclude independence.
Under the amendment to the Chilean Corporations Act, in effect as of January 1, 2010, an open-stock corporation must have at least one independent director (out of a minimum of seven directors) when its market capitalization reaches or exceeds 1.5 million Unidades de Fomento (as of March 31, 2013 approximately Ch$33,800 million) and at least 12.5% of its outstanding shares with voting rights are in the possession of shareholders that individually control or possess less than 10% of such shares. In addition, the Chilean Corporation Act enumerates a number of relationships that preclude independence. The Chilean law also establishes a number of principles of general applicability designed to avoid conflicts of interests and to establish standards and procedures to conduct related party transactions. Specifically, directors elected by a group or class of shareholders have the same duties to the company and to the other shareholders as the rest of the directors, and all transactions with the company in which a director has an interest, must be in the interest of and for the benefit of the company, compare in price, terms and conditions to those prevailing in the market at the time of its approval and comply with the requirements and procedures set forth in Chapter XVI of the Chilean Corporation Act. See “Item 7. Major Shareholders and Related Party Transactions.”
 
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Furthermore, such transactions must be reviewed by the directors committee (as defined below); they require prior approval by the board of directors, excluding interested directors, and must be disclosed at the next meeting of shareholders, unless such transactions fall within one the exemptions contemplated by the Chilean Corporations Act (i.e., di minimis transaction amount, or if the counterparty is a wholly owned subsidiary or when the transaction falls within the ordinary course as so determined in the company’s policy on recurring business transactions as approved by the board of directors). See “Item 7. Major Shareholders and Related Party Transactions.” Pursuant to NYSE rule 303A.00, we may follow Chilean practices and are not required to have a majority of independent directors.
Committees . The NYSE listing standards require that listed companies have a Nominating/Corporate Governance Committee, a Compensation Committee and an Audit Committee. Each of these committees must consist solely of independent directors and must have a written charter that addresses certain matters specified by the listing standards.
Under Chilean law, the only board committee that is required is the directors committee ( comité de directores ), composed of three members, such committee having a direct responsibility to (a) review the company’s financial statements and the independent auditors’ report and issue an opinion on such financial statements and report prior to their submission for shareholders’ approval, (b) make recommendations to the board of directors with respect to the appointment of independent auditors and risk rating agencies that the board may propose to the shareholders at a shareholders’ meeting, (c) review related party transactions, and issue a report on such transactions, (d) review the managers, principal executive officers’ and employees’ compensation policies and plans, (e) prepare an annual report of the performance of its duties, including the principal recommendations to shareholders; (f) report to the board of directors the convenience of retaining non-audit services from its external auditors, if the nature of such services could impair their independence; and (g) perform other duties as defined by the company’s bylaws, by the general shareholders’ meeting or by the board. Requirements to be deemed an independent director are set forth in “Item 6. Directors, Senior Management and Employees—Board Practices.”
Shareholder Approval of Equity-Compensation Plans . Under NYSE listing standards, shareholders must be given the opportunity to vote on all equity-compensation plans and material revisions thereto, with limited exemptions. An “equity-compensation plan” is a plan or other arrangement that provides for the delivery of equity securities of the listed company to any employee, director or other service provider as compensation for services.
Under Chilean law, if previously approved by shareholders at an extraordinary shareholders’ meeting, up to ten percent of a capital increase in a publicly traded company may be set aside to fund equity-compensation plans for the company’s employees and/or for the employees of the company’s subsidiaries. Pursuant to NYSE rule 303A.00, as a foreign private issuer, we may follow Chilean practices and are not required to comply with the NYSE listing standards with respect to shareholder approval of equity-compensation plans.
Corporate Governance Guidelines . The NYSE listing standards provide that listed companies must adopt and disclose corporate governance guidelines with regard to (a) director qualifications standards; (b) director responsibilities; (c) director access to management and independent advisors; (d) director compensation; (e) director orientation and continuing education; (f) management succession; and (g) annual performance evaluation of the board.
Chilean law does not require that such corporate governance guidelines be adopted. Director responsibilities and access to management and independent advisors are directly provided for by applicable law. Director compensation is determined by the annual meeting of shareholders pursuant to applicable law. As a foreign private issuer, we may follow Chilean practices and are not required to adopt and disclose corporate governance guidelines.
During 2012, the Superintendence of Securities and Insurance (Superintendencia de Valores y Seguros, or “SVS) adopted new regulations that require publicly traded corporations to produce information about the standards of their corporate governance currently in place and disclose such information not later than June 30, 2013 and thereafter on March 31 of each calendar year.
 
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In compliance with such regulations, the Company intends to deliver and make public the relevant information about its corporate governance practices and policies as currently in effect, as well as the corporate governance practices and policies that it is either in the process of adopting or reviewing for future implementation.
Code of Business Conduct . The NYSE listing standards require that listed companies adopt and disclose a code of business conduct and ethics for directors, officers and employees, and promptly disclose any waivers of the code for directors or executive officers.
We have adopted a code of ethics, which includes business conduct guidelines that apply generally to all of our executive officers and employees. A copy of this code of business conduct, as amended, is available in our website at www.cencosud.com/inversionistas/ under the “informacion de interes” tab. The information on our website is not incorporated by reference into this document.
Information of Interest to the Market . In 2008, the SVS promulgated new rules which require public companies to adopt a manual regarding disclosure of information of interest to the market, board members and executives shares transactions and black-out periods for such transactions. This manual applies to our directors, the directors of our subsidiaries, our executive officers, some of our employees which may be in possession of confidential, reserved or privileged information of interest, and to our advisors. The manual took effect on June 1, 2008. A copy of the manual regarding disclosure of information of interest to the market, as amended on March 18, 2010, is available in our website at http://www.cencosud.com/inversionistas/ The information on our website is not incorporated by reference into this document.
Executive Sessions . To empower non-management directors to serve as a more effective check on management, NYSE listing standards provide that non-management directors of each company must meet at regularly scheduled executive sessions without management.
Under Chilean law, the office of director is not legally compatible with that of a company officer in publicly traded companies. The board of directors exercises its functions as a collective body and may partially delegate its powers to executive officers, attorneys, a director or a board commission of the company, and for specific purposes to other persons. As a foreign private issuer, we may follow Chilean practices and are not required to comply with the NYSE listing standard for executive sessions.
Certification Requirements . Under NYSE listing standards, Section 303A.12(a) provides that each listed company CEO must certify to the NYSE each year that he or she is not aware of any violation by the company of NYSE corporate governance listing standards and Section 303A.12(b) provides that each listed company CEO must promptly notify the NYSE in writing after any executive officer of the listed company becomes aware of any material non-compliance with any applicable provisions of Section 303A.
As a foreign private issuer, we must comply with Section 303A.12(b) of the NYSE listing standards, but we are not required to comply with 303A.12(a).
 
 Item 16H.	Mine Safety Disclosure	
Not applicable.
 
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PART III
 Item 17. Financial Statements
We have responded to Item 18 in lieu of responding to this item.
 Item 18. Financial Statements.
See pages F-1 through F-167 of this annual report.
 Item 19. Exhibits

Exhibit
No.	  	Description	
		
  1.1	  	Restated bylaws of Cencosud S.A.	
		
  4.1	  	Stock Purchase Agreement among UBS A.G., London Branch, as buyer, Palermo Argentina Holdings I, S.L., Palermo Argentina Holdings II, S.L., International Finance Corporation, SCF Chile S.A., BSSF Chile S.A., and BSSFP Chile S.A, as sellers, dated March 30, 2011, previously filed as exhibit 10.1 to the Company’s registration statement on Form F-1 (File No. 333-181711) filed with the Securities and Exchange Commission on May 25, 2012 (“Form F-1”) and incorporated by reference herein.	
		
  4.2	  	Option Agreement between Cencosud S.A. and UBS A.G., London Branch, dated March 30, 2011, and related documents.	
		
  4.3	  	Indenture, dated as of January 20, 2011, among Cencosud S.A., as issuer, Cencosud Retail S.A., as guarantor, and The Bank of New York Mellon, as trustee, paying agent, registrar and transfer agent, and The Bank of New York Mellon (Luxembourg) S.A., as Luxembourg paying agent and Luxembourg transfer agent.	
		
  4.4	  	Indenture, dated as of December 6, 2012, among Cencosud S.A., as issuer, Cencosud Retail S.A., as guarantor, and The Bank of New York Mellon, as trustee, paying agent, registrar and transfer agent, and The Bank of New York Mellon (Luxembourg) S.A., as Luxembourg paying agent and Luxembourg transfer agent.	
		
  4.5	  	Credit Agreement, dated as of October 17, 2012, among Cencosud S.A., as borrower, the lenders party thereto, and JPMorgan Chase Bank, National Association, as Administrative Agent.	
		
  4.6	  	Share Purchase Agreement, dated as of October 18, 2012, between Carrefour Nederland B.V., Carrefour S.A. and Cencosud S.A.	
		
  4.7	  	English language summary of the 2013 Plan—Stock Option Plan, previously filed as exhibit 10.3 to the Company’s registration statement on Form F-1 and incorporated by reference herein.	
		
  4.8	  	English language summary of the Incentive Plan—Stock Option Plan, previously filed as exhibit 10.4 to the Company’s registration statement on Form F-1 and incorporated by reference herein.	
		
  4.9	  	English language summary of the Retention Plan—Stock Option Plan.	
		
  8.1	  	Subsidiaries of Cencosud S.A.	
		
12.1	  	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	
		
12.2	  	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	
		
13.1	  	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	
 
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 Index to the financial statements

 	  	Page	 	
		
Report of the Independent Registered Public Accounting Firm	  	 	F-2	  	
		
Consolidated Statements of Financial Position	  	 	F-3	  	
		
Consolidated Statements of Integral Income by Function	  	 	F-5	  	
		
Consolidated Statements of Comprehensive Income by Function	  	 	F-6	  	
		
Consolidated Statements of Changes in Net Equity	  	 	F-7	  	
		
Consolidated Statements of Cash Flows	  	 	F-9	  	
		
Notes to the Consolidated Financial Statements	  	 	F-10	  	
 
F-1

Table of Contents
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Cencosud S.A.
In our opinion, the accompanying consolidated statements of financial position and the related consolidated statements of integral income by function, comprehensive income, changes in net equity and cash flows present fairly, in all material respects, the financial position of Cencosud S.A. and its subsidiaries at December 31, 2012 and 2011, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2012 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audit of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers
Santiago, Chile
May 6, 2013
 
F-2

Table of Contents
 Cencosud S.A. and subsidiaries Consolidated statements of financial position

 	  	 	  	As of December 31,	 	
Assets	  	Note	  	2012	 	  	2011	 	
 	  	 	  	ThCh$	 	  	ThCh$	 	
				
Current assets	  		  				  				
Cash and cash equivalents	  	5	  	 	237,720,805	  	  	 	145,061,581	  	
Other financial assets, current	  	6	  	 	68,166,868	  	  	 	221,929,204	  	
Other non-financial assets, current	  	22	  	 	9,991,791	  	  	 	12,258,841	  	
Trade receivables and other receivables	  	8	  	 	1,060,332,866	  	  	 	929,868,791	  	
Receivables from related entities, current	  	9	  	 	323,624	  	  	 	82,334	  	
Inventory	  	10	  	 	926,761,585	  	  	 	769,472,451	  	
Current tax assets	  	16	  	 	31,269,885	  	  	 	6,962,369	  	

Total current assets	  		  	 	2,334,567,424	  	  	 	2,085,635,571	  	

Non-current assets	  		  				  				
Other financial assets, non-current	  	6	  	 	41,007,224	  	  	 	46,979,614	  	
Other non-financial assets, non-current	  	22	  	 	38,268,125	  	  	 	35,051,959	  	
Trade receivable and other receivables, non-current	  	8	  	 	142,306,161	  	  	 	194,443,515	  	
Equity method investment	  	11	  	 	42,272,108	  	  	 	38,830,440	  	
Intangible assets other than goodwill	  	12	  	 	544,511,965	  	  	 	526,687,793	  	
Goodwill	  	13	  	 	1,824,972,594	  	  	 	1,013,309,102	  	
Property, plant and equipment	  	14	  	 	2,977,837,830	  	  	 	2,228,528,801	  	
Investment property	  	15	  	 	1,471,343,789	  	  	 	1,310,143,075	  	
Non-current tax assets,	  	16	  	 	4,825,534	  	  	 	—  	  	
Deferred income tax assets	  	16	  	 	252,086,839	  	  	 	164,477,932	  	

Total non-current assets	  		  	 	7,339,432,169	  	  	 	5,558,452,231	  	

Total assets	  		  	 	9,673,999,593	  	  	 	7,644,087,802	  	
	  		  	 	 	 	  	 	 	 	
The accompanying notes are an integral part of these consolidated financial statements.
 
F-3

Table of Contents
Cencosud S.A. and subsidiaries Consolidated statements of financial position

 	  	 	  	As of December 31,	 	
Net equity and liabilities	  	Note	  	2012	 	 	2011	 	
 	  	 	  	ThCh$	 	 	ThCh$	 	
				
Current liabilities	  		  				 				
Other financial liabilities, current	  	17	  	 	1,179,131,616	  	 	 	597,877,250	  	
Trade payables and other payables	  	18	  	 	1,902,395,915	  	 	 	1,533,784,404	  	
Payables to related entities, current	  	9	  	 	974,469	  	 	 	1,447,631	  	
Provisions and other liabilities	  	19	  	 	42,623,763	  	 	 	17,980,677	  	
Current income tax liabilities	  	16	  	 	46,798,474	  	 	 	40,490,319	  	
Current provision for employee benefits	  	21	  	 	78,799,860	  	 	 	68,649,874	  	
Other non-financial liabilities, current	  	20	  	 	78,316,560	  	 	 	71,050,305	  	

Total current liabilities	  		  	 	3,329,040,657	  	 	 	2,331,280,460	  	

Non-current liabilities	  		  				 				
Other financial liabilities,	  	17	  	 	2,359,500,539	  	 	 	1,868,585,577	  	
Trade accounts payables	  	18	  	 	7,410,802	  	 	 	11,150,691	  	
Provisions and other liabilities	  	19	  	 	111,321,038	  	 	 	81,772,245	  	
Deferred income tax liabilities	  	16	  	 	397,605,514	  	 	 	317,970,794	  	
Other non–financial liabilities, non–current	  	20	  	 	70,909,299	  	 	 	82,721,789	  	

Total non-current liabilities	  		  	 	2,946,747,192	  	 	 	2,362,201,096	  	

Total liabilities	  		  	 	6,275,787,849	  	 	 	4,693,481,556	  	

Net equity	  		  				 				
Paid-in capital	  	23	  	 	1,551,811,762	  	 	 	927,804,431	  	
Retained earnings	  	23	  	 	1,852,745,697	  	 	 	1,660,432,903	  	
Issuance premium	  	23	  	 	477,341,095	  	 	 	477,341,095	  	
Other reserves	  	23	  	 	(484,364,409	) 	 	 	(202,722,478	) 	

Net equity attributable to controlling shareholders	  		  	 	3,397,534,145	  	 	 	2,862,855,951	  	
Non-controlling interest	  	23	  	 	677,599	  	 	 	87,750,295	  	

Total net equity	  		  	 	3,398,211,744	  	 	 	2,950,606,246	  	

Total net equity and liabilities	  		  	 	9,673,999,593	  	 	 	7,644,087,802	  	
	  		  	 	 	 	 	 	 	 	
The accompanying notes are an integral part of these consolidated financial statements.
 
F-4

Table of Contents
 Cencosud S.A. and subsidiaries Consolidated statements of integral income by function

 	  	 	  	For the year ended December 31,	 	
Statement of integral income	  	Note	  	2012	 	 	2011	 	 	2010	 	
 	  	 	  	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Revenues from ordinary activities	  	24	  	 	9,149,077,107	  	 	 	7,604,806,373	  	 	 	6,236,973,608	  	
Cost of Sales	  	25	  	 	(6,547,831,773	) 	 	 	(5,434,916,638	) 	 	 	(4,457,228,589	) 	

Gross Margin	  		  	 	2,601,245,334	  	 	 	2,169,889,735	  	 	 	1,779,745,019	  	
Other income by function	  	25	  	 	107,110,070	  	 	 	85,127,877	  	 	 	43,870,984	  	
Distribution cost	  	25	  	 	(20,233,594	) 	 	 	(15,017,899	) 	 	 	(11,362,548	) 	
Administrative expenses	  	25	  	 	(1,925,414,111	) 	 	 	(1,513,955,378	) 	 	 	(1,237,915,795	) 	
Other expenses by function	  	25	  	 	(176,173,759	) 	 	 	(140,400,227	) 	 	 	(121,795,565	) 	
Other gain (losses), net	  	25	  	 	1,332,431	  	 	 	(12,658,588	) 	 	 	10,771,983	  	
Financial income	  	25	  	 	8,110,468	  	 	 	10,984,101	  	 	 	16,922,479	  	
Financial expenses	  	25	  	 	(211,022,110	) 	 	 	(144,135,731	) 	 	 	(86,729,752	) 	
(Losses) from indexation	  	25	  	 	(25,915,449	) 	 	 	(31,288,530	) 	 	 	(15,656,615	) 	
Exchange differences	  	25	  	 	(2,679,798	) 	 	 	(9,876,115	) 	 	 	(2,052,778	) 	
Participation in profit or loss of equity method associates	  	11	  	 	5,639,716	  	 	 	5,778,560	  	 	 	7,513,999	  	

Profit before tax	  		  	 	361,999,198	  	 	 	404,447,805	  	 	 	383,311,411	  	
Income tax charge	  	26	  	 	(109,190,068	) 	 	 	(119,555,608	) 	 	 	(76,830,033	) 	

Profit from ongoing operations	  		  	 	252,809,130	  	 	 	284,892,197	  	 	 	306,481,378	  	

Profit attributable to controlling shareholders	  		  	 	249,958,615	  	 	 	274,332,941	  	 	 	296,261,227	  	
Profit attributable to non–controlling shareholders	  	23.6	  	 	2,850,515	  	 	 	10,559,256	  	 	 	10,220,151	  	

Net income	  		  	 	252,809,130	  	 	 	284,892,197	  	 	 	306,481,378	  	

Earnings per share	  		  				 				 				
Basic earnings per share	  	27	  	 	107.4	  	 	 	121.2	  	 	 	130.9	  	
Diluted earnings per share	  	27	  	 	106.4	  	 	 	120.0	  	 	 	129.6	  	
The accompanying notes are an integral part of these consolidated financial statements.
 
F-5

Table of Contents
 Cencosud S.A. and subsidiaries Consolidated statements of comprehensive income by function

 	  	For the year ended December 31,	 	
 	  	2012	 	 	2011	 	 	2010	 	
 	  	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Net income	  	 	252,809,130	  	 	 	284,892,197	  	 	 	306,481,378	  	

Other comprehensive income and expenses debited or credited in equity	  				 				 				
Foreign currency translation adjustments	  	 	(237,650,726	) 	 	 	80,199,792	  	 	 	(103,197,358	) 	
Cash flow hedge	  	 	16,862,328	  	 	 	5,808,527	  	 	 	(1,620,627	) 	
Income tax related to cash flow hedge presented in other comprehensive income	  	 	(3,372,466	) 	 	 	(987,450	) 	 	 	275,507	  	

Total other comprehensive income and expense	  	 	(224,160,864	) 	 	 	85,020,869	  	 	 	(104,542,478	) 	
Total comprehensive income and expense	  	 	28,648,266	  	 	 	369,913,066	  	 	 	201,938,900	  	

Comprehensive income and expense attributable to controlling shareholders	  	 	34,001,833	  	 	 	357,048,531	  	 	 	201,685,824	  	
Non-controlling shareholders	  	 	(5,353,567	) 	 	 	12,864,535	  	 	 	253,076	  	

Total comprehensive income and expense	  	 	28,648,266	  	 	 	369,913,066	  	 	 	201,938,900	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
The accompanying notes are an integral part of these consolidated financial statements.
 
F-6

Table of Contents
 Cencosud S.A. and subsidiaries
Consolidated statements of changes in net equity
For the year ended December 31, 2012

 	 	 	 	 	 	 	 	Other reserves	 	 	 	 	 	 	 	 	 	 	 	 	 	
Statement of changes in
net equity ThCh$	 	Paid-in
capital	 	 	Issuance
premiums	 	 	Translation
reserves	 	 	Hedge
reserves	 	 	Other
reserves	 	 	Total other
reserves	 	 	Changes in
retained earnings
(Accumulated
losses)	 	 	Changes in net
equity
attributable to
parent company
shareholders	 	 	Change in
non-
controlling
interest	 	 	Change in
net equity
total	 	
Opening balance as of January 1, 2012	 	 	927,804,431	  	 	 	477,341,095	  	 	 	(233,050,928	) 	 	 	9,825,606	  	 	 	20,502,844	  	 	 	(202,722,478	) 	 	 	1,660,432,903	  	 	 	2,862,855,951	  	 	 	87,750,295	  	 	 	2,950,606,246	  	

Changes in equity	 				 				 				 				 				 				 				 				 				 				
Comprehensive income	 				 				 				 				 				 				 				 				 				 				
Net income	 				 				 				 				 				 				 	 	249,958,615	  	 	 	249,958,615	  	 	 	2,850,515	  	 	 	252,809,130	  	
Other comprehensive income	 				 				 	 	(229,446,644	) 	 	 	13,489,862	  	 	 	—  	  	 	 	(215,956,782	) 	 				 	 	(215,956,782	) 	 	 	(8,204,082	) 	 	 	(224,160,864	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Comprehensive income	 				 				 	 	(229,446,644	) 	 	 	13,489,862	  	 	 	—  	  	 	 	(215,956,782	) 	 	 	249,958,615	  	 	 	34,001,833	  	 	 	(5,353,567	) 	 	 	28,648,266	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Share issuance	 	 	624,007,331	  	 				 				 				 	 	—  	  	 				 				 	 	624,007,331	  	 	 	—  	  	 	 	624,007,331	  	
Dividends	 				 				 				 				 				 				 	 	(57,645,821	) 	 	 	(57,645,821	) 	 				 	 	(57,645,821	) 	
Option (call–put) (see 23.5)	 				 				 				 				 	 	92,991,292	  	 	 	92,991,292	  	 				 	 	92,991,292	  	 				 	 	92,991,292	  	
Stock option (see 33)	 				 				 				 				 	 	2,297,559	  	 	 	2,297,559	  	 				 	 	2.297,559	  	 				 	 	2,297,559	  	
Decrease due to changes in ownership interest without a loss of control (see 23.5)	 				 				 				 				 	 	(160,974,000	) 	 	 	(160,974,000	) 	 	 	—  	  	 	 	(160,974,000	) 	 	 	(81,719,129	) 	 	 	(242,693,129	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total transactions with owners	 	 	624,007,331	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(65,685,149	) 	 	 	(65,685,149	) 	 	 	(57,645,821	) 	 	 	500,676,361	  	 	 	(81,719,129	) 	 	 	418,957,232	  	

Total Changes in equity	 	 	624,007,331	  	 	 	—  	  	 	 	(229,446,644	) 	 	 	13,489,862	  	 	 	(65,685,149	) 	 	 	(281,641,931	) 	 	 	192,312,794	  	 	 	534,678,194	  	 	 	(87,072,696	) 	 	 	447,605,498	  	

Ending balance, as of December 31, 2012	 	 	1,551,811,762	  	 	 	477,341,095	  	 	 	(462,497,572	) 	 	 	23,315,468	  	 	 	(45,182,305	) 	 	 	(484,364,409	) 	 	 	1,852,745,697	  	 	 	3,397,534,145	  	 	 	677,599	  	 	 	3,398,211,744	  	
 
F-7

Table of Contents
Cencosud S.A. and subsidiaries
Consolidated statements of changes in net equity
For the year ended December 31, 2011

 	 	 	 	 	 	 	 	Other reserves	 	 	 	 	 	 	 	 	 	 	 	 	 	
Statement of changes in net
equity ThCh$	 	Paid-in
capital	 	 	Issuance
premiums	 	 	Translation
reserves	 	 	Hedge
reserves	 	 	Other
reserves	 	 	Total other
reserves	 	 	Changes in
retained earnings
(Accumulated
losses)	 	 	Changes in net
equity
attributable to
parent company
shareholders	 	 	Change in
non-
controlling
interest	 	 	Change in
net equity
total	 	
Opening balance as of January 1, 2011	 	 	927,804,431	  	 	 	477,341,095	  	 	 	(310,945,441	) 	 	 	5,004,529	  	 	 	56,225,241	  	 	 	(249,715,671	) 	 	 	1,459,277,564	  	 	 	2,614,707,419	  	 	 	74,885,760	  	 	 	2,689,593,179	  	

Changes in equity	 				 				 				 				 				 				 				 				 				 				
Comprehensive income	 				 				 				 				 				 				 				 				 				 				
Net income	 				 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	274,332,941	  	 	 	274,332,941	  	 	 	10,559,256	  	 	 	284,892,197	  	
Other comprehensive income	 				 	 	—  	  	 	 	77,894,513	  	 	 	4,821,077	  	 	 	—  	  	 	 	82,715,590	  	 	 	—  	  	 	 	82,715,590	  	 	 	2,305,279	  	 	 	85,020,869	  	
Total Comprehensive income	 	 	—  	  	 	 	—  	  	 	 	77,894,513	  	 	 	4,821,077	  	 	 	—  	  	 	 	82,715,590	  	 	 	274,332,941	  	 	 	357,048,531	  	 	 	12,864,535	  	 	 	369,913,066	  	
Dividends	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(73,177,602	) 	 	 	(73,177,602	) 	 	 	—  	  	 	 	(73,177,602	) 	
Option (call–put) (see 3.1.5)	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(39,315,720	) 	 	 	(39,315,720	) 	 	 	—  	  	 	 	(39,315,720	) 	 	 	—  	  	 	 	(39,315,720	) 	
Stock option (see 33)	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	2,297,562	  	 	 	2,297,562	  	 	 	—  	  	 	 	2,297,562	  	 	 	—  	  	 	 	2,297,562	  	
Other increase (decrease) to net equity	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	1,295,761	  	 	 	1,295,761	  	 	 	—  	  	 	 	1,295,761	  	 	 	—  	  	 	 	1,295,761	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total transaction with owners	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(35,722,397	) 	 	 	(35,722,397	) 	 	 	(73,177,602	) 	 	 	(108,899,999	) 	 	 	—  	  	 	 	(108,899,999	) 	

Total Changes in equity	 	 	—  	  	 	 	—  	  	 	 	77,894,513	  	 	 	4,821,077	  	 	 	(35,722,397	) 	 	 	46,993,193	  	 	 	201,155,339	  	 	 	248,148,532	  	 	 	12,864,535	  	 	 	261,013,067	  	

Ending balance, as of December 31, 2011	 	 	927,804,431	  	 	 	477,341,095	  	 	 	(233,050,928	) 	 	 	9,825,606	  	 	 	20,502,844	  	 	 	(202,722,478	) 	 	 	1,660,432,903	  	 	 	2,862,855,951	  	 	 	87,750,295	  	 	 	2,950,606,246	  	
The accompanying notes are an integral part of these consolidated financial statements.
 
F-8

Table of Contents
 Cencosud S.A. and subsidiaries
Consolidated statements of cash flows

 	  	 	  	For the year ended December 31,	 	
 	  	Note	  	2012	 	 	2011	 	 	2010	 	
 	  	 	  	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
					
Cash flows from (used in) operating activities	  		  				 				 				
					
Types of revenues from operating activities	  		  				 				 				
Revenue from sale of goods & provision of services	  		  	 	10,742,663,679	  	 	 	8,989,150,451	  	 	 	7,202,531,895	  	
Proceeds from royalties, installments, commissions and other ordinary activities	  		  	 	1,521,785	  	 	 	6,436,783	  	 	 	7,529,045	  	
Receipts from premiums and claims, annuities and other policy benefits underwritten	  		  	 	63,957	  	 				 				
Other operating activity revenue	  		  	 	15,653,744	  	 	 	13,681,408	  	 	 	9,940,470	  	
					
Types of payments	  		  				 				 				
Payments to suppliers for supply of goods & services	  		  	 	(8,355,078,986	) 	 	 	(7,123,940,019	) 	 	 	(5,742,381,601	  	
Payments to and on behalf of personnel	  		  	 	(1,121,179,019	) 	 	 	(892,060,443	) 	 	 	(706,654,084	) 	
Other operating payments	  		  	 	(507,681,060	) 	 	 	(397,015,394	) 	 	 	(361,812,354	) 	
Interest paid	  		  	 	(1,123,089	) 	 	 	(663,380	) 	 	 	(623,120	) 	
Interest received	  		  	 	1,893,069	  	 	 	951,111	  	 	 	1,596,226	  	
Taxes paid	  		  	 	(80,948,678	) 	 	 	(40,466,963	) 	 	 	(7,877,320	) 	
Other cash inflows	  		  	 	22,929,217	  	 	 	11,665,063	  	 	 	4,924,892	  	

Net cash flow from operating activities	  		  	 	718,714,619	  	 	 	567,738,617	  	 	 	407,174,049	  	

Cash flows from (used in) investment activities	  		  				 				 				
Acquisition of subsidiaries	  		  	 	(1,292,423,533	) 	 	 	(21,576,346	) 	 	 	(299,091,574	) 	
Proceeds from sales of property, plant & equipment	  		  	 	22,153,794	  	 	 	2,312,314	  	 	 	6,100,620	  	
Purchases of property, plant & equipment	  		  	 	(575,227,695	) 	 	 	(616,336,080	) 	 	 	(349,793,314	) 	
Purchases of intangible assets	  		  	 	(19,857,531	) 	 	 	(5,732,991	) 	 	 	(687,638	) 	
Dividends received	  		  	 	2,002,606	  	 	 	1,323,919	  	 	 	1,067,722	  	
Interest received	  		  	 	3,362,729	  	 	 	1,964,159	  	 	 	4,356,196	  	
Other financial assets—mutual funds	  		  	 	(13,578,037	) 	 	 	14,292,145	  	 	 	224,371,757	  	

Net cash flow (used in) investment activities	  		  	 	(1,873,567,667	) 	 	 	(623,752,880	) 	 	 	(413,676,231	) 	

Cash flows from (used in) financing activities	  		  				 				 				
Acquisition of non-controlling interests (see note 23.5)	  		  	 	(242,681,460	) 	 	 	—  	  	 	 	—  	  	
Proceeds from paid in capital	  		  	 	632,987,359	  	 	 	—  	  	 	 	—  	  	
Proceeds from borrowing at long–term	  		  	 	2,148,614,022	  	 	 	1,345,483,375	  	 	 	613,669,344	  	
Proceeds from borrowing at short–term	  		  	 	3,273,570,701	  	 	 	530,825,961	  	 	 	284,090,114	  	

Total loan proceeds from borrowing	  		  	 	5,812,490,622	  	 	 	1,876,309,336	  	 	 	897,759,458	  	
Repayments of borrowing	  		  	 	(4,332,996,508	) 	 	 	(1,584,962,486	) 	 	 	(748,681,563	) 	
Dividends paid	  		  	 	(53,259,383	) 	 	 	(78,468,618	) 	 	 	(54,928,398	) 	
Interest paid	  		  	 	(171,177,287	) 	 	 	(123,271,067	) 	 	 	(85,890,976	) 	
Other cash outflows	  		  	 	(8,980,028	) 	 	 	—  	  	 	 	(3,172,882	) 	

Net cash flow from financing activities	  		  	 	1,246,077,416	  	 	 	89,607,165	  	 	 	5,085,639	  	
	  		  	 	 	 	 	 	 	 	 	 	 	 	
Net increase in cash and cash equivalents before the effect of variations	  		  	 	91,224,368	  	 	 	33,592,902	  	 	 	(1,416,543	) 	
					
Effects of variations in the exchange rate on cash and cash equivalents	  		  	 	1,434,856	  	 	 	3,346,395	  	 	 	4,943,093	  	
	  		  	 	 	 	 	 	 	 	 	 	 	 	
Net increase in cash and cash equivalents	  		  	 	92,659,224	  	 	 	36,939,297	  	 	 	3,526,550	  	
Cash and cash equivalents at the beginning of the year	  	5	  	 	145,061,581	  	 	 	108,122,284	  	 	 	104,595,734	  	
	  		  	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents at the end of the year	  	5	  	 	237,720,805	  	 	 	145,061,581	  	 	 	108,122,284	  	
The accompanying notes are an integral part of these consolidated financial statements.
 
F-9

Table of Contents
 Cencosud S.A. and subsidiaries
Notes to the consolidated financial statements
 
1	General information	
Cencosud S.A. (hereinafter “Cencosud Group,” “the Company,” “the Holding,” “the Group”) taxpayer ID number 93.834.000-5 is a public corporation with an indefinite life, with its legal residence at Avda. Kennedy 9001, 4th floor, Las Condes, Santiago, Chile.
Cencosud S.A. is a public company registered with the Chilean Superintendency of Securities and Insurance (SVS), under No.743, whose shares are quoted in Chile on the Stock Brokers-Stock Exchange (Valparaíso), the Chilean Electronic Stock Exchange and the Santiago Stock Exchange; it is also quoted on the United States of America Stock Exchange (“NYSE”) in New York in the form of American Depositary Receipts (ADRs).
Cencosud S.A. is a retail operator in Latin America, which has active operations in Chile, Argentina, Brazil, Colombia and Peru, where it has developed a successful multi-format and multi-brand strategy reaching sales of ThCh$ 9,149,077,107
During the period ended December 31, 2012, the Company employed an average of 142,675 employees, ending with a total number of 157,967 employees.
The Company’s operations include supermarkets, hypermarkets, home improvement stores, department stores, shopping centers, as well as real estate development and financial services, which makes it the most diversified retail company of Latin-American capital in South America with the biggest offering of square meters, it caters to the consumption needs of over 180 million customers.
Additionally, it operates other lines of business that complement the main retail operations, such as insurance brokerage, a travel agency, customer loyalty services and family entertainment centers. All of these services have gained recognition and prestige among customers, with brands that excel at quality and service.
The Company splits its equity among 2,507,103,215 shares of a single series whose main shareholders are the following:

Major shareholders as of December 31, 2012	  	Shares	 	  	Interest	 	
 	  	 	 	  	%	 	
Inversiones Quinchamali Limitada	  	 	581,754,802	  	  	 	23.204	  	
Inversiones Latadia Limitada	  	 	550,823,211	  	  	 	21.970	  	
Inversiones Tano Limitada	  	 	290,063,696	  	  	 	11.570	  	
Banco de Chile third-party accounts	  	 	97,095,309	  	  	 	3.873	  	
Banco Santander—JP Morgan	  	 	47,012,905	  	  	 	1.875	  	
Paulmann Kemna Horst	  	 	56,004,798	  	  	 	2.234	  	
Banco Itaú third-party accounts	  	 	93,242,539	  	  	 	3.719	  	
Fondo de Pendiones Provida C	  	 	50,933,781	  	  	 	2.032	  	
BanChile Corredores de Bolsa S.A.	  	 	41,469,487	  	  	 	1.654	  	
Fondo de Pensiones Habitat C	  	 	41,399,718	  	  	 	1.651	  	
Fondo de Pensiones Capital C	  	 	34,824,014	  	  	 	1.389	  	
Fondo de Pensiones Habitat B	  	 	36,566,841	  	  	 	1.459	  	
Other Shareholders	  	 	585,912,114	  	  	 	23.370	  	

Total	  	 	2,507,103,215	  	  	 	100.000	  	

F-10

Table of Contents
The Cencosud group is controlled by the Paulmann family, as detailed below:

Interest of Paulmann family as of December 31, 2012	  	Interest	 	
 	  	%	 	
Inversiones Quinchamalí Limitada	  	 	23.204	  	
Inversiones Latadía Limitada	  	 	21.971	  	
Inversiones Tano Limitada	  	 	11.570	  	
Paulmann Kemna Horst	  	 	2.234	  	
Manfred Paulmann Koepfer	  	 	0.555	  	
Peter Paulmann Koepfer	  	 	0.561	  	
Heike Paulmann Koepfer	  	 	0.555	  	
Helga Koepfer Schoebitz	  	 	0.130	  	
Inversiones Alpa Limitada	  	 	0.010	  	

Total	  	 	60.79	  	
	  	 	 	 	
The consolidated financial statements of Cencosud group corresponding to the year ended December 31, 2012, were approved by the Board of Directors in a session held on May 6, 2013.
 
2	Summary of the main accounting policies	
 
2.1	Presentation basis	
The consolidated financial statements of Cencosud S.A. have been prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB).
The consolidated financial statements have been prepared under the historic-cost basis, as modified by the revaluation at fair value of certain financial instruments, derivative instruments and investment property.
The presentation of the financial statements in conformity with IFRS requires the use of certain accounting estimates, and also requires Management to exercise its judgment in the process of applying the Company’s accounting policies. Note 4 to these financial statements shows the areas in which a greater level of judgment has been applied, or where there is a higher level of complexity and therefor hypothesis and estimates are material to the financial statements.
The amounts in the attached financial statements are expressed in thousands of Chilean pesos, as the Chilean peso is the functional and presentation currency of the Company. All values have been rounded to the nearest thousand of pesos, except where mentioned.
 
F-11

Table of Contents

2.2	New and amended standards adopted by the group	
There are no IFRS or IFRIC interpretations that are effective for the first time for the financial year beginning on or after January 1, 2012, that would be expected to have a material impact on the group.
The following are the new standards interpretations and amendments that have been issued but are not in force for the 2012 period and for which early adoption has not been exercised.

Standards and Interpretations	  	Mandatory for annual
periods beginning	
		
IAS 19 Revised “Employee Benefits”
Issued in June 2012, it replaces IAS 19 (1998). This revised standard modifies the recognition and measurement of expenses for defined benefit plans and termination benefits. In addition, it includes modifications to disclosures of all employee benefits.	  	01/01/2013	
		
IAS 27 “Separate Financial Statements”
Issued in May 2012, it replaces IAS 27 (2008). The scope of this standard is restricted by this modification to only in the individual financial statements, because the aspects related to the definition of control and consolidation were removed and included in IFRS 10. Its early adoption is permitted together with IFRS 10, IFRS 11 and IFRS 12, as well as the modification to IAS 28.	  	01/01/2013	
		
IFRS 9 “Financial Instruments”
Issued in December 2009, it modifies the classification and measurement of financial assets. This standard was later modified in November 2011 to include the treatment and classification of financial liabilities. Early adoption is permitted.	  	01/01/2013 This standard was Modified in December 2012 and its application has been deferred until January 1st 2015.	
		
IFRS 10 “Consolidated Financial Statements”
Issued in May 2012, it replaces SIC 12 “Consolidation of Special Purpose Entities” and parts of IAS 27 “Consolidated Financial Statements.” It establishes clarifications and new parameters for the definition of control, as well as the principles for preparing consolidated financial statements. Its early adoption is permitted together with IFRS 11 and IFRS 12, as well as the modifications to IAS 27 and 28.	  	01/01/2013	
		
IFRS 11 “Joint Arrangements”
Issued in May 2012, it replaces IAS 31 “Interests in Joint Ventures” and SIC 13 “Jointly Controlled Entities.” Its modifications include eliminating the concept of jointly controlled assets and the possibility of proportionate consolidation for jointly controlled entities. Its early adoption is permitted together with IFRS 10 and IFRS 12, as well as the modifications to IAS 27 and 28.	  	01/01/2013	
		
IFRS 12 “Disclosures of Interests in Other Entities”
Issued in May 2012, it applies to those entities that hold investments in subsidiaries, joint ventures and associates. Its early adoption is permitted together with IFRS 10 and IFRS 11, as well as the modifications to IAS 27 and 28.	  	01/01/2013	
		
IFRS 13 “Fair Value Measurement”
Issued in May 2012, it unifies the standards for measuring how the fair value of assets and liabilities should be measured and the necessary disclosures, and incorporates new concepts and clarifications for their measurement.	  	01/01/2013	
		
IAS 28 “Investments in Associates and Joint Ventures”
Issued in May 2012, it regulates the accounting treatment of these investments by applying the equity method. Its early adoption is permitted together with IFRS 10, IFRS 11 and IFRS 12, as well as the modification to IAS 27.	  	01/01/2013	
 
F-12

Table of Contents

Standards and Interpretations	  	Mandatory for annual
periods beginning	
		
IFRS 7 “Financial Instruments: Disclosures”
Issued in December 2011. Improve disclosures required compensation current assets and liabilities, with the aim of increasing convergence between IFRS and U.S. GAAP. These revelations are focused on quantitative information on financial instruments recognized offset in the Statement of Financial Position. Early adoption is permitted.	  	01/01/2013	
		
IAS 32 “Financial Instruments: Presentation”
Issued in December 2011. Clarifies the requirements for offsetting financial assets and liabilities in the Statement of Financial Position. Specifically, the law states that compensation should be available to the reporting date and not depend on a future event. It also indicates that it must be legally binding upon both counterparties in the normal course of business, as well as in the case of default, insolvency or bankruptcy. Early adoption is permitted	  	01/01/2014	
Management is evaluating the possible implication of the aforementioned standards coming into force.
Management has evaluated the standard coming into force for the annual period beginning 2013, and has concluded that there is no impact in the financial statements.
 
2.3	Consolidation basis	
 
2.3.1	Subsidiaries	
Subsidiaries are all those entities over which the Group has power to govern the financial and operational policies, generally participating with a shareholding of more than one half of the voting rights. At the time of evaluating whether the Group controls another entity or not, consideration is given to the existence and effect of the potential voting rights currently in force.
Subsidiaries are consolidated from the moment when control is transferred to the Group, and are excluded from the consolidation on the date control ceases.
The group also assesses existence of control where it does not have more than 50% of the voting power but is able to govern the financial and operating policies by virtue of de-facto control. De-facto control may arise in circumstances where the size of the group’s voting rights relative to the size and dispersion of holdings of other shareholders give the group the power to govern the financial and operating policies, etc.
The purchase method is used to account for the acquisition of subsidiaries by the Group. The acquisition cost is the fair value of the assets transferred, of the equity instruments issued and of the liabilities incurred or assumed on the transaction date. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. The identifiable assets, liabilities, and contingencies assumed in a business combination are initially measured at their fair value as of the acquisition date, independent of the scope of the non-controlling interest. The excess of the acquisition cost over the fair value of the Group’s interest in the identifiable net assets acquired is recognized as goodwill. If the acquisition cost is lower than the acquired subsidiary’s net assets fair value, the difference is charged to income.
The unrealized profits and balances are eliminated from the intercompany transactions. The unrealized losses are also eliminated unless the transaction shows evidence of a loss due to impairment of a transferred asset. Whenever necessary, in order to ensure the consistency of the policies adopted by the Group, the accounting policies of the subsidiaries and affiliates are modified.
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions—that is, as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the associate is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.
 
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Table of Contents
When the group ceases to have control any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognized in profit or loss. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss.
 
2.3.2	Associates or related entities	
Associates or related entities are those entities where the Group has a significant influence but not control, which is generally reflected in an interest between 20% and 50% of the voting rights. The investments in associates or related entities are accounted for using the equity method and are initially recognized at cost. The investment of the Group in associates or related entities includes the goodwill of the acquisition, net of any accumulated impairment loss.
The Group’s interest in the gains or losses which occurred after the acquisition of its associates or related entities is charged to income, and its participation in the equity changes subsequent to the acquisition that do not correspond to income are allocated to the corresponding equity reserves (and are presented accordingly in the statement of other integral income).
When the Group’s interest in the losses of an associate or related entity is equal to or higher than its interest—including any other uninsured accounts receivable—the Group does not recognize additional losses, unless it has incurred liabilities or payments on behalf of the associate or related entity.
Unrealized profits on transactions between the Group and its associates or related entities are eliminated to the extent of the Group’s interest in such entities. The unrealized losses are also eliminated unless the transaction provides evidence of impairment loss of the asset transferred. Whenever necessary to ensure consistency within the Group’s policy, the accounting policies of the associates are modified.
Dilution gains or losses in associates or related entities are recognized in the statement of income.
The group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognizes the impact in the statement of income.
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions—that is, as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the associate is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.
 
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Table of Contents

2.4	Subsidiary entities	
 
2.4.1	Directly consolidated entities	
The detail of the subsidiaries included in consolidation is as follows:

 	  	 	  	 	  	Interest percentage	 	
 	  	 	  	 	  	12/31/2012	 	  	12/31/2011	 	  	12/31/2010	 	
Country	  	Tax ID
Number	  	Company name	  	Direct	 	  	Indirect	 	  	Total	 	  	Total	 	  	Total	 	
 	  	 	  	 	  	%	 	  	%	 	  	%	 	  	%	 	  	%	 	
Chile	  	81.201.000-K	  	Cencosud Retail S.A.	  	 	98.184	  	  	 	1.7761	  	  	 	99.9609	  	  	 	99.9557	  	  	 	99.9735	  	
Chile	  	96.671.750-5	  	Easy S.A.	  	 	99.5750	  	  	 	0.0000	  	  	 	99.5750	  	  	 	99.5750	  	  	 	99.5750	  	
Chile	  	99.500.840-8	  	Cencosud Administradora de Tarjetas S.A.	  	 	99.9929	  	  	 	0.0071	  	  	 	100.0000	  	  	 	100.0000	  	  	 	100.0000	  	
Chile	  	76.568.660-1	  	Cencosud Administradora de Procesos S.A.	  	 	99.9928	  	  	 	0.0072	  	  	 	100.0000	  	  	 	100.0000	  	  	 	100.0000	  	
Chile	  	96.978.180-8	  	Cencosud Internacional Ltda.	  	 	74.8487	  	  	 	25.1476	  	  	 	99.9963	  	  	 	99.9957	  	  	 	99.9957	  	
Chile	  	94.226.000-8	  	Cencosud Shopping Centers S.A.	  	 	99.9999	  	  	 	0.0000	  	  	 	99.9999	  	  	 	99.9999	  	  	 	99.9999	  	
Chile	  	78.410.310-2	  	Comercial Food And Fantasy Ltda.	  	 	90.0000	  	  	 	0.0000	  	  	 	90.0000	  	  	 	90.0000	  	  	 	90.0000	  	
Chile	  	76.433.310-1	  	Costanera Center S.A.	  	 	99.9999	  	  	 	0.0000	  	  	 	99.9999	  	  	 	99.9999	  	  	 	99.9999	  	
Chile	  	76.476.830-2	  	Circulo Mas S.A.	  	 	99.0000	  	  	 	1.0000	  	  	 	100.0000	  	  	 	100.0000	  	  	 	100.0000	  	
Chile	  	99.565.970-0	  	Banco Paris S.A.	  	 	98.8900	  	  	 	1.1100	  	  	 	100.0000	  	  	 	100.0000	  	  	 	100.0000	  	
Chile	  	83.123.700-7	  	Mercado Mayorista P y P Ltda.	  	 	90.0000	  	  	 	0.0000	  	  	 	90.0000	  	  	 	90.0000	  	  	 	90.0000	  	
Chile	  	76.181.388-9	  	Cencosud Tiendas	  	 	100.0000	  	  	 	0.0000	  	  	 	100.0000	  	  	 	100.0000	  	  	 	0.0000	  	
China	  	Extranjera	  	Cencosud (Shangai) Trading CO, Ltda.	  	 	100.0000	  	  	 	0.0000	  	  	 	100.0000	  	  	 	100.0000	  	  	 	0.0000	  	
During 2011, the Company incorporated a subsidiary in China called Cencosud Shanghai Trading Co, Ltd. whose main purpose it is to support the commercial management regarding the importation of goods.
 
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2.4.2	Indirect consolidation entities	
The financial statements of consolidated subsidiaries also include the following companies:

Country	  	Tax ID number	  	Company name	
Chile	  	81.201.000-K	  	Cencosud Retail S.A.	
Chile	  	76.365.580-6	  	Jumbo Administradora Norte S.A.	
Chile	  	99.566.580-8	  	Jumbo Administradora S.A.	
Chile	  	99.571.870-7	  	Jumbo Administradora Temuco S.A.	
Chile	  	76.819.580-3	  	Santa Isabel Administradora Norte Ltda.	
Chile	  	76.819.500-5	  	Santa Isabel Administradora Sur Ltda.	
Chile	  	76.062.794-1	  	Santa Isabel Administradora S.A.	
Chile	  	88.637.500-K	  	Paris Administradora Norte Ltda.	
Chile	  	78.448.780-6	  	Paris Administradora Sur Ltda.	
Chile	  	77.313.160-0	  	Paris Administradora Centro Ltda.	
Chile	  	77.779.000-5	  	Paris Administradora Ltda.	
Chile	  	77.301.910-K	  	Logística y Distribución Paris Ltda.	
Chile	  	77.251.760-2	  	Jumbo Supermercados administradora ltda..	
Chile	  	77.218.570-7	  	Cencosud Corredores de Seguros y Servicios Ltda.	
Chile	  	77.312.480-9	  	Administradora de Servicios Paris Ltda.	
Chile	  	99.586.230-1	  	Viajes Paris S.A.	
Chile	  	79.829.500-4	  	Eurofashion Ltda.	
Chile	  	96.671.750-5	  	Easy S.A.	
Chile	  	76.365.590-3	  	Easy Administradora Norte S.A.	
Chile	  	99.500.840-8	  	Cencosud Administradora de Tarjetas S.A.	
Chile	  	76.023.825-2	  	Cencosud Servicios Integrales S.A.	
Chile	  	94.226.000-8	  	Cencosud Shopping Centers S.A.	
Chile	  	88.235.500-4	  	Sociedad Comercial de Tiendas S.A.	
Chile	  	84.658.300-9	  	Inmobiliaria Bilbao Ltda.	
Chile	  	78.409.990-8	  	ACC Alto las Condes Ltda.	
Chile	  	76.433.310-1	  	Costanera Center S.A.	
Chile	  	96.732.790-5	  	Inmobiliaria Santa Isabel S.A.	
Chile	  	99.565.970-0	  	Banco Paris S.A.	
Chile	  	76.099.893-1	  	Banparis Corredores de Seguros Ltda.	
Chile	  	76.181.388-9	  	Cencosud Tiendas S.A.	
Chile	  	76.116.801-3	  	Administradora TMO S.A.	
Chile	  	76.168.900-2	  	Meldar Capacitación Ltda.	
Chile	  	77.566.430-4	  	Sociedad Comercializadora de Vestuarios FES Ltda.	
Chile	  	99.512.750-4	  	MegaJohnsons Puente Alto S.A.	
Chile	  	96.953.470-3	  	MegaJohnsons S.A.	
Chile	  	96.973.670-5	  	MegaJohnsons Maipú S.A.	
Chile	  	96.988.680-4	  	MegaJohnsons Puente S.A.	
Chile	  	96.989.640-0	  	MegaJohnsons Viña del Mar S.A.	
Chile	  	96.988.700-2	  	MegaJohnsons Administradora S.A.	
Chile	  	96.988.690-1	  	MegaJohnsons Quilin S.A.	
Chile	  	76.398.410-9	  	Johnsons Mega San Bernardo S.A.	
Chile	  	96.978.180-8	  	Cencosud Internacional Ltda.	
Chile	  	76.190.379-9	  	Cencosud Detail Administradora Ltda.	
 
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Country	  	Tax ID number	  	Company name	
Argentina	  	Foreign	  	Cencosud S.A. (Argentina)	
Argentina	  	Foreign	  	Unicenter S.A.	
Argentina	  	Foreign	  	Jumbo Retail Argentina S.A.	
Argentina	  	Foreign	  	Agrojumbo	
Argentina	  	Foreign	  	Blaisten S.A.	
Argentina	  	Foreign	  	Corminas S.A.	
Argentina	  	Foreign	  	Invor S.A.	
Argentina	  	Foreign	  	Pacuy S.A.	
Argentina	  	Foreign	  	Cavas y Viñas El Acequion S.A.	
Argentina	  	Foreign	  	Carnes Huinca S.A.	
Argentina	  	Foreign	  	Supermercados Dave S.A.	
Argentina	  	Foreign	  	Agropecuaria Anjullon S.A.	
Argentina	  	Foreign	  	Cencosud Viajes S.A.	
Uruguay	  	Foreign	  	SUDCO Servicios Regionales S.A.	
Colombia	  	Foreign	  	Easy Colombia S.A.	
Colombia	  	Foreign	  	Grandes Superficies de Colombia S.A.	
Colombia	  	Foreign	  	Supermerdados Mayoristas S.A.	
Netherlands	  	Foreign	  	Colombia Holding Alpha BV	
Netherlands	  	Foreign	  	Thalie BV	
Netherlands	  	Foreign	  	Calliope BV	
Netherlands	  	Foreign	  	Uranie BV	
Netherlands	  	Foreign	  	Coledim BV	
Brazil	  	Foreign	  	Cencosud Brasil S.A.	
U.S.A.	  	Foreign	  	Gbarbosa Holding LLC	
Brazil	  	Foreign	  	Gbarbosa Holding S.A.	
Brazil	  	Foreign	  	Gbarbosa Comercial Ltda.	
Brazil	  	Foreign	  	Mercantil Rodríguez Comercial Ltda.	
Brazil	  	Foreign	  	Perini Comercial de Alimentos Ltda.	
Brazil	  	Foreign	  	Prezunic Ltda.	
Peru	  	Foreign	  	Cencosud Perú	
Peru	  	Foreign	  	Teledistribución S.A.	
Peru	  	Foreign	  	Almacenes Metro S.A.	
Peru	  	Foreign	  	E. Wong S.A.	
Peru	  	Foreign	  	Hipermercados Metro S.A.	
Peru	  	Foreign	  	Tres Palmeras S.A.	
Peru	  	Foreign	  	Las Hadas Inversionistas S.A.	
Peru	  	Foreign	  	Cinco Robles SAC	
Peru	  	Foreign	  	ISMB Supermercados S.A.	
Peru	  	Foreign	  	Travel International Partners Perú S.A.	
Peru	  	Foreign	  	Banco Cencosud S.A.	
Peru	  	Foreign	  	Loyalty Peru SAC.	
 
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2.5	Foreign currency transaction	
 
2.5.1	Functional and presentation currency	
Each entity included in these consolidated financial statements is measured using its functional currency, which is the currency of the main economic environment where the entity operates. The consolidated financial statements are presented in Chilean pesos.
In the case of international investments, the functional currency of each company has been defined as the local currency, as the business has a local focus and it is involved in the retail business.
The functional currency of each subsidiary were the Group operates is:

Country	  	Functional currency	
Chile	  	Chilean peso	
Argentina	  	Argentine peso	
Brazil	  	Brazilian Real	
Peru	  	Peruvian Nuevo Sol	
Colombia	  	Colombian peso	
China	  	Yuan	
If the presentation currency differs from the functional currency of the entity, this entity must translate its results and financial position to the selected presentation currency, which in this case is the Chilean peso.
 
2.5.2	Transactions and balances	
Transactions in foreign currency and adjustable units (“Unidad de Fomento” or “UF”) are recorded at the exchange rate of the corresponding currency or adjustable unit as of the date on which the transaction complies with the requirements for its initial acknowledgement. The UF is a Chilean inflation-indexed, peso-denominated monetary unit. The UF rate is set daily in advance based on changes in the previous month’s inflation rate. At the close of each statement of financial position the monetary assets and liabilities denominated in foreign currencies and adjustable units are translated into Chilean pesos at the exchange rate of the corresponding currency or adjustable unit. The exchange difference arising, both from the liquidation of foreign currency operations, as well as from the valuation of foreign currency monetary assets and liabilities, and the difference arising from the changes in adjustable units are recorded in the statement of income.
Transactions in foreign currency will be translated to the functional currency using the exchange rates in effect at the time of each transaction. Gains and losses in foreign currency that result from the liquidation of the transactions and from the translation at the current exchange rates at the closing of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of income.
Exchange rates
The assets and liabilities held in foreign currency and those set in UF (indexation unit), are presented at the following exchange rates and closing values:

Date	  	Ch$/US$	 	  	$Ch/Uf	 	  	$Ch/$ Ar$	 	  	$Ch/Colombian$	 	  	$Ch/
Peruvian
nuevo sol	 	  	$Ch/
Brasilian
real	 	  	$CL/
Chinese
yuan	 	
12-31-2012	  	 	479.96	  	  	 	22,840.75	  	  	 	97.70	  	  	 	0.27	  	  	 	188.15	  	  	 	234.98	  	  	 	77.02	  	
12-31-2011	  	 	519.20	  	  	 	22,294.03	  	  	 	120.74	  	  	 	0.27	  	  	 	193.27	  	  	 	278.23	  	  	 	82.48	  	
12-31-2010	  	 	468.01	  	  	 	21,455.55	  	  	 	117.78	  	  	 	0.25	  	  	 	166.79	  	  	 	281.31	  	  	 	70.84	  	
12-31-2009	  	 	507.10	  	  	 	20,942.88	  	  	 	133.48	  	  	 	0.25	  	  	 	175.65	  	  	 	290.94	  	  	 	74.30	  	
 
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Group entities
The results and financial position of all the entities of Cencosud Group (none is in a hyperinflationary economy), that have a functional currency different than the presentation currency, are translated to the presentation currency as follows:
 
a.	Assets, liabilities and equity of each statement of financial position are translated at the closing exchange rate of the closing date of the accounting period.	
 
b.	Revenues and expenses of each statement of income are translated at average exchange rate (unless this average does not represent a reasonable approximation of the accumulative effect of the rates existing on the transaction dates, in which case income and expenses are translated at the exchange rate of the date of the transaction); and	
 
c.	All the resulting exchange differences are recognized in other comprehensive income.	
On consolidation, the exchange rate differences arising from the translation of a net investment in foreign operations (or national entities with a functional currency that is different than the holding company), are recorded in net equity. When an investment is sold or disposed of (in part or entirely), exchange differences are recorded in the statement of income as part of the gain or loss on sale.
Adjustments to goodwill and to fair value of the assets and liabilities arising from the acquisition of a foreign entity (or entity with a functional currency different to that of the holding company) are treated as assets and liabilities of the foreign entity and translated at the closing exchange rate.
 
2.6	Financial information of operating segments.	
Segment information is reported in a manner consistent with the internal reports delivered to those responsible for making the relevant operating decisions. Such executives are in charge of allocating resources and assessing the performance of the operating segments, which have been identified as:
Supermarkets, department stores, home improvement stores, shopping centers, financial services and other for which the strategic decisions are made.
This information is detailed in Note 28.
 
2.7	Property, plant and equipment.	
Property, plant and equipments are measured at the acquisition cost, which includes the additional costs incurred until the asset is in operating condition, less the accumulated depreciation and the impairment losses.
Impairment losses are recorded as expenses in the Company’s consolidated statements of comprehensive income by function.
Depreciation is recorded in the statement of income following the straight line method considering the useful life of the different components.
Leasehold improvements are amortized over the shorter of useful life or the duration of lease agreements.
The Group reviews the residual value, useful life and depreciation method of the property, plant and equipment as of each reporting period. Modifications in the initially set criteria are recognized, according to the situation, as a change in an estimate.
Periodic expenses related to maintenance, conservation and repairs are recorded in the consolidated statements of integral income by function as incurred.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to income during the financial period in which they are incurred.
 
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2.8	Investment property.	
Investments properties are assets maintained to generate income through lease which corresponds to land, buildings, work in progress and other constructions which are held to be leased or for a capital appreciation as a result of the increases occur in the future in their respective market prices. Investment properties are initially recognized at acquisition cost which mainly includes its purchase price and any directly attributable expenditure. The group has chosen as its accounting policy for subsequent valuations of these assets the fair value model, using the methodology of discounting the future cash flows to an appropriate discount rate. The Management estimated at each statement of financial position variations of this value, according to the discounted cash flow model. Gains and losses arising from changes in fair value of investment properties are included in the income statement as they occur and are not subject to annual depreciation. The results generated by the revaluation, not part of the taxable income and tax are excluded in determining the distributable net result in the determination of interim dividends.
 
2.9	Intangible assets.	
 
2.9.1	General.	
Intangible assets are those non monetary assets without physical substance that are susceptible of being singled-out and identified, either because they are separable or because they arise from a legal or a contractual right. The only intangible assets recorded in the statement of financial position are those assets whose cost can be measured in a reliable way (or identified and recorded at fair value in a business combination) and those that the Group expects will generate future economic benefits.
In the case of intangible assets with an indefinite useful life, the Company considers that these maintain their value constantly over time, and therefore are not amortizable. However, these are tested for impairment annually, or more frequently, if events or changes in circumstances indicate a potential impairment.
 
2.9.2	Goodwill.	
The goodwill represents the excess of the acquisition cost over the fair value of the Group’s interest in the identifiable net assets of the subsidiary/associate as of the date of acquisition. Goodwill related to subsidiary acquisitions is included under intangible assets. Goodwill related to acquisitions of associates is included under investments in associates, and is tested for impairment along with the total balance of the associate.
Goodwill is not amortized; it is subsequently measured at cost less accumulated impairment losses and is tested for impairment annually. To perform this analysis, goodwill is allocated among the cash generating units that are expected to benefit from the business combination that generated the goodwill, and an estimation of the recoverable amount of the cash generating units through the method of the discounted cash flows estimated for each of the cash generating units. If the recoverable amount of any of the cash generating units is lower than the discounted cash flows, a loss should be recorded to income for the period. A loss from impairment of goodwill cannot be reversed in subsequent periods.
Goodwill impairment reviews are undertaken annually, or more frequently if events or changes in circumstances indicate a potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs to sell. Any impairment is recognized immediately as an expense.
Gains and losses related to the sale of an entity include the book value of the goodwill related to the sold entity.
 
2.9.3	Commercial brands.	
Commercial brands correspond to intangible assets of indefinite useful life that are shown at its historic cost, less any impairment loss. Trademarks acquired in a business combination are recognized at fair value at the acquisition date. These assets are subject to impairment tests annually or more frequently when events indicate that impairment may exist.
 
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2.9.4	Information technology and licenses.	
The licenses and database for information technology that have been acquired are capitalized at the cost incurred in the purchase plus the cost of implementation of the specific application. These expenses are amortized over the estimated useful life.
The corresponding development and maintenance expense of information technology are recorded as an expense of the period. Costs directly related with the production of unique and identifiable information technology that are controlled by the Group, and that may generate economical benefits that exceed the costs for over a year, are recognized as intangible assets. The direct costs include the expenses related to the personnel developing the application.
Development costs of technology recognized as assets are amortized over their estimated useful life.
 
2.10	Borrowing costs.	
General and specific borrowing costs directly attributable to the acquisition, construction or production of any qualified assets as described in Notes 2.7 and 2.8, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until the assets are ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
All other borrowing costs are recognized in profit or loss in the period in which they are incurred.
 
2.11	Impairment loss of non-financial assets.	
The assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment. The assets subject to amortization are reviewed for impairment tests whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
To test if the assets have suffered an impairment of value, the Group compares the book value of the assets with their recoverable amount and recognizes an impairment loss for the excess of the book value over its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.
Non-financial assets other than goodwill that have experienced an impairment loss are subject to subsequent impairment reviews as of each statements of financial position closing date in case a reversal of the loss may have occurred. If this situation occurs, the recoverable amount of the specific asset is recalculated and its amount increased if necessary. The increase is recognized in the Consolidated Statement of Comprehensive Income as a reversal of impairment losses. The increase in the asset resulting from the reversal of the impairment loss is limited to the amount that would have been recognized had there been no impairment.
 
2.12	Financial assets.	
The Group classifies its financial assets within the following categories: financial assets at fair value through profit and loss, and loans and receivables. The classification depends on the purpose for which the investments were acquired. The Group sets the classification of the investments at the time of the initial recognition. Purchases or sales of financial assets are accounted for as of the settlement date, which is the date when the asset is delivered or received by the Company.
 
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2.12.1	Financial assets at fair value through profit and loss.	
This category has two subcategories: (i) financial assets held for “trading” and (ii) those designated at the beginning as financial assets at fair value through profit and loss. The gains and losses that arise from the changes in their fair value are included in the net results of the period. A financial asset is classified at fair value through profit and loss if it is acquired mainly with the purpose of selling it in the short-term or if it is designated as such. The financial derivative instruments are classified as held for trading unless they are designated as hedging instruments.
Assets within this category are classified as current if they are held for trading or if they are expected to be realized within twelve months of the date of the financial statements.
 
2.12.2	Trade receivables and other receivables.	
Trade receivables are financial assets other than financial derivative instruments, with fixed payments or with established amounts that are not traded the financial market. They are included within current assets, with the exception of those maturing in over twelve months from the closing date of the financial statements, in which case they are classified as non-current assets.
Account receivables originated by the Company with a maturity in excess of 90 days are measured at their “amortized cost” by recognizing in income the accrued interests based on the effective interest rate (IRR). Amortized cost means the initial cost less the amortization of principal and the accumulated amortization based on the effective interest rate, considering the potential reductions due to impairment or payment default. Impairment for these assets happens when there is objective evidence that the Company will not be able to collect all the balances according to the original terms of the account receivable. The amount of the impairment allowance is the difference between the net accounting value and the present value of the discounted cash flows, discounted at the effective interest rate. The change in the impairment allowance is recorded against the Company’s income.
The effective interest rate is that which equals the future cash flows with the initial net asset value.
A value impairment allowance for trade accounts receivable is set when there is objective evidence that the Company will not be able to collect all the payments according to the original terms of the accounts receivable. Some indicators of potential impairment of accounts receivable are debtor’s financial difficulties, probability that the debtor will start a bankruptcy process or a financial restructuring, default or failure to pay, as well as the experience related to the behavior and characteristics of the collective portfolio.
The amount of the allowance is the difference between the book value of the asset and the present value of the estimated future cash flows, discounted at the effective interest rate. The book value of the asset is reduced through the allowance account and the amount of the loss is recorded in the statement of income.
 
2.12.3	Financial assets and liabilities offset	
Financial assets and liabilities are offset and the net amount reported in the statements of financial position when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis to realize the asset and settle the liability simultaneously.
 
2.13	Derivative financial instruments and hedging activity.	
The derivative financial instruments are initially recorded at fair value on the date a derivative contract is entered and are subsequently re-measured at their fair value through the income account, except in the specific case of the accounting of hedging instruments. In order to classify a derivative as a hedging instrument for accounting purposes, the Company documents (i) as of the transaction date or at designation time, the relationship or correlation between the hedging instrument and the hedged item, as well as the risk management purposes and strategies, (ii) the assessment, both at designation date as well as on a continuing basis, whether the instrument used is effective to offset changes in fair value or in the cash flow of the hedged item. A hedge is considered effective when changes in the fair value or in the cash flow of the underlying directly attributable to the risk hedged are offset with the changes in fair value, or in the cash flow of the hedging instrument with effectiveness between 80% to 125%.
 
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The method to recognize a gain or loss resulting from each valuation will depend on whether the derivative is designated as a hedge or not, and on the nature of the inherent risk of the hedged party. The Group designates certain derivatives as: i) fair value hedge of assets and liabilities recorded in the statements of financial position or and; ii) hedge of asset and liability cash flows recorded in the statements of financial position as highly probable transactions.
Hedges that meet the strict hedging accounting criteria are booked in accordance with IAS 39 “Financial instruments: Recognition and Measurement.”
The Group documents at the inception of the transaction the relationship between the hedging instrument and the hedged item, as well as its risk management objective and strategy for undertaking various hedging transactions. The Company also documents their evaluation, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly offsetting changes in fair values or cash flows of the hedged items.
 
2.13.1	Fair value hedge.	
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the statement of income, together with any changes in the fair value of the covered parties that can be attributable to the hedged risk.
The gain or loss related to the effective portion of interest rate swaps that hedge the loans at fixed interest rates is recognized in the statement of gains and losses as “financial expenses.”
The gain or loss related to the ineffective portion is also recorded in the statement of income. The changes in the fair value of the loans at a fixed rate that can be related to the interest rate risk are recorded in the statement of income under “financial expenses.”
If the hedge ceases to comply with the requirements to be recorded following the hedge accounting guidance, the adjustment in the book value of the hedged party for which the effective rate method is being used will be amortized in income over the remaining period until its maturity.
 
2.13.2	Hedging of cash flows.	
The effective portions of the changes in the fair value of derivatives that have been designated and qualify as cash flows hedges are recorded in net equity through other comprehensive income. The gain or loss related to the ineffective portion is recorded immediately in the statement of income.
The accumulated amounts in net equity are included in the statement of income in the periods in which the hedged parties impact the income account.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognized when the forecasted transaction is ultimately recognized in the statement of income. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the statement of income within “other gains/(losses)—net”.
 
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2.13.3	Financial assets—options.	
In order to determine the fair value of call options (a financial asset), the company considers the net present value of the discounted cash flows of the underlying asset and an analysis of market comparables.
Options contracts incorporated into the agreements between Cencosud S.A. and UBS A.G. London Branch “UBS” (note 23.5) are recognized in the financial statements of Cencosud S.A. as follows:
 
•	 	The put option was initially accounted for as a liability with a charge to the equity account other reserves, at the present value of the estimated exercise price, in accordance with the provisions of IAS 32 “Financial Instruments: Presentation.”	
 
•	 	After the initial recognition, all variations in the value of the put option are recorded against profit and loss.	
 
•	 	After their initial recognition, the call option is accounted at fair value through profit and loss. The fair value is the present value of the difference between the amount to be paid to exercise the option and the fair value of the underlying shares.	
 
•	 	If the call option is exercised, the asset will be derecognized together with the cash provided as the exercise price, with a credit to non-controlling interest and other reserves within equity. The liability for the put option will be reversed with a credit to the equity account other reserves.	
 
•	 	If the put option is exercised, the corresponding liability will be derecognized with a balancing entry for the cash outflow given as the exercise price. The non-controlling interest will be derecognized against the asset for the call option (if any) and against the equity account other reserves.	
 
2.14	Inventory.	
Assets recorded under inventory are stated at the lower value between acquisition cost or production cost, and the net realizable value.
The net realizable value is the estimated sales price in the normal course of operations, less estimated costs necessary to complete the sale.
Commercial and other discounts as well as other similar entries are deducted in the determination of the acquisition price.
The valuation method of the inventory is the Weighted Average Cost.
The cost of inventory includes all the costs related to the acquisition and transformation of the inventory, as well as other costs that may have been incurred to achieve their current condition and location, among which the cost of consumed material, labor, and manufacturing expenses are included.
 
2.15	Trade debtors and other receivables.	
Trade accounts receivable are recognized initially at their fair value (nominal value including an implicit interest) and subsequently recorded at their amortized cost according to the effective interest rate method, less the impairment allowance.
A value impairment allowance for trade accounts receivable is set when there is objective evidence that the Company will not be able to collect all the payments according to the original terms of the accounts receivable. Some indicators of potential impairment of accounts receivable are debtor’s financial difficulties, probability that the debtor will start a bankruptcy process or a financial restructuring, default or failure to pay, as well as the experience related to the behavior and characteristics of the collective portfolio.
The implicit interest is separated from the rest of the balance and is recorded as a financial income as the interests are accrued.
The amount of the allowance is the difference between the book value of the asset and the present value of the estimated future cash flows, discounted at the effective interest rate. The book value of the asset is reduced through the allowance account and the amount of the loss is recorded in the income statement.
 
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2.16	Cash and cash equivalents.	
Cash and cash equivalents include cash-in-hand, time deposits at financial entities, other liquid short-term investments with a high liquidity usually with an original maturity of up to three months and bank overdrafts. In the statement of financial position, if there are overdrafts, these are recorded under the line other financial liabilities within the line bank loans.
 
2.17	Loans and other financial liabilities.	
Loans, debt arising from bond issuances and financial liabilities are initially recorded at their fair value, less the transaction costs that are directly related to the transaction. Afterwards, the financial liabilities held by the Group are measured at their amortized cost using the effective rate method.
The effective rate is that which matches future payments with the net initial value of the liability.
 
2.18	Trade payables and other payables.	
The trade creditors and other accounts payable are recorded at their nominal value, as their average payment terms are small and there is not a relevant difference with their fair value.
Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.
Trade payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.
 
2.19	Provisions.	
Provisions are recorded in the statements of financial position when:
 
a.	The Group has a present obligation (either legal or implicit) as a result of past events,	
 
b.	It is probable that a resource outflow will occur that incorporate economic benefits to extinguish the obligation, and	
 
c.	A reliable estimate of the amount of the obligation can be made.	
Provisions are measured at the present value of the cash outflows that are expected to be necessary to settle the liability, considering the best information available at the date of the annual financial statements, and are restated at the closing of each accounting period. The discount rate used to establish the present value reflects the current market assessments, at the date of the financial statements, of the time value of money, as well as the specific risk related to the specific liability.
 
2.20	Staff vacations.	
The Company records vacation benefits expense following the accrual method. This benefit corresponds to all the personnel and is equivalent to a fixed amount according to the contracts of each employee. This benefit is recorded at its nominal value.
 
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2.21	Revenue recognition.	
Revenue recognition corresponds to the gross entry of economical benefits during the period from the Group operations. The revenue amount is shown net of any tax levy, price discounts and other items that impact the sales price.
Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for goods supplied, stated net of discounts, returns and value added taxes. The group recognizes revenue when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the entity; and when specific criteria have been met for each of the group’s activities, as described below. The group bases its estimate of return on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.
Ordinary revenue from sales of assets.
The sales of inventory are recorded when the risks and benefits that rise from the ownership of the goods are substantially transferred, the amount of the income can be accurately calculated, and the collection of the sales is deemed probable.
Ordinary revenue from leases.
Revenue obtained from leases is recognized in a straight-line over the life of the corresponding contracts.
Interest income.
The financial income derived from the Group’s commercial cards is recorded on an accrual basis according to the terms agreed upon with the customers. Interest is recognized using effective interest rate method.
When a loan and receivable is impaired, the group reduces the carrying amount to its recoverable amount, which is the estimated future cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loans and receivables is recognized using the original effective interest rate.
Revenues from insurance brokerage, travel agencies and family entertainment centers.
The Company has income from personal and/or large-scale insurance brokerage exclusively to customers of the companies involved in the Group. The commission is recognized as earned over the term of the related coverage.
The Company generates revenues from domestic and international travel agency services. Commissions are recognized monthly and when the risks and benefits inherent in the transactions have been transferred to third parties.
The Company has revenues from of family entertainment services which are part of the malls of the Holding. Revenue is recognized when services have been effectively provided.
Customer loyalty program.
The Group operates a loyalty programe where customers accumulate points for purchases made, which entitle them to discounts on future purchases. The reward points are recognized as a separately identifiable component of the initial sale transaction by allocating the fair value of the consideration received between the award points and the other components of the sale such that the reward points are initially recognized as deferred income at their fair value.
Revenue from the reward points is recognized when the points are redeemed. Breakage is recognized as reward points are redeemed based upon expected redemption rates. Reward points expire 12 months after the initial sale.
 
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2.22	Deferred income.	
Cencosud registers deferred income for various transactions from which cash is received and when the conditions to register the income described in Note 2.21 have not been met, such as cash received at the beginning of the issuance of the Group’s investment property rental contracts.
Deferred income is recorded in the statement of income on an accrual basis and when the commercial and contractual conditions are met.
 
2.23	Leases.	
Leases are classified as financial when they substantially transfer all the risks and benefits related to the ownership of the good. All other leases are considered as operating.
Goods acquired through a finance lease are recorded as non-current assets, and are initially measured at the present value of the minimum future payments or at its fair value if it is lower, reflecting the corresponding debt with the lessor as a liability. The payments made are detailed between the debt repayment and the corresponding financial burden, which is recorded as a financial expense for the year.
In the case of operating leases, the expense is recorded in a straight line according to the life of the lease contract for the fixed lease portion. The contingent leases are recorded as an expense of the period in which the payment appears probable, as well as the increments of fixed rent indexed by the fluctuation of the consumer price index.
 
2.24	Current and deferred income taxes.	
The tax expense for the period is comprised of current and deferred tax. Tax is recognized in the statement of income, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.
The current tax is that which is estimated that will be paid or recovered during the period, using approved legal tax rates, or about to be approved at the date of the financial position statement, corresponding to the current period and including an adjustment corresponding to income taxes payable or recoverable from prior periods.
The deferred tax is calculated using the liability method, which identifies the temporary differences that arise from carrying balances used for the purpose of financial information and those used for tax purposes. The deferred tax liability corresponds to the amounts payable in the future from the temporary tax differences, and the deferred tax assets are those amounts recoverable as a result of temporary deductible differences, compensating negative taxable income balances or tax deductions pending application.
The assets and liabilities from deferred income taxes are measured at the rates applicable in the corresponding periods when the assets will be realized or the liabilities will be paid, based on approved current legal regulations at the date of the financial statements and after considering all tax consequences that derive from the way that the Group expects to recover the assets and liquidate the liabilities.
A deferred income tax asset is recorded only up to the point that it is probable that there will be future fiscal gains, against which unused fiscal credits can be applied. The deferred income tax assets accounted for, as well as those not accounted for, are subject to review at every closing date.
The deferred income tax rate is accrued from the temporary differences that arise from the investments in subsidiaries and affiliates, except when the Company has control over the time when the temporary differences will be reversed, and what it is probable that the temporary difference will not be reversed in the foreseeable future.
The deferred income tax assets and liabilities are recorded in the consolidated financial statements as non-current assets and liabilities, independently of their expected date of realization or liquidation.
 
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The deferred income tax assets and liabilities are compensated when there is a legally executable right to compensate the current tax assets with the current tax liabilities and when the deferred income tax asset and liability are related to the income tax that is levied by the same tax authority to the same tax subject or to different tax subjects where there is the intention of liquidating the balances over a net basis.
 
2.25	Payment of dividends.	
The payment of dividends to the Company’s shareholders is recorded as a liability in the annual accounts of the Group in the period in which the dividends are approved by the Company’s shareholders or when the corresponding liability is accrued according to legal regulations or the by-laws set at the Shareholders’ Meeting.
 
2.26	Paid-in capital.	
The Company’s paid-in capital is represented by ordinary shares.
The incremental costs that can be directly allocated to the issuance of new shares are presented as a reduction to net equity, net of income taxes.
 
2.27	Compensation payments in shares.	
Compensation plans implemented through the use of stock options are recognized in the financial statements applying IFRS 2 “Share-based payments”, booking the expenses associated with the services provided by company executives at the time that these are incurred booking a credit in the account of other equity reserves.
The Company determines the fair value of the services received by refering to the fair value of the equity instruments at the date on which they are issued. The plan that issues the stock options based on continued employment assumes that the services will be received on a lineal basis up to the maturity date of the stock options. Likewise, in the case of stock options based on performance, it is assumed that the services will be received on a lineal basis up to the maturity date of the stock options.
The fair value of the employee services received in exchange for the grant of the options is recognized as an expense. The total amount to be expensed is determined by reference to the fair value of the options granted, including any performance condition and to have a current employment contract with the Company or any of its subsidiaries in Chile or abroad and the employment relationship has-not been interrupted from the date of signature of this contract until the date of execution of stock options.
 
2.28	Cost of sales.	
Cost of sales includes the cost of acquiring products sold and other costs incurred to bring inventory to the locations and conditions necessary for their sale. These costs primarily include acquisition costs net of discounts obtained, non-recoverable import expenses and taxes, insurance and costs for transporting products to distribution centers.
Cost of sales also includes losses related to the credit card receivable portfolio from the financial services segment.
 
2.29	Other expenses by function.	
Other expenses by function includes, primarily, advertising expenses that the company incurs to promote its products and brands.
 
2.30	Distribution costs.	
Distribution costs include all expenses necessary to deliver products to customers.
 
2.31	Administrative expenses.	
Administrative expenses include payroll and personnel compensation, depreciation of property, plant and equipment for administrative purposes, amortization of non-current assets, and other overhead and administrative expenses.
 
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3	Risk management policies	
 
3.1	Position-taking financial instruments.	
 
3.1.1	Categories of financial instruments (classification and presentation).	
The Company’s position-taking instruments are classified based on their nature, characteristics and the purpose for which they have been acquired or issued.
As of December 31, 2012, and 2011 the Company classifies its financial instruments as follows: Table 1-1. Classification of financial instruments.
December 2012

 	  	 	  	 	  	 	  	At amortized cost	 	  	At fair
value	 	
Classification	  	Group	  	Type	  	Note	  	Book value	 	  	Fair value
(Informational)	 	  	Book value	 	
 	  	 	  	 	  	 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
At fair value through profit and loss	  	Mutual funds Derivatives	  	Mutual fund shares	  	6	  				  				  	 	65,183,729	  	
	  		  	Derivatives at fair value with changes in results	  	6	  				  				  	 	2,946,670	  	
	  	Other financial instruments	  	Shares	  	6	  				  				  	 	36,469	  	
	  		  	Financial investments long term	  	6	  				  				  	 	852,289	  	
Credit cards and Trade receivables, net	  	Cash and equivalents	  	Cash balances	  	5	  	 	53,106,390	  	  	 	53,106,390	  	  				
	  		  	Bank balances	  	5	  	 	164,801,594	  	  	 	168,801,594	  	  				
	  		  	Short-term deposits	  	5	  	 	19,812,821	  	  	 	19,812,821	  	  				
	  	Receivables Credit card and Trade	  	receivables, net	  	8	  	 	1,202,639,027	  	  	 	1,268,286,977	  	  				
	  	Receivables from related entities	  	Receivables from related entities, current	  	9	  	 	323,624	  	  	 	323,624	  	  				
	  	Tax assets	  	Tax assets, current	  	16	  	 	31,269,885	  	  	 	31,269,885	  	  				
Financial liabilities and payables	  	Bank loans	  	Current	  	17	  	 	954,868,162	  	  	 	982,057,492	  	  				
	  		  	Non-Current	  	17	  	 	531,859,027	  	  	 	538,626,881	  	  				
	  	Bond debt	  	Current	  	17	  	 	25,513,254	  	  	 	27,913,012	  	  				
	  		  	Non-Current	  	17	  	 	1,663,382,237	  	  	 	1,712,058,615	  	  				
	  	Other loans (leases)	  	Current	  	17	  	 	5,453,350	  	  	 	5,453,350	  	  				
	  		  	Non-Current	  	17	  	 	25,683,325	  	  	 	25,683,325	  	  				
	  	Time deposits	  	Current	  	17	  	 	123,248,846	  	  	 	123,248,846	  	  				
	  		  	Non-Current	  	17	  	 	46,883,852	  	  	 	46,883,852	  	  				
	  	Term savings accounts	  	Current	  	17	  	 	1,022,988	  	  	 	1,022,988	  	  				
	  	Letters of credit	  	Non-Current	  	17	  	 	10,209,850	  	  	 	10,209,850	  	  				
	  	Deposits and other demand deposits	  	Current	  	17	  	 	2,586,949	  	  	 	2,586,949	  	  				
	  	Debt purchase Subsidiaries (Bretas—Prezunic and Johnson´s)	  	Current	  	17	  	 	27,452,688	  	  	 	27,452,688	  	  				
	  		  	Non-Current	  	17	  	 	71,907,667	  	  	 	71,907,667	  	  				
	  	Other financial liabilities—other	  	Current	  	17	  	 	29,115,522	  	  	 	29,115,522	  	  				
	  	Trade payables,	  	Current	  	18	  	 	1,704,773,063	  	  	 	1,704,773,063	  	  				
	  		  	Non-Current	  	18	  	 	1,303,392	  	  	 	1,303,392	  	  				
	  	Withholding taxes	  	Current	  	18	  	 	197,295,354	  	  	 	197,295,354	  	  				
	  		  	Non-Current	  	18	  	 	6,107,410	  	  	 	6,107,410	  	  				
	  	Other payables	  	Current	  	18	  	 	327,498	  	  	 	327,498	  	  				
	  	Payables to related entities, current	  	Current	  	9	  	 	974,469	  	  	 	974,469	  	  				
	  	Tax liabilities	  	Current	  	16	  	 	46,798,474	  	  	 	46,798,474	  	  				
	  	Other financial liabilities	  	Cross currency swaps	  	17	  				  				  	 	7,624,595	  	
	  		  	Put options	  		  				  				  				
Hedges	  	Hedging derivatives	  	Cash flow hedging Liabilities	  	17	  				  				  	 	7,518,990	  	
	  		  	Fair value hedging liabilities	  	17	  				  				  	 	4,300,853	  	
	  		  	Cash flow hedging assets	  	6	  				  				  	 	23,735,101	  	
	  		  	Fair values hedging assets	  	6	  				  				  	 	16,419,834	  	
 
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December 2011

 	  	 	  	 	  	 	  	At amortized cost	 	  	At fair
value	 	
Classification	  	Group	  	Type	  	Note	  	Book value	 	  	Fair value
(Informational)	 	  	Book value	 	
 	  	 	  	 	  	 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
At fair value through profit and loss	  	Mutual funds Derivatives	  	Mutual fund shares	  	6	  	 	—  	  	  	 	—  	  	  	 	43,067,809	  	
	  		  	Derivatives at fair value with changes in results	  	6	  	 	—  	  	  	 	—  	  	  	 	2,060,000	  	
	  		  	Call option (call)	  	6	  	 	—  	  	  	 	—  	  	  	 	171,402,489	  	
	  	Other financial instruments	  	Shares	  	6	  	 	—  	  	  	 	—  	  	  	 	36,891	  	
	  		  	Highly liquid financial instruments	  	6	  	 	—  	  	  	 	—  	  	  	 	5,362,015	  	
Credit cards and Trade receivables, net	  	Cash and equivalents	  	Cash balances	  	5	  	 	48,779,345	  	  	 	48,779,345	  	  	 	—  	  	
	  		  	Bank balances	  	5	  	 	76,287,432	  	  	 	76,287,432	  	  	 	—  	  	
	  		  	Short-term deposits	  	5	  	 	19,994,804	  	  	 	19,994,804	  	  	 	—  	  	
	  	Receivables Credit card and Trade	  	Receivables, net	  	8	  	 	1,124,312,306	  	  	 	1,124,312,306	  	  	 	—  	  	
	  	Receivables from related entities	  	Receivables from related entities, current	  	9	  	 	82,334	  	  	 	82,334	  	  	 	—  	  	
	  	Tax assets	  	Tax assets, current	  	16	  	 	6,962,369	  	  	 	6,962,369	  	  	 	—  	  	
Financial liabilities and payables	  	Bank loans	  	Current	  	17	  	 	156,345,921	  	  	 	161,363,683	  	  	 	—  	  	
	  		  	Non-Current	  	17	  	 	637,918,888	  	  	 	656,865,551	  	  	 	—  	  	
	  	Bond debt	  	Current	  	17	  	 	24,531,922	  	  	 	26,580,593	  	  	 	—  	  	
	  		  	Non-Current	  	17	  	 	1,141,130,894	  	  	 	1,168,573,948	  	  	 	—  	  	
	  	Other loans (leases)	  	Current	  	17	  	 	5,059,200	  	  	 	5,059,200	  	  	 	—  	  	
	  		  	Non-Current	  	17	  	 	19,966,902	  	  	 	19,966,902	  	  	 	—  	  	
	  	Time deposits	  	Current	  	17	  	 	142,602,017	  	  	 	142,602,017	  	  	 	—  	  	
	  	Term savings accounts	  	Current	  	17	  	 	1,033,220	  	  	 	1,033,220	  	  	 	—  	  	
	  	Letters of credit	  	Non-Current	  	17	  	 	10,849,475	  	  	 	10,849,475	  	  	 	—  	  	
	  	Deposit and other demand deposits	  	Current	  	17	  	 	2,510,178	  	  	 	2,510,178	  	  	 	—  	  	
	  	Debt purchase (Bretas and Johnson´s)	  	Non-Current	  	17	  	 	57,126,496	  	  	 	57,126,496	  	  	 	—  	  	
	  	Other financial liabilities—Other	  	Current	  	17	  	 	18,567,156	  	  	 	18,567,156	  	  				
	  	Trade payables	  	Current	  	18	  	 	1,374,705,770	  	  	 	1,388,459,617	  	  	 	—  	  	
	  		  	Non-Current	  	18	  	 	2,439,794	  	  	 	2,439,794	  	  	 	—  	  	
	  	Withholding taxes	  	Current	  	18	  	 	158,078,423	  	  	 	158,078,423	  	  	 	—  	  	
	  		  	Non-Current	  	18	  	 	8,710,897	  	  	 	8,710,897	  	  	 	—  	  	
	  	Other payables	  	Current	  	18	  	 	1,000,211	  	  	 	1,000,211	  	  	 	—  	  	
	  	Payables to related entities, current	  	Current	  	9	  	 	1,447,631	  	  	 	1,447,631	  	  	 	—  	  	
	  	Tax liabilities	  	Current	  	16	  	 	40,490,319	  	  	 	40,490,319	  	  	 	—  	  	
	  	Other financial liabilities	  	Cross currency swaps	  	17	  	 	—  	  	  	 	—  	  	  	 	5,150,270	  	
	  		  	Put options	  	17	  	 	—  	  	  	 	—  	  	  	 	240,955,817	  	
Hedges	  	Hedging derivatives	  	Cash flow hedging Liabilities	  	17	  	 	—  	  	  	 	—  	  	  	 	2,111,593	  	
	  		  	Fair value hedging liabilities	  	17	  	 	—  	  	  	 	—  	  	  	 	602,878	  	
	  		  	Cash flow hedging assets	  	6	  	 	—  	  	  	 	—  	  	  	 	32,065,119	  	
	  		  	Fair values hedging assets	  	6	  	 	—  	  	  	 	—  	  	  	 	14,914,495	  	
 
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3.1.2.	General characterization.	
The Company maintains instruments classified at fair value through profit and loss for trading and risk management (derivate instruments not classified as cash flow or fair value hedges purposes. This category is comprised mainly of investments in mutual funds and derivatives.
The category “loans and Trade receivables net” includes bank balances, time deposits and receivables mainly from the credit card business, receivables from consumer credit loans of Banco Paris and notes receivable from customers when credit is extended using post-dated checks. As a result, this category of financial instruments combines the objectives of surplus optimization, liquidity management and financial planning to satisfy the Company’s working capital needs.
Financial liabilities maintained by the Company include obligations with banks and financial institutions, bond issuances and payables, and certificate of deposit issued by Banco Paris and other liabilities.
Lastly, the Company has classified as hedges those derivative instruments determined to be highly effective in offsetting exposure to changes in the hedged item attributable to the hedged risk.
 
3.1.3.	Accounting treatment of financial instruments (Note 2, accounting policies).	
 
3.1.4.	Valuation methodology (initially and subsequently).	
Financial instruments that have been accounted for at fair value in the statement of financial position as of December 31, 2012 have been measured using the methodologies set forth in IAS 39. These methodologies applied for each class of financial instruments are classified using the following hierarchy:
Level I: Quoted values or prices in active markets for observables and identical liabilities.
Level II: Inputs from sources other than quoted values from Level I, but observable in the market for assets and liabilities, either directly (prices) or indirectly (obtained from prices).
Level III: Inputs for assets or liabilities that are not based on observable market data.
Taking into account the nature and characteristics of the instruments maintained in its portfolio, the Company classifies its valuation methodologies in the three aforementioned levels. Currently, the valuation process considers internally developed valuation techniques, for which parameters and observable market inputs are used, mainly using the present value methodology.
 
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The table below presents the percentage of financial instruments, valued under each method, compared to their total value.
Table 1-4. Successive valuation methodologies.
December 2012

 	  	 	  	 	  	 	  	Valuation method	  	Amortized	 	
Classification	  	Group	  	Type	  	Note	  	Value	 	  	Level I	 	  	Level II	 	  	Level III	  	cost	 	
 	  	 	  	 	  	 	  	ThCh$	 	  	%	 	  	%	 	  	%	  	%	 	
At fair value through Profit and loss	  	Mutual funds	  	Mutual fund shares	  	6	  	 	65,183,729	  	  	 	100	  	  				  		  				
	  	Derivatives	  	Derivatives at fair value with changes in results	  	6	  	 	2,946,670	  	  				  	 	100	  	  		  				
	  		  	Call option (call)	  		  				  				  				  		  				
	  	Other financial Instrument	  	S hares	  	6	  	 	36,469	  	  	 	100	  	  				  		  				
	  		  	Highly liquid financial instruments	  	6	  	 	852,289	  	  	 	100	  	  				  		  				
Credit cards and trade Receivables, net	  	Cash and cash equivalents	  	Cash balances	  	5	  	 	53,106,390	  	  				  				  		  	 	100	  	
	  		  	Bank balances	  	5	  	 	164,801,594	  	  				  				  		  	 	100	  	
	  		  	Short-term deposits	  	5	  	 	19,812,821	  	  				  				  		  	 	100	  	
	  	Receivables	  	Credit card and trade receivables, net	  	8	  	 	1,202,639,027	  	  				  				  		  	 	100	  	
	  	Receivables from related entities	  	Receivables from related entities, current	  	9	  	 	323,624	  	  				  				  		  	 	100	  	
	  	Tax assets	  	Tax assets, current	  	16	  	 	31,269,885	  	  				  				  		  	 	100	  	
Financial liabilities and payables	  	Bank loans	  	Current	  	17	  	 	954,868,162	  	  				  				  		  	 	100	  	
	  		  	Non-Current	  	17	  	 	531,859,027	  	  				  				  		  	 	100	  	
	  	Bonds payable	  	Current	  	17	  	 	25,513,254	  	  				  				  		  	 	100	  	
	  		  	Non-Current	  	17	  	 	1,663,382,237	  	  				  				  		  	 	100	  	
	  	Other loans (lease)	  	Current	  	17	  	 	5,453,350	  	  				  				  		  	 	100	  	
	  		  	Non-Current	  		  	 	25,683,325	  	  				  				  		  	 	100	  	
	  	Deposits and savings Accounts	  	Current	  		  	 	126,858,783	  	  				  				  		  	 	100	  	
	  		  	Non-Current	  	17	  	 	46,883,852	  	  				  				  		  	 	100	  	
	  	Debt purchase Bretas	  	Non-Current	  	17	  	 	27,452,688	  	  				  				  		  	 	100	  	
	  	Letters of credit	  	Current	  	17	  	 	71,907,667	  	  				  				  		  	 	100	  	
	  	Trade payables	  	Current	  	17	  	 	10,209,850	  	  				  				  		  	 	100	  	
	  		  	Non-Current	  	17	  	 	29,115,522	  	  				  				  		  	 	100	  	
	  	Withholding taxes	  	Current	  	18	  	 	1,704,773,063	  	  				  				  		  	 	100	  	
	  	Lease liabilities	  	Current	  	18	  	 	7,410,802	  	  				  				  		  	 	100	  	
	  	Other payables	  	Current	  	18	  	 	197,295,354	  	  				  				  		  	 	100	  	
	  	Payables to related entities	  	Current	  	18	  	 	327,498	  	  				  				  		  	 	100	  	
	  	Tax liabilities	  	Current	  	9	  	 	974,469	  	  				  				  		  	 	100	  	
	  	Payables	  	Payables	  	16	  	 	46,798,474	  	  				  	 	100	  	  		  				
	  	Other financial liabilities	  	Cross currency swaps	  	17	  	 	7,624,595	  	  				  	 	100	  	  		  				
Hedges	  	Hedging derivatives	  	Cash flow hedging liabilities	  	17	  	 	7,518,990	  	  				  	 	100	  	  		  				
	  		  	Fair value hedging liabilities	  	17	  	 	4,300,853	  	  				  	 	100	  	  		  				
	  		  	Cash flow hedging assets	  	6	  	 	23,735,101	  	  				  	 	100	  	  		  				
	  		  	Fair values hedging assets	  	6	  	 	16,419,834	  	  				  	 	100	  	  		  				
 
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December 2011

 	  	 	  	 	  	 	  	Valuation method	 	  	Amortized
cost	 	
Classification	  	Group	  	Type	  	Note	  	Value	 	  	Level I	 	  	Level II	 	  	Level III	 	  			
 	  	 	  	 	  	 	  	ThCh$	 	  	%	 	  	%	 	  	%	 	  	%	 	
At fair value through Profit and loss	  	Mutual funds Derivatives	  	Mutual fund shares	  	6	  	 	43,067,809	  	  	 	100	  	  	 	—  	  	  	 	—  	  	  				
	  		  	Derivatives at fair value with changes in results	  	6	  	 	2,060,000	  	  				  	 	100	  	  				  				
	  		  	Call option (call)	  	6	  	 	171,402,489	  	  				  				  	 	100	  	  				
	  	Other financial Instrument	  	Shares	  	6	  	 	36,891	  	  	 	100	  	  				  				  				
	  		  	Highly liquid financial instruments	  	6	  	 	5,362,015,100	  	  	 	100	  	  				  				  				
Credit cards and trade Receivables, net	  	Cash and cash equivalents	  	Cash balances	  	5	  	 	48,779,345	  	  				  				  				  	 	100	  	
	  		  	Bank balances	  	5	  	 	76,287,432	  	  				  				  				  	 	100	  	
	  		  	Short-term deposits	  	5	  	 	19,994,804	  	  				  				  				  	 	100	  	
	  	Receivables	  	Credit card and trade receivables, net	  	8	  	 	1,124,312,306	  	  				  				  				  	 	100	  	
	  	Receivables from related entities	  	Receivables from related entities, current	  	9	  	 	82,334	  	  				  				  				  	 	100	  	
	  	Tax assets	  	Tax assets, current	  	16	  	 	6,962,369	  	  				  				  				  	 	100	  	
Financial liabilities and payables	  	Bank loans	  	Current	  	17	  	 	156,345,921	  	  				  				  				  	 	100	  	
	  		  	Non-Current	  	17	  	 	637,918,888	  	  				  				  				  	 	100	  	
	  	Bonds payable	  	Current	  	17	  	 	24,531,922	  	  				  				  				  	 	100	  	
	  		  	Non-Current	  	17	  	 	1,141,130,894	  	  				  				  				  	 	100	  	
	  	Other loans (lease)	  	Current	  	17	  	 	5,059,200	  	  				  				  				  	 	100	  	
	  		  	Non-Current	  	17	  	 	19,966,962	  	  				  				  				  	 	100	  	
	  	Deposits and savings Accounts	  	Current	  	17	  	 	146,145,415	  	  				  				  				  	 	100	  	
	  		  	Non-Current	  	17	  	 	10,849,475	  	  				  				  				  	 	100	  	
	  	Debt purchase Bretas	  	Non-Current	  	17	  	 	57,126,496	  	  				  				  				  	 	100	  	
	  	Letters of credit	  	Current	  	17	  	 	10,849,475	  	  				  				  				  	 	100	  	
100	  		  		  	17	  	 	18,567,156	  	  				  				  				  	 	100	  	
	  	Trade payables	  	Current	  	18	  	 	1,374,705,770	  	  				  				  				  	 	100	  	
	  		  	Non-Current	  	18	  	 	11,150,691	  	  				  				  				  	 	100	  	
	  	Withholding taxes	  	Current	  	18	  	 	158,078,423	  	  				  				  				  	 	100	  	
	  	Lease liabilities	  	Current	  	18	  	 	3,282,468	  	  				  				  				  	 	100	  	
	  	Other payables	  	Current	  	18	  	 	1,000,211	  	  				  				  				  	 	100	  	
	  	Payables to related entities	  	Current	  	9	  	 	1,447,631	  	  				  				  				  	 	100	  	
	  	Tax liabilities	  	Current	  	15	  	 	40,490,319	  	  				  				  				  	 	100	  	
	  	Other financial liabilities	  	Cross currency swaps	  	17	  	 	5,150,270	  	  				  				  				  	 	100	  	
	  		  	Put options	  	17	  	 	240,955,817	  	  				  	 	100	  	  				  				
Hedges	  	Hedging derivatives	  	Cash flow hedging liabilities	  	17	  	 	2,111,594	  	  				  	 	100	  	  				  				
	  		  	Fair value hedging liabilities	  	17	  	 	602,877	  	  				  	 	100	  	  				  				
	  		  	Cash flow hedging assets	  	6	  	 	32,065,119	  	  				  	 	100	  	  				  				
	  		  	Fair values hedging assets	  	6	  	 	14,914,495	  	  				  	 	100	  	  				  				
Level I instruments are accounted from prices in an active market for directly observable and identical asset and liabilities.
Instruments classified as Level II correspond mainly to interest rate and cross currency swaps that have been valued by discounting the future cash flows stipulated in the contract for both the asset and liability component of each instrument. The structure of interest rates used to bring the future cash flows to present value is constructed based on the currency of each component and inferred from transactions involving risk-free instruments in the relevant market. Instruments classified as Level III consist mainly of options contracts and financial derivatives. The fair value of these instruments has been determined using the net present value of discounted cash flows from the underlying asset and an analysis of market comparables.
In order to estimate the fair value of debt instruments not accounted for at deemed cost, the Company has estimated the cash flows from variable interest obligations using relevant swap curves. The structure of interest rates used to bring the future cash flows to present value is constructed based on the currency of each obligation and corresponds to the risk-free curve in the relevant market plus a credit spread inferred from the initial contractual conditions of each obligation.
 
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In addition, the fair value for informational purposes (Table 1-1) has been estimated for those instruments accounted for at amortized cost. For instruments maturing in less than one year, the Company has determined that the fair value does not differ significantly from the book value presented. The criteria adopted is applied to balances maintained in trade and other receivables, cash and cash equivalents, trade and other payables and the current portion of bank loans and bonds payable.
The fair value of the non-current portion of debt instruments (bank loans and bonds) accounted for at amortized cost has been calculated as the equivalent amount necessary to prepay that debt less the current portion of the loans.
 
3.1.5.	Particular effects on income and net equity accounts.	
As of December 31, 2012, the effects of each financial instrument on income and net equity accounts are detailed as follows.
Table 1-5. Particular effects on income and net equity accounts for financial assets and obligations (excludes banks operations).

   	  	Effect on 2012 income (ThCh$)	 	 	Equity	 	
Line item	  	Interest	 	 	Other
earnings
(losses)	 	 	Indexation
units (UF)	 	 	Exchange
differences	 	 	Losses and
gains in
net equity	 	
Investments (mutual funds)	  	 	7,848,416	  	 				 				 				 				
Obligations with banks	  	 	(129,859,156	) 	 				 	 	300,500	  	 	 	(7,151,972	) 	 				
Bonds payable	  	 	(61,010,164	) 	 				 	 	(16,126,911	) 	 	 	28,203,299	  	 				
Hedge derivatives	  	 	(11,295,937	) 	 				 				 	 	(30,619,310	) 	 	 	13,489,862	(1) 	
Options (call—put)	  	 	(7,435,673	) 	 	 	(16,258,777	) 	 				 				 	 	92,991,292	(2) 	
Debt purchase Bretas	  	 	(1,421,181	) 	 				 	 	(9,391,256	) 	 				 				

 	  	Effect on 2011 income (ThCh$)	 	 	Equity	 	
Line item	  	Interest	 	 	Other
earnings
(losses)	 	 	Indexation
units (UF)	 	 	Exchange
differences	 	 	Losses and
gains in
net equity	 	
Investments (mutual funds)	  	 	9,765,709	  	 				 				 				 				
Obligations with banks	  	 	(66,970,868	) 	 				 	 	0	  	 	 	(4,214,944	) 	 				
Bonds payable	  	 	(57,053,521	) 	 				 	 	(24,867,764	) 	 	 	(6,159,487	) 	 				
Hedge derivatives	  	 	(10,816,223	) 	 				 				 	 	20,856,663	  	 	 	4,821,077	(1) 	
Options (call—put)	  	 	(11,469,417	) 	 	 	(18,768,191	) 	 				 				 	 	(39,315,720	)(2) 	
Debt purchase Bretas	  	 	(2,164,013	) 	 				 	 	(6,420,766	) 	 				 				
Please see hedge details in table 1-10
 
(1)	Please see consolidated statements of changes in equity in the column “hedge reserves”.	
(2)	Please see consolidated statements of changes in equity in the column “other reserves”.	
For all of the aforementioned categories of financial instruments, the Company identifies net losses and gains; total finance income and costs, calculated using the effective interest rate method for assets and liabilities not recorded at fair value through profit and loss; and fee income and expenses from the instruments.
Net equity corresponds to the effect of applying hedge accounting for derivative instruments classified as effective cash flow hedges, namely derivative contracts (cross currency swaps) with Banco Santander for UF 2,257,437 (equivalent to 280,000,000 soles) related to Incabond Hedge which maturity date is in 2018, hedges by US$ 535,000,000 related to the 144a bond issuance which maturity is on 2021, hedges by US$ 410,000,000 related to the 144a bond issuance which maturity is on 2023, hedges by US$ 100,000,000 related to the Scotiabank which maturity is on 2017, hedges by US$ 50,000,000 related to the Rabobank which maturity is on 2018, and hedges by US$75,000,000 related to bank loans belongs to the subsidiary in Peru.
 
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As of December 31, 2012 the company present US$1,650,000,000 short term forwards hedges related to the cross currency swap with the JP Morgan Bridge Loan. Regarding this short term operations, the company has a “Roll-over” strategy of automatic renewal which will continue until the stockholders meeting approves the issuance of new shares, which expected to be during first semester of 2013. Those hedge transactions allow to the company hedge the foreign exchange income statement impact due to debt denominated in foreign exchange.
 
3.1.6.	Reclassifications.	
As of the end of this reporting period, the Company has not reclassified any entries in the aforementioned financial instrument categories.
 
3.1.7.	Embedded derivatives.	
As of the end of this reporting period, the Company has not identified any embedded derivatives that should be valued independently from the host contract.
 
3.1.8.	Non-compliance.	
As of the end of this reporting period, the Company has not identified any non-compliance with the conditions related to outstanding liabilities.
 
3.1.9.	Hedges.	
The Company has entered into derivative contracts to hedge risks of fluctuations in exchange rates and interest rates. These instruments have been designated as hedges of eligible items and have been valued and accounted for as defined in the accounting criteria described in note 2.13.
 
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Although the Company holds positions in financial instruments as part of its overall financial risk management strategy, only the following derivative instruments have been classified as accounting hedges:
Table 1-10. Hedges.
2012

 	 	 	 	Hedge
subject	 	 	 	 	 	Book	 	 	Hedging instrument	 	Fair	 	 	 	
Hedge type	 	Risk	 	classification	 	Group	 	Type	 	value	 	 	Group	 	Type	 	value	 	 	Note	
 	 	 	 	 	 	 	 	 	 	(ThCh$)	 	 	 	 	 	 	(ThCh$)	 	 	 	
Fair value	 	Interest
rate	 	Financial liability	 	Bank obligations	 	IFC Credit	 	 	—  	  	 	Derivate	 	Interest
rate
swap	 	 	(426,558	) 	 	17	
	 		 		 		 		 				 		 		 	 	 	 	 		
	 		 		 		 		 				 	Sub—total
derivative	 		 	 	(426,558	) 	 		
	 		 		 		 		 				 		 		 	 	 	 	 		
Fair value	 	Interest
rate and exchange	 	Financial liability	 	Bank obligations	 	Rabobank Credit	 	 	—  	  	 	Derivate	 	Interest
rate
swap	 	 	16,419,834	  	 	6	
	 		 		 		 		 				 		 		 	 	 	 	 		
	 		 		 		 		 				 	Sub—total
derivative	 		 	 	16,419,834	  	 		
	 		 		 		 		 				 		 		 	 	 	 	 		
Cash flow	 	Interest
rate and exchange	 	Financial liability	 	Bank obligations	 	Rabobank Credit	 	 	—  	  	 	Derivate	 	Cross
currency
swap	 	 	15,452,679	  	 	6	
Cash flow	 	Interest
rate and exchange	 	Financial liability	 	Bonds payable	 	Inacabond 1	 	 	—  	  	 	Derivate	 	Cross
currency
swap	 	 	8,282,422	  	 	6	
	 		 		 		 		 				 		 		 	 	 	 	 		
	 		 		 		 		 				 	Sub—total
Derivative	 		 	 	23,735,101	  	 		

Fair value	 	Interest
rate and exchange	 	Financial liability	 	Bank obligations	 	Rabobank Credit	 	 	—  	  	 	Derivate	 	Interest
rate
swap	 	 	492,335	  	 	17	
Cash flow	 	Interest
rate and exchange	 	Financial liability	 	Bank obligations	 	Scotiabank Credit	 	 	—  	  	 	Derivate	 	Cross
currency
swap	 	 	(1,828,367	) 	 	17	
Cash flow	 	Interest
rate and exchange	 	Financial liability	 	Bank
payable	 	US bond	 	 	—  	  	 	Derivate	 	Cross
currency
swap	 	 	(3,178,389	) 	 	17	
Fair value	 	Interest
rate and exchange	 	Financial liability	 	Bonds payable	 	US bond	 	 	—  	  	 	Derivate	 	Cross
currency
swap	 	 	(4,366,630	) 	 	17	
Cash flow	 	Interest
rate and exchange	 	Financial liability	 	Bonds payable	 	Inacabond 1	 	 	—  	  	 	Derivate l	 	Cross
currency
swap	 	 	956,677	  	 	17	
Cash flow	 	Interest
rate and exchange	 	Financial liability	 	Bank obligations	 	Scotiabank Credit	 	 	—  	  	 	Derivate	 	Cross
currency
swap	 	 	(2,978,132	) 	 	17	
Cash flow	 	Interest
rate and exchange	 	Financial liability	 	Bank obligations	 	Banco Continental Credit	 	 	—  	  	 	Derivate	 	Cross
currency
swap	 	 	(490,779	) 	 	17	
	 		 		 		 		 				 		 		 	 	 	 	 		
	 		 		 		 		 				 	Sub—total
derivative	 		 	 	(11,393,285	) 	 		

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2011

 	 	 	 	Hedge
subject	 	 	 	 	 	Book	 	 	Hedging instrument	 	Fair	 	 	 	
Hedge type	 	Risk	 	classification	 	Group	 	Type	 	value	 	 	Group	 	Type	 	value	 	 	Note	
 	 	 	 	 	 	 	 	 	 	(ThCh$)	 	 	 	 	 	 	(ThCh$)	 	 	 	
Fair value	 	Interest
rate	 	Financial liability	 	Bank obligations	 	IFC Credit	 	 	—  	  	 	Derivate	 	Interest
rate
swap	 	 	(602,877	) 	 	17	
	 		 		 		 		 				 		 		 	 	 	 	 		
	 		 		 		 		 				 	Sub—total
derivative	 		 	 	(602,877	) 	 		
	 		 		 		 		 				 		 		 	 	 	 	 		
Fair value	 	Interest
rate and exchange	 	Financial liability	 	Bank obligations	 	Rabobank Credit	 	 	—  	  	 	Derivate	 	Interest
rate
swap	 	 	132,724	  	 	6	
Fair value	 	Interest
rate and exchange	 	Financial liability	 	Bonds payable	 	US bond	 	 	—  	  	 	Derivate	 	Cross
currency
swap	 	 	14,781,771	  	 	6	
	 		 		 		 		 				 		 		 	 	 	 	 		
	 		 		 		 		 				 	Sub—total
derivative	 		 	 	14,914,495	  	 		
	 		 		 		 		 				 		 		 	 	 	 	 		
Cash flow	 	Interest
rate and exchange	 	Financial liability	 	Bank obligations	 	Rabobank Credit	 	 	—  	  	 	Derivate	 	Cross
currency
swap	 	 	188,162	  	 	6	
Cash flow	 	Interest
rate and exchange	 	Financial liability	 	Bank payable	 	US bond	 	 	—  	  	 	Derivate	 	Cross
currency
swap	 	 	26,800,254	  	 	6	
Cash flow	 	Interest
rate and exchange	 	Financial liability	 	Bonds payable	 	Inacabond 1	 	 	—  	  	 	Derivate	 	Cross
currency
swap	 	 	5,076,703	  	 	6	
	 		 		 		 		 				 	Sub—total
derivative	 		 	 	32,065,119	  	 		
Cash flow	 	Interest
rate and exchange	 	Financial liability	 	Bank obligations	 	Scotiabank Credit	 	 	—  	  	 	Derivate	 	Cross
currency
swap	 	 	(333,447	) 	 	17	
Cash flow	 	Interest
rate and exchange	 	Financial liability	 	Bank obligations	 	Banco Continental Credit	 	 	—  	  	 	Derivate	 	Cross
currency
swap	 	 	(1,778,147	) 	 	17	
	 		 		 		 		 				 		 		 	 	 	 	 		
	 		 		 		 		 				 	Sub—total
derivative	 		 	 	(2,111,594	) 	 		
	 		 		 		 		 				 		 		 	 	 	 	 		
The fair value hedges have been evaluated as highly effective. A fair value hedge is intended to hedge exposure to changes in the fair value of assets or liabilities recorded in the statements of financial position, unrecognized firm commitments or a portion of those assets, liabilities or firm commitments that are attributable to a particular risk and may affect profit for the year.
The cash flow hedges have been evaluated as highly effective. A cash flow hedge is intended to hedge exposure to changes in the cash flows that (i) are attributed to a particular risk associated with an asset or liability recorded previously (as all or some of the future interest payments of debt at variable interest), or a highly probable forecasted transaction and that (ii) may affect profit for the year.
For the described hedge, the financial risk refers to the potential upward deviation of equivalent cash flows in the functional currency (Ch$) as compared to coupon payments for bonds denominated in be consister in how you refer to Peruvian currency and the international bond placed in the United States, attributable to increases in the Sol/Ch$ and US/Ch$ exchange rates prevailing as of the date of the coupon payments. The hedge strategy adopted enables the Company to fix the cash outflow expressed in the functional currency for all coupon payments being hedged.
 
3.2.	Characteristics of financial risks.	
The Board of Directors understands that it is imperative for the Company to have an institutional framework that protects its financial stability and sustainability by effectively managing financial risks.
In general terms, the Company’s efforts are aimed at maintaining a policy that is sustainable with the development of its business, which by nature incorporates an important number of associated risks. As a result, the Company’s strategy is focused on maintaining strong financial solvency, placing emphasis on obtaining the cash flows necessary for its investments, ensuring proper management of working capital and taking necessary actions to minimize the financial risk from exposure of its loan commitments in different currencies and interest rates.
 
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The Company identifies the following risks relevant to its operations:
 
3.2.1.	Credit risk.	
The concept of credit risk refers to financial uncertainty, at different time horizons, related to complying with obligations entered into with counterparties, when contractual rights are exercised to receive cash or other financial assets from the Company.
 
3.2.1.1.	Exposure:	
The following table presents, as of December 31, 2012 and 2011, the amount in the financial asset category that best represents maximum exposure to credit risk without considering guarantees or credit enhancements.
Table 2-1-1. Exposure to credit risk by financial asset category.
As of December 31, 2012

Classification	  	Group	  	Type	  	Note	  	Book value	 	
 	  	 	  	 	  	 	  	(ThCh$)	 	
At fair value through Profit and loss	  	Mutual funds	  	Mutual funds shares	  	6	  	 	65,183,729	  	
	  	Derivatives	  	Derivatives at fair value with changes in results	  	6	  	 	2,946,670	  	
	  	Other	  	Call option (call)	  	6	  	 	—  	  	
	  		  	Shares	  	6	  	 	36,469	  	
	  		  	Highly liquid financial instruments	  		  	 	852,289	  	
Credit cards and trade receivables net	  	Cash and cash equivalents	  	Cash balances	  	5	  	 	53,106,390	  	
	  		  	Bank balances	  	5	  	 	164,801,594	  	
	  		  	Short-term deposits	  	5	  	 	19,812,821	  	
	  	Receivables	  	Credit card and trade receivables, net	  	8	  	 	1,202,639,027	  	
As of December 31, 2011

Classification	  	Group	  	Type	  	Note	  	Book value	 	
 	  	 	  	 	  	 	  	(ThCh$)	 	
At fair value through Profit and loss	  	Mutual funds	  	Mutual funds shares	  	6	  	 	43,067,809	  	
	  	Derivatives	  	Derivatives at fair value with changes in results	  	6	  	 	2,060,000	  	
	  	Other	  	Call option (call)	  	6	  	 	171,402,489	  	
	  		  	Shares	  	6	  	 	36,891	  	
	  		  	Highly liquid financial instruments	  	6	  	 	5,362,015	  	
Credit cards and trade receivables net	  	Cash and cash equivalents	  	Cash balances	  	5	  	 	48,779,345	  	
	  		  	Bank balances	  	5	  	 	76,287,432	  	
	  		  	Short-term deposits	  	5	  	 	19,994,804	  	
	  	Receivables	  	Credit card and trade receivables, net	  	8	  	 	1,124,312,306	  	
Credit risk exposure is primarily concentrated in credit card and trade receivables, please note 8.
 
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3.2.1.2.	Effect of guarantees on exposure.	
As of the end of this reporting period, the Company has not received any guarantees or other credit enhancements that impact its credit exposure detailed above. However, trade receivables are adequately covered from operating risks with life insurance policies that cover the risk of death.
 
3.2.1.3.	Concentrations.	
As of the end of this reporting period, the Company identifies its concentrations for credit risk based on the relevant counterparty for each category of financial assets.
Table 2-1-2. Diversification of counterparties.
As of December 31, 2012

Classification	  	Group	  	Type	  	Counterparty	  	Exposure
by type of
instrument	 	
 	  	 	  	 	  	 	  	% 	 	
At fair value through profit and loss	  	Mutual funds	  	Mutual funds	  	Domestic banks	  	 	67.92	  	
	  		  		  	Foreign banks	  	 	32.08	  	
Trade receivables and credit card	  	Cash and cash equivalents	  	Cash balances	  	Domestic banks	  	 	7.75	  	
	  		  		  	Foreign banks	  	 	92.25	  	
	  		  	Bank balances	  	Domestic banks	  	 	0.46	  	
	  		  		  	Foreign banks	  	 	99.54	  	
	  		  	Short- term deposits	  	Domestic banks	  	 	57.00	  	
	  		  		  	Foreign banks	  	 	43.00	  	
	  	Receivables	  	Trade receivables, gross	  	Non-financial institutions	  	 	100	  	
As of December 31, 2011

Classification	  	Group	  	Type	  	Counterparty	  	Exposure
by type of
instrument	 	
 	  	 	  	 	  	 	  	% 	 	
At fair value through profit and loss	  	Mutual funds	  	Mutual funds	  	Domestic banks	  	 	62.70	  	
	  		  		  	Foreign banks	  	 	37.30	  	
Trade receivables and credit card	  	Cash and cash equivalents	  	Cash balances	  	Domestic banks	  	 	37.30	  	
	  		  		  	Foreign banks	  	 	62.70	  	
	  		  	Bank balances	  	Domestic banks	  	 	59.20	  	
	  		  		  	Foreign banks	  	 	40.80	  	
	  		  	Short- term deposits	  	Domestic banks	  	 	60.70	  	
	  		  		  	Foreign banks	  	 	39.30	  	
	  	Receivables	  	Trade receivables, gross	  	Non-financial institutions	  	 	100	  	
Non-financial institutions are mainly composed of clients’ credit cards and receivables from other companies. (see note 8)
As presented above, a considerable portion of the Company’s credit risk exposure stems from trade receivables, which, given the high degree of fragmentation of the customer portfolio (in terms of geographic location, age, socioeconomic level, among others), has been segmented using internal credit scales.
 
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3.2.1.4.	Financial assets that are not in default or impaired.	
As part of its credit risk management activities, the Company constantly monitors the credit quality of counterparties for financial assets that are not in default or impaired. The following table details the credit quality by financial entity of the Company’s investments:
As of December 31, 2012

 	  	 	  	 	 	  	Credit quality	
Type	  	Counterpart	  	Amount of exposure	 	  	Solvency	 	Outlook	
 	  	 	  	(ThCh$)	 	  	 	 	 	
Mutual funds	  	Itaú	  	 	6,000,000	  	  	AA-	 	Stable	
	  	Bci	  	 	13,960,000	  	  	AA+	 	Stable	
	  	Scotiabank	  	 	3,600,000	  	  	AA	 	Stable	
	  	Foreing banks	  	 	37,615,606	  	  	(*)	 		
	  	BanChile	  	 	1,308,123	  	  	AA+	 	Stable	
	  	BBVA	  	 	2,700,000	  	  	AA+	 	Stable	
As of December 31, 2011

 	  	 	  	 	 	  	Credit quality	
Type	  	Counterpart	  	Amount of exposure	 	  	Solvency	  	Outlook	
 	  	 	  	(ThCh$)	 	  	 	 	 	
Mutual funds	  	Itaú	  	 	5,004,685	  	  	AA-	 	Stable	
	  	Bci	  	 	11,803,725	  	  	AA+	 	Stable	
	  	Santander	  	 	8,190,641	  	  	AA+	 	Stable	
	  	Foreing banks	  	 	18,068,758	  	  	(*)	 		
Financial instrument	  	Financial instrument of Central bank	  	 	5,362,015	  	  	AAA	 	Stable	
 
(*)	All mutual funds included under “Foreign banks” have international risk ratings greater than or equal to A- as required by the Company’s investment policy. The assets that are due but not impaired are presented in Note 8.	
 
3.2.1.5.	Credit Risk from operations other than credit card business.	
Credit risk from operations other than the credit card and banking businesses is limited primarily to balances maintained in notes payable from customers for sales with post-dated checks and external credit cards, which are generally recoverable in 30, 60 and 90 days, and investments in time deposits, bank balances and mutual funds. The Company monitors the latter using the credit risk rating granted by risk rating agencies. In addition, it targets its investments in mutual funds toward portfolios with highly solvent underlying assets, properly diversified assets and consistent management by the fund manager.
 
3.2.1.6.	Credit Risk from the credit card business.	
Given the relative importance of this exposure from the credit card business as compared to total maximum credit risk exposure, Cencosud has targeted its credit risk management toward developing a management model for its own credit cards as well as the banking business that is consistent with the Company’s strategic guidelines and the profiles of its credit transactions. The model takes into consideration the large-scale and fragmented nature of the cardholder portfolio and is structured in terms of cardholder selection, portfolio management and recovery of cardholders in default.
 
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3.2.1.6.1	Business definition.	
The financial business is defined as one more element of Cencosud’s value offering, which complements the comprehensive product and service offerings the Company provides through each of its retail business units and is aimed at building long-term relationships with our customers. The largest percentage of the financial retail business corresponds to the Más Credit Card in Chile, which has been operating for more than 20 years. The card’s market penetration is less in other countries, such as Peru where it has been available for 2 years and 6 months with the name of Banco Cencosud Peru. In addition, the Company operates with Banco Bradesco in Brazil to develop the financial business in that country.
3.2.1.6.2. Risk Model
Foundations:
The Risk Management Model is tightly linked to the large-scale and fragmented nature of the retail cardholder portfolio with a very large volume of cardholders (more than 4,000,000 in the region) and average debt per cardholder of around US$ 460.
In this context, the challenge lies in managing the cardholder portfolio and its associated risk, building long-term relationships with cardholders and making the value proposition and the retail business sustainable over time. Risk management is structured to ensure:
 
•	 	Optimum cardholder selection.	
 
•	 	Optimum portfolio management, which involves activating, strengthening, retaining, reducing and containing the portfolio card holders.	
 
•	 	Optimum collections management for cardholders in default, maximizing recovery with high standards of quality and service without affecting the relationship with Cencosud’s customers.	
Cardholder management efforts are broadly targeted to include all customers, from our target market to prospective customers, including those with or without retail purchases, with or without credit card movements and with or without payments in default.
 
a.	Key Risk Management Factors	
The large-scale and fragmented nature of the business determines portfolio management, in which the following key risk management factors stand out:
 
•	 	Automation and centralization of decision making.	
 
•	 	Customer segmentation.	
 
•	 	Management of information and earnings projections.	
 
•	 	Collections management.	
 
•	 	Large-scale and selective control model for credit and collections circuit.	
 
•	 	Provision models to cover portfolio risk in line with Basel II standards.	
Automation and centralization of decision making: credit and collections decisions are large-scale and automated and only a minority of decisions are analyzed by very specialized personnel. The Company features world class risk management and collections systems, including Capstone Decision Accelerator (CDA), TRIAD, Model Builder (from Fair Isaac Corporation - FICO) and Cyber Financial (from Inffinix), among others.
Customer segmentation: processes are segmented, differentiated by strategy and action tactics per risk profile, activity level and likelihood of occurrence, among others.
Management of information and earnings projections: the Company manages comprehensive information and statistical models on all relevant business and customer variables, which allows it to make timely, prognostic decisions.
Collections management: the Company has one sole collections model for managing collections for retail cards, which uses an outsourcing collection model to efficiently recover debt through quality management of debtors.
 
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Large-scale and selective control model for credit and collections circuit: the Company has large-scale controls over all phases of the credit and collections process, from its centralized processes to its point of- sale and collections processes.
Provision models to cover portfolio risk in line with Basel II standards: the Company has different provisions models that adhere to local regulations in each country as well as Basel II standards, in order to most adequately reflect cardholder portfolio risk. External variables which affect payment behavior are also included in statistical models for estimating provisions. The Company is making progress in each country on implementing anti-cyclical provisions based on industry best practices, starting with Chile and Peru and also during 2012 in Argentina. It also uses back testing to periodically monitor the sufficiency of the provisions it establishes.
Lastly, the Company has a corporate governance strategy that includes, among others, local Risk Committees for each country and a Corporate Risk Committee in which directors and senior executives participate. These committees have the following objectives, among others:
 
•	 	Monitor the business’s main risk indicators.	
 
•	 	Monitor the correct functioning of policies and credit and collections processes.	
 
•	 	Authorize entry into new markets and/or new products that impact risk.	
 
•	 	Authorize provisions model and monitor sufficiency.	
 
3.2.1.7.	Liquidity risk.	
The concept of liquidity risk is used by the Company to refer to financial uncertainty, at different time horizons, related to its capacity to respond to cash needs to support its operations, under both normal and exceptional circumstances.
 
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As of December 31, 2012 and 2011, the Company presents the following maturity profile for its financial instruments:
Table 2-2-1. Maturity analysis.
As of December 31, 2012

 	 	 	 	Maturity	 	
Classification	 	Instrument	 	0—6 months	 	 	6—12 months	 	 	1—2 years	 	 	2—3 years	 	 	3—5 years	 	 	More than
5 years	 	 	Total
liabilities	 	
 	 	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
	 	Total liabilities	 	 	3,054,501,218	  	 	 	238,514,739	  	 	 	397,658,832	  	 	 	390,294,267	  	 	 	437,573,737	  	 	 	2,131,734,327	  	 	 	6,650,277,121	  	
Other financial liabilities current and non-current	 	Bank loans	 	 	869,704,636	  	 	 	107,034,016	  	 	 	110,377,060	  	 	 	256,307,537	  	 	 	211,831,775	  	 	 	10,151,277	  	 	 	1,565,406,301	  	
	 	Bond debt	 	 	36,261,347	  	 	 	47,900,291	  	 	 	132,774,483	  	 	 	96,074,094	  	 	 	192,401,737	  	 	 	2,089,183,311	  	 	 	2,594,595,263	  	
	 	Other loans	 	 	1,165,082	  	 	 	5,037,292	  	 	 	4,594,267	  	 	 	4,444,779	  	 	 	4,522,787	  	 	 	16,908,015	  	 	 	36,672,222	  	
	 	Other financial liabilities (CCS—IRS)	 	 	7,624,595	  	 	 	2,245,262	  	 	 	—  	  	 	 	2,382,506	  	 	 	2,839,709	  	 	 	4,352,366	  	 	 	19,444,438	  	
	 	Time deposits	 	 	77,779,040	  	 	 	48,845,190	  	 	 	45,584,668	  	 	 	6,104,530	  	 	 	—  	  	 	 	—  	  	 	 	178,313,428	  	
	 	Term savings accounts	 	 	1,022,988	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 				 				 	 	1,022,988	  	
	 	Letters of credit	 	 	—  	  	 	 	—  	  	 	 	2,039,031	  	 	 	1,011,599	  	 	 	2,008,507	  	 	 	11,139,358	  	 	 	16,198,495	  	
	 	Deposits and other demand deposits	 	 	2,652,873	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	2,652,873	  	
	 	Debt purchase Bretas—Prezunic—Johnson	 	 	—  	  	 	 	27,452,688	  	 	 	23,969,222	  	 	 	23,969,222	  	 	 	23,969,222	  	 	 	—  	  	 	 	99,360,355	  	
	 	Other financial liabilities—Other	 	 	29,115,522	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	29,115,522	  	
Commercial loans	 	Trade payables and other payables and non-current liabilities	 	 	1,902,395,915	  	 	 	—  	  	 	 	7,410,802	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	1,909,806,717	  	
	 	Other non-financial liabilities current and non-current	 	 	79,006,277	  	 	 	—  	  	 	 	70,909,299	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	149,915,576	  	
	 	Payables to related entities	 	 	974,469	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	974,469	  	
	 	Current income tax liabilities	 	 	46,798,474	  	 				 				 				 				 				 	 	46,798,474	  	
As of December 31, 2011

 	 	 	 	Maturity	 	
Classification	 	Instrument	 	0—6 months	 	 	6—12 months	 	 	1—2 years	 	 	2—3 years	 	 	3—5 years	 	 	More than
5 years	 	 	Total
liabilities	 	
 	 	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
	 	Total liabilities	 	 	1,912,630,548	  	 	 	399,305,977	  	 	 	336,315,030	  	 	 	309,218,465	  	 	 	488,640,231	  	 	 	1,558,689,632	  	 	 	5,004,799,883	  	
Other financial liabilities current and non-current	 	Bank loans	 	 	124,270,818	  	 	 	55,949,881	  	 	 	147,451,816	  	 	 	180,477,476	  	 	 	328,776,058	  	 	 	74,764,570	  	 	 	911,690,619	  	
	 	Bond debt	 	 	24,531,922	  	 	 	42,076,801	  	 	 	69,583,670	  	 	 	103,681,931	  	 	 	132,846,732	  	 	 	1,461,596,278	  	 	 	1,834,317,334	  	
	 	Other loans	 	 	837,894	  	 	 	4,221,308	  	 	 	5,095,933	  	 	 	4,989,021	  	 	 	4,398,671	  	 	 	10,226,554	  	 	 	29,769,381	  	
	 	Other financial liabilities (CCS—IRS)	 	 	6,271,819	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	1,592,922	  	 	 	—  	  	 	 	7,864,741	  	
	 	Time deposits	 	 	89,365,723	  	 	 	56,102,170	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	145,467,893	  	
	 	Term savings accounts	 	 	1,033,220	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	1,033,220	  	
	 	Letters of credit	 	 	—  	  	 	 	—  	  	 	 	1,268,966	  	 	 	1,027,872	  	 	 	1,983,682	  	 	 	12,102,230	  	 	 	16,382,750	  	
	 	Deposits and other demand deposits	 	 	2,510,178	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	2,510,178	  	
	 	Debt purchase Bretas	 	 	—  	  	 	 	—  	  	 	 	19,042,165	  	 	 	19,042,165	  	 	 	19,042,166	  	 	 	—  	  	 	 	57,126,496	  	
	 	Other financial liabilities Option	 	 	—  	  	 	 	240,955,817	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	240,955,817	  	
Commercial loans	 	Trade payables and other payables and non-current liabilities	 	 	1,550,820,719	  	 	 	—  	  	 	 	11,150,691	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	1,561,971,410	  	
	 	Other non-financial liabilities current and non-current	 	 	71,050,305	  	 	 	—  	  	 	 	82,721,789	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	153,772,094	  	
	 	Payables to related entities	 	 	1,447,631	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	1,447,631	  	
	 	Current income tax liabilities	 	 	40,490,319	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	40,490,319	  	
 
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As part of its comprehensive risk management framework, the Company has liquidity management policies aimed at ensuring timely compliance with its obligations based on the scale and risk of its operations, both under normal conditions and exceptional situations, which are defined as circumstances in which cash flows can be substantially greater than expected as a result of unforeseen changes in general market conditions or the particular situation of a certain institution. In this context, liquidity risk management tools have been designed to both ensure positioning of the statements of financial position that allows minimizing the probability of an internal liquidity crisis (prevention policies) as well as defining contingency plans to address a liquidity crisis scenario.
For such purposes, the liquidity management policies define the Company’s management strategy, management’s roles and responsibilities, internal limits for cash flow mismatches, sources of risk, contingency plans and internal control mechanisms.
One of the indicators used to monitor liquidity risk is the liquidity position, which is measured and controlled each day based on the difference between cash flows payable for liabilities and expense accounts and cash flows receivable from assets and income accounts for a given maturity period.
In the event of a cash deficit on a consolidated level, Cencosud S.A. has various short and long-term financing alternatives, including lines of credit with banks, access to international debt markets, liquidation of investment instruments, etc. In contrast, in the event of a cash surplus on a consolidated level, this money is invested in different investment instruments.
As of December 31, 2012, the Company has available unused lines of credit for approximately ThCh$ 301,068,423 (ThCh$ 320,733,256 as of December 31, 2011).
As of December 31, 2012, the company held unused line of credits as a result of Confirming operations by ThCh$ 107,352,517 (ThCh$ 63,194,765 as of December 31, 2011) which held the original maturities agreed with the supplier. Such operations are presented in the line trade accounts payables.
Confirming operations that consider larger payment with the bank that the original payment deadline set by the Company and its suppliers in the trade agreement amounted, in the portion corresponding to the longest period of payment to ThCh$7,992,721 (ThCh$ 4,951,299 as of December 31, 2011) in Chile and ThCh$ 21,122,803 (ThCh$ 13,615,857 as of December 31, 2011) in Peru, to December 31, 2012. These operations are presented under “Other financial liabilities”
These operations are monitored on a regular basis so that these exposures do not adversely affect the consolidated financial ratios according to corporate policies.
 
3.2.1.8.	Market risk.	
The Company is exposed to market risk, which involves variations in interest and exchange rates that may affect its financial position, operating results and cash flows. The Company’s hedge policy calls for a periodic review of its exposure to interest and exchange rate risk for its main assets and obligations.
 
3.2.1.8.1.	Interest rate risk.	
As of December 31, 2012, approximately 61% of the Company’s financial debt, primarily its short-term debt and bonds, was at fixed interest rates. The remaining 39% was at variable interest rates including derivates. Of the variable rate debt, approximately 99% is indexed to local interest rates (either as originally denominated or by re-denominating with derivatives).
The Company has identified as important its interest rate risk generated primarily from variable rate obligations, which are sensitized by measuring the impact on income of a reasonably possible variation in the observed interest rate. Following regulatory guidelines, the deviation in relevant interest rates is estimated using historical series with a daily frequency for each of the identified risk variables. The distribution of percentage changes occurring in three-month intervals is then analyzed and the extreme scenarios that fall outside a confidence interval of 95% are eliminated. The amount of the sensitized exposure corresponds to the total of the variable rate debt.
 
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For variable rate debt, the financial risk refers to the potential upward deviation of cash flows related to interest payments on obligations from a specific target, attributable to the rise in interest rates that are important to the Company’s indebtedness structure, namely: LIBOR, TAB nominal and the Chamber rate (CAM), Chile.
As of and for December 31, 2012

Classification	  	Currency	  	Exposure	 	  	Market variable	  	Change in
risk  factor	 	 	Effect on income	 	
 	  	 	  	 	 	  	 	  	%	 	 	(ThCh$)	 	
Net liability	  	US$	  	 	1,500,000,000	  	  	LIBOR 1M	  	 	(37.73	) 	 	 	285,219	  	
	  		  				  		  	 	32.90	  	 	 	(248,737	) 	
Net liability	  	Ch$	  	 	79,508,100,000	  	  	TAB NOM 90	  	 	(43.86	) 	 	 	552,757	  	
	  		  				  		  	 	43.61	  	 	 	(549,525	) 	
Net liability	  	Ch$	  	 	59,819,697,369	  	  	TAB NOM 180	  	 	(37.04	) 	 	 	1,484,275	  	
	  		  				  		  	 	45.07	  	 	 	(1,806,216	) 	
Net liability	  	Ch$	  	 	419,586,630,000	  	  	CAM	  	 	(53.93	) 	 	 	1,755,215	  	
	  		  				  		  	 	49,12	  	 	 	(2,461,922	) 	
As of and for December 31, 2011

Classification	  	Currency	  	Exposure	 	  	Market variable	  	Change in
risk factor	 	 	Effect on income	 	
 	  	 	  	 	 	  	 	  	%	 	 	(ThCh$)	 	
Net liability	  	US$	  	 	12,839,422	  	  	LIBOR 6M	  	 	(39.76	) 	 	 	5,168	  	
	  		  				  		  	 	42.31	  	 	 	(5,500	) 	
Net liability	  	Ch$	  	 	116,914,350,000	  	  	TAB NOM 90	  	 	(49.88	) 	 	 	950,152	  	
	  		  				  		  	 	50.00	  	 	 	(952,504	) 	
Net liability	  	Ch$	  	 	247,319,697,369	  	  	TAB NOM 180	  	 	(40.72	) 	 	 	1,554,613	  	
	  		  				  		  	 	50.00	  	 	 	(1,909,019	) 	
Net liability	  	Ch$	  	 	311,284,230,000	  	  	CAM	  	 	(62.83	) 	 	 	2,253,157	  	
	  		  				  		  	 	52.55	  	 	 	(2,146,936	) 	
The effect on income obtained from a theoretical exercise shows the incremental effect generated from the reasonably possible estimated change (i.e. it corresponds to the difference between the amount that was effectively recorded for the interest payment and the amount that would have been recorded in a scenario of lower or higher interest rates).
The Company’s risk management strategy is to hold between 40 and 60% of its financial debt in variable rates in order to benefit from lower cost of funds and the remainder of its financial debt in fixed rates in order to reduce uncertainty stemming from variable interest payments, by denominating part of its variable interest rate liabilities into fixed rate liabilities using derivative financial instruments for these purposes, which allow the interest rate of the original obligation to be fixed.
 
3.2.1.8.2.	Foreign exchange rate risk.	
In the countries in which the Company operates, most expenses and income are in local currency. As a result, most of its debt (89%) is denominated in local currency. As of December 31, 2012, approximately 70% of the debt in U.S. dollars was hedged with cross currency swaps or other foreign currency hedges. The Company’s policy is to hedge risks from variations in exchange rates on its net liability position in foreign currency using market instruments designed for that purpose.
 
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The Company has identified as important the exchange rate risk generated from obligations in US dollars, Argentine pesos, Peruvian Nuevos Soles and Unidades de Fomento, which are sensitized by measuring the impact on income of a reasonably possible variation in observed exchange rates. Following regulatory guidelines, the deviation in relevant exchange rates is estimated using historical series with a daily frequency for each of the identified risk variables. The distribution of percentage changes occurring in three-month intervals is then analyzed and the extreme scenarios that fall outside a confidence interval of 95% are eliminated.
The amount of sensitized exposure is estimated based on the effects on the income and equity accounts presented in chart 1.5.
As of and for December 31, 2012

Classification	  	Currency	  	Exposure	 	  	Market
variable	  	Closing
value	 	  	Change in
risk factor	 	 	Exchange
rate
value	 	  	Effect on
income	 	
 	  	 	  	 	 	  	 	  	 	 	  	%	 	 	 	 	  	(ThCh$)	 	
Net liability	  	USD	  	 	953,071,777	  	  	USD-CLP	  	 	479.96	  	  	 	(9.37	) 	 	 	434.99	  	  	 	42,859,387	  	
	  		  				  		  	 	—  	  	  	 	10.41	  	 	 	529.92	  	  	 	(47,618,782	) 	
Net liability	  	ARS	  	 	210,872,941	  	  	ARS-CLP	  	 	97.49	  	  	 	(13.99	) 	 	 	83.85	  	  	 	2,876,425	  	
	  		  				  		  	 	—  	  	  	 	12.41	  	 	 	109.59	  	  	 	(2,551,030	) 	
Net liability	  	UF	  	 	28,987,893	  	  	CLF-CLP	  	 	22,840.75	  	  	 	(0.516	) 	 	 	22,722.86	  	  	 	3,417,303	  	
	  		  				  		  	 	—  	  	  	 	2.653	  	 	 	23,446.77	  	  	 	(17,567,240	) 	
Net liability	  	COP	  	 	306,413,618,608	  	  	COP-CLP	  	 	0.27	  	  	 	(10.626	) 	 	 	0.24	  	  	 	8,829,821	  	
	  		  				  		  				  	 	10.721	  	 	 	0.30	  	  	 	(8,908,770	) 	
Net liability	  	PEN	  	 	473,855,927	  	  	PEN-CLP	  	 	187.81	  	  	 	(8.911	) 	 	 	171.08	  	  	 	7,930,579	  	
	  		  				  		  	 	—  	  	  	 	10.233	  	 	 	207.03	  	  	 	(9,106,529	) 	
Net liability	  	BRL	  	 	473,509,151	  	  	BRL-CLP	  	 	233,59	  	  	 	(11.568	) 	 	 	206.56	  	  	 	12,795,265	  	
	  		  				  		  	 	—  	  	  	 	12.282	  	 	 	262.27	  	  	 	(13,584,143	) 	
As of and for December 31, 2011

Classification	  	Currency	  	Exposure	 	  	Market
variable	  	Closing
value	 	  	Change in
risk factor	 	 	Exchange
rate
value	 	  	Effect on
income	 	
 	  	 	  	 	 	  	 	  	 	 	  	%	 	 	 	 	  	(ThCh$)	 	
Net liability	  	USD	  	 	359,817,826	  	  	USD-CLP	  	 	519.20	  	  	 	(9.43	) 	 	 	470.22	  	  	 	17,625,604	  	
	  		  				  		  	 	—  	  	  	 	10.75	  	 	 	575.03	  	  	 	(20,089,936	) 	
Net liability	  	ARS	  	 	297,442,554	  	  	ARS-CLP	  	 	120.74	  	  	 	(14.38	) 	 	 	103.38	  	  	 	5,163,067	  	
	  		  				  		  	 	—  	  	  	 	12.76	  	 	 	136.14	  	  	 	(4,581,527	) 	
Net liability	  	UF	  	 	27,112,448	  	  	CLF-CLP	  	 	22,291.88	  	  	 	(0.558	) 	 	 	22,167.55	  	  	 	3,370,886	  	
	  		  				  		  	 	—  	  	  	 	2.756	  	 	 	22,906.29	  	  	 	(16,658,149	) 	
Net liability	  	COP	  	 	3,129,233,333	  	  	COP-CLP	  	 	0.27	  	  	 	(11.024	) 	 	 	0.24	  	  	 	93,138	  	
	  		  				  		  				  	 	10.976	  	 	 	0.30	  	  	 	(92,734	) 	
Net liability	  	PEN	  	 	547,343,736	  	  	PEN-CLP	  	 	196.27	  	  	 	(9.158	) 	 	 	178.30	  	  	 	9,837,920	  	
	  		  				  		  	 	—  	  	  	 	10.618	  	 	 	217.11	  	  	 	(11,407,096	) 	
Net liability	  	BRL	  	 	203,087,446	  	  	BRL-CLP	  	 	278.23	  	  	 	(11.875	) 	 	 	245.19	  	  	 	6,709,865	  	
	  		  				  		  	 	—  	  	  	 	12.522	  	 	 	313.07	  	  	 	(7,075,786	) 	
The effect on income obtained from a theoretical exercise shows the incremental effect generated from the reasonably possible estimated change (i.e. it corresponds to the difference between the amount that was effectively recorded for exchange differences and the amount that would have been recorded in a scenario of lower or higher exchange rates).
The Company’s strategy is to held most of its financial debt in local currencies to reduce uncertainty stemming from an increase in the value of its liabilities due to foreign currency fluctuations, using derivative financial instruments for these purposes, which allow the value of the obligation to be expressed in its functional currency.
 
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4	Estimates, judgment or criteria applied by management	
The estimates and criteria used are continuously assessed and are based on prior experience and other factors, including the expectation of occurrence of future events that are considered reasonable according to the circumstances.
The Cencosud Group makes estimates and assumptions with respect to the future. Actual results could differ from those estimates. The estimates and assumptions that have a significant risk of generating material adjustments to the asset and liability balances in the next year are presented below.
 
4.1	Estimate of impairment of assets with indefinite useful lives	
The Cencosud Group assesses annually whether goodwill has experienced any impairment, according to the accounting policy described in Note 2.11. The recoverable balances of the cash generating units have been determined from the base of their value in use. The methodology of discounting cash flows at a real pre-tax discount rate calculated for each country is applied. The assets measured correspond mainly to trademarks and goodwill arising from past business combinations. The measurements are performed for each business segment and for each cash generating unit. The projected cash flows in each segment are allocated initially to identifiable tangible and intangible assets and the exceeding portion is allocated to goodwill. The valuation review of the trademarks incorporates among other factors the market analysis, financial projections and the determination of the role that brand has in the generation of sales.
 
4.2.	Useful life of property, plant and equipment	
The Company and its subsidiaries review the estimated useful lives, residual values and depreciation method of its property, plant and equipment at the end of each year. During this year the Company has established that there are no significant changes in the useful lives estimated during the period.
 
4.3	Estimate of impairment of property, plant and equipment	
For property, plant and equipment, the company applies the methodology of discounting future cash flows using a pre-tax nominal discount rate, differentiated by country (7.6% in Chile; 19.2% in Argentina; 8.2% in Peru; 8.0% in Brazil and 7.8% in Colombia). Cash flow projections are performed for each country and business segment. The functional currency of each country is used and the projection considers a 5 year outlook plus perpetuity. The projections are based on historical information from recent years and the main macroeconomic variables that affect markets. In addition, the projections consider moderate organic growth and the recurring investments necessary to maintain the cash flow generating capacity of each segment.
 
4.4.	Impairment of accounts receivable	
The Company assesses the impairment of the accounts receivable when there is objective evidence that it will not be able to collect all the amounts according to the original terms of the account receivable (Note 2.12.2).
 
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4.5	Investment property	
For investment property the methodology of the discounted future cash flows uses a country-specific WACC after tax rate, measured in real terms (8.3% in Chile, 18.2% in Argentina and 8.7% in Perú). To this effect, a calculation is performed to obtain the net revenues that correspond to the lease income minus the direct costs and operating expenses. Additionally, the projected cash flows used the historical information of the recent years and the projected macroeconomic variables that will affect each country. The cash flows are calculated in a scenario of moderated growth for those investment properties that have reached the expected maturity level and the main variables used are:
 
1.	Determination of the Discount Rate	
The discount rate is reviewed quarterly for each country and consists of the following factors:
 
a)	BETA: Because the American market presents a greater number of comparable companies within this industry, using betas of companies in that country.	
 
b)	Risk-free rate: It draws on the U.S. Treasury rate at 30 years (30yr T-Bond)	
 
c)	risk premium: Estimated on long-term returns of the stock market and the country risk of each transaction, estimated by the Credit Default Swap to 10 years (10yr CDS). In the case of Argentina’s country risk used is the average of the last three years.	
 
d)	Leverage Ratio: Estimated as of BETA referring them on 74% equity and 26% debt.	
 
e)	Tax rate: We use the tax rate in effect in each country	
 
f)	Spread: To estimate the return on debt using the international bond spread Cencosud which is similar to the Industry spread. With all these factors we estimate the discount rate (WACC) nominal and real, the latter being used as the flow is estimated at UF (Unidad de Fomento) in Chile, or adjusted for inflation in Peru and Argentina	
 
2.	Revenue growth:	
The evolution of income depends on the property, but remains between 0.5% and 1.0% annual real growth, except those newly opened malls whose maturation does expect superior performance improved in the first years of operation. The revenue projection is reviewed quarterly so that it is aligned to the budget approved by the board in the short term and that their expectations of long-term trends are in line with the life cycle in which the asset is (Shopping).
 
3.	Growth in costs and expenses:	
As income, change in expenditure depends on the property but always reflects the standard structure resulting from the operation of such properties and operating agreements signed with tenants. Also reviewed quarterly to be aligned with the budget and expected evolution for each Shopping.
 
4.	Investment Plan:	
For shopping center me each review a reinvestment plan in line with the characteristics of each property and the life cycle in which they are placed.
Based on the points described above, the estimated available flow projection thirty-year term, after which it is estimated a perpetuity. The present value of these flows determines the fair value of the investment property.
 
4.6.	Financial assets—options	
In order to determine the fair value of call options (a financial asset), the company considers the net present value of the discounted cash flows of the underlying asset and an analysis of market comparables.
Options contracts incorporated into the agreements between Cencosud S.A. and UBS A.G. London Branch “UBS” (note 23.5) are recognized in the financial statements of Cencosud S.A. as follows:
 
•	 	The put option was initially accounted for as a liability with a charge to the equity account other reserves, at the present value of the estimated exercise price, in accordance with the provisions of IAS 32 “Financial Instruments: Presentation.”	
 
•	 	After the initial recognition, all variations in the value of the put option are recorded against profit and loss.	
 
•	 	After their initial recognition, the call option is accounted at fair value through profit and loss. The fair value is the present value of the difference between the amount to be paid to exercise the option and the fair value of the underlying shares.	
 
•	 	If the call option is exercised, the asset will be derecognized together with the cash provided as the exercise price, with a credit to non-controlling interest and other reserves within equity. The liability for the put option will be reversed with a credit to the equity account other reserves.	
 
•	 	If the put option is exercised, the corresponding liability will be derecognized with a balancing entry for the cash outflow given as the exercise price. The non-controlling interest will be derecognized against the asset for the call option (if any) and against the equity account other reserves.	
 
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5	Cash and cash equivalents	
The composition of this item as of December 31, 2012 and 2011 is the following:

 	  	As of December 31,	 	
Cash categories	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Cash in hand	  	 	53,106,390	  	  	 	48,779,345	  	
Bank balances	  	 	164,801,594	  	  	 	76,287,432	  	
Short-term deposits	  	 	19,812,821	  	  	 	19,994,804	  	
Cash	  	 	237,720,805	  	  	 	145,061,581	  	
Ash and equivalents include cash, bank account balances and short term investments. Currency is as follows:

 	  	As of December 31,	 	
Currency	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Chilean Peso	  	 	101,729,681	  	  	 	75,222,826	  	
Argentine Peso	  	 	21,768,921	  	  	 	36,569,236	  	
US dollars	  	 	305,374	  	  	 	123,201	  	
Peruvian New Sol	  	 	39,771,877	  	  	 	19,032,784	  	
Brazilian Real	  	 	22,637,088	  	  	 	13,124,282	  	
Colombian Peso	  	 	51,507,864	  	  	 	989,252	  	
Total	  	 	237,720,805	  	  	 	145,061,581	  	

6	Other financial assets, current and non-current	
The composition of this item as of December 31, 2012 and 2011 includes the following:

 	  	As of December 31,	 	
Other financial assets, current	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Shares	  	 	36,469	  	  	 	36,891	  	
Mutual Funds Shares(*)	  	 	65,183,729	  	  	 	43,067,809	  	
Derivatives at fair value through profit and loss	  	 	2,946,670	  	  	 	2,060,000	  	
Highly liquid financial instruments	  	 	—  	  	  	 	5,362,015	  	
Call option (**)	  	 	—  	  	  	 	171,402,489	  	
Total other financial assets, current	  	 	68,166,868	  	  	 	221,929,204	  	

									
 	  	As of December 31,	 	
Other financial assets, non-current	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Derivatives at fair value through profit and loss	  	 	—  	  	  	 	—  	  	
Hedging derivatives	  	 	40,154,935	  	  	 	46,979,614	  	
Financial investments Long term	  	 	852,289	  	  	 	—  	  	
Total other financial assets, non-current	  	 	41,007,224	  	  	 	46,979,614	  	

(*)	Mutual Funds shares are mainly fixed rate investments.	
(**)	On June 29, 2012, in connection with the purchase by the Company of the remaining 38.6062% interest in Jumbo Retail Argentina S.A. from UBS A.G. London Branch, Cencosud S.A. and UBS A.G. London Branch agreed to terminate the purchase option (call) and put option (put) and associated rights and obligations between the parties.The accounting effects of this decision are recognized in equity under “other reserves”, for an amount of ThCh$ 160,974,000.	
 
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7	Derivative financial instruments	
 
7.1	Financial assets and liabilities held at fair value through profit and loss	
The Company, following the financial risk management policy described in Note 3, enters into financial derivative contracts to hedge exchange rate and interest rate fluctuation risks.
This account as of December 31, 2012 includes cross currency swaps and interest rate swaps designed to hedge debt payment flows in foreign currency (US dollars). The fair value of these contracts as of December 31, 2012 represents current and non-current assets of ThCh$ 2,946,670 and liabilities of ThCh$ 7,624,595, respectively (current asset of $ 2,060,000 and liabilities of ThCh$ 5,150,270 as of December 31, 2011).
Changes in the fair value of the assets and liabilities classified in this category (cross currency swaps and interest rate swaps) are recorded under “financial income” or “financial expenses”, except for the agreements that do not hedge direct liabilities, which are recorded as other gains (losses).
On June 29, 2012, in connection with the purchase by the Company of the remaining 38.6062% interest in Jumbo Retail Argentina S.A. from UBS A.G. London Branch, the Company and UBS A.G. London Branch agreed to terminate the purchase option (call) and put option (put) and associated rights and obligations between the parties. As a result of the termination of these contracts and the exercise of the call option, the Company paid ThCh$ 242,681,660 for the 38.6062% interest in Jumbo Retail Argentina. The accounting effects of this transaction are presented in Equity within “other reserves”
These financial instruments are recorded in the accounts other current and non-current financial assets and other current and non-current financial liabilities.
 
7.2	Hedging assets and liabilities	
The Company has derivatives to hedge exposure to exchange rate variations, particularly instruments classified as cross currency swaps (CCS), used to hedge debts denominated in Peruvian Nuevo Soles and U.S. dollars from bond placements and bank debt in those currencies. These instruments are classified as cash flow and fair value hedges. The fair value of these contracts as of December 31, 2012 represent an asset of ThCh$ 41,007,224 (ThCh$ 46,979,614 as of December 31,2011) and a liability of ThCh$ 11,819,843 (ThCh$ 2,714,471 as of December 31, 2011).
These financial instruments are recorded in the accounts current and non-current financial assets and current and non-current financial liabilities. The liabilities are detailed in Note 17.
Changes in the fair value of the assets and liabilities classified in this category (cross currency swaps) are recorded under “financial income” or “financial expenses”.
These financial instruments are presented as “operating activities” in the statement of cash flows as part of the changes in working capital. This is based on the fact that Cencosud has entered into these assets and liabilities as derivative financial instruments to serve as economic and financial hedges for the risks associated with exchange rates and interest rates as described previously.
Instruments at fair value through profit and loss and hedge instruments are detailed in Note 3.
 
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8	Trade receivables and other receivables	
Trade receivables and other receivables as of December 31, 2012 and 2011 are as follows:

 	  	As of December 31,	 	
Trade receivables and other receivables, net, current	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Trade receivables net, current	  	 	177,242,282	  	  	 	130,061,944	  	
Credit card receivables net, current	  	 	515,978,920	  	  	 	496,758,427	  	
Other receivables, net, current (1)	  	 	323,577,322	  	  	 	286,507,258	  	
Letters of credit loans	  	 	640,892	  	  	 	728,625	  	
Consumer installment credit—(Banco Paris)	  	 	42,893,450	  	  	 	15,812,537	  	
	  	 	 	 	  	 	 	 	
Total	  	 	1,060,332,866	  	  	 	929,868,791	  	

									
 	  	As of December 31,	 	
Trade receivables and other receivables, net, non-current	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Trade receivables net, non-current	  	 	219,025	  	  	 	304,780	  	
Credit card receivables net, non-current	  	 	50,229,846	  	  	 	70,615,145	  	
Other receivables, net, non-current(1)	  	 	13,767,953	  	  	 	8,807,825	  	
Letters of credit loans	  	 	11,936,654	  	  	 	10,802,064	  	
Consumer installment credit—(Banco Paris)	  	 	66,152,683	  	  	 	103,913,701	  	
	  	 	 	 	  	 	 	 	
Total	  	 	142,306,161	  	  	 	194,443,515	  	

(1)	Previously issued consolidated financial statements included ThCh$26,833,098 associated with a receivable from the former owners of Bretas for pre-acquisition contingencies. Considering that the Company has a legally enforceable right to set-off this amount and it intends to realize this asset and settle it against a liability that the Company has with the former owners of Bretas, the Company has reclasiffied this amount to “Other financial liabilities.” See Note 17.1.	

 	  	As of December 31,	 	
Trade receivables and other receivables, gross, current	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Trade receivables gross, current	  	 	192,728,230	  	  	 	148,214,060	  	
Credit card receivables gross, current	  	 	566,060,108	  	  	 	555,800,756	  	
Other receivables gross, current	  	 	337,075,113	  	  	 	297,195,383	  	
Letters of credit loans	  	 	872,438	  	  	 	728,625	  	
Consumer installment credit—(Banco Paris)	  	 	55,500,755	  	  	 	27,577,540	  	
	  	 	 	 	  	 	 	 	
Total	  	 	1,152,236,644	  	  	 	1,029,516,364	  	

									
 	  	As of December 31,	 	
Trade receivables and other receivables close to maturity	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Past due less than three months	  	 	765,569,835	  	  	 	629,973,448	  	
Past due between three and six months	  	 	78,732,326	  	  	 	69,940,662	  	
Past due between six and twelve months	  	 	136,763,286	  	  	 	101,265,124	  	
Past due in more than twelve months	  	 	142,306,161	  	  	 	194,443,515	  	

Total	  	 	1,123,371,608	  	  	 	995,622,749	  	
	  	 	 	 	  	 	 	 	
Please refer to table 1-1 in Note 3 to see the trade receivables’ and other receivables’ fair value.
 
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The maturity of past due trade receivables as of December 31, 2012 and 2011 is as follows:

 	  	As of December 31,	 	
Trade receivables past due but not impaired	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Past due in less than three months	  	 	119,132,649	  	  	 	159,215,632	  	
Past due between three and six months	  	 	31,800,108	  	  	 	34,361,276	  	
Past due between six and twelve months	  	 	10,058,406	  	  	 	14,061,808	  	
Past due in more than twelve months	  	 	10,180,034	  	  	 	20,698,414	  	

Total	  	 	171,171,197	  	  	 	228,337,130	  	
	  	 	 	 	  	 	 	 	
The roll-forward of the bad debt allowance is as follows:

 	  	As of December 31,	 	
Change in bad debt allowance	  	2012	 	 	2011	 	
 	  	ThCh$	 	 	ThCh$	 	
Initial balance	  	 	99,647,573	  	 	 	63,083,764	  	
Increase in reserve	  	 	123,866,930	  	 	 	114,175,472	  	
Increase for business combination	  	 	2,172,569	  	 	 	15,350,400	  	
Reserve uses	  	 	(94,865,255	) 	 	 	(68,835,977	) 	
Decreases in reserve	  	 	(38,918,039	) 	 	 	(24,126,086	) 	

Total	  	 	91,903,778	  	 	 	99,647,573	  	
	  	 	 	 	 	 	 	 	
The maximum exposure to credit risk at the date of the report is the book value in each category of the trade account. The Cencosud Group does not request collateral as a guarantee.
The information presented below is required by the Superintendency of Securities and Insurance through the rule number 23942 dated on September 14, 2011.
The financial business is defined as one more element of Cencosud’s value offering, which complements the comprehensive product and service offerings the Company provides through each of its business units and is aimed at building long-term relationships with our customers. The largest percentage of the financial retail business corresponds to the Más Credit Card in Chile, which has been operating for more than 20 years. The card’s market penetration is less in other countries, such as Peru where it has been available for less than 1 year. Its distribution with respect to the total portfolio is:

 	  	As of December 31,	 	
Receivables portfolio	  	2012	 	  	 	 	  	2011	 	  	 	 	
 	  	ThCh$	 	  	%	 	  	ThCh$	 	  	%	 	
Current credit card receivables, gross	  	 	566,060,108	  	  				  	 	555,800,756	  	  				
Non—current credit card receivables, gross	  	 	50,229,846	  	  				  	 	70,615,145	  	  				

Total credit card receivables	  	 	616,289,954	  	  				  	 	626,415,901	  	  				

Chilean credit card	  	 	452,363,211	  	  	 	73	  	  	 	481,195,215	  	  	 	77	  	
Credit card Más	  	 	447,400,665	  	  				  	 	446,795,346	  	  				
Credit card Johnson’s	  	 	4,962,546	  	  				  	 	34,399,869	  	  				
Argentine credit card	  	 	129,198,584	  	  	 	21	  	  	 	125,781,428	  	  	 	20	  	
Peruvian credit card	  	 	34,728,159	  	  	 	6	  	  	 	19,439,258	  	  	 	3	  	

Total credit card receivables	  	 	616,289,954	  	  	 	100	  	  	 	626,415,901	  	  	 	100	  	

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Progress is being made to regionalize the financial business through an organizational structure where each risk area autonomously and independently manages risk, led by the Corporate Risk Management Division, which reports directly to Cencosud’s Corporate CEO. In turn, the risk management areas in each country report (administratively and functionally) to the Corporate Risk Manager.
CHILE
 
1.	Credit policies. Credit Card Más	
 
a)	Credit policies are led by the Risk Management Division through a risk committee in Chile and parameters are set in the Company’s evaluation systems for the entire credit process. Among others, these policies include:	
 
 	i.	the commercial ethics of debtors or those eligible for credit;	
 
 	ii.	the cardholder risk profile, measured based on payment behavior and/or associated score models;	
 
 	iii.	the debtor’s credit capacity, among others.	
As mentioned, the main objective of the financial business is to grant customers access to financing for products offered by the Company´s retail stores (to complement Cencosud’s value offering). Cash advances and financing at affiliated businesses are very limited as compared to total credit card sales. Financial products are targeted toward cardholders with better risk profiles and are complementary to the credit card itself. Minimum payment policies are segmented by risk profile and fluctuate between 10% and 20% of the value invoiced monthly.
 
b)	The collections policy aims to secure 100% of debt payments while the cardholder is in the early stages of default so that the cardholder’s account may remain open to continue making purchases. However, some cardholders cannot make their payments. For these cardholders, new payment plans can be structured. These agreements must consider at least:	
 
 	i.	The cardholder’s expressed will.	
 
 	ii.	The intention to pay, manifested by an initial payment as a condition to restructure the debt.	
 
 	iii.	Account blockage for all cardholders who restructure debt that is more than 30 days in default. Only after having demonstrated favorable payment behavior does the company evaluate potentially opening the account so the cardholder may continue making purchases and reducing the credit limit, as appropriate.	
Most renegotiation and refinancing are done for cardholders that are more than 30 days in default and require initial payments of an average of 15% of the total debt. The average term is around 23 months and a maximum of 2 restructurings per year is accepted.
 
c)	Bad debt allowances are determined using a model that brings together banking industry best practices, in line with Basel criteria, in order to estimate the level of allowances necessary to cover the portfolio’s potential risk. This model segments cardholders in different clusters to better estimate losses, classifying renegotiated cardholders, among others, in a special category. The validation and sufficiency of the allowance model is monitored on a monthly basis by the Risk Committee using defined back testing and sufficiency analyses. Beginning in December 31, the Board of Directors of Cencosud Group, through its Corporate Risk Committee, decided to begin establishing anti-cyclical provisions for a total of ThCh$ 3,533, which is increasingly being adopted as a best practice by the international and local banking industry. These provisions, which are established in economically favorable periods with low unemployment rates and high growth rates, allow the company to prepare for recessionary economic cycles and their impact on the cardholder portfolio.	
 
d)	The write-off policy establishes that 100% of all accounts with more than 6 invoices past due be written off and that such amounts be fully recognized as a loss in the statement of income. All cardholders that subsequently pay all or part of their written-off debt are recognized as recovered write-offs in the statement of income.	
 
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e)	Credit terms (months)	

 	  	 	 	  	Range	 	
 	  	Average term	 	  	Minimum	 	  	Maximum	 	
Purchases	  	 	3	  	  	 	1	  	  	 	36	  	
Affiliated businesses	  	 	3	  	  	 	1	  	  	 	36	  	
Cash advances	  	 	17	  	  	 	3	  	  	 	48	  	
Renegotiated	  	 	22	  	  	 	4	  	  	 	24	  	
Refinancing	  	 	7	  	  	 	4	  	  	 	12	  	
 
2.	Definition of portfolio types.	
Considers 2 types of policies in restructuring debt in default:
 
a.	Renegotiation Policy: establishes the conditions for restructuring 100% of the cardholder’s debt in default.	
 
b.	Refinancing Policy: establishes the conditions for restructuring 100% of the cardholder’s invoiced debt.	
 
3.	Portfolio stratification	
As of December 31, 2012

Credit card Más Delinquency segments	  	Non-
refinanced
customers
(number)	 	  	Non-
refinanced
portfolio	 	  	Refinanced
customers
(number)	 	  	Refinanced
portfolio	 	  	Total
Gross
portfolio	 	
 	  	N°	 	  	ThCh$	 	  	N°	 	  	ThCh$	 	  	ThCh$	 	
Payments up to date	  	 	1,331,332	  	  	 	340,634,129	  	  	 	35,707	  	  	 	15,816,484	  	  	 	356,450,613	  	
01-30 days	  	 	104,369	  	  	 	38,285,647	  	  	 	15,432	  	  	 	6,624,456	  	  	 	44,910,103	  	
31-60 days	  	 	38,400	  	  	 	11,515,243	  	  	 	8,995	  	  	 	3,986,817	  	  	 	15,502,060	  	
61-90 days	  	 	22,451	  	  	 	6,911,283	  	  	 	5,997	  	  	 	2,702,941	  	  	 	9,614,224	  	
91-120 days	  	 	18,238	  	  	 	5,486,035	  	  	 	4,815	  	  	 	2,113,735	  	  	 	7,599,770	  	
121-150 days	  	 	16,587	  	  	 	4,640,823	  	  	 	3,980	  	  	 	1,670,276	  	  	 	6,311,099	  	
150-180 days	  	 	16,624	  	  	 	5,187,576	  	  	 	3,999	  	  	 	1,825,220	  	  	 	7,012,796	  	
>180 days	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	

Total	  	 	1,548,001	  	  	 	412,660,736	  	  	 	78,925	  	  	 	34,739,929	  	  	 	447,400,665	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
As of December 31, 2011

Credit card Más Delinquency segments	  	Non-
refinanced
customers
(number)	 	  	Non-
refinanced
portfolio	 	  	Refinanced
customers
(number)	 	  	Refinanced
portfolio	 	  	Total
gross
portfolio	 	
 	  	N°	 	  	ThCh$	 	  	N°	 	  	ThCh$	 	  	ThCh$	 	
Payments up to date	  	 	1,352,303	  	  	 	336,253,200	  	  	 	33,090	  	  	 	13,292,350	  	  	 	349,545,550	  	
01-30 days	  	 	113,731	  	  	 	39,014,774	  	  	 	15,729	  	  	 	6,256,413	  	  	 	45,271,187	  	
31-60 days	  	 	42,857	  	  	 	11,924,308	  	  	 	9,724	  	  	 	4,057,004	  	  	 	15,981,312	  	
61-90 days	  	 	27,446	  	  	 	7,512,616	  	  	 	7,812	  	  	 	3,237,586	  	  	 	10,750,202	  	
91-120 days	  	 	21,849	  	  	 	6,026,631	  	  	 	6,839	  	  	 	2,902,233	  	  	 	8,928,864	  	
121-150 days	  	 	18,010	  	  	 	5,267,406	  	  	 	6,277	  	  	 	2,529,875	  	  	 	7,797,281	  	
150-180 days	  	 	19,263	  	  	 	5,779,322	  	  	 	6,312	  	  	 	2,741,628	  	  	 	8,520,950	  	
>180 days	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	

Total	  	 	1,595,459	  	  	 	411,778,257	  	  	 	85,783	  	  	 	35,017,089	  	  	 	446,795,346	  	

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As of December 31, 2012

ThCh$	
Total allowance on non-refinanced portfolio	  	 	23,944,291	  	  	As of December 2012	
Total allowance on refinanced portfolio	  	 	6,980,027	  	  	As of December 2012	
Total write-offs for the period	  	 	69,979,748	  	  	Write-offs between Jan and Dec 2012	
Total recovered for the period	  	 	18,157,313	  	  	Write-offs recovered between Jan and Dec 2012	

							
N°	
Number of cards issued (not additional cards)	  	 	2,716,985	  	 	Stock as of December 2012	
Number of cards with outstanding balances	  	 	1,626,926	  	 	Stock as of December 2012	
Average number of refinancings	  	 	8,273	  	 	Average number of accounts refinanced monthly between Jan and Dec 2012	
Total refinanced receivables (ThCh$)	  	 	34,739,929	  	 	Stock of refinanced portfolio as of December 2012	
% refinanced / non-refinanced portfolio	  	 	5.10	% 	 	Number of refinanced customers/non-refinanced customers	
As of December 31, 2011

ThCh$	
Total allowance on non-refinanced portfolio	  	 	24,820,732	  	  	As of December 2011	
Total allowance on refinanced portfolio	  	 	7,260,220	  	  	As of December 2011	
Total write-offs for the period	  	 	56,328,892	  	  	Write-offs between Jan and Dec 2011	
Total recovered for the period	  	 	19,944,373	  	  	Write-offs recovered between Jan and Dec 2011	

							
N°	
Number of cards issued (not additional cards)	  	 	2,658,970	  	 	Stock as of December 2011	
Number of cards with outstanding balances	  	 	1,681,242	  	 	Stock as of December 2011	
Average number of refinancings	  	 	9,202	  	 	Average number of accounts refinanced monthly between Jan and Dec 2011	
Total refinanced receivables(ThCh$)	  	 	35,017,089	  	 	Stock of refinanced portfolio as of December 2011	
% refinanced / non-refinanced portfolio	  	 	5.38	% 	 	Number of refinanced customers/non-refinanced customers	
 
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4.	Portfolio allowance factors	
As of December 31, 2012

Credit card Más Delinquency segments	  	Non-refinanced
portfolio
as  % of average
losses	 	  	Refinanced
portfolio
as %  of
average losses	 	
Payments up to date	  	 	1.4	  	  	 	7.4	  	
01-30	  	 	7.4	  	  	 	15.7	  	
31-60	  	 	27.0	  	  	 	25.9	  	
61-90	  	 	44.5	  	  	 	33.9	  	
91-120	  	 	57.8	  	  	 	43.3	  	
121-150	  	 	70.0	  	  	 	54.5	  	
151-180	  	 	70.4	  	  	 	54.4	  	
>180 days	  	 	—  	  	  	 	—  	  	
	  	 	 	 	  	 	 	 	
Total	  	 	5.8	  	  	 	20.1	  	
	  	 	 	 	  	 	 	 	
As of December 31, 2011

Credit card Más Delinquency segments	  	Non-refinanced
portfolio
as  % of average
losses	 	  	Refinanced
portfolio
as %  of
average losses	 	
Payments up to date	  	 	2.0	  	  	 	5.6	  	
01-30	  	 	6.7	  	  	 	12.5	  	
31-60	  	 	21.9	  	  	 	21.3	  	
61-90	  	 	36.5	  	  	 	29.3	  	
91-120	  	 	50.9	  	  	 	39.3	  	
121-150	  	 	63.8	  	  	 	52.4	  	
151-180	  	 	64.3	  	  	 	52.9	  	
>180 days	  	 	—  	  	  	 	—  	  	
	  	 	 	 	  	 	 	 	
Total	  	 	6.0	  	  	 	20.7	  	

5.	Risk ratios. (% provision/portfolio)	
As of December 31, 2012

Credit card Más risk ratios (allowance / portfolio)	  	%	 	  	 	
Non-refinanced portfolio	  	 	5.8	  	  	Stock of allowances on non-refinanced portfolio /Stock of non-refinanced portfolio	
Rrefinanced portfolio	  	 	20.1	  	  	Stock of allowances on refinanced portfolio /Stock of refinanced portfolio	
Total portfolio	  	 	6.9	  	  	Stock of total allowances/ Stock of total portfolio	
Write off ratio	  	 	12.4	  	  		
 
(1)	The rate of punishment corresponds to annualized net of recoveries punishment measured on average stock of deposits from the period.	
 
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As of December 31, 2011

Credit card Más risk ratios (allowance / portfolio)	  	%	 	  	 	
Non-refinanced portfolio	  	 	6.0	  	  	Stock of allowances on non-refinanced portfolio /Stock of non-refinanced portfolio	
Rrefinanced portfolio	  	 	20.7	  	  	Stock of allowances on refinanced portfolio/Stock of refinanced portfolio	
Total portfolio	  	 	7.2	  	  	Stock of total allowances/Stock of total portfolio	
Write off ratio (1)	  	 	8.9	  	  		
The penalty rate corresponds to the annual penalties, net of recoveries / average stock of deposits from the period January to December 2011.
Credit Card Johnson´s — TMO
As of March 2012 system begins to migrate the portfolio management of Johnson’s Multiopción Card (hereinafter TMO) to Cencosud Cards. This process involves the client must change its current product by Cencosud card and will be conducted during 2012. For purposes of portfolio impacts, promotes the transfer of clients without problems of arrears and without renegotiation conditions.
1. Credit policies.
 
a)	Credit policies are defined by the Risk Management Division in Chile for TMO and parameters are set in the Company’s evaluation systems for the entire credit process. Among others, these policies include:	
 
 	i.	the commercial ethics of debtors or those eligible for credit;	
 
 	ii.	the cardholder risk profile, measured based on payment behavior and/or associated score models;	
 
 	iii.	the debtor’s credit capacity, among others.	
The target market is TMO socioeconomic group D C3 and therefore the credit given is quite limited.
 
b)	The collections policy aims to secure 100% of debt payments while the cardholder is in the early stages of default so that the cardholder’s account may remain open to continue making purchases. However, some cardholders cannot make their payments. For these cardholders, new payment plans can be structured. These agreements must consider at least:	
 
 	i.	The cardholder’s expressed will.	
 
 	ii.	The intention to pay, manifested by an initial payment as a condition to restructure the debt.	
 
 	iii.	Account blockage for all cardholders who restructure debt that is more than 30 days in default. Only after having demonstrated favorable payment behavior does the company evaluate potentially opening the account so the cardholder may continue making purchases and reducing the credit limit, as appropriate.	
 
c)	Bad debt allowances are determined using a model is determined by a statistical model (logistic regression) based on the expected loss. There are models by segment for a better estimate of the loss. The segments are defined in terms of the performance characteristics of the client.	
 
d)	Validation and sufficiency of the Model Provisions is monitored on a monthly basis by the Risk Committee, through backtesting and definen adequacy analysis based on behavioral characteristics of the Customer.	
 
e)	The write-off policy establishes that 100% of all accounts with more than 6 invoices past due be written off and that such amounts be fully recognized as a loss in the statement of income. All cardholders that subsequently pay all or part of their written-off debt are recognized as recovered write-offs in the statement of income.	
 
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f)	Credit terms (months)	

 	  	 	 	  	Range	 	
 	  	Average term	 	  	Minimum	 	  	Maximum	 	
Purchases	  	 	7	  	  	 	3	  	  	 	36	  	
Affiliated businesses	  	 	4	  	  	 	3	  	  	 	18	  	
Renegotiated	  	 	30	  	  	 	3	  	  	 	36	  	
 
2.	Portfolio stratification	
As of December 31, 2012

Credit card Johnson’s Delinquency segments	  	Non-
refinanced
customers
(number)	 	  	Non-
refinanced
portfolio	 	  	Refinanced
customers
(number)	 	  	Refinanced
portfolio	 	  	Total
Gross
portfolio	 	
 	  	N°	 	  	ThCh$	 	  	N°	 	  	ThCh$	 	  	ThCh$	 	
Payments up to date	  	 	8,763	  	  	 	431,404	  	  	 	5,160	  	  	 	1,274,257	  	  	 	1,705,661	  	
01-30 days	  	 	3,564	  	  	 	308,702	  	  	 	2,185	  	  	 	557,360	  	  	 	866,062	  	
31-60 days	  	 	2,055	  	  	 	144,699	  	  	 	1,223	  	  	 	294,740	  	  	 	439,439	  	
61-90 days	  	 	1,863	  	  	 	127,851	  	  	 	1,179	  	  	 	312,784	  	  	 	440,635	  	
91-120 days	  	 	2,098	  	  	 	170,835	  	  	 	996	  	  	 	294,467	  	  	 	465,302	  	
121-150 days	  	 	2,162	  	  	 	240,418	  	  	 	905	  	  	 	287,201	  	  	 	527,619	  	
150-180 days	  	 	2,081	  	  	 	237,949	  	  	 	783	  	  	 	264,361	  	  	 	502,310	  	
>180 days	  	 	147	  	  	 	12,785	  	  	 	9	  	  	 	2,733	  	  	 	15,518	  	

Total	  	 	22,733	  	  	 	1,674,643	  	  	 	12,440	  	  	 	3,287,903	  	  	 	4,962,546	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
As of December 31, 2012

ThCh$	
Total allowance on non—refinanced portfolio	  	 	607,715	  	  	Stock as of December 2012	
Total allowance on refinanced portfolio	  	 	1,638,749	  	  	Stock as of December 2012	
Total write—offs for the period	  	 	12,724,805	  	  	Write—offs between January and December 2012	
Total recovered for the period	  	 	1,347,969	  	  	Write—offs recovered between January and December 2012	

N°	
Number of cards issued (not additional cards)	  	 	475,049	  	  	Stock as of December 2012	
Number of cards with outstanding balances	  	 	35,173	  	  	Stock as of December 2012	
Average number of refinancinds	  	 	978	  	  	Average number of accounts refinanced monthly between January and December 2012	
Total refinanced receivables (ThCh$)	  	 	3,287,903	  	  	Stock of refinanced portfolio as of December 2012	
% refinanced / non—refinanced portfolio customers	  	 	54.72	  	  	Number of refinanced customers / non—refinanced	
 
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As of December 31, 2011

Credit card Johnson’s Delinquency segments	  	Non-
refinanced
customers
(number)	 	  	Non-
refinanced
portfolio	 	  	Refinanced
customers
(number)	 	  	Refinanced
portfolio	 	  	Total
Gross
portfolio	 	
 	  	N°	 	  	ThCh$	 	  	N°	 	  	ThCh$	 	  	ThCh$	 	
Payments up to date	  	 	158,011	  	  	 	17,385,817	  	  	 	12,949	  	  	 	4,667,013	  	  	 	22,052,830	  	
01-30 days	  	 	22,477	  	  	 	2,782,536	  	  	 	3,920	  	  	 	1,607,317	  	  	 	4,389,853	  	
31-60 days	  	 	7,571	  	  	 	872,481	  	  	 	2,537	  	  	 	1,160,912	  	  	 	2,033,393	  	
61-90 days	  	 	5,701	  	  	 	699,894	  	  	 	2,410	  	  	 	1,084,937	  	  	 	1,784,831	  	
91-120 days	  	 	4,324	  	  	 	525,535	  	  	 	1,938	  	  	 	899,201	  	  	 	1,424,736	  	
121-150 days	  	 	3,333	  	  	 	411,101	  	  	 	1,991	  	  	 	1,328,605	  	  	 	1,739,706	  	
151-180 days	  	 	2,643	  	  	 	347,757	  	  	 	879	  	  	 	588,189	  	  	 	935,946	  	
>181 days	  	 	744	  	  	 	26,440	  	  	 	39	  	  	 	12,135	  	  	 	38,575	  	

Total	  	 	204,804	  	  	 	23,051,561	  	  	 	26,663	  	  	 	11,348,309	  	  	 	34,399,870	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
As of December 31, 2011

ThCh$	
Total allowance on non—refinanced portfolio	  	 	3,073,182	  	  	Stock as of December 2012	
Total allowance on refinanced portfolio	  	 	8,467,997	  	  	Stock as of December 2012	
Total write—offs for the period	  	 	8,016,980	  	  	Write—offs between January and December 2012	
Total recovered for the period	  	 	4,072,279	  	  	Write—offs recovered between January and December 2012	

N°	
Number of cards issued (not additional cards)	  	 	959,820	  	  	Stock as of December 2012	
Number of cards with outstanding balances	  	 	231,467	  	  	Stock as of December 2012	
Average number of refinancinds	  	 	3,003	  	  	Average number of accounts refinanced monthly between January and December 2012	
Total refinanced receivables (ThCh$)	  	 	11,348,309	  	  	Stock of refinanced portfolio as of December 2012	
% refinanced / non—refinanced portfolio customers	  	 	13.02	  	  	Number of refinanced customers / non—refinanced	
As of December 31, 2012

Credit card Johnson’s Delinquency segments	  	Non-refinanced
portfolio
as  % of average
losses	 	  	Refinanced
portfolio
as %  of
average losses	 	
Payments up to date	  	 	11.6	  	  	 	46.0	  	
01-30	  	 	10.2	  	  	 	46.2	  	
31-60	  	 	23.0	  	  	 	48.3	  	
61-90	  	 	31.2	  	  	 	49.2	  	
91-120	  	 	52.8	  	  	 	56.3	  	
121-150	  	 	65.5	  	  	 	58.5	  	
151-180	  	 	81.2	  	  	 	61.5	  	
>180 days	  	 	98.0	  	  	 	98.0	  	
	  	 	 	 	  	 	 	 	
Total	  	 	36.3	  	  	 	49.8	  	

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As of December 31, 2011

Credit card Johnson’s delinquency segments	  	Non-refinanced
portfolio
as % of average
losses	 	  	Refinanced
portfolio
as % of average
losses	 	
Payments up to date	  	 	7.2	  	  	 	65.5	  	
01-30	  	 	11.7	  	  	 	71.7	  	
31-60	  	 	34.3	  	  	 	77.7	  	
61-90	  	 	42.6	  	  	 	74.3	  	
91-120	  	 	59.3	  	  	 	78.8	  	
121-150	  	 	68.8	  	  	 	96.1	  	
151-180	  	 	83.4	  	  	 	94.8	  	
>180 days	  	 	71.4	  	  	 	57.8	  	
	  	 	 	 	  	 	 	 	
Total	  	 	13.3	  	  	 	74.6	  	
	  	 	 	 	  	 	 	 	
As of December 31, 2012

Credit card Johnson´s risk ratios (allowance / portfolio)	  	%	 	  	 	
Non-refinanced portfolio	  	 	36.3	  	  	Stock of allowances on non-refinanced portfolio /Stock of non-refinanced portfolio	
Rrefinanced portfolio	  	 	49.8	  	  	Stock of allowances on refinanced portfolio /Stock of refinanced portfolio	
Total portfolio	  	 	45.3	  	  	Stock of total allowances/Stock of total portfolio	
Write off ratio (1)	  	 	63.1	  	  		
 
(1)	The penalty rate corresponds to the annual penalties, net of recoveries/average stock of deposits from the period January to December 2011.	
As of December 31, 2011

Credit card Johnson´s risk ratios (allowance / portfolio)	  	%	 	  	 	
Non-refinanced portfolio	  	 	13.3	  	  	Stock of allowances on non-refinanced portfolio/Stock of non-refinanced portfolio	
Rrefinanced portfolio	  	 	74.6	  	  	Stock of allowances on refinanced portfolio/Stock of refinanced portfolio	
Total portfolio	  	 	33.6	  	  	Stock of total allowances/Stock of total portfolio	
Write off ratio (1)	  	 	9.4	  	  		
 
(1)	The penalty rate corresponds to the annual penalties, net of recoveries/average stock of deposits from the period January to December 2011.	
 
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ARGENTINA
 
1.	Credit policies.	
 
a)	Customers are selected using policies with parameters based on the credit assessment system. The approval decision and the credit limit are based on a combination of statistical models, payment history in the financial system and an estimate of the applicant’s income level. The minimum payment is 25% of the invoiced amount. Affiliate businesses and financial products are complementary to offering the card itself and represent a very small percentage of total sales.	
 
b)	Collections policy: during the first 90 days of delay, the company aims to ensure that the cardholder pays its debt in default and recovers access to credit. Refinancing requires an initial payment of at least 50% of the unpaid minimum payment and are limited to a maximum of once every six months. For cardholders more than 90 days in default, the card is blocked indefinitely and a new payment plan is established based on their willingness and capacity to pay.	
 
c)	Allowances: allowances are calculated each month by applying statistical methodology that combines portfolio behavior over the last 12 months. The portfolio is also segmented into clusters based on the likelihood of non-payment calculated when the account is opened and also the cardholder’s seniority. The company verifies that the calculated allowances charge the expected losses in the current period and also that they exceed the requirements of the local regulator (BCRA). Conservative allowances are added based on new factors that may not be taken into consideration by the statistical methodology.	
 
d)	Write-off policy: The local regulator requires allowances for 100% of delinquent debt once it is 360 days past due. However, Cencosud applies the conservative criteria of establishing allowances for 100% of accounts that are 180 days past due. Currently, because of a limitation with the card processing system in Argentina, accounts are not written-off in accounting at 360 days. However, the 100% allowance is maintained.	
Average Terms for Credit Cards and Refinancing (months)

Range of terms	  	Portfolio	 	
 	  	%	 	
Payment upon invoicing	  	 	36	  	
Installments 0-3 M	  	 	31	  	
Installments 3-6 M	  	 	13	  	
Installments 6-12 M	  	 	14	  	
Installments +12 M	  	 	6	  	
Average term for portfolio	  	 	2.6	  	

Range of terms for refinanced collections	  	Portfolio	 	
 	  	%	 	
Installments 0-3 M	  	 	5	  	
Installments 3-6 M	  	 	17	  	
Installments 6-12 M	  	 	39	  	
Installments +12 M	  	 	39	  	
Average term for refinanced collections in months	  	 	9.3	  	
 
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2.	Definition of portfolio types.	
Cencosud Argentina segments its portfolio into three main groups based on risk of non-payment. This segmentation is determined when customers are approved for credit and is used primarily to properly allocate credit limits. Each month, the company monitors the mixture of characteristics of new cards issued versus the portfolio, and any important deviations are used to modify customer selection methods.
As of December 31, 2012

Delinquency segments	  	Non-refinanced
customers
(number)	 	  	Non-
refinanced
portfolio	 	  	Refinanced
customers
(number)	 	  	Refinanced
portfolio	 	  	Total
Gross
portfolio	 	
 	  	N°	 	  	ThCh$	 	  	N°	 	  	ThCh$	 	  	ThCh$	 	
Payments up to date	  	 	545,967	  	  	 	107,624,696	  	  	 	2,282	  	  	 	620,706	  	  	 	108,245,402	  	
01-30 days	  	 	72,059	  	  	 	12,500,427	  	  	 	762	  	  	 	210,569	  	  	 	12,710,996	  	
31-60 days	  	 	24,637	  	  	 	3,274,075	  	  	 	608	  	  	 	162,735	  	  	 	3,436,810	  	
61-90 days	  	 	8,384	  	  	 	1,104,216	  	  	 	248	  	  	 	77,711	  	  	 	1,181,927	  	
91-120 days	  	 	4,889	  	  	 	834,832	  	  	 	178	  	  	 	68,201	  	  	 	903,033	  	
121-150 days	  	 	3,626	  	  	 	724,721	  	  	 	74	  	  	 	24,010	  	  	 	748,731	  	
150-180 days	  	 	2,481	  	  	 	480,089	  	  	 	18	  	  	 	4,989	  	  	 	485,078	  	
>180 days	  	 	7,112	  	  	 	1,486,607	  	  	 	0	  	  	 	0	  	  	 	1,486,607	  	

Total	  	 	669,155	  	  	 	128,029,663	  	  	 	4,170	  	  	 	1,168,921	  	  	 	129,198,584	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
As of December 31, 2011

Delinquency segments	  	Non-refinanced
customers
(number)	 	  	Non-
refinanced
portfolio	 	  	Refinanced
customer
(number)	 	  	Refinanced
portfolio	 	  	Total
gross
portfolio	 	
 	  	N°	 	  	ThCh$	 	  	N°	 	  	ThCh$	 	  	ThCh$	 	
Payments up to date	  	 	523,837	  	  	 	104,378,683	  	  	 	1,525	  	  	 	428,935	  	  	 	104,807,618	  	
01-30 days	  	 	59,557	  	  	 	11,067,314	  	  	 	424	  	  	 	122,981	  	  	 	11,190,295	  	
31-60 days	  	 	18,604	  	  	 	3,121,896	  	  	 	349	  	  	 	116,617	  	  	 	3,238,513	  	
61-90 days	  	 	7,518	  	  	 	1,239,831	  	  	 	239	  	  	 	92,949	  	  	 	1,332,780	  	
91-120 days	  	 	2,640	  	  	 	693,181	  	  	 	111	  	  	 	48,092	  	  	 	741,273	  	
121-150 days	  	 	1,867	  	  	 	582,326	  	  	 	58	  	  	 	23,165	  	  	 	605,491	  	
150-180 days	  	 	1,582	  	  	 	440,593	  	  	 	13	  	  	 	4,601	  	  	 	445,194	  	
>180 days	  	 	16,000	  	  	 	3,420,264	  	  	 	—  	  	  	 	—  	  	  	 	3,420,264	  	

Total	  	 	631,605	  	  	 	124,944,088	  	  	 	2,719	  	  	 	837,340	  	  	 	125,781,428	  	

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As of December 31, 2012

M$	
Total allowance on non-refinanced portfolio	  	 	7,597,100	  	  	Stock as of December 2012	
Total allowance on refinanced portfolio	  	 	571,389	  	  	Stock as of December 2012	
Total write-offs for the period	  	 	7,251,331	  	  	Write-offs between Jan and Dec 2012	
Total recovered for the period	  	 	911,892	  	  	Write-offs recovered between Jan and Dec 2012	

							
N°	
Number of cards issued (not additional cards)	  	 	1,010,132	  	  	Stock as of December 2012	
Number of cards with outstanding balances	  	 	673,325	  	  	Stock as of December 2012	
Average number of refinancings	  	 	707	  	  	Average number of accounts refinanced monthly between Jan and Dec 2012	
Total refinanced receivables	  	 	1,168,921	  	  	Stock of refinanced portfolio as of December 2012	
% refinanced / non-refinanced portfolio	  	 	0.62	  	  	Number of refinanced customers/non-refinanced customers	
As of December 31, 2011

M$	
Total allowance on non-refinanced portfolio	  	 	9,104,607	  	  	Stock as of December 2011	
Total allowance on refinanced portfolio	  	 	438,215	  	  	Stock as of December 2011	
Total write-offs for the period	  	 	1,511,673	  	  	Write-offs between Jan and Dec 2011	
Total recovered for the period	  	 	—  	  	  	Write-offs recovered between Jan and Dec 2011	

							
N°	
Number of cards issued (not additional cards)	  	 	922,659	  	 	Stock as of December 2011	
Number of cards with outstanding balances	  	 	634,624	  	 	Stock as of December 2011	
Average number of refinancings	  	 	507	  	 	Average number of accounts refinanced monthly between Jan and Dec 2011	
Total refinanced receivables	  	 	837,340	  	 	Stock of refinanced portfolio as of December 2011	
% refinanced / non-refinanced portfolio	  	 	0.43	% 	 	Number of refinanced customers/non-refinanced customers	
 
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3.	Portfolio allowance factors.	
As of December 31, 2012

Delinquency segments	  	Non-refinanced
portfolio
as % of
average losses	 	  	Refinanced
portfolio as %
of average
losses	 	
Payments up to date	  	 	3.1	  	  	 	33.6	  	
01-30	  	 	4.0	  	  	 	33.6	  	
31-60	  	 	15.1	  	  	 	72.0	  	
61-90	  	 	37.6	  	  	 	100.0	  	
91-120	  	 	52.4	  	  	 	100.0	  	
121-150	  	 	70.6	  	  	 	100.0	  	
151-180	  	 	87.8	  	  	 	100.0	  	
>180 days	  	 	100.0	  	  	 	100.0	  	
	  	 	 	 	  	 	 	 	
Total	  	 	5.9	  	  	 	48.9	  	
	  	 	 	 	  	 	 	 	
As of December 31, 2011

Delinquency segments	  	Non-refinanced
portfolio
as % of
average losses	 	  	Refinanced
portfolio as  %
of average
losses	 	
Payments up to date	  	 	2.0	  	  	 	33.6	  	
01-30	  	 	5.9	  	  	 	33.6	  	
31-60	  	 	29.3	  	  	 	72.0	  	
61-90	  	 	58.9	  	  	 	100.0	  	
91-120	  	 	71.4	  	  	 	100.0	  	
121-150	  	 	72.4	  	  	 	100.0	  	
151-180	  	 	95.1	  	  	 	100.0	  	
>180 days	  	 	100.0	  	  	 	100.0	  	

Total	  	 	7.3	  	  	 	52.3	  	

4.	Risk ratios (% provision/portfolio).	
As of December 31, 2012

Risk ratios (allowance / portfolio)	  	%	 	  	 	
Non-refinanced portfolio	  	 	5.9	  	  	Stock of allowances on non-refinanced portfolio /Stock of non-refinanced portfolio	
Refinanced portfolio	  	 	48.9	  	  	Stock of allowances on refinanced portfolio /Stock of refinanced portfolio	
Total portfolio	  	 	6.3	  	  	Stock of total allowances /Stock of total portfolio	
	  	 	 	 	  		
As of December 31, 2011

Risk ratios (allowance / portfolio)	  	%	 	  	 	
Non-refinanced portfolio	  	 	7.3	  	  	Stock of allowances on non-refinanced portfolio /Stock of non-refinanced portfolio	
Refinanced portfolio	  	 	52.3	  	  	Stock of allowances on refinanced portfolio / Stock of refinanced portfolio	
Total portfolio	  	 	7.6	  	  	Stock of total allowances /Stock of total portfolio	

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PERU
 
1.	Credit policies.	
Financial retail operations in Peru began July 21, 2010 with a pilot program in one store and later in October 2010 was rolled out in all formats of Metro Supermarkets. Prospective credit card holders are selected based on the cardholders’ purchasing behavior in the Bonus customer loyalty program, combined with an analysis of behavior profiles by credit rating agencies available in the country.
Since operations began, they were structured as defined by the Group, following the requirements defined by Peruvian banking regulations (despite not being enforceable at that time). From June, 2012 Cencosud Bank has been authorized by the Superintendency of Banks and Insurance (SBS) to establish itself as a bank.
Adhering to banking regulations involves diverse elements; including observing mandatory definitions for refinancing, as well as classifying debtors based on days in default which, in turn, translates into establishing allowances over the principal of the loans.
In addition, the standards require pro-cyclical provisions to be established that are linked to the economic cycle and that in practice translate into 1.5% additional allowances over current non-delinquent balances.
The average term of the portfolio in Peru is 2.7 months for the non-refinanced portfolio and 12 months for the refinanced portfolio.
 
2.	Definition of portfolio types.	
The portfolio is divided into two groups:
 
•	 	Non-refinanced portfolio.	
 
•	 	Refinanced portfolio, which includes cardholders that are at least one day delinquent. They must make a minimum payment and the debtor classification (and therefore the allowance) must be maintained or increased based on the regulations mentioned above.	
 
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3.	Portfolio stratification	
As of December 31, 2012

Delinquency segments	  	Non-refinanced
customers
(number)	 	  	Non-
refinanced
portfolio	 	  	Refinanced
customers
(number)	 	  	Refinanced
portfolio	 	  	Total
gross
portfolio	 	
 	  	N°	 	  	ThCh$	 	  	N°	 	  	ThCh$	 	  	ThCh$	 	
Payments up to date	  	 	181,187	  	  	 	27,590,606	  	  	 	882	  	  	 	198,142	  	  	 	27,788,748	  	
01-30 days	  	 	11,529	  	  	 	1,535,931	  	  	 	180	  	  	 	34,669	  	  	 	1,570,600	  	
31-60 days	  	 	5,161	  	  	 	739,746	  	  	 	110	  	  	 	20,235	  	  	 	759,981	  	
61-90 days	  	 	3,590	  	  	 	573,679	  	  	 	130	  	  	 	25,147	  	  	 	598,826	  	
91-120 days	  	 	2,435	  	  	 	511,091	  	  	 	92	  	  	 	16,649	  	  	 	527,741	  	
121-150 days	  	 	1,343	  	  	 	300,862	  	  	 	105	  	  	 	31,807	  	  	 	332,669	  	
150-180 days	  	 	1,742	  	  	 	355,238	  	  	 	181	  	  	 	49,057	  	  	 	404,295	  	
>180 days	  	 	8,702	  	  	 	2,125,102	  	  	 	2,125	  	  	 	620,198	  	  	 	2,745,299	  	

Total	  	 	215,689	  	  	 	33,732,255	  	  	 	3,805	  	  	 	995,904	  	  	 	34,728,159	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
As of December 31, 2011

Delinquency segments	  	Non-refinanced
customers
(number)	 	  	Non-
refinanced
portfolio	 	  	Refinanced
customers
(number)	 	  	Refinanced
portfolio	 	  	Total
gross
portfolio	 	
 	  	N°	 	  	ThCh$	 	  	N°	 	  	ThCh$	 	  	ThCh$	 	
Payments up to date	  	 	146,551	  	  	 	13,973,994	  	  	 	2,362	  	  	 	458,448	  	  	 	14,432,442	  	
01-30 days	  	 	8,011	  	  	 	712,122	  	  	 	536	  	  	 	122,693	  	  	 	834,815	  	
31-60 days	  	 	3,344	  	  	 	331,848	  	  	 	285	  	  	 	76,816	  	  	 	408,664	  	
61-90 days	  	 	2,582	  	  	 	303,612	  	  	 	270	  	  	 	63,005	  	  	 	366,617	  	
91-120 days	  	 	2,725	  	  	 	389,966	  	  	 	268	  	  	 	70,107	  	  	 	460,073	  	
121-150 days	  	 	2,527	  	  	 	425,038	  	  	 	247	  	  	 	72,283	  	  	 	497,321	  	
150-180 days	  	 	2,628	  	  	 	474,704	  	  	 	253	  	  	 	69,919	  	  	 	544,623	  	
>180 days	  	 	6,442	  	  	 	1,871,649	  	  	 	61	  	  	 	23,054	  	  	 	1,894,703	  	

Total	  	 	174,810	  	  	 	18,482,933	  	  	 	4,282	  	  	 	956,325	  	  	 	19,439,258	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
As of December 31, 2012

ThCh$	
Total allowance on non-refinanced portfolio	  	 	3,978,674	  	  	Stock as of December 2012	
Total allowance on refinanced portfolio	  	 	842,517	  	  	Stock as of December 2012	
Total write-offs for the period	  	 	3,172,864	  	  	Write-offs between Jan and Dec 2012	
Total recovered for the period	  	 	148,240	  	  	Write-offs recovered between Jan and Dec 2012	

							
N°	
Number of cards issued (not additional cards)	  	 	439,804	  	  	Stock as of December 2012	
Number of cards with outstanding balances	  	 	219,494	  	  	Stock as of December 2012	
Average number of refinancings	  	 	201	  	  	Average number of accounts refinanced monthly between Jan and Dec 2012	
Total refinanced receivables	  	 	995,904	  	  	Stock of refinanced portfolio as of December 2012	
% refinanced / non-refinanced portfolio	  	 	1.76	  	  	Number of refinanced customers/non- refinanced customers	
 
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As of December 31, 2011

ThCh$	
Total allowance on non-refinanced portfolio	  	 	1,557,519	  	 	Stock as of December 2011	
Total allowance on refinanced portfolio	  	 	584,069	  	 	Stock as of December 2011	
Total write-offs for the period	  	 	200,114	  	 	Write-offs between Jan and Dec 2011	
Total recovered for the period	  	 	—  	  	 	Write-offs recovered between Jan and Dec 2011	

N°	
Number of cards issued (not additional cards)	  	 	310,214	  	 	Stock as of December 2011	
Number of cards with outstanding balances	  	 	179,092	  	 	Stock as of December 2011	
Average number of refinancings	  	 	517	  	 	Average number of accounts refinanced monthly between Jan and Dec 2011	
Total refinanced receivables	  	 	956,325	  	 	Stock of refinanced portfolio as of December 2011	
% refinanced / non-refinanced portfolio	  	 	5.20	% 	 	Number of refinanced customers/non- refinanced customers	
 
4.	Portfolio allowance factors.	
As of December 31, 2012

Delinquency segments	  	Non-refinanced
portfolio
as % of
average losses	 	  	Refinanced
portfolio
as % of
average losses	 	
Payments up to date	  	 	1.0	  	  	 	34.9	  	
01-30	  	 	5.1	  	  	 	59.2	  	
31-60	  	 	25.0	  	  	 	70.2	  	
61-90	  	 	60.0	  	  	 	85.8	  	
91-120	  	 	60.0	  	  	 	96.6	  	
121-150	  	 	100.0	  	  	 	100.0	  	
151-180	  	 	100.0	  	  	 	100.0	  	
>180 days	  	 	100.0	  	  	 	100.0	  	

Total	  	 	11.8	  	  	 	84.6	  	
	  	 	 	 	  	 	 	 	
As of December 31, 2011

Delinquency segments	  	Non-refinanced
portfolio
as % of
average losses	 	  	Refinanced
portfolio
as % of
average losses	 	
Payments up to date	  	 	0.8	  	  	 	45.5	  	
01-30	  	 	3.5	  	  	 	77.4	  	
31-60	  	 	16.3	  	  	 	75.8	  	
61-90	  	 	35.6	  	  	 	77.3	  	
91-120	  	 	32.7	  	  	 	77.3	  	
121-150	  	 	50.7	  	  	 	71.8	  	
151-180	  	 	44.9	  	  	 	71.9	  	
>180 days	  	 	37.3	  	  	 	74.2	  	

Total	  	 	8.4	  	  	 	61.1	  	

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5.	Risk ratios (% provision/portfolio)	
As of December 31, 2012

Risk ratios (allowance / portfolio)	  	%	 	  	 	
Non-refinanced portfolio	  	 	11.8	  	  	Stock of allowances on non-refinanced portfolio /Stock of non-refinanced portfolio	
Refinanced portfolio	  	 	84.6	  	  	Stock of allowances on refinanced portfolio / Stock of refinanced portfolio	
Total portfolio	  	 	13.9	  	  	Stock of total allowances / Stock of total portfolio	
	  	 	 	 	  		
Note:
Allowances and allowance ratios do not include millions ThCh$ 388 in anti-cyclical provisions that are included based on international and domestic banking industry best practices and in line with the Basel standards in order to be prepared for future changes in macroeconomic conditions.
As of December 31, 2011

Risk ratios (allowance / portfolio)	  	%	 	  	 	
Non-refinanced portfolio	  	 	8.4	  	  	Stock of allowances on non-refinanced portfolio /Stock of non-refinanced portfolio	
Refinanced portfolio	  	 	61.1	  	  	Stock of allowances on refinanced portfolio / Stock of refinanced portfolio	
Total portfolio	  	 	11.0	  	  	Stock of total allowances / Stock of total portfolio	
	  	 	 	 	  		
Note:
Allowances and allowance ratios do not include millons ThCh$ 203 in anti-cyclical provisions that are included based on international and domestic banking industry best practices and in line with the Basel standards in order to be prepared for future changes in macroeconomic conditions.
 
9	Transactions with related parties	
Transactions with related companies are based on immediate payment or collection or with a term of up to 30 days, and are not subject to special conditions. These operations comply with what is established in articles 44 and 49 of Law N° 18,046 that regulates the Corporations.
It is noteworthy that the related party transactions are in accordance with IAS 24 (Revised) “Related Parties”. The Company has a policy to disclose all transactions performed with related parties during the period.
 
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9.1	Trade receivables from related entities	
The composition of the item as of December 31, 2012 and December 31, 2011 is as follows:

 	  	 	  	Receivables from related entities	  	Balance as of	 	
Tax ID Number	  	Company	  	Transaction
description	  	Transaction
term	  	Nature of
relationship	  	Currency	  	Current	 	  	Non-current	 	
	  		  		  		  		  		  	12/31/2012	 	  	12/31/2011	 	  	12/31/2012	 	  	12/31/2011	 	
 	  	 	  	 	  	 	  	 	  	 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
96.863.570-0	  	Inmobiliaria Mall Viña del Mar S.A.	  	Dividends receivable	  	Current	  	Associate	  	Pesos	  	 	323,624	  	  	 	82,334	  	  	 	—  	  	  	 	—  	  	
	  		  		  		  		  		  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  		  		  		  		  		  	 	323,624	  	  	 	82,334	  	  	 	—  	  	  	 	—  	  	

9.2	Trade payables to related entities	
The composition of the item as of December 31, 2012 and December 31, 2011 is as follows:

 	  	 	  	Payables to related entities	  	Balance as of	 	
Tax ID number	  	Company	  	Transaction
description	  	Transaction
term	  	Nature of
relationship	  	Currency	  	Current	 	  	Non-current	 	
	  		  		  		  		  		  	12/31/2012	 	  	12/31/2011	 	  	12/31/2012	 	  	12/31/2011	 	
 	  	 	  	 	  	 	  	 	  	 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
—  	  	Loyalti del Perú S.A.C.	  	Fund transfer	  	Current	  	Associate	  	Peruvian
New Sol	  	 	974,469	  	  	 	1,447,631	  	  	 	—  	  	  	 	—  	  	

Total	  		  		  		  		  		  	 	974,469	  	  	 	1,447,631	  	  	 	—  	  	  	 	—  	  	

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9.3	Transactions with related parties and impact on income	
The operations and its impact on income are presented for the years ended December 31, 2012 and December 31, 2011, as follows:

Transactions	 	
Tax ID Number	 	 	Company	 	Nature of
relationship	 	Transaction
description	 	Currency	 	Country	 	12/31/2012	 	 	Impact to
income
(charge
/credit)	 	 	12/31/2011	 	 	Impact to
income
(charge
/credit)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
 	3.294.888-k	  	 	Horst Paulmann Kemna	 	Chairman	 	Dividends paid	 	Chilean pesos	 	Chile	 	 	1,317,423	  	 				 	 	1,940,998	  	 	 	—  	  	
 	3.294.888-k	  	 	Horst Paulmann Kemna	 	Chairman	 	Remuneration	 	Chilean pesos	 	Chile	 	 	23,889	  	 	 	(23,889	) 	 	 	23,805	  	 	 	(23,805	) 	
 	4.580.001-6	  	 	Helga Koepfer Schoebitz	 	Shareholder	 	Dividends paid	 	Chilean pesos	 	Chile	 	 	75,482	  	 				 	 	111,034	  	 	 	—  	  	
 	77.913.630-2	  	 	ALPA Ltda.	 	Shareholder	 	Dividends paid	 	Chilean pesos	 	Chile	 	 	5,647	  	 				 	 	10,422	  	 	 	—  	  	
 	76.425.400-7	  	 	Inversiones Tano Ltda.	 	Shareholder	 	Dividends paid	 	Chilean pesos	 	Chile	 	 	5.579,052	  	 				 	 	8,219,782	  	 	 	—  	  	
 	86.193.900-6	  	 	Inversiones Quinchamali Ltda.	 	Shareholder	 	Dividends paid	 	Chilean pesos	 	Chile	 	 	13,684,845	  	 				 	 	20,162,283	  	 	 	—  	  	
 	96.802.510-4	  	 	Inversiones Latadia Ltda.	 	Shareholder	 	Dividends paid	 	Chilean pesos	 	Chile	 	 	12,957,229	  	 				 	 	19,090,266	  	 	 	—  	  	
 	7.012.865-9	  	 	Manfred Paulmann Koepfer	 	Shareholder	 	Dividends paid	 	Chilean pesos	 	Chile	 	 	327,118	  	 				 	 	468,012	  	 	 	—  	  	
 	7.012.865-9	  	 	Manfred Paulmann Koepfer	 	Shareholder	 	Remuneration	 	Chilean pesos	 	Chile	 	 	14,713	  	 	 	(14,713	) 	 	 	14,195	  	 	 	(14,195	) 	
 	8.953.509-3	  	 	Peter Paulmann Koepfer	 	Director	 	Dividends paid	 	Chilean pesos	 	Chile	 	 	331,087	  	 				 	 	471,436	  	 	 	—  	  	
 	8.953.510-7	  	 	Heike Paulmann Koepfer	 	Director	 	Remuneration	 	Chilean pesos	 	Chile	 	 	12,840	  	 	 	(12,840	) 	 	 	12,579	  	 	 	(12,579	) 	
 	8953510-7	  	 	Heike Paulmann Koepfer	 	Director	 	Dividends paid	 	Chilean pesos	 	Chile	 	 	327,411	  	 				 	 	466,020	  	 	 	—  	  	
 	0-E	  	 	Erasmo Wong Lu	 	Director	 	Director fees	 	Peruvian New Sol	 	Perú	 	 	315,357	  	 	 	(315,357	) 	 	 	442,622	  	 	 	(442,622	) 	
 	0-E	  	 	Plaza Lima Norte	 	Company director relationship	 	Common expenses paid	 	Peruvian New Sol	 	Perú	 	 	85,591	  	 	 	(85,591	) 	 	 	118,868	  	 	 	(118,868	) 	
 	96.863.570-0	  	 	Inmobiliaria Mall Viña Del Mar S.A.	 	Associate	 	Leases paid	 	Chilean pesos	 	Chile	 	 	2,902,584	  	 	 	(2,902,584	) 	 	 	2,715,482	  	 	 	(2,715,482	) 	
 	96.863.570-0	  	 	Inmobiliaria Mall Viña Del Mar S.A.	 	Associate	 	Common Expenses Paid	 	Chilean pesos	 	Chile	 	 	2,207,131	  	 	 	(2,207,131	) 	 	 	1,991,044	  	 	 	(1,991,044	) 	
 	96.863.570-0	  	 	Inmobiliaria Mall Viña Del Mar S.A.	 	Associate	 	Dividends collected	 	Chilean pesos	 	Chile	 	 	1,818,965	  	 				 	 	933,538	  	 	 	—  	  	
 	96.863.570-0	  	 	Inmobiliaria Mall Viña Del Mar S.A.	 	Associate	 	Sale of goods	 	Chilean pesos	 	Chile	 	 	5,519	  	 	 	5,519	  	 	 	10,840	  	 	 	10,840	  	
 	77.209.070-6	  	 	Viña Cousiño Macul S.A.	 	Common director	 	Merchandise buying	 	Chilean pesos	 	Chile	 	 	698,660	  	 	 	698,660	  	 	 	492,435	  	 	 	(492,435	) 	
 	92.147.000-2	  	 	Wenco S.A.	 	Common director	 	Merchandise buying	 	Chilean pesos	 	Chile	 	 	2,271,850	  	 	 	(2,287,475	) 	 	 	2,119,269	  	 	 	(2,119,269	) 	
 	92.147.000-2	  	 	Wenco S.A.	 	Common director	 	Sale of goods	 	Chilean pesos	 	Chile	 	 	401,923	  	 	 	401,923	  	 	 	260,658	  	 	 	260,658	  	
 	76.076.630-5	  	 	Maxi Kioskos Chile S.A.	 	Company’s Director	 	Leases collected	 	Chilean pesos	 	Chile	 	 	149,971	  	 	 	149,971	  	 	 	260,509	  	 	 	258,779	  	
 	76.076.630-5	  	 	Maxi Kioskos Chile S.A.	 	Company’s Director	 	Common expenses collected	 	Chilean pesos	 	Chile	 	 	71,277	  	 	 	71,277	  	 	 	100,766	  	 	 	100,766	  	
 
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Transactions	 	
Tax ID Number	 	 	Company	 	Name of
relationship	 	Transaction
description	 	Currency	 	Country	 	12/31/2012	 	 	Impact to
Income
(charge
/credit)	 	 	12/31/2011	 	 	Impact to
income
(charge
/credit)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
 	76.076.630-5	  	 	Maxi Kioskos Chile S.A.	 	Company’s Director	 	Common expenses collected	 	Chilean pesos	 	Chile	 	 	139	  	 	 	139	  	 				 				
 	76.596.490-3	  	 	Automotora Globus Atv Chile Ltda.	 	Company’s Director	 	Leases collected	 	Chilean pesos	 	Chile	 				 				 	 	154,341	  	 	 	154,341	  	
 	76.596.490-3	  	 	Automotora Globus Atv Chile Ltda.	 	Company’s Director	 	Sale of goods	 	Chilean pesos	 	Chile	 				 				 	 	30,694	  	 	 	30,694	  	
 	78.410.320-K	  	 	Imp y Comercial Regen Ltda.	 	Company’s Director	 	Merchandise buying	 	Chilean pesos	 	Chile	 	 	499,114	  	 	 	(499,114	) 	 	 	519,871	  	 	 	(482,907	) 	
 	78.410.320-K	  	 	Imp Y Comercial Regen Ltda.	 	Company’s Director	 	Leases collected	 	Chilean pesos	 	Chile	 	 	141,972	  	 	 	141,972	  	 	 	73,927	  	 	 	73,927	  	
 	78.410.320-K	  	 	Imp Y Comercial Regen Ltda.	 	Company’s Director	 	Common expenses collected	 	Chilean pesos	 	Chile	 	 	49,580	  	 	 	49,580	  	 	 	32,325	  	 	 	32,325	  	
 	79.595.200-4	  	 	Adelco Santiago Ltda.	 	Company, director relationship	 	Merchandise buying	 	Chilean pesos	 	Chile	 	 	557	  	 	 	(557	) 	 	 	886	  	 	 	(886	) 	
 	88.983.600-8	  	 	Teleductos S.A.	 	Common director	 	Services provided	 	Chilean pesos	 	Chile	 	 	1,315,418	  	 	 	(1,315,418	) 	 	 	750,357	  	 	 	(750,357	) 	
 	92.491.000-3	  	 	Labsa Inversiones Ltda.	 	Company, director relationship	 	Leases paid	 	Chilean pesos	 	Chile	 	 	526,181	  	 	 	(526,181	) 	 	 	425,638	  	 	 	(425,638	) 	
 	93.737.000-8	  	 	Manquehue Net S.A.	 	Common director	 	Services provided	 	Chilean pesos	 	Chile	 	 	512,381	  	 	 	(512,381	) 	 	 	33,635	  	 	 	(33,635	) 	
 	77.978.800-8	  	 	Neuralis Ltda.	 	Company, director relationship	 	Services provided	 	Chilean pesos	 	Chile	 	 	13,879	  	 	 	(13,879	) 	 	 	36,288	  	 	 	(36,288	) 	
 	96.566.940-K	  	 	Agencias Universales S.A.	 	Common director	 	Services provided	 	Chilean pesos	 	Chile	 	 	384,323	  	 	 	(384,323	) 	 	 	104,797	  	 	 	(104,797	) 	
 	96.566.940-K	  	 	Agencias Universales S.A.	 	Common director	 	Sale of goods	 	Chilean pesos	 	Chile	 	 	19,039	  	 	 	19,039	  	 	 	9,674	  	 	 	9,674	  	
 	90.299.000-3	  	 	Cía. Nacional de Telefonos, Telefonica del Sur S.A.	 	Common director	 	Leases collected	 	Chilean pesos	 	Chile	 	 	30,763	  	 	 	30,763	  	 	 	416	  	 	 	416	  	
 	91.656.000-1	  	 	Industrias Forestales S.A.	 	Common director	 	Sale of goods	 	Chilean pesos	 	Chile	 				 				 	 	1,801	  	 	 	1,801	  	
 	96.628.870-1	  	 	Industria Productos Alimenticios S.A.	 	Common director	 	Merchandise buying	 	Chilean pesos	 	Chile	 	 	1,138,386	  	 	 	(1,138,386	) 	 	 	691,408	  	 	 	(691,408	) 	
 	79.675.370-5	  	 	Asset-Chile S.A.	 	Company, director relationship	 	Sale of goods	 	Chilean pesos	 	Chile	 				 				 	 	3,500	  	 	 	3,500	  	
 	70.649.100-7	  	 	Centros de Estudios Pùblicos	 	Company, director relationship	 	Services provided	 	Chilean pesos	 	Chile	 				 				 	 	27,525	  	 	 	(27,525	) 	
 	77.783.200-K	  	 	Asesorías e Inversiones Vesta Ltda.	 	Company, director relationship	 	Services provided	 	Chilean pesos	 	Chile	 	 	40,939	  	 	 	(40,939	) 	 	 	39,766	  	 	 	(39,766	) 	
 	88,417,000-1	  	 	Sky Airline S.A.	 	Company, director relationship	 	Fee charged	 	Chilean pesos	 	Chile	 				 				 	 	69,935	  	 	 	—  	  	
 	88.417.000-1	  	 	Sky Airline S.A.	 	Company, director relationship	 	Leases collected	 	Chilean pesos	 	Chile	 	 	12,616	  	 	 	12,616	  	 	 	12,213	  	 	 	12,213	  	
 	88.417.000-1	  	 	Sky Airline S.A.	 	Company, director relationship	 	Common expenses collected	 	Chilean pesos	 	Chile	 	 	4,319	  	 	 	4,319	  	 	 	4,719	  	 	 	4,719	  	
 	88.417.000-1	  	 	Sky Airline S.A.	 	Company, director relationship	 	Purchase airline tickets	 	Chilean pesos	 	Chile	 				 				 	 	416,091	  	 	 	—  	  	
 
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9.4	Board of Directors and key management of the Company	
The Board of Directors as of December 31, 2012 is comprised of the following people:

Board of directors	  	Role	  	Profession	
Horst Paulmann Kemna	  	Chairman	  	Businessman	
Heike Paulmann Koepfer	  	Director	  	Commercial Engineer	
Peter Paulmann Koepfer	  	Director	  	Commercial Engineer	
Roberto Oscar Philipps	  	Director	  	National Public Accountant	
Cristian Eyzaguirre Johnston	  	Director	  	Economist	
Sven Von Appen Behrmann	  	Director	  	Businessman	
Erasmo Wong Lu	  	Director	  	Civil Engineer	
David Gallagher Patrickson	  	Director	  	Economist	
Julio Moura	  	Director	  	Engineer	
Key management of the Company as of December 31, 2012 is composed of the following people:

Senior management	  	Position	  	Profession	
Daniel Rodríguez	  	Chief Executive Officer	  	Forest Engineer	
Carlos Mechetti	  	General Counsel	  	Attorney at law	
Bronislao Jandzio	  	Audit Managing Director	  	Business Administrator	
Pablo Castillo	  	Supermarket Managing Director	  	Commercial Engineer	
Carlos Wulf	  	Home Improvement Stores Managing Director	  	Naval Engineer	
Renato Fernández	  	Corporate Affairs Manager	  	Journalist	
Jaime Soler	  	Department Stores Managing Director	  	Commercial Engineer	
Renzo Paonessa	  	Real Estate Director	  	Commercial Engineer	
Marcelo Reyes	  	Corporate Risk Managing Director	  	Commercial Engineer	
Patricio Rivas	  	Financial Retail Managing Director	  	Commercial Engineer	
Pietro Illuminati	  	Procurement Director	  	Industrial Engineer	
Mauricio Soto	  	Customer and Digital Sales Director	  	Commercial Engineer	
Rodrigo Hetz	  	Human Resources Director	  	Industrial Engineer	
Andres Artigas	  	Chief Information Officer	  	Industrial Engineer	
Juan Manuel Parada	  	Chief Financial Officer	  	Business Administrator	
Nicolas Larco	  	M&A and Investment Managing Director	  	Economist	
 
9.5	Board of Directors compensation	
In accordance with Article 33 of Law N° 18,046 in regards to Corporations, the Ordinary Shareholders’ Meeting held on April 24, 2012, set the following amounts for the 2012 period:
 
•	 	Fees paid for attending Board sessions: payment of UF 200 (equivalents to ThCh$ 4,568) each month for those holding the position of Director of the Board and twice this amount for the President and Vice-president of the Board, if and only if they attend a minimum of 10 ordinary sessions each year .	
 
•	 	Fees paid for attending the Directors’ Committee: payment to each Director of UF 67 (equivalents to ThCh$ 1,530) for each session they attend.	
 
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The details of the amount paid to Directors for the years ended December 31, 2012, 2011 and 2010, are as follows:

 	  	 	  	For the year ended December 31,	 	
Name	  	Role	  	2012	 	  	2011	 	  	2010	 	
 	  	 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Horst Paulmann Kemna	  	Chairman	  	 	104,146	  	  	 	87,730	  	  	 	85,994	  	
Manfred Paulmann Koepfer	  	Vice chairman(*)	  				  	 	—  	  	  	 	77,777	  	
Heike Paulmann Koepfer	  	Director	  	 	57,292	  	  	 	58,193	  	  	 	50,654	  	
Peter Paulmann Koepfer	  	Director	  	 	52,072	  	  	 	43,854	  	  	 	42,426	  	
Bruno Philippi Irarrázaval	  	Director(*)	  	 	—  	  	  	 	21,774	  	  	 	35,354	  	
Roberto Oscar Philipps	  	Director	  	 	69,453	  	  	 	50,739	  	  	 	44,299	  	
Cristián Eyzaguirre Johnston	  	Director	  	 	69,453	  	  	 	57,483	  	  	 	53,813	  	
Sven von Appen Behmann	  	Director	  	 	52,072	  	  	 	43,936	  	  	 	31,879	  	
Erasmo Wong Lu Vega	  	Director	  	 	52,072	  	  	 	44,673	  	  	 	84,013	  	
Julio Moura	  	Director	  	 	52,072	  	  	 	—  	  	  				
David Gallagher Patrickson	  	Director	  	 	69,453	  	  	 	43,973	  	  	 	—  	  	
	  		  	 	 	 	  	 	 	 	  	 	 	 	
Total	  		  	 	578,085	  	  	 	452,355	  	  	 	506,209	  	

(*)	On December 30, 2011 and August 2012, the Company communicated a material event, reporting that Vice-Chairman and Director Manfred Paulmann Koepfer and Director Bruno Philippi Irarrázaval, respectively, submitted their resignation. On each occasion, the Company also informed that in accordance with article 32 of the Corporations Law No. 18,046, renewal of the entire Board of Directors must be voted on at the next ordinary general shareholders’ meeting to be held by the Company.	
 
9.6	Compensation paid to senior management	

 	  	For the year ended December 31,	 	
Key management compensation	  	2012	 	  	2011	 	  	2010	 	
 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Salary and other short term employee benefits	  	 	5,715,000	  	  	 	4,533,000	  	  	 	6,150,366	  	
Shares—based payments	  	 	445,717	  	  	 	412,530	  	  	 	453,375	  	

Total	  	 	6,160,717	  	  	 	4,945,530	  	  	 	6,603,741	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
The Cencosud Group has established an incentive plan, which rewards management for the achievement of individual objectives in the achievement of the company’s results. These incentives are structured as a minimum and a maximum of gross compensation and are paid once a year.
 
10	Inventory	
The composition of this item as of December 31, 2012 and 2011 is as follows:

 	  	As of December 31,	 	
Inventory category	  	2012	 	 	2011	 	
 	  	ThCh$	 	 	ThCh$	 	
Raw material	  	 	5,591,904	  	 	 	3,399,366	  	
Goods	  	 	989,445,147	  	 	 	819,944,380	  	
Finished Goods	  	 	284,640	  	 	 	305,559	  	
Provisions	  	 	(68,560,106	) 	 	 	(54,176,854	) 	

Total	  	 	926,761,585	  	 	 	769,472,451	  	

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The composition of inventories by business as of December 31, 2012 and 2011 is as follows:

 	  	As of December 31, 2012	 	
Inventory category	  	Department
store	 	  	Supermarkets	 	  	Home
improvement	 	  	Total	 	
 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Raw material	  	 	2,498,464	  	  	 	3,093,440	  	  	 	—  	  	  	 	5,591,904	  	
Goods	  	 	138,647,647	  	  	 	586,803,418	  	  	 	195,433,976	  	  	 	920,885,041	  	
Finished Goods	  	 	24,893	  	  	 	259,747	  	  	 	—  	  	  	 	284,640	  	

Total	  	 	141,171,004	  	  	 	590,156,605	  	  	 	195,433,976	  	  	 	926,761,585	  	

																	
 	  	As of December 31, 2011	 	
Inventory category	  	Department
store	 	  	Supermarkets	 	  	Home
improvement	 	  	Total	 	
 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Raw material	  	 	706,255	  	  	 	2,693,111	  	  	 	—  	  	  	 	3,399,366	  	
Goods	  	 	132,257,450	  	  	 	442,339,991	  	  	 	191,170,085	  	  	 	765,767,526	  	
Finished Goods	  	 	—  	  	  	 	305,559	  	  	 	—  	  	  	 	305,559	  	

Total	  	 	132,963,705	  	  	 	445,338,661	  	  	 	191,170,085	  	  	 	769,472,451	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
The Company periodically appraises its inventory at their net realizable value, by separating the inventory for each line of business and verifying the age, inventory turn over, sales prices and seasonality. Any adjustments are carried against income of the period.
The goods included in inventory are valued between the purchase price or production cost, net of allowance for obsolescence and net realizable value.
The carrying amount of inventories carried at December 31, 2012 and December 31, 2011 to its fair value less selling costs, provides for:
Current Inventories:

Inventories at net realizable	  	Inventories at net realizable
as of December 31,	 	
	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Inventory	  	 	43,659,617	  	  	 	30,835,953	  	
	  	 	 	 	  	 	 	 	
Total	  	 	43,659,617	  	  	 	30,835,953	  	

									
 	  	Balance as of December 31,	 	
Net realizable value movements	  	2012	 	 	2011	 	
 	  	ThCh$	 	 	ThCh$	 	
Beginning Balance	  	 	30,835,953	  	 	 	23,942,264	  	
Increase of Inventory to NRV (Net Realizable Value)	  	 	9,171,318	  	 	 	14,885,770	  	
Decrease of Inventory to NRV (Net Realizable Value)	  	 	(7,797,237	) 	 	 	(7,992,081	) 	
Acquisitions through Business combinations	  	 	11,449,583	  	 	 	—  	  	
	  	 	 	 	 	 	 	 	
Total	  	 	43,659,617	  	 	 	30,835,953	  	

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Other information relevant to inventory:

 	  	For the periods between	 	
 	  	01/01/2012	 	  	01/01/2011	 	  	01/01/2010	 	
Additional information inventory	  	12/31/2012	 	  	12/31/2011	 	  	12/31/2010	 	
 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Cost of inventories recognized as expenses during the year	  	 	6,318,469,948	  	  	 	5,242,789,902	  	  	 	4,358,061,295	  	
Provision movements:

 	  	Balance as of December 31,	 	
Provisions	  	2012	 	 	2011	 	
 	  	ThCh$	 	 	ThCh$	 	
Beginning Balance	  	 	54,176,854	  	 	 	44,581,363	  	
Amount of sales of inventory	  	 	5,866,261	  	 	 	6,146,959	  	
Amount of reversals of inventory reductions	  	 	(1,588,938	) 	 	 	(147,875	) 	
Acquisitions through Business combinations	  	 	10,105,929	  	 	 	3,596,407	  	

Total	  	 	68,560,106	  	 	 	54,176,854	  	
	  	 	 	 	 	 	 	 	
The circumstances or events that led to the reversal of any write-down of inventories at December 31, 2012 and 2011, relate mainly to liquidations and auctions to recover more value from the estimated net realizable value for inventories.
The Company has not given stock as guarantee at the end of the period.
 
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11	Investments in associates recorded following the equity method	
 
11.1.	Breakdown of investments in associates	
The composition of the item as of December 31, 2012 and 2011, as well as other related information is as follows:

Investments in associates	  	Country
Of origin	  	Functional
currency	  	Ownership
percentage	 	  	Voting power
percentage	 	  	Balance
as of
December  31,
2011	 	 	Participation
in profit or
loss of equity
method	 	 	Translation
difference	 	 	Other increase
(decrease)	 	 	Balance
as of
December  31,
2012	 	
 	  	 	  	 	  	%	 	  	%	 	  	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Loyalti del Perú S.A.C.	  	Perú	  	Peruvian Nuevo Sol	  	 	42.50	  	  	 	42.50	  	  	 	935,477	  	 	 	97,534	  	 	 	(315,168	) 	 	 	—  	  	 	 	717,843	  	
Carnes Huinca S.A.	  	Argentina	  	Argentine Pesos	  	 	50.00	  	  	 	50.00	  	  	 	(14,578	) 	 	 	801	  	 	 	(27,234	) 	 	 	248,371	  	 	 	207,360	  	
Inmobiliaria Mall Viña del Mar S.A.	  	Chile	  	Chilean Pesos	  	 	33.33	  	  	 	33.33	  	  	 	37,897,834	  	 	 	5,544,077	  	 	 	—  	  	 	 	(2,106,713	) 	 	 	41,335,198	  	
Combanc S.A.	  	Chile	  	Chilean Pesos	  	 	0.37	  	  	 	0.37	  	  	 	11,707	  	 	 	(2,696	) 	 	 	—  	  	 	 	2,696	  	 	 	11,707	  	
										
Total	  		  		  				  				  	 	38,830,440	  	 	 	5,639,716	  	 	 	(342,402	) 	 	 	(1,855,646	) 	 	 	42,272,108	  	
	  		  		  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
The composition of the item as of December 31, 2011 and 2010, as well as other related information is as follows:

Investments in associates	  	Country
of origin	  	Functional
currency	  	Ownership
percentage	 	  	Voting power
percentage	 	  	Balance
as of
December  31,
2010	 	  	Participation
in profit or
loss of equity
method	 	 	Translation
difference	 	 	Other increase
(decrease)	 	 	Balance
as of
December  31,
2011	 	
 	  	 	  	 	  	%	 	  	%	 	  	ThCh$	 	  	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Loyalti del Perú S.A.C.	  	Perú	  	Peruvian Nuevo Sol	  	 	42.50	  	  	 	42.50	  	  	 	977,607	  	  	 	120,280	  	 	 	(162,410	) 	 	 	—  	  	 	 	935,477	  	
Carnes Huinca S.A.	  	Argentina	  	Argentine Pesos	  	 	50.00	  	  	 	50.00	  	  	 	57,548	  	  	 	(72,540	) 	 	 	414	  	 	 	—  	  	 	 	(14,578	) 	
Inmobiliaria Mall Viña del Mar S.A.	  	Chile	  	Chilean Pesos	  	 	33.33	  	  	 	33.33	  	  	 	33,301,709	  	  	 	5,735,270	  	 	 	—  	  	 	 	(1,139,145	) 	 	 	37,897,834	  	
Combanc S.A.	  	Chile	  	Chilean Pesos	  	 	0.37	  	  	 	0.37	  	  	 	11,707	  	  	 	(4,450	) 	 	 	—  	  	 	 	4,450	  	 	 	11,707	  	
Total	  		  		  				  				  	 	34,348,571	  	  	 	5,778,560	  	 	 	(161,996	) 	 	 	(1,134,695	) 	 	 	38,830,440	  	
	  		  		  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
The composition of the item as of December 31, 2010 and January 1, 2010, as well as other related information is as follows:

Investments in associates	  	Country
of origin	  	Functional
currency	  	Ownership
percentage	 	  	Voting  power
percentage	 	  	Balance
as of
January 1,
2010	 	  	Participation
in profit or
loss of equity
method	 	 	Translation
difference	 	 	Other  increase
(decrease)	 	 	Balance
as of
December 31,
2010	 	
 	  	 	  	 	  	%	 	  	%	 	  	ThCh$	 	  	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Loyalti del Perú S.A.C.	  	Perú	  	Peruvian Nuevo Sol	  	 	42.50	  	  	 	42.50	  	  	 	834,327	  	  	 	201,711	  	 	 	(58,431	) 	 	 	—  	  	 	 	977,607	  	
Carnes Huinca S.A.	  	Argentina	  	Argentine Pesos	  	 	50.00	  	  	 	50.00	  	  	 	233,128	  	  	 	(149,867	) 	 	 	(13,920	) 	 	 	(86	) 	 	 	69,255	  	
Inmobiliaria Mall Viña del Mar S.A.	  	Chile	  	Chilean Pesos	  	 	33.33	  	  	 	33.33	  	  	 	26,998,206	  	  	 	7,462,155	  	 	 	—  	  	 	 	(1,158,652	) 	 	 	33,301,709	  	
	  		  		  				  				  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	  		  		  				  				  	 	28,065,661	  	  	 	7,513,999	  	 	 	(72,351	) 	 	 	(1,158,738	) 	 	 	34,348,571	  	

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11.2	Relevant summarized information with regards to associates	
The information regarding investments in associates as of December 31, 2012 is as follows:

 	 	At December 31, 2012	 	
Investments in associates	 	Interest	 	 	Current
assets	 	 	Non-current
assets	 	 	Current
liabilities	 	 	Non-current
liabilities	 	 	Ordinary
income	 	 	Ordinary
expense	 	 	Net gain
(loss)	 	
 	 	%	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Loyalti del Perú S.A.C.	 	 	42.5	  	 	 	4,183,697	  	 	 	204,230	  	 	 	829,610	  	 	 	1,869,275	  	 	 	6,203,947	  	 	 	5,974,455	  	 	 	229,492	  	
Carnes Huinca S.A.	 	 	50.00	  	 	 	254,780	  	 	 	263,165	  	 	 	103,225	  	 				 	 	1,882,828	  	 	 	1,881,226	  	 	 	1,602	  	
Inmobiliaria Mall Viña del Mar S.A.	 	 	33.33	  	 	 	5,681,797	  	 	 	190,702,140	  	 	 	11,181,517	  	 	 	61,184,425	  	 	 	21,313,956	  	 	 	4,680,062	  	 	 	16,633,894	  	
									
Total	 				 	 	10,120,274	  	 	 	191,169,535	  	 	 	12,114,352	  	 	 	63,053,700	  	 	 	29,400,731	  	 	 	12,535,743	  	 	 	16,864,988	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
The information regarding investments in associates as of December 31, 2011 is as follows:

 	 	At December 31, 2011	 	
Investments in associates	 	Interest	 	 	Current
assets	 	 	Non-current
assets	 	 	Current
liabilities	 	 	Non-current
liabilities	 	 	Ordinary
income	 	 	Ordinary
expense	 	 	Net gain
(loss)	 	
 	 	%	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Loyalti del Perú S.A.C.	 	 	42.50	  	 	 	4,620,075	  	 	 	192,299	  	 	 	681,724	  	 	 	1,929,528	  	 	 	5,559,731	  	 	 	5,276,719	  	 	 	283,012	  	
Carnes Huinca S.A.	 	 	50.00	  	 	 	268,177	  	 	 	347,064	  	 	 	171,908	  	 	 	472,489	  	 	 	1,136,462	  	 	 	1,281,542	  	 	 	(145,080	) 	
Inmobiliaria Mall Viña del Mar S.A.	 	 	33.33	  	 	 	5,355,450	  	 	 	168,055,721	  	 	 	14,647,110	  	 	 	45,059,189	  	 	 	18,916,588	  	 	 	1,709,056	  	 	 	17,207,532	  	
									
Total	 				 	 	10,243,702	  	 	 	168,595,084	  	 	 	15,500,742	  	 	 	47,461,206	  	 	 	25,612,781	  	 	 	8,267,317	  	 	 	17,345,464	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
The composition of the item as of December 31, 2010, as well as other related information is as follows:

 	 	At December 31, 2010	 	
Investments in associates	 	Interest	 	 	Current
assets	 	 	Non-current
assets	 	 	Current
liabilities	 	 	Non-current
liabilities	 	 	Ordinary
income	 	 	Ordinary
expense	 	 	Net gain
(loss)	 	
 	 	%	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Loyalti del Perú S.A.C.	 	 	42.50	  	 	 	4,195,011	  	 	 	134,189	  	 	 	1,032,530	  	 	 	996,418	  	 	 	5,352,847	  	 	 	4,878,234	  	 	 	474,613	  	
Carnes Huinca S.A.	 	 	50.00	  	 	 	133,840	  	 	 	342,217	  	 	 	360,961	  	 	 	—  	  	 	 	1,270,090	  	 	 	1,571,180	  	 	 	(301,090	) 	
Inmobiliaria Mall Viña del Mar S.A.	 	 	33.33	  	 	 	5,808,706	  	 	 	160,104,886	  	 	 	14,109,606	  	 	 	51,888,868	  	 	 	15,263,875	  	 	 	(7,124,828	) 	 	 	22,388,703	  	
	 				 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 				 	 	10,137,557	  	 	 	160,581,292	  	 	 	15,503,097	  	 	 	52,885,286	  	 	 	21,886,812	  	 	 	(675,414	) 	 	 	22,562,226	  	

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12	Intangible assets other than goodwill	
Intangible assets are mainly composed of software and brands acquired in business combinations. The detail as of December 31, 2012 and 2011 is as follows:

Intangibles assets other than goodwill net	  	As of December 31,	 	
	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Finite life intangible assets, net	  	 	71,892,987	  	  	 	61,079,912	  	
Indefinite life intangible assets, net	  	 	472,618,978	  	  	 	465,607,881	  	

Intangible assets, net	  	 	544,511,965	  	  	 	526,687,793	  	

Patents, Trade Marks and Other Rights, Net	  	 	472,618,978	  	  	 	465,607,881	  	
Software (IT)	  	 	42,339,432	  	  	 	24,008,338	  	
Other Identifiable Intangible Assets, net	  	 	29,553,555	  	  	 	37,071,574	  	

Identifiable Intangible Assets, Net	  	 	544,511,965	  	  	 	526,687,793	  	

									
Intangibles assets other than goodwill gross	  	As of December 31,	 	
	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Finite life intangible assets, Gross	  	 	130,546,076	  	  	 	109,752,623	  	
Indefinite life intangible assets, Gross	  	 	472,618,978	  	  	 	465,607,881	  	

Intangible Assets, Gross	  	 	603,165,054	  	  	 	575,360,504	  	

Patents, Trade Marks and Other Rights, Gross	  	 	472,618,978	  	  	 	465,607,881	  	
Software (IT)	  	 	88,402,817	  	  	 	63,901,802	  	
Other Identifiable Intangible Assets, Gross	  	 	42,143,259	  	  	 	45,850,821	  	

Identifiable Intangible Assets, Gross	  	 	603,165,054	  	  	 	575,360,504	  	

									
Accumulated amortization and value impairment	  	As of December 31,	 	
	  	2012	 	 	2011	 	
 	  	ThCh$	 	 	ThCh$	 	
Finite life intangible assets	  	 	(58,653,089	) 	 	 	(48,672,711	) 	
Indefinite life intangible assets	  	 	—  	  	 	 	—  	  	

Intangible Assets, Gross	  	 	(58,653,089	) 	 	 	(48,672,711	) 	

Software (IT)	  	 	(46,063,385	) 	 	 	(39,893,464	) 	
Other Identifiable Intangible Assets	  	 	(12,589,704	) 	 	 	(8,779,247	) 	

Accumulated amortization and value impairment	  	 	(58,653,089	) 	 	 	(48,672,711	) 	
	  	 	 	 	 	 	 	 	
Other identifiable intangible assets mainly correspond to customer’s data base.
Regardings the treatment of intangibles with an indefinite life, the recoverable amount is estimated annually at each closing balance.
The holding company performs an annual recoverability analysis, according to the criteria described under IAS 36 “impairment of assets.”
 
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The detail of the useful lives applied to intangible assets as of December 31, 2012 and 2011 is as follows:

Estimated useful lives or amortization rates used	  	Minimum
life	  	Maximum
life	
Software products development costs	  	1	  	7	
Patents, Trade Marks and Other Rights	  	Indefinite	  	Indefinite	
Software (IT)	  	1	  	7	
Other identifiable Intangible Assets	  	1	  	5	
The roll-forward of intangible assets as of and for the year ended December 31, 2012 is the following:

Intangible movements	  	Patents,
trade marks
and other
rights	 	 	Applications
(IT)	 	 	Other
identifiable
intangible
assets	 	 	Intangible
assets, net	 	
 	  	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Initial balance as of January 1, 2012	  	 	465,607,881	  	 	 	24,008,338	  	 	 	37,071,574	  	 	 	526,687,793	  	
Additions	  	 	—  	  	 	 	18,241,706	  	 	 	326,711	  	 	 	18,568,417	  	
Acquisitions through business combination	  	 	15,849,182	  	 	 	8,634,196	  	 	 	—  	  	 	 	24,483,378	  	
Amortization	  	 	—  	  	 	 	(6,169,921	) 	 	 	(3,810,457	) 	 	 	(9,980,378	) 	
Increase (decrease) in foreign exchange	  	 	(8,838,085	) 	 	 	(2,374,887	) 	 	 	(4,034,273	) 	 	 	(15,247,245	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at December 31, 2012	  	 	472,618,978	  	 	 	42,339,432	  	 	 	29,553,555	  	 	 	544,511,965	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
The roll-forward of intangible assets as of and for the year ended December 31, 2011 is the following:

Intangible movements	  	Patents,
trade marks
and other
rights	 	  	Applications
(IT)	 	 	Other
identifiable
intangible
assets	 	 	Intangible
assets, net	 	
 	  	ThCh$	 	  	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Initial balance as of January 1, 2011	  	 	411,972,146	  	  	 	23,981,589	  	 	 	10,607,654	  	 	 	446,561,389	  	
Additions	  	 	—  	  	  	 	4,727,407	  	 	 	428,383	  	 	 	5,155,790	  	
Acquisitions through business combination	  	 	40,044,212	  	  	 	100,033	  	 	 	32,218,624	  	 	 	72,362,869	  	
Amortization	  	 	—  	  	  	 	(5,680,536	) 	 	 	(5,669,091	) 	 	 	(11,349,627	) 	
Increase (decrease) in foreign exchange	  	 	13,591,523	  	  	 	433,351	  	 	 	(67,502	) 	 	 	13,957,372	  	
Other increases (decreases)	  	 	—  	  	  	 	446,494	  	 	 	(446,494	) 	 	 	—  	  	
	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Balance at December 31, 2011	  	 	465,607,881	  	  	 	24,008,338	  	 	 	37,071,574	  	 	 	526,687,793	  	
	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
The details of the amounts of identifiable intangible assets that are individually significant as of December 31, 2012 and 2011 is as follows:

Individually significant identifiable Intangible assets	  	Book
Value
2012	 	  	Book
Value
2011	 	  	Remaining
amortization
period	  	Country of
origin	  	Segment	
 	  	ThCh$	 	  	ThCh$	 	  	 	  	 	  	 	
Paris Brand	  	 	326,363,010	  	  	 	326,363,010	  	  	Indefinite	  	Chile	  	Department stores	
Wong Brand	  	 	30,351,417	  	  	 	31,177,350	  	  	Indefinite	  	Peru	  	Supermarkets	
Metro Brand	  	 	66,221,274	  	  	 	68,023,309	  	  	Indefinite	  	Peru	  	Supermarkets	
Bretas Brand	  	 	19,700,488	  	  	 	23,326,525	  	  	Indefinite	  	Brazil	  	Supermarkets	
Perini Brand	  	 	882,115	  	  	 	1,044,475	  	  	Indefinite	  	Brazil	  	Supermarkets	
Pierre Cardin License	  	 	171,584	  	  	 	171,584	  	  	Defined	  	Chile	  	Department stores	
Johnson’s Brand	  	 	15,501,628	  	  	 	15,501,628	  	  	Indefinite	  	Chile	  	Department stores	
Prezunic Brand	  	 	13,427,462	  	  	 	—  	  	  	Indefinite	  	Brazil	  	Supermarkets	
	  	 	 	 	  	 	 	 	  		  		  		
Total	  	 	472,618,978	  	  	 	465,607,881	  	  		  		  		

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The factors for considering the brands with indefinite useful lives over time are the following:
 
•	 	Verifiable history and expected use of the asset by the Company: This is the most important factor to consider in the definition of the useful life of the brand. The brands mentioned have a history of more than 80 years of successful existence in the market. The use that has been and is being given to these brands shows an intention to keep them and consolidate them further in the long term.	
 
•	 	Legal, regulatory or contractual limits to the useful life of the intangible asset: There are no legal, regulatory or contractual limits linked to the brands. The brands are duly protected and the pertinent registrations remain current.	
 
•	 	Effects of obsolescence, demand, competition and other economic factors: The brands have a rating linked to strong national brands according to their history. This implies a low risk of obsolescence.	
 
•	 	Maintenance of the necessary investment levels to produce the projected future cash flows: historic and projected cash flows for the brands are duly sustained with investments in marketing, publicity, technology, renovations and improvements to the retail infrastructure. They are efficient as a result of synergies and scale of operations, but are compatible and realistic for the industry. An increase in the other general administration expenses and necessary sales is also contemplated to sustain the projected increase in sales.	
 
•	 	Relationship of the useful life of an asset or group of assets with the useful life of an intangible asset: The brands do not depend on the useful life of any asset or group of assets as they existed independently for a substantial time prior to the acquisitions, and they are not related to sectors subject to technological obsolescence or other causes.	
The charge to income for amortization of intangibles for the periods ended December 31, 2012, 2011 and 2010, are detailed below:

Item line in statement of income which includes amortization of identifiable
Intangible assets	  	As of December 31,	 	
	  	2012	 	  	2011	 	  	2010	 	
 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Administrative expenses (see note 25.1)	  	 	9,980,378	  	  	 	11,349,627	  	  	 	9,171,776	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	9,980,378	  	  	 	11,349,627	  	  	 	9,171,776	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
As of December 31, 2012, there are no relevant intangible assets encumbered. There are also no restrictions on ownership of them.
As of December 31, 2012, there are no commitments to acquire intangible assets.
No relevant intangible assets that have been fully depreciated are in use as of December 31, 2012.
 
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13	Goodwill	
The detail of goodwill as of December 31, 2012 and 2011 is as follows:

ID
(Unique tax
number)	 	  	Company	  	Country	  	December 31,
2010	 	  	Increase
(decrease)
adjustments
for business
combinations	 	 	Increase
(decrease)
foreign
exchange	 	 	December 31,
2011	 	  	Increase
(decrease)
adjustments
for business
combinations	 	  	Increase
(decrease)
foreign
exchange	 	 	December 31,
2012	 	
 	 	  	 	  	 	  	ThCh$	 	  	ThCh$	 	 	ThCh$	 	 	ThCh$	 	  	ThCh$	 	  	ThCh$	 	 	ThCh$	 	
 	—  	  	  	Constructora Reineta S.A.	  	Argentina	  	 	249,512	  	  				 	 	6,271	  	 	 	255,783	  	  				  	 	(48,810	) 	 	 	206,973	  	
 	—  	  	  	Blaisten S.A.	  	Argentina	  	 	5,227,328	  	  				 	 	131,370	  	 	 	5,358,698	  	  				  	 	(1,022,534	) 	 	 	4,336,164	  	
 	—  	  	  	E Wong S.A.	  	Peru	  	 	2,478,066	  	  				 	 	393,424	  	 	 	2,871,490	  	  				  	 	(76,070	) 	 	 	2,795,420	  	
 	—  	  	  	Metro Inmobiliaria S.A.	  	Peru	  	 	1,357,444	  	  				 	 	215,511	  	 	 	1,572,955	  	  				  	 	(41,670	) 	 	 	1,531,285	  	
 	—  	  	  	Mercantil Pizarro	  	Peru	  	 	2,649,633	  	  				 	 	420,662	  	 	 	3,070,295	  	  				  	 	(81,336	) 	 	 	2,988,959	  	
 	—  	  	  	Supermercados El Centro	  	Peru	  	 	3,399,433	  	  				 	 	539,703	  	 	 	3,939,136	  	  				  	 	(104,354	) 	 	 	3,834,782	  	
 	—  	  	  	Inmobiliaria Los Alamos S.A.C.	  	Peru	  	 	195,242	  	  				 	 	30,997	  	 	 	226,239	  	  				  	 	(5,993	) 	 	 	220,246	  	
 	—  	  	  	GSW S.A.	  	Peru	  	 	210,721,791	  	  				 	 	33,454,717	  	 	 	244,176,508	  	  				  	 	(6,468,587	) 	 	 	237,707,921	  	
 	—  	  	  	Gbarbosa Holding LLC	  	Brazil	  	 	188,136,161	  	  				 	 	(2,059,861	) 	 	 	186,076,300	  	  				  	 	(29,032,219	) 	 	 	157,044,081	  	
 	—  	  	  	Mercantil Rodríguez Comercial Ltda.	  	Brazil	  	 	9,475,993	  	  				 	 	(103,751	) 	 	 	9,372,242	  	  				  	 	(1,456,886	) 	 	 	7,915,356	  	
 	—  	  	  	Super Família Comercial de Alimentos Ltda.	  	Brazil	  	 	15,114,917	  	  	 	(2,863,821	) 	 	 	(90,679	) 	 	 	12,160,417	  	  				  	 	(1,890,300	) 	 	 	10,270,117	  	
 	—  	  	  	Perini Comercial de Alimentos Ltda.	  	Brazil	  	 	9,660,490	  	  	 	(2,503,792	) 	 	 	(105,770	) 	 	 	7,050,928	  	  				  	 	(1,096,045	) 	 	 	5,954,883	  	
 	—  	  	  	Irmaos Bretas Filhos e Cia. Ltda.	  	Brazil	  	 	329,707,742	  	  	 	(37,272,936	) 	 	 	(1,635,573	) 	 	 	290,799,233	  	  				  	 	(45,113,287	) 	 	 	245,685,946	  	
 	—  	  	  	Prezunic Comercial Ltda.	  	Brazil	  	 	—  	  	  	 	—  	  	 	 	—  	  	 	 	—  	  	  	 	188,220,315	  	  	 	(28,759,652	) 	 	 	159,460,663	  	
 	—  	  	  	Grandes Superficies de Colombia S.A.	  	Colombia	  	 	—  	  	  	 	—  	  	 	 	—  	  	 	 	—  	  	  	 	709,374,087	  	  	 	29,266,833	  	 	 	738,640,920	  	
 	76.193.360-4	  	  	Umbrale S.A.	  	Chile	  	 	1,442,588	  	  				 				 	 	1,442,588	  	  				  				 	 	1,442,588	  	
 	76.203.080-2	  	  	Mega Supermercado Infante Ltda.	  	Chile	  	 	3,598,780	  	  				 				 	 	3,598,780	  	  				  				 	 	3,598,780	  	
 	78.072.360-2	  	  	Distribución y Administraciones Ltda.	  	Chile	  	 	5,900,758	  	  				 				 	 	5,900,758	  	  				  				 	 	5,900,758	  	
 	78.509.620-7	  	  	Preaservice Ltda.	  	Chile	  	 	809,682	  	  				 				 	 	809,682	  	  				  				 	 	809,682	  	
 	79.829.500-4	  	  	Comercializadora Foster Ltda.	  	Chile	  	 	4,536,210	  	  				 				 	 	4,536,210	  	  				  				 	 	4,536,210	  	
 	83.274.300-3	  	  	Empresas Almacenes Paris S.A.	  	Chile	  	 	120,650,073	  	  				 				 	 	120,650,073	  	  				  				 	 	120,650,073	  	
 	83.336.200-3	  	  	Montrone Pla S.A.	  	Chile	  	 	33,253,496	  	  				 				 	 	33,253,496	  	  				  				 	 	33,253,496	  	
 	83.681.900-4	  	  	Supermercado Montecarlo S.A.	  	Chile	  	 	45,250,207	  	  				 				 	 	45,250,207	  	  				  				 	 	45,250,207	  	
 	84.671.700-5	  	  	Santa Isabel S.A.	  	Chile	  	 	18,179,034	  	  				 				 	 	18,179,034	  	  				  				 	 	18,179,034	  	
 	96.671.750-5	  	  	Easy S.A.	  	Chile	  	 	224,445	  	  				 				 	 	224,445	  	  				  				 	 	224,445	  	
 	96.805.390-6	  	  	Proterra S.A.	  	Chile	  	 	1,003,013	  	  				 				 	 	1,003,013	  	  				  				 	 	1,003,013	  	
 	78.183.534-3	  	  	Retail .S.A.	  	Chile	  	 	—  	  	  	 	11,530,592 	  	 	 	—  	  	 	 	11,530,592	  	  				  				 	 	11,530,592	  	
			  		  		  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	
 	Total	  	  		  		  	 	1,013,222,038	  	  	 	(31,109,957	) 	 	 	31,197,021	  	 	 	1,013,309,102	  	  	 	897,594,402	  	  	 	(85,930,910	) 	 	 	1,824,972,594	  	

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Goodwill is allocated to each store or group of stores, as appropriate, in each country and business segment (cash generating units). The following table details goodwill by business segment and country as of December 31, 2012 and 2011:

 	  	As of December 31,	 	
Goodwill per segment and country	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Real Estate & Shopping—Argentina	  	 	206,973	  	  	 	255,783	  	
Supermarkets—Chile	  	 	106,991,957	  	  	 	106,991,957	  	
Supermarkets—Brazil	  	 	586,331,046	  	  	 	505,459,120	  	
Supermarkets—Peru	  	 	249,078,613	  	  	 	255,856,623	  	
Supermarkets— Colombia	  	 	738,640,920	  	  	 	—  	  	
Home Improvement—Argentina	  	 	4,336,164	  	  	 	5,358,698	  	
Home Improvement—Chile	  	 	1,227,458	  	  	 	1,227,458	  	
Department stores—Chile	  	 	138,159,463	  	  	 	138,159,463	  	
	  	 	 	 	  	 	 	 	
Total	  	 	1,824,972,594	  	  	 	1,013,309,102	  	
	  	 	 	 	  	 	 	 	
The basis of the amount recoverable from the cash generating units is the value in use, which determined by the net present value of the cash flows that the cash generating units will produce, discounted based on a rate of average cost of market capital in line with the business of each country.
The financial projections for determining the net present value of future cash flows are modeled considering the principal variables that determine the historic flows of each cash generating unit and the budgets approved by the Board. Conservative growth rates are used for this purpose, which fluctuate between 0% and 3%, and nil after the fifth year of the projection; and the degree of maturity of each of the investments is taken into account. The most sensitive variables in these projections are the discount rates applied in the determination of the net present value of the projected cash flows, operating costs, store occupation factors and the market prices of the goods and services traded.
A differentiated discount rate is used for each country in which the Company operates, depending on the related risk. The rates applied to the test are the same as described in Note 4.3. For purposes of the impairment test, sensitivity tests are carried out for the discount rates applied in the financial projections, in a variation range of 5% to 10%.
The sensitivity analysis performed does not cause in any case, that the carrying of goodwill exceed their recoverable amount.
Prezunic Comercial Ltda.
On January 2, 2012 the Company’s subsidiary Cencosud Brasil Comercial Ltda. acquired 100% ownership of the Prezunic Comercial Ltda. shares pursuant to an acquisition agreement between the Company and Andrea Dias de Cunha and Marcio Dias da Cunha.
The total price of the shares was R$875,000,000 (ThCh$242,690,000) which was adjusted based on the variances in debt and work in capital of R$216,513,232 (ThCh$60,052,110), accordingly the total acquisition price net of adjustments was R$658,486,768 (ThCh$182,637,890).
The above mentioned price is paid in installment, including an initial payment of R$390,723,722 (ThCh$108,371,132) at the time of execution of the contract with the remaining amount to be paid in four annual installments from January 1, 2013 to January 1, 2016. (See note 17.1)
The acquired company operates 31 supermarkets stores, one distribution center and has more than 7,300 employees. As a result, the acquired company represents one of the market-leading supermarkets in the Rio de Janeiro state.
 
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As of December 31, 2012 the Company has concluded the process of determining the fair value measurement of assets and liabilities.

Assets	  	Measurement
Period
Adjustments	 	  	Final allocation of
consideration
transferred	 	  	Preliminary
allocation as
of January 2,
2012	 	
 	  	 	 	  	ThCh$	 	  	ThCh$	 	
Current Assets	  				  				  				
Cash and cash equivalents	  	 	—  	  	  	 	6,220,882	  	  	 	6,220,882	  	
Trade accounts receivables	  	 	18,681,711	  	  	 	54,014,987	  	  	 	35,333,276	  	
Inventories	  	 	—  	  	  	 	33,648,544	  	  	 	33,648,544	  	
Current tax assets	  	 	—  	  	  	 	999,408	  	  	 	999,408	  	

Total current assets	  	 	18,681,711	  	  	 	94,883,821	  	  	 	76,202,110	  	

Non-current assets	  				  				  				
Intangible assets other than goodwill	  	 	15,849,182	  	  	 	15,849,946	  	  	 	764	  	
Property, plant and equipment	  	 	7,146,279	  	  	 	47,635,536	  	  	 	40,489,257	  	
Deferred income tax assets	  	 	1,404,178	  	  	 	2,076,866	  	  	 	672,688	  	

Total non-current assets	  	 	24,399,639	  	  	 	65,562,348	  	  	 	41,162,709	  	

Total assets	  	 	43,081,350	  	  	 	160,446,169	  	  	 	117,364,819	  	

Net Equity and liabilities	  	Measurement
Period
Adjustments	 	  	Final allocation of
consideration
transferred	 	  	Preliminary
allocation  as
of January 2,
2012	 	
 	  	 	 	  	ThCh$	 	  	ThCh$	 	
Current liabilities	  				  				  				
Other financial liabilities, current	  	 	—  	  	  	 	57,953,720	  	  	 	57,953,720	  	
Trade creditors and other Accounts payables	  	 	2,876,017	  	  	 	69,353,032	  	  	 	66,477,015	  	
Other short-term provisions	  	 	16,703,215	  	  	 	18,681,710	  	  	 	1,978,495	  	
Intercompany Accounts payable, current	  	 	—  	  	  	 	7,535,255	  	  	 	7,535,255	  	
Other non-financial liabilities, current	  	 	—  	  	  	 	4,217,781	  	  	 	4,217,781	  	

Total current liabilities	  	 	19,579,232	  	  	 	157,741,498	  	  	 	138,162,266	  	

Deferred income tax liabilities	  	 	8,287,096	  	  	 	8,287,096	  	  	 	—  	  	

Total non-current liabilities	  	 	8,287,096	  	  	 	8,287,096	  	  	 	—  	  	

Total liabilities	  	 	27,866,328	  	  	 	166,028,594	  	  	 	138,162,266	  	

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Net Equity and liabilities	  	Measurement
Period
Adjustments	  	Final allocation of
consideration
transferred	 	 	Preliminary
allocation as
of January 2,
2012	 	
 	  	 	  	ThCh$	 	 	ThCh$	 	
				
Paid in Capital	  		  				 	 	25,192,609	  	
Retained Earnings (Accumulated losses)	  		  				 	 	(45,990,056	) 	
Net equity attributable to equity instrument holders:	  		  				 				
Net of controlling entity	  		  				 	 	(20,797,447	) 	

Net equity and liabilities	  		  				 	 	117,364,819	  	

Net Assets	  		  	 	5,582,425	  	 				
Price Paid	  		  	 	182,637,890	  	 				
Goodwill as of January 2, 2012	  		  	 	188,220,315	  	 				
Accumulated exchange difference	  		  	 	(28,759,652	) 	 				
Goodwill as of December 31, 2012	  		  	 	159,460,663	  	 				
Acquisition of Sociedad Retail S.A. (Johnson’s Group)
On December 20, 2011, Cencosud S.A., through the subsidiary in Chile Cencosud Tiendas S.A. acquired 85.58% of Johnson’s.
Johnson’s operates 39 department stores and 11 stores under the Sociedad Comercializadora de vestuario FES ltda. brand, with 118,578 square meters of selling space.
The acquisition included a payment by Cencosud of ThCh$ 39,642,000.
As of December 31, 2012, the Company determined the fair value measurement of assets and liabilities for commercial Retail S.A. (holding of Johnson’s group).
All the expenses related to this transaction have been recorded in the income statements of the Company.
Allocation of Consideration Transferred to Net Assets Acquired a preliminary allocation of the consideration transferred to the net assets of Johnson’s Group was made as of the date of the acquisition. Subsequent to December 31, 2011 the Company adjusted the preliminary values assigned to certain assets and liabilities in order to reflect additional information obtained since the preliminary allocation was made that pertained to facts and circumstances that existed as of the acquisition Date. These measurement period adjustments have been reflected in the opening statements of financial position, the statements of integral income by function, comprehensive income by function and of changes in net equity for the year ended December 31, 2011. As of December 31, 2012 the company has concluded the fair value measurement of assets and liabilities. The Company recorded a goodwill amounting ThCh$ 11,530,592 that is presented in the line goodwill.
The Company acquisition price included ThCh$ 32,606,000 in cash and ThCh$ 7,036,000 recognized as deferred payment to ensure the right to purchase the remaining 14.42% for said amount. As a result of this operation risks and benefits are transferred.
 
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According to IAS 32.p23 the Company has consolidated the 100% of the Company and has recorded a financial liability amounting to ThCh$7,036,000 for the 14.42% remaining of Johnson’s. (See 17.1)
Sociedad Retail S.A.
Expressed in thousands of Chilean pesos

Assets	  	Measurement
Period
Adjustments	 	 	Final allocation of
consideration
transferred	 	  	Preliminary
allocation as
of December 20,
2011	 	
 	  	 	 	 	ThCh$	 	  	ThCh$	 	
Current Assets	  				 				  				
Cash and cash equivalents	  	 	(253,893	) 	 	 	14,577,181	  	  	 	14,831,074	  	
Other financial assets, current	  	 	—  	  	 	 	790,995	  	  	 	790,995	  	
Trade debtors and other accounts receivables	  	 	(511,916	) 	 	 	20,965,677	  	  	 	21,477,593	  	
Inventories	  	 	—  	  	 	 	19,313,441	  	  	 	19,313,441	  	
Current tax assets	  	 	—  	  	 	 	610	  	  	 	610	  	

Total current assets	  	 	(765,809	) 	 	 	55,647,904	  	  	 	56,413,713	  	

Non-current assets	  				 				  				
Trade debtors and other accounts receivable, non-current	  	 	—  	  	 	 	7,672,388	  	  	 	7,672,388	  	
Intangible assets other than goodwill	  	 	25,040,861	  	 	 	25,501,079	  	  	 	460,218	  	
Property, plant and equipment	  	 	(31,760,389	) 	 	 	29,130,444	  	  	 	60,890,833	  	
Deferred income tax assets	  	 	10,314,647	  	 	 	28,860,753	  	  	 	18,546,106	  	

Total non-current assets	  	 	3,595,119	  	 	 	91,164,664	  	  	 	87,569,545	  	

Total assets	  	 	2,829,310	  	 	 	146,812,568	  	  	 	143,983,258	  	

Net Equity and liabilities	  	Measurement
Period
Adjustments	 	 	Final allocation of
consideration
transferred	 	  	Preliminary
allocation  as
of December 20,
2011	 	
 	  	 	 	 	ThCh$	 	  	ThCh$	 	
Current liabilities	  				 				  				
Other financial liabilities, current	  	 	487,252	  	 	 	6,662,264	  	  	 	6,175,012	  	
Trade creditors and other Accounts payables	  	 	1,530,840	  	 	 	62,163,393	  	  	 	60,632,553	  	
Intercompany Accounts payable, current	  	 	—  	  	 	 	2,439,604	  	  	 	2,439,604	  	
Other short-term provisions	  	 	2,259,097	  	 	 	3,221,577	  	  	 	962,480	  	
Tax liabilities, current	  	 	—  	  	 	 	22,680	  	  	 	22,680	  	
Employee benefit provisions, current	  	 	—  	  	 	 	1,008,751	  	  	 	1,008,751	  	
Other non-financial liabilities, current	  	 	—  	  	 	 	41,007	  	  	 	41,007	  	

Total current liabilities	  	 	4,277,189	  	 	 	75,559,276	  	  	 	71,282,087	  	

Non current Liabilities	  	 	(4,365,431	) 	 	 	12,256,790	  	  	 	16,622,221	  	
Other financial liabilities, non-current	  	 	—  	  	 	 	274,862	  	  	 	274,862	  	
Non-current liabilities	  	 	—  	  	 	 	—  	  	  	 	—  	  	
Other long term provisions	  	 	21,431,929	  	 	 	25,301,420	  	  	 	3,869,491	  	
Deferred income tax liabilities	  	 	5,008,172	  	 	 	5,308,812	  	  	 	300,640	  	

Total non-current liabilities	  	 	22,074,670	  	 	 	43,141,884	  	  	 	21,067,214	  	

Total liabilities	  	 	26,351,859	  	 	 	118,701,160	  	  	 	92,349,301	  	
 
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Net Equity and liabilities	  	Measurement
Period
Adjustments	 	  	Final
allocation of
consideration
transferred	 	  	Preliminary
allocation as
of
December 20,
2011	 	
 	  	 	 	  	ThCh$	 	  	ThCh$	 	
				
Paid in Capital	  	 	—  	  	  	 	—  	  	  	 	82,335,911	  	
Retained Earnings (Accumulated losses)	  	 	—  	  	  	 	—  	  	  	 	(33,470,026	) 	
Other Reserves	  	 	—  	  	  	 	—  	  	  	 	2,768,072	  	
				
Net equity attributable to equity instrument holders:	  				  				  				
Net of controlling entity	  	 	—  	  	  	 	—  	  	  	 	51,633,957	  	

Net equity and liabilities	  	 	—  	  	  	 	—  	  	  	 	143,983,258	  	

Net Assets	  				  	 	28,111,408	  	  				
Price Paid	  				  	 	39,642,000	  	  				
Goodwill as of December 31, 2012	  				  	 	11,530,592	  	  				
	  	 	 	 	  	 	 	 	  	 	 	 	
Acquisition of Colombia Holdings Alpha BV, Colombia Holdings Thalie BV, Colombia Holdings Calliope BV, Colombia Holdings Uranie BV, and Colombia Holdings Coledim BV, each organized under the laws of the Kingdom of the “Netherlands”, as well as the acquisition of 100% of the capital stock of Grandes Superficies de Colombia S.A. and Atacadao de Colombia S.A.S (Carrefour)
On November 30, 2012, Cencosud S.A. filed an official notice of an essential event, or “ Hecho Esencial ”, with the Chilean Superintendency of Securities and Insurance, “ Superintendencia de Valores y Seguros ” (“SVS”), pursuant to article 9 and second paragraph of article 10 of Act number 18.045 of the Republic of Chile, and Section II of the General Rule No. 30 of the SVS, announcing that:
Pursuant to the stock purchase agreement executed between the Company and Carrefour Nederlans B.V., a company organized under the laws of the Kingdom of the Netherlands and an affiliate of Carrefour S.A., a company organized under the laws of France, the Company completed the acquisition of 100% of the capital stock of Colombia Holdings Alpha BV, Colombia Holdings Thalie BV, Colombia Holdings Calliope BV, Colombia Holdings Uranie BV, and Colombia Holdings Coledim BV, each organized under the laws of the Kingdom of the Netherlands, as well as the acquisition of 100% of the capital stock of Grandes Superficies de Colombia S.A. and Atacadao de Colombia S.A.S., each organized under the laws of Colombia (collectively, the “Acquired Companies”). The Acquired Companies operate supermarkets under the Carrefour brand name in Colombia.
The total purchase price operation was EUR 1,905,005,000 (ThCh$1,171,090,394)
All the expenses related to this transaction have been recorded in the income statements of the Company. The expenses amounted to ThCH$3,359,720 (professional fees).
The Company operates 72 hypermarkets, 16 convenience stores, four local cash & carry format, as well as gas stations. Net sales of the chain in the last twelve months totaled about US$ 2,1 million. It also acquired the premises are located in nine of the ten largest cities in Colombia, becoming the second supermarket operator.
The provisory goodwill determined as of December 31, 2012, corresponds to future economic benefits related to the entry to the Colombian market and development of potential business segments of the Company in the market currently expanding.
 
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The Company is in the process of determining the fair value measurements of assets and liabilities so the purchase price allocation presented below is preliminary. Accounting to IFRS 3, the Company must conclude this process within one year following the acquisition date.

Assets	  	Preliminary
allocation of
consideration
transferred	 	
 	  	ThCh$	 	
Current Assets	  				
Cash and cash equivalents	  	 	7,137,486	  	
Other financial assets, current	  	 	2,660,494	  	
Receivables from related entities, current	  	 	74,099	  	
Trade debtors and other accounts receivables	  	 	35,728,423	  	
Inventories	  	 	109,955,210	  	
Current tax assets	  	 	1,811,403	  	
	  	 	 	 	
Total current assets	  	 	157,367,115	  	

Non-current Assets	  				
Trade debtors and other accounts receivable, non-current	  	 	7,280	  	
Intangible assets other than goodwill	  	 	7,296,677	  	
Goodwill	  	 	—  	  	
Property, plant and equipment	  	 	567,379,985	  	
Investment property	  	 	23,495,425	  	
	  	 	 	 	
Deferred income tax assets	  	 	34,186,339	  	
	  	 	 	 	
Total non-current assets	  	 	632,365,706	  	
	  	 	 	 	
Total assets	  	 	789,732,821	  	

					
Net Equity and liabilities	  	Preliminary
allocation of
consideration
transferred	 	
 	  	ThCh$	 	
Current liabilities	  				
Other financial liabilities, current	  	 	80,314,269	  	
Trade creditors and other Accounts payables	  	 	183,420,368	  	
Payables to related entities, current	  	 	5,220,634	  	
Other short-term provisions	  	 	4,368,747	  	
Tax liabilities, current	  	 	(6,205,038	) 	
Employee benefit provisions, current	  	 	2,788,075	  	
Other non-financial liabilities, current	  	 	867,040	  	
	  	 	 	 	
Total current liabilities	  	 	270,774,095	  	

Non-current Liabilities	  				
Other financial liabilities, non-current	  	 	9,049,564	  	
Non-current liabilities	  	 	14,538,258	  	
Deferred income tax liabilities	  	 	32,941,337	  	
Other long term provisions	  	 	713,260	  	
	  	 	 	 	
Total non-current liabilities	  	 	57,242,419	  	
	  	 	 	 	
Total liabilities	  	 	328,016,514	  	

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Net Equity and liabilities	  	Preliminary
allocation of
consideration
transferred	 	
 	  	ThCh$	 	
		
Paid in Capital	  	 	323,596,000	  	
Retained Earnings (Accumulated losses)	  	 	78,632,494	  	
Other Reserves	  	 	38,293,512	  	
		
Net equity attributable to equity instrument holders:	  				
Net of controlling entity	  	 	440,522,006	  	

Net equity and liabilities	  	 	738,778,120	  	

Net Assets	  	 	461,716,307	  	
Price Paid	  	 	1,171,090,394	  	
Goodwill	  	 	709,374,087	  	
Accumulated exchange difference	  	 	29,266,833	  	
Goodwill as of December 31, 2012	  	 	738,640,920	  	
 
14	Property, plant and equipment	
 
14.1	The composition of this item as of December 31, 2012 and 2011 is as follows:	

 	  	As of December 31,	 	
 	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Construction in progress	  	 	277,245,095	  	  	 	350,254,325	  	
Land	  	 	791,324,701	  	  	 	593,589,931	  	
Buildings	  	 	949,946,417	  	  	 	608,920,291	  	
Plant and equipment	  	 	284,380,910	  	  	 	214,613,734	  	
Information technology equipment	  	 	34,893,309	  	  	 	22,501,400	  	
Fixed installations and accessories	  	 	391,014,509	  	  	 	264,943,521	  	
Motor vehicles	  	 	1,823,082	  	  	 	1,101,256	  	
Leasehold improvements	  	 	195,341,364	  	  	 	134,218,413	  	
Other property plant and equipment	  	 	51,868,443	  	  	 	38,385,930	  	

Totals	  	 	2,977,837,830	  	  	 	2,228,528,801	  	

									
 	  	As of December 31,	 	
Property, plant and equipment categories, gross	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Construction in progress	  	 	277,245,095	  	  	 	350,254,325	  	
Land	  	 	791,324,701	  	  	 	593,589,931	  	
Buildings	  	 	1,221,605,839	  	  	 	773,663,349	  	
Plant and equipment	  	 	606,784,273	  	  	 	471,412,479	  	
Information technology equipment	  	 	136,699,180	  	  	 	108,467,970	  	
Fixed installations and accessories	  	 	700,190,908	  	  	 	460,979,200	  	
Motor vehicles	  	 	6,821,956	  	  	 	4,445,687	  	
Leasehold improvements	  	 	232,715,802	  	  	 	171,948,987	  	
Other property plant and equipment	  	 	77,351,951	  	  	 	43,749,898	  	

Totals	  	 	4,050,739,705	  	  	 	2,978,511,826	  	

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Accumulated depreciation and impairment of property, plant and equipment	  	As of December 31,	 	
	  	2012	 	 	2011	 	
 	  	ThCh$	 	 	ThCh$	 	
Buildings	  	 	(271,659,422	) 	 	 	(164,743,058	) 	
Plant and equipment	  	 	(322,403,363	) 	 	 	(256,798,745	) 	
Information technology equipment	  	 	(101,805,871	) 	 	 	(85,966,570	) 	
Fixed installations and accessories	  	 	(309,176,399	) 	 	 	(196,035,679	) 	
Motor vehicles	  	 	(4,998,874	) 	 	 	(3,344,431	) 	
Leasehold improvements	  	 	(37,374,438	) 	 	 	(37,730,574	) 	
Other property plant and equipment	  	 	(25,483,508	) 	 	 	(5,363,968	) 	
	  	 	 	 	 	 	 	 	
Totals	  	 	(1,072,901,875	) 	 	 	(749,983,025	) 	

14.2	The following table shows the technical useful lives for the assets.	

Method used for the depreciation of property, plant and equipment (life)	  	Rate explanation	  	Minimum
life	  	Maximum
life	
Buildings	  	Useful Life (years)	  	25	  	60	
Plant and equipment	  	Useful Life (years)	  	7	  	20	
Information technology equipment	  	Useful Life (years)	  	3	  	7	
Fixed installations and accessories	  	Useful Life (years)	  	7	  	15	
Motor vehicles	  	Useful Life (years)	  	1	  	5	
Leasehold improvements	  	Useful Life (years)	  	5	  	35	
Other property plant and equipment	  	Useful Life (years)	  	3	  	15	
 
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14.3	Reconciliation of changes in property, plant and equipment	
The following chart shows a detailed roll-forward of changes in property, plant and equipment; by class between January 1, 2012 and December 31, 2012:

Movement year 2012	 	Construction  In
progress	 	 	Land	 	 	Building,
net	 	 	Plant and
equipment
net	 	 	Information
technology
equipment,
net	 	 	Fixed
installations
and
accessories,
net	 	 	Motor
vehicles,
net	 	 	Lease
improvements,
net	 	 	Other
property,
plant and
equipment,
net	 	 	Property,
plant and
equipment,
net	 	
 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Openning balance January 1, 2012	 	 	350,254,325	  	 	 	593,589,931	  	 	 	608,920,291	  	 	 	214,613,734	  	 	 	22,501,400	  	 	 	264,943,521	  	 	 	1,101,256	  	 	 	134,218,413	  	 	 	38,385,930	  	 	 	2,228,528,801	  	
Charge	 				 				 				 				 				 				 				 				 				 				
Additions	 	 	199,439,068	  	 	 	29,558,199	  	 	 	16,356,250	  	 	 	51,499,622	  	 	 	9,289,164	  	 	 	53,502,893	  	 	 	292,850	  	 	 	44,026,508	  	 	 	15,425,831	  	 	 	419,390,384	  	
Acquisitions through business combination (See note 13)	 	 	26,475,367	  	 	 	210,293,841	  	 	 	253,895,660	  	 	 	31,654,390	  	 	 	4,512,013	  	 	 	33,303,217	  	 	 	1,023,794	  	 	 	33,077,924	  	 	 	20,779,314	  	 	 	615,015,521	  	
Disposals	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(125,471	) 	 	 	—  	  	 	 	—  	  	 	 	(125,471	) 	
Transfer to (from) non—current assets and disposal groups held for sale	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
Transfers to (from) investment properties	 	 	9,102,922	  	 	 	(9,116,117	) 	 	 	4,195,542	  	 	 	(119,851	) 	 	 	(74,635	) 	 	 	(107,278	) 	 				 				 	 	(6,375,415	) 	 	 	(2,494,832	) 	
Disposals through business divestiture	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
Removal	 	 	(2,026,193	) 	 	 	(15,760,624	) 	 	 	(4,430,792	) 	 	 	(4,829,501	) 	 	 	(355,432	) 	 	 	(739,975	) 	 				 	 	(150,265	) 	 	 	(522,448	) 	 	 	(28,815,230	) 	
Depreciation expenses	 				 				 	 	(22,060,242	) 	 	 	(37,751,366	) 	 	 	(7,339,250	) 	 	 	(53,029,585	) 	 	 	(352,937	) 	 	 	(9,750,470	) 	 	 	(1,186,169	) 	 	 	(131,470,019	) 	
Increase (decrease) in foreign exchange	 	 	(4,810,026	) 	 	 	(32,237,454	) 	 	 	(27,380,220	) 	 	 	(16,245,504	) 	 	 	(2,191,010	) 	 	 	(14,729,318	) 	 	 	(116,439	) 	 	 	(18,835,643	) 	 	 	(5,645,710	) 	 	 	(122,191,324	) 	
Transfer from construction in progress	 	 	(301,190,368	) 	 	 	14,996,925	  	 	 	120,449,928	  	 	 	45,559,386	  	 	 	8,551,059	  	 	 	107,871,034	  	 	 	29	  	 	 	12,754,897	  	 	 	(8,992,890	) 	 	 	—  	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total changes	 	 	(73,009,230	) 	 	 	197,734,770	  	 	 	341,026,126	  	 	 	69,767,176	  	 	 	12,391,909	  	 	 	126,070,988	  	 	 	721,826	  	 	 	61,122,951	  	 	 	13,482,513	  	 	 	749,309,029	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Final balance as of December 31, 2012	 	 	277,245,095	  	 	 	791,324,701	  	 	 	949,946,417	  	 	 	284,380,910	  	 	 	34,893,309	  	 	 	391,014,509	  	 	 	1,823,082	  	 	 	195,341,364	  	 	 	51,868,443	  	 	 	2,977,837,830	  	

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The following chart shows a detailed roll-forward of changes in property, plant and equipment; by class between January 1, 2011 and December 31, 2011:

Movement year 2011	 	Construction
In  progress	 	 	Land	 	 	Building,
net	 	 	Plant and
equipment,
net	 	 	Information
Technology
equipment,
net	 	 	Fixed
Installations
And
accessories,
net	 	 	Engine
vehicles,
net	 	 	Lease
improvements,
net	 	 	Other
property,
plant and
equipment,
net	 	 	Property,
plant and
equipment,
net	 	
 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Openning balance January 1, 2011	 	 	109,230,322	  	 	 	541,185,553	  	 	 	551,290,735	  	 	 	198,160,309	  	 	 	21,225,303	  	 	 	202,328,521	  	 	 	1,416,837	  	 	 	76,067,717	  	 	 	25,584,230	  	 	 	1,726,489,527	  	
Charge	 				 				 				 				 				 				 				 				 				 				
Additions	 	 	203,740,631	  	 	 	35,065,311	  	 	 	11,592,567	  	 	 	54,216,429	  	 	 	5,898,221	  	 	 	69,682,626	  	 	 	14,370	  	 	 	33,565,115	  	 	 	15,204,514	  	 	 	428,979,784	  	
Acquisitions through business combination (See note 13)	 	 	452,320	  	 	 	4,347,811	  	 	 	4,631,683	  	 	 	(440,001	) 	 	 	2,282,178	  	 	 	16,503,637	  	 	 	24,800	  	 	 	8,006,177	  	 	 	2,163,930	  	 	 	37,972,535	  	
Disposals	 	 	—  	  	 	 	(29,921	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(79,736	) 	 	 	—  	  	 	 	—  	  	 	 	(109,657	) 	
Transfer to (from) non—current assets and disposal groups held for sale	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
Transfers to (from) investment properties	 	 	73,360,573	  	 	 	5,732,183	  	 	 	18,092,851	  	 	 	4,491,327	  	 	 	508,644	  	 	 	11,725,930	  	 	 	58,277	  	 	 	(745,289	) 	 	 	—  	  	 	 	113,224,496	  	
Disposals through business divestiture	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
Removal	 	 	(2,661,970	) 	 	 	(3,524,411	) 	 	 	(435,916	) 	 	 	(1,125,497	) 	 	 	(560,995	) 	 	 	(2,929,462	) 	 	 	—  	  	 	 	(147,025	) 	 	 	(5,027	) 	 	 	(11,390,303	) 	
Depreciation expenses	 				 				 	 	(16,890,987	) 	 	 	(37,550,128	) 	 	 	(9,122,907	) 	 	 	(37,189,378	) 	 	 	(387,518	) 	 	 	(6,533,051	) 	 	 	(1,150,711	) 	 	 	(108,824,680	) 	
Increase (decrease) in foreign exchange	 	 	(11,603,669	) 	 	 	10,610,295	  	 	 	40,488,814	  	 	 	11,587,582	  	 	 	720,411	  	 	 	(9,566,297	) 	 	 	54,226	  	 	 	2,831,575	  	 	 	(2,935,838	) 	 	 	42,187,099	  	
Transfer from construction in progress	 	 	(22,263,882	) 	 	 	203,110	  	 	 	150,544	  	 	 	(14,726,287	) 	 	 	1,550,545	  	 	 	14,387,944	  	 				 	 	21,173,194	  	 	 	(475,168	) 	 	 	—  	  	

Total changes	 	 	241,024,003	  	 	 	52,404,378	  	 	 	57,629,556	  	 	 	16,453,425	  	 	 	1,276,097	  	 	 	62,615,000	  	 	 	(315,581	) 	 	 	58,150,696	  	 	 	12,801,700	  	 	 	502,039,274	  	

Final balance as of December 31, 2011	 	 	350,254,325	  	 	 	593,589,931	  	 	 	608,920,291	  	 	 	214,613,734	  	 	 	22,501,400	  	 	 	264,943,521	  	 	 	1,101,256	  	 	 	134,218,413	  	 	 	38,385,930	  	 	 	2,228,528,801	  	

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14.4	The cost includes disbursements directly attributable to the acquisition or construction of an asset, as well as interests from related financing in the case of specific assets.	
 
14.5	Costs arising from interest expense:	

 	  	As of December 31,	 	
Detail	  	2012	 	 	2011	 	 	2010	 	
 	  	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Balance of costs of capitalized interest in Property, Plant and Equipment	  	 	14,158,806	  	 	 	21,589,141	  	 	 	9,887,611	  	
Capitalization rate of capitalized interests in Property, Plant and Equipment	  	 	4.5	% 	 	 	4.5	% 	 	 	4.4	% 	
 
14.6	Assets subject to finance lease	
The financial lease operations are shown in note 30.
 
14.7	Assets granted	
As of December 31, 2012 and 2011, properties, plant and equipment have been granted as security for the total amount of ThCh$ 3,622,226 and ThCh$ 4,194,354, respectively, whose details are shown in Note 31.1 Guarantees Granted. Nevertheless, there are no restrictions on ownership of assets.
 
14.8	Commitments to acquire assets	
As of December 31, 2012, there are commitments to acquire property, plant and equipment by ThCh$ 70,006,644. (As of December 31, 2011 there are not commitments to acquire property, plant or equipment.)
 
14.9	Assets out of service	
As of December 31, 2012 and 2011, there are no essential elements or assets that are temporarily out of service. The property, plant and equipment mainly relate to stores and operating fixed assets to enable the performance of the retail business every day of the year, except when there are restrictions for public holidays established in each country.
 
14.10	Assets fully depreciated	
In view of the nature of the retail business, the Company has no relevant assets that are fully depreciated and that are in use as of December 31, 2012 and 2011. These assets relate mainly to minor equipment such as scales, furniture, computers, cameras, lighting and others.
 
14.11	Impairment losses	
Assets subject to amortization are tested for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be recovered. It recognizes an impairment loss when the carrying amount is greater than its recoverable amount. The recoverable amount of an asset is the higher of an asset’s fair value less costs to sell and its value in use. For the purposes of assessing impairment, assets are grouped at the lowest level for which identifiable cash flows exist separately. The Company has not recognized losses or reversals of impairment affecting profit or loss as of December 31, 2012 and December 31, 2011
 
14.12	Fair value not differ from book value	
The fair value of Property, plant and equipment does not significantly differs from their book value
 
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14.13	Property Plant and Equipment components:	
Leasehold improvements are amortized over de shorter of useful fige or the duration of lease agreements.
The main items that compose each asset class are:
Plant and equipment: presented in this asset class are primarily properties used in the operation of retail business such as mixers, sausages portioning machines, system ready meals, frozen island, cold containers, refrigerated display cases, forming bread ovens, blender, ñoqueras and sobadora, among others.
Equipment for information technology: correspond to items such as computers, printers, notebook, labeling, scanner, micramáticos, clock control, price inquiries and servers, among others.
Fixtures and fittings: presented in this asset class are expenditures to enable operations of stores, such, ceilings, floors, wall finishes, lighting the sky, smoke detectors, sprinklers, air ducts and heating, communications networks , escalators, elevators, hoists, electrical substation and central air conditioning among others.
Leasehold improvements: presented in this asset class are disbursements associated with enabling or leased store improvements such as remodeling of facades, finishes, floors, ceilings and walls among others. Other property, plant and equipment: mainly corresponds to fixed assets in transit and assets acquired under finance lease.
 
15	Investment properties	
 
15.1	The roll-forward of investment properties at December 31, 2012 and 2011 is the following:	

 	  	As of December 31,	 	
Roll-forward of investment properties, net, fair value method	  	2012	 	 	2011	 	
 	  	ThCh$	 	 	ThCh$	 	
Investment properties, net, initial value	  	 	1,310,143,075	  	 	 	1,187,154,458	  	
Increase due to reappraisal with impact to income	  	 	98,633,366	  	 	 	72,797,791	  	
Additions, Investment Properties, Fair Value Method	  	 	95,302,864	  	 	 	149,857,170	  	
Transfer to (from) inventory, investment properties, fair value method	  	 	23,495,425	  	 	 	—  	  	
Transfer to (from) owner-occupied property, investment property, cost model	  	 	2,494,832	  	 	 	(113,224,496	) 	
Retirement, investment properties, Fair Value Method	  	 	(3,502,154	) 	 	 	(4,563,481	) 	
Increase (decrease) in foreign exchange rate, Investment Properties, Fair Value Method	  	 	(55,223,619	) 	 	 	18,121,633	  	

Changes in Investment Properties, Fair Value Method, Total	  	 	161,200,714	  	 	 	122,988,617	  	

Investment Properties, Fair Value Method, Final Balance	  	 	1,471,343,789	  	 	 	1,310,143,075	  	

15.2	Income and expense from investment properties	

 	  	As of December 31,	 	
Roll-forward of investment properties, net fair value method	  	2012	 	  	2011	 	  	2010	 	
 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Revenue from Investment Property Leases	  	 	165,462,046	  	  	 	129,727,271	  	  	 	116,224,693	  	
Direct Expense of Operation of Investment Properties which generate lease revenue	  	 	54,075,826	  	  	 	41,503,630	  	  	 	38,438,080	  	
Direct Expense of Operation of Investment Properties which do not generate lease revenue	  	 	—  	  	  	 	89,903	  	  	 	17,896	  	
 
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15.3	As of December 31, 2012, investment properties are not encumbered.	
 
15.4	As of December 31, 2012, there are commitments to acquire investment properties by ThCh$ 22,923,474. (ThCh$ 22,872,687 as of December 31,2011).	
 
15.5	There are no restrictions on ownership of assets.	
 
15.6	Investment Properties	
The Costanera Center project corresponds to assets that have been classified as investment property. At December 31, 2012, these assets are valued using the fair value model. The methodology used in the valuation of these assets and significant assumptions used are described in note 4.5. At the end of the period the Shopping Mall is in operation and the offices and hotel are under construction.
 
16	Deferred income taxes and current tax	
The source of the deferred income taxes recorded as of December 31, 2012 and 2011 is the following:
 
16.1	Deferred income tax assets	

Deferred income tax assets	  	As of December 31,	 	
	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Fixed assets	  	 	26,870,096	  	  	 	12,366,373	  	
Accumulations or accruals	  	 	9,652,275	  	  	 	267,806	  	
Inventory	  	 	13,772,657	  	  	 	6,259,301	  	
Bad-debt reserve	  	 	25,227,789	  	  	 	18,570,658	  	
Accruals and provisions	  	 	50,511,175	  	  	 	41,080,093	  	
Vacation / annual leave	  	 	3,138,530	  	  	 	1,427,975	  	
Tax carry forward losses	  	 	120,720,440	  	  	 	73,999,575	  	
Start-up costs	  	 	2,193,877	  	  	 	10,495,031	  	

Total	  	 	252,086,839	  	  	 	164,466,812	  	
	  	 	 	 	  	 	 	 	
The recovery of the deferred tax asset balances requires that the business achieves a sufficient level of taxable income in the future. The Company estimates that the estimated projected future income will cover the recovery of the assets.
 
16.2	Deferred income tax liabilities	

Deferred income tax liabilities	  	As of December 31,	 	
	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Fixed assets	  	 	332,290,360	  	  	 	287,409,424	  	
Intangibles	  	 	45,284,612	  	  	 	23,222,924	  	
Accumulations or accruals	  	 	9,959,769	  	  	 	4,405,237	  	
Foreign currency translation	  	 	10,070,773	  	  	 	2,922,089	  	

Total	  	 	397,605,514	  	  	 	317,959,674	  	

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The analysis of deferred tax assets and deferred tax liabilities is as follows:

 	  	As of December 31,	 	
Deferred income tax assets	  	2012	 	 	2011	 	
 	  	ThCh$	 	 	ThCh$	 	
Deferred tax assets to be recovered after more than 12 months	  	 	247,500,467	  	 	 	161,385,952	  	
Deferred tax assets to be recovered within 12 months	  	 	4,586,372	  	 	 	3,080,860	  	

Deferred tax assets	  	 	252,086,839	  	 	 	164,466,812	  	

 	  	As of December 31,	 	
Deferred income tax liabilities	  	2012	 	 	2011	 	
 	  	ThCh$	 	 	ThCh$	 	
Deferred tax liabilities to be recovered after more than 12 months	  	 	(391,596,351	) 	 	 	(311,469,518	) 	
Deferred tax liabilities to be recovered within 12 months	  	 	(6,009,163	) 	 	 	(6,490,156	) 	

Deferred tax liabilities	  	 	(397,605,514	) 	 	 	(317,959,674	) 	

Deferred tax liability (net)	  	 	(145,518,675	) 	 	 	(153,492,862	) 	
	  	 	 	 	 	 	 	 	
The gross movement on the deferred income tax account is as follows:

 	  	As of December 31,	 	
 	  	2012	 	 	2011	 	
 	  	ThCh$	 	 	ThCh$	 	
As of 1 January	  	 	(153,492,862	) 	 	 	(137,326,220	) 	
Debit to the statement of income	  	 	(9,477,594	) 	 	 	(28,917,650	) 	
Business combinations and change differences	  	 	20,824,247	  	 	 	13,738,458	  	
Tax debited (credited) directly to equity	  	 	(3,372,466	) 	 	 	(987,450	) 	

At 31 December	  	 	(145,518,675	) 	 	 	(153,492,862	) 	

16.3	The deferred income tax roll-forward is as follows:	

 	  	As of December 31,	 	
Roll-forward in deferred tax assets	  	2012	 	 	2011	 	
 	  	ThCh$	 	 	ThCh$	 	
Deferred income tax assets Initial balance	  	 	164,466,812	  	 	 	122,935,127	  	
Increase (decrease) in deferred income tax assets	  	 	88,092,934	  	 	 	40,880,971	  	
Increase (decrease) for change in income tax rate	  	 	3,760,307	  	 	 	(716,620	) 	
Increase (decrease) in foreign exchange rate	  	 	(4,233,214	) 	 	 	1,367,334	  	

Deferred income tax assets, final balance	  	 	252,086,839	  	 	 	164,466,812	  	

 	  	As of December 31,	 	
Movements in deferred income tax liabilities	  	2012	 	 	2012	 	
 	  	ThCh$	 	 	ThCh$	 	
Deferred income tax liabilities, Initial balance	  	 	(317,959,674	) 	 	 	(260,261,348	) 	
Increase (decrease) in deferred income tax liabilities	  	 	(82,139,867	) 	 	 	(61,601,182	) 	
Increase (decrease) in income tax rate	  	 	7,881,016	  	 	 	(3,677	) 	
Increase (decrease) in foreign exchange rate	  	 	(5,386,989	) 	 	 	3,906,533	  	

Deferred income tax liabilities, final balance	  	 	(397,605,514	) 	 	 	(317,959,674	) 	

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The changes in deferred income tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same tax jurisdiction, is as follows:

Deferred tax liabilities	  	Fixed assets	 	 	Intangibles	 	 	Capitalized
expenses	 	 	Other	 	 	Total	 	
 	  	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
As of 1 January 2011	  	 	(228,889,201	) 	 	 	(25,016,335	) 	 	 	(5,935,546	) 	 	 	(420,266	) 	 	 	(260,261,348	) 	
Charged (credit to the Statement of income	  	 	(58,520,223	) 	 	 	1,793,411	  	 	 	1,530,309	  	 	 	(2,501,823	) 	 	 	(57,698,326	) 	
Charged directly to equity	  				 				 				 				 				
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
At December 31, 2011	  	 	(287,409,424	) 	 	 	(23,222,924	) 	 	 	(4,405,237	) 	 	 	(2,922,089	) 	 	 	(317,959,674	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Charged (credit) to the statement of income	  	 	(44,880,936	) 	 	 	(22,061,688	) 	 	 	(5,554,532	) 	 	 	(7,148,684	) 	 	 	(79,645,840	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
At December 31, 2012	  	 	(332,290,360	) 	 	 	(45,284,612	) 	 	 	(9,959,769	) 	 	 	(10,070,773	) 	 	 	(397,605,514	) 	

Deferred tax assets	  	Tax losses
carryforward	 	 	Bad debt
provision	 	 	Provisions	 	 	Other	 	 	Total	 	
 	  	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
As of 1 January 2011	  	 	47,877,992	  	 	 	16,627,648	  	 	 	30,355,746	  	 	 	28,073,741	  	 	 	122,935,127	  	
Charged (credit) to the Statement of Income	  	 	26,121,583	  	 	 	1,943,010	  	 	 	10,724,347	  	 	 	3,730,195	  	 	 	42,519,135	  	
Charged directly to equity	  				 				 				 	 	(987,450	) 	 	 	(987,450	) 	

At December 31, 2011	  	 	73,999,575	  	 	 	18,570,658	  	 	 	41,080,093	  	 	 	30,816,486	  	 	 	164,466,812	  	

Charged (credit) to the Statement of Income	  	 	46,720,865	  	 	 	6,657,131	  	 	 	9,431,083	  	 	 	28,183,414	  	 	 	90,992,493	  	
Charged directly to equity	  				 				 				 	 	(3,372,466	) 	 	 	(3,372,466	) 	

At December 31, 2012	  	 	120,720,440	  	 	 	25,227,789	  	 	 	50,511,176	  	 	 	55,627,434	  	 	 	252,086,839	  	

16.4	Compensation of deferred income tax assets and liabilities	
The compensated amounts are detailed below:

Concept	  	Gross assets/
liabilities	 	 	Compensated
values	 	 	Compensated
values	 	
Deferred income tax assets	  	 	164,466,812	  	 	 	11,120	  	 	 	164,477,932	  	
Deferred income tax liabilities	  	 	(317,959,674	) 	 	 	(11,120	) 	 	 	(317,970,794	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Final balance at December 31, 2011	  	 	(153,492,862	) 	 	 	—  	  	 	 	(153,492,862	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Deferred income tax assets	  	 	252,086,839	  	 				 	 	252,086,839	  	
Deferred income tax liabilities	  	 	(397,605,514	) 	 				 	 	(397,605,514	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Final balance at December 31, 2012	  	 	(145,518,675	) 	 	 	—  	  	 	 	(145,518,675	) 	

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16.5	Current income tax assets and current income tax liabilities	
The composition of this item as of December 31, 2012 and 2011 is the following:

Current tax assets	  	12/31/2012	 	 	12/31/2011	 	
 	  	ThCh$	 	 	ThCh$	 	
Current tax assets, total	  	 	32,804,242	  	 	 	26,356,271	  	
Compensated values	  	 	(1,534,357	) 	 	 	(19,393,902	) 	

Current tax assets	  	 	31,269,885	  	 	 	6,962,369	  	

Current income tax liabilities	  	12/31/2012	 	 	12/31/2011	 	
 	  	ThCh$	 	 	ThCh$	 	
Current income tax liabilities, total	  	 	48,332,831	  	 	 	59,884,221	  	
Compensated values	  	 	(1,534,357	) 	 	 	(19,393,902	) 	

Current income tax liabilities	  	 	46,798,474	  	 	 	40,490,319	  	

Non-current tax assets	  	12/31/2012	 	 	12/31/2011	 	
 	  	ThCh$	 	 	ThCh$	 	
Minimum presume tax asset	  	 	1,453,326	  	 	 	—  	  	
Tax receivable long term	  	 	3,372,208	  	 	 	—  	  	

Non-current tax assets	  	 	4,825,534	  	 	 	—  	  	

16.6	Income tax recorded in equity	
The taxes recorded in equity accounts are detailed in the Statements of Comprehensive Income.
 
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17	Other financial liabilities, current and non-current	
The composition of this item as of December 31, 2012 and 2011 is the following:
 
17.1	Types of interest bearing (accruing) loans	

 	  	Balance as of 12/31/2012	 	  	Balance as of 12/31/2011	 	
Loans	  	Current	 	  	Non-current	 	  	Current	 	  	Non-current	 	
 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Bank loans (2)	  	 	954,868,162	  	  	 	531,859,027	  	  	 	156,345,921	  	  	 	637,918,888	  	
Bond debt (3)	  	 	25,513,254	  	  	 	1,663,382,237	  	  	 	24,531,922	  	  	 	1,141,130,894	  	
Other loans—leases	  	 	5,453,350	  	  	 	25,683,325	  	  	 	5,059,200	  	  	 	19,966,902	  	
Time deposits (4)	  	 	123,248,846	  	  	 	46,883,852	  	  	 	142,602,017	  	  	 	—  	  	
Term savings accounts	  	 	1,022,988	  	  	 	—  	  	  	 	1,033,220	  	  	 	—  	  	
Letters of credit	  				  	 	10,209,850	  	  	 	—  	  	  	 	10,849,475	  	
Deposits and other demand deposits	  	 	2,586,949	  	  	 	—  	  	  	 	2,510,178	  	  	 	—  	  	
Debt purchase Bretas (1)	  	 	—  	  	  	 	41,189,467	  	  	 	—  	  	  	 	50,090,495	  	
Debt purchase Prezunic	  	 	20,236,478	  	  	 	30,718,200	  	  				  				
Debt purchase Johnson (see 13)	  	 	7,216,210	  	  	 	—  	  	  				  	 	7,036,001	  	
Other Financial liabilities—other	  	 	29,115,522	  	  	 	—  	  	  	 	18,567,156	  	  	 	—  	  	

Totals Loans	  	 	1,169,261,759	  	  	 	2,349,925,958	  	  	 	350,649,614	  	  	 	1,866,992,655	  	

																	
Financial liabilities at fair value through profit or loss	  	Balance as of 12/31/2012	 	  	Balance as of 12/31/2011	 	
	  	Current	 	  	Non-current	 	  	Current	 	  	Non-current	 	
 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
					
Other financial liabilities (Non Hedging derivatives)	  	 	7,624,595	  	  	 	—  	  	  	 	5,150,270	  	  	 	—  	  	
					
Other financial liabilities (Hedging derivatives)	  	 	2,245,262	  	  	 	9,574,581	  	  	 	1,121,549	  	  	 	1,592,922	  	
Other financial liabilities Option	  	 	—  	  	  	 	—  	  	  	 	240,955,817	  	  	 	—  	  	

Total Other Financial Liabilities (5)	  	 	9,869,857	  	  	 	9,574,581	  	  	 	247,227,636	  	  	 	1,592,922	  	
Total	  	 	1,179,131,616	  	  	 	2,359,500,539	  	  	 	597,877,250	  	  	 	1,868,585,577	  	

(1)	It is presented net of a receivable amounting to ThCh$ 26,833,098 from the former owners of Bretas. See note 8.	
(2)	Bank loans correspond to loans taken out with banks and financial institutions.	
(3)	Bond debt corresponds to bonds placed in public securities markets or issued to the public in general.	
(4)	Time deposits are the main funding source of the subsidiary, Banco Paris in Chile. Deposits taken by Chilean clients of Banco Paris are mainly money market deposits, which are 1743 persons and 11 companies. The average maturity of these deposits are 257 days.	
(5)	Other financial liabilities includes derivative contracts (cross currency swaps) and the fair value of options contracts incorporated into the agreements between Cencosud S.A. and UBS A.G. London Branch “UBS”.	
 
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Description of transaction and recognition in accounting.
The Santander Short-Term Loan matures on December 28, 2012, and has an annual interest rate equal to the Tasa Bancaria (the Banking Interest Rate, or “TAB”), established by the Asociación de Bancos e Instituciones Financieras (the Association of Banks and Financial Institutions, or “ABIF”), plus 0.4%. On August 2, 2012, the company repaid the total of this facility.
On March 13, 2012, the Company entered into a short-term facility for approximately U.S.$200 million (ThCh$ 96,942) with an affiliate of Banco Bilbao Vizcaya Argentaria, S.A., as lender, to finance our investing activities, including capital expenditures, and to refinance certain short-term liabilities, including repayment of overdraft lines (“BBVA Short-Term Loan”). The BBVA Short-Term Loan bears interest at an annual rate of the Tasa Cámara, an indexed interest rate established by ABIF, plus 1.86%, and has a maturity date of March 13, 2013. On July 27,2012 the Company paid U.S.$200 million (ThCh$ 99,852) of this short term facility.
On April 27, 2012, the Company entered into a U.S.$750 million (ThCh$ 362,558) committed credit facility with J.P. Morgan Chase National Association, an affiliate of J.P. Morgan Securities LLC (“J.P. Morgan”), Morgan Stanley Bank, N.A., an affiliate of Morgan Stanley & Co. LLC (“Morgan Stanley”), The Bank of Tokyo—Mitsubishi UFJ, Ltd. and Mizuho Corporate Bank Ltd., as lenders, (the “J.P. Morgan Credit Facility”) in order to finance the Company´s short-term funding requirements, including capital expenditures, interest expense and tax obligations. As of May 7, 2012, amounts drawn under the J.P. Morgan Credit Facility totaled U.S.$250 million (ThCh$ 120,860). The J.P. Morgan Credit Facility bears an interest rate of LIBOR, as adjusted for statutory reserve requirements for eurocurrency liabilities, plus a margin of 1.25% for the first six months, 1.50% for the following three months, and 1.75% thereafter. The J.P. Morgan Credit Facility matures on March 13, 2013. On August 2, 2012 the company repaid US$250 million (ThCh$ 121,150).
On December 27, 2012 de Company repaid US$ 150 million (ThCh$ 71,994,000) corresponding to the loan agreement signed between Cencosud S.A. and BBVA Bancomer S.A., as Managing Agent, on February 11, 2008.
On October 17, 2012 Cencosud S.A. and JPMorgan Chase Bank, National Association as administrative agent, JPMorgan securities LLC, acting as global coordinator and J.P. Morgan Securities LLC as Bookrunner and Lead Arranger entered into a Credit Agreement, under the New York Law, USA by US$2,500 million (ThCh$1,199,900,000). On December 06, 2012 the Company repaid US$1,000 million. (See 17.2)
On December 6, 2012 the Company signed a bond issuance pursuant to Rule 144A under the Securities Act by US$1,200 million (ThCh$575,952,000) (see 17.3.1).
 
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17.2	Bank loans—breakdown of currency and maturity dates	

At December 31, 2012	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Current	 	 	Non-current	 	
Segment	 	ID	 	 	Creditor name	 	Currency	 	Amortization
type	 	Effective
interest
rate	 	 	Nominal
rate	 	 	Expiration	 	 	Total
Current at
12/31/2012	 	 	Expiration	 	 	Total non-
current at
12/31/2012	 	
	 			 		 		 		 			 			 	Up to 90
days	 	 	90 days to
1 year	 	 			 	1 to 3 year	 	 	3 to 5 years	 	 	5 or more
years	 	 			
 	 	 	 	 	 	 	 	 	 	 	%	 	 	%	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Chile	 	 	97.004.000-5	  	 	BANCO DE CHILE S.A.	 	USD	 	Monthly	 	 	1.71	  	 	 	1.71	  	 	 	1,824,068	  	 				 	 	1,824,068	  	 				 				 				 				
	 	 	97.004.000-5	  	 	BANCO DE CHILE S.A.	 	Ch$	 	At maturity l	 	 	7.40	  	 	 	7.03	  	 				 	 	767,149	  	 	 	767,149	  	 	 	48,317,173	  	 				 				 	 	48,317,173	  	
	 	 	97.015.000-5	  	 	BANCO SANTANDER CHILE S.A.	 	Ch$	 	At maturity	 	 	7.13	  	 	 	6.70	  	 	 	630,312	  	 				 	 	630,312	  	 				 	 	32,630,509	  	 				 	 	32,630,509	  	
	 	 	97.015.000-5	  	 	BANCO SANTANDER CHILE S.A.	 	USD	 	Monthly	 	 	1.80	  	 	 	1.80	  	 	 	7,093	  	 				 	 	7,093	  	 				 				 				 				
	 	 	97.015.000-5	  	 	BANCO SANTANDER CHILE S.A.	 	USD	 	Monthly	 	 	1.04	  	 	 	1.04	  	 	 	3,274,931	  	 				 	 	3,274,931	  	 				 				 				 				
	 	 	97.006.000-6	  	 	BANCO SANTANDER CHILE S.A.	 	USD	 	Monthly	 	 	1.06	  	 	 	1.06	  	 	 	16,280	  	 				 	 	16,280	  	 				 				 				 				
	 	 	76.645.030-K	  	 	BANCO DE CREDITO E INVERSIONES S.A.	 	Ch$	 	Annual	 	 	7.12	  	 	 	7.26	  	 	 	383,146	  	 				 	 	383,146	  	 	 	24,882,987	  	 				 				 	 	24,882,987	  	
—	 	 	76.645.030-K	  	 	BANCO ITAU CHILE S.A.	 	Ch$	 	At maturity	 	 	7.09	  	 	 	7.02	  	 	 	419,250	  	 				 	 	419,250	  	 	 	24,843,291	  	 				 				 	 	24,843,291	  	
	 	 	97.080.000-K	  	 	BANCO ITAU CHILE S.A.	 	Ch$	 	At maturity	 	 	7.57	  	 	 	7.02	  	 				 	 	419,250	  	 	 	419,250	  	 	 	25,000,000	  	 				 				 	 	25,000,000	  	
	 	 	97.080.000-K	  	 	BANCO BICE S.A	 	UF	 	Semiannual	 	 	6.54	  	 	 	6.54	  	 				 	 	342,365	  	 	 	342,365	  	 	 	611,245	  	 	 	203,748	  	 				 	 	814,993	  	
	 	 	97.032.000-8	  	 	BANCO BICE S.A	 	Ch$	 	At maturity	 	 	7.11	  	 	 	7.09	  	 	 	404,130	  	 				 	 	404,130	  	 				 	 	18,873,780	  	 				 	 	18,873,780	  	
	 	 	97.032.000-8	  	 	BANCO BILBAO VIZCAYA ARGENTARIA CHILE S.A.	 	Ch$	 	Monthly	 	 	7.19	  	 	 	6.75	  	 	 	1,509,375	  	 				 	 	1,509,375	  	 	 	6,943,341	  	 	 	62,490,072	  	 				 	 	69,433,413	  	
	 	 	97.030.000-6	  	 	BBANCO BILBAO VIZCAYA ARGENTARIA CHILE S.A	 	Ch$	 	At maturity	 	 	6.87	  	 	 	6.44	  	 	 	940,557	  	 				 	 	940,557	  	 	 	34,545,798	  	 				 				 	 	34,545,798	  	
	 	 	97.053.000-2	  	 	BANCO DEL ESTADO DE CHILE S.A.	 	Ch$	 	Annual	 	 	7.27	  	 	 	6.69	  	 	 	1,384,148	  	 				 	 	1,384,148	  	 	 	79,072,244	  	 				 				 	 	79,072,244	  	
	 	 	97.053.000-2	  	 	BANCO SECURITY S.A.	 	USD	 	Monthly	 	 	1.02	  	 	 	1.02	  	 	 	3,220,209	  	 				 	 	3,220,209	  	 				 				 				 				
	 	 	97.053.000-2	  	 	BANCP SECURITY S.A	 	USD	 	Monthly	 	 	1.31	  	 	 	1.31	  	 	 	194,371	  	 				 	 	194,371	  	 				 				 				 				
	 	 	O-E	  	 	BANCO SECURITY S.A	 	USD	 	Monthy	 	 	1.31	  	 	 	1.31	  	 	 	495,902	  	 				 	 	495,902	  	 				 				 				 				
	 	 	O-E	  	 	BANCO RABOBANK CURACAO N.V.	 	USD	 	Annual	 	 	4.16	  	 	 	3.86	  	 	 	226,581	  	 				 	 	226,581	  	 	 	4,852,671	  	 	 	9,705,342	  	 	 	9,705,343	  	 	 	24,263,356	  	
	 	 	O-E	  	 	BANCO SCOTIABANK	 	USD	 	Semiannual	 	 	2.35	  	 	 	2.06	  	 	 	191,868	  	 				 	 	191,868	  	 	 	15,865,479	  	 	 	31,721,439	  	 				 	 	47,586,918	  	
	 	 	O-E	  	 	BANCO JPMORGAN	 	USD	 	At maturity	 	 	1.71	  	 	 	1.71	  	 	 	710,989,135	  	 				 	 	710,989,135	  	 				 				 				 				
Argentina	 	 	O-E	  	 	BBVA BANCO FRANCES	 	ARS	 	Monthly	 	 	16.50	  	 	 	16.50	  	 				 	 	5,698,171	  	 	 	5,698,171	  	 				 				 				 				
	 	 	O-E	  	 	BANCO GALICIA	 	ARS	 	Monthly	 	 	15.01	  	 	 	15.01	  	 				 	 	189,924	  	 	 	189,924	  	 	 	1,304,295	  	 				 				 	 	1,304,295	  	
	 	 	O-E	  	 	OTROS BANCOS	 	$ Argentino	 	Monthly	 	 	15.01	  	 	 	15.01	  	 				 	 	189,924	  	 	 	189,924	  	 	 	1,304,295	  	 				 				 	 	1,304,295	  	
	 	 	O-E	  	 	BANCO GALICIA	 	ARS	 	Monthly	 	 	10.25	  	 	 	10.25	  	 	 	141,795	  	 				 	 	141,795	  	 				 				 				 				
	 	 	O-E	  	 	BANCO FRANCES	 	ARS	 	Monthly	 	 	13.50	  	 	 	13.50	  	 	 	1,231,750	  	 				 	 	1,231,750	  	 				 				 				 				
	 	 	O-E	  	 	BANCO IFC	 	USD	 	Monthly	 	 	2.83	  	 	 	2.83	  	 	 	10,697,420	  	 	 	11,255,396	  	 	 	21,952,816	  	 	 	10,992,883	  	 				 				 	 	10,992,883	  	
	 	 	O-E	  	 	BANCO FRANCES	 	ARS	 	Monthly	 	 	16.50	  	 	 	16.50	  	 				 	 	8,468,971	  	 	 	8,468,971	  	 	 	1,736,889	  	 				 				 	 	1,736,889	  	
	 	 	O-E	  	 	BANCO GALICIA	 	ARS	 	Monthly	 	 	15.01	  	 	 	15.01	  	 				 	 	287,991	  	 	 	287,991	  	 				 				 				 				
	 	 	O-E	  	 	BANCO GALICIA	 	ARS	 	Monthly	 	 	10.25	  	 	 	10.25	  	 	 	3,998	  	 				 	 	3,998	  	 				 				 				 				
Colombia	 	 	O-E	  	 	BANCO HELM BANK	 	COP	 	Semiannual	 	 	.250	  	 	 	2.50	  	 				 	 	1,131,402	  	 	 	1,131,402	  	 				 				 				 				
	 	 	O-E	  	 	BANCO DE BOGOTA	 	COP	 	At maturity	 	 	6.70	  	 	 	6.50	  	 	 	15,521,553	  	 				 	 	15,521,553	  	 				 				 				 				
	 	 	O-E	  	 	BANCO DE BOGOTA	 	COP	 	At maturity	 	 	6.70	  	 	 	6.50	  	 	 	3,698,401	  	 				 	 	3,698,401	  	 				 				 				 				
	 	 	O-E	  	 	BANCO DE BOGOTA	 	COP	 	At maturity	 	 	6.70	  	 	 	6.50	  	 	 	1,922,673	  	 				 	 	1,922,673	  	 				 				 				 				
	 	 	O-E	  	 	BANCO CORPBANCA	 	COP	 	At maturity	 	 	7.23	  	 	 	7.00	  	 	 	27,991,450	  	 				 	 	27,991,450	  	 				 				 				 				
	 	 	O-E	  	 	BANCO BBVA	 	COP	 	At maturity	 	 	7.02	  	 	 	6.80	  	 	 	18,196,648	  	 				 	 	18,196,648	  	 				 				 				 				
	 	 	O-E	  	 	BANCO CITIBANK	 	COP	 	At maturity	 	 	6.86	  	 	 	6.65	  	 	 	5,147,358	  	 				 	 	5,147,358	  	 				 				 				 				
	 	 	O-E	  	 	BANCO POPULAR	 	COP	 	At maturity	 	 	6.47	  	 	 	6.29	  	 	 	6,755,813	  	 				 	 	6,755,813	  	 				 				 				 				
	 	 	O-E	  	 	BANCO DE BOGOTA	 	COP	 	At maturity	 	 	10.23	  	 	 	9.78	  	 	 	1,645,998	  	 				 	 	1,645,998	  	 				 				 				 				
	 	 	O-E	  	 	BANCO CORPBANCA	 	COP	 	At maturity	 	 	7.23	  	 	 	7.00	  	 	 	1,088,078	  	 				 	 	1,088,078	  	 				 				 				 				
Brasil	 	 	O-E	  	 	BRADESCO	 	Real	 	At maturity	 	 	7.27	  	 	 	7.27	  	 	 	6,303	  	 	 	18,908	  	 	 	25,211	  	 	 	4,582,110	  	 	 	3,054,740	  	 				 	 	7,636,850	  	
	 	 	O-E	  	 	BRADESCO	 	Real	 	At maturity	 	 	7.01	  	 	 	7.01	  	 	 	11,830,902	  	 				 	 	11,830,902	  	 				 				 				 				
	 	 	O-E	  	 	HSBC	 	USD	 	Semiannual	 	 	10.43	  	 	 	8.80	  	 	 	881,724	  	 	 	2,645,172	  	 	 	3,526,896	  	 				 				 				 				
	 	 	O-E	  	 	HSBC	 	USD	 	Semiannual	 	 	7.80	  	 	 	7.80	  	 	 	17,791,228	  	 	 	35,582,456	  	 	 	53,373,684	  	 				 				 				 				
	 	 	O-E	  	 	HSBC	 	USD	 	Semiannual	 	 	7.87	  	 	 	7.87	  	 	 	3,443,994	  	 	 	6,887,988	  	 	 	10,331,982	  	 				 				 				 				
	 	 	O-E	  	 	BNDES	 	Real	 	Monthly	 	 	10.30	  	 	 	10.30	  	 	 	439,803	  	 	 	879,606	  	 	 	1,319,409	  	 				 				 				 				
	 	 	O-E	  	 	BNDES	 	Real	 	Monthly	 	 	7.80	  	 	 	7.80	  	 	 	1,275,650	  	 	 	3,826,949	  	 	 	5,102,599	  	 	 	662,289	  	 				 				 	 	662,289	  	
	 	 	O-E	  	 	BNDES	 	Real	 	Monthly	 	 	7.30	  	 	 	7.30	  	 	 	267,584	  	 	 	802,753	  	 	 	1,070,337	  	 	 	274,249	  	 				 				 	 	274,249	  	
	 	 	O-E	  	 	BNDES	 	Real	 	Monthly	 	 	1.89	  	 	 	1.89	  	 	 	501,617	  	 	 	1,504,850	  	 	 	2,006,467	  	 	 	171,764	  	 				 				 	 	171,764	  	
	 	 	O-E	  	 	BANCO DO NORESTE	 	Real	 	Monthly	 	 	10.50	  	 	 	10.50	  	 	 	299,101	  	 	 	897,303	  	 	 	1,196,404	  	 	 	99,700	  	 				 				 	 	99,700	  	
	 	 	O-E	  	 	BANCO DO BRASIL	 	Real	 	At maturity	 	 	11.51	  	 	 	11.51	  	 	 	2,454,742	  	 	 	7,364,227	  	 	 	9,818,969	  	 				 				 				 				
	 	 	O-E	  	 	BANCO DO NORESTE	 	Real	 	Monthly	 	 	10.00	  	 	 	10.00	  	 	 	88,133	  	 	 	264,397	  	 	 	352,530	  	 	 	768,017	  	 	 	512,010	  	 	 	512,010	  	 	 	1,792,037	  	
Perú	 	 	O-E	  	 	BANCO DE CREDITO	 	Soles	 	Quartery	 	 	7.34	  	 	 	7.34	  	 	 	1,030	  	 				 	 	1,030	  	 	 	3,297,974	  	 	 	1,743,784	  	 				 	 	5,041,758	  	
	 	 	O-E	  	 	BANCO CONTINENTAL	 	Soles	 	Monthly	 	 	5.15	  	 	 	5.15	  	 	 	334,171	  	 	 	9,577	  	 	 	343,748	  	 	 	11,557,566	  	 	 	7,685,526	  	 				 	 	19,243,092	  	
	 	 	O-E	  	 	BANCO BILBAO VIZCAYA	 	Soles	 	Quartery	 	 	2.31	  	 	 	2.31	  	 	 	59,239	  	 	 	5,442,470	  	 	 	5,501,709	  	 	 	13,695,946	  	 				 				 	 	13,695,946	  	
	 	 	O-E	  	 	BANCO OF TOKIO	 	Soles	 	Quartery	 	 	2.91	  	 	 	2.91	  	 	 	5,891	  	 				 	 	5,891	  	 	 	13,323,971	  	 	 	3,357,547	  	 				 	 	16,681,518	  	
	 	 	O-E	  	 	BANCO BCI	 	Soles	 	Quartery	 	 	7.71	  	 	 	7.71	  	 	 	147,320	  	 				 	 	147,320	  	 				 	 	13,094,373	  	 				 	 	13,094,373	  	
	 				 	BANCO SCOTIABANK	 	Soles	 	Monthly	 	 	7.50	  	 	 	7.50	  	 	 	8,240	  	 				 	 	8,240	  	 	 	5,231,723	  	 	 	2,630,904	  	 				 	 	7,862,627	  	
														
	 				 	TOTAL	 		 		 				 				 				 				 				 				 				 				 				
	 				 		 		 		 				 				 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	 				 	TOTAL	 		 		 				 				 	 	859,990,963	  	 	 	94,877,199	  	 	 	954,868,162	  	 	 	333,937,900	  	 	 	187,703,774	  	 	 	10,217,353	  	 	 	531,859,027	  	

F-100

Table of Contents

At December 31, 2011	  	 	  	 	  	 	  	 	 	  	 	 	  	Current	 	  	Non-current	 	
Segment	 	 	  	Creditor name	  	Currency	  	Amortization
type	  	Effective
interest
rate	 	  	Nominal
rate	 	  	Expiration	 	  	Total
Current at
12/31/2011	 	  	Expiration	 	  	Total non-
current at
12/31/2011	 	
	 		  		  		  		  			  			  	Up to 90
days	 	  	90 days to
1 year	 	  			  	1 to 3 year	 	  	3 to 5 years	 	  	5 or more
years	 	  			
 	 	 	  	 	  	 	  	 	  	%	 	  	%	 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Chile	 	97.004.000-5	  	BANCO DE CHILE S.A.	  	USD	  	Monthly	  	 	1.69	  	  	 	1.69	  	  	 	1,480,759	  	  	 	—  	  	  	 	1,480,759	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
	 	97.015.000-5	  	BANCO DE CHILE S.A.	  	Ch$	  	At maturity	  	 	6.88	  	  	 	6.50	  	  	 	1,592,561	  	  	 	—  	  	  	 	1,592,561	  	  	 	—  	  	  	 	47,379,924	  	  	 	—  	  	  	 	47,379,924	  	
	 	97.015.000-5	  	BANCO SANTANDER CHILE S.A.	  	Ch$	  	At maturity	  	 	7.58	  	  	 	7.08	  	  	 	659,595	  	  	 	—  	  	  	 	659,595	  	  	 	—  	  	  	 	32,603,321	  	  	 	—  	  	  	 	32,603,321	  	
	 	97.015.000-5	  	BANCO SANTANDER CHILE S.A.	  	USD	  	Monthly	  	 	1.80	  	  	 	1.80	  	  	 	7,093	  	  	 	—  	  	  	 	7,093	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
	 	97.015.000-5	  	BANCO SANTANDER CHILE S.A.	  	USD	  	Monthly	  	 	1.49	  	  	 	1.49	  	  	 	11,833,639	  	  	 	—  	  	  	 	11,833,639	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
	 	97.006.000-6	  	BANCO SANTANDER CHILE S.A.	  	USD	  	Monthly	  	 	1.50	  	  	 	1.50	  	  	 	77,544	  	  	 	—  	  	  	 	77,544	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
	 	97.006.000-6	  	BANCO DE CREDITO E INVERSIONES S.A.	  	Ch$	  	At maturity	  	 	7.14	  	  	 	6.73	  	  	 	369,193	  	  	 	—  	  	  	 	369,193	  	  	 	—  	  	  	 	24,858,061	  	  	 	—  	  	  	 	24,858,061	  	
	 	76.645.030-K	  	BANCO ITAU CHILE S.A.	  	Ch$	  	At maturity	  	 	7.14	  	  	 	6.62	  	  	 	—  	  	  	 	395,361	  	  	 	395,361	  	  	 	—  	  	  	 	24,805,715	  	  	 	—  	  	  	 	24,805,715	  	
	 	97.080.000-K	  	BANCO ITAU CHILE S.A.	  	Ch$	  	At maturity	  	 	5.97	  	  	 	6.62	  	  	 	—  	  	  	 	395,361	  	  	 	395,361	  	  	 	—  	  	  	 	25,000,000	  	  	 	—  	  	  	 	25,000,000	  	
	 	97.080.000-K	  	BANCO BICE S.A	  	UF	  	Semiannual	  	 	5.29	  	  	 	5.29	  	  	 	—  	  	  	 	322,258	  	  	 	322,258	  	  	 	766,524	  	  	 	239,693	  	  				  	 	1,006,217	  	
	 	97.032.000-8	  	BANCO BICE S.A	  	Ch$	  	At maturity	  	 	7.12	  	  	 	6.75	  	  	 	384,750	  	  	 	—  	  	  	 	384,750	  	  	 	—  	  	  	 	18,878,611	  	  	 	—  	  	  	 	18,878,611	  	
	 	97.032.000-8	  	BANCO BILBAO VIZCAYA ARGENTARIA CHILE S.A.	  	Ch$	  	At maturity	  	 	6.79	  	  	 	6.37	  	  	 	1,424,403	  	  	 	—  	  	  	 	1,424,403	  	  	 	—  	  	  	 	34,682,162	  	  	 	34,682,162	  	  	 	69,364,324	  	
	 	97.032.000-8	  	BANCO BILBAO VIZCAYA ARGENTARIA CHILE S.A.	  	Ch$	  	At maturity	  	 	6.00	  	  	 	6.92	  	  	 	1,010,661	  	  	 	—  	  	  	 	1,010,661	  	  	 	—  	  	  	 	34,423,648	  	  	 	—  	  	  	 	34,423,648	  	
	 	97.030.000-6	  	BANCO DEL ESTADO DE CHILE S.A.	  	Ch$	  	At maturity	  	 	7.57	  	  	 	6.97	  	  	 	30,787	  	  	 	—  	  	  	 	30,787	  	  	 	—  	  	  	 	78,874,660	  	  	 	—  	  	  	 	78,874,660	  	
	 	97.053.000-2	  	BANCO SECURITY S.A.	  	Ch$	  	Monthly	  	 	1.07	  	  	 	1.07	  	  	 	1,771,991	  	  	 	—  	  	  	 	1,771,991	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
	 	97.053.000-2	  	BANCO SECURITY S.A.	  	USD	  	Monthly	  	 	1.41	  	  	 	1.41	  	  	 	1,345,018	  	  	 	—  	  	  	 	1,345,018	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
	 	O-E	  	BANCO RABOBANK CURACAO N.V.	  	USD	  	Annual	  	 	4.16	  	  	 	3.86	  	  	 	245,106	  	  	 	—  	  	  	 	245,106	  	  	 	2,544,973	  	  	 	7,634,920	  	  	 	15,269,841	  	  	 	25,449,734	  	
	 	O-E	  	BANCO SCOTIABANK	  	USD	  	Semiannual	  	 	2.39	  	  	 	2.10	  	  	 	217,603	  	  	 	—  	  	  	 	217,603	  	  	 	—  	  	  	 	34,240,967	  	  	 	17,117,916	  	  	 	51,358,883	  	
	 	O-E	  	BANCO SANTANDER S.A. NY BRANC	  	USD	  	Annual	  	 	1.68	  	  	 	1.10	  	  	 	9,765,204	  	  	 	—  	  	  	 	9,765,204	  	  	 	21,831,130	  	  	 	—  	  	  	 	—  	  	  	 	21,831,130	  	
	 	O-E	  	BANCO BBVA (BANCO AGENTE)	  	USD	  	Annual	  	 	1.68	  	  	 	1.10	  	  	 	6,009,356	  	  	 	—  	  	  	 	6,009,356	  	  	 	13,434,542	  	  	 	—  	  	  	 	—  	  	  	 	13,434,542	  	
	 	O-E	  	BNP PARIBAS	  	USD	  	Annual	  	 	1.68	  	  	 	1.10	  	  	 	5,633,772	  	  	 	—  	  	  	 	5,633,772	  	  	 	12,594,882	  	  	 	—  	  	  	 	—  	  	  	 	12,594,882	  	
	 	O-E	  	THE BANK OF TOKIO—MITSUBISHI UFJ LTD.	  	USD	  	Annual	  	 	1.68	  	  	 	1.10	  	  	 	3,755,848	  	  	 	—  	  	  	 	3,755,848	  	  	 	8,396,588	  	  	 	—  	  	  	 	—  	  	  	 	8,396,588	  	
	 	O-E	  	BANCO RABOBANK CURACAO N.V.	  	USD	  	Annual	  	 	1.68	  	  	 	1.10	  	  	 	3,755,848	  	  	 	—  	  	  	 	3,755,848	  	  	 	8,396,588	  	  	 	—  	  	  	 	—  	  	  	 	8,396,588	  	
	 	O-E	  	SCOTIABANK AND TRUST (CAYMAN) LTD.	  	USD	  	Annual	  	 	1.68	  	  	 	1.10	  	  	 	3,755,848	  	  	 	—  	  	  	 	3,755,848	  	  	 	8,396,588	  	  	 	—  	  	  	 	—  	  	  	 	8,396,588	  	
	 	O-E	  	BANCO ITAU EUROPA S.A.	  	USD	  	Annual	  	 	1.68	  	  	 	1.10	  	  	 	1,126,755	  	  	 	—  	  	  	 	1,126,755	  	  	 	2,518,976	  	  	 	—  	  	  	 	—  	  	  	 	2,518,976	  	
	 	O-E	  	INTESA SANPAOLO S.P.A. NY BRANCH	  	USD	  	Annual	  	 	1.68	  	  	 	1.10	  	  	 	1,126,755	  	  	 	—  	  	  	 	1,126,755	  	  	 	2,518,976	  	  	 	—  	  	  	 	—  	  	  	 	2,518,976	  	
	 	O-E	  	NATIXIS PANAMA BRANCH	  	USD	  	Annual	  	 	1.68	  	  	 	1.10	  	  	 	1,126,755	  	  	 	—  	  	  	 	1,126,755	  	  	 	2,518,976	  	  	 	—  	  	  	 	—  	  	  	 	2,518,976	  	
Argentina	 	O-E	  	BANCO GALICIA	  	ARS	  	Monthly	  	 	14.25	  	  	 	14.25	  	  	 	547,106	  	  	 	—  	  	  	 	547,106	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
	 	O-E	  	BBVA BANCO FRANCES	  	ARS	  	Monthly	  	 	28.00	  	  	 	28.00	  	  	 	8,451,800	  	  	 	—  	  	  	 	8,451,800	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
	 	O-E	  	BBVA BANCO FRANCES	  	ARS	  	Monthly	  	 	14.25	  	  	 	14.25	  	  	 	8,451,800	  	  	 	—  	  	  	 	8,451,800	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
	 	O-E	  	BBVA BANCO FRANCES	  	ARS	  	Monthly	  	 	15.50	  	  	 	15.50	  	  	 	4,829,600	  	  	 	—  	  	  	 	4,829,600	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
	 	O-E	  	BBVA BANCO FRANCES	  	ARS	  	Monthly	  	 	14.60	  	  	 	14.60	  	  	 	8,451,800	  	  	 	—  	  	  	 	8,451,800	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
	 	O-E	  	ABN AMRO BANK	  	USD	  	Monthly	  	 	5.77	  	  	 	5.77	  	  	 	—  	  	  	 	4,459,540	  	  	 	4,459,540	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
	 	O-E	  	BANCO I.F.C.	  	USD	  	Monthly	  	 	3.10	  	  	 	3.10	  	  	 	9,147,653	  	  	 	10,230,204	  	  	 	19,377,857	  	  	 	31,357,299	  	  	 	3,997,423	  	  	 	—  	  	  	 	35,354,722	  	
	 	O-E	  	BANCO MACRO	  	ARS	  	Monthly	  	 	18.75	  	  	 	18.75	  	  	 	4,684,180	  	  	 	—  	  	  	 	4,684,180	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
	 	O-E	  	BANCO GALICIA	  	ARS	  	Monthly	  	 	18.75	  	  	 	18.75	  	  	 	496,676	  	  	 	—  	  	  	 	496,676	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
	 	O-E	  	OTROS BANCOS	  	$ Argentino	  	Monthly	  	 	14.25	  	  	 	14.25	  	  	 	252	  	  	 	—  	  	  	 	252	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
Colombia	 	O-E	  	BANCO HELM BANK	  	$ Colombiano	  	Monthly	  	 	2.01	  	  	 	2.01	  	  	 	844,893	  	  	 	—  	  	  	 	844,893	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
Brasil	 	O-E	  	BRADESCO	  	Real	  	At maturity	  	 	13.96	  	  	 	13.96	  	  	 	472,916	  	  	 	1,261,108	  	  	 	1,734,024	  	  	 	—  	  	  	 	9,042,475	  	  	 	—  	  	  	 	9,042,475	  	
	 	O-E	  	BNDES	  	Real	  	Monthly	  	 	9.03	  	  	 	9.03	  	  	 	2,688,206	  	  	 	8,064,618	  	  	 	10,752,824	  	  	 	11,940,470	  	  	 	—  	  	  	 	—  	  	  	 	11,940,470	  	
	 	O-E	  	BANCO DO NORDESTE	  	Real	  	Monthly	  	 	8.50	  	  	 	8.50	  	  	 	289,636	  	  	 	868,908	  	  	 	1,158,544	  	  	 	1,255,089	  	  	 	—  	  	  	 	—  	  	  	 	1,255,089	  	
	 	O-E	  	ITAU	  	Real	  	Anual	  	 	14.79	  	  	 	14.79	  	  	 	1,112,235	  	  	 	3,336,704	  	  	 	4,448,939	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
	 	O-E	  	BANCO DO BRASIL	  	Real	  	At maturity	  	 	13.31	  	  	 	13.31	  	  	 	3,316,507	  	  	 	9,949,520	  	  	 	13,266,027	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
	 	O-E	  	BANCO DO NORDESTE—MERCANTIL RODRIGUES	  	Real	  	Monthly	  	 	7.50	  	  	 	7.50	  	  	 	102,587	  	  	 	307,760	  	  	 	410,347	  	  	 	1,069,835	  	  	 	713,223	  	  	 	713,223	  	  	 	2,496,281	  	
Perú	 	O-E	  	CONTINENTAL	  	USD	  	Semiannual	  	 	5.15	  	  	 	5.15	  	  	 	356,091	  	  	 	23,824	  	  	 	379,915	  	  	 	7,345,756	  	  	 	13,572,216	  	  	 	—  	  	  	 	20,917,972	  	
	 	O-E	  	CITIBANK N.A.	  	Soles	  	Monthly	  	 	4.00	  	  	 	4.00	  	  	 	1,828,859	  	  	 	—  	  	  	 	1,828,859	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
	 	O-E	  	BANCO BILBAO VIZCAYA	  	USD	  	Quartery	  	 	2.29	  	  	 	2.29	  	  	 	67,532	  	  	 	—  	  	  	 	67,532	  	  	 	20,795,103	  	  	 	—  	  	  	 	—  	  	  	 	20,795,103	  	
	 	O-E	  	BANCO BIF	  	Soles	  	At maturity	  	 	5.00	  	  	 	5.00	  	  	 	1,941,100	  	  	 	—  	  	  	 	1,941,100	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
	 	O-E	  	BANCO SCOTIABANK	  	Soles	  	Semiannual	  	 	0.00	  	  	 	0.00	  	  	 	8,412	  	  	 	—  	  	  	 	8,412	  	  	 	2,667,579	  	  	 	5,401,057	  	  	 	—  	  	  	 	8,068,636	  	
	 	O-E	  	BANCO BCI	  	Soles	  	Quartery	  	 	7.71	  	  	 	7.71	  	  	 	134,070	  	  	 	—  	  	  	 	134,070	  	  	 	—  	  	  	 	13,437,796	  	  	 	—  	  	  	 	13,437,796	  	
														
	 		  	TOTAL	  		  		  				  				  	 	116,730,755	  	  	 	39,615,166	  	  	 	156,345,921	  	  	 	160,349,874	  	  	 	409,785,872	  	  	 	67,783,142	  	  	 	637,918,888	  	

F-101

Table of Contents

17.3	Bond debt	
Long Terms Bonds—Short term portion

Inscription
number or ID	  	Note	  	Series	  	Current
nominal
amount placed	 	  	Restatement
unit
of the
bond	  	Interest
rate	 	  	Effective
interest
rate	 	  	Maturity	 	  	Periodicity	 	  	Accounting value	 	  	Placement
in Chile
or abroad	
	  		  		  			  		  			  			  			  	Principal
installment	 	  	Amortization
type	 	  	12/31/2012	 	  	12/31/2011	 	  		
 	  	 	  	 	  	 	 	  	 	  	%	 	  	%	 	  	 	 	  	 	 	  	 	 	  	ThCh$	 	  	ThCh$	 	  	 	
268	  	17.6.1	  	BJUMB—B1	  	 	379,343	  	  	UF	  	 	65	  	  	 	6.90	  	  	 	9-1-2026	  	  	 	Semiannual	  	  	 	Semiannual	  	  	 	476,752	  	  	 	444,319	  	  	National	
268	  	17.6.1	  	BJUMB—B2	  	 	1,896,716	  	  	UF	  	 	6.5	  	  	 	6.90	  	  	 	9-1-2026	  	  	 	Semiannual	  	  	 	Semiannual	  	  	 	2,405,687	  	  	 	2,260,223	  	  	National	
443	  	17.6.2	  	BCENC—A	  	 	4,000,000	  	  	UF	  	 	4.3	  	  	 	4.68	  	  	 	3-15-2027	  	  	 	Semiannual	  	  	 	Semiannual	  	  	 	1,189,404	  	  	 	1,168,635	  	  	National	
530	  	17.6.3	  	BCENC—E	  	 	2,000,000	  	  	UF	  	 	3.5	  	  	 	4.14	  	  	 	5-7-2018	  	  	 	Semiannual	  	  	 	At maturity	  	  	 	268,209	  	  	 	260,469	  	  	National	
530	  	17.6.3	  	BCENC—F	  	 	4,500,000	  	  	UF	  	 	4.0	  	  	 	4.31	  	  	 	5-7-2028	  	  	 	Semiannual	  	  	 	At maturity	  	  	 	626,344	  	  	 	610,345	  	  	National	
551	  	17.6.5	  	BCENC—J	  	 	3,000,000	  	  	UF	  	 	5.7	  	  	 	5.70	  	  	 	10-15-2029	  	  	 	Semiannual	  	  	 	Semiannual	  	  	 	812,486	  	  	 	792,981	  	  	National	
551	  	17.6.5	  	BCENC—K	  	 	30,000,000	  	  	Ch $	  	 	7.0	  	  	 	7.15	  	  	 	3-1-2014	  	  	 	Semiannual	  	  	 	At maturity	  	  	 	697,496	  	  	 	696,556	  	  	National	
551	  	17.6.5	  	BCENC—L	  	 	1,000,000	  	  	UF	  	 	4.1	  	  	 	3.86	  	  	 	5-28-2015	  	  	 	Semiannual	  	  	 	Semiannual	  	  	 	5,789,499	  	  	 	77,572	  	  	National	
551	  	17.6.5	  	BCENC—N	  	 	4,500,000	  	  	UF	  	 	4.7	  	  	 	4.95	  	  	 	5-28-2030	  	  	 	Semiannual	  	  	 	Semiannual	  	  	 	442,919	  	  	 	431,773	  	  	National	
551	  	17.6.5	  	BCENC—O	  	 	54,000,000	  	  	Ch $	  	 	7.0	  	  	 	7.20	  	  	 	6-1-2031	  	  	 	Semiannual	  	  	 	At maturity	  	  	 	312,742	  	  	 	312,188	  	  	National	
BCHIS (*)	  	NA	  	11—A	  	 	5,705,882	  	  	Ch$	  	 	7.0	  	  	 	6.64	  	  	 	07-21-2013	  	  	 	Quarterly	  	  	 	Quarterly	  	  	 	—  	  	  	 	5,760,939	  	  	BCHIS	
BCHIS(*)	  	NA	  	11—B	  	 	3,363,638	  	  	Ch$	  	 	7.7	  	  	 	8.09	  	  	 	07-21-2013	  	  	 	Quarterly	  	  	 	Quarterly	  	  	 	—  	  	  	 	91,815	  	  	BCHIS	
N/A	  	17.6.4	  	ÚNICA—A	  	 	280,000,000	  	  	S	  	 	7.2	  	  	 	7.49	  	  	 	5-5-2018	  	  	 	Semiannual	  	  	 	At maturity	  	  	 	590,025	  	  	 	583,920	  	  	Foreign	
N/A	  	17.6.4	  	ÚNICA—A	  	 	130,000,000	  	  	S	  	 	7.6	  	  	 	7.76	  	  	 	8-12-2017	  	  	 	Semiannual	  	  	 	At maturity	  	  	 	714,665	  	  	 	739,258	  	  	Foreign	
N/A	  	17.6.14	  	ÚNICA—A	  	 	750,000,000	  	  	USD	  	 	5.5	  	  	 	5.80	  	  	 	1-20-2021	  	  	 	Semiannual	  	  	 	At maturity	  	  	 	9,195,693	  	  	 	9,926,466	  	  	Foreign	
N/A	  	17.6.24	  	UNICA-A	  	 	1,200,000,000	  	  	USD	  	 	4.9	  	  	 	5.17	  	  	 	20-01-2023	  	  	 	Quarterly	  	  	 	Quarterly	  	  	 	1,631,837	  	  	 	—  	  	  	Foreign	
N/A	  	17.6.20	  	2E SERIE 2	  	 	6,745,363	  	  	S	  	 	6.5	  	  	 	6.50	  	  	 	12-14-2016	  	  	 	Quarterly	  	  	 	Quarterly	  	  	 	359,496	  	  	 	374,463	  	  	Foreign	

	  		  	Total short—term portion	  	  		  				  				  				  				  				  	 	25,513,254	  	  	 	24,531,922	  	  		

(*)	On May 2012 the company repaid those bonds	
On January 12, 2011 Cencosud S.A. (Chile) issued bonds in the international Market by a total amount of 750 million of US Dollars (ThCh$ 369,952,500), under the rule “144-A” ( Rule 144-A ) and under the “S” Regulation ( Regulation S ), both under the United States Securities act. ( US Securities Act of 1933 ). According to the law applicable the instruments above mentioned do not need to be filled in the local SVS (Superintendencia de Valores y Seguros de Chile) neither should be registered in the Securities and Exchange Commission of United States of America. The interest rate of this bond is a 5.5% annual, payable semiannualy with a maturity date of the principal on January 20 th , 2021. The cash of this issuance were received on January 20 th 2011.
On December 06, 2012 Cencosud S.A. (Chile) issued bonds in the international Market by a total amount of 1.200 million of US Dollars (ThCh$ 572,928,000) under the rule “144-A” ( Rule 144-A ) and under the “S” Regulation ( Regulation S ), both under the United States Securities act. ( US Securities Act of 1933 ). According to the law applicable the instruments above mentioned do not need to be filled in the local SVS (Superintendencia de Valores y Seguros de Chile) neither should be registered in the Securities and Exchange Commission of United States of America. The interest rate of this bond is a 4.9% annual, payable semiannualy with a maturity date of the principal on January 20 th , 2023. The cash of this issuance were received on December 7, 2012.
 
F-102

Table of Contents

17.3.1	Bond long term	

Inscription
number or ID	  	Series	  	Current
nominal
amount
placed	 	  	Restatement
unit of the
bond	  	Interest
rate	 	 	Effective
interest
rate	 	 	Maturity	  	Periodicity	  	Accounting value	 	  	Placement
in Chile
or abroad	
	  		  			  		  			 			 		  	Principal
installment	  	Amortization
type	  	12/31/2012	 	  	12/31/2011	 	  		
 	  	 	  	 	 	  	 	  	%	 	 	%	 	 	 	  	 	  	 	  	ThCh$	 	  	ThCh$	 	  	 	
268	  	BJUMB—B1	  	 	379,343	  	  	UF	  	 	6.5	% 	 	 	6.90	% 	 	01-09-2026	  	Semiannual	  	Semiannual	  	 	8,093,233	  	  	 	8,191,617	  	  	National	
268	  	BJUMB—B2	  	 	1,896,716	  	  	UF	  	 	6.5	% 	 	 	6.90	% 	 	01-09-2026	  	Semiannual	  	Semiannual	  	 	39,258,725	  	  	 	39,644,469	  	  	National	
443	  	BCENC—A	  	 	4,000,000	  	  	UF	  	 	4.3	% 	 	 	4.75	% 	 	15-03-2027	  	Semiannual	  	Semiannual	  	 	88,134,115	  	  	 	86,172,839	  	  	National	
443	  	BCENC—C	  	 	4,500,000	  	  	UF	  	 	4.1	% 	 	 	4.61	% 	 	01-07-2027	  	Semiannual	  	Semiannual	  	 	98,232,678	  	  	 	96,145,235	  	  	National	
443	  	BCENC—D	  	 	1,500,000	  	  	UF	  	 	4.0	% 	 	 	4.38	% 	 	01-07-2028	  	Semiannual	  	Semiannual	  	 	33,039,439	  	  	 	32,371,292	  	  	National	
530	  	BCENC—E	  	 	2,000,000	  	  	UF	  	 	3.5	% 	 	 	4.14	% 	 	07-05-2018	  	Semiannual	  	At maturity	  	 	44,293,492	  	  	 	43,012,742	  	  	National	
530	  	BCENC—F	  	 	4,500,000	  	  	UF	  	 	4.0	% 	 	 	4.31	% 	 	07-05-2028	  	Semiannual	  	At maturity	  	 	99,200,929	  	  	 	96,661,498	  	  	National	
551	  	BCENC—J	  	 	3,000,000	  	  	UF	  	 	5.7	% 	 	 	5.70	% 	 	15-10-2029	  	Semiannual	  	Semiannual	  	 	68,492,552	  	  	 	66,843,172	  	  	National	
551	  	BCENC—K	  	 	30,000,000	  	  	$	  	 	7.0	% 	 	 	7.15	% 	 	01-03-2014	  	Semiannual	  	At maturity	  	 	29,947,243	  	  	 	29,904,035	  	  	National	
551	  	BCENC—L	  	 	1,000,000	  	  	UF	  	 	4.1	% 	 	 	3.86	% 	 	28-05-2015	  	Semiannual	  	Semiannual	  	 	17,221,350	  	  	 	22,427,598	  	  	National	
551	  	BCENC—N	  	 	4,500,000	  	  	UF	  	 	4.7	% 	 	 	4.95	% 	 	28-05-2030	  	Semiannual	  	Semiannual	  	 	100,107,864	  	  	 	97,582,346	  	  	National	
551	  	BCENC—O	  	 	54,000,000	  	  	$	  	 	7.0	% 	 	 	7.68	% 	 	01-06-2031	  	Semiannual	  	At maturity	  	 	50,456,310	  	  	 	50,361,929	  	  	National	
BCHIS	  	11—A	  	 	5,705,882	  	  	Ch$	  	 	7.0	% 	 	 	6.64	% 	 	21-07-2013	  	Quarterly	  	Quarterly	  	 	—  	  	  	 	4,266,542	  	  	Foreign	
BCHIS	  	11—B	  	 	3,363,638	  	  	Ch$	  	 	7.7	% 	 	 	8.09	% 	 	21-07-2013	  	Quarterly	  	Quarterly	  	 	—  	  	  	 	3,389,626	  	  	Foreign	
N/A	  	ÚNICA—A	  	 	280,000,000	  	  	S	  	 	7.2	% 	 	 	7.49	% 	 	05-05-2018	  	Semiannual	  	At maturity	  	 	52,272,165	  	  	 	53,647,268	  	  	Foreign	
N/A	  	ÚNICA—A	  	 	130,000,000	  	  	S	  	 	7.6	% 	 	 	7.76	% 	 	12-08-2017	  	Semiannual	  	At maturity	  	 	24,460,137	  	  	 	25,117,213	  	  	Foreign	
N/A	  	ÚNICA—A	  	 	750,000,000	  	  	USD	  	 	5.5	% 	 	 	5.80	% 	 	20-01-2021	  	Semiannual	  	At maturity	  	 	360,591,850	  	  	 	383,845,313	  	  	Foreign	
N/A	  	ÚNICA—A	  	 	1,200,000,000	  	  	USD	  	 	4.9	% 	 	 	5.17	% 	 	21/01/2023	  	Semiannual	  	At maturity	  	 	548,451,255	  	  	 	—  	  	  	Foreign	
N/A	  	2E SERIE 2	  	 	6,745,363	  	  	S	  	 	6.5	% 	 	 	6.50	% 	 	14-12-2016	  	Quarterly	  	Quarterly	  	 	1,128,900	  	  	 	1,546,160	  	  	Foreign	
	  		  				  		  				 				 		  		  		  	 	 	 	  	 	 	 	  		
	  	Total Long—Term portion	  	  		  				 				 		  		  		  	 	1,663,382,237	  	  	 	1,141,130,894	  	  		

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17.4	Other Financial Liabilities—Derivatives—Options	
The detail as of December 31, 2012 and December 31, 2011 is as follows:

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Periodicity	 	Total
Current and Non-Current	
ID	 	Institution Name	 	Asset Position
(In  Thousands)	 	 	currency	 	Assets
Interest
rate	 	 	Liability
Position  (In
Thousands)	 	 	Currency	 	Liability
Interest
Rate	 	 	Due date	 	Interest payment	 	Principal
Installment	 	December 31,
2012  (ThCh$)	 	 	December 31,
2011  (ThCh$)	 	 	Placement in
Chile or
abroad	
97.015.000-5	 	Banco Santander	 	 	40,052	  	 	USD	 	 	0.96	% 	 	 	24,839,230	  	 	Ch$	 	 	4.80	% 	 	11/02/2013	 	Quarterly	 	ANNUALY	 	 	5,626,390	  	 	 	6,087,008	  	 	National	
97.015.000-5	 	Banco Santander	 	 	60,079	  	 	USD	 	 	0.96	% 	 	 	29,735,209	  	 	Ch$	 	 	4.80	% 	 	11/02/2013	 	Quarterly	 	ANNUALY	 	 	907,921	  	 	 	(2,189,584	) 	 	National	
97.032.000-8	 	Banco BBVA	 	 	50,066	  	 	USD	 	 	0.96	% 	 	 	25,113,462	  	 	Ch$	 	 	5.23	% 	 	10/01/2013	 	Quarterly	 	ANNUALY	 	 	1,090,284	  	 	 	(1,251,811	) 	 	National	
97.015.000-5	 	Banco Santander	 	 	—  	  	 	—	 	 	0.00	% 	 	 	3,346	  	 	USD	 	 	0.00	% 	 	02/01/2012	 	NA	 	MONTHLY	 	 	—  	  	 	 	1,737,035	  	 	National	
97.015.000-5	 	Banco Santander	 	 	—  	  	 	—	 	 	0.00	% 	 	 	1,424	  	 	USD	 	 	0.00	% 	 	03/01/2012	 	NA	 	MONTHLY	 	 	—  	  	 	 	767,622	  	 	National	
97.004.000-5	 	Banco Chile S.A.	 	 	50,960	  	 	USD	 	 	6.63	% 	 	 	26,645,387	  	 	Ch$	 	 	3.86	% 	 	04/10/2018	 	Semiannual	 	SEMIANNUAL	 	 	1,336,032	  	 	 	—  	  	 	National	
97.008.000-7	 	Banco Scotiabank	 	 	50,473	  	 	USD	 	 	2.13	% 	 	 	26,565,120	  	 	Ch$	 	 	5.60	% 	 	20/10/2017	 	Semiannual	 	SEMIANNUAL	 	 	1,522,074	  	 	 	109,365	  	 	National	
O-E	 	Banco JP Morgan	 	 	50,473	  	 	USD	 	 	2.13	% 	 	 	26,786,898	  	 	Ch$	 	 	5.48	% 	 	20/10/2017	 	Semiannual	 	SEMIANNUAL	 	 	1,656,315	  	 	 	224,082	  	 	National	
97.015.000-5	 	Banco Santander	 	 	160,542	  	 	USD	 	 	4.88	% 	 	 	77,133,943	  	 	Ch$	 	 	7.92	% 	 	20/01/2023	 	Semiannual	 	AT MATURITY	 	 	1,808,295	  	 	 	—  	  	 	National	
O-E	 	Banco JP Morgan	 	 	50,169	  	 	USD	 	 	4,88	% 	 	 	23,941,732	  	 	Ch$	 	 	7.82	% 	 	20/01/2023	 	Semiannual	 	AT MATURITY	 	 	169,119	  	 	 	—  	  	 	National	
O-E	 	Banco JP Morgan	 	 	50,169	  	 	USD	 	 	4.88	% 	 	 	23,863,977	  	 	Ch$	 	 	7.83	% 	 	20/01/2023	 	Semiannual	 	AT MATURITY	 	 	92,550	  	 	 	—  	  	 	National	
O-E	 	Banco JP Morgan	 	 	50,169	  	 	USD	 	 	4.88	% 	 	 	23,909,515	  	 	Ch$	 	 	8,00	% 	 	20/01/2023	 	Semiannual	 	AT MATURITY	 	 	463,339	  	 	 	—  	  	 	National	
97.004.000-5	 	Banco Chile S.A.	 	 	50,169	  	 	USD	 	 	4,88	% 	 	 	23,952,664	  	 	Ch$	 	 	8,02	% 	 	20/01/2023	 	Semiannual	 	AT MATURITY	 	 	563,111	  	 	 	—  	  	 	National	
O-E	 	Deutsche Bank	 	 	50,169	  	 	USD	 	 	4,88	% 	 	 	23,900,735	  	 	Ch$	 	 	7.92	% 	 	20/01/2023	 	Semiannual	 	AT MATURITY	 	 	313,538	  	 	 	—  	  	 	National	
O-E	 	UBS Put Option	 	 	—  	  	 	—	 	 	0.00	% 	 	 	471,565	  	 	USD	 	 	0.00	% 	 	22/03/2013	 	NA	 	AT MATURITY	 	 	—  	  	 	 	240,955,817	  	 	Foreign	
O-E	 	Banco BBVA	 	 	747	  	 	USD	 	 	2.27	% 	 	 	1,217	  	 	USD	 	 	3.49	% 	 	15/08/2013	 	Semiannual	 	NA	 	 	31,620	  	 	 	85,884	  	 	Foreign	
O-E	 	Banco BBVA	 	 	950	  	 	USD	 	 	1.82	% 	 	 	1,256	  	 	USD	 	 	2.20	% 	 	15/08/2016	 	Semiannual	 	NA	 	 	216,616	  	 	 	263,606	  	 	Foreign	
O-E	 	Banco Santander	 	 	747	  	 	USD	 	 	2.27	% 	 	 	1,197	  	 	USD	 	 	3,41	% 	 	15/08/2013	 	Semiannual	 	NA	 	 	23,691	  	 	 	69,018	  	 	Foreign	
O-E	 	Banco Santander	 	 	950	  	 	USD	 	 	1,82	% 	 	 	1,256	  	 	USD	 	 	2.20	% 	 	15/08/2016	 	Semiannual	 	NA	 	 	154,631	  	 	 	184,370	  	 	Foreign	
O-E	 	Banco BBVA	 	 	41,627	  	 	USD	 	 	2,31	% 	 	 	124,868	  	 	Soles	 	 	6.30	% 	 	16/11/2015	 	Quarterly	 	QUARTERLY	 	 	2,978,133	  	 	 	1,778,146	  	 	Foreign	
O-E	 	Citibank N.A.	 	 	38,358	  	 	USD	 	 	2.91	% 	 	 	106,070	  	 	Soles	 	 	5.16	% 	 	28/03/2017	 	Quarterly	 	SEMIANNUAL	 	 	490,779	  	 	 	—  	  	 	Foreign	
														
	 		 				 		 				 				 		 				 		 		 	TOTAL	 	 	19,444,438	  	 	 	248,820,558	  	 		
 
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17.5	Other loans—leases	
The detail of the leasing agreement as of December 31, 2012 and 2011 is as follows;

 	  	 	  	 	  	 	  	 	  	Current Expiration	 	  	Non-Current Expiration	 	
 	  	ID	  	Creditor
Name	  	Currency	  	Amortization
type	  	Up to 90  days
ThCh$	 	  	Between 90
days and  one
year
ThCh$	 	  	TOTAL
Current
as of
December 31,
2012
ThCh$	 	  	1 to 3  years
ThCh$	 	  	3 to 5  years
ThCh$	 	  	5 or  more
years
ThCh$	 	  	Total non-
Current as of
December 31,
2012
ThCh$	 	
Cencosud Shopping Centers S.A	  	94226000-8	  	CIA. DE SEG. DE VIDA CONS. NAC. DE SEG. S.A.	  	Ch$	  	Monthly	  	 	50,445	  	  	 	151,334	  	  	 	201,779	  	  	 	838,336	  	  	 	838,336	  	  	 	3,038,971	  	  	 	4,715,643	  	
Cencosud Shopping Centers S.A	  	94226000-8	  	CIA. DE SEG. DE VIDA CONS. NAC. DE SEG. S.A.	  	Ch$	  	Monthly	  	 	28,278	  	  	 	84,834	  	  	 	113,112	  	  	 	469,951	  	  	 	469,951	  	  	 	1,703,573	  	  	 	2,643,475	  	
Cencosud Shopping Centers S.A	  	94226000-8	  	CIA. DE SEG. DE VIDA CONS. NAC. DE SEG. S.A.	  	Ch$	  	Monthly	  	 	5,543	  	  	 	16,628	  	  	 	22,171	  	  	 	92,115	  	  	 	92,115	  	  	 	333,916	  	  	 	518,146	  	
Cencosud Shopping Centers S.A	  	94226000-8	  	CIA. DE SEG. DE VIDA CONS. NAC. DE SEG. S.A.	  	Ch$	  	Monthly	  	 	12,279	  	  	 	36,837	  	  	 	49,116	  	  	 	204,063	  	  	 	204,063	  	  	 	739,729	  	  	 	1,147,855	  	
Cencosud Shopping Centers S.A	  	94226000-8	  	CIA. DE SEG. DE VIDA CONS. NAC. DE SEG. S.A.	  	Ch$	  	Monthly	  	 	14,470	  	  	 	43,410	  	  	 	57,880	  	  	 	240,474	  	  	 	240,474	  	  	 	871,719	  	  	 	1,352,667	  	
Cencosud Retail S.A.	  	81201000-K	  	INMOBILIARIA EDIFICIO PANORAMICO LTDA.	  	UF	  	Monthly	  	 	536	  	  	 	1,609	  	  	 	2,145	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
Cencosud Retail S.A.	  	81201000-K	  	INMOBILIARIA EDIFICIO PANORAMICO LTDA.	  	Ch$	  	Monthly	  	 	7,360	  	  	 	22,080	  	  	 	29,440	  	  	 	66,135	  	  	 	77,140	  	  	 	626,654	  	  	 	769,929	  	
Cencosud Retail S.A.	  	81201000-K	  	CENTRO ESPAÑOL DE TEMUCO	  	UF	  	Monthly	  	 	4,247	  	  	 	12,740	  	  	 	16,987	  	  	 	38,159	  	  	 	44,509	  	  	 	265,481	  	  	 	348,149	  	
Cencosud Retail S.A.	  	81201000-K	  	SOCIEDAD DE RENTA HISPANO CHILENA S.A.	  	UF	  	Monthly	  	 	5,282	  	  	 	15,846	  	  	 	21,128	  	  	 	47,462	  	  	 	55,359	  	  	 	182,121	  	  	 	284,942	  	
Cencosud Retail S.A.	  	81201000-K	  	BANCO CHILE-LEASING	  	UF	  	Semiannual	  	 	109,036	  	  	 	327,109	  	  	 	436,145	  	  	 	979,757	  	  	 	549,418	  	  	 	—  	  	  	 	1,529,175	  	
Cencosud Retail S.A.	  	81201000-K	  	BANCO BICE-LEASING	  	UF	  	Semiannual	  	 	8,466	  	  	 	25,398	  	  	 	33,864	  	  	 	76,073	  	  	 	88,732	  	  	 	49,758	  	  	 	214,563	  	
Grandes Superficies de Colombia S.A.	  	830025638	  	BANCO DE BOGOTA	  	COL	  	Monthly	  	 	43,476	  	  	 	130,427	  	  	 	173,903	  	  	 	774,422	  	  	 	—  	  	  	 	—  	  	  	 	774,422	  	
Grandes Superficies de Colombia S.A.	  	830025638	  	IBM	  	COL	  	Monthly	  	 	30,570	  	  	 	91,710	  	  	 	122,280	  	  	 	448,856	  	  	 	—  	  	  	 	—  	  	  	 	448,856	  	
Grandes Superficies de Colombia S.A.	  	830025638	  	FIDUCIARIA BOGOTA S.A	  	COL	  	Monthly	  	 	1,344	  	  	 	4,032	  	  	 	5,376	  	  	 	32,255	  	  	 	64,510	  	  	 	1,257,495	  	  	 	1,354,260	  	
Grandes Superficies de Colombia S.A.	  	830025638	  	ES DEL ESTADO E S A	  	COL	  	Monthly	  	 	749	  	  	 	2,248	  	  	 	2,997	  	  	 	17,985	  	  	 	35,971	  	  	 	404,271	  	  	 	458,227	  	
Grandes Superficies de Colombia S.A.	  	830025638	  	FIDUCIARIA ALIANZA S.A.	  	COL	  	Monthly	  	 	4,193	  	  	 	12,580	  	  	 	16,773	  	  	 	100,643	  	  	 	201,285	  	  	 	1,108,004	  	  	 	1,409,932	  	
Grandes Superficies de Colombia S.A.	  	830025638	  	ALIANZA FIDUCIARIA S.A.	  	COL	  	Monthly	  	 	1,552	  	  	 	4,657	  	  	 	6,209	  	  	 	37,255	  	  	 	74,509	  	  	 	2,998,606	  	  	 	3,110,370	  	
Grandes Superficies de Colombia S.A.	  	830025638	  	GRUPO KALA S.A.	  	COL	  	Monthly	  	 	3,733	  	  	 	11,200	  	  	 	14,933	  	  	 	89,597	  	  	 	179,195	  	  	 	564,258	  	  	 	833,050	  	
Grandes Superficies de Colombia S.A.	  	830025638	  	IVESUR COLOMBIA S.A.	  	COL	  	Monthly	  	 	518	  	  	 	1,554	  	  	 	2072	  	  	 	12,434	  	  	 	24,868	  	  	 	185,608	  	  	 	222,910	  	
Grandes Superficies de Colombia S.A.	  	830025638	  	ALIANZA FIDUCIARIA S.A.	  	COL	  	Monthly	  	 	244	  	  	 	731	  	  	 	975	  	  	 	5,848	  	  	 	11,696	  	  	 	69,101	  	  	 	86,645	  	
Grandes Superficies de Colombia S.A.	  	830025638	  	FIDUCIARIA COLMENA S.A.	  	COL	  	Monthly	  	 	595	  	  	 	1,786	  	  	 	2,381	  	  	 	14,289	  	  	 	28,577	  	  	 	146,302	  	  	 	189,168	  	
Grandes Superficies de Colombia S.A.	  	830025638	  	SOISAN S.A.	  	COL	  	Monthly	  	 	97	  	  	 	292	  	  	 	389	  	  	 	2,336	  	  	 	4,671	  	  	 	27,594	  	  	 	34,601	  	
Grandes Superficies de Colombia S.A.	  	830025638	  	SOISAN S.A.	  	COL	  	Monthly	  	 	1,211	  	  	 	3,634	  	  	 	4,845	  	  	 	29,073	  	  	 	58,147	  	  	 	343,525	  	  	 	430,745	  	
Hipermercados Metro	  	20109072177	  	CONTINENTAL LEASING	  	Soles	  	Monthly	  	 	212,537	  	  	 	446,051	  	  	 	658,588	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
Hipermercados Metro	  	20109072177	  	CONTINENTAL LEASING	  	Soles	  	Semiannual	  	 	274	  	  	 	75,444	  	  	 	75,718	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
E. Wong	  	20100106915	  	CONTINENTAL LEASING	  	Soles	  	Semiannual	  	 	177,635	  	  	 	111,980	  	  	 	289,615	  	  	 	207,974	  	  	 	—  	  	  	 	—  	  	  	 	207,974	  	
E. Wong	  	20100106915	  	CONTINENTAL LEASING	  	Soles	  	Semiannual	  	 	6,995	  	  	 	431,238	  	  	 	438,233	  	  	 	222,602	  	  	 	—  	  	  	 	—  	  	  	 	222,602	  	
Hipermercados Metro	  	20109072177	  	CONTINENTAL LEASING	  	Soles	  	Semiannual	  	 	1,937	  	  	 	357,021	  	  	 	358,958	  	  	 	176,422	  	  	 	—  	  	  	 	—  	  	  	 	176,422	  	
Hipermercados Metro	  	20109072177	  	CONTINENTAL LEASING	  	Soles	  	Semiannual	  	 	2,033	  	  	 	393,911	  	  	 	395,944	  	  	 	165,787	  	  	 	—  	  	  	 	—  	  	  	 	165,787	  	
Hipermercados Metro	  	20109072177	  	CONTINENTAL LEASING	  	Soles	  	Semiannual	  	 	—  	  	  	 	189,236	  	  	 	189,236	  	  	 	97,682	  	  	 	—  	  	  	 	—  	  	  	 	97,682	  	
Hipermercados Metro	  	20109072177	  	CONTINENTAL LEASING	  	Soles	  	Semiannual	  	 	68,614	  	  	 	65,267	  	  	 	133,881	  	  	 	134,566	  	  	 	—  	  	  	 	—  	  	  	 	134,566	  	
Hipermercados Metro	  	20109072177	  	CONTINENTAL LEASING	  	Soles	  	Semiannual	  	 	3,675	  	  	 	218,802	  	  	 	222,477	  	  	 	228,318	  	  	 	—  	  	  	 	—  	  	  	 	228,318	  	
Hipermercados Metro	  	20109072177	  	BIF LEASING	  	Soles	  	Monthly	  	 	46,221	  	  	 	137,971	  	  	 	184,192	  	  	 	160,421	  	  	 	—  	  	  	 	—  	  	  	 	160,421	  	
E. Wong	  	20100106915	  	BIF LEASING	  	Soles	  	Monthly	  	 	76,192	  	  	 	160,540	  	  	 	236,732	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
Hipermercados Metro	  	20109072177	  	BIF LEASING	  	Soles	  	Monthly	  	 	77,266	  	  	 	229,907	  	  	 	307,173	  	  	 	322,331	  	  	 	—  	  	  	 	—  	  	  	 	322,331	  	
Hipermercados Metro	  	20109072177	  	BIF LEASING	  	Soles	  	Monthly	  	 	65,589	  	  	 	194,121	  	  	 	259,710	  	  	 	342,671	  	  	 	—  	  	  	 	—  	  	  	 	342,671	  	
Hipermercados Metro	  	20109072177	  	BIF LEASING	  	Soles	  	Monthly	  	 	61,424	  	  	 	180,046	  	  	 	241,470	  	  	 	475,306	  	  	 	—  	  	  	 	—  	  	  	 	475,306	  	
Hipermercados Metro	  	20109072177	  	BIF LEASING	  	Soles	  	Monthly	  	 	30,464	  	  	 	94,059	  	  	 	124,523	  	  	 	271,515	  	  	 	—  	  	  	 	—  	  	  	 	271,515	  	
	  		  		  		  		  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
	  		  		  		  	Total	  	 	1,165,080	  	  	 	4,288,270	  	  	 	5,453,350	  	  	 	7,423,113	  	  	 	3,343,526	  	  	 	14,916,686	  	  	 	25,683,325	  	

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Table of Contents

 	  	 	  	 	  	 	  	 	 	  	Current Expiration	 	  	Non-Current Expiration	 	
 	  	ID	  	Creditor
Name	  	Currency	  	Amortization
type	 	  	Up to
90 days
ThCh$	 	  	Between
90 days
and one
year
ThCh$	 	  	TOTAL
Current
as of
December 31,
2012
ThCh$	 	  	1 to 3
years
ThCh$	 	  	3 to 5
years
ThCh$	 	  	5 or
more
years
ThCh$	 	  	Total non-
Current as of
December 31,
2011
ThCh$	 	
Cencosud Shopping Centers S.A	  	94226000-8	  	CIA. DE SEG. DE VIDA CONS. NAC. DE SEG. S.A.	  	Ch$	  	 	Monthly	  	  	 	49,539	  	  	 	148,618	  	  	 	198,157	  	  	 	875,736	  	  	 	875,736	  	  	 	3,166,493	  	  	 	4,917,965	  	
Cencosud Shopping Centers S.A	  	94226000-8	  	CIA. DE SEG. DE VIDA CONS. NAC. DE SEG. S.A.	  	Ch$	  	 	Monthly	  	  	 	27,771	  	  	 	83,312	  	  	 	111,083	  	  	 	490,916	  	  	 	490,916	  	  	 	1,775,059	  	  	 	2,756,891	  	
Cencosud Shopping Centers S.A	  	94226000-8	  	CIA. DE SEG. DE VIDA CONS. NAC. DE SEG. S.A.	  	Ch$	  	 	Monthly	  	  	 	5,443	  	  	 	16,330	  	  	 	21,773	  	  	 	96,224	  	  	 	96,224	  	  	 	347,928	  	  	 	540,376	  	
Cencosud Shopping Centers S.A	  	94226000-8	  	CIA. DE SEG. DE VIDA CONS. NAC. DE SEG. S.A.	  	Ch$	  	 	Monthly	  	  	 	12,059	  	  	 	36,176	  	  	 	48,235	  	  	 	213,167	  	  	 	213,167	  	  	 	770,769	  	  	 	1,197,103	  	
Cencosud Shopping Centers S.A	  	94226000-8	  	CIA. DE SEG. DE VIDA CONS. NAC. DE SEG. S.A.	  	Ch$	  	 	Monthly	  	  	 	14,210	  	  	 	42,631	  	  	 	56,841	  	  	 	251,202	  	  	 	251,202	  	  	 	908,298	  	  	 	1,410,702	  	
Cencosud Retail S.A.	  	81201000-K	  	INMOBILIARIA EDIFICIO PANORAMICO LTDA.	  	UF	  	 	Monthly	  	  	 	—  	  	  	 	1,901	  	  	 	1,901	  	  	 	2,127	  	  	 	—  	  	  	 	—  	  	  	 	2,127	  	
Cencosud Retail S.A.	  	81201000-K	  	INMOBILIARIA EDIFICIO PANORAMICO LTDA.	  	Ch$	  	 	Monthly	  	  	 	—  	  	  	 	26,486	  	  	 	26,486	  	  	 	60,247	  	  	 	70,657	  	  	 	678,686	  	  	 	809,590	  	
Cencosud Retail S.A.	  	81201000-K	  	CENTRO ESPAÑOL DE TEMUCO	  	UF	  	 	Monthly	  	  	 	—  	  	  	 	14,553	  	  	 	14,553	  	  	 	33,187	  	  	 	39,112	  	  	 	284,100	  	  	 	356,399	  	
Cencosud Retail S.A.	  	81201000-K	  	SOCIEDAD DE RENTA HISPANO CHILENA S.A.	  	UF	  	 	Monthly	  	  	 	—  	  	  	 	18,207	  	  	 	18,207	  	  	 	41,531	  	  	 	49,111	  	  	 	208,136	  	  	 	298,778	  	
Cencosud Retail S.A.	  	81201000-K	  	BANCO CHILE-LEASING	  	UF	  	 	Semiannual	  	  	 	—  	  	  	 	396,688	  	  	 	396,688	  	  	 	831,122	  	  	 	1,053,009	  	  	 	—  	  	  	 	1,884,131	  	
Cencosud Retail S.A.	  	81201000-K	  	BANCO BICE-LEASING	  	UF	  	 	Semiannual	  	  	 	—  	  	  	 	29,417	  	  	 	29,417	  	  	 	67,349	  	  	 	80,274	  	  	 	95,756	  	  	 	243,379	  	
Hipermercados Metro	  	20109072177	  	CONTINENTAL LEASING	  	Soles	  	 	Monthly	  	  	 	283,920	  	  	 	865,720	  	  	 	1,149,640	  	  	 	787,427	  	  	 	—  	  	  	 	—  	  	  	 	787,427	  	
Hipermercados Metro	  	20109072177	  	CONTINENTAL LEASING	  	Soles	  	 	Semiannual	  	  	 	—  	  	  	 	74,250	  	  	 	74,250	  	  	 	77,497	  	  	 	—  	  	  	 	—  	  	  	 	77,497	  	
E. Wong	  	20100106915	  	CONTINENTAL LEASING	  	Soles	  	 	Semiannual	  	  	 	196,127	  	  	 	200,468	  	  	 	396,595	  	  	 	627,497	  	  	 	—  	  	  	 	—  	  	  	 	627,497	  	
E. Wong	  	20100106915	  	CONTINENTAL LEASING	  	Soles	  	 	Semiannual	  	  	 	—  	  	  	 	424,127	  	  	 	424,127	  	  	 	671,632	  	  	 	—  	  	  	 	—  	  	  	 	671,632	  	
Hipermercados Metro	  	20109072177	  	CONTINENTAL LEASING	  	Soles	  	 	Semiannual	  	  	 	—  	  	  	 	351,390	  	  	 	351,390	  	  	 	547,960	  	  	 	—  	  	  	 	—  	  	  	 	547,960	  	
Hipermercados Metro	  	20109072177	  	CONTINENTAL LEASING	  	Soles	  	 	Semiannual	  	  	 	—  	  	  	 	387,695	  	  	 	387,695	  	  	 	574,929	  	  	 	—  	  	  	 	—  	  	  	 	574,929	  	
Hipermercados Metro	  	20109072177	  	CONTINENTAL LEASING	  	Soles	  	 	Semiannual	  	  	 	—  	  	  	 	186,116	  	  	 	186,116	  	  	 	294,726	  	  	 	—  	  	  	 	—  	  	  	 	294,726	  	
Hipermercados Metro	  	20109072177	  	CONTINENTAL LEASING	  	Soles	  	 	Semiannual	  	  	 	62,736	  	  	 	64,181	  	  	 	126,917	  	  	 	270,703	  	  	 	—  	  	  	 	—  	  	  	 	270,703	  	
Hipermercados Metro	  	20109072177	  	CONTINENTAL LEASING	  	Soles	  	 	Semiannual	  	  	 	—  	  	  	 	215,115	  	  	 	215,115	  	  	 	459,287	  	  	 	—  	  	  	 	—  	  	  	 	459,287	  	
Hipermercados Metro	  	20109072177	  	BIF LEASING	  	Soles	  	 	Monthly	  	  	 	43,346	  	  	 	133,829	  	  	 	177,175	  	  	 	352,416	  	  	 	—  	  	  	 	—  	  	  	 	352,416	  	
E. Wong	  	20100106915	  	BIF LEASING	  	Soles	  	 	Monthly	  	  	 	70,513	  	  	 	220,683	  	  	 	291,196	  	  	 	241,627	  	  	 	—  	  	  	 	—  	  	  	 	241,627	  	
Hipermercados Metro	  	20109072177	  	BIF LEASING	  	Soles	  	 	Monthly	  	  	 	72,230	  	  	 	283,413	  	  	 	355,643	  	  	 	643,760	  	  	 	—  	  	  	 	—  	  	  	 	643,760	  	
	  		  		  		  				  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
	  		  		  		  	 	TOTAL	  	  	 	837,894	  	  	 	4,221,306	  	  	 	5,059,200	  	  	 	8,512,269	  	  	 	3,219,408	  	  	 	8,235,225	  	  	 	19,966,902	  	

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17.6	Restrictions.	
 
1.	As established in the agreement to issue bonds of Cencosud S.A. dated July 5, 2011 and by virtue of which two series (Series A and Series B) were issued, of which only Series B (tranche B1 and B2) remains in effect, the Company, hereinafter the Issuer, has the following indebtedness limits or management restrictions, among others:	
 
 	a)	Comply with the laws, regulations and other legal provisions applicable to it;	
 
 	b)	Establish and maintain adequate accounting systems based on generally accepted accounting principles in Chile, as well as hire and maintain an independent external auditing firm of recognized local or international prestige to examine and analyze the Financial Statements and issue an opinion on the statements as of December 31 of each year. Likewise, in accordance with current standards and as long as they are in effect, the Issuer shall hire and maintain, continuously and without interruption, two risk rating agencies registered with the SVS for the life of the bond issuance. These risk rating agencies may be replaced to the extent that the Issuer complies with the obligation of maintaining two of them, continuously and without interruption, for the life of the bond issuance. Nevertheless, it is expressly agreed that: (i) in the event that by SVS provision the currently valid accounting standards were modified, replacing IFRS, and that change were to affect one or more of the restrictions contained in the Ninth clause and/or the definitions in the First clause related to the aforementioned Ninth clause of the Agreement, or (ii) if the valuation criteria established for the accounting entries in the current Financial Statements were modified by the competent entity authorized to issue accounting standards, the Issuer shall, within fifteen Working Days of the new provisions having been reflected for the first time in its Financial Statements, present these changes to the Bondholders’ Representative. The Issuer, within twenty Working Days of the new provisions having been reflected for the first time in its Financial Statements, shall request that its external auditors proceed to adapt the obligations indicated in the Ninth clause and/or the definitions contained in the First clause that are related to the aforementioned Ninth clause of the Agreement based on the new accounting situation within twenty Working Days after the date of request. The Issuer and the Bondholders’ Representative shall modify the Agreement in order to adjust it as determined by the auditors within ten Working Days of the auditors having issued their report, and the Issuer shall file with the SVS the request for this modification of the Agreement, together with the respective documentation. The aforementioned procedure shall be considered prior to the date on which the Financial Statements must be filed with the SVS by the Issuer, for the reporting period following that in which the new provisions have been reflected for the first time in its Financial Statements. For this, prior consent from the bondholders’ association shall not be necessary. Notwithstanding, the Bondholders’ Representative shall inform the Bondholders of the modifications to the Agreement by publishing a notice in the newspaper La Nacion (print or digital version) and in the event this publication is suspended or no longer exists, in the Official Gazette, which shall take place within twenty Working Days following the date the respective deed modifying the Agreement is granted. In the cases mentioned above, and until the Agreement has been modified in accordance with the aforementioned procedure, the Issuer shall not be considered to have breached the Agreement when as a result exclusively of these modifications, the Issuer fails to comply with one or more restrictions contained in the Ninth clause of the Agreement and/or the definitions contained in the First clause that are related to the aforementioned Ninth clause. Once the Agreement has been modified as stated above, the Issuer shall comply with the agreed-upon modifications to reflect its new accounting situation. Record is left that the procedure contained in this provision is intended to protect the changes produced exclusively by provisions on accounting matters and in no case those produced by variations in market conditions that affect the Issuer. All expenses resulting from the above shall be borne by the Issuer. Likewise, the Issuer shall hire and maintain, continuously and without interruption, two risk rating agencies registered with the SVS for the life of the bonds;	
 
 	c)	Send a copy of its quarterly and annual Financial Statements to the Bondholders’ Representative within the same period of time in which it must be filed with the SVS;	
 
 	d)	Notify the Bondholders’ Representative of notices for ordinary and extraordinary shareholders’ meetings no later than the day of publication of the last notice for shareholders;	
 
 	e)	Notify the Bondholders’ Representative of all material events that are not considered reserved or any infraction of the Issuer’s obligations under the agreement as soon as the event or infraction occurs or comes to its knowledge, within the same period of time in which it must notify the SVS. The document that fulfills this obligation must be signed by the Issuer’s Chief Executive Officer or by his replacement and must be sent with a return receipt or by certified mail;	
 
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 	f)	Maintain, during the life of this Agreement, its assets free of Restricted Encumbrances that are equivalent, at least, to one point two times the unpaid balance of the principal owed on the Bonds. This obligation shall be verified and measured as of the reporting dates of the Financial Statements. The Issuer shall send information to verify the ratio referred to in this clause to the Bondholders’ Representative upon request. In the event that the Issuer fails to comply with this obligation, it may equally and within a maximum of sixty days from the date of violation, establish guarantees in favor of the Bondholders that are proportionally equal to those granted to third parties other than the Bondholders. For these purposes, assets and debt will be valued at book value. The following shall not be considered for these purposes: encumbrances established for any authority for taxes that are still not owed by the Issuer and are being duly challenged by it; those established in the ordinary course of business of the Issuer that are being duly challenged by it; preferences established by law such as, for example, those mentioned in article two thousand four hundred seventy-two of the Civil Code and articles one hundred five and one hundred six of the Securities Market Law; and all encumbrances to which the Issuer has not consented and that are being duly challenged by it;	
 
 	g)	Not sell or transfer essential assets that represent more than 30% of its total assets and that place in danger the continuity of its business, unless that sale, cession or transfer is to a subsidiary and to the extent that it jointly and severally undertakes to pay the Bonds;	
 
 	h)	Maintain an indebtedness ratio no greater than one point three;	
 
 	i)	Maintain minimum equity of eleven million, five hundred thousand UF at all times during the life of the bonds;	
 
 	j)	Not make investments in debt instruments issued by related persons or engage in transactions with related persons under conditions that are less favorable than market conditions for the Issuer;	
 
 	k)	Contract and maintain insurance that reasonably protects its operating assets;	
 
 	l)	Send information on any reduction in its interest in Subsidiaries that results in losing control and stems from a sale, exchange or merger of its interest in them to the Bondholders’ Representative within 30 working days of the event having occurred;	
 
 	m)	Record in its accounting books the provisions that arise from adverse contingencies that, in management’s opinion, should be reflected in the Financial Statements of the Issuer in accordance with IFRS or the standards that replace them and those established by the SVS, as appropriate.	
 
2.	As established in the agreement to issue bonds of Cencosud S.A., dated October 5, 2005 and modified on November 10, 2005, and by virtue of which three series (Series A, Series C and Series D) were issued, the Company, hereinafter the Issuer, has the following obligations or management restrictions:	
 
 	a)	Comply with the laws, regulations and other legal provisions applicable to it, particularly to comply with the timely and correct payment of taxes, duties and charges that affect the Issuer itself or its real estate or chattel property, except those that it challenges in good faith and in accordance with pertinent judicial or administrative procedures, and as long as, in this case, it maintains adequate reserves to cover such contingency when necessary in conformity with IFRS or those standards that replace IFRS;	
 
 	b)	Establish and maintain adequate accounting systems based on IFRS or those standards that replace IFRS, as well as hire and maintain an independent external auditing firm of recognized local or international prestige to examine and analyze the Issuer’s Financial Statements and issue an opinion on the statements as of December 31 of each year. Likewise, the Issuer shall hire and maintain, continuously and without interruption, two risk rating agencies registered with the SVS for the life of the Bonds;	
 
 	c)	Send a copy of all information that the Issuer must send the SVS to the Bondholders’ Representative, as long as it is not considered reserved information, including a copy of its quarterly and annual individual and consolidated Financial Statements, within the period of time in which it should file such information with the SVS. The Issuer shall also inform the Bondholders’ Representative of compliance with the obligations undertaken by virtue of the Agreement within the period of time in which it should file its Financial Statements with the SVS. To do so, the Issuer shall use the format included as Appendix One in this deed, which was notarized on the tenth day of November of the year two thousand five, under number eight thousand one hundred forty-three and for all legal purposes is understood to be an integral part of the Issuance Agreement. Likewise, the Issuer shall send the Bondholders’ Representative copies of the risk rating reports on the issuance no later than five Working Days after receipt of these reports from its private risk rating agencies. Finally, the Issuer undertakes to send the Bondholders’ Representative all information regarding any violation of its obligations undertaken by virtue of this Agreement, particularly the provisions of this Clause, and any other relevant information requested by the SVS regarding the Issuer, as soon as the event occurs or comes to its knowledge and within the period of time in which it should notify the SVS, as long as it should be reported to its creditors;	
 
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 	d)	Notify the Bondholders’ Representative of notices for ordinary and extraordinary shareholders’ meetings no later than the day of publication of the last notice for shareholders;	
 
 	e)	Send the Bondholders’ Representative, along with the quarterly information, information on any reduction of its interest in the capital of its subsidiaries that are greater than 10% of the capital, as well as any reduction that means losing control of the company once the transaction has taken place. This shall apply to subsidiaries that represent more than 15% of the Issuer’s Total Assets;	
 
 	f)	Not engage in, with related persons, transactions under conditions that are less favorable for the Issuer than prevailing market conditions, as set forth in article eighty-nine of the Corporations Law;	
 
 	g)	Maintain the following ratios based on the Quarterly Financial Statements filed as and when stipulated in SVS Ruling 1,879 of April 25, 2008 and Ruling 1,924 of April 24, 2009, and their modifications or the standard that replaces them: (i) An indebtedness level based on the Financial Statements of a ratio of Liabilities less cash and cash equivalents, less other current financial assets, over total equity no greater than one point five. Liabilities shall include the obligations that the Issuer undertakes as endorser, simple and/or joint guarantor and those in which it responds directly or indirectly for obligations of third parties; ii) Maintain Total Assets free of all pledges, mortgages or other encumbrances for an amount at least equal to one point two times the Issuer’s unguaranteed Liabilities in conformity with the Financial Statements; and iii) Maintain minimum equity attributable to owners of parent company of twenty-two million UF. Nevertheless, it is expressly agreed that: /i/ in the event that by SVS provision the currently valid accounting standards were modified, replacing IFRS, and that change were to affect one or more of the restrictions contained in the Fifteenth clause and/or the definitions in the First clause related to the aforementioned Fifteenth clause of the Agreement, or /ii/ if the valuation criteria established for the accounting entries in the current Financial Statements were modified by the competent entity authorized to issue accounting standards, the Issuer shall, within fifteen Working Days of the new provisions being reflected for the first time in its Financial Statements, present these changes to the Bondholders’ Representative. The Issuer, within twenty Working Days of the new provisions having been reflected for the first time in its Financial Statements, shall request that its external auditors proceed to adapt the obligations indicated in the Fifteenth clause and/or the definitions contained in the First clause that are related to the aforementioned Fifteenth clause of the Agreement based on the new accounting situation within twenty Working Days of the date of the request. The Issuer and the Bondholders’ Representative shall modify the Agreement in order to adjust it as determined by the auditors within ten Working Days of the auditors having issued their report, and the Issuer shall file with the SVS the request for this modification of the Agreement, together with the respective documentation. The aforementioned procedure shall be considered prior to the date on which the Financial Statements must be filed with the SVS by the Issuer, for the reporting period following that in which the new provisions have been reflected for the first time in its Financial Statements. For this, prior consent from the bondholders’ association shall not be necessary. Notwithstanding, the Bondholders’ Representative shall inform the Bondholders of the modifications to the Agreement by publishing a notice in the newspaper Diario Financiero, and in the event this publication is suspended or no longer exists, in the Official Gazette, which shall take place within twenty Working Days following the date the respective deed modifying the Agreement is granted. In the cases mentioned above, and until the Agreement has been modified in accordance with the aforementioned procedure, the Issuer shall not be considered to have breached the Agreement when as a result exclusively of these modifications, the Issuer fails to comply with one or more restrictions contained in the Fifteenth clause of the Agreement and/or the definitions contained in the First clause that are related to the aforementioned Fifteenth clause of the Agreement. Once the Agreement has been modified as stated above, the Issuer shall comply with the agreed-upon modifications to reflect its new accounting situation. Record is left that the procedure contained in this provision is intended to protect the changes produced exclusively by provisions on accounting matters and in no case those produced by variations in market conditions that affect the Issuer. All expenses resulting from the above shall be borne by the Issuer. Likewise, the Issuer shall hire and maintain, continuously and without interruption, two risk rating agencies registered with the SVS as long as the Line remains valid;	
 
 	h)	Except by express statement of the Bondholders’ Representative, authorized at an extraordinary meeting of the Bondholders, with votes that represent at least fifty-one percent of the Bonds in circulation, that releases the Issuer from the obligation indicated below, it shall maintain ownership of the brands (i) “Jumbo” and (ii) “París” directly or through its subsidiaries;	
 
 	i)	Record in its accounting books the provisions that arise from adverse contingencies that, in the Issuer’s opinion, should be reflected in the Issuer’s financial statements;	
 
 	j)	Maintain insurance that reasonably protects its operating assets, which are comprised of its main offices, buildings, inventory, furniture, office equipment and vehicles. The Issuer shall ensure that its subsidiaries meet that condition;	
 
 	k)	Not grant endorsements or guarantees, or establish itself as joint and several co-signer in favor of third parties, except subsidiaries of the Issuer.	
 
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 	l)	Maintain in the Quarterly Financial Statements direct or indirect ownership of at least 51% in “Cencosud Supermercados S.A.” and “Cencosud Administradora de Tarjetas S.A.”;	
 
 	m)	Maintain income from retail sales, mall management, real estate investment and credit assessments, granting and management equivalent to at least two thirds of the Issuer’s ordinary revenue, based on the Quarterly Financial Statements; and	
 
 	n)	Inform the Bondholders’ Representative of the effective use of the funds stemming from the Bond placement corresponding to the Line.	
 
3.	As established in the agreement to issue bonds of Cencosud S.A., dated March 13, 2008, and by virtue of which two series (Series E and Series F) were issued, the Company, hereinafter the Issuer, has the following obligations and management restrictions, among others:	
 
 	a)	Comply with applicable laws, regulations and other legal provisions, particularly those related to the timely and correct payment of taxes, duties and charges;	
 
 	b)	Establish and maintain adequate accounting systems based on IFRS or those standards that replace IFRS; an independent external auditing firm of recognized prestige to issue an opinion on the financial statements as of December 31 of each year; two risk rating agencies registered with the SVS for the life of the Bonds;	
 
 	c)	Send to the Bondholders’ Representative (i) a copy of all information that the Issuer must send the SVS, as long as it is not considered reserved information, including a copy of its quarterly and annual Financial Statements, within the period of time in which it should file such information with the SVS; (ii) information on compliance with the obligations undertaken by virtue of the Agreement within the period of time in which it should file its Financial Statements with the SVS; (iii) copies of the risk rating reports on the issuance no later than five Working Days after receipt of these reports from its private risk rating agencies; (iv) all information regarding any violation of its obligations undertaken by virtue of the Issuance Agreement and any other relevant information requested by the SVS, as soon as the event occurs or comes to its knowledge.	
 
 	d)	Notify the Bondholders’ Representative of notices for ordinary and extraordinary shareholders’ meetings no later than the day of publication of the last notice for shareholders;	
 
 	e)	Send the Bondholders’ Representative information on any reduction of its interest in the capital of its Relevant Subsidiaries that are greater than 10% of the capital, as well as any reduction that means losing control of the company once the transaction has taken place;	
 
 	f)	Not engage in, with related persons, transactions under conditions that are less favorable for the Issuer than prevailing market conditions;	
 
 	g)	Maintain the following financial ratios based on the Quarterly Financial Statements: (i) An indebtedness level based on the Financial Statements of a ratio of other current financial liabilities and other non-current financial liabilities, less cash and cash equivalents, less other current financial assets, over total equity attributable to the owners of the parent company, no greater than one point two. Liabilities shall include the obligations that the Issuer undertakes as endorser, simple and/or joint guarantor and those in which it responds directly or indirectly for obligations of third parties; and ii) Maintain Total Assets free of all pledges, mortgages or other encumbrances for an amount at least equal to one point two times the Issuer’s Liabilities in conformity with the Financial Statements;	
 
 	h)	Except by express statement of the Bondholders’ Representative, authorized at an extraordinary meeting of the Bondholders, with votes that represent at least fifty-one percent of the Bonds in circulation, that releases the Issuer from the obligation indicated below, it shall maintain ownership of the brands (i) “Jumbo” and (ii) “París” directly or through its subsidiaries;	
 
 	i)	Record in its accounting books the provisions that arise from adverse contingencies that, in the Issuer’s opinion, should be reflected in the Issuer’s financial statements;	
 
 	j)	Maintain insurance that reasonably protects its operating assets and ensure that its subsidiaries meet this condition;	
 
 	k)	Not grant endorsements or guarantees or establish itself as joint and several co-signer in favor of third parties, except subsidiaries of the Issuer.	
 
 	l)	Maintain direct or indirect ownership of at least fifty-one percent of Cencosud Supermercados S.A. and Cencosud Administradora de Tarjetas S.A., as well as the Companies that eventually control the business areas currently developed by these Companies;	
 
 	m)	Maintain income from retail sales, mall management, real estate investment and credit assessments, granting and management equivalent to at least sixty-seven percent of the Issuer’s ordinary revenue, based on the Quarterly Financial Statements; and	
 
 	n)	Inform the Bondholders’ Representative of the effective use of the funds stemming from the Bond placement corresponding to the Line.	
 
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4.	As established in the Master Issuance Agreement for the Private Offering Program for Corporate Bonds of Cencosud S.A., dated April 24, 2008, hereinafter “the Program”, entered into in Lima, Peru, and by virtue of which two issuances of the same series (Series A) were carried out, the Company, hereinafter the Issuer, has the following obligations and management restrictions, among others:	
 
 	a)	Preserve its corporate existence and duly maintain and develop its corporate objective;	
 
 	b)	Be in full compliance with all tax obligations, whether formalities or payment obligations, except those that have been challenged using procedures set forth by the laws of the applicable jurisdiction;	
 
 	c)	Maintain on at least a pari passu basis with Bonds issued with respect to payment obligations of other debts or obligations without specific guarantees;	
 
 	d)	Not make substantial changes in the line of business or its corporate objective that produce a material adverse effect on the Issuer’s financial condition, understanding as such any change that reduces the Program’s risk rating by two (2) or more risk categories below the rating in effect at that time;	
 
 	e)	A change in control that reduces the Program’s risk rating by two (2) or more risk categories below the rating in effect at that time may not occur;	
 
 	f)	Not transfer fully or partially, its obligations under the Program Documents;	
 
 	g)	Maintain indebtedness, based on the consolidated Financial Statements, or the individual financial statements if the Issuer does not consolidate, of a ratio of consolidated financial liabilities, or individual if the Issuer does not consolidate, less Cash, less Time Deposits, less Marketable Securities, less repo agreements and forward contracts classified as other current assets in the Issuer’s consolidated Financial Statements, or the individual financial statements if the Issuer does not consolidate, to Total Equity that does not exceed 1.20. Consolidated financial liabilities, or individual if the Issuer does not consolidate, shall include the obligations that the Issuer undertakes as endorser, simple and/or joint guarantor and those in which it responds directly or indirectly for obligations of third parties. Nevertheless, the liabilities of Banco París shall not be considered for the purpose of calculating this indebtedness; and	
 
 	h)	The Issuer shall issue each quarter: (i) a report that is a sworn statement indicating that no violation of the obligations established in this clause has occurred; (ii) a report containing the calculation of the ratios referred to in the preceding letter.	
 
5.	As established in the agreement to issue bonds of Cencosud S.A., dated September 5, 2008 and modified on October 2, 2008, and by virtue of which the Series J, K, L, N and O were issued, the Company, hereinafter the Issuer, has the following obligations or management restrictions:	
 
 	a)	Comply with applicable laws, regulations and other legal provisions, particularly those related to the timely and correct payment of taxes, duties and charges;	
 
 	b)	Establish and maintain adequate accounting systems based on IFRS or those standards that replace IFRS; an independent external auditing firm of recognized prestige to issue an opinion on the financial statements as of December 31 of each year; two risk rating agencies registered with the SVS for the life of the Bonds;	
 
 	c)	Send to the Bondholders’ Representative (i) a copy of all information that the Issuer must send the SVS, as long as it is not considered reserved information, including a copy of its quarterly and annual Financial Statements, within the period of time in which it should file such information with the SVS; (ii) information regarding compliance with the obligations undertaken by virtue of the Agreement within the period of time in which it should file its Financial Statements with the SVS; (iii) copies of the risk rating reports on the issuance no later than five Working Days after receipt of these reports from its private risk rating agencies; (iv) all information regarding any violation of its obligations undertaken by virtue of the Agreement and any other relevant information requested by the SVS, as soon as the event occurs or comes to its knowledge;	
 
 	d)	Notify the Bondholders’ Representative of notices for ordinary and extraordinary shareholders’ meetings no later than the day of publication of the last notice for shareholders;	
 
 	e)	Send the Bondholders’ Representative information on any reduction of its interest in the capital of its Relevant Subsidiaries that are greater than 10% of the capital, as well as any reduction that means losing control of the company once the transaction has taken place;	
 
 	f)	Not engage in, with related persons, transactions under conditions that are less favorable for the Issuer than prevailing market conditions;	
 
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 	g)	Maintain the following financial ratios based on the Quarterly Financial Statements: (i) An indebtedness level based on the Financial Statements of a ratio of other current financial liabilities and other non-current financial liabilities, less cash and cash equivalents, less other current financial assets, over total equity attributable to the owners of the parent company, no greater than one point two. Liabilities shall include the obligations that the Issuer undertakes as endorser, simple and/or joint guarantor and those in which it responds directly or indirectly for obligations of third parties; and ii) Maintain Total Assets free of all pledges, mortgages or other encumbrances for an amount at least equal to one point two times the Issuer’s Liabilities in conformity with the Financial Statements;	
 
 	h)	Except by express statement of the Bondholders’ Representative, authorized at an extraordinary meeting of the Bondholders, with votes that represent at least fifty-one percent of the Bonds in circulation, that releases the Issuer from the obligation indicated below, it shall maintain ownership of the brands (i) “Jumbo” and (ii) “París” directly or through its subsidiaries;	
 
 	i)	Record in its accounting books the provisions that arise from adverse contingencies that, in the Issuer’s opinion, should be reflected in the Issuer’s financial statements;	
 
 	j)	Maintain insurance that reasonably protects its operating assets and ensure that its subsidiaries meet this condition;	
 
 	k)	Not grant endorsements or guarantees or establish itself as joint and several co-signer in favor of third parties, except subsidiaries of the Issuer.	
 
 	l)	Maintain direct or indirect ownership of at least fifty-one percent of Cencosud Supermercados S.A. and Cencosud Administradora de Tarjetas S.A., as well as the Companies that eventually control the business areas currently developed by these Companies;	
 
 	m)	Maintain income from retail sales, mall management, real estate investment and credit assessments, granting and management equivalent to at least sixty-seven percent of the Issuer’s ordinary revenue, based on the Quarterly Financial Statements; and	
 
 	n)	Inform the Bondholders’ Representative of the effective use of the funds stemming from the Bond placement corresponding to the Line.	
 
6.	As a result of the loan granted by the International Finance Corporation to the subsidiary Cencosud S.A. (Argentina), an agreement was signed between these entities on September 24, 2008. The Minutes of the Board of Directors of the subsidiary Cencosud S.A. (Argentina) dated September 5, 2008, makes mention of having entered into a Share Retention Agreement, which was signed by the subsidiary Cencosud S.A. (Argentina) and its controller, Cencosud S.A. (Chile), in favor of the “International Finance Corporation” by virtue of which Cencosud S.A. (Chile) undertakes to:	
 
 	a)	Maintain its shareholdings in the subsidiaries Cencosud S.A., Cencosud Shopping Centers S.A. (Chile) and Cencosud Retail S.A. (Chile);	
 
 	b)	Maintain its shareholding in Blaisten S.A. and Unicenter S.A.	
 
7.	In accordance with the surety and joint debt agreements dated September 30, 2008 and May, 2010, entered into by Cencosud as guarantor and joint debtor and Banco Itaú BBA S.A. as guaranteed creditor, regarding the obligations that the subsidiary G Barbosa could have with this Bank as a result of the guarantee that it granted to Banco Nacional de Desenvolvimento Económico y Social, BNDES, for the loans granted to the subsidiary G Barbosa, Cencosud S.A. shall comply with the following obligations and financial and management restrictions:	
 
 	a)	Cencosud S.A. as guarantor and joint co-debtor may not have a Financial Expense Coverage Ratio of less than 3.0 to 1.0 at any quarter end (for the most recent period of four consecutive quarters ending as of the end of that quarter);	
 
 	b)	Cencosud S.A. may not have a Ratio of Consolidated Net Financial Debt to EBITDA greater than 5.25 to 1.0 at any quarter end (for the most recent period of four consecutive quarters ending as of the end of that quarter);	
 
 	c)	Cencosud S.A. shall maintain direct or indirect ownership of one hundred percent and control of G Barbosa Comercial Ltda., where control is defined by Law eighteen thousand forty-five of the Republic of Chile. The “Main Shareholders” of Cencosud S.A. shall maintain the current shareholding and control that Cencosud S.A. currently has, directly or indirectly.	
This should all be calculated using the IFRS Financial Statements, excluding the line items related to Banco París, which are duly listed individually in those Financial Statements.
 
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8.	As established in the debt consolidation agreement signed June 30, 2010 between Cencosud Retail S.A. as Debtor and Banco del Estado de Chile as Creditor, Cencosud S.A., shall comply with the following obligations and financial and management restrictions:	
 
 	a)	Maintain income from retail sales, mall management, real estate investment and credit assessments, granting and management equivalent to at least sixty-seven percent of the Consolidated Operating Income, based on the Consolidated Quarterly Financial Statements;	
 
 	b)	Not merge with any company, except those cases in which the merger meets all of the following requirements: (i) that the Company resulting from the merger is a Corporation established and governed by the laws of the Republic of Chile, and (ii) that the Company resulting from the merger maintains Cencosud’s current line of business;	
 
 	c)	Maintain at all times a ratio of Net Financial Debt to Own Funds of no more than one point two;	
 
 	d)	Maintain minimum equity equivalent to 28,000,000 UF.	
 
 	e)	Maintain assets free of all pledges, mortgages and other encumbrances for an amount at least equivalent to one point two times its unguaranteed consolidated liabilities. The obligations established in this letter and in letters (a),( c) and (d) above shall be measured every quarter based on the Financial Statements of Cencosud S.A.	
 
 	f)	Do not establish personal guarantees in favor of other creditors to secure obligations of third parties that do not belong to Cencosud S.A. and its subsidiaries without prior authorization from the Bank;	
 
 	g)	Send to the Bank, signed by duly authorized persons, its annual report and annual Financial Statements, duly audited, and the quarterly Financial Statements, in the same format in which they were filed with the SVS, within 5 days following the date on which the information must be filed with the SVS. This obligation shall only be demandable in the event, for any reason, that the information is not available on the SVS’s website; and	
 
 	h)	Each quarter, submit to the Bank a certificate of compliance of the affirmative and negative obligations established in the agreement, including a detail of the calculation of the financial covenants entered into by the Finance Manager.	
 
9.	As established in the debt recognition and restructuring agreement signed September 1, 2010 between Cencosud Administradora de Tarjetas S.A. as Debtor and Banco Bilbao Vizcaya Argentaria Chile as Creditor, Cencosud S.A., shall comply with the following obligations and financial and management restrictions:	
 
 	a)	Submit to the Bank a copy of its individual and consolidated Financial Statements for each quarter as soon as possible and in any event within thirty days of filing them with the SVS, to the extent that this information is not available on the SVS’s website or another publicly accessible website. If it were not obligated to file this information with the SVS, it must still submit it to the Bank as soon as it is available. These Financial Statements shall be prepared in accordance with IFRS;	
 
 	b)	Submit to the Bank a copy of its individual and consolidated Financial Statements for each year end as soon as possible and in any event within thirty days of filing them with the SVS, to the extent that this information is not available on the SVS’s website or another publicly accessible website. If it were not obligated to file this information with the SVS, it must still submit it to the Bank as soon as it is available. These Financial Statements shall be certified by an independent auditor of recognized international prestige that is registered with the SVS;	
 
 	c)	Along with the Financial Statements referred to in the preceding letters, submit to the Bank a certificate issued by the Chief Executive Officer and/or Chief Financial Officer, or their replacement, that certifies that, to the best of their knowledge and understanding, no Grounds for Non-compliance or Non-Compliance, as defined in the agreement, have occurred or detailing the nature and extent of such events if they have occurred;	
 
 	d)	Notify the Bank as soon as possible but no later than five banking days after the date on which any executive has knowledge of: (i) the occurrence of any Grounds for Non-Compliance, as defined in the agreement, or any Non-Compliance; (ii) any action, lawsuit or judicial or administrative proceedings regarding this instrument; (iii) any circumstance or event that affects or could result in an Important Adverse Effect on the businesses, activities, operations or financial situation of Cencosud and that results in the inability to pay of the Debtor and/or Cencosud; (iv) any relevant event referring to Cencosud’s operations that, in conformity with articles nine and ten of Law eighteen thousand forty-five on Securities Markets and the instructions provided by the SVS in General Character Ruling number thirty, may be interpreted as a material event, to the extent that that information is not available on the SVS’s website or another publicly accessible site and provided that that information is not considered “reserved” in conformity with the law;	
 
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 	e)	Submit to the Bank, when requested in writing or for justified reasons, additional information on the financial, tax, accounting, economic and/or legal situation of Cencosud, in which case it shall be provided within thirty banking days of the date on which the request is made in writing. Notwithstanding, and at the Bank’s request, Cencosud shall inform the Bank of the modifications made to the Company within thirty banking days of the event, submitting all pertinent information, and shall also inform the Bank of all new powers of attorney or the revocation of current powers of attorney, providing a copy of the corresponding public deeds;	
 
 	f)	Submit to the Bank, at its request, information necessary to correctly apply the provisions on individual credit limits;	
 
 	g)	Maintain and ensure that each Subsidiary maintains its books, records and accounting notes in which it makes complete, timely and reliable notes in conformity with current standards and IFRS;	
 
 	h)	Maintain all relevant rights, licenses, permits, brands, franchises, concessions or patents fully valid, with the understanding, however, that these rights, licenses, permits, brands, franchises, concessions or patents may be surrendered to the extent that they do not involve an Important Adverse Effect. In particular, it shall maintain ownership of the following brands directly or through its subsidiaries: (i) “Jumbo” and (ii) “París”;	
 
 	i)	Comply with and ensure that each Subsidiary complies with each and every one of its obligations by virtue of any act, contract or convention, whose failure to comply produces or could produce, individually or collectively, an Important Adverse Effect;	
 
 	j)	Comply with and ensure that each Relevant Subsidiary complies with current laws and standards applicable to the development of its business and ownership of its assets;	
 
 	k)	Pay and ensure that each Subsidiary pays, fully and opportunely, all important obligations, which are understood for the purposes of this instrument as those obligations that are important for the business, operations, financial or other conditions, projections, including but not limited to all taxes, charges or property taxes it must pay, as well as all obligations that, for taxes, charges, property taxes, labor matters or obligations with its suppliers or others, may result in an Encumbrance, except when compliance of these obligations is challenged through proper legal proceedings initiated in good faith and adequate accounting provisions have been established in accordance with IFRS;	
 
 	l)	Maintain and ensure that each Relevant Subsidiary maintains all assets necessary to keep its businesses and operations in proper working order and maintenance, except for wear resulting from legitimate use. It shall also maintain and ensure that each Relevant Subsidiary maintains proper insurance coverage for these assets in conformity with industry practice;	
 
 	m)	Ensure that all operations with related persons, as defined in law number eighteen thousand forty-five, either directly or through related persons, are carried out under prevailing market conditions;	
 
 	n)	Ensure that at any time its obligations under this agreement shall have the same payment preference (pari passu) as its other debts with third party creditors. These restrictions shall not be applied to any case where the agreement considers them Permitted Encumbrances;	
 
 	o)	Possess, directly or indirectly, shares that represent at least fifty-one percent of the capital of the following Companies: Cencosud Retail S.A. and Cencosud Shopping Centers S.A., and their respective successor companies and transferees, as well as the Companies that eventually control the business areas currently developed by these Companies;	
 
 	p)	Maintain a ratio of net financial liabilities to equity of less than one point two;	
 
 	q)	Maintain assets free of pledges or Encumbrances or at least one hundred twenty percent of the value of liabilities;	
 
 	r)	Not dispose of or transfer, and ensure that the Relevant Subsidiaries do not dispose of or transfer, either directly or indirectly, their Essential Assets, as defined hereinafter. For the purposes of this agreement, “Essential Assets” shall be defined as the brands “Jumbo” and “París” and the shares that represent at least fifty-one percent of the capital of the companies Cencosud Retail S.A. and Cencosud Shopping Centers S.A. and;	
 
 	s)	Not enter into or execute, and not allow Relevant Subsidiaries to enter into or execute any act or agreement to liquidate or dissolve its operations or businesses, nor to agree on, enter into or execute any act to split or merge, when it involves or may involve, directly or indirectly, that the Debtor and/or the Guarantor lose control or ownership of its current businesses, as well as the assets necessary for execution and that it produces or may produce an Important Adverse Effect, except when such acts are for an amount less than or equal to two percent of the consolidated assets of Cencosud S.A.	
 
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10.	As established in the line of credit agreement signed October 1, 2010 between Cencosud Administradora de Tarjetas S.A. as Debtor and Banco Itaú Chile as Creditor, Cencosud S.A., shall comply with the following obligations and financial and management restrictions:	
 
 	a)	Submit to the Bank a copy of its individual and consolidated Financial Statements for each quarter as soon as possible and in any event within thirty days of filing them with the SVS, to the extent that this information is not available on the SVS’s website or another publicly accessible website. If it were not obligated to file this information with the SVS, it must still submit it to the Bank as soon as it is available. These Financial Statements shall be prepared in accordance with IFRS;	
 
 	b)	Submit to the Bank a copy of its individual and consolidated Financial Statements for each year end as soon as possible and in any event within thirty days of filing them with the SVS, to the extent that this information is not available on the SVS’s website or another publicly accessible website. If it were not obligated to file this information with the SVS, it must still submit it to the Bank as soon as it is available. These Financial Statements shall be certified by an independent auditor of recognized international prestige that is registered with the SVS;	
 
 	c)	Along with the Financial Statements referred to in the preceding letters, submit to the Bank a certificate issued by the Chief Executive Officer and/or Chief Financial Officer, or their replacement, that certifies that, to the best of their knowledge and understanding, no grounds for non-compliance or violation, as defined hereinafter, have occurred or detailing the nature and extent of such events if they have occurred;	
 
 	d)	Notify the Bank as soon as possible but no later than five banking days after the date on which any executive has knowledge of: (i) the occurrence of any Grounds for Non-Compliance, as defined hereinafter, or any Non-Compliance; (ii) any action, lawsuit or judicial or administrative proceedings regarding this instrument; (iii) any circumstance or event that affects or could result in an Adverse Important Effect on the businesses, activities, operations or financial situation of the Debtor and/or Cencosud and that results in the inability to pay of the Debtor and/or Cencosud; (iv) any relevant event referring to Cencosud’s and/or the Guarantor’s operations that, in conformity with articles nine and ten of Law eighteen thousand forty-five on Securities Markets and the instructions provided by the SVS in General Character Ruling number thirty, may be interpreted as a material event, to the extent that that information is not available on the SVS’s website or another publicly accessible site;	
 
 	e)	Submit to the Bank, when requested in writing or for justified reasons, additional information on its financial, tax, accounting, economic and/or legal situation, in which case it shall be provided within thirty banking days of the date on which the request is made in writing. Notwithstanding, and at the Bank’s request, it shall inform the Bank of the modifications made to the Company within thirty banking days of the event, submitting all pertinent information, and shall also inform the Bank of all new powers of attorney or the revocation of current powers of attorney, providing a copy of the corresponding public deeds;	
 
 	f)	Submit to the Bank, at its request, information necessary to correctly apply the provisions on individual credit limits;	
 
 	g)	Maintain and ensure that each Subsidiary maintains its books, records and accounting notes in which it makes complete, timely and reliable notes in conformity with current standards and IFRS;	
 
 	h)	Maintain all relevant rights, licenses, permits, brands, franchises, concessions or patents fully valid, with the understanding, however, that these rights, licenses, permits, brands, franchises, concessions or patents may be surrendered to the extent that they do not involve an Important Adverse Effect. In particular, it shall maintain ownership of the following brands directly or through its subsidiaries: (i) “Jumbo” and (ii) “París”;	
 
 	i)	Comply with and ensure that each Subsidiary complies with each and every one of its obligations by virtue of any act, contract or convention, whose failure to comply produces or could produce, individually or collectively, an Important Adverse Effect;	
 
 	j)	Comply with and ensure that each Relevant Subsidiary complies with current laws and standards applicable to the development of its business and ownership of its assets;	
 
 	k)	Pay and ensure that each Subsidiary pays, fully and opportunely, all important obligations, which are understood for the purposes of this instrument as those obligations that are important for the business, operations, financial or other conditions, projections, including but not limited to all taxes, charges or property taxes it must pay, as well as all obligations that, for taxes, charges, property taxes, labor matters or obligations with its suppliers or others, may result in an Encumbrance, except when compliance of these obligations is challenged through proper legal proceedings initiated in good faith and adequate accounting provisions have been established in accordance with IFRS;	
 
 	l)	Maintain and ensure that each Relevant Subsidiary maintains all assets necessary to keep its businesses and operations in proper working order and maintenance, except for wear resulting from legitimate use. It shall also maintain and ensure that each Relevant Subsidiary maintains proper insurance coverage for these assets in conformity with industry practice;	
 
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 	m)	Ensure that all operations with related persons, as defined in law number eighteen thousand forty-five, either directly or through related persons, are carried out under prevailing market conditions;	
 
 	n)	Ensure that at any time its obligations under this agreement shall have the same payment preference (pari passu) as its other debts with third party creditors. These restrictions shall not be applied to any case where the agreement considers them Permitted Encumbrances;	
 
 	o)	Maintain direct or indirect ownership of at least fifty-one percent of Cencosud Retail S.A. and Cencosud Shopping Centers S.A., as well as its successor companies and transferees and the Companies that eventually control the business areas currently developed by these Companies;	
 
 	p)	Maintain a ratio of net financial liabilities to equity of less than one point two. For these purposes, net financial liabilities shall be defined as all consolidated current financial debt of Cencosud S.A. less the sum of the items Cash, Time Deposits, Marketable Securities and repo agreements and forward contracts accounted for in Other Assets. Net Financial Debt shall also include the obligations that the company undertakes as endorser or simple or joint guarantor and all obligations where it responds directly or indirectly for obligations of unrelated third parties. In no case shall net Financial Debt include the liabilities owed by Banco París;	
 
 	q)	Maintain a ratio of total liabilities to equity of less than one point five;	
 
 	r)	Maintain minimum equity of twenty-eight million UF.	
 
 	s)	Not dispose of or transfer, and ensure that the Relevant Subsidiaries do not dispose of or transfer, either directly or indirectly, their Essential Assets, as defined hereinafter. For the purposes of this agreement, “Essential Assets” shall be defined as the brands “Jumbo” and “París” and the shares that represent at least fifty-one percent of the capital of the companies Cencosud Retail S.A. and Cencosud Shopping Centers S.A. and;	
 
 	t)	Not enter into or execute, and not allow Relevant Subsidiaries to enter into or execute any act or agreement to liquidate or dissolve its operations or businesses, nor to agree on, enter into or execute any act to split or merge, when it involves or may involve, directly or indirectly, losing control or ownership of its current businesses, as well as the assets necessary for execution and that it produces or may produce an Important Adverse Effect, except when such acts are for an amount less than or equal to two percent of the consolidated assets of Cencosud S.A.	
 
11.	As established in the line of credit agreement signed October 1, 2010 between Cencosud Retail S.A. as Debtor and Banco Itaú Chile as Creditor, Cencosud S.A., shall comply with the following obligations and financial and management restrictions:	
 
 	a)	Submit to the Bank a copy of its individual and consolidated Financial Statements for each quarter as soon as possible and in any event within thirty days of filing them with the SVS, to the extent that this information is not available on the SVS’s website or another publicly accessible website. If it were not obligated to file this information with the SVS, it must still submit it to the Bank as soon as it is available. These Financial Statements shall be prepared in accordance with IFRS;	
 
 	b)	Submit to the Bank a copy of its individual and consolidated Financial Statements for each year end as soon as possible and in any event within thirty days of filing them with the SVS, to the extent that this information is not available on the SVS’s website or another publicly accessible website. If it were not obligated to file this information with the SVS, it must still submit it to the Bank as soon as it is available. These Financial Statements shall be certified by an independent auditor of recognized international prestige that is registered with the SVS;	
 
 	c)	Along with the Financial Statements referred to in the preceding letters, submit to the Bank a certificate issued by the Chief Executive Officer and/or Chief Financial Officer, or their replacement, that certifies that, to the best of their knowledge and understanding, no grounds for non-compliance or violation, as defined hereinafter, have occurred or detailing the nature and extent of such events if they have occurred;	
 
 	d)	Notify the Bank as soon as possible but no later than five banking days after the date on which any executive has knowledge of: (i) the occurrence of any Grounds for Non-Compliance, as defined hereinafter, or any Non-Compliance; (ii) any action, lawsuit or judicial or administrative proceedings regarding this instrument; (iii) any circumstance or event that affects or could result in an Adverse Important Effect on the businesses, activities, operations or financial situation of the Debtor and/or Cencosud and that results in the inability to pay of the Debtor and/or Cencosud; (iv) any relevant event referring to Cencosud’s and/or the Guarantor’s operations that, in conformity with articles nine and ten of Law eighteen thousand forty-five on Securities Markets and the instructions provided by the SVS in General Character Ruling number thirty, may be interpreted as a material event, to the extent that that information is not available on the SVS’s website or another publicly accessible site;	
 
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 	e)	Submit to the Bank, when requested in writing or for justified reasons, additional information on its financial, tax, accounting, economic and/or legal situation, in which case it shall be provided within thirty banking days of the date on which the request is made in writing. Notwithstanding, and at the Bank’s request, it shall inform the Bank of the modifications made to the Company within thirty banking days of the event, submitting all pertinent information, and shall also inform the Bank of all new powers of attorney or the revocation of current powers of attorney, providing a copy of the corresponding public deeds;	
 
 	f)	Submit to the Bank, at its request, information necessary to correctly apply the provisions on individual credit limits;	
 
 	g)	Maintain and ensure that each Subsidiary maintains its books, records and accounting notes in which it makes complete, timely and reliable notes in conformity with current standards and IFRS;	
 
 	h)	Maintain all relevant rights, licenses, permits, brands, franchises, concessions or patents fully valid, with the understanding, however, that these rights, licenses, permits, brands, franchises, concessions or patents may be surrendered to the extent that they do not involve an Important Adverse Effect. In particular, it shall maintain ownership of the following brands directly or through its subsidiaries: (i) “Jumbo” and (ii) “París”;	
 
 	i)	Comply with and ensure that each Subsidiary complies with each and every one of its obligations by virtue of any act, contract or convention, whose failure to comply produces or could produce, individually or collectively, an Important Adverse Effect;	
 
 	j)	Comply with and ensure that each Relevant Subsidiary complies with current laws and standards applicable to the development of its business and ownership of its assets;	
 
 	k)	Pay and ensure that each Subsidiary pays, fully and opportunely, all important obligations, which are understood for the purposes of this instrument as those obligations that are important for the business, operations, financial or other conditions, projections, including but not limited to all taxes, charges or property taxes it must pay, as well as all obligations that, for taxes, charges, property taxes, labor matters or obligations with its suppliers or others, may result in an Encumbrance, except when compliance of these obligations is challenged through proper legal proceedings initiated in good faith and adequate accounting provisions have been established in accordance with IFRS;	
 
 	l)	Maintain and ensure that each Relevant Subsidiary maintains all assets necessary to keep its businesses and operations in proper working order and maintenance, except for wear resulting from legitimate use. It shall also maintain and ensure that each Relevant Subsidiary maintains proper insurance coverage for these assets in conformity with industry practice;	
 
 	m)	Ensure that all operations with related persons, as defined in law number eighteen thousand forty-five, either directly or through related persons, are carried out under prevailing market conditions;	
 
 	n)	Ensure that at any time its obligations under this agreement shall have the same payment preference (pari passu) as its other debts with third party creditors. These restrictions shall not be applied to any case where the agreement considers them Permitted Encumbrances;	
 
 	o)	Maintain direct or indirect ownership of at least fifty-one percent of Cencosud Retail S.A. and Cencosud Shopping Centers S.A., as well as its successor companies and transferees and the Companies that eventually control the business areas currently developed by these Companies;	
 
 	p)	Maintain a ratio of net financial liabilities to equity of less than one point two. For these purposes, net financial liabilities shall be defined as all consolidated current financial debt of Cencosud S.A. less the sum of the items Cash, Time Deposits, Marketable Securities and repo agreements and forward contracts accounted for in Other Assets. Net Financial Debt shall also include the obligations that the company undertakes as endorser or simple or joint guarantor and all obligations where it responds directly or indirectly for obligations of unrelated third parties. In no case shall net Financial Debt include the liabilities owed by Banco París;	
 
 	q)	Maintain a ratio of total liabilities to equity of less than one point five;	
 
 	r)	Maintain minimum equity of twenty-eight million UF.	
 
 	s)	Not dispose of or transfer, and ensure that the Relevant Subsidiaries do not dispose of or transfer, either directly or indirectly, their Essential Assets, as defined hereinafter. For the purposes of this agreement, “Essential Assets” shall be defined as the brands “Jumbo” and “París” and the shares that represent at least fifty-one percent of the capital of the companies Cencosud Retail S.A. and Cencosud Shopping Centers S.A. and;	
 
 	t)	Not enter into or execute, and not allow Relevant Subsidiaries to enter into or execute any act or agreement to liquidate or dissolve its operations or businesses, nor to agree on, enter into or execute any act to split or merge, when it involves or may involve, directly or indirectly, losing control or ownership of its current businesses, as well as the assets necessary for execution and that it produces or may produce an Important Adverse Effect, except when such acts are for an amount less than or equal to two percent of the consolidated assets of Cencosud S.A.	
 
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12.	As established in the line of credit agreement signed October 12, 2010 between Cencosud S.A. as Debtor and Banco de Chile as Creditor, Cencosud S.A., shall comply with the following obligations and financial and management restrictions:	
 
 	a)	Submit to the Bank a copy of the Debtor’s individual and consolidated Financial Statements for each quarter as soon as possible and in any event within thirty days of filing them with the SVS, to the extent that this information is not available on the SVS’s website or another publicly accessible website. If the Debtor were not obligated to file this information with the SVS, it must still submit it to the Bank as soon as it is available. These Financial Statements shall be prepared in accordance with IFRS;	
 
 	b)	Submit to the Bank a copy of the Debtor’s individual and consolidated Financial Statements for each year end as soon as possible and in any event within thirty days of filing them with the SVS, to the extent that this information is not available on the SVS’s website or another publicly accessible website. If the Debtor were not obligated to file this information with the SVS, it must still submit it to the Bank as soon as it is available. These Financial Statements shall be certified by an independent auditor of recognized international prestige that is registered with the SVS;	
 
 	c)	Along with the Financial Statements referred to in the preceding letters, submit to the Bank a certificate issued by the Debtor’s Chief Executive Officer and/or Chief Financial Officer, or their replacement, that certifies that, to the best of their knowledge and understanding, no Grounds for Non-Compliance has occurred or detailing the nature and extent of such events if they have occurred;	
 
 	d)	Notify the Bank as soon as possible but no later than five banking days after the date on which any executive of the Debtor has knowledge of: (i) the occurrence of any Grounds for Non-Compliance; (ii) any action, lawsuit or judicial or administrative proceedings regarding this instrument; (iii) any circumstance or event that affects or could result in an Adverse Important Effect on the businesses, activities, operations or financial situation of the Debtor and that results in the inability to pay of the Debtor; (iv) any relevant event referring to the Debtor’s operations that, in conformity with articles nine and ten of Law eighteen thousand forty-five on Securities Markets and the instructions provided by the SVS in General Character Ruling number thirty, may be interpreted as a material event, to the extent that that information is not available on the SVS’s website or another publicly accessible site;	
 
 	e)	Submit to the Bank, when requested in writing or for justified reasons, additional information on the financial, tax, accounting, economic and/or legal situation of the Debtor, in which case it shall be provided within thirty banking days of the date on which the request is made in writing. Notwithstanding, and at the Bank’s request, the Debtor shall inform the Bank of the modifications made to the Company within thirty banking days of the event, submitting all pertinent information, and shall also inform the Bank of all new powers of attorney or the revocation of current powers of attorney, providing a copy of the corresponding public deeds;	
 
 	f)	Submit to the Bank, at its request, information necessary to correctly apply the provisions on individual credit limits;	
 
 	g)	Maintain and ensure that each Subsidiary maintains its books, records and accounting notes in which it makes complete, timely and reliable notes in conformity with current standards and IFRS;	
 
 	h)	Maintain all relevant rights, licenses, permits, brands, franchises, concessions or patents fully valid, with the understanding. However, the Debtor or any of its Subsidiaries may surrender these rights, licenses, permits, brands, franchises, concessions or patents to the extent that they do not involve an Important Adverse Effect. In particular, it shall maintain ownership of the following brands directly: (i) “Jumbo” and (ii) “París”;	
 
 	i)	Comply with and ensure that each Subsidiary complies with each and every one of its obligations by virtue of any act, contract or convention, whose failure to comply produces or could produce, individually or collectively, an Important Adverse Effect;	
 
 	j)	Comply with and ensure that each Relevant Subsidiary complies with current laws and standards applicable to the development of its business and ownership of its assets;	
 
 	k)	Pay and ensure that each Subsidiary pays, fully and opportunely, all important obligations, which are understood for the purposes of this instrument as those obligations that are important for the Debtor’s business, operations, financial or other conditions, projections, including but not limited to all taxes, charges or property taxes it must pay, as well as all obligations that, for taxes, charges, property taxes, labor matters or obligations with its suppliers or others, may result in an Encumbrance, except when compliance of these obligations is challenged by the Debtor or a Relevant Subsidiary, through proper legal proceedings initiated in good faith and adequate accounting provisions have been established in accordance with IFRS;	
 
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 	l)	Maintain and ensure that each Relevant Subsidiary maintains all assets necessary to keep its businesses and operations in proper working order and maintenance, except for wear resulting from legitimate use. The Debtor shall also maintain and ensure that each Relevant Subsidiary maintains proper insurance coverage for these assets in conformity with industry practice;	
 
 	m)	Ensure that all operations with related persons, as defined in law number eighteen thousand forty-five, either directly or through related persons, are carried out under prevailing market conditions;	
 
 	n)	Ensure that at any time the obligation listed in the first clause shall have the same payment preference (pari passu) as its other debts with third party creditors. These restrictions shall not be applied to any case considered Permitted Encumbrances by the agreement;	
 
 	o)	Maintain direct or indirect ownership of at least fifty-one percent of Cencosud Retail S.A. and Cencosud Shopping Centers S.A., as well as its successor companies and transferees and the Companies that eventually control the business areas currently developed by these Companies.	
 
 	p)	Maintain a ratio of net financial liabilities to equity of less than one point two. For these purposes, net financial liabilities shall be defined as all consolidated current financial debt of Cencosud S.A. less the sum of the items Cash, Time Deposits, Marketable Securities and repo agreements and forward contracts accounted for in Other Assets. Net Financial Debt shall also include the obligations that the company undertakes as endorser or simple or joint guarantor and all obligations where it responds directly or indirectly for obligations of unrelated third parties. In no case shall net Financial Debt include the liabilities owed by Banco París;	
 
 	q)	Maintain minimum equity of twenty-eight million UF.	
 
 	r)	Maintain assets free of pledges or Encumbrances or at least one hundred twenty percent of the value of current, unguaranteed liabilities;	
 
 	s)	Not dispose of or transfer, and ensure that the Relevant Subsidiaries do not dispose of or transfer, either directly or indirectly, their Essential Assets, as defined hereinafter. For the purposes of this agreement, “Essential Assets” shall be defined as the brands “Jumbo” and “París” and the shares that represent at least fifty-one percent of the capital of the companies Cencosud Retail S.A. and Cencosud Shopping Centers S.A. and;	
 
 	t)	Not enter into or execute, and not allow Relevant Subsidiaries to enter into or execute any act or agreement to liquidate or dissolve its operations or businesses, nor to agree on, enter into or execute any act to split or merge, when it causes or may cause the Debtor, directly or indirectly, to lose control or ownership of its current businesses, as well as the assets necessary for execution and that it produces or may produce an Important Adverse Effect, except when such acts are for an amount less than or equal to two percent of the consolidated assets of Cencosud S.A.	
 
13.	As established in the line of credit agreement signed October 12, 2010 between Cencosud Retail S.A. as Debtor and Banco de Crédito e Inversiones as Creditor, Cencosud S.A., shall comply with the following obligations and financial and management restrictions:	
 
 	a)	Submit to the Bank a copy of its individual and consolidated Financial Statements for each quarter as soon as possible and in any event within thirty days of filing them with the SVS, to the extent that this information is not available on the SVS’s website or another publicly accessible website. If it were not obligated to file this information with the SVS, it must still submit it to the Bank as soon as it is available. These Financial Statements shall be prepared in accordance with IFRS;	
 
 	b)	Submit to the Bank a copy of its individual and consolidated Financial Statements for each year end as soon as possible and in any event within thirty days of filing them with the SVS, to the extent that this information is not available on the SVS’s website or another publicly accessible website. If it were not obligated to file this information with the SVS, it must still submit it to the Bank as soon as it is available. These Financial Statements shall be certified by an independent auditor of recognized international prestige that is registered with the SVS;	
 
 	c)	Along with the Financial Statements referred to in the preceding letters, submit to the Bank a certificate issued by the Chief Executive Officer and/or Chief Financial Officer, or their replacement, that certifies that, to the best of their knowledge and understanding, no grounds for non-compliance or violation, as defined hereinafter, have occurred or detailing the nature and extent of such events if they have occurred;	
 
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 	d)	Notify the Bank as soon as possible but no later than five banking days after the date on which any executive has knowledge of: (i) the occurrence of any Grounds for Non-Compliance, as defined hereinafter, or any Non-Compliance; (ii) any action, lawsuit or judicial or administrative proceedings regarding this instrument; (iii) any circumstance or event that affects or could result in an Adverse Important Effect on the businesses, activities, operations or financial situation of the Debtor and/or Cencosud and that results in the inability to pay of the Debtor and/or Cencosud; (iv) any relevant event referring to Cencosud’s and/or the Guarantor’s operations that, in conformity with articles nine and ten of Law eighteen thousand forty-five on Securities Markets and the instructions provided by the SVS in General Character Ruling number thirty, may be interpreted as a material event, to the extent that that information is not available on the SVS’s website or another publicly accessible site;	
 
 	e)	Submit to the Bank, when requested in writing or for justified reasons, additional information on its financial, tax, accounting, economic and/or legal situation, in which case it shall be provided within thirty banking days of the date on which the request is made in writing. Notwithstanding, and at the Bank’s request, it shall inform the Bank of the modifications made to the Company within thirty banking days of the event, submitting all pertinent information, and shall also inform the Bank of all new powers of attorney or the revocation of current powers of attorney, providing a copy of the corresponding public deeds;	
 
 	f)	Submit to the Bank, at its request, information necessary to correctly apply the provisions on individual credit limits;	
 
 	g)	Maintain and ensure that each Subsidiary maintains its books, records and accounting notes in which it makes complete, timely and reliable notes in conformity with current standards and IFRS;	
 
 	h)	Maintain all relevant rights, licenses, permits, brands, franchises, concessions or patents fully valid, with the understanding, however, that these rights, licenses, permits, brands, franchises, concessions or patents may be surrendered to the extent that they do not involve an Important Adverse Effect. In particular, it shall maintain ownership of the following brands directly or through its subsidiaries: (i) “Jumbo” and (ii) “París”;	
 
 	i)	Comply with and ensure that each Subsidiary complies with each and every one of its obligations by virtue of any act, contract or convention, whose failure to comply produces or could produce, individually or collectively, an Important Adverse Effect;	
 
 	j)	Comply with and ensure that each Relevant Subsidiary complies with current law and standards applicable to the development of its business and ownership of its assets;	
 
 	k)	Pay and ensure that each Subsidiary pays, fully and opportunely, all important obligations, which are understood for the purposes of this instrument as those obligations that are important for the business, operations, financial or other conditions, projections, including but not limited to all taxes, charges or property taxes it must pay, as well as all obligations that, for taxes, charges, property taxes, labor matters or obligations with its suppliers or others, may result in an Encumbrance, except when compliance of these obligations is challenged through proper legal proceedings initiated in good faith and adequate accounting provisions have been established in accordance with IFRS;	
 
 	l)	Maintain and ensure that each Relevant Subsidiary maintains all assets necessary to keep its businesses and operations in proper working order and maintenance, except for wear resulting from legitimate use. It shall also maintain and ensure that each Relevant Subsidiary maintains proper insurance coverage for these assets in conformity with industry practice;	
 
 	m)	Ensure that all operations with related persons, as defined in law number eighteen thousand forty-five, either directly or through related persons, are carried out under prevailing market conditions;	
 
 	n)	Ensure that at any time its obligations under this agreement shall have the same payment preference (pari passu) as its other debts with third party creditors. These restrictions shall not be applied to any case where the agreement considers them Permitted Encumbrances;	
 
 	o)	Maintain direct or indirect ownership of at least fifty-one percent of Cencosud Retail S.A. y Cencosud Shopping Centers S.A., as well as its successor companies and transferees and the Companies that eventually control the business areas currently developed by these Companies;	
 
 	p)	Maintain a ratio of net financial liabilities to equity of less than one point two. For these purposes, net financial liabilities shall be defined as all consolidated current financial debt of Cencosud S.A. less the sum of the items Cash, Time Deposits, Marketable Securities and repo agreements and forward contracts accounted for in Other Assets. Net Financial Debt shall also include the obligations that the company undertakes as endorser or simple or joint guarantor and all obligations where it responds directly or indirectly for obligations of unrelated third parties. In no case shall net Financial Debt include the liabilities owed by Banco París;	
 
 	q)	Maintain a ratio of total liabilities to equity of less than one point five;	
 
 	r)	Maintain minimum equity of twenty-eight million UF.	
 
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 	s)	Not dispose of or transfer, and ensure that the Relevant Subsidiaries do not dispose of or transfer, either directly or indirectly, their Essential Assets, as defined hereinafter. For the purposes of this agreement, “Essential Assets” shall be defined as the brands “Jumbo” and “París” and the shares that represent at least fifty-one percent of the capital of the companies Cencosud Retail S.A. and Cencosud Shopping Centers S.A. and;	
 
 	t)	Not enter into or execute, and not allow Relevant Subsidiaries to enter into or execute any act or agreement to liquidate or dissolve its operations or businesses, nor to agree on, enter into or execute any act to split or merge, when it involves or may involve, directly or indirectly, losing control or ownership of its current businesses, as well as the assets necessary for execution and that it produces or may produce an Important Adverse Effect, except when such acts are for an amount less than or equal to two percent of the consolidated assets of Cencosud S.A.	
 
14.	As established in the Indenture dated January 20, 2011, entered into under the laws of the state of New York, United States, and by virtue of which Rule 144/A bonds were placed in the U.S. market, the Company, hereinafter the Issuer, has the following obligations and management restrictions, among others:	
 
 	a)	Prohibition from granting encumbrances;	
 
 	b)	Prohibition from entering into leaseback agreements;	
 
 	c)	Prohibition from merging or selling all or a substantial part of its assets;	
 
 	d)	Reporting obligations established in Rule 144/A and;	
 
 	e)	Obligation to submit annual and quarterly financial statements to the trustee and bondholders.	
 
15.	As established in the loan agreement signed September 7, 2011 between Cencosud S.A. as Debtor and Banco Bilbao Vizcaya Argentaria Chile as Creditor, Cencosud S.A., shall comply with the following obligations and financial and management restrictions:	
 
 	a)	Submit to the Bank a copy of the Debtor’s consolidated Financial Statements for each quarter as soon as possible and in any event within 30 days of filing them with the SVS, to the extent that this information is not available on the SVS’s website or another publicly accessible website. These Financial Statements shall be prepared in accordance with IFRS or applicable standards in Chile;	
 
 	b)	Submit to the Bank a copy of the Debtor’s individual and consolidated Financial Statements for each year end as soon as possible and in any event within 30 days of filing them with the SVS, to the extent that this information is not available on the SVS’s website or another publicly accessible website. These Financial Statements shall be certified by an independent auditor of recognized international prestige that is registered with the SVS;	
 
 	c)	Along with the Financial Statements referred to in the preceding letters, submit to the Bank a certificate issued by the Debtor’s Chief Executive Officer and/or Chief Financial Officer, or their replacement, that certifies that, to the best of their knowledge and understanding, no Grounds for Non-Compliance has occurred or detailing the nature and extent of such events if they have occurred;	
 
 	d)	Notify the Bank as soon as possible but no later than 5 banking days after the date on which any one of the indicated executives of the Debtor has knowledge of: (i) the occurrence of any Grounds for Non-Compliance or any Non-Compliance; (ii) any action, lawsuit or judicial or administrative proceedings regarding the agreement; (iii) any circumstance or event that affects or could result in an Adverse Important Effect on the businesses, activities, operations or financial situation of the Debtor and that results in the inability to pay of the Debtor; (iv) any relevant event referring to the Debtor’s operations that, in conformity with articles nine and ten of Law eighteen thousand forty-five on Securities Markets and the instructions provided by the SVS in General Character Ruling number thirty, may be interpreted as a material event, to the extent that that information is not available on the SVS’s website or another publicly accessible site and provided that that information is not considered “reserved” in conformity with the law; (v) submit to the Bank, when requested in writing and for justified reasons, additional information on the financial, tax, accounting, economic and/or legal situation of the Debtor, in which case it shall be provided within 30 banking days of the date on which the request is made in writing; (vi) submit to the Bank, at its request, information necessary to correctly apply the provisions on individual credit limits;	
 
 	e)	Maintain and ensure that each Subsidiary maintains its books, records and accounting notes in which it makes complete, timely and reliable notes in conformity with current standards and/or IFRS;	
 
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 	f)	Maintain all relevant rights, licenses, permits, brands, franchises, concessions or patents fully valid, with the understanding, however, that the Debtor or any of its Subsidiaries may surrender these rights, licenses, permits, brands, franchises, concessions or patents to the extent that they do not involve an Important Adverse Effect. In particular, the Debtor shall maintain ownership of the following brands directly or through its subsidiaries: (i) “Jumbo” and (ii) “París”;	
 
 	g)	Comply with and ensure that each Subsidiary complies with each and every one of its obligations by virtue of any act, contract or convention, whose failure to comply produces or could produce, individually or collectively, an Important Adverse Effect;	
 
 	h)	Comply with and ensure that each Relevant Subsidiary complies with current laws and standards applicable to the development of its business and ownership of its assets;	
 
 	i)	Pay and ensure that each Subsidiary pays, fully and opportunely, all important obligations, which are understood for the purposes of this instrument as those obligations that are important for the Debtor’s business, operations, financial or other conditions, including but not limited to all taxes, charges or property taxes it must pay, as well as all obligations that, for taxes, charges, property taxes, labor matters or obligations with its suppliers or others, may result in an Encumbrance, except when compliance of these obligations is challenged by the Debtor or a Relevant Subsidiary, through proper legal proceedings initiated in good faith and adequate accounting provisions have been established in accordance with IFRS or the current standards in Chile;	
 
 	j)	Maintain and ensure that each Relevant Subsidiary maintains all assets necessary to keep its businesses and operations in proper working order and maintenance, except for wear resulting from legitimate use. The Debtor shall also maintain and ensure that each Relevant Subsidiary maintains proper insurance coverage for these assets in conformity with industry practice;	
 
 	k)	Ensure that all operations with related persons, as defined in law number 18,045, either directly or through related persons, are carried out under prevailing market conditions;	
 
 	l)	Ensure that at any time the Debtor’s obligations under this agreement shall have the same payment preference (pari passu) as its other debts with third party creditors, a restriction which is not applicable in cases the agreement defines as Permitted Encumbrances.	
 
 	m)	Possess, directly or indirectly, shares that represent at least 51% of the capital of the following companies: Cencosud Retail S.A., Cencosud Shopping Centers S.A. and Cencosud Administradora de Tarjetas S.A. and their respective successor companies and transferees, as well as the companies that may eventually control the business areas currently developed by these companies.	
 
 	n)	Maintain a ratio of net financial liabilities to equity of less than one point two.	
 
 	o)	Maintain assets free of pledges or Encumbrances or at least one hundred twenty percent of the value of liabilities;	
 
 	p)	Not dispose of or transfer, and ensure that the Relevant Subsidiaries do not dispose of or transfer, either directly or indirectly, their Essential Assets, as defined in the agreement.	
 
 	q)	Not enter into or execute, and not allow Relevant Subsidiaries to enter into or execute any act or agreement to liquidate or dissolve its operations or businesses, nor to agree on, enter into or execute any act to split or merge, when it causes or may cause the Debtor, directly or indirectly, to lose control or ownership of its current businesses, as well as the assets necessary for execution and that it produces or may produce an Important Adverse Effect, except when such acts are for an amount less than or equal to two percent of the consolidated assets of Cencosud S.A.	
 
16.	As established in the loan agreement signed September 14, 2011 between Cencosud S.A. as Debtor and Banco Bice, Chile as Creditor, Cencosud S.A., shall comply with the following obligations and financial and management restrictions:	
 
 	a)	Submit to the Bank a copy of the Debtor’s consolidated Financial Statements for each quarter as soon as possible and in any event within 30 days of filing them with the SVS, to the extent that this information is not available on the SVS’s website or another publicly accessible website. These Financial Statements shall be prepared in accordance with IFRS or applicable standards in Chile;	
 
 	b)	Submit to the Bank a copy of the Debtor’s individual and consolidated Financial Statements for each year end as soon as possible and in any event within 30 days of filing them with the SVS, to the extent that this information is not available on the SVS’s website or another publicly accessible website. These Financial Statements shall be certified by an independent auditor of recognized international prestige that is registered with the SVS;	
 
 	c)	Along with the Financial Statements referred to in the preceding letters, submit to the Bank a certificate issued by the Debtor’s Chief Executive Officer and/or Chief Financial Officer, or their replacement, that certifies that, to the best of their knowledge and understanding, no Grounds for Non-Compliance has occurred or detailing the nature and extent of such events if they have occurred;	
 
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 	d)	Notify the Bank as soon as possible but no later than 5 banking days after the date on which any one of the indicated executives of the Debtor has knowledge of: (i) the occurrence of any Grounds for Non-Compliance or any Non-Compliance; (ii) any action, lawsuit or judicial or administrative proceedings regarding the agreement; (iii) any circumstance or event that affects or could result in an Adverse Important Effect on the businesses, activities, operations or financial situation of the Debtor and that results in the inability to pay of the Debtor; (iv) any relevant event referring to the Debtor’s operations that, in conformity with articles nine and ten of Law eighteen thousand forty-five on Securities Markets and the instructions provided by the SVS in General Character Ruling number thirty, may be interpreted as a material event, to the extent that that information is not available on the SVS’s website or another publicly accessible site and provided that that information is not considered “reserved” in conformity with the law; (v) submit to the Bank, when requested in writing and for justified reasons, additional information on the financial, tax, accounting, economic and/or legal situation of the Debtor, in which case it shall be provided within 30 banking days of the date on which the request is made in writing; (vi) submit to the Bank, at its request, information necessary to correctly apply the provisions on individual credit limits;	
 
 	e)	Maintain and ensure that each Subsidiary maintains its books, records and accounting notes in which it makes complete, timely and reliable notes in conformity with current standards and/or IFRS;	
 
 	f)	Maintain all relevant rights, licenses, permits, brands, franchises, concessions or patents fully valid, with the understanding, however, that the Debtor or any of its Subsidiaries may surrender these rights, licenses, permits, brands, franchises, concessions or patents to the extent that they do not involve an Important Adverse Effect. In particular, the Debtor shall maintain ownership of the following brands directly or through its subsidiaries: (i) “Jumbo” and (ii) “París”;	
 
 	g)	Comply with and ensure that each Subsidiary complies with each and every one of its obligations by virtue of any act, contract or convention, whose failure to comply produces or could produce, individually or collectively, an Important Adverse Effect;	
 
 	h)	Comply with and ensure that each Relevant Subsidiary complies with current laws and standards applicable to the development of its business and ownership of its assets;	
 
 	i)	Pay and ensure that each Subsidiary pays, fully and opportunely, all important obligations, which are understood for the purposes of this instrument as those obligations that are important for the Debtor’s business, operations, financial or other conditions, including but not limited to all taxes, charges or property taxes it must pay, as well as all obligations that, for taxes, charges, property taxes, labor matters or obligations with its suppliers or others, may result in an Encumbrance, except when compliance of these obligations is challenged by the Debtor or a Relevant Subsidiary, through proper legal proceedings initiated in good faith and adequate accounting provisions have been established in accordance with IFRS or the current standards in Chile;	
 
 	j)	Maintain and ensure that each Relevant Subsidiary maintains all assets necessary to keep its businesses and operations in proper working order and maintenance, except for wear resulting from legitimate use. The Debtor shall also maintain and ensure that each Relevant Subsidiary maintains proper insurance coverage for these assets in conformity with industry practice;	
 
 	k)	Ensure that all operations with related persons, as defined in law number 18,045, either directly or through related persons, are carried out under prevailing market conditions;	
 
 	l)	Ensure that at any time the Debtor’s obligations under this agreement shall have the same payment preference (pari passu) as its other debts with third party creditors, a restriction which is not applicable in cases the agreement defines as Permitted Encumbrances.	
 
 	m)	Possess, directly or indirectly, shares that represent at least 51% of the capital of the following companies: Cencosud Retail S.A., Cencosud Shopping Centers S.A. and Cencosud Administradora de Tarjetas S.A. and their respective successor companies and transferees, as well as the companies that may eventually control the business areas currently developed by these companies.	
 
 	n)	Maintain a ratio of net financial liabilities to equity of less than one point two.	
 
 	o)	Maintain assets free of pledges or Encumbrances or at least one hundred twenty percent of the value of its liabilities;	
 
 	p)	Not dispose of or transfer, and ensure that the Relevant Subsidiaries do not dispose of or transfer, either directly or indirectly, their Essential Assets, as defined in the agreement.	
 
 	q)	Not enter into or execute, and not allow Relevant Subsidiaries to enter into or execute any act or agreement to liquidate or dissolve its operations or businesses, nor to agree on, enter into or execute any act to split or merge, when it causes or may cause the Debtor, directly or indirectly, to lose control or ownership of its current businesses, as well as the assets necessary for execution and that it produces or may produce an Important Adverse Effect, except when such acts are for an amount less than or equal to two percent of the consolidated assets of Cencosud S.A.	
 
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17.	As established in the line of credit agreement signed September 20, 2011 between Cencosud S.A. as Debtor and Banco Santander-Chile as Creditor, Cencosud S.A., shall comply with the following obligations and financial and management restrictions:	
 
 	a)	Submit to the Bank its quarterly and annual individual Financial Statements, together with the quarterly consolidated Financial Statements of Cencosud to the extent that these documents have not been published on a publicly accessible website. These Financial Statements shall be submitted to the Bank within sixty days of the corresponding quarter end. The year-end Financial Statements shall be submitted to the Bank within one hundred twenty days of the respective year end. The year-end individual Financial Statements of Cencosud shall be audited and submitted with their notes and the opinion of the Independent Auditors;	
 
 	b)	Supply opportunely, accurately and sufficiently, and to the extent available all financial and accounting information and all other information that the Bank reasonably requests and that is necessary for evaluating and controlling faithful and exact compliance with the Agreement;	
 
 	c)	Comply fully and opportunely with the payment of all relevant obligations considered first-class loans, especially labor, social security, tax and other obligations with such preference. For these purposes, relevant obligations “Relevant Obligations” are those whose cumulative amount exceeds one million United States dollars or their equivalent in domestic currency. A delay of less than thirty days in the payment of the aforementioned obligations shall not be considered non-compliance for the purposes of this clause;	
 
 	d)	Maintain an “Indebtedness Level” based on the Financial Statements of Cencosud of a ratio of Other Current Financial Liabilities and Other Non-Current Financial Liabilities, less Cash and Cash Equivalents, less Other Current Financial Assets, over Cencosud’s Total Equity no greater than one point two. Liabilities shall include the obligations that Cencosud undertakes as endorser, simple and/or joint guarantor and those in which it responds directly or indirectly for obligations of third parties, all in conformity with accounting principles generally accepted in Chile GAAP or IFRS, as appropriate; and	
 
 	e)	Maintain a ratio of Assets Free of Pledges and/or Encumbrances and Liabilities equal to or greater than one point two. For these purposes, “Assets” is defined as all real estate or chattel property and assets, tangible or intangible and securities; and “Liabilities” is defined as all obligations of the debtor, financial or not, contingent or not, less the Equity of Cencosud;	
 
 	f)	Submit to the Bank a copy of its audited annual report within thirty days of its approval at the General Shareholders’ Meeting as set forth in its by-laws—or in the absence of by-laws, by the law—to the extent that these documents have not been published on a publicly accessible website.	
 
18.	As established in the line of credit agreement signed October 04, 2011 between Cencosud S.A. as Debtor and Rabobank Curacao N.V as Creditor, Cencosud S.A., shall comply with the following obligations and financial and management restrictions:	
 
 	a)	Maintain with the rest of the lenders at least the same conditions, guarantees or preferences under this agreement, according to the Chilean law, except for the preferences in favor of the fiscal authority, employees, labor obligations and any other obligation imposed by applicable laws.	
 
 	b)	Not encumber or give guarantee over Assets of Cencosud, except for the mentioned in this agreement.	
 
 	c)	Send the Audited Financial Statements under IFRS and its corresponding notes , as soon as they are available, even if they are not in the S.V.S web site.	
 
 	d)	Send, among with the Financial Information, a letter signed off by the attorneys properly authorized by the debtor, a letter informing comply or not any of the obligations included in this contract.	
 
 	e)	The debtor will inform any relevant or essential event that could be adversely affect within ten bank business days after the event occurs, except for legal exceptions.	
 
 	f)	As soon as take knowledge, and within thirty business bank days, the company should inform the following: i) any potential force major that could affect this contract; ii) any fails to comply to the terms of this agreement, litigation or relevant claims against the debtor or any event that could adversely affect the obligations included in this contract, iii) inform to the bank any deviation in the budget under this contract iv) Any event that could adversely affect and could reasonably occurs, mentioned before.	
 
 	g)	Give to the bank any copy of the documents or notice relevant that could result in any material adversely effect to the bank.	
 
 	h)	Inform any modifications to the by-laws within fifteen business bank days.	
 
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 	i)	Inform to the bank, within ten bank business days, any claim, action or demand initiated against the company by any court or other public or private entity that could cause any material adverse effect.	
 
 	j)	Keep updated the contingencies plans to keep the business on going and make the best effort to accomplish with the main obligations related to licenses, permits, software.	
 
 	k)	Inform to the bank, within ten bank business days the acquisition over or equal to fifty million of US dollars, of any ownership in companies that give to the debtor the control over that company.	
 
 	l)	To pay on time taxes, labor or other obligations.	
 
 	m)	To keep accurate accounting records according to the generally accounting principles accepted in Chile	
 
 	n)	Keep the main asset to the business in good shape, giving proper maintenance, keeping insurance over the asset. Specially the debtor will keep the property of the following bands a) Jumbo and b) Paris	
 
 	o)	Keep its actual business operations and activities.	
 
 	p)	To keep the actual number of shares in its main subsidiaries	
 
 	q)	Comply with the laws, regulations and other legal provisions applicable to its subsidiaries.	
 
 	r)	Maintain the following financial ratios: (i) Leverage Ratio of no more than 1.2; (ii) Consolidated Equity greater than UF 28,000,000; (iii) assets pledges or encumbrances over consolidated liabilities under 1.2	
 
 	s)	Not sell or transfer any essential consolidated asset. Essential asset under this contract are the brands a) Jumbo and Paris, b) the shares that represent at least fifty percent of the companies “Cencosud Retail S.A.” and Cencosud Shopping Centers S.A.	
 
 	t)	Not enter into or execute, and not allow Relevant Subsidiaries to enter into or execute any act or agreement to liquidate or dissolve its operations or businesses, nor to agree on, enter into or execute any act to split or merge, when it involves or may involve, directly or indirectly, losing control or ownership of its current businesses, as well as the assets necessary for execution and that it produces or may produce an Important Adverse Effect.	
 
19.	As established in the credit agreement signed October 19, 2011 between Cencosud S.A. as Debtor and Scotiabank & Trust (Cayman) LDT as Creditor, Cencosud S.A., shall comply with the following obligations and financial and management restrictions:	
 
 	a)	Send the Audited Financial Statements under IFRS and its corresponding notes , as soon as they are available, even if they are not in the S.V.S web site.	
 
 	b)	Send copy of the general information reported by the debtor to the S.V.S to accomplish with any rule.	
 
 	c)	Send the taxes or stamp tax payments to which this contract is affected and inform any action on this taxes.	
 
 	d)	Send, among with the Financial Information, a letter signed off by the attorneys properly authorized by the debtor, a letter informing comply or not any of the obligations included in this contract. Additionally to that the company should send a certificate signed off by the external auditors.	
 
 	e)	Give to the bank any change in relevant events that could result in any material adversely effect to the bank.	
 
 	f)	Ensure that at any time its obligations under this agreement shall have the same payment preference (pari passu) as its other debts with third party creditors.	
 
 	g)	Not sell, transfer or give guarantees over any essential consolidated asset of the company or any subsidiary.	
 
 	h)	The debtor and the guarantors can not incur in other indebtedness, except for those consider as part of the normal business and that can not adversely affect the Company.	
 
 	i)	Keep the main asset to the business in good shape, giving proper maintenance, keeping insurance over the asset.	
 
 	j)	Prohibition to the debtor or guarantor, merging or selling its assets, except for the exceptions consider in this agreement.	
 
 	k)	To keep accurate accounting records according to the generally accounting principles accepted in Chile.	
 
 	l)	To keep actual main business operations.	
 
 	m)	Maintain the following financial ratios: (i) Leverage Ratio of no more than 1.2; (ii) Consolidated Equity greater than UF 28,000,000; (iii) Maintain a financial expense ratio of at least 3.0 to 1.0 and assets pledges or encumbrances over consolidated liabilities under 1.2.	
 
 	n)	Not engage in, with related persons, transactions under conditions that are more that those transactions which could have agree with third parties.	
 
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20.	On December 19, 2005, E Wong and Hipermercados Metro (Originators) with assistance from Scotia Titulizadora (trustee), entered into a Securitization Trust Master Agreement.	
On March 14, 2011, a prepayment of 55,500,000 Peruvian soles was made on the First Issuance and the First Series-Second Issuance of the Securitized Bonds, leaving outstanding the second series of the second issuance of bonds, equivalent to 11,000,000.00 Peruvian soles. On May 23, 2011, the Fourth Addendum of the Securitization Trust Master Agreement was entered into, by which the term “Indirect Contingents” was modified to exclude Cencosud Perú as a third party and to extinguish the Usufruct of the Patrimony in Trust. The Patrimony in Trust is comprised of the Future Cash Flows arising from the sales made by the Originators in the normal development of their commercial activities and that are paid using any of the Chosen Credit and/or Debit Cards (cards affiliated with the Mastercard network). These cash flows are accumulated in accounts designated for that purpose and back quarterly interest and annual principal payments of the Securitized Bonds.
Financial and Management Restrictions:
 
 	a)	Corporate restructuring: do not take part in any merger, consolidation, split or multi-level reorganization that generates indebtedness greater than the indebtedness limit (less than or equal to 2.20). In the event of non-compliance, 100% of the surplus available for covenants shall be withheld.	
 
 	b)	Chosen Credit and or Debit Card Sales System: maintain the sales system referred to in the credit and or debit card acceptance of greater than or equal to 1.6 times the outstanding debt on the Securitized Bonds. In the event of non-compliance, 10% of the surplus available for covenants shall be withheld.	
 
 	c)	Obligation to maintain insurance in effect: maintain in effect the insurance policies contracted for real estate owned by the company. In the event of non-compliance, 100% of the surplus available for covenants shall be withheld.	
 
 	d)	Paying Bank and Issuing Bank System: select the credit and or debit card issuing bank as the paying bank when designated. In the event of non-compliance, 10% of the surplus available for covenants shall be withheld.	
 
 	e)	Equity Indebtedness Limit: Not exceed a consolidated debt to equity ratio based on the table below:	

Years	  	2009	 	  	2010	 	  	2011	 	  	2012	 	  	2013	 	  	2014	 	  	2015	 	
Ratio	  	 	2.20	  	  	 	2.00	  	  	 	2.00	  	  	 	2.00	  	  	 	2.00	  	  	 	2.00	  	  	 	2.00	  	
Indirect indebtedness: Maintain an indirect indebtedness ratio less than or equal to 0.10.
In the event of non-compliance by the Supermercados Wong Group, the trustee shall withhold 10% of the Surplus Available for Covenants. If non-compliance were to continue for a period of 30 calendar days, it shall withhold 20% of the Surplus Available for Covenants, and so on until reaching a limit of 50% of the Surplus Available for Covenants.
 
 	f)	Interest coverage ratio: Maintain an interest coverage ratio greater than or equal to 2.50.	
 
 	g)	Distribution of Dividends and other limitations: It undertakes that the amounts paid during each fiscal year to its shareholders for dividends in cash or in kind or allowances paid to the Board of Directors not exceed 50% of the net profits for the year. In case of non-compliance, 100% of the surplus available for covenants shall be withheld.	
 
 	h)	Intra-group commercial transactions: Not sell or provide services to Group companies or their shareholders at prices and conditions other than those applied to their customers that do not belong to the Group. In case of non-compliance, 100% of the surplus available for covenants shall be withheld.	
 
 	i)	Acquisition of securities of Group companies: Not acquire securities issued by, or belonging to, the companies that comprise the Group, whether investment instruments (such as common shares or investment shares), debt instruments (such as corporate bonds, securitized bonds or commercial paper), or acquire portfolios or accounts receivable from those companies. In case of non-compliance, 100% of the surplus available for covenants shall be withheld.	
 
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21.	On September 2, 2010, Cencosud Perú S.A. and Banco Continental entered into a medium-term loan agreement by which Cencosud Perú S.A. commits to adopting the following measures over the life of the agreement. E. Wong S.A. and Hipermercados Metro S.A. were established as guarantors of this loan. Financial and Management Restrictions:	
 
 	a)	Corporate obligations: Preserve and maintain the corporate existence, corporate objective, authorizations, licenses and permits required to conduct business.	
 
 	b)	Submit quarterly and annual audited financial statements.	
 
 	c)	Submit quarterly Compliance Certificate for Affirmative, Negative and Financial Obligations.	
 
 	d)	Report any event that may have a Substantially Adverse Effect.	
 
 	e)	Maintain accounting books and records in accordance with accounting principles generally accepted in Peru.	
 
 	f)	Comply with applicable laws, including tax, social security, labor, pension, environmental and other types of legal provisions, as well as requirements from Governmental Authorities.	
 
 	g)	Comply with tax and social security obligations.	
 
 	h)	Maintain assets and insurance policies.	
 
 	i)	Maintain ownership of the Wong and Metro brands and future brands related to the supermarket business, either directly or through subsidiaries.	
 
 	j)	Maintain direct or indirect ownership of 51% of Wong and Metro and their respective successor companies or transferees.	
 
 	k)	Maintain income from the retail and shopping center business areas equivalent to 70.00% of consolidated income.	
 
 	l)	Indebtedness ratio: Maintain an indebtedness ratio of less than 1.50.	
 
 	m)	Net equity should be greater than S/ 1,500,000,000.00 (one point five billion Nuevos Soles).	
 
 	n)	Cencosud Perú and the guarantors undertake not to distribute profits, reduce their paid-in capital, pay dividends, hand over real estate or chattel property, money, rights, obligations, securities, make capital investments and increase the amount of their Financial Debt if it could result in a Non-Compliance Event.	
 
 	o)	Cencosud Perú and the guarantors undertake not to grant loans or guarantees in favor of third parties outside the normal course of business, unless to a subsidiary and in the normal course of business.	
 
 	p)	Cencosud Perú and the guarantors undertake not to dispose of, transfer, give an interest in or sell the Assets that collectively represent 70% of its Equity.	
 
 	q)	Cencosud Perú and the guarantors undertake not to engage in transactions involving the transfer of current or future cash flows.	
 
 	r)	Cencosud Perú, the guarantors and/or any subsidiary may not grant guarantees in favor of third parties that involve pledging their assets or transferring them to a trust (except to guarantee loans secured to acquire such assets and/or replace guarantees), if the ratio of the collective assets (not pledged with specific guarantees) of Cencosud Perú and subsidiaries to the total unguaranteed Financial Debt of Cencosud Perú S.A. on a consolidated level is less than or equal to 1.25.	
 
 	s)	Cencosud Perú and the guarantors undertake not to engage in any merger process with or acquire shares or interests in affiliates if such act may result in a materially adverse effect.	
 
 	t)	Cencosud Perú and/or any of its subsidiaries may not engage directly or indirectly in activities developed outside the Cencosud S.A. Group.	
 
 	u)	Not make the Loan subordinate to other obligations with third parties.	
 
 	v)	Not transfer or delegate the Loan.	
 
 	w)	Transactions with related companies should be at market value.	
 
 	x)	Should the Suspending Financial Ratios established in the Agreement be violated while the Agreement is in effect, the Borrower and the Guarantors may not: (i) agree on the direct or indirect distribution of profits, reduce their paid-in capital, pay dividends, either in money or in kind, hand over real estate or chattel property, money, rights, obligations, securities and other considerations for an interest in the company’s capital (ii) make capital investments and (iii) increase the amount of their Financial Debt. The restriction established in the prior paragraph shall not apply if the Borrower and the Guarantors designate all funds from any profit distribution agreement to prepaying the Loan.	
 
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22.	On November 16, 2010, Cencosud Perú S.A. and Banco Bilbao Vizcaya Argentaria S.A. entered into a medium-term loan agreement by which Cencosud Perú S.A. commits to adopting the following measures over the life of the agreement. E. Wong S.A., Hipermercados Metro S.A. and Tres Palmeras S.A. were established as guarantors of this loan.	
Financial and Management Restrictions:
 
 	a)	Corporate obligations: Preserve and maintain the corporate existence, corporate objective, authorizations, licenses and permits required to conduct business.	
 
 	b)	Submit quarterly and annual audited financial statements.	
 
 	c)	Submit quarterly Compliance Certificate for Affirmative, Negative and Financial Obligations.	
 
 	d)	Report any event that may have a Substantially Adverse Effect.	
 
 	e)	Maintain accounting books and records in accordance with accounting principles generally accepted in Peru.	
 
 	f)	Comply with applicable laws, including tax, social security, labor, pension, environmental and other types of legal provisions, as well as requirements from Governmental Authorities.	
 
 	g)	Compliance with tax and social security obligations.	
 
 	h)	Maintain assets and insurance policies.	
 
 	i)	Maintain ownership of the Wong and Metro brands and future brands related to the supermarket business, either directly or through subsidiaries.	
 
 	j)	Maintain direct or indirect ownership of 51% of Wong and Metro and their respective successor companies or transferees.	
 
 	k)	Maintain income from the retail and shopping center business areas equivalent to 70.00% of consolidated income.	
 
 	l)	Indebtedness ratio: Maintain an indebtedness ratio of less than 1.50.	
 
 	m)	Net equity should be greater than S 1,500,000,000.00 (one point five billion Nuevos Soles).	
 
 	n)	Cencosud Perú and the guarantors undertake to not grant loans or guarantees in favor of third parties outside the normal course of business, unless to a subsidiary and in the normal course of business.	
 
 	o)	Cencosud Perú and the guarantors undertake not to dispose of, transfer give an interest in or sell relevant assets.	
 
 	p)	Cencosud Perú and the guarantors undertake not to engage in transactions involving the transfer of current or future cash flows.	
 
 	q)	Cencosud Perú, the guarantors and/or any subsidiary may not grant guarantees in favor of third parties that involve pledging their assets or transferring them to a trust (except to guarantee loans secured to acquire such assets and/or replace guarantees), if the ratio of the collective assets (not pledged with specific guarantees) of Cencosud Perú and subsidiaries to the total unguaranteed Financial Debt of Cencosud Perú S.A. on a consolidated level is less than or equal to 1.25.	
 
 	r)	Cencosud Perú and the guarantors undertake not to engage in any merger, split, consolidation, transfer of property, plant and equipment used in production or to acquire new businesses if such act may result in a Materially Adverse Effect.	
 
 	s)	Cencosud Perú and/or any of its subsidiaries may not engage directly or indirectly in activities developed outside the Cencosud S.A. Group.	
 
 	t)	Not make the Loan subordinate to other obligations with third parties.	
 
 	u)	Not transfer or delegate the Loan.	
 
 	v)	Transactions with related companies should be at market value.	
Should the Suspending Financial Ratios established in the Agreement be violated while the Agreement is in effect, the Borrower and the Guarantors may not: (i) agree on the direct or indirect distribution of profits, reduce their paid-in capital, pay dividends, either in money or in kind, hand over real estate or chattel property, money, rights, obligations, securities and other considerations for an interest in the company’s capital (ii) make capital investments and (iii) increase the amount of their Financial Debt. The restriction established in the prior paragraph shall not apply if the Borrower and the Guarantors designate all funds from any profit distribution agreement to prepaying the Loan.
 
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23.	On December 23, 2010, Cencosud Perú S.A. and Banco de Crédito del Perú entered into a medium-term loan agreement by which Cencosud Perú S.A. commits to adopting the following measures over the life of the agreement. E. Wong S.A., Hipermercados Metro S.A. and Tres Palmeras S.A. were established as guarantors of this loan.	
Financial and Management Restrictions:
 
 	a)	Corporate obligations: Preserve and maintain the corporate existence, corporate objective, authorizations, licenses and permits required to conduct business.	
 
 	b)	Submit quarterly and annual audited financial statements.	
 
 	c)	Submit quarterly Compliance Certificate for Affirmative, Negative and Financial Obligations and a certificate confirming that no Non-Compliance Events or Substantially Adverse Events have occurred.	
 
 	d)	Maintain accounting books and records in accordance with accounting principles generally accepted in Peru.	
 
 	e)	Notify the Bank of any meeting of creditors, insolvency proceedings or any other payment suspension process initiated under Applicable Law.	
 
 	f)	Comply with applicable laws, including tax, social security, labor, pension, environmental and other types of legal provisions, as well as requirements from Governmental Authorities.	
 
 	g)	Maintain assets and insurance policies.	
 
 	h)	Maintain sureties in effect during the life of the Loan.	
 
 	i)	Not distribute dividends or any other form of profit distribution when a Non-Compliance Event could result from that distribution.	
 
 	j)	Not sell, lease, give in usufruct, dispose of or transfer its property, plant and equipment and/or transfer the rights to them, including transfers to a trust for an amount greater than 30% of net consolidated equity.	
 
 	k)	Not grant financing or guarantees in favor of third party individuals or entities or in favor of their Affiliates (except in favor of its Subsidiaries) for an individual or aggregate amount of US$3,500,000 or its equivalent in Nuevos Soles.	
 
 	l)	Not transfer the Loan, except with prior written authorization.	
 
 	m)	Cencosud Perú and its Subsidiaries shall not establish guarantees over its property, plant and equipment.	
 
 	n)	Maintain a leverage ratio equal to or less than 1.5.	
 
 	o)	Not make capital investments related to the acquisition, improvement or replacement of property, plant and equipment or dividend distributions when the debt service coverage ratio is less than 1.80 during the immediately prior period or the following projected period.	
 
 	p)	Not take out debt with shareholders, directors, managers or Subsidiaries, except when such debt is subordinate to the Bank’s debt.	
 
 	q)	Cencosud Perú and the guarantors undertake not to take part in any liquidation, merger or other type of corporate reorganization process, except with a company from the Cencosud Group.	
 
 	r)	Not make the Loan subordinate to other obligations with third parties.	
 
 	s)	Transactions with related companies should be at market value.	
 
 	t)	Cencosud Perú and the guarantors undertake to communicate changes in Effective Control.	
 
 	u)	Report any event that may have a Substantially Adverse Effect.	
 
 	v)	Cencosud Perú and the guarantors shall report if their shareholders agree to reduce paid-in capital or if for purposes of Applicable Law they were obligated to reduce it by an amount equivalent to more than 10% of its paid-in capital.	
 
 	w)	Cencosud Perú and its subsidiaries may not engage in new financing transactions or obligations if such acts could result in a Substantially Adverse Effect.	
 
 	x)	Cencosud Perú and the guarantors may not engage directly or indirectly in activities developed outside the Cencosud S.A. Group.	
 
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24.	According to the stated in the “Indenture”, dated December 6, 2012 under the bond issuance pursuant to Rule 144ª under the Securities Act, the Company as “issuer” shall comply with the following:	
 
 	a)	The Company shall not, nor shall it permit any Subsidiary to, issue, assume or suffer to exist any Indebtedness, if such Indebtedness is secured by a Lien upon any property or assets of the Company or any Subsidiary, unless, concurrently therewith, the Securities shall be secured equally and ratably with (or prior to) such Indebtedness; provided, except for the mentioned in the agreement.	
 
 	b)	The Company shall not, nor shall it permit any Subsidiary to, enter into any Sale and Leaseback Transaction with respect to any of their property or assets, unless (a) the Company or such Subsidiary would be entitled pursuant to Section 5.02 of the agreement to issue or assume Indebtedness (in an amount equal to the Attributable Value with respect to such Sale and Leaseback Transaction) secured by a Lien on such property or assets without equally and ratably securing the Securities, (b) the Company or such Subsidiary shall apply or cause to be applied, in the case of a sale or transfer for cash, the net proceeds thereof and, in the case of a sale or transfer otherwise than for cash, an amount equal to the fair market value (as determined in good faith by the Board of Directors) of the property or assets so leased, (i) to the retirement, within 360 days after the effective date of such Sale and Leaseback Transaction, of (A) Indebtedness of the Company ranking at least pari passu with the Securities or (B) Indebtedness of any Subsidiary, in each case owing to a Person other than the Company or any Affiliate of the Company, or (ii) to the acquisition, purchase, construction, development, extension or improvement of any property or assets of the Company or any Subsidiary used or to be used by or for the benefit of the Company or any Subsidiary in the ordinary course of business or (c) the Company or such Subsidiary equally and ratably secures the Securities. Except for transactions providing for a lease for a term, including any renewal, of not more than three years or to arrangements between the Company and a Subsidiary or between Subsidiaries.	
 
 	c)	Submit or make accesible electronically with notice to the trustee as soon as they are available, but in any event within 120 calendar days after the end of each fiscal year of the Company (currently ending December 31), copies of its audited financial statements on a consolidated basis) in respect of such fiscal year (including a profit and loss account, statements of financial position and cash flow statement), in English, prepared in accordance with IFRS and audited by a member firm of an internationally recognized firm of independent accountants. As soon as they are available, but in any event within 90 calendar days after the end of each of the first three fiscal quarters of each fiscal year of the Company, copies of its unaudited financial statements (on a consolidated basis) in respect of the relevant period (including a profit and loss account, statements of financial position and cash flow statement), in English, prepared on a basis consistent with the audited financial statements of the Company and in accordance with IFRS, together with a certificate signed by the person then authorized to sign financial statements on behalf of the Company to the effect that such financial statements are true in all material respects and present fairly the financial position of the Company as at the end of, and the results of its operations for, the relevant quarterly period in the event the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, timely file with the Commission such annual and other reports as may be required by the rules and regulations of the Commission in effect at the relevant time and in the form required thereunder.	
 
 	d)	The Company shall take all action necessary to provide information to permit resales of the Securities pursuant to Rule 144A under the Securities Act, including furnishing to any Holder of a Security or beneficial interest in a Global Security, or to any prospective purchaser designated by such Holder, upon written request of such Holder, financial and other information required to be delivered under Rule 144A(d)(4) (as amended from time to time and including any successor provision) unless, at the time of such request, the Company is subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act or is exempt from such requirements pursuant to Rule 12g3-2(b) under the Exchange Act (as amended from time to time and including any successor provision).	
 
 	e)	Protect its existence as a corporation, and, in the case of the Company, the corporate, partnership, limited liability company or other existence of each Subsidiary, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company, the Guarantor or any such Subsidiary;	
 
 	f)	Neither the Company nor the Guarantor shall consolidate with or merge into any other Person or convey or transfer its properties and assets substantially as an entirety to any Person except for the mentioned in the agreement.	
 
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25.	On October 17, 2012 Cencosud S.A. and JPMorgan Chase Bank, National Association as administrative agent, JPMorgan securities LLC, acting as global coordinator and J.P. Morgan Securities LLC as Bookrunner and Lead Arranger entered into a Credit Agreement, under the New York Law, USA, in which it is stablished that Cencosud S.A. shall comply with the following obligations and financial and management restrictions:	
 
 	a)	Submit within 90 days after the end of each fiscal year of the Borrower, audited consolidated statements of financial position and related statements of operations, stockholders’ equity and cash flows for each of the Borrower and Cencosud Retail as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by PricewaterhouseCoopers or other independent public accountants of recognized national standing (without a “going concern” or like qualification, commentary or exception arising out of the scope of the audit, or without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its Consolidated Subsidiaries or Cencosud Retail and its Consolidated Subsidiaries, respectively, on a consolidated basis in accordance with IFRS consistently applied;	
 
 	b)	Submit within 60 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, consolidated statements of financial position and related statements of operations, stockholders’ equity and cash flows for the Borrower as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the statements of financial position, as of the end of) the previous fiscal year, all certified by one of the Borrower’s Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its Consolidated Subsidiaries, on a consolidated basis in accordance with IFRS consistently applied, subject to normal year-end audit adjustments and the absence of footnotes	
 
 	c)	Concurrently with any delivery of financial statements mentioned above, a certificate of a Financial Officer of the Borrower (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance and (iii) stating whether any change in IFRS or in the application thereof has occurred since the date of the audited financial	
 
 	d)	Promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Borrower or any Subsidiary with the SVS, the SEC, or any Governmental Authority succeeding to any or all of the functions of said Commission, or with any national securities exchange, as the case may be	
 
 	e)	Promptly after Moody’s or S&P shall have announced a change in the rating established or deemed to have been established for the Index Debt, written notice of such rating change;	
 
 	f)	promptly following any request therefor, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of the Borrower by independent accountants in connection with the accounts or books of the Borrower or any Material Subsidiary, or any audit of any of them;	
 
 	g)	promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any Material Subsidiary, or compliance with the terms of this Agreement, as the Administrative Agent or any Lender may reasonably request;	
 
 	h)	Communicate any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect;	
 
 	i)	The Borrower will, and will cause each of its Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business;.;	
 
 	j)	The Borrower will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. The Borrower will, and will cause each Guarantor and each other Material Subsidiary to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested	
 
 	k)	Borrower will cause the obligations under this Agreement to rank at all times at least pari passu with all other present and future unsecured indebtedness of the Borrower and its Subsidiaries.;	
 
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 	l)	The Borrower shall not, and shall not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of its property, assets, income or profits, whether now owned or hereafter acquired, except for the mentioned in the agreement.	
 
 	m)	The Borrower shall not (i)enter into any merger or consolidation or amalgamation or reorganization, or sell or otherwise transfer or dispose of all or substantially all of its assets or the assets of the Borrower and its Subsidiaries, taken as a whole or (ii)liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or permit any of its Subsidiaries to liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution); provided that if at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred and is continuing, (x) any Person may merge with and into a Loan Party in a transaction in which the Loan Party is the surviving entity, (y) any Subsidiary may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders and (z) any Subsidiary may merge with and sell or otherwise Dispose of assets to another Subsidiary.	
 
 	n)	The Borrower will not declare or make any dividend, distribution or other Restricted Payment, unless required by law (including without limitation minimum distributions required in accordance with the Ley sobre Sociedades Anonimas of Chile).	
 
 	o)	The Borrower shall not, and shall not permit any of its Subsidiaries to, make any Disposition of any of its property, business or assets (including, without limitation, other payments and receivables, but excluding leasehold interests), whether now owned or hereafter acquired, except for the mentioned in the agreement:	
 
 	p)	The Borrower shall not and shall not permit any of its Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except for transactions in the ordinary course of business that are at the prices and on terms and conditions substantially as favorable to the Borrower or such Affiliate as could reasonably be obtained at that time from unaffiliated third parties in comparable arm’s length transactions; provided that the foregoing shall not apply to (i)transactions among Loan Parties and (ii)transactions permitted under this agreement.	
 
 	q)	The Borrower will not permit the Leverage Ratio, at the end of any fiscal quarter (for the most recently completed period of four consecutive fiscal quarters ending at the end of such fiscal quarter), calculated based on the Financial Statements, to be greater than 5.25 to 1.0;	
 
 	r)	The Borrower will not permit the Debt to Net Worth Ratio at the end of any fiscal quarter (for the most recently completed period of four consecutive fiscal quarters ending at the end of such fiscal quarter), calculated based on the Financial Statements, to be greater than 1.2 to 1.0.	
As of December 31, 2012 and 2011 the Company was in compliance with the aforementioned rates.
 
18	Trade accounts payable and other payables	
The composition of the area as of December 31, 2012 and 2011 is as follows:

 	  	 	 	  	As of December 31,	 	
 	  	Current	 	  	Non-current	 	
Account	  	2012	 	  	2011	 	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Trade payable	  	 	1,704,773,063	  	  	 	1,374,705,770	  	  	 	1,303,392	  	  	 	2,439,794	  	
Withholdings	  	 	197,295,354	  	  	 	158,078,423	  	  	 	6,107,410	  	  	 	8,710,897	  	
Other accounts payable	  	 	327,498	  	  	 	1,000,211	  	  				  	 	—  	  	

Total	  	 	1,902,395,915	  	  	 	1,533,784,404	  	  	 	7,410,802	  	  	 	11,150,691	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
The main suppliers of Cencosud S.A. are as follows: Unilever, Nestlé, Ambev, Latic Luce Ltda., Coca Cola, JBS (Swift), Primo Schincariol Ind Cerv e Refrig, BRF, P&G, Agrosuper Com.de Alimentos Ltda., Danone, CMPC, Arcor, Kraft, Mastellone Hnos. S.A., Molinos Rio de la Plata S.A., Comercial Santa Elena S.A., Kimberly Clark, Carozzi y CCU.
 
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The detail of the trade payables as of December 31, 2012 are as follows;
Trade Payables and other payables outstanding

 	  	Days	 	  	 	 	  	 	 	
Suppliers	  	Up to 30
days	 	  	31 - 60	 	  	61 - 90	 	  	91 - 120	 	  	121 - 365	 	  	366 and
more	 	  	TOTAL
ThCh$	 	  	Payment
average
(days)	 	
Goods	  	 	746,871,999	  	  	 	282,576,325	  	  	 	77,341,870	  	  	 	9,944,320	  	  	 	1,222,807	  	  	 	314,858	  	  	 	1,118,272,179	  	  	 	43	  	
Services	  	 	154,950,482	  	  	 	73,035,679	  	  	 	27,518,150	  	  	 	6,109,381	  	  	 	2,303,668	  	  	 	3,389	  	  	 	263,920,749	  	  	 	50	  	
Other	  	 	52,232,630	  	  	 	14,847,272	  	  	 	5,497,022	  	  	 	2,407,390	  	  	 	77,477	  	  	 	—  	  	  	 	75,061,791	  	  	 	44	  	
									
TotalThCh$	  	 	954,055,111	  	  	 	370,459,276	  	  	 	110,357,042	  	  	 	18,461,091	  	  	 	3,603,952	  	  	 	318,247	  	  	 	1,457,254,719	  	  	 	44	  	

 	  	Days	 	  	 	 	
Suppliers	  	Up to 30
days	 	  	31 - 60	 	  	61 - 90	 	  	91 - 120	 	  	121 - 180	 	  	181 and
more	 	  	Total
ThCh$	 	
Goods	  	 	83,838,488	  	  	 	16,941,831	  	  	 	12,960,401	  	  	 	5,468,672	  	  	 	9,885,305	  	  	 	46,298,002	  	  	 	175,392,699	  	
Services	  	 	25,619,493	  	  	 	6,264,058	  	  	 	2,076,942	  	  	 	9,087,591	  	  	 	3,416,927	  	  	 	17,597,712	  	  	 	64,062,723	  	
Other	  	 	3,189,442	  	  	 	2,231,870	  	  	 	7,721	  	  	 	1,115,137	  	  	 	1,572,161	  	  	 	1,249,983	  	  	 	9,366,314	  	
								
TotalThCh$	  	 	112,647,423	  	  	 	25,437,759	  	  	 	15,045,064	  	  	 	15,671,400	  	  	 	14,874,393	  	  	 	65,145,697	  	  	 	248,821,736	  	
The detail of the trade payables as of December 31, 2011 are as followins:
Trade Payables and other payables past due

 	  	Days	 	  	 	 	  	 	 	
Suppliers	  	Up to 30
days	 	  	31 - 60	 	  	61 - 90	 	  	91 - 120	 	  	121 - 365	 	  	366 and
more	 	  	TOTAL
ThCh$	 	  	Payment
average
(days)	 	
Goods	  	 	527,292,575	  	  	 	369,745,935	  	  	 	75,999,453	  	  	 	12,296,088	  	  	 	3,137,541	  	  	 	281,660	  	  	 	988,753,252	  	  	 	48	  	
Services	  	 	71,215,415	  	  	 	19,375,252	  	  	 	2,183,513	  	  	 	1,372,263	  	  	 	75,775	  	  	 	3,171,309	  	  	 	97,393,527	  	  	 	50	  	
Other	  	 	37,274,276	  	  	 	1,392,790	  	  	 	114,788	  	  	 	29,617	  	  	 	739,254	  	  	 	—  	  	  	 	39,550,725	  	  	 	38	  	

TotalThCh$	  	 	235,782,266	  	  	 	390,513,977	  	  	 	78,297,754	  	  	 	13,697,968	  	  	 	3,952,570	  	  	 	3,452,939	  	  	 	1,125,697,504	  	  	 	48	  	

																													
 	  	Days	 	  	 	 	
Suppliers	  	Up to 30
days	 	  	31 - 60	 	  	61 - 90	 	  	91 - 120	 	  	121 - 180	 	  	181 and
more	 	  	Total
ThCh$	 	
Goods	  	 	73,812,980	  	  	 	34,224,541	  	  	 	28,042,411	  	  	 	7,583,523	  	  	 	12,126,026	  	  	 	29,563,287	  	  	 	185,352,768	  	
Services	  	 	23,022,303	  	  	 	6,600,191	  	  	 	2,892,815	  	  	 	1,539,298	  	  	 	4,114,983	  	  	 	19,522,340	  	  	 	57,691,930	  	
Other	  	 	5,725,076	  	  	 	1,152,280	  	  	 	197,257	  	  	 	153,912	  	  	 	663,973	  	  	 	510,864	  	  	 	8,403,362	  	

TotalThCh$	  	 	102,560,359	  	  	 	41,977,012	  	  	 	31,132,483	  	  	 	9,276,733	  	  	 	16,904,982	  	  	 	49,596,491	  	  	 	251,448,060	  	

19	Provisions and other liabilities	
 
19.1	Provisions	
 
19.1.1	The composition of this item as of December 31, 2012 and 2011 is as follows:	

 	  	 	 	  	As of December 31,	 	
 	  	Current	 	  	Non-current	 	
Accruals and provision	  	2012	 	  	2011	 	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Legal claims provision(1)	  	 	41,070,876	  	  	 	15,425,204	  	  	 	87,514,712	  	  	 	55,049,716	  	
Onerous contracts provision(2)	  	 	1,552,887	  	  	 	2,555,473	  	  	 	23,806,326	  	  	 	26,722,529	  	

Total	  	 	42,623,763	  	  	 	17,980,677	  	  	 	111,321,038	  	  	 	81,772,245	  	

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The following table shows the civil, labor and tax proceedings faced by the Company and its subsidiaries (by country). The proceedings comprising each category are those presenting a probable occurrence likelihood and the amount of loss can be quantified or estimated.

 	  	Provision Legal Claims	 	  	Exposure	 	
 	  	Civil	 	  	Labor	 	  	Tax	 	  	Total	 	  	Current	 	  	Non-current	 	
 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Total as of December 31,2012	  	 	37,201,863	  	  	 	28,132,559	  	  	 	63,251,166	  	  	 	128,585,588	  	  	 	41,070,876	  	  	 	87,514,712	  	
Total as of December 31,2011	  	 	12,558,792	  	  	 	21,867,679	  	  	 	36,048,449	  	  	 	70,474,920	  	  	 	15,425,204	  	  	 	55,049,716	  	

									
Provision By Country	  	December 31,  2012
ThCh$	 	  	December  31,2011
ThCh$	 	
Chile	  	 	22,892,859	  	  	 	2,692,156	  	
Argentina	  	 	32,791,224	  	  	 	28,219,719	  	
Brasil	  	 	69,441,835	  	  	 	39,563,045	  	
Perú	  	 	1,183,692	  	  	 	—  	  	
Colombia	  	 	2,275,978	  	  	 	—  	  	
Total Provision	  	 	128,585,588	  	  	 	70,474,920	  	

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The nature of these obligations is as follows:
Civil provision: This primarily corresponds to civil and commercial trials that mainly deal with claims from customers, defects in products, accidents of customers in the stores and suits related with customer service.
The short-term provision includes ThCh$20,000,000 related to the class action lawsuit against the company “Cencosud Administradora de Tarjetas SA”, whose non-appealable final judgment was notified by the First Chamber of the Supreme Court of Chile, dated April 24, 2013. This is a preliminary estimate of the provision and still needs to be ratified by the Supreme Court of Chile after subsequent filings for interpretation, rectification and amendment are addressed by the court. The ruling requires the company to reimburse cardholders for excess maintenance fees charged since 2006 plus inflation adjustment and interest. The amount has been recognized in the Statements of Integral Income by function as of December 31, 2012, under the line “Other expenses by function” shown in Note 25.1 “Expenses by nature”.
Labor provision: This primarily corresponds to staff severance indemnities and salary disputes from former employees
Tax provision: This primarily corresponds to tax claims in the countries in which the Company operates.
(2) Provisions for onerous contracts
The provisions recorded under this concept correspond mainly to the excess over the fair value payable related to onerous lease contracts recorded in business combinations of the period.
 
19.2	Roll-forward of provisions:	

Provision type	  	Legal claims	 	 	Onerous
contracts	 	 	Total	 	
 	  	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Initial Balance January 1, 2012	  	 	70,474,920	  	 	 	29,278,002	  	 	 	99,752,922	  	
Movements in Provisions:	  				 				 				
Additional provisions	  	 	47,863,876	  	 	 	—  	  	 	 	27,863,876	  	
Increase (decrease) in existing provisions	  	 	20,771,008	  	 	 	(3,918,789	) 	 	 	16,852,219	  	
Acquisitions through business combinations (See note 13)	  	 	18,681,710	  	 	 	—  	  	 	 	18,681,710	  	
Provision used during the year	  	 	(6,397,675	) 	 	 	—  	  	 	 	(6,397,675	) 	
Reversal of used provision	  	 	(8,938,185	) 	 	 	—  	  	 	 	(8,938,185	) 	
Increase (decrease) in foreign exchange rate	  	 	(13,870,066	) 	 	 	—  	  	 	 	(13,870,066	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Changes in provisions, total	  	 	58,110,668	  	 	 	(3,918,789	) 	 	 	34,191,879	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total provision, final balance as of december 31, 2012	  	 	128,585,588	  	 	 	25,359,213	  	 	 	133,944,801	  	

													
Provision type	  	Legal claims	 	 	Onerous
contracts	 	 	Total	 	
 	  	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Initial Balance January 1, 2011	  	 	53,409,957	  	 	 	2,258,298	  	 	 	55,668,255	  	
Movements in Provisions:	  				 				 				
Additional provisions	  	 	9,643,074	  	 	 	—  	  	 	 	9,643,074	  	
Increase (decrease) in existing provisions	  	 	3,609,389	  	 	 	(571,322	) 	 	 	3,038,067	  	
Acquisitions through business combinations	  	 	8,811,324	  	 	 	27,591,026	  	 	 	36,402,350	  	
Provision used during the year	  	 	(5,143,603	) 	 	 	—  	  	 	 	(5,143,603	) 	
Increase (decrease) in foreign exchange rate	  	 	144,779	  	 	 	—  	  	 	 	144,779	  	

Changes in provisions, total	  	 	17,064,963	  	 	 	27,019,704	  	 	 	44,084,667	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total provision, final balance as of december 31, 2011	  	 	70,474,920	  	 	 	29,278,002	  	 	 	99,752,922	  	

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20	Other non-financial liabilities	
The composition of this item as of December 31, 2012 and 2011 is as follows:

 	  	As of December 31,	 	
 	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Customer loyalty program	  	 	11,461,190	  	  	 	12,697,758	  	
Guarantees deposits	  	 	9,737,004	  	  	 	8,161,228	  	
Minimum accrual dividend	  	 	51,749,049	  	  	 	47,362,611	  	
Other	  	 	5,369,316	  	  	 	2,828,708	  	

Total Other non-financial Liabilities, current	  	 	78,316,560	  	  	 	71,050,305	  	

Guarantees deposits	  	 	13,363,961	  	  	 	14,192,881	  	
Prepaid Commissions	  	 	52,538,040	  	  	 	62,985,921	  	
Other	  	 	5,007,298	  	  	 	5,542,987	  	

Total Other non-financial Liabilities, non-current	  	 	70,909,299	  	  	 	82,721,789	  	

21	Current provisions for employee benefits	
The composition of this item as of December 31, 2012 and 2011 is as follows:

 	  	As of December 31,	 	
 	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Employees’ vacation	  	 	49,808,855	  	  	 	45,014,488	  	
Income sharing and bonuses	  	 	28,991,005	  	  	 	23,635,386	  	

Total accumulated or accrued liabilities	  	 	78,799,860	  	  	 	68,649,874	  	
	  	 	 	 	  	 	 	 	
The amount of accumulated liabilities for vacations is calculated in accordance with current Chilean legislation on an accrual basis. The bonuses relate to the amount that is paid the following year with respect to compliance with annual targets, which can be estimated reliably.
 
22	Other current and non-current non-financial assets	
The composition of the area as of December 31, 2012 and 2011 is as follows:

 	  	As of December 31,	 	
Other non-financial assets, current	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Lease guarantees	  	 	3,405,540	  	  	 	3,469,790	  	
Pre-paid rent	  	 	3,298,433	  	  	 	2,402,568	  	
Pre-paid insurance	  	 	3,205,079	  	  	 	6,291,444	  	
Other	  	 	82,739	  	  	 	95,039	  	

Total	  	 	9,991,791	  	  	 	12,258,841	  	

									
 	  	As of December 31,	 	
Other non-financial assets, non-current	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Lease guarantees	  	 	7,362,011	  	  	 	5,970,932	  	
Pre-paid rent	  	 	29,245,588	  	  	 	26,906,749	  	
Other	  	 	1,660,526	  	  	 	2,174,278	  	

Total	  	 	38,268,125	  	  	 	35,051,959	  	

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23	Net equity	
The objectives of the Cencosud Group regarding capital management are to safeguard its capacity to continue as a going concern, ensuring appropriate returns for its shareholders and benefits for other stakeholders, and maintaining an optimum capital structure while reducing capital costs.
In line with the industry, the Cencosud Group monitors its capital using the leverage ratio. This ratio is calculated by dividing net financial debt by total capital. Net financial debt corresponds to total indebtedness (including current and non-current debt) less cash and cash equivalents. Total capital corresponds to total equity as shown in the consolidated statement of financial position plus net debt.
In accordance with the above, the Cencosud Group has combined different financing sources, such as: capital increases, operating cash flows, bank loans and bonds.
 
23.1	Paid-in capital	
As of December 31, 2012, the authorized, subscribed and paid-in capital amounts to ThCh$ 1,551,811,762 (ThCh$927,804,431 as of December 31, 2011).
 
23.2	Subscribed and paid shares	
At the extraordinary shareholders meeting held on March 1, 2012, the shareholders agreed to modify the agreement previously approved at the Cencosud S.A. shareholders meeting held on April 29, 2011, of a capital increase of the Company to be effected through the issuance of 270,000,000 shares. On March 1, 2012, the shareholders also authorized the Board of Directors to offer a portion of these shares in the international capital markets and also authorized the Board of Directors to determine the issuance price of the shares. 27,000,000 of these shares were set aside for option compensations plans for executives.
The referential share price reported to the SVS (Superintendencia de Valores y Seguros) was ThCh$ 3,555.56. The final issue share price was ThCh$2,600 per share.
In connection with share issuance, 59,493,000 shares were issued in the United States of America in the form of American Depositary Shares (ADSs) and 183,507,000 shares were issued in the local market in Chile.
As of December 31, 2012, 243,000,000 shares were subscribed and paid, as follows; 92,309,978 shares were paid on July 25, 2012; 145,642,584 shares were paid on September 14, 2012; 3,028,463 shares were paid on September 26, 2012; and 2,018,975 were paid with the capital increase by ThCh$ 864,000,000. and ThCh$239,992,669 was recognized as a decrease in paid–in surplus.
As of December 31, 2012, the Company’s capital is represented by 2,507,103,215 shares without par value. As of December 31, 2012, 69,911,801 issued shares were pending of subscription and payment, of which 39,911,801 expired on April 25, 2012 and 27,000,000 will expire on April 29 th 2017.
 
23.3	Dividends	
The dividend distribution policy adopted by Cencosud S.A. establishes the payment of dividends of 30% of the distributable net profits.
In relation to SVS Ruling No. 1945, on October 29, 2010, the Company’s Board of Directors agreed that the net distributable profits for the year 2010 and following years will be the figure reflected in the financial statements as “profit for the year attributable controlling shareholders”, excluding the unrealized result for fair value appraisal of investment properties, net of deferred taxes.
The shareholders’ meeting held on April 24, 2012 approved to pay a minimum dividend amounting to ThCh$ 53,259,383 (Ch$23.52339). This dividend was paid in May 4, 2012.
The shareholders’ meeting held on April 24, 2012 approved to pay an additional amount of ThCh$ 5,896,771 over the minimum dividends accrued at December 31, 2011 (ThCh$ 3,059,914 at December 31, 2011).
 
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The company recorded a minimum dividend by ThCh$ 51,749,049 at December 31, 2012 (ThCh$ 47,362,611 at December 31, 2011) (see note 20). The total charge to equity as of December 31, 2012 was ThCh$ 57,645,821 (ThCh$ 73,177,602 as of December 31, 2011).
At the Ordinary Shareholders’ Meeting held on April 29, 2011, the shareholders agreed to pay a minimum mandatory final dividend of Ch$ 24.60733 per share, charged to profit for the year 2010, which is equivalent to ThCh$ 55,713,543. This dividend was paid on May 12, 2011.
At December 31, 2011, the Company recognized a provision for dividends with a charge to net equity amounting to ThCh$ 47,362,611 (ThCh$ 52,653,627 at December 31, 2010).
At the Ordinary Shareholders’ Meeting held on October 28, 2011, the shareholders agreed to pay an interim dividend of Ch$ 10.05037 per share, charged to profit for the year 2011, which is equivalent to ThCh$ 22,755,075. This amount added to the payment made in May 12, 2011 by ThCh$55,713,543, reaching a total of ThCh$78,468,618 of dividends paid during the year 2011.
At an ordinary meeting of the Board of Directors of Cencosud S.A. held March 26, 2010, the Board agreed to distribute a final dividend of ThCh$15.38 per share charged to profit for the year 2009 (equivalents to ThCh$ 34,794,278. This dividend was made available to shareholders registered in the respective registry five days before payment on May 12, 2010, in accordance with an agreement made by the shareholders in an Ordinary Shareholders’ Meeting held April 30, 2010.
At an extraordinary meeting of the Board of Directors of Cencosud S.A. held November 5, 2010, the Board agreed to distribute an interim dividend of ThCh$8.96643 per share charged to profit for the year 2010 (equivalents to ThCh$20,134,120). This dividend was made available on November 16, 2010 to shareholders registered in the respective registry on November 10, 2010. This amount added to the payment made in May 12, 2010 by ThCh$34,794,278, reaching a total of ThCh$54,928,398 of dividends paid during the year 2010.
 
23.4	Reserves	
The initial Balance is mainly due to the inflation adjustment reversal recorded under IFRS first adoption (transition date to IFRS on January 1 st , 2009). The ThCh$ 92,991,292 indudes the effects of the purchase option (call) and put option (put) termination between Cencosud S.A. and UBS A.G. London Branch.
 
23.5	Other Reserves and Changes in ownership interest	
On June 29, 2012, in connection with the purchase by the Company of the remaining 38.6062% interest in Jumbo Retail Argentina S.A. from UBS A.G. London Branch, the Company and UBS A.G. London Branch agreed to terminate the purchase option (call) and put option (put) and associated rights and obligations between the parties. As a result of the termination of these contracts and the exercise of the call option, the Company paid ThCh$ 242,681,460 for the 38.6062% interest in Jumbo Retail Argentina. The accounting effects of this decision are recognized in equity under “other reserves”, as follows:

 	  	ThCh$	 	
Purchase price	  	 	242,681,460	  	
Non controlling interests acquired	  	 	(81,707,460	) 	
	  	 	 	 	
Total due to minority interest acquired	  	 	160,974,000	  	

Call option asset	  	 	(147,470,592	) 	
Put option liability	  	 	240,461,884	  	
	  	 	 	 	
Total due to options	  	 	92,991,292	  	
 
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Roll-forward of reserves between January 1, 2012 and December 31, 2012 is as follows:

Reserve roll-forward	  	Translation	 	 	Hedging
reserves	 	  	Other
reserves	 	 	Total
reserves	 	
 	  	ThCh$	 	 	ThCh$	 	  	ThCh$	 	 	ThCh$	 	
Initial balance current period January 1, 2012	  	 	(233,050,928	) 	 	 	9,825,606	  	  	 	20,502,844	  	 	 	(202,722,478	) 	

Change in equity	  				 				  				 				
Other integral results	  	 	(229,446,644	) 	 	 	13,489,862	  	  				 	 	(215,956,782	) 	
Transfer to (from) retained earnings	  				 				  	 	95,288,851	  	 	 	95,288,851	  	
Increase (decrease) from changes in ownership interest in subsidiaries that do not result in loss of control	  				 				  	 	(160,974,000	) 	 	 	(160,974,000	) 	

Total changes in equity	  	 	(229,446,644	) 	 	 	13,489,862	  	  	 	(65,685,149	) 	 	 	(281,641,931	) 	

Final balance of current year, december 31, 2012	  	 	(462,497,572	) 	 	 	23,315,468	  	  	 	(45,182,305	) 	 	 	(484,364,409	) 	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Roll-forward of reserves between January 1, 2011 and December 31, 2011 is as follows:

Reserve roll-forward	  	Translation
(a)	 	 	Hedging
reserves
(b)	 	  	Other
reserves
(c)	 	 	Total
reserves	 	
 	  	ThCh$	 	 	ThCh$	 	  	ThCh$	 	 	ThCh$	 	
Initial balance current period January 1, 2011	  	 	(310,945,441	) 	 	 	5,004,529	  	  	 	56,225,241	  	 	 	(249,715,671	) 	

Change in equity	  				 				  				 				
Other integral results	  	 	77,894,513	  	 	 	4,821,077	  	  	 	—  	  	 	 	82,715,590	  	
Transfer to (from) retained earnings	  	 	—  	  	 	 	—  	  	  	 	(35,722,397	) 	 	 	(35,722,397	) 	

Total changes in equity	  	 	77,894,513	  	 	 	4,821,077	  	  	 	(35,722,397	) 	 	 	46,993,193	  	

Final balance of current year, december 31, 2011	  	 	(233,050,928	) 	 	 	9,825,606	  	  	 	20,502,844	  	 	 	(202,722,478	) 	

a)	Translation reserves: originated in the translation of the financial statements of subsidiaries located abroad, whose functional currency is different than the presentation currency of the consolidated financial statements.	
b)	Hedging reserves: this reserve arises from the application of cash flow hedging accounting for certain financial instruments. These reserves are transferred to income of the period at the end of the life of the instruments’ contracts when the hedged cash flow is realized.	
c)	Other reserves: the initial balance arose primarily from the elimination of price-level restatement of book-basis capital under IFRS for the transition year. The increase by ThCh$ 95,288,851 includes the termination purchase option (call) and put option (put) agreement between UBS and Cencosud (ThCh$92,991,292) and the accounting of stock options (ThCh$2,297,559). The decrease by ThCh$ 160,974,000 as of December 31, 2012 mainly includes recognition of the purchase by the Company of the remaining 38.6062% interest in Jumbo Retail Argentina S.A. from UBS A.G. London Branch, the Company and UBS A.G (note 17.4).	
 
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23.6	Non-controlling interest	
Details of the non-controlling shares as of December 31, 2012 and 2011 is as follows:

 	  	Minority
Interest
Dec 31,	 	  	Minority
Interest
Dec 31,	 	  	 
As of December 31,	 	
 	  	2012	 	  	2011	 	  	2012	 	 	2011	 	
Company	  	%	 	  	%	 	  	ThCh$	 	 	ThCh$	 	
Cencosud Shoppings Centers S.A.	  	 	0.00010	  	  	 	0.00010	  	  	 	233	  	 	 	200	  	
Cencosud Internacional Ltda.	  	 	0.00433	  	  	 	0.00433	  	  	 	57,892	  	 	 	65,093	  	
Mercado Mayorista P y P Ltda.	  	 	10.00000	  	  	 	10.00000	  	  	 	93,589	  	 	 	93,589	  	
Easy S.A.	  	 	0.42500	  	  	 	0.42500	  	  	 	205,874	  	 	 	162,666	  	
Comercial Food and Fantasy Ltda.	  	 	10.00000	  	  	 	10.00000	  	  	 	(78,606	) 	 	 	(122,301	) 	
Administradora del Centro Comercial	  				  				  				 				
Alto Las Condes Ltda.	  	 	55.00000	  	  	 	55.00000	  	  	 	(395,225	) 	 	 	(54,824	) 	
Cencosud Retail S.A.	  	 	0.00039	  	  	 	0.04435	  	  	 	236,584	  	 	 	238,415	  	
Jumbo Retail Argentina S.A.	  	 	0.07700	  	  	 	38.68320	  	  	 	147,419	  	 	 	86,969,669	  	
Cencosud Argentina S.A.	  	 	0.08302	  	  	 	0.08302	  	  	 	409,839	  	 	 	397,788	  	
					
Total	  				  				  	 	677,599	  	 	 	87,750,295	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	
Details of the non-controlling interests are as follows, for the years ended December 31, is as follows:

 	  	Minority
Interest	 	  	Minority	 	  	Minority	 	  	Results	 	
 	  	2012	 	  	interest	 	  	interest	 	  	2012	 	 	2011	 	 	2010	 	
Company	  	%	 	  	2011	 	  	2010	 	  	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Cencosud Shoppings Centers S.A.	  	 	0.00010	  	  	 	0.00010	  	  	 	0.00003	  	  	 	33	  	 	 	17	  	 	 	15	  	
Cencosud Internacional Ltda.	  	 	0.00433	  	  	 	0.00433	  	  	 	0.00433	  	  	 	3,372	  	 	 	5,853	  	 	 	4,597	  	
Mercado Mayorista P y P Ltda.	  	 	10.00000	  	  	 	10.00000	  	  	 	10.00000	  	  				 	 	(1,476	) 	 	 	(581	) 	
Easy S.A.	  	 	0.42500	  	  	 	0.42500	  	  	 	0.25	  	  	 	43,190	  	 	 	30,214	  	 	 	29,573	  	
Comercial Food and Fantasy Ltda.	  	 	10.00000	  	  	 	10.00000	  	  	 	10.00000	  	  	 	43,694	  	 	 	(24,608	) 	 	 	3,175	  	
Administradora del Centro Comercial	  				  				  				  				 				 				
Alto Las Condes Ltda.	  	 	55.00000	  	  	 	55.00000	  	  	 	55.00000	  	  	 	(340,401	) 	 	 	(174,794	) 	 	 	(313,239	) 	
Cencosud Retail S.A.	  	 	0.00039	  	  	 	0.04435	  	  	 	0.04029	  	  	 	39,914	  	 	 	46,229	  	 	 	44,704	  	
Jumbo Retail Argentina S.A.	  	 	0.07700	  	  	 	38.68320	  	  	 	38.63952	  	  	 	3,002,758	  	 	 	10,613,039	  	 	 	10,435,641	  	
Cencosud Argentina S.A. (*)	  	 	0.08302	  	  	 	0.08302	  	  	 	0.03704	  	  	 	57,955	  	 	 	64,782	  	 	 	16,266	  	
Total	  				  				  				  	 	2,850,515	  	 	 	10,559,256	  	 	 	10,220,151	  	

(*)	Inversiones Jumbo S.A. in 2010	
 
24	Income	
The breakdown of ordinary income is as follows:

 	  	For the year ended December 31,	 	
Income by nature	  	2012	 	  	2011	 	  	2010	 	
 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Sale of goods	  	 	8,687,331,819	  	  	 	7,195,684,554	  	  	 	5,911,410,443	  	
Services rendered (xx)	  	 	263,564,458	  	  	 	220,226,796	  	  	 	185,125,797	  	
Commission(*)	  	 	26,677,422	  	  	 	26,447,796	  	  	 	5,776,404	  	
Interests income	  	 	171,503,408	  	  	 	162,447,227	  	  	 	134,660,964	  	

Total	  	 	9,149,077,107	  	  	 	7,604,806,373	  	  	 	6,236,973,608	  	

(*)	Includes revenues from insurance brokerage, travel agencies, family entertainment centers and customer loyalty program.	
(xx)	Includes lease revenues from Shopping Centers	
 
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25	Breakdown of significant results	
The items by function from the Statements of Income are described as follows in 25.1, 25.2 y 25.3.

Expenses by nature of integral income by function	  	For the year ended December 31,	 	
	  	2012	 	  	2011	 	  	2010	 	
 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Cost of sales	  	 	6,547,831,773	  	  	 	5,434,916,638	  	  	 	4,457,228,589	  	
Distribution cost	  	 	20,233,594	  	  	 	15,017,899	  	  	 	11,362,548	  	
Administrative expenses	  	 	1,925,414,111	  	  	 	1,513,955,378	  	  	 	1,237,915,795	  	
Other expenses by function (*)	  	 	156,173,759	  	  	 	140,400,227	  	  	 	121,795,565	  	

Total	  	 	8,649,653,237	  	  	 	7,104,290,142	  	  	 	5,828,302,497	  	

(*)	Mainly includes marketing expenses.	
 
25.1	Expenses by nature	
The following is a breakdown of the main operating and management costs and expenses of the Cencosud Group for the following periods:

 	  	For the year ended December 31,	 	
Expenses by nature	  	2012	 	  	2011	 	  	2010	 	
 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Cost of goods sold	  	 	6,318,469,948	  	  	 	5,242,789,902	  	  	 	4,358,061,295	  	
Other cost of sales	  	 	229,361,825	  	  	 	192,126,736	  	  	 	99,167,294	  	
Personnel expenses	  	 	1,157,677,464	  	  	 	903,313,471	  	  	 	733,528,788	  	
Depreciation and amortization	  	 	141,450,398	  	  	 	120,174,307	  	  	 	102,310,024	  	
Distribution cost	  	 	20,233,594	  	  	 	15,017,899	  	  	 	11,362,548	  	
Other expenses by function (*)	  	 	176,173,759	  	  	 	140,400,227	  	  	 	121,795,565	  	
Utilities and other store related expenses	  	 	100,303,114	  	  	 	82,692,345	  	  	 	64,119,803	  	
Cleaning	  	 	53,155,225	  	  	 	43,266,099	  	  	 	36,250,910	  	
Safety and security	  	 	53,810,657	  	  	 	42,915,213	  	  	 	36,186,680	  	
Maintenance	  	 	66,987,807	  	  	 	52,649,260	  	  	 	48,809,804	  	
Professional fees	  	 	50,665,506	  	  	 	34,812,393	  	  	 	28,725,745	  	
Bags for Customers	  	 	30,788,372	  	  	 	27,299,462	  	  	 	22,317,738	  	
Credit card commission	  	 	77,472,181	  	  	 	63,895,227	  	  	 	50,893,762	  	
lease	  	 	153,089,337	  	  	 	121,693,558	  	  	 	96,127,412	  	
Other	  	 	40,014,050	  	  	 	21,244,043	  	  	 	18,645,129	  	

Total	  	 	8,669,653,237	  	  	 	7,104,290,142	  	  	 	5,828,302,497	  	

(*)	Includes ThCh$ 20,000,000 of litigation provisioning.	
 
25.2	Personnel expenses	
The following is a breakdown of personnel expenses for the following periods:

 	  	For the year ended December 31,	 	
Personnel expenses	  	2012	 	  	2011	 	  	2010	 	
 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Salaries	  	 	916,346,146	  	  	 	711,107,739	  	  	 	571,405,278	  	
Short—term employee benefits	  	 	218,779,750	  	  	 	172,828,409	  	  	 	144,142,289	  	
Termination benefits	  	 	22,551,568	  	  	 	19,377,323	  	  	 	17,981,221	  	

Total	  	 	1,157,677,464	  	  	 	903,313,471	  	  	 	733,528,788	  	

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25.3	Depreciation and amortization	
The following is a breakdown of depreciation and amortization for the following periods:

 	  	For the year ended December 31,	 	
Depreciation and amortization	  	2012	 	  	2011	 	  	2010	 	
 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Depreciation	  	 	131,470,020	  	  	 	108,824,680	  	  	 	93,138,248	  	
Amortization	  	 	9,980,378	  	  	 	11,349,627	  	  	 	9,171,776	  	

Total	  	 	141,450,398	  	  	 	120,174,307	  	  	 	102,310,024	  	

25.4	Other gains (losses)	

 	  	For the year ended December 31,	 	
Other gains (loss)	  	2012	 	 	2011	 	 	2010	 	
 	  	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Compulsory fluctuation PUT option—Group Wong	  	 	—  	  	 	 	—  	  	 	 	15,508,330	  	
Earthquake damage recovered (net)	  	 	—  	  	 	 	—  	  	 	 	(4,865,149	) 	
Sales of Property, plant and equipment	  	 	7,184,649	  	 	 	—  	  	 	 	—  	  	
UBS Call Option	  	 	(16,258,777	) 	 	 	(18,768,191	) 	 	 	—  	  	
Recovery of taxes paid in previous year	  	 	8,701,786	  	 	 	—  	  	 	 	—  	  	
Commission under operational agreement	  	 	—  	  	 	 	4,223,587	  	 	 	—  	  	
Other Net Gains and Losses	  	 	1,704,773	  	 	 	1,886,016	  	 	 	128,802	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total	  	 	1,332,431	  	 	 	(12,658,588	) 	 	 	10,771,983	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
As a result of the earthquake that impacted south central Chile on February 27, 2010, there was major damage primarily to Santa Isabel stores in the cities of Concepción, Talcahuano, Coronel and San Pedro de la Paz. The Company had insurance coverage for damages resulting from the earthquake itself as well as damage caused by third parties.
 
25.5	Other operating income	

 	  	For the year ended December 31,	 	
Other operating income	  	2012	 	  	2011	 	  	2010	 	
 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Sell Carton & Wraps	  	 	2,983,358	  	  	 	5,664,678	  	  	 	3,147,232	  	
Recovery of fees	  	 	956,947	  	  	 	862,165	  	  	 	707,691	  	
Increase on revaluation of investment properties	  	 	98,633,366	  	  	 	72,797,791	  	  	 	37,573,302	  	
Other Income	  	 	4,536,399	  	  	 	5,803,243	  	  	 	2,442,759	  	

Total	  	 	107,110,070	  	  	 	85,127,877	  	  	 	43,870,984	  	

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25.6	Financial results	
The following is the financial income detailed for the periods ended:

 	  	For the year ended December 31,	 	
Financial results	  	2012	 	 	2011	 	 	2010	 	
 	  	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Financial income	  	 	8,110,468	  	 	 	10,984,101	  	 	 	16,922,479	  	

Bank loan expenses	  	 	(120,611,344	) 	 	 	(68,858,210	) 	 	 	(40,843,313	) 	
Bond debt expenses	  	 	(61,010,164	) 	 	 	(57,053,521	) 	 	 	(38,615,726	) 	
Interest on bank loans	  	 	(11,487,735	) 	 	 	(7,407,777	) 	 	 	(7,122,461	) 	
Valuation of financial derivatives expenses	  	 	(17,912,867	) 	 	 	(10,816,223	) 	 	 	(148,252	) 	

Financial Expenses	  	 	(211,022,110	) 	 	 	(144,135,731	) 	 	 	(86,729,752	) 	
Results from UF indexed bonds in Chile	  	 	(16,126,911	) 	 	 	(24,867,764	) 	 	 	(15,656,615	) 	
Results from UF indexed Brazil	  	 	(9,391,256	) 	 	 	(6,420,766	) 	 	 	—  	  	
Results from UF indexed Other	  	 	(397,282	) 	 				 				

(Losses) gains from indexation	  	 	(25,915,449	) 	 	 	(31,288,530	) 	 	 	(15,656,615	) 	
Financial debt IFC-ABN Argentina	  	 	(5,468,763	) 	 	 	(5,466,649	) 	 	 	(3,661,821	) 	
Bond debt USA and Peru	  	 	(2,276,453	) 	 	 	(6,159,487	) 	 	 	1,151,800	  	
Financial debt Peru	  	 	1,121,237	  	 	 	1,750,021	  	 	 	457,243	  	
Financial assets and Financial debt—Colombia	  	 	3,944,181	  	 				 				

Exchange difference	  	 	(2,679,798	) 	 	 	(9,876,115	) 	 	 	(2,052,778	) 	

Financial results total	  	 	(231,506,889	) 	 	 	(174,316,275	) 	 	 	(87,516,666	) 	

26	Corporate income tax	
The corporate income tax expense amounts to ThCh$ 99,712,474 ThCh$ 90,637,958 and ThCh$ 53,899,979, for the periods according to the following detail:

Expenses (income) due to income tax, current and deferred portions
(presentation)	  	For the year ended December 31,	 	
	  	2012	 	 	2011	 	  	2010	 	
 	  	ThCh$	 	 	ThCh$	 	  	ThCh$	 	
Current tax expense	  	 	99,712,474	  	 	 	90,637,958	  	  	 	66,116,937	  	
Adjustments to income tax of the prior period	  				 	 	—  	  	  	 	—  	  	

Total current tax expenses, Net	  	 	99,712,474	  	 	 	90,637,958	  	  	 	66,116,937	  	

Deferred tax income (expense) due to taxes arising from the creation and reversal of temporary differences	  	 	21,118,918	  	 	 	25,757,361	  	  	 	17,020,596	  	
Deferred expenses (income) due to taxes arising from the changes in tax rates or new rates	  	 	(11,641,324	) 	 	 	3,160,289	  	  	 	(6,307,500	) 	

Total deferred tax expenses, net	  	 	9,477,594	  	 	 	28,917,650	  	  	 	10,713,096	  	

Expense due to income tax	  	 	109,190,068	  	 	 	119,555,608	  	  	 	76,830,033	  	

													
Expenses (income) due to income tax, by source
(national, foreign) (presentation)	  	For the year ended December 31,	 	
	  	2012	 	 	2011	 	  	2010	 	
 	  	ThCh$	 	 	ThCh$	 	  	ThCh$	 	
Current income tax expense, Net, Foreign	  	 	70,950,015	  	 	 	59,211,226	  	  	 	51,198,389	  	
Current income tax expense, Net, Local	  	 	28,762,459	  	 	 	31,426,732	  	  	 	14,918,548	  	

Current income tax expense, Net, Total	  	 	99,712,474	  	 	 	90,637,958	  	  	 	66,116,937	  	

Deferred income tax expense, Net, Foreign	  	 	(15,214,306	) 	 	 	22,814,635	  	  	 	4,650,356	  	
Deferred income tax expense, Net, Local	  	 	24,691,900	  	 	 	6,103,015	  	  	 	6,062,740	  	

Deferred income tax expense, Net, Total	  	 	9,477,594	  	 	 	28,917,650	  	  	 	10,713,096	  	

Tax Expense	  	 	109,190,068	  	 	 	119,555,608	  	  	 	76,830,033	  	

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The following chart shows the reconciliation between the corporate income tax calculations resulting from the application of the legal and effective rates for the periods:

Reconciliation of income tax expense using the statutory rate to income tax
expense using the effective rate	  	For the periods	 	
	  	2012	 	 	2011	 	 	2010	 	
 	  	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Income tax expense using the legal rate	  	 	76,399,840	  	 	 	84,141,278	  	 	 	65,359,022	  	

Tax effect of rates in other territories	  	 	24,183,407	  	 	 	33,575,867	  	 	 	27,423,531	  	
Non-taxable income (non-taxable expenses), net	  	 	23,550,467	  	 	 	9,327,074	  	 	 	(7,860,908	) 	
Income effect of non-taxable Equity Value	  	 	(1,108,276	) 	 	 	(5,783,010	) 	 	 	(4,972,022	) 	
Price level restatement under tax law	  	 	(3,984,056	) 	 	 	(4,606,120	) 	 	 	(3,264,179	) 	
Tax Effect of changes in tax rates	  	 	(11,641,323	) 	 	 	3,160,289	  	 	 	3,644,585	  	
Other increase (decrease) in legal tax charge	  	 	1,790,009	  	 	 	(259,770	) 	 	 	(3,499,996	) 	

Adjustments to tax expenses using the legal rate, Total	  	 	32,790,228	  	 	 	35,414,330	  	 	 	11,471,011	  	

Income tax expense using the effective rate	  	 	109,190,068	  	 	 	119,555,608	  	 	 	76,830,033	  	
 
a)	Tax losses:	
The Company has deferred assets for tax losses arising from the different countries where it has investments. These arise mainly in the retail and real estate areas, both in Chile and abroad. These losses are in countries where they have no time limit and their reversal is estimated as projected future revenues as increasing.
 
b)	Reversal of asset and liability timing differences:	
The reversal of asset and liability timing differences is directly related to the nature of the asset and liability accounts generating these differences. There is no set term for the reversal of timing differences, due to the reversal of some and the origin of others.
 
c)	Rate of income tax.	
The current income tax rate in Chile that affects the company is 17% for the year 2010, 20% for 2011, 18.5% for 2012 and is expected return to 17% for 2013. The rates that affect its foreign subsidiaries are: 35% in Argentina, 33% in Colombia, 30% in Peru and 34% in Brazil.
 
d)	Deferred taxes not recognized.	
The Company has no unrecognized deferred taxes as of the date of these financial statements.
 
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27	Earnings per share	
The basic earnings per share is calculated dividing the profits attributable to the Company shareholders among the weighted average of the common shares circulating during the year, excluding any common shares acquired by the Company and held as treasury shares.

 	  	For the year ended December 31,	 	
Basic Earnings per Share	  	2012	 	  	2011	 	  	2010	 	
Earnings Attributable to instruments of participation in the net equity of the controlling entity	  	 	249,958,615	  	  	 	274,332,941	  	  	 	296,261,227	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Available income for common shareholders, basic	  	 	249,958,615	  	  	 	274,332,941	  	  	 	296,261,227	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Weighted average of share number, basic	  	 	2,327,518,639	  	  	 	2,264,103,215	  	  	 	2,264,103,215	  	
Earnings per share, basic	  	 	107.4	  	  	 	121.2	  	  	 	130.9	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
The diluted earnings per share is calculated by dividing the profit attributable to shareholders of the Company by the weighted average of common shares that would be issued on the conversion of all dilutive potential ordinary shares are dilutive.

 	  	For the year ended December 31,	 	
Basic Earnings per Share, diluted	  	2012	 	  	2011	 	  	2010	 	
Earnings Attributable to instruments of participation in the net equity of the controlling entity	  	 	249,958,615	  	  	 	274,332,941	  	  	 	296,261,227	  	
Available income for common shareholders, diluted	  	 	249,958,615	  	  	 	274,332,941	  	  	 	296,261,227	  	

Weighted average of share number, diluted	  	 	2,350,018,631	  	  	 	2,286,603,215	  	  	 	2,286,603,215	  	
Earnings per share, diluted	  	 	106.4	  	  	 	120	  	  	 	129.6	  	

													
 	  	For the year ended December 31,	 	
Reconciliation of basic and diluted shares	  	2012	 	  	2011	 	  	2010	 	
 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Weighted average number of shares, basic	  	 	2,327,518,639	  	  	 	2,264,103,215	  	  	 	2,264,103,215	  	
Increase in shares from share-based compensation plans	  	 	22,500,000	  	  	 	22,500,000	  	  	 	22,500,000	  	

Weighted average number of shares, diluted	  	 	2,350,018,639	  	  	 	2,286,603,215	  	  	 	2,286,603,215	  	

28	Information by segment	
The Company reports the information by segment according to what is set forth in IFRS 8 “Operating Segments.” An operating segment is defined as a component of an entity over which separated financial information is available and is regularly reviewed.
In the information by segments, all transactions between the different operating segments have been eliminated.
 
28.1	Segmentation criteria	
For management purposes, the Company is organized in five operative divisions: Supermarkets, Shopping Centers, Home Improvement stores, Department stores and Financial Services. These segments are the basic on which the Company makes decisions with respect to its operations and resource allocation.
The operative segments are disclosed in a similar way with the presentation of the internal reports used by Management in the control and decision making process, considering the segments from a point of view according to the type of business and geographical area.
The operating segments that are reported derive their revenues mainly from the sale of products and rendering of services to final consumers of retail.
 
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The rest of the minor activities, mainly including the travel agency and family-entertainment centers businesses, plus certain consolidation adjustments and corporate expenses administered centrally, are included in the segment “Support services, financing, adjustments and other”.
 
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28.2	Regional information by segment	
The segment information which is delivered to the chief operating decision maker (“Board of Directors”) of the reportable segments for the years ended December 31, 2012, 2011 and 2010 in thousands of Chilean pesos, is the following:
Regional information, by segment

Consolidated statement of income	 	Supermarkets	 	 	Shopping
Centers	 	 	Home
improvement	 	 	Department
stores	 	 	Financial
services	 	 	Support
services,
financing,
adjustments
and other	 	 	Consolidated
total	 	
For the year ended December 31, 2012	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Revenues from ordinary activities	 	 	6,738,170,738	  	 	 	165,462,046	  	 	 	1,063,086,246	  	 	 	886,074,835	  	 	 	282,253,499	  	 	 	14,029,743	  	 	 	9,149,077,107	  	
Cost of sales	 	 	(5,060,408,496	) 	 	 	(23,771,461	) 	 	 	(711,500,077	) 	 	 	(644,667,874	) 	 	 	(104,900,726	) 	 	 	(2,583,139	) 	 	 	(6,547,831,773	) 	

Gross Margin	 	 	1,677,762,242	  	 	 	141,690,585	  	 	 	351,586,169	  	 	 	241,406,961	  	 	 	177,352,773	  	 	 	11,446,604	  	 	 	2,601,245,334	  	

Other revenues by function	 	 	7,104,301	  	 	 	98,897,535	  	 	 	102,797	  	 	 	315,626	  	 	 	99,287	  	 	 	590,524	  	 	 	107,110,070	  	
Sales, general and administrative expenses	 	 	(1,374,645,198	) 	 	 	(30,304,365	) 	 	 	(278,043,349	) 	 	 	(221,491,769	) 	 	 	(121,641,423	) 	 	 	(95,695,360	) 	 	 	(2,121,821,464	) 	
Financial expenses and income, net	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(202,911,642	) 	 	 	(202,911,642	) 	
Participation in profit or loss of equity method associates	 	 	98,335	  	 	 	5,643,512	  	 	 	—  	  	 	 	—  	  	 	 	(2,695	) 	 	 	(99,436	) 	 	 	5,639,716	  	
Exchange differences	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(2,679,798	) 	 	 	(2,679,798	) 	
(Losses) from Indexation	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(25,915,449	) 	 	 	(25,915,449	) 	
Other earnings (Losses), net	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	1,332,431	  	 	 	1,332,431	  	
Income tax charge	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(109,190,068	) 	 	 	(109,190,068	) 	
Profit attributable to Non controlling interests	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(2,850,515	) 	 	 	(2,850,515	) 	

Profit for the year attributable to controlling shareholders, Total	 	 	310,319,680	  	 	 	215,927,267	  	 	 	73,645,617	  	 	 	20,230,818	  	 	 	52,807,942	  	 	 	(425,972,709	) 	 	 	249,958,615	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	 	89,454,327	  	 	 	2,605,979	  	 	 	17,740,121	  	 	 	22,895,958	  	 	 	3,464,356	  	 	 	5,289,657	  	 	 	141,450,398	  	
								
For the year ended December 31, 2011	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenues from ordinary activities	 	 	5,556,271,353	  	 	 	129,727,271	  	 	 	948,640,802	  	 	 	690,772,399	  	 	 	267,874,237	  	 	 	11,520,311	  	 	 	7,604,806,373	  	
Cost of sales	 	 	(4,177,664,040	) 	 	 	(19,448,911	) 	 	 	(647,337,459	) 	 	 	(499,413,266	) 	 	 	(85,631,767	) 	 	 	(5,421,195	) 	 	 	(5,434,916,638	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross Margin	 	 	1,378,607,313	  	 	 	110,278,360	  	 	 	301,303,343	  	 	 	191,359,133	  	 	 	182,242,470	  	 	 	6,099,116	  	 	 	2,169,889,735	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other revenues by function	 	 	7,519,999	  	 	 	76,522,049	  	 	 	184,669	  	 	 	830,854	  	 	 	52,116	  	 	 	18,190	  	 	 	85,127,877	  	
Sales, general and administrative expenses	 	 	(1,086,570,417	) 	 	 	(22,144,624	) 	 	 	(234,196,587	) 	 	 	(162,492,264	) 	 	 	(90,876,852	) 	 	 	(73,092,760	) 	 	 	(1,669,373,504	) 	
Financial expenses and income, net	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(133,151,630	) 	 	 	(133,151,630	) 	
Participation in profit or loss of equity method associates	 	 	48,108	  	 	 	5,735,280	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(4,828	) 	 	 	5,778,560	  	
Exchange differences	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(9,876,115	) 	 	 	(9,876,115	) 	
(Losses) from Indexation	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(31,288,530	) 	 	 	(31,288,530	) 	
Other earnings, net	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(12,658,588	) 	 	 	(12,658,588	) 	
Income tax charge	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(119,555,608	) 	 	 	(119,555,608	) 	
Profit attributable to Non controlling interests	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(10,559,256	) 	 	 	(10,559,256	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Profit for the year attributable to controlling shareholders, Total	 	 	299,605,003	  	 	 	170,391,065	  	 	 	67,291,425	  	 	 	29,697,723	  	 	 	91,417,734	  	 	 	(384,070,009	) 	 	 	274,332,941	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	 	76,559,436	  	 	 	2,344,118	  	 	 	16,500,774	  	 	 	17,292,116	  	 	 	2,937,314	  	 	 	4,540,549	  	 	 	120,174,307	  	

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Consolidated statement of income	 	Supermarkets	 	 	Shopping
Centers	 	 	Home
improvement	 	 	Department
stores	 	 	Financial
services	 	 	Support
services,
financing,
adjustments
and other	 	 	Consolidated
total	 	
For the year ended December 31, 2010	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenues from ordinary activities	 	 	4,452,758,880	  	 	 	116,990,741	  	 	 	819,837,864	  	 	 	622,718,876	  	 	 	221,010,287	  	 	 	3,656,960	  	 	 	6,236,973,608	  	
Cost of sales	 	 	(3,355,795,513	) 	 	 	(17,857,530	) 	 	 	(561,005,948	) 	 	 	(446,769,009	) 	 	 	(70,457,951	) 	 	 	(5,342,638	) 	 	 	(4,457,228,589	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross Margin	 	 	1,096,963,367	  	 	 	99,133,211	  	 	 	258,831,916	  	 	 	175,949,867	  	 	 	150,552,336	  	 	 	(1,685,678	) 	 	 	1,779,745,019	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other revenues by function	 	 	6,204,329	  	 	 	37,611,082	  	 	 	66,580	  	 	 	(25,251	) 	 	 	2,990	  	 	 	11,254	  	 	 	43,870,984	  	
Sales, general and administrative expenses	 	 	(853,854,809	) 	 	 	(21,212,943	) 	 	 	(205,546,213	) 	 	 	(151,340,845	) 	 	 	(76,516,196	) 	 	 	(62,602,902	) 	 	 	(1,371,073,908	) 	
Financial expenses and income, net	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(69,807,273	) 	 	 	(69,807,273	) 	
Participation in profit or loss of equity method associates	 	 	51,166	  	 	 	6,818,114	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	644,719	  	 	 	7,513,999	  	
Exchange differences	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(2,052,778	) 	 	 	(2,052,778	) 	
(Losses) from Indexation	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(15,656,615	) 	 	 	(15,656,615	) 	
Other earnings, net	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	10,771,983	  	 	 	10,771,983	  	
Income tax charge	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(76,830,033	) 	 	 	(76,830,033	) 	
Comprehensive income and expenses from minority interests	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(10,220,151	) 	 	 	(10,220,151	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Comprehensive income and expenses, Total	 	 	249,364,053	  	 	 	122,349,464	  	 	 	53,352,283	  	 	 	24,583,771	  	 	 	74,039,130	  	 	 	(227,427,474	) 	 	 	296,261,227	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	 	58,346,828	  	 	 	4,299,529	  	 	 	16,435,058	  	 	 	16,211,403	  	 	 	3,231,493	  	 	 	3,785,713	  	 	 	102,310,024	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
The Company controls the results of each of the operating segments, at the level of revenues, costs and management expenses. The support services, exchange rates, readjustments, taxes and non-recurring income and expense, or financial income, are not allocated, as they are centrally managed.
 
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28.3	Gross margin by country and segment, in thousands of Chilean pesos:	
Gross margin by country and segment

For the year ended December 31, 2012	 	Supermarkets	 	 	Shopping
centers	 	 	Home
improvement	 	 	Department
stores	 	 	Financial
services	 	 	Support services,
financing,
adjustments
and other	 	 	Consolidated
total	 	
 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
								
Chile	 				 				 				 				 				 				 				
Ordinary income, total	 	 	2,057,975,971	  	 	 	93,090,583	  	 	 	400,374,671	  	 	 	886,074,835	  	 	 	223,726,231	  	 	 	1,125,243	  	 	 	3,662,367,534	  	
Cost of sales	 	 	(1,560,271,586	) 	 	 	(8,201,278	) 	 	 	(285,324,555	) 	 	 	(644,667,874	) 	 	 	(83,597,726	) 	 	 	(535,982	) 	 	 	(2,582,599,001	) 	

Gross margin	 	 	497,704,385	  	 	 	84,889,305	  	 	 	115,050,116	  	 	 	241,406,961	  	 	 	140,128,505	  	 	 	589,261	  	 	 	1,079,768,533	  	
								
Argentina	 				 				 				 				 				 				 				
Ordinary income, total	 	 	1,751,868,719	  	 	 	65,468,487	  	 	 	619,984,596	  	 	 	—  	  	 	 	41,237,795	  	 	 	10,588,737	  	 	 	2,489,148,334	  	
Cost of sales	 	 	(1,235,669,100	) 	 	 	(14,498,868	) 	 	 	(394,867,272	) 	 	 	—  	  	 	 	(10,786,532	) 	 	 	(1,697,425	) 	 	 	(1,657,519,197	) 	

Gross margin	 	 	516,199,619	  	 	 	50,969,619	  	 	 	225,117,324	  	 	 	—  	  	 	 	30,451,263	  	 	 	8,891,312	  	 	 	831,629,137	  	

Brazil	 				 				 				 				 				 				 				
Ordinary income, total	 	 	2,095,104,021	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	3,675,547	  	 	 	—  	  	 	 	2,098,779,568	  	
Cost of sales	 	 	(1,639,791,932	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(1,639,791,932	) 	

Gross margin	 	 	455,312,089	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	3,675,547	  	 	 	—  	  	 	 	458,987,636	  	

Peru	 				 				 				 				 				 				 				
Ordinary income, total	 	 	716,623,946	  	 	 	6,902,976	  	 	 	—  	  	 	 	—  	  	 	 	13,613,926	  	 	 	2,315,763	  	 	 	739,456,611	  	
Cost of sales	 	 	(538,231,151	) 	 	 	(1,071,316	) 	 	 	—  	  	 	 	—  	  	 	 	(10,516,468	) 	 	 	(349,731	) 	 	 	(550,168,666	) 	

Gross margin	 	 	178,392,795	  	 	 	5,831,660	  	 	 	—  	  	 	 	—  	  	 	 	3,097,458	  	 	 	1,966,032	  	 	 	189,287,945	  	
								
Colombia	 				 				 				 				 				 				 				
Ordinary income, total	 	 	116,598,081	  	 	 	—  	  	 	 	42,726,979	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	159,325,060	  	
Cost of sales	 	 	(86,444,727	) 	 	 	—  	  	 	 	(31,308,250	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(117,752,977	) 	

Gross margin	 	 	30,153,354	  	 	 	—  	  	 	 	11,418,729	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	41,572,083	  	
 
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Gross margin by country and segment

For the year ended December 31, 2011	 	Supermarkets	 	 	Shopping
centers	 	 	Home
improvement	 	 	Department
stores	 	 	Financial
services	 	 	Support services,
financing,
adjustments
and other	 	 	Consolidated
total	 	
 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
								
Chile	 				 				 				 				 				 				 				
Ordinary income, total	 	 	1,826,056,074	  	 	 	64,500,943	  	 	 	367,482,607	  	 	 	690,772,399	  	 	 	222,560,370	  	 	 	(340,328	) 	 	 	3,171,032,065	  	
Cost of sales	 	 	(1,392,974,430	) 	 	 	(5,097,011	) 	 	 	(265,945,202	) 	 	 	(499,413,266	) 	 	 	(71,603,835	) 	 	 	(1,679,794	) 	 	 	(2,236,713,538	) 	

Gross margin	 	 	433,081,644	  	 	 	59,403,932	  	 	 	101,537,405	  	 	 	191,359,133	  	 	 	150,956,535	  	 	 	(2,020,122	) 	 	 	934,318,527	  	

Argentina	 				 				 				 				 				 				 				
Ordinary income, total	 	 	1,553,663,443	  	 	 	59,661,271	  	 	 	541,777,988	  	 	 	—  	  	 	 	31,915,370	  	 	 	8,909,899	  	 	 	2,195,927,971	  	
Cost of sales	 	 	(1,107,112,515	) 	 	 	(13,577,531	) 	 	 	(352,609,965	) 	 	 	—  	  	 	 	(9,346,562	) 	 	 	(2,677,355	) 	 	 	(1,485,323,928	) 	

Gross margin	 	 	446,550,928	  	 	 	46,083,740	  	 	 	189,168,023	  	 	 	—  	  	 	 	22,568,808	  	 	 	6,232,544	  	 	 	710,604,043	  	

Brazil	 				 				 				 				 				 				 				
Ordinary income, total	 	 	1,552,064,331	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	4,657,306	  	 	 	—  	  	 	 	1,556,721,637	  	
Cost of sales	 	 	(1,204,385,968	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(1,204,385,968	) 	

Gross margin	 	 	347,678,363	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	4,657,306	  	 	 	—  	  	 	 	352,335,669	  	

Peru	 				 				 				 				 				 				 				
Ordinary income, total	 	 	624,487,505	  	 	 	5,565,057	  	 	 	—  	  	 	 	—  	  	 	 	8,741,190	  	 	 	2,950,742	  	 	 	641,744,494	  	
Cost of sales	 	 	(473,191,128	) 	 	 	(774,370	) 	 	 	—  	  	 	 	—  	  	 	 	(4,681,369	) 	 	 	(1,064,044	) 	 	 	(479,710,911	) 	

Gross margin	 	 	151,296,377	  	 	 	4,790,687	  	 	 	—  	  	 	 	—  	  	 	 	4,059,821	  	 	 	1,886,698	  	 	 	162,033,583	  	

Colombia	 				 				 				 				 				 				 				
Ordinary income, total	 	 	—  	  	 	 	—  	  	 	 	39,380,206	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	39,380,206	  	
Cost of sales	 	 	—  	  	 	 	—  	  	 	 	(28,782,293	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(28,782,293	) 	

Gross margin	 	 	—  	  	 	 	—  	  	 	 	10,597,913	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	10,597,913	  	

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Gross margin by country and segment

For the year ended December 31, 2010	 	Supermarkets	 	 	Shopping
centers	 	 	Home
improvement	 	 	Department
stores	 	 	Financial
services	 	 	Support services,
financing,
adjustments
and other	 	 	Consolidated
total	 	
 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
								
Chile	 				 				 				 				 				 				 				
Ordinary income, total	 	 	1,680,021,557	  	 	 	54,851,907	  	 	 	335,727,404	  	 	 	622,718,876	  	 	 	199,727,243	  	 	 	(3,448,810	) 	 	 	2,889,598,177	  	
Cost of sales	 	 	(1,280,914,592	) 	 	 	(4,912,996	) 	 	 	(240,655,260	) 	 	 	(446,769,009	) 	 	 	(64,356,481	) 	 	 	(1,420,594	) 	 	 	(2,039,028,932	) 	

Gross margin	 	 	399,106,965	  	 	 	49,938,911	  	 	 	95,072,144	  	 	 	175,949,867	  	 	 	135,370,762	  	 	 	(4,869,404	) 	 	 	850,569,245	  	

Argentina	 				 				 				 				 				 				 				
Ordinary income, total	 	 	1,370,236,283	  	 	 	53,336,695	  	 	 	451,021,344	  	 	 	—  	  	 	 	12,653,841	  	 	 	4,856,657	  	 	 	1,892,104,820	  	
Cost of sales	 	 	(990,079,422	) 	 	 	(10,827,267	) 	 	 	(297,025,936	) 	 	 	—  	  	 	 	(5,752,227	) 	 	 	(3,157,261	) 	 	 	(1,306,842,113	) 	

Gross margin	 	 	380,156,861	  	 	 	42,509,428	  	 	 	153,995,408	  	 	 	—  	  	 	 	6,901,614	  	 	 	1,699,396	  	 	 	585,262,707	  	

Brazil	 				 				 				 				 				 				 				
Ordinary income, total	 	 	842,901,494	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	5,776,404	  	 	 	—  	  	 	 	848,677,898	  	
Cost of sales	 	 	(661,807,973	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(661,807,973	) 	

Gross margin	 	 	181,093,521	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	5,776,404	  	 	 	—  	  	 	 	186,869,925	  	

Peru	 				 				 				 				 				 				 				
Ordinary income, total	 	 	559,599,546	  	 	 	8,802,139	  	 	 	—  	  	 	 	—  	  	 	 	2,852,800	  	 	 	2,249,113	  	 	 	573,503,598	  	
Cost of sales	 	 	(422,993,527	) 	 	 	(2,117,268	) 	 	 	—  	  	 	 	—  	  	 	 	(349,241	) 	 	 	(764,783	) 	 	 	(426,224,819	) 	

Gross margin	 	 	136,606,019	  	 	 	6,684,871	  	 	 	—  	  	 	 	—  	  	 	 	2,503,559	  	 	 	1,484,330	  	 	 	147,278,779	  	

Colombia	 				 				 				 				 				 				 				
Ordinary income, total	 	 	—  	  	 	 	—  	  	 	 	33,089,115	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	33,089,115	  	
Cost of sales	 	 	—  	  	 	 	—  	  	 	 	(23,324,752	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(23,324,752	) 	

Gross margin	 	 	—  	  	 	 	—  	  	 	 	9,764,363	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	9,764,363	  	

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28.4	Regional information by segment: non-current assets	
In thousands of Chilean pesos
Regional information by segment

 	 	Supermarkets	 	 	Shopping
centers	 	 	Home
improvement	 	 	Department
stores	 	 	Financial
services	 	 	Support services,
financing,
adjustments
and other	 	 	Consolidated
total	 	
At December 31, 2012	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Other financial assets, non-current	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	41,007,224	  	 	 	41,007,224	  	
Other non-financial assets, non-current	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	38,268,125	  	 	 	38,268,125	  	
Trade receivables and other receivables, non-current	 	 	12,035,470	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	128,319,182	  	 	 	1,951,509	  	 	 	142,306,161	  	
Equity method investments	 	 	925,203	  	 	 	41,335,198	  	 	 	—  	  	 	 	—  	  	 	 	11,707	  	 	 	—  	  	 	 	42,272,108	  	
Intangible assets other than goodwill	 	 	138,777,382	  	 	 	—  	  	 	 	—  	  	 	 	136,427,526	  	 	 	205,608,697	  	 	 	63,698,360	  	 	 	544,511,965	  	
Goodwill	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	1,824,972,594	  	 	 	1,824,972,594	  	
Property, plant and equipment	 	 	2,039,897,336	  	 	 	171,683,777	  	 	 	437,565,787	  	 	 	270,923,216	  	 	 	8,188,321	  	 	 	49,579,393	  	 	 	2,977,837,830	  	
Investment property	 	 	—  	  	 	 	1,471,343,789	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	1,471,343,789	  	
Income tax assets, non-current	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	4,825,534	  	 	 	4,825,534	  	
Deferred income tax assets	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	252,086,839	  	 	 	252,086,839	  	

Total non-current assets	 	 	2,191,635,391	  	 	 	1,684,362,764	  	 	 	437,565,787	  	 	 	407,350,742	  	 	 	342,127,907	  	 	 	2,276,389,578	  	 	 	7,339,432,169	  	

At December 31, 2011	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other financial assets, non-current	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	46,979,614	  	 	 	46,979,614	  	
Other non-financial assets, non-current	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	35,051,959	  	 	 	35,051,959	  	
Trade receivables and other receivables, non-current	 	 	32,932,917	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	158,487,608	  	 	 	3,022,990	  	 	 	194,443,515	  	
Equity method investments	 	 	920,899	  	 	 	37,897,834	  	 	 	—  	  	 	 	—  	  	 	 	11,707	  	 	 	—  	  	 	 	38,830,440	  	
Intangible assets other than goodwill	 	 	148,458,304	  	 	 	—  	  	 	 	—  	  	 	 	136,588,518	  	 	 	205,608,697	  	 	 	36,032,274	  	 	 	526,687,793	  	
Goodwill	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	1,013,309,102	  	 	 	1,013,309,102	  	
Property, plant and equipment	 	 	1,354,465,551	  	 	 	207,931,976	  	 	 	363,238,824	  	 	 	256,996,235	  	 	 	6,103,646	  	 	 	39,792,569	  	 	 	2,228,528,801	  	
Investment property	 	 	—  	  	 	 	1,310,143,075	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	1,310,143,075	  	
Deferred income tax assets	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	164,477,932	  	 	 	164,477,932	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total non-current assets	 	 	1,536,777,671	  	 	 	1,555,972,885	  	 	 	363,238,824	  	 	 	393,584,753	  	 	 	370,211,658	  	 	 	1,338,666,440	  	 	 	5,558,452,231	  	

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28.5	Current Asset and liabilities by segment	

Regional information by segment
Current assets and liabilities
at December 31, 2012	 	supermarkets	 	 	Shopping
Center	 	 	Home
Improvement	 	 	Department
Stores	 	 	Financial
Services
(Insurance +
cards + bank)	 	 	Support
Services,
Financing, and
Other Settings	 	 	Total
Consolidated	 	
	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Trade and other accounts charge you comment	 	 	360,516,572	  	 	 	33,329,057	  	 	 	66,128,123	  	 	 	28,921,744	  	 	 	571,164,524	  	 	 	272,846	  	 	 	1,060,332,866	  	
current inventory	 	 	590,156,605	  	 	 	—  	  	 	 	195,433,976	  	 	 	141,171,004	  	 	 	—  	  	 	 	—  	  	 	 	926,761,585	  	
Trade accounts payable and other payables	 	 	1,311,664,091	  	 	 	57,574,132	  	 	 	228,748,697	  	 	 	230,855,777	  	 	 	59,734,593	  	 	 	13,818,625	  	 	 	1,902,395,915	  	

Regional information by segment
Current assets and liabilities
at December 31, 2011	 	supermarkets	 	 	Shopping
Center	 	 	Home
Improvement	 	 	Department
Stores	 	 	Financial
Services
(Insurance +
cards + bank)	 	 	Support
Services,
Financing, and
Other Settings	 	 	Total
Consolidated	 	
	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Trade and other accounts charge you comment	 	 	289,205,147	  	 	 	31,156,863	  	 	 	62,309,456	  	 	 	23,399,974	  	 	 	523,409,453	  	 	 	387,898	  	 	 	929,868,791	  	
current inventory	 	 	445,338,661	  	 	 	—  	  	 	 	191,170,085	  	 	 	132,963,705	  	 	 	—  	  	 	 	—  	  	 	 	769,472,451	  	
Trade accounts payable and other payables	 	 	973,002,131	  	 	 	47,328,180	  	 	 	216,553,732	  	 	 	236,929,719	  	 	 	51,072,581	  	 	 	8,898,061	  	 	 	1,533,784,404	  	
 
28.6	Information by country, assets and liabilities	
In thousands of Chilean pesos:
Assets and liabilities by country

 	 	Chile	 	 	Argentina	 	 	Brazil	 	 	Peru	 	 	Colombia	 	 	Consolidated
total	 	
At December 31, 2012	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Total assets	 	 	4,454,315,307	  	 	 	1,266,718,615	  	 	 	1,397,406,576	  	 	 	895,260,292	  	 	 	1,660,298,803	  	 	 	9,673,999,593	  	
Total liabilities	 	 	4,198,663,160	  	 	 	704,020,139	  	 	 	664,303,965	  	 	 	355,619,741	  	 	 	353.180,844	  	 	 	6,275,787,849	  	
							
At December 31, 2011	 				 				 				 				 				 				
Total assets	 	 	4,274,998,976	  	 	 	1,373,378,310	  	 	 	1,107,790,625	  	 	 	801,584,506	  	 	 	86,335,385	  	 	 	7,644,087,802	  	
Total liabilities	 	 	3,143,408,084	  	 	 	769,041,760	  	 	 	459,793,950	  	 	 	311,404,769	  	 	 	9,832,993	  	 	 	4,693,481,556	  	

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28.7	Regional information, including intersegments is as follows:	

 	  	For the year ended December 31, 2012	 	
Regional information, by segment	  	Total  segment
revenue	 	  	Intersegment
revenue	 	  	Revenue from
external  customer	 	
 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Supermarkets	  	 	6,738,170,738	  	  	 	—  	  	  	 	6,738,170,738	  	
Shopping	  	 	267,744,739	  	  	 	102,282,693	  	  	 	165,462,046	  	
Home Improvement	  	 	1,071,180,346	  	  	 	8,094,100	  	  	 	1,063,086,246	  	
Department stores	  	 	886,074,835	  	  	 	—  	  	  	 	886,074,835	  	
Financial Services	  	 	282,253,499	  	  	 	—  	  	  	 	282,253,499	  	
Others	  	 	14,029,743	  	  	 	—  	  	  	 	14,029,743	  	

TOTAL	  	 	9,259,453,900	  	  	 	110,376,793	  	  	 	9,149,077,107	  	

 	  	For the year ended December 31, 2011	 	
Regional information, by segment	  	Total  segment
revenue	 	  	Intersegment
revenue	 	  	Revenue from
external  customer	 	
 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Supermarkets	  	 	5,556,271,353	  	  	 	—  	  	  	 	5,556,271,353	  	
Shopping	  	 	227,979,409	  	  	 	98,252,138	  	  	 	129,727,271	  	
Home Improvement	  	 	958,067,011	  	  	 	9,426,209	  	  	 	948,640,802	  	
Department stores	  	 	690,772,399	  	  	 	—  	  	  	 	690,772,399	  	
Financial Services	  	 	267,874,237	  	  	 	—  	  	  	 	267,874,237	  	
Others	  	 	11,520,311	  	  	 	—  	  	  	 	11,520,311	  	

TOTAL	  	 	7,712,484,720	  	  	 	107,678,347	  	  	 	7,604,806,373	  	

 	  	For the year ended December 31, 2010	 	
Regional information, by segment	  	Total segment
revenue	 	  	Intersegment
revenue	 	  	Revenue from
external  customer	 	
 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Supermarkets	  	 	4,452,758,880	  	  	 	—  	  	  	 	4,452,758,880	  	
Shopping	  	 	202,222,376	  	  	 	85,231,635	  	  	 	116,990,741	  	
Home Improvement	  	 	826,121,860	  	  	 	6,283,996	  	  	 	819,837,864	  	
Department stores	  	 	622,718,876	  	  	 	—  	  	  	 	622,718,876	  	
Financial Services	  	 	221,010,287	  	  	 	—  	  	  	 	221,010,287	  	
Others	  	 	3,656,960	  	  	 	—  	  	  	 	3,656,960	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
TOTAL	  	 	6,328,489,239	  	  	 	91,515,631	  	  	 	6,236,973,608	  	

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28.8	Long-lived assets by country 	

At December 31, 2012	  	Chile	 	  	Argentina	 	 	Brazil	 	  	Peru	 	  	Colombia	 	  	Consolidated
total	 	
 	  	ThCh$	 	  	ThCh$	 	 	ThCh$	 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Other non-financial assets	  	 	31,802,299	  	  	 	6,458,266	  	 	 	—  	  	  	 	—  	  	  	 	7,560	  	  	 	38,268,125	  	
Trade receivables and other receivables	  	 	118,852,275	  	  	 	11,518,280	  	 	 	9,894,674	  	  	 	2,040,932	  	  	 	—  	  	  	 	142,306,161	  	
Equity Method investments	  	 	41,346,905	  	  	 	207,360	  	 	 	—  	  	  	 	717,843	  	  	 	—  	  	  	 	42,272,108	  	
Intangible assets other than goodwill	  	 	364,347,068	  	  	 	2,710,169	  	 	 	68,122,032	  	  	 	101,138,070	  	  	 	8,194,626	  	  	 	544,511,965	  	
Goodwill	  	 	246,271,648	  	  	 	4,543,137	  	 	 	586,438,275	  	  	 	249,078,613	  	  	 	738,640,921	  	  	 	1,824,972,594	  	
Property Plant and Equipment	  	 	1,239,830,418	  	  	 	461,852,383	  	 	 	327,480,746	  	  	 	311,768,451	  	  	 	636,905,832	  	  	 	2,977,837,830	  	
Investment Property	  	 	1,076,383,068	  	  	 	233,206,607	  	 	 	—  	  	  	 	129,920,885	  	  	 	31,833,229	  	  	 	1,471,343,789	  	
Income tax assets, non-current	  	 	3,372,209	  	  	 	749,322	  	 	 	—  	  	  	 	—  	  	  	 	704,003	  	  	 	4,825,534	  	

Long lived assets—Total	  	 	3,122,205,890	  	  	 	721,245,524	  	 	 	991,935,727	  	  	 	794,664,794	  	  	 	1,416,286,171	  	  	 	7,046,338,106	  	

 	  	Chile	 	  	Argentina	 	 	Brazil	 	  	Peru	 	  	Colombia	 	  	Consolidated
total	 	
At December 31, 2011	  	ThCh$	 	  	ThCh$	 	 	ThCh$	 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Other non-financial assets	  	 	27,641,021	  	  	 	6,900,578	  	 	 	510,360	  	  	 	—  	  	  	 	—  	  	  	 	35,051,959	  	
Trade receivables and other receivables	  	 	176,412,417	  	  	 	12,085,175	  	 	 	4,485,902	  	  	 	1,460,021	  	  	 	—  	  	  	 	194,443,515	  	
Equity Method investments	  	 	37,909,541	  	  	 	(14,578	) 	 	 	—  	  	  	 	935,477	  	  	 	—  	  	  	 	38,830,440	  	
Intangible assets other than goodwill	  	 	362,292,641	  	  	 	872,095	  	 	 	62,457,143	  	  	 	101,065,914	  	  	 	—  	  	  	 	526,687,793	  	
Goodwill	  	 	246,378,878	  	  	 	5,614,481	  	 	 	505,459,120	  	  	 	255,856,623	  	  	 	—  	  	  	 	1,013,309,102	  	
Property Plant and Equipment	  	 	1,132,223,903	  	  	 	521,365,259	  	 	 	244,257,603	  	  	 	278,191,626	  	  	 	52,490,410	  	  	 	2,228,528,801	  	
Investment Property	  	 	918,662,623	  	  	 	280,409,706	  	 	 	—  	  	  	 	103,780,746	  	  	 	7,290,000	  	  	 	1,310,143,075	  	

Long lived assets—Total	  	 	2,901,521,024	  	  	 	827,232,716	  	 	 	817,170,128	  	  	 	741,290,407	  	  	 	59,780,410	  	  	 	5,346,994,685	  	

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28.9	Cash Flow by segment:	

Regional information by segment Consolidated
Segment Flows at December 31, 2012	 	Supermarkets	 	 	Shopping
Center	 	 	Home
Improvement	 	 	Department
Stores	 	 	Financial
Services
(Insurance +
cards +
bank)	 	 	Support
Services,
Financing,
and Other
Settings	 	 	Total
Consolidated	 	
	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Net cash flows from (used in) operating activities	 	 	511,615,028	  	 	 	138,682,474	  	 	 	59,899,058	  	 	 	37,800,248	  	 	 	60,778,455	  	 	 	(90,060,644	) 	 	 	718,714,619	  	
Net cash flows from (used in) investing activities	 	 	(1,840,668,972	) 	 	 	(169,430,593	) 	 	 	(30,630,553	) 	 	 	(35,053,881	) 	 	 	2,525,737	  	 	 	(42,990,865	) 	 	 	(2,116,249,127	) 	
Net cash flows from (used in) financing activities	 	 	1,386,938,449	  	 	 	35,772,502	  	 	 	(21,716,322	) 	 	 	11,406,894	  	 	 	(56,969,377	) 	 	 	133,326,730	  	 	 	1,488,758,876	  	
								
Regional information by segment Consolidated
Segment Flows at December 31, 2011	 	supermarkets	 	 	Shopping
Center	 	 	Home
Improvement	 	 	Department
Stores	 	 	Financial
Services
(Insurance +
cards +
bank)	 	 	Support
Services,
Financing,
and Other
Settings	 	 	Total
Consolidated	 	
	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	 	ThCh$	 	
Net cash flows from (used in) operating activities	 	 	374,509,930	  	 	 	109,943,585	  	 	 	68,826,418	  	 	 	43,296,869	  	 	 	42,701,507	  	 	 	(71,539,692	) 	 	 	567,738,617	  	
Net cash flows from (used in) investing activities	 	 	(244,972,415	) 	 	 	(224,084,865	) 	 	 	(25,845,735	) 	 	 	(131,118,878	) 	 	 	(9,779,253	) 	 	 	12,048,266	  	 	 	(623,752,880	) 	
Net cash flows from (used in) financing activities	 	 	(135,666,317	) 	 	 	120,028,668	  	 	 	(44,814,346	) 	 	 	103,481,206	  	 	 	(21,245,979	) 	 	 	67,823,933	  	 	 	89,607,165	  	
 
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28.10	Bank statements Paris:	
Below is classified financial information of Banco Paris, used in the consolidation of Cencosud SA at December 31, 2012 and December 31, 2011.

 	  	As of December 31,	 	
Assets	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
			
Current assets	  				  				
Cash and cash equivalents	  	 	23,896,165	  	  	 	14,530,600	  	
Other financial assets, current	  	 	—  	  	  	 	5,362,015	  	
Trade receivables and other receivables	  	 	101,261,110	  	  	 	51,140,152	  	
Current tax assets	  	 	585,892	  	  	 	772,072	  	

Total current assets	  	 	125,743,167	  	  	 	71,804,839	  	

Non-current assets	  				  				
Trade receivable and other receivables, non-current	  	 	94,451,338	  	  	 	116,352,951	  	
Deceibles from related entities	  	 	566,484	  	  	 	132,171	  	
Equity method investment	  	 	11,707	  	  	 	11,707	  	
Intangible assets other than goodwill	  	 	2,667,657	  	  	 	2,644,991	  	
Property, plant and equipment	  	 	1,269,846	  	  	 	2,552,775	  	
Deferred income tax assets	  	 	3,463,815	  	  	 	1,687,664	  	

Total non-current assets	  	 	102,430,847	  	  	 	123,382,259	  	

Total assets	  	 	228,174,014	  	  	 	195,187,098	  	
	  	 	 	 	  	 	 	 	
The accompanying notes are an integral part of these consolidated financial statements.
 
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28.10	Bank statements Paris:	
Below is classified financial information of Banco Paris, used in the consolidation of Cencosud SA at December 31, 2012 and December 31, 2011.

 	  	As of December 31,	 	
Net equity and liabilities	  	2012	 	 	2011	 	
 	  	ThCh$	 	 	ThCh$	 	
			
Current liabilities	  				 				
Other financial liabilities, current	  	 	126,924,707	  	 	 	146,272,803	  	
Trade payables and other payables	  	 	4,193,313	  	 	 	2,465,899	  	
Current income tax liabilities	  	 	98,070	  	 	 	150,028	  	
Current provision for employee benefits	  	 	539,753	  	 	 	4,006,773	  	
Total current liabilities	  	 	131,755,843	  	 	 	152,895,503	  	

Non-current liabilities	  				 				
Other financial liabilities,	  	 	57,093,700	  	 	 	10,722,087	  	
Trade accounts payables	  	 	631,197	  	 	 	91,119	  	
Deferred income tax liabilities	  	 	1,623,259	  	 	 	1,525,641	  	

Total non-current liabilities	  	 	59,348,156	  	 	 	12,338,847	  	

Total liabilities	  	 	191,103,999	  	 	 	165,234,350	  	

Net equity	  				 				
Paid-in capital	  	 	39,579,421	  	 	 	27,579,421	  	
Retained earnings (accumulated losses)	  	 	(2,324,000	) 	 	 	2,183,597	  	
Other reserves	  	 	(185,406	) 	 	 	189,730	  	

Net equity attributable to controlling shareholders	  	 	37,070,015	  	 	 	29,952,748	  	
Non-controlling interest	  	 	—  	  	 	 	—  	  	

Total net equity	  	 	37,070,015	  	 	 	29,952,748	  	

Total net equity and liabilities	  	 	228,174,014	  	 	 	195,187,098	  	
	  	 	 	 	 	 	 	 	
The accompanying notes are an integral part of these consolidated financial statements.
 
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28.10	Bank statements Paris:	
Below is classified financial information of Banco Paris, used in the consolidation of Cencosud SA at December 31, 2012 and December 31, 2011.

 	  	For the year ended
December 31,	 	
Statement of integral income	  	2012	 	 	2011	 	
	  	ThCh$	 	 	ThCh$	 	
Revenues from ordinary activities	  	 	36,388,016	  	 	 	39,935,445	  	
Cost of Sales	  	 	(4,913,680	) 	 	 	(3,182,445	) 	
	  	 	 	 	 	 	 	 	
Gross Margin	  	 	31,474,336	  	 	 	36,753,000	  	
Administrative expenses	  	 	(27,328,182	) 	 	 	(24,817,963	) 	
Financial income	  	 	120,992	  	 	 	271,119	  	
Financial expenses	  	 	(11,487,735	) 	 	 	(9,288,774	) 	
Exchange differences	  	 	(9,048	) 	 	 	7,770	  	
Participation in profit or loss of equity method associates	  	 	(2,696	) 	 	 	(4,450	) 	
	  	 	 	 	 	 	 	 	
Profit before tax	  	 	(7,232,333	) 	 	 	2,920,702	  	
Income tax charge	  	 	1,580,324	  	 	 	(357,646	) 	
	  	 	 	 	 	 	 	 	
Profit from ongoing operations	  	 	(5,652,009	) 	 	 	2,563,056	  	
	  	 	 	 	 	 	 	 	
Net income	  	 	(5,652,009	) 	 	 	2,563,056	  	
	  	 	 	 	 	 	 	 	
The accompanying notes are an integral part of these consolidated financial statements.
 
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29	Restrictions, contingencies, legal proceedings and other matters	
 
•	 	The subsidiary Cencosud S.A. (Argentina) has counter guaranteed with fixed assets certain guarantee deposits received from concessionaires. The pledged assets are mortgaged real estate with guarantee deposits received for 2012 and 2011 of ThCh$ 3,622,226 and ThCh$ 4,194,354, respectively. (See note 31.2 and 31.3)	
 
•	 	The subsidiaries of Cencosud S.A. in Chile are involved in lawsuits and litigation that are pending as of period end. The amounts of these claims are covered by a civil liability insurance policy.	
 
•	 	A civil lawsuit was filed against the indirectly controlled affiliate GBarbosa Comercial (Brazil) by the Public Employees Union in supermarkets in the State of Sergipe, which is awaiting the first instance ruling. The union is seeking compensation for overtime hours for all employees of the subsidiary for the period after May 2007. The petition was filed and supported by the ruling, albeit still not judicial, that was issued through another public civil claim, which annulled a bank of hours from May 2007 to April 2009.	
Based on the opinion of a legal advisor, we cannot estimate the value of the case given the complexity of the calculations related to the process, as well as the absence of sufficient evidence in the file in order to quantify.
 
•	 	A class action suit was also filed against the indirectly controlled affiliate G Barbosa Comercial (Brazil) filed by the Retail and Service Establishment Employees Union, Paulo Afonso and the Region based on the alleged violation of the clause in the Collective Bargaining Agreement that prohibits stores in this region from operating on Sundays after 13:00 hours. The request for payment of fines to the union has been confirmed in the first and second instance rulings and today is awaiting the decision on an appeal.	
There is no evidence that could support a reasonable estimate of the amount in question, given the extreme difficulty of determining the number of employees allegedly affected by the work schedule at that time.
The contingencies and legal proceedings disclosed above are deemed to be of a remote outcome.
 
30	Leases	
The Company leases installations, land, equipment and other assets under operating lease agreements.
The agreements have diverse durations and expiration periods, renewal rights and indexation clauses, which are mainly related to the inflation rate in the countries where the contracts are held.
 
30.1	Operating leases.	
The Minimum Future Payments of leases, as a Lessee as of December 31, 2012 and 2011 are detailed below:

 	  	As of December 31,	 	
 	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Up to one year, Lessees	  	 	124,354,758	  	  	 	94,219,664	  	
Between two and up to five years	  	 	470,134,378	  	  	 	358,745,605	  	
Over five years	  	 	1,155,042,379	  	  	 	938,819,367	  	

Total	  	 	1,749,531,515	  	  	 	1,391,784,631	  	

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Lease payments and subleases recognized in the statement of income:

 	  	As of December 31,	 	
 	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Minimum payments from operational leases	  	 	125,765,684	  	  	 	96,026,183	  	
Contingent leases from operational leases	  	 	16,479,307	  	  	 	13,403,806	  	

Total	  	 	142,244,991	  	  	 	109,429,989	  	
	  	 	 	 	  	 	 	 	
The Minimum Future payments of leases, as a Lessor as of December 31, 2012 and 2011 are detailed below:

 	  	As of December 31,	 	
 	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Up to one year, Lessees	  	 	113,114,028	  	  	 	95,706,272	  	
Between two and five years	  	 	257,755,799	  	  	 	211,386,513	  	
Over five years	  	 	68,874,974	  	  	 	42,116,221	  	

Total	  	 	439,744,801	  	  	 	349,209,006	  	
	  	 	 	 	  	 	 	 	
The contingent income recognized in the statement of income amounts to ThCh$ 23,996,512 (ThCh$ 18,970,482 as of December 31, 2011).
The Company has no individually significant operating leases, nor are there restrictions on the distribution of dividends or on incurring other leasing contracts or debt. All the contracts are at market values.
 
30.2	Financial leases	
In Other property, plant and equipment are assets acquired under finance leases.

 	  	Balance as of,	 	
	  	31/12/2012	 	  	31/12/2011	 	
Property, plant and equipment, net	  	ThCh$	 	  	ThCh$	 	
Land	  	 	15,322,744	  	  	 	8,020,434	  	
Buildings	  	 	8,804,193	  	  	 	9,597,715	  	
Information technology equipment	  	 	845,667	  	  	 	900,092	  	
fixed installations and accessories	  	 	2,630,647	  	  	 	2,605,793	  	
Equipment	  	 	8,178,650	  	  	 	7,769,787	  	
Vehicles	  	 	960,693	  	  	 	—  	  	

Total	  	 	36,742,594	  	  	 	28,893,821	  	

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The values of the future payments under these leases are as follows:

 	  	31/12/2012	 	
Reconciliation of minimum lease payments lessee financial	  	Present Value
ThCh$	 	  	Interest
ThCh$	 	  	Gross
ThCh$	 	
Less than one year	  	 	5,453,350	  	  	 	749,024	  	  	 	6,202,374	  	
Between one and five years	  	 	10,766,639	  	  	 	2,795,193	  	  	 	13,561,832	  	
More than five years	  	 	14,916,686	  	  	 	1,991,329	  	  	 	16,908,015	  	

Total	  	 	31,136,675	  	  	 	5,535,546	  	  	 	36,672,221	  	

													
 	  	31/12/2011	 	
Reconciliation of minimum lease payments lessee financial	  	Present Value
ThCh$	 	  	Interest
ThCh$	 	  	Gross
ThCh$	 	
Less than one year	  	 	5,059,200	  	  	 	958,887	  	  	 	6,018,087	  	
Between one and five years	  	 	11,731,676	  	  	 	2,751,949	  	  	 	14,483,625	  	
More than five years	  	 	8,235,226	  	  	 	1,991,329	  	  	 	10,226,555	  	

Total	  	 	25,026,102	  	  	 	5,702,165	  	  	 	30,728,267	  	

31	Guarantees with third parties	
The detail of the guarantees obtained is the following:
 
31.1	Guarantees received by project.	
The amounts detailed below are related to off statements of financial position arrangement.

 	  	As of December 31,	 	
Grantor of the guarantee	  	2012	 	  	2011	 	
 	  	ThCh$	 	  	ThCh$	 	
Constructora INALCO S.A.	  	 	167,147	  	  	 	—  	  	
Constructora Trebol Ltda.	  	 	105,136	  	  	 	—  	  	
Salfa Construcción S.A.	  	 	318,932	  	  	 	1,308,846	  	
Ascensores OTIS Chile Ltda.	  	 	50,308	  	  	 	—  	  	
Constructora Cruzat S.A.	  	 	66,030	  	  	 	—  	  	
Traancura Ing. Constr. Ltda.	  	 	98,829	  	  	 	—  	  	
Constructora Cuevas y Purcell S.A.	  	 	1,094,558	  	  	 	799,685	  	
Desarrollo Constructivos Axis S.A.	  	 	—  	  	  	 	200,853	  	
Socovesa Ingenieria y Construccion S.A.	  	 	—  	  	  	 	114,688	  	
Empresa Constructora D L P Ltda.	  	 	—  	  	  	 	128,539	  	
Ready Mix S.A.	  	 	—  	  	  	 	—  	  	
Other Guarantees obtained for work completion	  	 	206,080	  	  	 	171,793	  	

Total guarantees obtained for work completion	  	 	2,107,020	  	  	 	2,724,404	  	
Guarantees received for store leases	  	 	8,214,781	  	  	 	4,473,539	  	

Total guarantees obtained	  	 	10,321,801	  	  	 	7,197,943	  	

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31.2	Direct guarantees	

 	  	Debtor	 	  	 	 	  	Committed Assets	 	
Guarantee creditor	  	Name	  	Relation	 	  	Guarantee
type	 	  	Type	 	  	Book value
2012	 	  	Book value
2011	 	
 	  	 	  	 	 	  	 	 	  	 	 	  	ThCh$	 	  	ThCh$	 	
Concesionarios	  	Cencosud S.A Argentina	  	 	Subsidiary	  	  	 	Mortgage	  	  	 
 	Property, plant and
equipment	  
  	  	 	3,622,226	  	  	 	4,194,354	  	

Total property, plant and equipment	  		  				  				  				  	 	3,622,226	  	  	 	4,194,354	  	
	  		  				  				  				  	 	 	 	  	 	 	 	
31.3 Debt Balance from Direct Guarantees

 	  	Debtor	 	  	 	 	  	 	 	  	 	 	
Guarantee creditor	  	Name	 	  	Relation	 	  	Guarantee
type	 	  	Book value
2012	 	  	Book value
2011	 	
 	  	 	 	  	 	 	  	 	 	  	ThCh$	 	  	ThCh$	 	
Concesionarios	  	 	Cencosud S.A Argentina	  	  	 	Subsidiary	  	  	 	Mortgage	  	  	 	3,622,226	  	  	 	4,194,354	  	

Total property, plant and equipment	  				  				  				  	 	3,622,226	  	  	 	4,194,354	  	

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32	Personnel distribution	
The distribution of personnel of the Company is the following:

 	  	As of December 31, 2012	 	  	 	 	
Company	  	Managers
and main
executives	 	  	Professionals
and
technicians	 	  	Workers
and
other	 	  	Total	 	  	Average	 	
Cencosud S.A.	  	 	16	  	  	 	681	  	  	 	415	  	  	 	1,112	  	  	 	1,038	  	
Subsidiaries in Chile—Argentina Brazil—Peru—Colombia	  	 	1,068	  	  	 	14,574	  	  	 	141,213	  	  	 	156,855	  	  	 	141,637	  	

Total	  	 	1,084	  	  	 	15,255	  	  	 	141,628	  	  	 	157,967	  	  	 	142,675	  	

 	  	As of December 31, 2011	 	  	 	 	
Company	  	Managers
and main
executives	 	  	Professionals
and
technicians	 	  	Workers
and
other	 	  	Total	 	  	Average	 	
Cencosud S.A.	  	 	14	  	  	 	426	  	  	 	387	  	  	 	827	  	  	 	827	  	
Subsidiaries in Chile—Argentina—Brazil—Peru—Colombia	  	 	783	  	  	 	5,275	  	  	 	124,620	  	  	 	130,678	  	  	 	127,202	  	

Total	  	 	797	  	  	 	5,701	  	  	 	125,007	  	  	 	131,505	  	  	 	128,029	  	

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33	Stock options	
As of December 31, 2012, the Company has a share-based compensation plan for executives of Cencosud S.A. and Affiliates. The details of the arrangements are described below:

Agreement	 	Stock options granted to key
executives	 	Stock options granted to key
executives	
			
Nature of the arrangement	 	Years of service plan	 	Performance incentive	
Date of grant	 	1/1/2010	 	1/1/2010	
Number of instruments granted	 	8,392,143 shares	 	16,607,857 shares	
Exercise price	 	Ch$ 1,750	 	Ch$ 1,750	
Share price at granted date	 	Ch$ 1,766.8	 	Ch$ 1,766.8	
Vesting	 	3.3	 	3.3	
Condition	 	a)       As of the grant date, the executive must have a current employment contract with the Company or any of its subsidiaries in Chile or abroad without any interruption in its employment relationship.
 
b)      From the date of signing of the stock option contract and until the exercise date, the Executive has not committed any serious breaches of its employment duties, at the Company’s sole discretion.	 	The investing condition requires that EBITDA for the year ended December 31, 2012 (meaning the Consolidated net income of Cencosud S.A. plus financial interest, depreciation, amortization and income taxes and excluding the variation of adjustment unit and change by revaluation of investment properties) increase 100% or more based on the EBITDA for the year ended December 31, 2009 (amounting to ThCh$ 403,210,000. EBITDA is calculated based only on the businesses that the Company has or operates as of signing date of the stock options contract and excludes any acquisition (such as purchase, merger, or other similar transaction) made by the Company. The Board has approved a change to the performance incentive plan, as is described below.	
			
Settlement	 	Shares	 	Shares	
Data used in the options pricing model:	 		 		
			
Weighted average price of shanes used	 	Ch$ 1,766.8	 	Ch$ 1,766.8	
Exercise price	 	Ch$ 1,750	 	Ch$ 1,750	
Expected volatility	 	16.0%	 	16.0%	
Expected term at grant day (in years)	 	3.3	 	3.3	
Risk free interest rate	 	4.7%	 	4.7%	
Expected dividends (dividends yield)	 	0%	 	0%	
Anticipated % of executives leaving the plan (at grant date)	 	10%	 	10%	
Fair value of the option at the grant date	 	Ch$ 331.87	 	Ch$ 331.87	
 
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 	  	Numbers of shares	 	
Stock options granted to key executives	  	2012	 	 	2011	 	
1) Outstanding as of the beginning of the period	  	 	22,717,830	  	 	 	23,412,830	  	
2) Granted during the period	  	 	303,250	  	 	 	735,000	  	
3) Forfeited during the period	  	 	(4,577,288	) 	 	 	(1,430,000	) 	
4) Exercised during the period	  	 	—  	  	 	 	—  	  	
5) Expired at the end of the period	  	 	—  	  	 	 	—  	  	
6) Outstanding at the end of the period	  	 	18,443,792	  	 	 	22,717,830	  	
7) Vested and expected to vest at the end of the period	  	 	18,443,792	  	 	 	22,717,830	  	
8) Eligible for exercise at the end of the period	  	 	250	  	 	 	271	  	

Stock options—Impact in P&L	  	2012	 	  	2011	 	  	2010	 	
 	  	ThCh$	 	  	ThCh$	 	  	ThCh$	 	
Impact in the income statement	  	 	2,297,559	  	  	 	2,297,562	  	  	 	2,297,562	  	
The Board has approved a change to the performance incentive plan, changing the condition of exercise in accordance with the EBITDA increase percentage actually achieved. It was also agreed to postpone the deadline for exercising the stock option plans until April 22, 2013.
Additionally, the Board delegated to its Chairman the possibility of providing additional options to the aforementioned performance incentive plan to certain key executives under the condition that they not exceed the limit of number of shares approved by the Shareholders dated April 25, 2008 for this purposes.
At the end of each reporting period, the Company revises its estimates of the number of options that can be exercised. The estimated number of options to be exercised is 18,443,792 and 22,717,830 shares at December 31, 2012 and December 31, 2011, respectively.
A new compensation plan proposal based on options to purchase shares was presented to the board of Directors. This proposal is expected to be approved during the first quarter of 2013. The shares that will be used for this new plan are shares reserved for incentive programs for executives coming from the capital increases approved by the Shareholders Meeting dated April 29, 2011 and November 20, 2012
The Company utilizes a valuation model that is based in a constant volatility assumption to value its employee share options. The fair value of each option grant has been estimated, as of the grant date, using the Black Scholes option pricing model.
 
34	Environmental matters	
As of December 31, 2012 and 2011, the Company has not made disbursements related to the protection of the environment, and there are no future commitments with regards to this matter.
 
35	Subsequent events	
Issuance of Shares:
On February 4, 2013, the Superintendency of Securities and Insurance registered in the Securities Registry under rule No. 970, the issuance of 332,987,717 shares of a single series and no nominal value, for a total of Ch$835 billion. The deadline for the issuance, subscription and payment of these actions is 3 years from the date of November 20, 2012, except that part which will go to a compensation plan for employees of the Company and its subsidiaries, which is up to 33,298,771 shares, for which the deadline for subscription to them and paying them will be 5 years from that date.
The funds obtained from this share issuance will be used to prepay all or part of the unpaid balance of short-term debt undertaken on October 17, 2012 with JP Morgan Chase Bank (Bridge Loan Agreement) by the Company upon purchasing Carrefour’s operations in Colombia, despite to other uses that the Board may decide to do considering the needs of the Company.
 
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The part of this issuance that is not intended for the workers’ compensation plan of the Company and its subsidiaries provides preference to the shareholders of the Company, entitled to subscribe to 0.1195359425 new shares for each share they own registered in the shareholders registry at midnight on February 6, 2013. These shares will be offered at a price of Ch$2,600 per share, and must be paid upon subscription of the shares in cash, cashier’s check or electronic funds transfer, in Chilean pesos, the currency of the Republic of Chile.
Shareholders entitled to subscribe for the shares or options assignees must state in writing to the issuing Company of its intention to subscribe them, within 30 days from the start date of the option, ie between February 12, 2013 to March 14, 2013, provided that foregoes this right if anything expressed within that period.
On April 24, 2013 the Supreme Court of Chile ruled on the ongoing class action suit filed by the Servicio Nacional del Consumidor (the National Consumer Protection Agency, or “SERNAC”), against the company “Cencosud Administradora de Tarjetas SA”, filed in December 2006.
The non-appealable final judgment requires the company to reimburse cardholders for excess maintenance fees charged since 2006 plus inflation adjustment and interest.
Cencosud has begun the process of quantifying the final amount which preliminary amounts to ThCh$20,000,000. This estimation should be ratified by the Supreme Court of Chile after subsequent filings for interpretation, rectification and amendment are addressed by the court. The preliminary estimated amount is shown in Note 19 “Provisions and other liabilities”.
Between the date of issuance of these consolidated financial statements and the date at which the consolidated financial statements were available to be issued, there are no other events that may significantly affect the consolidated financial statements.
 
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SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

Cencosud S.A.	
		
	 	/s/ Daniel Rodriguez	
	 	Name:	 	Daniel Rodriguez	
	 	Title:	 	Chief Executive Officer	
Date: May 7, 2013

Exhibit 1.1
RESTATED TEXT OF THE BYLAWS OF CENCOSUD S.A.
TITLE FIRST
NAME, DOMICILE, BUSINESS PURPOSE AND DURATION
ARTICLE FIRST : A corporation is organized, which will be named “CENCOSUD S.A.”, that will be subject to the rules governing open-held corporations under the terms provided by Article second of Supreme Decree 587 of 1982, Regulations of Law 18,046.
ARTICLE SECOND : The domicile of the company will be the borough of Santiago, being able to establish agencies or branches elsewhere in the country or abroad.
ARTICLE THIRD : The business purposes of the company are the following: a) To practice commerce in general, including to purchase, sell, consign, distribute, import, export, represent, arrange, pack, divide and commercialize, for itself or for the benefit of third parties, all kind of movable tangible property; b) To make in the country or aboard permanent or profitable investments in all kind of tangible and intangible property. For these purposes the company may acquire, keep, sell, transfer and negotiate in any manner and under any title, all kind of goods, whether in the country or aboard, and receive its profits and rents; c) Execute or enter into any act or contract leading to the fulfillment of its business purpose.
ARTICLE FOURTH : The duration of the company shall be indefinite.
TITLE SECOND
CAPITAL AND SHARES
ARTICLE FIFTH : The capital of the company is the amount of $2,515,694,297,208, divided into 2,907,002,733 nominal, single-series and non-par-value shares, which is subscribed for and paid up in the manner set forth in Article Transitory First.
ARTICLE SIXTH : The shares will be nominative, of common stock and of the same series, and their certificates will indicate, at least, the name of the owner in the front, the name and seal of the company, the signatures of the chairman and the chief executive officer or the person acting in replacement of them, the date of the incorporation deed and notarial office in which it has been granted, a reference to the registration of the abstract in the relevant Registry of Commerce and its publication in the Official Gazette, a reference to the capital, the total number of shares into which the capital of the company is divided, the number of shares represented by the certificate and the duration of the company.

ARTICLE SEVENTH : A registry of all the shareholders will be kept, indicating the number of shares held by each one of them. Transfers of shares will be made pursuant to applicable laws and will be registered in the corresponding shareholders’ registry. The acquisition of shares of the company implies the acceptance of its bylaws, the resolutions passed at shareholders meetings and the obligation of paying the owed installments, if the acquired shares are not fully paid. The company will register the transfers of shares presented to the same, provided they meet the minimum formalities required by applicable laws.
ARTICLE EIGHT : If one or more shares are jointly owned by several persons, the co-owners shall appoint an attorney to represent them to act upon the company.
ARTICLE NINTH : Shares issued as a consequence of a capital increase shall always be offered in a preferred manner to the shareholders pro rata their shares. This right may be essentially waived and transferred.
TITLE THIRD
MANAGEMENT
ARTICLE TENTH : The Company will be managed by a Board of Directors comprised of nine members. The directors may be shareholders or not and they may be re-elected in an indefinite manner. The Board of Directors will serve in office for a period of three years.
ARTICLE ELEVENTH : The election of Directors will be made at the corresponding Regular General Shareholders Meeting. At the elections made at the Shareholders Meeting, each shareholder will have one vote per share held or represented, and may accumulate his/her votes in favor of one person or apportion them as he/she deems fit. The Directors who obtain the highest number of votes at one and the same ballot will be elected to the board until the number of directors to be elected shall have been completed. Nevertheless, by unanimous vote of the present shareholders entitled to vote, the ballot may be omitted and all of the Directors may be elected by acclaim.
ARTICLE TWELFTH : If for any reason the Shareholders Meeting called upon to elect the Board is not held at the time provided, the office of the directors which term has expired will be deemed extended until the appointment of their substitutes and the Board shall summon, within 30 days, a shareholders meeting in order to conduct the appointment. In case of vacancy of a Director, the Board shall be totally renewed at the next Regular General Shareholders Meeting to be held by the company and in the meantime the Board may appoint a substitute.
ARTICLE THIRTEENTH : The directors will be remunerated as annually determined by the regular shareholders meeting.
ARTICLE FOURTEENTH : The Board is totally revocable, at any time by resolution of a Regular or Special Shareholders Meeting. Office of Directors may not be delegated and it is jointly exercised at a legally installed meeting.
ARTICLE FIFTEENTH : The Board of Directors represents the company judicially and out-of-court, and for the fulfillment of the corporate business purpose, which need not

be evidenced unto third parties; is vested with all the management and disposition authorities which are not within the exclusive province of the General Shareholders Meeting, without requiring any special power-of-attorney, even for acts or contracts regarding which the laws require said requirement. The above is notwithstanding the representative judicial authority corresponding to the Chief Executive Officer. The Board of Directors may delegate part of its authorities to the Managers, Assistant Managers or Attorneys of the Company, to a Director or to a Committee of Directors and, for specific purposes, to other persons.
ARTICLE SIXTEENTH : The Board is authorized, under the personal liability of the Directors voting in favor of the relevant agreement, to distribute provisional dividends during the year on the account of the profits of the same, provided there are no accumulated losses.
ARTICLE SEVENTEENTH : The Board of Directors will meet at least once a month. Board meetings will be Regular and Special Meetings. Regular meetings will be held on the date predetermined by the Board of Directors and will not require special summon. Special meetings will be held when especially summoned by the chairman pro se or at the behest of one or more directors, in the manner determined by the Regulations, prior qualification made by the Chairman about the need of the meeting, unless requested by the absolute majority of the Directors, case in which it shall be held without prior qualification. Only matters specifically indicated in the summons may be transacted at special meetings.
ARTICLE EIGHTEENTH : Board meetings will be validly held if attended by at least five directors and resolutions shall be passed by the majority of the voting directors present, unless the law or these bylaws provide for a special quorum. In case of a tie, the Chairman will have casting vote.
ARTICLE NINETEENTH : The debates and resolutions of the Board of Directors shall be memorialized in a Book of Minutes by any means, provided they offer assurance that no alterations such as could affect the accuracy of the minutes can be made, which minutes shall be signed by the Directors who have attended the meeting. If any Director dies or is howsoever prevented from signing the relevant minutes, the minutes shall record the respective circumstance or impediment. The minutes will be deemed approved once it is signed and from such date resolutions contained in the same may become effective. Any director who believes that the minutes is inaccurate or incomplete will have the right to record his/her objections prior to signing the same. Any Director who wishes to decline responsibility for any act or resolution of the Board shall record his/her dissent in the minutes, and said circumstance shall be advised at the next Shareholders Meeting by the person chairing the same.
TITLE FOURTH
CHAIRMANSHIP AND MANAGEMENT
ARTICLE TWENTIETH : The Board, at the first meeting following its election, will appoint among its regular members a Chairman, who will also be the president of the company and the Shareholders Meeting. The Chairman or who acts as the same will have casting vote to resolve ties at ballots.

ARTICLE TWENTY FIRST : The Chairman of the Board will have, besides the authorities and obligations indicated or imposed by the law, the Regulations on Corporations and these bylaws, those authorities granted and delegated by the own Board.
ARTICLE TWENTY SECOND : The company will have a Chief Executive Officer to be appointed by the Board, who shall have the authorities of an agent ( factor de comercio ) and all those specially granted by the Board, besides the ones indicated by the Law, the Regulations on Corporations and these bylaws. The Chief Executive Officer shall represent the company judicially, with the authorities contemplated by both paragraphs of article seventh of the Civil Procedural Code and will have right to speak at Board meetings. The Chief Executive Officer shall be the secretary of the Board and the General Shareholders Meetings, unless the Board specially appoints a secretary. The office of Chief Executive Officer is not compatible with the office of Director, Chairman, Auditor or Accountant of the company.
TITLE FIFTH
SHAREHOLDERS MEETINGS
ARTICLE TWENTY THIRD : The shareholders will meet at regular and special meetings.
ARTICLE TWENTY FOURTH : Regular meetings will be held between January 1 and April 30 of each year, to decide on matters being of the exclusive concern of such kind of meetings, without requiring indicating them in the relevant summons. The following matters will be transacted at regular shareholders meetings: One. the examination of the company’s situation and the reports of the external auditors, and the approval or rejection of the annual report, balance sheet, financial statements and demonstrations submitted by the company’s managers or liquidators; Two. The distribution of earnings for each financial year and, especially, the dividends’ distribution; Three. The election or revocation of the regular and alternate board members, liquidators, and management supervisors; and Four. In general, any matter of corporate interest that is not the exclusive concern of the special shareholders meeting.
ARTICLE TWENTY FIFTH : Special meetings will be held when required by the corporate needs, to decide on any matter that law or these bylaws indicate that shall be decided by such meetings and provided they are indicated in the relevant summons. The following matters will be transacted at special shareholders meetings: One. The dissolution of the company. Two. The transformation, merger or spin-off of the company and the amendment of its by-laws; Three. The issuance of bonds or debentures convertible into shares; Four. The transfer of the fix asset and liabilities of the company or all of its assets; Five. The granting of collateral or personal guarantees for securing third parties obligations, except in the case of subsidiaries, in which case the board’s approval shall suffice; Six. Other matters that under the law or the bylaws are of competence of the shareholders meetings. All these matters, save for the ones referred in points Five) and Six above), shall be agreed at a meeting held before a notary, who shall certificate that the minutes is a faithful expression of what has occurred at and resolved by the meeting.

ARTICLE TWENTY SIXTH : Meetings, whether regular or special meetings, will be summoned by the board of directors of the company. The board of directors shall summon a) A regular shareholders meeting to be held within the first four months following the balance sheet date, in order to transact the business within its purview. b) A special shareholders meeting whenever, at its opinion, the interests of the Company so justify it. c) A regular or special shareholders meeting, as applicable, whenever so requested by shareholders representing at least 10% of the shares entitled to vote, the request to indicate the matters to be discussed at the meeting. d) A regular or special shareholders meeting, as applicable, whenever so requested by the Securities and Insurance Commission, notwithstanding the authority of such entity to summon them directly. Meetings referred in letters c) and d) above shall be held within thirty days from the date of the relevant request.
ARTICLE TWENTY SEVENTH : Summons to shareholders meetings shall be made through a notice to be prominently published at least three times on different days in a newspaper with wide circulation of the city of Santiago, to be designated by the Regular Shareholders Meeting or, in the absence of any agreement or if the designated newspaper is suspended or discontinued, in the Official Gazette, in time and form and on the conditions indicated in the Regulations. Likewise, a notice shall be sent to each shareholder by mail, to the address registered by the company, at least 15 days in advance of the date in which the Meeting is going to be held, which shall contain a reference of the matters to be discussed at the same. Notices of second summons may only be published once the meeting summoned by a first notice has failed and, in any case, the adjourned meeting shall be summoned for being held within 45 days following the date set for the not held meeting. However, meetings may be validly held if attended by all the shares entitled to vote, even if the formal requirements to summon a meeting have not been met.
ARTICLE TWENTY EIGHTH : The shareholders meetings will be validly held upon the first call with the absolute majority of shares entitled to vote, and, upon the second call, with the shares present or represented, regardless of their number. Resolutions shall be adopted by an absolute majority of the shares present or represented entitled to vote, save for the matters listed in article thirty second of these bylaws. Shareholders meetings shall be chaired by the chairman of the board or by the person acting as such, and the regular secretary, if any, shall act as such, in the absence of which the chief executive officer shall act as secretary.
ARTICLE TWENTY NINTH : Only the holders of the shares registered in the shareholders’ registry five days in advance of the scheduled date of a shareholders meeting may participate at the same with the right to speak and vote. At the elections made in general shareholders meetings, each shareholder will have one vote per share held or represented, and he/she may accumulate his/her votes or apportion them as he/she deems fit.
ARTICLE THIRTIETH : Shareholders may be represented at meetings by another person who need not be a shareholder. Representation shall be conferred in writing for all the shares held by the principal as of the record date indicated in article twenty ninth of these bylaws.

ARTICLE THIRTY FIRST : The proceedings and resolutions adopted at shareholders meetings shall be memorialized in a book of minutes to be kept by the secretary, if any, or in his/her absence, by the chief executive officer of the company. Minutes will be signed by the persons acting as chairman and secretary of the meeting and by three shareholders elected at the same or by all the persons present if less than three. The minutes will be deemed approved upon their signature by the three aforementioned persons, whereupon the resolutions referred to therein may be acted upon. If any of the persons designated to sign the minutes believes the same is inaccurate or incomplete, they will be entitled to record their objections thereon prior to signing the same.
ARTICLE THIRTY SECOND : The affirmative vote of two thirds of the issued, paid and voting shares shall be required to adopt resolutions at special shareholders meetings when they refer to following matters: One. The transformation of the company, the spin-off of the same and its merger with another company; Two. The early dissolution of the company; Three. The change of its corporate domicile; Four. To decrease the corporate capital; Five. The approval of contributions and estimation of non-cash assets; Six. The amendment of the authority established exclusively for the shareholders meetings or to the limitations to the powers of the board of directors; Seven. To decrease the number of board members; Eight. The disposition of 50% or more of its assets, whether including liabilities or not, and also the preparation or modification of any business plan contemplating for the disposition of assets in excess of the aforementioned percentage; Nine. The manner of distributing corporate profits; Ten. Furnishing of collateral or personal guarantees to secure third party obligations exceeding 50% of assets, except in the case of subsidiaries, in which case the board’s approval shall suffice.
TITLE SIXTH
BALANCE SHEETS AND PROFITS
ARTICLE THIRTY THIRD : The company shall prepare a balance sheet as of December 31st of each year.
ARTICLE THIRTY FOURTH : Profits recorded by the balance sheet shall be destined primarily to absorb losses from prior years and the balance will be distributed as determined by the shareholders meeting. Unless otherwise agreed at the same, by unanimous vote of the issued shares, the company shall annually distribute to its shareholders, as cash dividend, at least 30% of the net profits of each year.
TITLE SEVENTH
MANAGEMENT OVERSIGHT
ARTICLE THIRTY FIFTH : The regular shareholders meeting shall appoint, on an annual basis, external independent auditors. Requirements, rights, obligations, duties and authorities of external auditors or accountant examiners shall be the ones indicated by the law and the Regulations on Corporations.

TITLE EIGHTH
DISSOLUTION AND LIQUIDATION
ARTICLE THIRTY SIXTH : The company will be dissolved upon all the shares being held by one person, upon resolution adopted at a special general shareholders meeting or by judicial resolution against which there is no pending remedy.
ARTICLE THIRTY SEVENTH : Once the company is dissolved, it will subsist as legal entity for the purposes of its liquidation, in which case it shall add to its name the words “under liquidation”. During the liquidation, the bylaws will be applied provided its dispositions are compatible with the liquidation status.
ARTICLE THIRTY EIGHTH : After the dissolution of the company, the liquidation will be conducted by a liquidation commission appointed by the general shareholders meeting, which will set the commission’s fees. Unless otherwise resolved by the relevant meeting by unanimous vote of the issued shares, the liquidation committee will be comprised of three members. Such commission shall designate a chairman from among its members, who shall represent the company judicially and out-of-court.
TITLE NINTH
ARBITRATION
ARTICLE THIRTY NINTH : Any difficulty or controversy arising among the shareholders as such, or among them and the company or its managers, whether during the term of duration of the company or upon its liquidation, in connection with the corporate business or any other aspect related to the company, in particular as to the fulfillment, breach, validity, nullity, termination, cancellation, interpretation, application or execution of the company’s contract, the rights and obligations arising from the same and the referred business, shall be resolved by an arbitrator who will be empowered to act as arbitrator-at-law with regard to the substance of the dispute and as ex aequo et bono with regard to the procedure, who will know the matter in a brief manner and without a judicial procedure, and who will settle the dispute in accordance to law in a sole instance. The arbitrator will be appointed by mutual agreement of the parties or, if failure to reach an agreement by the parties, by the courts of justice, but in this case the arbitrator appointed shall necessarily be a lawyer being a Regular Professor of Civil Law or Commercial Law at the Law School of Universidad de Chile or Pontificia Universidad Católica de Chile.

TRANSITORY ARTICLES
ARTICLE TRANSITORY FIRST : The capital of the company, which amounts to $2,515,694,297,208, divided into 2,907,002,733 nominal, single-series and non-par-value shares, has been subscribed for and paid up and will be subscribed for and paid up in the following manner:
(one) With the amount of $1,791,804,431,231, divided into 2,507,103,215 nominal, single-series and no-par-value shares, amount which is fully subscribed for and paid up;
(two) With the amount of $963,882,535,606, divided into 399,899,518 nominal, single-series and no-par-value shares, that must be subscribed for and paid up as indicated below:
(a) With the amount of $32,882,535,606, divided into 39,911,801 nominal, single-series and no-par-value shares which corresponds to part of the capital increase approved by the Extraordinary Shareholders Meeting held on April 25, 2008, which must be subscribed for and paid up within the term of 5 years counted from the referred date, as they are allocated to comply with stock option plans for workers of the Company and its subsidiaries. Within the referred 39,911,801 shares are included those shares which were not originally allocated to such stock option plans, in accordance with the resolution adopted by the referred Extraordinary Shareholders Meeting held on April 25, 2008, but became part of such plans when they failed to be subscribed for and paid up within the term provided for such purpose in the referred Shareholders Meeting, which expired on April 25, 2011;
(b) With the amount of $96,000,000,000, divided into 27,000,000 nominal, single-series and no-par-value shares, which corresponds to the capital increase approved by the Extraordinary Shareholders Meeting held on April 29, 2011, supplemented and amended by resolutions taken in the Extraordinary Shareholders Meetings held on March 1, 2012 and May 15, 2012, which shall be subscribed for and paid up within the maximum term of 5 years counted from April 29, 2011, as they are allocated to comply with stock option plans for workers of the Company and its subsidiaries.
(c) With the amount of $835,000,000,000, divided into 332,987,717 nominal, single-series and no-par-value shares, which corresponds to part of the capital increase approved by the Extraordinary Shareholders Meeting held on November 20, 2012, which shall be subscribed for and paid up within the maximum term of 3 years counted from the referred date. Part of these shares will be allocated to stock option plans for workers of the Company and its subsidiaries to be determined by the Board of Directors, which shall be subscribed for and paid up within the maximum term of 5 years counted from November 20, 2012.
(three) It is noted that in the Extraordinary Shareholders Meeting held on November 20, 2012: (a) In compliance with Article 26 of Law No. 18,046 on Corporations, it was expressly acknowledged the lower value in the placement of the capital increase approved by the Extraordinary Shareholders Meeting held on April 29, 2011, supplemented and amended by resolutions adopted in the Extraordinary Shareholders Meetings held on March 1, 2012 and May 15, 2012, for an amount of $231,012,640,688 as a reduction of the capital to be paid; and (b) The account “Shares Issuance and Placement Premium” was deducted from the paid capital of the company, for an amount of $8,980,028,941.
ARTICLE TRANSITORY SECOND : Up to 10% of the shares from the capital increase approved in the Extraordinary Shareholders Meeting held on November 20, 2012 will be allocated to be issued and comply with the stock option plans for the workers of the Company and its subsidiaries, in accordance with the option plans that the Board of

Directors will prepare to that effect. In respect of these shares, the shareholders will not have preemptive rights and, in addition, these shares may only be offered to the workers proportionally to the number of shares of the corresponding capital increase, in the portion not reserved for such purposes, which are actually subscribed for, as provided in the third paragraph of Article 24 of Law No. 18,046 on Corporations. The term to subscribe for and pay up these shares will be 5 years counted from November 20, 2012, as provided in the fourth paragraph of Article 24 of Law No. 18,046 on Corporations.

Incorporation :
The company was incorporated by public deed dated November 10, 1978 executed before the Notary Public of Santiago Mr. Enrique Morgan Torres. An abstract of this public deed was registered in the Register of Commerce of the Santiago Real Estate Registrar on page 13,808 with the number 7,412 corresponding to the year 1978, and published in the Official Gazette No. 30,252 on December 30, 1978.
Amendments : The main amendments to the Company are the following:
By public deed dated September 5, 2005 granted before the Notary Public of Santiago Mr. José Musalem Saffie, registered on page 36,103 with the number 23,745 in the Register of Commerce of the Santiago Real Estate Registrar corresponding to the year 2005, and published in the Official Gazette No. 38,278 on October 4, 2005, was approved the merger of the Company by incorporation of Empresas Almacenes Paris S.A., establishing restated text of the corporate bylaws.
By public deed dated April 29, 2008 granted before the Notary Public of Santiago Mr. José Musalem Saffie, registered on page 20,393 with the number 13,966 in the Register of Commerce of the Santiago Real Estate Registrar corresponding to the year 2008, and published in the Official Gazette No. 39,065 on May 19, 2008, was increased the number of directors and the company’s capital.
By public deed dated October 30, 2008 granted before the Notary Public of Santiago Mr. José Musalem Saffie, registered on page 51,926 with the number 35,894 in the Register of Commerce of the Santiago Real Estate Registrar corresponding to the year 2008, and published in the Official Gazette No. 39,209 on November 11, 2008, was increased the capital of the company.
By public deed dated April 29, 2009 granted before the Notary Public of Santiago Mr. José Musalem Saffie, registered on page 20,654 with the number 14,129 in the Register of Commerce of the Santiago Real Estate Registrar corresponding to the year 2009, and published in the Official Gazette No. 39,364 on May 18, 2009, was decreased the number of directors of the company.
By public deed dated May 31, 2011 granted before the Notary Public of Santiago Mr. José Musalem Saffie, registered on page 31,215 with the number 23,327 in the Register of Commerce of the Santiago Real Estate Registrar corresponding to the year 2011, and published in the Official Gazette No. 39,986 on June 15, 2011, was increased the capital of the company.
By public deed dated March 8, 2012 granted before the Notary Public of Santiago Mr. José Musalem Saffie, registered on page 18,070 with the number 12,678 in the Register of Commerce of the Santiago Real Estate Registrar corresponding to the year 2012, and published in the Official Gazette No. 40,214 on March 16, 2012, an involuntary mistake made in the Extraordinary Shareholders Meeting held on April 29, 2011 was amended.
By public deed dated November 22, 2012 granted before the Notary Public of Santiago Mr. José Musalem Saffie, registered on page 84,201 with the number 58,884 in the Register of Commerce of the Santiago Real Estate Registrar corresponding to the year 2012, and published in the Official Gazette No. 40,423 on November 30, 2012, was increased the capital of the company.

Exhibit 4.2
EXHIBIT A
6/29/2012
[DATE]
Jumbo Retail Argentina S.A.
Suipacha 1111, 18 th Floor,
City of Buenos Aires, Argentina.
Section 215 Letter
Dear Sirs:
This Section 215 Letter is to inform you of the sale and transfer of all of the shares of Jumbo Retail Argentina S.A. owned by the undersigned to Cencosud SA, pursuant to the Offer Letter SPA 001/2012 dated as of June 29, 2012 sent by Cencosud S.A. and duly accepted by UBS AG London Branch through this letter.
Please register the transfer in the corresponding share certificates as well as in the Stock Ledger of Jumbo Retail Argentina S.A.

	 		 	Sincerely,	
			
	 		 	UBS AG, London Branch	
				
Sworn before me this 29 th day of June, 2012	 		 	By:	 		
	 		 	Name:	 	ROBERT OSTERWALDER	
	 		 	Title:	 	ATTORNEY IN FACT	
			
	 		 	CERTIFIED SIGNATURE	
				
	 		 	By:	 		
	 		 	NAME:	 	SANTIAGO QUINTANA	
	 		 	TITLE:	 	ATTORNEY IN FACT	

June 29, 2012
UBS AG, London Branch
100 Liverpool Street
London EC2M 2RH
United Kingdom
Offer Letter SPA 001/2012
Dear Sirs:
We hereby offer to purchase you all the shares of Jumbo Retail Argentina S.A. owned by you, pursuant to the terms and conditions set forth herein. You may accept this offer by sending us the notice of transfer of the shares pursuant to section 215 of the Argentine Business Companies Law N° 19.550 attached as Exhibit A. This offer will expire by 5:00 pm, New York time, on June 29, 2012.
Should you have any doubts or questions, please feel free to contact any of the undersigned.

Sincerely,	
	
CENCOSUD S.A.	

Name:	 	DANIEL RODRIGUEZ	
Title:	 	CEO	
This STOCK PURCHASE AGREEMENT, dated as of June 29, 2012, is made by and among (i) CENCOSUD SA, a corporation organized and existing under the laws of the Republic of Chile (“ Buyer ”), and ( ii ) UBS AG, LONDON BRANCH, operating as a branch of UBS AG, a Swiss banking corporation, organized and existing under the laws of Switzerland (“ Seller ”). RECITALS
WHEREAS, the Seller owns 367,598,038 ordinary shares of nominal value AR$ 1 and one vote each (the “ Shares ”), in the capital of Jumbo Retail Argentina S.A., a closed stock corporation organized and existing under the laws of Argentina (the “ Company ”).

WHEREAS, Seller and Buyer, are parties to that certain Option Agreement, dated March 30, 2011(the “Option Agreement”).
WHEREAS, the Seller and Buyer wish to terminate the Option Agreement, subject to the compliance of the terms and conditions set forth in this Agreement.
(a) Sale and Purchase of the Shares .
(i) Sale and Purchase of the Shares . Subject to the terms and conditions hereof, the Seller will sell all of its respective Shares to Buyer and Buyer will purchase all of the respective Shares from the Seller for a price per Share equal to US$ 1.31552, amounting to an aggregate price of US$ 483,583,333.33 (the “ Price ”), payable in cash in the manner set forth in section (a)(ii)(2) below.
(ii) Closing . The closing of the sale and purchase of all of the Shares (the “ Closing ”) shall take place at 3:00 pm New York time as of the date of this Agreement, unless the parties otherwise agree in writing (the “ Closing Date ”). At the Closing the following simultaneous acts shall take place:
(1) the Seller shall deliver to Buyer, free and clear of any liens, charges or encumbrances of any kind whatsoever (collectively, “ Liens ”), the certificate representing all of the Shares in the name of the Seller for purposes of its cancellation, and a copy of an executed and certified letter from the Seller to the Company informing it of the sale of the Shares to Buyer (the form of such letter attached hereto as Exhibit A , the “ Section 215 Letter ”);
(2) The Buyer shall pay to the Seller the Price, such amount to be paid by wire transfer of immediately available funds to the following account:
USD Cash AG London
Nostro Agent: UBS AG, Stamford Branch
Nostro Agent Bic: UBSWUS33XXX
Beneficiary Bank:: UBS AG, London Branch
Beneficiary Bank BIC: UBSWGB2LXXX
Account #: 101-WA-140007-000
(3) The Buyer shall cause the Board of Directors of the Company to hold a Board of Directors’ meeting as of the Closing Date whereby (x) the Company acknowledges the reception of the Section 215 Letter, (y) the

certificate representing all of the Shares in the name of the Seller is cancelled and a new certificate/s representing all of the Shares in the name of the Buyer is/are issued;
(4) The transfer of the Shares in favor of Buyer is duly registered in the Stock Ledger of the Company.
(b) Representations and Warranties of the Seller . The Seller represents and warrants to Buyer in respect of itself only, as of the Closing Date, as follows:
Corporate Status: Authorization, etc . The Seller is duly formed, validly existing and in good standing under the laws of the country of its organization or formation. The Seller has full power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement, the performance of the Seller’s obligations hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate or organizational action of the Seller. The Seller has duly executed and delivered this Agreement. This Agreement constitutes the legal, valid and binding obligation of the Seller enforceable against the Seller in accordance with its terms.
Title to Shares . The Seller owns, beneficially and of record, the respective Shares, free and clear of any Liens. Upon the delivery of and payment for the Seller’s Shares at the Closing as provided for in this Agreement, Buyer will acquire good and valid title to all the Shares, free and clear of any Liens other than any Liens created by Buyer.
No Conflicts, etc . The execution, delivery and performance of this Agreement by the Seller and the consummation of the transactions contemplated hereby do not conflict with, contravene, result in a violation or breach of or default under (with or without the giving of notice or the lapse of time or both), create in any other Person a right or claim of termination, amendment, or require modification, acceleration or cancellation of, or result in the creation of any Liens (or any obligation to create any Liens) upon any of the properties or assets of the Seller under, ( i ) any law, regulation or order of any court or other legal authority applicable to the Seller or any of its properties or assets, ( ii ) any provision of any of the organizational or governance documents of the Seller or (iii) any contract, or any other agreement or instrument to which the Seller is a party or by which any of its properties or assets may be bound, except, in the case of this clause ( iii ), for violations and defaults that, individually and in the aggregate, could not reasonably be expected to materially impair the ability of the Seller to perform its obligations hereunder. The Seller is not required to make or obtain any filing, consent, approval, authorization, waiver or permit from or with any governmental authority, contractual counterparty or other person in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.

(c) Representations and Warranties of Buyer . Buyer represents and warrants to the Seller, as of the Closing Date, as follows:
Corporate Status: Authorization, etc . Buyer is a corporation duly incorporated, validly existing and in good standing under the laws of Chile. Buyer has full corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement, the performance of its obligations hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action of Buyer. Buyer has duly executed and delivered this Agreement. This Agreement constitutes the legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms.
No Conflicts, etc . The execution, delivery and performance by Buyer of this Agreement and the consummation of the transactions contemplated hereby do not conflict with, contravene, result in a violation or breach of or default under (with or without the giving of notice or the lapse of time, or both), create in any other Person a right or claim of termination, amendment, modification, acceleration or cancellation of, or result in or require the creation of any Lien (or any obligation to create any Lien) on any of the properties or assets of Buyer under ( i ) any law, regulation or order of any court or other legal authority applicable to Buyer or any of its properties or assets, ( ii ) any provision of any of the organizational or governance documents of Buyer, or ( iii ) any contract, agreement or other instrument to which Buyer is a party or by which its properties or assets may be bound except, in the case of clause (c), for violations and defaults that, individually and in the aggregate, would not materially impair the ability of Buyer to perform its obligations hereunder. Buyer is not required to make or obtain any filing, consent, approval, authorization, waiver or permit from or with any governmental authority, contractual counterparty or other person in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.
(d) Miscellaneous .
Automatic Termination of the Option Agreement . Effective as from the date the parties hereto comply with their respective obligations regarding the Closing under Section (a) of this Agreement at the Closing Date, the Parties irrevocably terminate the Option Agreement. Upon termination of the Option Agreement the Parties shall have no right, obligation or action under such Option Agreement and they waive any and all claims that they may have as of the date hereof, or in the future in connection with the Option Agreement, and they hereby release and forever discharge each other from and against any

and all claims, actions, losses, causes of action, suits, debts, dues, obligations, damages of whatever nature, whether past or present, known or unknown, existing or claimed to exist, asserted or unasserted, foreseen or unforeseen, direct or indirect, fixed or contingent relating to the Option Agreement.
Expenses and Taxes . Each party shall bear its own respective expenses, costs and fees (including attorneys’, auditors’ and financing commitment fees) in connection with the transactions contemplated hereby, including the preparation, execution and delivery of this Agreement.
Governing Law, etc . THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING AS TO VALIDITY, INTERPRETATION AND EFFECT, BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
Arbitration . Any dispute, controversy or claim arising out of or in connection with, or relating to, this Agreement, or the breach, termination or validity thereof, will be finally settled exclusively by arbitration in accordance with the Rules of Arbitration of the London Court of International Arbitration, as in effect at the time of the arbitration, except as modified herein or by mutual agreement of the parties. The seat of the arbitration will be Miami, Florida, provided that the arbitrators may hold hearings in such other locations as the arbitrators determine to be most convenient and efficient for all of the parties to such arbitration under the circumstances. The arbitration will be governed by the Federal Arbitration Act. The arbitration shall be conducted in English.
Binding Effect . This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors and permitted assigns.
Assignment . This Agreement shall not be assignable or otherwise transferable by any party hereto without the prior written consent of the other parties hereto.
No Third Party Beneficiaries . Nothing in this Agreement shall confer any rights upon any person or entity other than the parties hereto and their respective heirs, successors and permitted assigns.
Entire Agreement . This Agreement constitutes the entire agreement of the parties and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof.
Severability . If any provision, including any phrase, sentence, clause, section or subsection, of this Agreement is invalid, inoperative or unenforceable for any reason, such circumstances shall not have the effect of rendering such provision in question invalid, inoperative or unenforceable in any other case or circumstance, or of rendering any other provision herein contained invalid, inoperative, or unenforceable to any extent whatsoever.

Counterparts . This Agreement may be executed in several counterparts, each of which shall be deemed an original and all of which shall together constitute one and the same instrument.

EXHIBIT A
[DATE]
Jumbo Retail Argentina S.A.
Suipacha 1111, 18 th Floor,
City of Buenos Aires, Argentina.
Section 215 Letter
Dear Sirs:
This Section 215 Letter is to inform you of the sale and transfer of all of the shares of Jumbo Retail Argentina S.A. owned by the undersigned to Cencosud SA, pursuant to the Offer Letter SPA 001/2012 dated as of June 29, 2012 sent by Cencosud S.A. and duly accepted by UBS AG London Branch through this letter.
Please register the transfer in the corresponding share certificates as well as in the Stock Ledger of Jumbo Retail Argentina S.A.

Sincerely,	
	
UBS AG, London Branch	
		
By:	 	 	
Name:	 		
Title:	 		
	
CERTIFIED SIGNATURE	

UBS A.G., London Branch
100 Liverpool Street
London EC2M 2RH
United Kingdom
Offer Letter No. SL 001/2012
Reference is made to the (i) Offer Letter No. SL 001/2011 dated as of March 30, 2011 in connection to that certain Option Agreement, sent by Cencosud S.A. (the “ Company ”) and accepted by UBS AG, London Branch (the “ Bank ”) as of such date (the “ SL Agreement ”); and (ii) Stock Purchase Agreement (“ SPA ”) dated as of June 29, 2012 by and between the Bank and the Company; and (iii) Waiver and Termination Letter with respect to the Shareholders Agreement, dated as of March 30, 2011 (the “ Shareholders Agreement ”), by and between the Bank, the Company, Mr. Horst Paulmann Kemna, Inversiones Jumbo S.A. (merged with Cencosud S.A.) and Cencosud Internacional Ltda. (the “SHA Waiver and Termination Letter”). Terms used herein and not otherwise defined shall have the meanings ascribed to such term in the SL Agreement or the SPA or the SHA Waiver and Termination Letter as the case maybe. In consideration of the parties entering into the SPA, the Company hereby offers to the Bank to agree as follows:
1. Notwithstanding anything to the contrary in the Option Agreement, the Shareholders Agreement, the SPA or the SHA Waiver and Termination Letter (including without limitation any waivers, releases and discharges mutually agreed between the respective parties under the SPA and the SHA Termination Letter), the indemnity obligations of the Company under Section 7 of the SL Agreement shall continue to be valid and binding on the Company vis a vis the Bank and shall not terminate upon the execution of the SPA or the SHA Waiver and Termination Letter, or the termination of the Option Agreement or the Shareholders Agreement. For the avoidance of doubt, it is understood that the indemnity obligations of the Company under Section 7 of the SL Agreement include, without limitation, any losses arising out of or relating to the PAT or the PAT Payment (as defined in 2 below). Consequently, the Company waives, releases and forever discharges, and shall cause the Argentine Company to waive, release and forever discharge, from and against any and all claims, actions, losses, damages of whatever nature, whether past or present or future in connection or arising out of the PAT or the PAT Payment.
2. In connection to the payment by Jumbo Retail Argentina S.A. the (“ Argentine Company ”) of the personal assets tax (the “ PAT ”) in the name and on behalf of the Bank as a result of the Bank ownership of Shares of the Argentine Company (the “ PAT Payment ”), the Bank hereby agrees to deliver to the Argentine Company, as promptly as possible, but in any event no more than 45 days from the date hereof, a certificate issued by the appropriate governmental authority from Switzerland, certifying the Bank’s residence in Switzerland, such certificate to be presented by the Argentine Company to the Argentine tax authorities.
Governing law and jurisdiction (arbitration) applicable to this letter agreement shall be such specified in Section (d) of the SPA.

This offer will expire if not accepted in writing by you by 5:00 pm, New York time, on June 29, 2012.

Cencosud S.A.	
		
By:	 		
Name:	 	DANIEL RODRIGUEZ	
Title	 	CEO	

June 29, 2012
Cencosud S.A.
Avenida Kennedy 9001, 4 th Floor
Las Condes, Santiago
Chile
Letter of Acceptance of Offer SL No. SL 001/2012
Dear Sirs,
UBS AG, London Branch hereby accepts your offer, as set forth in your Offer Letter SL 001/2012, dated June 29, 2012.

	 		 	UBS AG, London Branch	
				
	 		 	By:	 		
	 		 	Name:	 	ROBERT OSTERWALDER	
	 		 	Title:	 	ATTORNEY IN FACT	
				
	 		 	By:	 		
	 		 	Name:	 	SANTIAGO QUINTANA	
	 		 	Title:	 	ATTORNEY IN FACT	
			
	 		 	Sworn before me this 29 th day of June, 2012	

				

March 30, 2011
UBS A.G., London Branch
100 Liverpool Street
London EC2M 2RH
United Kingdom
Offer Letter No. OA 001/2011
Dear Sirs:
We hereby offer you to enter into an Option Agreement as per the terms and conditions enclosed hereto. You may accept this offer by notifying us in writing. This offer will expire if not accepted in writing by you by 12:00 pm, New York time, on March 30, 2011.
Should you have any questions, please feel free to contact any of the undersigned.

Sincerely,	
		
	 	CENCOSUD S.A.	
			
	 	By:	 		
	 	Name:	 		
	 	Title:	 		
Enclosure

March 30, 2011
UBS A.G., London Branch
100 Liverpool Street
London EC2M 2RH
United Kingdom
Receipt Acknowledgement of Acceptance of Offer No. OA 001/2011
Dear Sirs:
We hereby acknowledge receipt of your Letter of Acceptance of Offer, dated March 30. 2011, accepting the offer contained in our Offer Letter, dated March 30, 2011.

Sincerely,	
	
CENCOSUD S.A.	
		
By:	 		
			
Name:	 		
			
Title:	 		

March 30, 2011
Cencosud S.A.
Avenida Kennedy 9001, 4 th Floor
Las Condes, Santiago
Chile
Receipt Acknowledgment of Offer Letter No. OA 001/2011
Dear Sirs:
UBS A.G., London Branch hereby acknowledges receipt of your Offer Letter, dated March 30, 2011, which had annexed to it an Option Agreement (a copy of which is enclosed hereto). This letter does not constitute acceptance of your offer contained in the Offer Letter.

Sincerely,	
	
UBS A.G., LONDON BRANCH	

Name:	 	CESAR GUEIKIAN	
Title:	 	MANAGING DIRECTOR	

Name:	 	SCOTT STEVENS	
Title:	 	MANAGING DIRECTOR	
Enclosure

March 30, 2011
Cencosud S.A.
Avenida Kennedy 9001, 4 th Floor
Las Condes, Santiago
Chile
Letter of Acceptance of Offer No. OA 001/2011
Dear Sirs:
UBS A.G., London Branch hereby accepts your offer, as set forth in your Offer Letter, dated March 30, 2011. We acknowledged receipt of such offer on March 30, 2011.

Sincerely,	
	
UBS A.G., LONDON BRANCH	

Name:	 	CESAR GUEIKIAN	
Title:	 	MANAGING DIRECTOR	

Name:	 	SCOTT STEVENS	
Title:	 	MANAGING DIRECTOR	

March 30, 2011
UBS A.G., London Branch
100 Liverpool Street
London EC2M 2RH
United Kingdom
Receipt Acknowledgement of Acceptance of Offer No. OA 001/2011
Dear Sirs:
We hereby acknowledge receipt of your Letter of Acceptance of Offer, dated March 30, 2011, accepting the offer contained in our Offer Letter, dated March 30, 2011.

Sincerely,	
	
CENCOSUD S.A.	
		
By:	 		
			
Name:	 		
			
Title:	 		

OPTION AGREEMENT
THIS AGREEMENT is made and entered into this March 30, 2011, by and between CENCOSUD S.A., a corporation organized and existing under the laws of Chile (hereinafter referred to as “Cencosud”), domiciled at Avenida Kennedy 9001, 4th Floor, Las Condes, Santiago, Chile; and UBS A.G, London Branch, operating as a branch of UBS AG, a Swiss banking corporation, organized and existing under the laws of Switzerland (hereinafter referred to as the “Bank”), domiciled at 100 Liverpool Street, London EC2M 2RH United Kingdom.
WITNESSES THAT:
WHEREAS, the Bank has acquired on this date 367,598,038 ordinary shares (the “Shares”) of Jumbo Retail Argentina S.A. (“Jumbo”) pursuant to the terms and conditions of a share purchase agreement dated as of this date;
WHEREAS, as of the date hereof, Bank and the Cencosud Shareholder (as defined in the Shareholders Agreement) have entered into a shareholders agreement with respect to the acquisition of the Shares (the “Shareholders Agreement”);
AND WHEREAS, Bank and Cencosud wish to enter into a transaction whereby Cencosud will be able to call the Shares from Bank, and Bank will be able to put the Shares to Cencosud, as further described herein.

NOW THEREFORE THIS AGREEMENT WITNESSETH that, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto agree as follows:
1. INTERPRETATION
Definitions
1.1 In this Agreement, unless something in the subject matter or context is inconsistent therewith:
“Adjusted Strike Price” means, if an Early Termination Date occurs on a Scheduled Potential Exercise Date, the Strike Price on such date or, otherwise, an amount determined based on the following formula:

X = X0 + (Y) *    	 	(	 	X1 - X0
Y1	 	)	  		
	 		 		 		  		
Where:
X = the Adjusted Strike Price;
X0 = the Strike Price on the nearest Scheduled Potential Exercise Date preceding the Early Termination Date (or, if the Early Termination Date occurs prior to the first Scheduled Call Option Potential Exercise Date, an amount equal to USD 442,116,640);
X1 = the Strike Price on the nearest Scheduled Potential Exercise Date following the Early Termination Date;
Y = the number of days from and including the nearest Scheduled Potential Exercise Date preceding the Early Termination Date (or, if the Early Termination Date occurs prior to the first Scheduled Call Option Potential Exercise Date, from and including the date hereof) to and including the Early Termination Date); and
Y1 = the number of days from and including the nearest Scheduled Potential Exercise Date preceding the Early Termination Date (or, if the Early Termination Date occurs prior to the first Scheduled Call Option Potential Exercise Date, from and including the date hereof) to the next succeeding Scheduled Potential Exercise Date.
Attached as Annex A is a numerical example of the formula set forth above.
“Agreement” means this agreement and all amendments made hereto by written agreement between the parties hereto.
 
2

“Bankruptcy” means, with respect to a party, that the party is (1) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (2) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; (3) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (4) institutes or has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition (A) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding up or liquidation or (B) is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; (5) has a resolution passed for its winding up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (6) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets; (7) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter; (8) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (1) to (7) inclusive); or (9) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.
“Business Day” shall mean Monday through Friday, except legal and banking holidays in Santiago, Chile, City of Buenos Aires, Argentina and New York, New York, United States of America.
“Call Option” means the right of Cencosud to purchase the Shares from Bank pursuant to this Agreement.
 
3

“Call Option Exercise Period” means the five Business Days ending on, and including, the Close of Business for each Call Option Potential Exercise Date.
“Call Option Potential Exercise Date” means (i) September 23, 2011, (ii) March 23, 2012, (iii) March 22, 2013 (each of (i), (ii) and (iii), a “Scheduled Call Option Potential Exercise Date”) or, if any date specified in clause (i), (ii) or (iii) is not a Business Day, the following Business Day, (iv) any other Business Day on which an Event of Default with respect to Bank has occurred and is continuing and (v) any other Business Day on which an Optional Termination Event has occurred and is continuing.
“Call Option Strike Price” means (i) with respect to the first Scheduled Call Option Potential Exercise Date, USD 460,020,000, (ii) with the second Scheduled Call Option Potential Exercise Date, USD 473,625,000, and (iii) with respect to the third Scheduled Call Option Potential Exercise Date, USD 496,120,000. In the event the Call Option is exercised on a date described in clauses (iv) or (v) of the definition of “Call Option Potential Exercise Date,” the Call Option Strike Price shall be the Adjusted Strike Price.
“Close of Business” means 5:00 p.m. local time in New York City.
“Defaulting Party” has the meaning set forth in Section 3.
“Early Termination Date” means (i) with respect to an Event of Default other than a Bankruptcy, the Business Day on which a party delivers to the other party a notice of an Event of Default with respect to the other party and (ii) with respect to a Bankruptcy, immediately upon the occurrence thereof.
“Event of Default” means, with respect to a party: (i) the failure of such party to make any payment or delivery required by this Agreement; (ii) a Bankruptcy of such party or its Guarantor; (iii) a default, event of default or other similar condition or event (however described) in respect of such party or its Guarantor under one or more agreements or instruments relating to Indebtedness in an aggregate amount of not less than USD 150,000,000 (or its foreign currency equivalent), which has resulted in such Indebtedness becoming, or becoming capable at such
 
4

time of being declared, due and payable before they would otherwise have been due and payable or (2) a default by such party or its Guarantor in making one or more payments on the due date thereof in an aggregate amount of not less than USD 150,000,000 under such agreements or instruments (after giving effect to any applicable notice requirement or grace period); or (iv) with respect to Cencosud, the failure of an unconditional guarantee, by Guarantor in favour of Bank, of Cencosud’s obligations hereunder to be in full force and effect at any time after May 30, 2011.
“Exercise Date” means the date on which the Call Option or Put Option is exercised.
“Exercise Period” means the Call Option Exercise Period or the Put Option Exercise Period, as applicable.
“Fair Market Value” means, with respect to the Shares: (i) in relation to an Event of Default where Bank is the Defaulting Party, an amount, determined by the Investment Bank, which may be based, without limitation, on comparables, quotations or other valuation methods; and (ii) in relation to an Event of Default where Cencosud is the Defaulting Party, an amount, determined by the Valuation Bank, which may be based, without limitation, on comparables, quotations or other valuation information or sale or bid prices for the Shares in an auction conducted by the Valuation Bank in which Bank may be a bidder; provided , however , that if the Valuation Bank conducts an auction or sale process which results in an agreement to purchase the Shares, the Fair Market Value shall be based on the price obtained in such process. Notwithstanding the foregoing, the parties agree that if the Fair Market Value is based on sale or bid prices for the Shares, and either Jumbo or Cencosud blocks, delays or otherwise impedes the disposition of the Shares, the Fair Market Value of the Shares shall be deemed to be USD 0. Notwithstanding clause (ii) hereof, If the Valuation Bank has not determined a Fair Market Value by the time of a judicial declaration of bankruptcy with respect to Cencosud, Bank may determine the Fair Market Value in good faith and in a commercially reasonable manner.
“Guarantor” means Cencosud Retail S.A.
“Investment Bank” means the qualified third party selected by the Bank from a list of three investment banks submitted by Cencosud. Each bank on the list must be an international
 
5

investment bank of worldwide reputation with relevant expertise regarding the supermarket industry in Chile and Argentina. In the event that no such list can be created because an insufficient number of banks meet the foregoing criteria, the Bank may either (i) choose from such shorter list as Cencosud submits or (ii) agree with Cencosud on a qualified third party to act as Investment Bank. In the event the Bank does not select among the list provided by Cencosud within a 15-day period beginning on the date such list is delivered to Bank, Cencosud will be entitled to appoint as Investment Bank any of Deutsche Bank, Santander or Bank of America Merrill Lynch (or their affiliates).
“Indebtedness” means any obligation (whether present or future, contingent or otherwise, as principal or surety or otherwise) in respect of borrowed money.
“Non-Defaulting Party” has the meaning set forth in Section 3.
“Notice of Termination” has the meaning set forth in Section 3.
“Optional Termination Event” means that due to the adoption of, or any change in, any applicable law after the date hereof, or due to the promulgation of, or any change in, the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law after such date, it becomes unlawful, or there is a substantial likelihood that it will become unlawful, for either Bank or Cencosud to perform its obligations, whether absolute or contingent, hereunder.
“Put Option” means the right of Bank to require Cencosud to purchase the Shares from Bank pursuant to this Agreement.
“Put Option Exercise Period” means each of the five Business Days ending on, and including, the Close of Business on the Put Option Potential Exercise Date.
“Put Option Potential Exercise Date” means (i) September 24,2012 (the “Scheduled Put Option Potential Exercise Date”) or, if such date is not a Business Day, the following Business Day, (ii) any other Business Day on which an Event of Default with respect to Cencosud has occurred and is continuing and (iii) any other Business Day on which an Optional Termination Event has occurred and is continuing.
 
6

“Put Option Strike Price” means, with respect to the Scheduled Put Option Potential Exercise Date, USD 486,630,000. In the event the Put Option is exercised on a date described in clauses (ii) or (iii) of the definition of “Put Option Potential Exercise Date,” the Put Option Strike Price shall be the Adjusted Strike Price.
“Scheduled Potential Exercise Date” means each Scheduled Call Option Potential Exercise Date and the Scheduled Put Option Potential Exercise Date.
“Settlement Date” means the third Business Day following the Exercise Date.
“Shareholders Agreement” has the meaning set forth in the recitals.
“Shares” has the meaning set forth in the recitals (as adjusted to reflect any stock splits or combinations).
“Strike Price” means the Call Option Strike Price or the Put Option Strike Price, as applicable.
“Termination Value” means an amount (which may be positive or negative) determined by the Non-Defaulting Party equal to (i) the Adjusted Strike Price less (ii) the Fair Market Value of the Shares.
“USD” means the lawful currency of the United States of America.
“Valuation Bank” an internationally recognized investment bank selected by Bank from the list attached hereto as Schedule A .
 
7

2. CALL AND PUT OPTION
2.1 Call of Cencosud . 
Cencosud shall have the right, by notice delivered to Bank during the Exercise Period on any Call Option Potential Exercise Date, to purchase from Bank all, and not less than all, of the Shares at the relevant Call Option Strike Price; provided, however, that the Call Option may only be exercised if the Put Option has not been previously exercised.
2.2 Put of Bank . 
Bank shall have the right, by notice to Cencosud delivered during the Exercise Period on any Put Option Potential Exercised Date, to sell all, and not less than all, of the Shares to Cencosud, and Cencosud shall have the obligation to purchase such Shares at the Put Option Strike Price; provided, however, that the Put Option may only be exercised if the Call Option has not been previously exercised.
2.3 Option Settlement . 
On the Settlement Date, Cencosud will pay the applicable Strike Price to Bank in USD in immediately available funds. Upon its receipt of such payment and on the same date, Bank will deliver the Shares to Cencosud. For the avoidance of doubt, Bank’s delivery obligations shall be satisfied by the delivery to Cencosud of one or more certificates representing the Shares, along with a duly executed notice of transfer pursuant to Section 215 of the Argentine Companies Law; it shall not be required that such transfer shall have been registered or recorded on the books and records of Jumbo. The transfer of the Shares shall be made in accordance with the form of share purchase agreement attached hereto as Annex B . Settlement of the Put Option or the Call Option shall take place in a location in Santiago, Chile, City of Buenos Aires, Argentina or New York, New York, United States of America to be mutually agreed upon between the parties.
3. EARLY TERMINATION . Upon the occurrence and continuation of an Event of Default with respect to a party (the “Defaulting Party”), the other party (the “Non-Defaulting Party”) may deliver a notice of termination (a “Notice of Termination”) to the Defaulting Party
 
8

and upon such delivery the Call Option and the Put Option shall be immediately terminated (except that upon the occurrence of a Bankruptcy, the Call Option and the Put Option shall be immediately terminated upon the occurrence thereof, regardless of whether a Notice of Termination shall have been delivered), and the only remaining obligation between the parties in relation to the Call Option and the Put Option shall be the obligation of the Defaulting Party or the Non-Defaulting Party, as applicable, to make the payment of the Termination Value in accordance with this Section 3; provided , however , that, unless the Event of Default is a Bankruptcy or the failure by a party to perform its payment or delivery options hereunder, the Non-Defaulting Party shall exercise its Call Option or Put Option, as applicable, and may only deliver a Notice of Termination if the Defaulting Party shall fail to perform its payment or delivery obligations hereunder following such exercise. As promptly as reasonably practicable following the Early Termination Date, the Non-Defaulting Party shall deliver to the Defaulting Party a notice setting forth the Termination Value, which shall be due and payable by Cencosud, if positive, or by Bank, if negative, in each case as of the date of such notice. In addition to the foregoing, the Defaulting Party will, on demand, indemnify and hold harmless the Non- Defaulting Party from and against all reasonable out of pocket expenses, including legal fees and stamp tax, incurred by the Non-Defaulting Party by reason of the enforcement and protection of its rights under this Agreement or by reason of the early termination of this Agreement, including, but not limited to, costs of collection.
4. MISCELLANEOUS PROVISIONS . 
4.1 Incorporation . 
Sections 4.1, 4.2 and 8 of the Shareholders Agreement are incorporated into this Agreement in their entirety as if set forth herein.
4.2 Valuation Costs . 
The Defaulting Party shall be responsible for the cost of the valuation made by the Investment Bank or the Valuation Bank in accordance with the definition of “Fair Market Value.”
 
9

ANNEX A
ADJUSTED STRIKE FORMULA APPLICATION EXAMPLES
Formula:

X = X0 + (Y)*    	 	(	 	X1 - X0
Y1	 	)	  		
	 		 		 		  		
Where:
X = the Adjusted Strike Price;
X0 = the Strike Price on the nearest Scheduled Potential Exercise Date preceding the Early Termination Date (or, if the Early Termination Date occurs prior to the first Scheduled Call Option Potential Exercise Date, an amount equal to USD 442,116,640);
X1 = the Strike Price on the nearest Scheduled Potential Exercise Date following the Early Termination Date;
Y = the number of days from and including the nearest Scheduled Potential Exercise Date preceding the Early Termination Date (or, if the Early Termination Date occurs prior to the first Scheduled Call Option Potential Exercise Date, from and including the date hereof) to and including the Early Termination Date); and
Y1 = the number of days from and including the nearest Scheduled Potential Exercise Date preceding the Early Termination Date (or, if the Early Termination Date occurs prior to the first Scheduled Call Option Potential Exercise Date, from and including the date hereof) to the next succeeding Scheduled Potential Exercise Date.

(	  	Date	 	  	Strike	 	  	X0	 	  	X1	 	  	X1 - X0	 	  	Y1	 	  	Y	 	  	(X1 - X0)
/ Y1	 	  	X
(Adjusted
Strike)	 	
										
Closing date	  	 	30-3-11	  	  	 	442.1	  	  				  				  				  				  				  				  				
										
Early termination date example 1	  	 	16-5-11	  	  				  	 	442.1	  	  	 	460.0	  	  	 	17.90	  	  	 	177	  	  	 	47	  	  	 	0.1011	  	  	 	446.9	  	
										
Call 1	  	 	23-9-11	  	  	 	460.0	  	  				  				  				  				  				  				  				
										
Early termination date example 2	  	 	6-12-11	  	  				  	 	460.0	  	  	 	473.6	  	  	 	13.61	  	  	 	182	  	  	 	74	  	  	 	0.0748	  	  	 	465.6	  	
										
Call 2	  	 	23-3-12	  	  	 	473.6	  	  				  				  				  				  				  				  				
										
Early termination date example 3	  	 	7-5-12	  	  				  	 	473.6	  	  	 	486.6	  	  	 	13.01	  	  	 	187	  	  	 	45	  	  	 	0.0695	  	  	 	476.8	  	
										
Put	  	 	24-9-12	  	  	 	486.6	  	  				  				  				  				  				  				  				
										
Early termination date example 4	  	 	28-2-13	  	  				  	 	486.6	  	  	 	496.1	  	  	 	9.49	  	  	 	177	  	  	 	155	  	  	 	0.0536	  	  	 	494.9	  	
										
Call 3	  	 	22-3-13	  	  	 	496.1	  	  				  				  				  				  				  				  				

ANNEX B
FORM OF
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT, dated as of [        ], [            ], is made by and among ( i ) CENCOSUD S.A,, a corporation organized and existing under the laws of the Republic of Chile (“ Buyer ”), and ( ii ) UBS A.G LONDON BRANCH, operating as a branch of UBS AG a Swiss banking corporation, organized and existing under the laws of Switzerland (“ Seller ”).
RECITALS
WHEREAS, Buyer and Seller are parties to that certain Option Agreement, dated March 30, 2011 (the “Option Agreement”).
(b) Sale and Purchase of the Shares .
Sale and Purchase of the Shares . Subject to the terms and conditions hereof, the Seller will sell all of its respective Shares to Buyer and Buyer will purchase all of the respective Shares from the Seller for a price per Share equal to US$[        ], payable in cash at the closing in the manner set forth in Section 2.3 of the Option Agreement.
Closing . The closing of the sale and purchase of all of the Shares (the “ Closing ”) shall take place at the offices of [                    ] at [                    ] New York time on [                    ], unless the parties otherwise agree in writing (the “ Closing Date ”). At the Closing:
The Seller shall deliver to Buyer, free and clear of any liens, charges or encumbrances of any kind whatsoever (collectively, “ Liens ”), certificates representing all of the Shares, duly endorsed in blank or accompanied by stock powers or other instruments of transfer duly executed in blank, and a copy of an executed letter from the Seller to the Company informing it of the sale of the Shares to Buyer (the form of such letter attached hereto as Exhibit A , the “ Section 215 Letter ”); and
 
1

Buyer will pay to the Seller the Strike Price (as defined in the Option Agreement), such amount to be paid by wire transfer of immediately available funds to the following account:
[                    ]
(c) Representations and Warranties of the Seller . the Seller represents and warrants to Buyer, in respect of itself only, as of the date of Closing, as follows:
Corporate Status; Authorization, etc . the Seller is duly formed, validly existing and in good standing under the laws of the country of its organization or formation. The Seller has full power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement, the performance of the Seller’s obligations hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate or organizational action of the Seller. The Seller has duly executed and delivered this Agreement. This Agreement constitutes the legal, valid and binding obligation of the Seller enforceable against the Seller in accordance with its terms.
Title to Shares . The Seller owns, beneficially and of record, the respective Shares, free and clear of any Liens. Upon the delivery of and payment for the Seller’s Shares at the Closing as provided for in this Agreement, Buyer will acquire good and valid title to all the Shares, free and clear of any Liens other than any Liens created by Buyer.
No Conflicts, etc . The execution, delivery and performance of this Agreement by the Seller and the consummation of the transactions contemplated hereby do not conflict with, contravene, result in a violation or breach of or default under (with or without the giving of notice or the lapse of time or both), create in any other Person a right or claim of termination, amendment, or require modification, acceleration or cancellation of, or result in the creation of any Liens (or any obligation to create any Liens) upon any of the properties or assets of the Seller under, ( i ) any law, regulation or order of any court or other legal authority applicable to the Seller or any of its properties or assets, ( ii ) any provision of any of the organizational or governance documents of the Seller or ( iii ) any contract, or any other agreement or instrument to which the Seller is a party or by which any of its properties or assets may be bound, except, in the case of this clause (iii), for violations and defaults that, individually and in the aggregate, could not reasonably be expected to materially impair the ability of the Seller to perform its obligations hereunder. The Seller is not required to make or obtain any filing, consent, approval, authorization, waiver or permit from or with any governmental authority, contractual counterparty or other person in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.
 
2

(d) Representations and Warranties of Buyer . Buyer represents and warrants to the Seller, as of the date of Closing, as follows:
Corporate Status; Authorization, etc . Buyer is a corporation duly incorporated, validly existing and in good standing under the laws of Chile. Buyer has full corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement, the performance of its obligations hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action of Buyer, Buyer has duly executed and delivered this Agreement. This Agreement constitutes the legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms.
No Conflicts, etc . The execution, delivery and performance by Buyer of this Agreement and the consummation of the transactions contemplated hereby do not conflict with, contravene, result in a violation or breach of or default under (with or without the giving of notice or the lapse of time, or both), create in any other Person a right or claim of termination, amendment, modification, acceleration or cancellation of, or result in or require the creation of any Lien (or any obligation to create any Lien) on any of the properties or assets of Buyer under ( i ) any law, regulation or order of any court or other legal authority applicable to Buyer or any of its properties or assets, ( ii ) any provision of any of the organizational or governance documents of Buyer, or ( iii ) any contract, agreement or other instrument to which Buyer is a party or by which its properties or assets may be bound except, in the case of clause (c), for violations and defaults that, individually and in the aggregate, would not materially impair the ability of Buyer to perform its obligations hereunder. Buyer is not required to make or obtain any filing, consent, approval, authorization, waiver or permit from or with any governmental authority, contractual counterparty or other person in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.
(e) Miscellaneous .
Expenses . Each party shall bear its own respective expenses, costs and fees (including attorneys’, auditors’ and financing commitment fees) in connection with the transactions contemplated hereby, including the preparation, execution and delivery of this Agreement and compliance herewith.
 
3

Governing Law, etc . THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING AS TO VALIDITY, INTERPRETATION AND EFFECT, BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
Arbitration . Any dispute, controversy or claim arising out of or in connection with, or relating to, this Agreement, or the breach, termination or validity thereof, will be finally settled exclusively by arbitration in accordance with the Rules of Arbitration of the London Court of International Arbitration, as in effect at the time of the arbitration, except as modified herein or by mutual agreement of the parties. The seat of the arbitration will be Miami, Florida, provided that the arbitrators may hold hearings in such other locations as the arbitrators determine to be most convenient and efficient for all of the parties to such arbitration under the circumstances. The arbitration will be governed by the Federal Arbitration Act. The arbitration shall be conducted in English.
Binding Effect . This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors and permitted assigns.
Assignment . This Agreement shall not be assignable or otherwise transferable by any party hereto without the prior written consent of the other parties hereto.
No Third Party Beneficiaries . Nothing in this Agreement shall confer any rights upon any person or entity other than the parties hereto and their respective heirs, successors and permitted assigns.
Entire Agreement . This Agreement, together with the Option Agreement, constitutes the entire agreement of the parties and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof.
Severability . If any provision, including any phrase, sentence, clause, section or subsection, of this Agreement is invalid, inoperative or unenforceable for any reason, such circumstances shall not have the effect of rendering such provision in question invalid, inoperative or unenforceable in any other case or circumstance, or of rendering any other provision herein contained invalid, inoperative, or unenforceable to any extent whatsoever.
Counterparts . This Agreement may be executed in several counterparts, each of which shall be deemed an original and all of which shall together constitute one and the same instrument.
 
4

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written.

CENCOSUD S.A.	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
UBS A.G., LONDON BRANCH.	
		
By:	 	 	
	 	Name:	
	 	Title:	

EXHIBIT A
[DATE]
Jumbo Retail Argentina S.A.
[Address]
Section 215 Letter
Dear Sirs:
This Section 215 Letter is to inform you of the sale and transfer of all of the shares of Jumbo Retail Argentina S.A. owned by the undersigned to UBS A.G: London Branch, pursuant to the Stock Purchase Agreement dated as of [        ], [            ] between [                    ] S.A. and UBS A.G., London Branch and the undersigned.
This Section 215 Letter maybe executed in several counterparts, each of which shall be deemed an original and all of which shall together constitute one and the same instrument.

Sincerely,	
	
[                    ]	
		
By:	 	 	
Name:	 		
Title:	 		
		
	 	[ACKNOWLEDGEMENT]	

SCHEDULE A
Permitted Valuation Banks
Any of the following entities (or their successors or assigns) may be chosen as Valuation Bank: Bank of America, Deutsche Bank, Santander, Morgan Stanley or Goldman Sachs

Exhibit 4.3
INDENTURE
CENCOSUD S.A.,
as Issuer
CENCOSUD RETAIL S.A.,
as Guarantor
5.500% SENIOR NOTES DUE 2021
THE BANK OF NEW YORK MELLON,
as Trustee, Paying Agent, Registrar and Transfer Agent
and
THE BANK OF NEW YORK MELLON (LUXEMBOURG) S.A.,
as Luxembourg Paying Agent and Luxembourg Transfer Agent
Dated as of January 20, 2011

TABLE OF CONTENTS

 	 	 	  	Page	
	
ARTICLE I	
	
Definitions; Incorporation by Reference and Rules of Construction	
			
SECTION 1.01.	 	Definitions	  	1	
SECTION 1.02.	 	Rules of Construction	  	7	
	
ARTICLE II	
	
The Securities	
			
SECTION 2.01.	 	Amount of Securities; Issuable in Series	  	7	
SECTION 2.02.	 	Form and Dating	  	8	
SECTION 2.03.	 	Execution and Authentication	  	8	
SECTION 2.04.	 	Registrar, Paying Agent and Transfer Agent	  	9	
SECTION 2.05.	 	Paying Agent To Hold Money in Trust	  	9	
SECTION 2.06.	 	Holder Lists	  	10	
SECTION 2.07.	 	Transfer and Exchange	  	10	
SECTION 2.08.	 	Replacement Securities	  	11	
SECTION 2.09.	 	Outstanding Securities	  	11	
SECTION 2.10.	 	Temporary Securities	  	11	
SECTION 2.11.	 	Cancellation	  	11	
SECTION 2.12.	 	Defaulted Interest	  	12	
SECTION 2.13.	 	CUSIP and ISIN Numbers	  	12	
SECTION 2.14.	 	Denomination	  	12	
SECTION 2.15.	 	Open Market Purchases	  	12	
	
ARTICLE III	
	
General Redemption Provisions	
			
SECTION 3.01.	 	Notices to Trustee	  	12	
SECTION 3.02.	 	Notice of Redemption	  	13	
SECTION 3.03.	 	Effect of Notice of Redemption	  	13	
SECTION 3.04.	 	Deposit of Redemption Price	  	14	
	
ARTICLE IV	
	
Optional Redemption	
			
SECTION 4.01.	 	Tax Redemption	  	14	
SECTION 4.02.	 	Make-Whole Redemption	  	15	
 
i

					
ARTICLE V	
	
Covenants	
			
SECTION 5.01.	 	Payment of Securities	  	15	
SECTION 5.02.	 	Limitation on Liens	  	15	
SECTION 5.03.	 	Limitation on Sale and Leaseback Transactions	  	17	
SECTION 5.04.	 	Reporting Requirements	  	18	
SECTION 5.05.	 	Additional Amounts	  	19	
SECTION 5.06.	 	Rule 144A Information	  	22	
SECTION 5.07.	 	Further Instruments and Acts	  	22	
SECTION 5.08.	 	Statement as to Compliance	  	22	
SECTION 5.09.	 	Corporate Existence	  	22	
SECTION 5.10.	 	Listing	  	22	
	
ARTICLE VI	
	
Successor Company or Guarantor	
			
SECTION 6.01.	 	When the Company or the Guarantor May Merge or Transfer Assets	  	23	
	
ARTICLE VII	
	
Defaults and Remedies	
			
SECTION 7.01.	 	Events of Default	  	24	
SECTION 7.02.	 	Acceleration	  	25	
SECTION 7.03.	 	Other Remedies	  	25	
SECTION 7.04.	 	Waiver of Past Defaults	  	26	
SECTION 7.05.	 	Control by Majority	  	26	
SECTION 7.06.	 	Limitation on Suits	  	26	
SECTION 7.07.	 	Rights of Holders To Receive Payment	  	27	
SECTION 7.08.	 	Collection Suit by Trustee	  	27	
SECTION 7.09.	 	Trustee May File Proofs of Claim	  	27	
SECTION 7.10.	 	Priorities	  	27	
SECTION 7.11.	 	Undertaking for Costs	  	27	
SECTION 7.12.	 	Waiver of Stay or Extension Laws	  	28	
	
ARTICLE VIII	
	
Trustee	
			
SECTION 8.01.	 	Duties of Trustee	  	28	
SECTION 8.02.	 	Rights of Trustee	  	29	
SECTION 8.03.	 	Individual Rights of Trustee	  	31	
SECTION 8.04.	 	Trustee’s Disclaimer	  	31	
SECTION 8.05.	 	Notice of Defaults	  	31	
 
ii

					
SECTION 8.06.	 	Compensation and Indemnity	  	31	
SECTION 8.07.	 	Replacement of Trustee	  	32	
SECTION 8.08.	 	Successor Trustee by Merger	  	33	
SECTION 8.09.	 	Eligibility; Disqualification	  	33	
SECTION 8.10.	 	Appointment of Co-Trustee	  	34	
	
ARTICLE IX	
	
Defeasance; Discharge of Indenture	
			
SECTION 9.01.	 	Legal Defeasance and Covenant Defeasance	  	35	
SECTION 9.02.	 	Conditions to Defeasance	  	36	
SECTION 9.03.	 	Application of Trust Money	  	37	
SECTION 9.04.	 	Repayment to Company	  	38	
SECTION 9.05.	 	Indemnity for U.S. Government Obligations	  	38	
SECTION 9.06.	 	Reinstatement	  	38	
SECTION 9.07.	 	Satisfaction and Discharge	  	38	
	
ARTICLE X	
	
Amendments	
			
SECTION 10.01.	 	Without Consent of Holders	  	39	
SECTION 10.02.	 	With Consent of Holders	  	40	
SECTION 10.03.	 	Revocation and Effect of Consents and Waivers	  	41	
SECTION 10.04.	 	Notation on or Exchange of Securities	  	41	
SECTION 10.05.	 	Trustee To Sign Amendments	  	41	
	
ARTICLE XI	
	
Subsidiary Guarantee	
			
SECTION 11.01.	 	Subsidiary Guarantee	  	42	
SECTION 11.02.	 	Limitation on Liability	  	44	
SECTION 11.03.	 	Successors and Assigns	  	44	
SECTION 11.04.	 	No Waiver	  	44	
SECTION 11.05.	 	Modification	  	44	
SECTION 11.06.	 	Non-Impairment	  	44	
SECTION 11.07.	 	Release of Subsidiary Guarantor	  	44	
	
ARTICLE XII	
	
Miscellaneous	
			
SECTION 12.01.	 	Notices	  	45	
SECTION 12.02.	 	Certificate and Opinion as to Conditions Precedent	  	47	
SECTION 12.03.	 	Statements Required in Certificate or Opinion	  	47	
SECTION 12.04.	 	When Securities Disregarded	  	47	
 
iii

					
SECTION 12.05.	 	Rules by Trustee, Paying Agent and Registrar	  	47	
SECTION 12.06.	 	Legal Holidays	  	47	
SECTION 12.07.	 	Governing Law; Consent to Jurisdiction and Service of Process	  	48	
SECTION 12.08.	 	Waiver of Immunity	  	49	
SECTION 12.09.	 	No Recourse Against Others	  	50	
SECTION 12.10.	 	Successors	  	50	
SECTION 12.11.	 	Multiple Originals	  	50	
SECTION 12.12.	 	Table of Contents; Headings	  	50	
SECTION 12.13.	 	Waiver of Jury Trial	  	50	
SECTION 12.14.	 	Severability	  	50	
SECTION 12.15.	 	USA Patriot Act	  	50	

Appendix A	  	–	    	Provisions Relating to Securities	
Exhibit 1 to Appendix A	  	–	    	Form of Security	
Exhibit 2 to Appendix A	  	–	    	Form of Regulation S Transfer Certificate	
Exhibit 3 to Appendix A	  	–	    	Form of Rule 144A Transfer Certificate	
 
iv

INDENTURE dated as of January 20, 2011, among Cencosud S.A., a sociedad anónima organized under the laws of Chile (the “Company”), Cencosud Retail S.A., a sociedad anónima organized under the laws of Chile and a majority-owned subsidiary of the Company, as guarantor (the “Guarantor”), The Bank of New York Mellon, a corporation duly organized and existing under the laws of the State of New York authorized to conduct a banking business, as Trustee (the “Trustee”), Registrar, Paying Agent and Transfer Agent (as such terms are defined below), and The Bank of New York Mellon (Luxembourg) S.A., as Luxembourg Paying Agent (the “Luxembourg Paying Agent”) and Luxembourg Transfer Agent (the “Luxembourg Transfer Agent”).
Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Company’s 5.500% Senior Notes due 2021, to be issued, from time to time, as in this Indenture provided (the “Securities”).
ARTICLE I
Definitions; Incorporation by Reference and Rules of Construction
SECTION 1.01. Definitions .
“Additional Amounts” has the meaning set forth in Section 5.05(a) hereof.
“Additional Securities” means Securities issued pursuant to Section 2.01(c) hereof, if any.
“Affiliate” means, with respect to any specified Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control,” when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.
“Attributable Value” means, as to any particular lease under which the Company or any Subsidiary is at any time liable as lessee and any date as of which the amount thereof is to be determined, the total net obligations of the lessee for rental payments during the remaining term of the lease (including any period for which such lease has been extended or may, at the option of the lessor, be extended) discounted from the respective due dates thereof to such date at a rate per annum equivalent to the interest rate inherent in such lease (as determined in good faith by the Company in accordance with generally accepted financial practice).
“Board of Directors” means the Board of Directors of the Company or any committee thereof duly authorized to act on behalf of such Board of Directors.
“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification.
“Business Day” means each day that is not a Legal Holiday.

“Chile” means the Republic of Chile.
“Commission” means the U.S. Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act.
“Company” means the party named as such in the first paragraph of this Indenture until a successor replaces it pursuant to the applicable provisions hereof and, thereafter, means the successor and, for purposes of any provision contained herein, each other obligor on the Securities.
“Company Order” has the meaning set forth in Section 2.03(d) hereof.
“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the Securities to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Securities.
“Comparable Treasury Price” means, with respect to a redemption date, (a) the average of four Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest Reference Treasury Dealer Quotations or (b) if the Independent Investment Banker obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.
“Consolidated Net Tangible Assets” means the total of all assets appearing on a consolidated balance sheet of the Company and the Subsidiaries, net of all applicable reserves and deductions, but excluding goodwill, trade names, trademarks, patents, unamortized debt discount and all other like intangible assets, less the aggregate of the current liabilities of the Company and the Subsidiaries appearing on such balance sheet as determined in accordance with IFRS.
“Corporate Trust Office” means the principal office of the Trustee at which at any time its corporate trust business shall be administered, which office at the date hereof is located at 101 Barclay Street, Floor 4E, New York, New York 10286, Attention: International Corporate Trust, or such other address as the Trustee may designate from time to time by notice to the Holders, the Company and the Guarantor, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders, the Company and the Guarantor).
“Covenant Defeasance” has the meaning set forth in Section 9.01(c) hereof.
“Default” means any event which is, or after notice or passage of time or both would be, an Event of Default.
“Event of Default” has the meaning set forth in Section 7.01 hereof.
“Excess Additional Amounts” means Additional Amounts in respect of interest received on the Securities at a rate of withholding or deduction in excess of 4.0%.
 
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“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
“Global Securities” has the meaning set forth in Appendix A.
“Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person, direct or indirect, contingent or otherwise, or entered into for the purpose of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided , however , that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning. The term “Guarantee” shall not apply to a guarantee of intercompany indebtedness among the Company and the Subsidiaries or among the Subsidiaries.
“Guaranteed Obligations” has the meaning set forth in Section 11.01(a) hereof.
“Guarantor” means the party named as such in the first paragraph of this Indenture until a successor replaces it pursuant to the applicable provisions hereof and, thereafter, including the successor for purposes of any provision contained herein.
“Holder” means the Person in whose name a Security is registered on the Security Register described in Section 2.04 hereof.
“IFRS” means International Financial Reporting Standards or other accounting standards generally accepted in Chile, as required by the SVS for Chilean public companies, in each case as in effect from time to time.
“Indebtedness” means, with respect to any Person (without duplication) (a) any obligation of such Person (i) for borrowed money, (ii) evidenced by bonds, debentures, notes or other similar instruments, (iii) under any reimbursement obligation relating to a letter of credit other than letters of credit in the ordinary course of business, (iv) for the payment of money relating to any obligations under any capital lease of real or personal property, (v) under any agreement or instrument in respect of an interest rate or currency swap, exchange or hedging transaction or other financial derivatives transaction, (vi) to pay the deferred and unpaid purchase price of property or services (other than trade accounts payable arising in the ordinary course of business), which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto or the completion of such service or (vii) a Guarantee of such Person; and (b) any amendment, supplement, modification, deferral, renewal, extension or refunding of any liability of the types referred to in clause (a) above. For the purpose of determining any particular amount of Indebtedness under this definition, Guarantees of (or obligations with respect to letters of credit) Indebtedness otherwise included in the determination of such amount shall not be included. For the avoidance of any doubt, any obligation that is non-recourse to any such Person shall not be deemed to be Indebtedness under this definition.
“Indenture” means this Indenture as amended or supplemented from time to time.
“Independent Investment Banker” means one of the Reference Treasury Dealers.
 
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“Interest Payment Date” means January 20 and July 20 of each year, commencing on July 20, 2011, or if such date is not Business Day on the next succeeding Business Day.
“Issue Date” means January 20, 2011.
“Legal Defeasance” has the meaning set forth in Section 9.01(b) hereof.
“Legal Holiday” has the meaning set forth in Section 12.06 hereof.
“Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind.
“Luxembourg Paying Agent” has the meaning set forth in the first paragraph of this Indenture and its successors and assigns.
“Luxembourg Transfer Agent” has the meaning set forth in the first paragraph of this Indenture and its successors and assigns.
“Officer” means the Chief Executive Officer, the President, the Chief Financial Officer or any Vice President of the Company or the Guarantor, as applicable.
“Officer’s Certificate” means a certificate signed by an Officer of the Company or the Guarantor, as applicable, and delivered to the Trustee. Any Officer’s Certificate required by this Indenture to be provided to the Trustee or any Paying Agent for these purposes shall be deemed to be duly provided if telecopied to the Trustee or such Paying Agent, as applicable.
“Opinion of Counsel” means a written opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Company, the Guarantor or the Trustee.
“Original Securities” has the meaning set forth in Section 2.03(d) hereof.
“Paying Agent” has the meaning set forth in Section 2.04(a) hereof.
“Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.
“principal” means, with respect to any Indebtedness (including the Securities), the principal amount of such Indebtedness plus the premium, if any, on such Indebtedness.
“Protected Purchaser” means a purchaser of a Security, or of an interest therein, who (a) gives value, (b) does not have notice of any adverse claim to the Security, and (c) obtains control of the Security.
“QIB” means a “qualified institutional buyer” as defined in Rule 144A under the Securities Act.
 
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“Record Date” means the close of business on January 5 or July 5, as applicable (whether or not a Business Day).
“Reference Treasury Dealer” means Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC or their affiliates which are primary United States government securities dealers and not less than two other leading primary United States government securities dealers in New York City, New York reasonably designated by the Company; provided that if any of the foregoing cease to be a primary United States government securities dealer in New York City, New York (a “Primary Treasury Dealer”), the Company shall substitute therefor another Primary Treasury Dealer.
“Reference Treasury Dealer Quotation” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker by such Reference Treasury Dealer at or about 3:30 p.m. (New York City time) on the third Business Day preceding such redemption date.
“Registrar” has the meaning assigned to it in Section 2.04(a) hereof.
“Relevant Jurisdiction” has the meaning assigned to it in Section 4.01 hereof.
“Remaining Scheduled Payments” means, with respect to each Security to be redeemed, the remaining scheduled payments of the principal thereof and interest thereon that would be due after the related redemption date but for such redemption; provided , however , that, if that redemption date is not an Interest Payment Date with respect to such Securities, the amount of the next succeeding scheduled interest payment thereon shall be reduced by the amount of interest accrued thereon to that redemption date.
“Sale and Leaseback Transaction” means any transaction or series of related transactions pursuant to which the Company or any Subsidiary sells or transfers any property to any Person with the intention of taking back a lease of such property pursuant to which the rental payments are calculated to amortize the purchase price of such property substantially over the useful life thereof and such property is in fact so leased.
“Securities” has the meaning assigned to such term in the second paragraph of this Indenture.
“Securities Act” means the U.S. Securities Act of 1933, as amended.
“Securities Register” has the meaning assigned to it in Section 2.04 hereof.
“Significant Subsidiaries” means collectively, (a) each Subsidiary of the Company which would be a “significant subsidiary” within the meaning of Rule 1-02 under Regulation S-X promulgated by the Commission as in effect on the date of this Indenture, assuming the Company is the registrant referred to in such definition, and (b) to the extent not a “significant subsidiary” pursuant to clause (a) above, the Guarantor.
 
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“Stated Maturity” means, with respect to any security, the date specified in such security as the fixed date on which the payment of principal of such security is due and payable (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the Company unless such contingency has occurred).
“Subsidiary” means any corporation or other business entity of which the Company owns or controls (either directly or through one or more other Subsidiaries) more than 50% of the issued share capital or other ownership interests, in each case having ordinary voting power to elect or appoint directors, managers or trustees of such corporation or other business entity (whether or not capital stock or other ownership interests or any other class or classes have or might have voting power upon the occurrence of any contingency) including, without limitation, the Guarantor.
“Subsidiary Guarantee” has the meaning set forth in Section 11.01(a) hereof.
“SVS” means the Chilean Securities and Insurance Commission ( Superintendencia de Valores y Seguros ).
“Taxes” has the meaning set forth in Section 5.05(a) hereof.
“Transfer Agent” has the meaning set forth in Section 2.04(a) hereof.
“Transfer Restricted Securities” means Securities that bear or are required to bear the Restricted Securities Legend (as defined in Section 2.1(f) of the Appendix A).
“Treasury Rate” means, with respect to a redemption date, the rate per annum equal to the semi-annual equivalent yield-to-maturity or interpolated maturity (on a day count basis) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.
“Trust Officer” means, when used with respect to the Trustee, any officer within the Corporate Trust Office of the Trustee having direct responsibility for the administration of this Indenture, or any other officer to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject.
“Trustee” means the party named as such in the first paragraph of this Indenture until a successor replaces it pursuant to Article VIII of this Indenture and, thereafter, means the successor.
“U.S. Government Obligations” means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable or redeemable at the Company’s option.
 
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SECTION 1.02. Rules of Construction . Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with IFRS;
(c) “or” is not exclusive;
(d) “including” means including without limitation;
(e) words in the singular include the plural and words in the plural include the singular; and
(f) the principal amount of any noninterest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer thereof dated such date prepared in accordance with IFRS.
ARTICLE II
The Securities
SECTION 2.01. Amount of Securities; Issuable in Series .
(a) The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. All Securities shall be identical in all respects other than issue date, issue price and the first interest payment date. The Securities may be issued in one or more series; provided , however , that any Securities issued with original issue discount (“OID”) for U.S. Federal income tax purposes shall not be issued as part of the same series as any Securities that are issued with a different amount of OID or are not issued with OID, unless the Original Securities and the Additional Securities would be treated as part of the same issue for U.S. Federal income tax purposes.
(b) With respect to any Securities issued after the Issue Date (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, Original Securities pursuant to Section 2.07, Section 2.08 or Section 2.10 hereof), there shall be established in or pursuant to a resolution of the Board of Directors, and subject to Section 2.03 hereof, set forth, or determined in the manner provided in an Officer’s Certificate of the Company, or established in one or more indentures supplemental hereto, prior to the issuance of such Securities:
(i) whether such Securities shall be issued as part of a new or existing series of Securities and the title of such Securities (which shall distinguish the Securities of the series from Securities of any other series);
(ii) the aggregate principal amount of such Securities that may be authenticated and delivered under this Indenture;
 
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(iii) the issue price, issue date and first interest payment date of such Securities, including the date from which interest on such Securities shall accrue;
(iv) if applicable, that such Securities shall be issuable in whole or in part in the form of one or more Global Securities and, in such case, the respective depositories for such Global Securities, the form of any legend or legends that shall be borne by any such Global Security in addition to or in lieu of that set forth in Exhibit 1 to Appendix A and any circumstances in addition to or in lieu of those set forth in Section 2.2 of Appendix A in which any such Global Security may be exchanged in whole or in part for Securities registered, and any transfer of such Global Security in whole or in part may be registered, in the name or names of Persons other than the depository for such Global Security or a nominee thereof; and
(v) any CUSIP(s), ISIN(s) or other identifying numbers.
(c) If any of the terms of any Securities are established by action taken by the Board of Directors, a Board Resolution shall be delivered to the Trustee at or prior to the delivery of the Officer’s Certificate of the Company or the trust indenture supplemental hereto setting forth the terms of such Securities.
SECTION 2.02. Form and Dating . Provisions relating to the Securities are set forth in the Rule 144A/Regulation S Appendix attached hereto (the “Appendix A”) which is hereby incorporated in, and expressly made part of, this Indenture. The Original Securities and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit 1 to the Appendix A which is hereby incorporated in, and expressly made a part of, this Indenture. The Securities may have notations, legends or endorsements required by law, stock exchange rule, agreements to which each of the Company and the Guarantor is subject, if any, or usage; provided that any such notation, legend or endorsement is in a form acceptable to the Company and the Guarantor. Each Security shall be dated the date of its authentication.
SECTION 2.03. Execution and Authentication .
(a) An Officer of the Company shall sign the Securities for the Company by manual or facsimile signature.
(b) If an Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless.
(c) A Security shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Security. Such signature shall be conclusive evidence that the Security has been authenticated under this Indenture.
(d) On the Issue Date, the Trustee shall authenticate and deliver U.S.$750,000,000 aggregate principal amount of 5.500% Senior Notes due 2021 (the “Original Securities”) and, at any time and from time to time thereafter, the Trustee shall authenticate and deliver Securities for original issue in an aggregate principal amount specified in such order, in each case upon a written order of the Company signed by an Officer of the Company (the “Company Order”). Such order shall specify the amount of the Securities to be authenticated and the date on which the original issue of Securities is to be authenticated.
(e) The Trustee may appoint an authenticating agent reasonably acceptable to the Company to authenticate the Securities. Unless limited by the terms of such appointment, an authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such authenticating agent.
 
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SECTION 2.04. Registrar, Paying Agent and Transfer Agent .
(a) The Company shall maintain an office or agency in The City of New York, New York (which office or agency may be an office of the Trustee or an affiliate of the Trustee) where Securities may be presented for registration of transfer or for exchange (the “Registrar”) and an office or agency where Securities may be presented for payment (the “Paying Agent”). The Registrar shall keep a register of the Securities and of their transfer and exchange (the “Securities Register”). The Company shall also maintain an office or agency in The City of New York, New York (which office or agency may be an office of the Trustee or an affiliate of the Trustee) where Securities may be presented or surrendered for transfer or for exchange (the “Transfer Agent”). The Company may have one or more co-registrars and one or more additional paying agents and transfer agents. The term “Paying Agent” includes any additional paying agent and the term “Transfer Agent” includes any additional transfer agent.
(b) The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent, Transfer Agent or co-registrar not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such agent. The Company shall promptly notify the Trustee of the name and address of any such agent. If the Company fails to maintain a Registrar, Paying Agent or Transfer Agent, the Trustee shall act as such, to the extent that it is lawful to so act, and shall be entitled to appropriate compensation therefor pursuant to Section 8.06 hereof. The Company or any Subsidiary may act as Paying Agent, Registrar, Transfer Agent or co-registrar.
(c) The Company initially appoints the Trustee as Registrar, Paying Agent and Transfer Agent in connection with the Securities.
(d) So long as the Securities are listed on the Luxembourg Stock Exchange and the Luxembourg Stock Exchange rules so require, there shall be a Paying Agent and Transfer Agent in Luxembourg. The Company initially appoints The Bank of New York Mellon (Luxembourg) S.A. as Luxembourg Paying Agent and Luxembourg Transfer Agent in connection with the Securities.
SECTION 2.05. Paying Agent To Hold Money in Trust . On or before 12:00 p.m. (New York) time, at least one Business Day prior to each due date of the principal and interest on any Security, the Company shall deposit with the Paying Agent a sum sufficient to pay such principal and interest, together with any Additional Amounts then due, when so becoming due. Each Paying Agent a party to this Indenture agrees that, and the Company shall require each Paying Agent not a party to this Indenture to agree in writing that, the Paying Agent
 
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shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of or interest on the Securities and shall notify the Trustee of any default by the Company in making any such payment. If the Company or a Subsidiary acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon complying with this Section 2.05, the Paying Agent shall have no further liability for the money delivered to the Trustee.
SECTION 2.06. Holder Lists . The Registrar shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders. If the Trustee is not the Registrar, the Company shall furnish to the Trustee, in writing at least seven Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders.
SECTION 2.07. Transfer and Exchange .
(a) The Securities shall be issued in registered form and shall be transferable only upon the surrender of a Security for registration of transfer. When a Security is presented to the Registrar or a co-registrar with a request to register a transfer, the Registrar shall register the transfer only upon receipt by the Company and the Registrar of such Opinions of Counsel, certificates and/or other information reasonably required by and satisfactory to each in order to ensure compliance with the Securities Act. When Securities are presented to the Registrar or a co-registrar with a request to exchange them for an equal principal amount of Securities of other denominations, the Registrar shall make the exchange as requested if the same requirements are met. To permit registration of transfers and exchanges, the Company shall execute and the Trustee shall authenticate and deliver Securities at the Registrar’s or co-registrar’s request. The Company and the Registrar may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section 2.07. The Company shall not be required to make, and the Registrar need not register, transfers or exchanges of Securities selected and delivered for redemption or any Securities for a period of 15 days before a selection of Securities to be redeemed or 15 days before an Interest Payment Date.
(b) Prior to the due presentation for registration of transfer of any Security, the Company, the Guarantor, the Trustee, any Paying Agent, the Registrar or any co-registrar may deem and treat the person in whose name a Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of, interest and Additional Amounts, if any, on such Security and for all other purposes whatsoever, whether or not presentation of such Security is overdue, and none of the Company, the Guarantor, the Trustee, any Paying Agent, the Registrar or any co-registrar shall be affected by notice to the contrary.
(c) All Securities issued upon any registration of transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Securities surrendered upon such registration of transfer or exchange.
 
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SECTION 2.08. Replacement Securities . In the event that any Security shall become mutilated, defaced, destroyed, lost or stolen, the Company shall execute and, upon the Company’s request, the Trustee shall authenticate and deliver a new Security, of like tenor (including the same date of issuance) and equal principal amount, registered in the same manner, and bearing interest from the date to which interest has been paid on such Security, in exchange and substitution for such Security (upon surrender and cancellation thereof in the case of a mutilated or defaced Security) or in lieu of and substitution for such Security. In the event that such Security is destroyed, lost or stolen, the applicant for a substitute Security shall furnish to the Company, the Guarantor, the Trustee, any Paying Agent (including, without limitation, the Luxembourg Paying Agent), any Transfer Agent (including, without limitation, the Luxembourg Transfer Agent), the Registrar and any co-registrar such security or indemnity as may be required by them to hold each of them harmless, and, in every case of destruction, loss or theft of such Security, the applicant shall also furnish to the Company, the Guarantor and the Trustee satisfactory evidence of the destruction, loss or theft of such Security and of the ownership thereof. Upon the issuance of any substituted Security, the Company may require the payment by the registered Holder thereof of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other fees and expenses (including the fees and expenses of the Trustee) connected therewith.
SECTION 2.09. Outstanding Securities .
(a) Securities outstanding at any time are all Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section 2.09 as not outstanding. A Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the Security.
(b) If a Security is replaced pursuant to Section 2.08 hereof, it ceases to be outstanding unless the Trustee and the Company receive proof satisfactory to them that the replaced Security is held by a Protected Purchaser.
(c) If a Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest payable on that date with respect to the Securities (or portions thereof) to be redeemed or maturing, as the case may be, then on and after that date such Securities (or portions thereof) cease to be outstanding and interest on them ceases to accrue.
SECTION 2.10. Temporary Securities . Until definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Securities and deliver them in exchange for temporary Securities.
SECTION 2.11. Cancellation . The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar, each Transfer Agent and each Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel and dispose of (subject to the record
 
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retention requirements of the Exchange Act) all Securities surrendered for registration of transfer, exchange, payment or cancellation in accordance with its current practice unless the Company directs the Trustee in writing to deliver cancelled Securities to the Company. The Company may not issue new Securities to replace Securities it has redeemed, paid or delivered to the Trustee for cancellation.
SECTION 2.12. Defaulted Interest . If the Company defaults in a payment of interest on the Securities, the Company shall pay the defaulted interest (plus interest on such defaulted interest to the extent lawful) in any lawful manner. The Company may pay the defaulted interest (a) to the persons who are Holders on a subsequent special Record Date or (b) to persons who are Holders in any other lawful manner not inconsistent with the rules of any applicable securities exchange if deemed practicable by the Trustee. The Company or the Guarantor, as applicable, shall fix or cause to be fixed any such special Record Date (which special Record Date shall not be more than 15 nor less than 10 days prior to the payment date) and payment date to the reasonable satisfaction of the Trustee and shall promptly mail to each Holder a notice that states the special Record Date, the payment date and the amount of defaulted interest to be paid.
SECTION 2.13. CUSIP and ISIN Numbers . The Company in issuing the Securities may use CUSIP numbers (if then generally in use) and, if so, the Trustee shall use CUSIP or ISIN numbers in notices of redemption as a convenience to Holders; provided , however , that neither the Company nor the Trustee shall have any responsibility for any defect in the CUSIP or ISIN number that appears on any Security, check, advice of payment or redemption notice, and any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company shall notify the Trustee, in writing, of any change in any CUSIP or ISIN numbers.
SECTION 2.14. Denomination . The Securities will be issued in fully registered form without interest coupons attached and will be issued in denominations of U.S.$150,000 and integral multiples of U.S.$1,000 in excess thereof.
SECTION 2.15. Open Market Purchases . Each of the Company and the Guarantor may at any time purchase Securities in the open market or otherwise at any price. Any such purchased Securities shall not be resold, except in compliance with applicable requirements or exemptions under the relevant securities laws.
ARTICLE III
General Redemption Provisions
SECTION 3.01. Notices to Trustee .
(a) If the Company elects to redeem Securities pursuant to this Indenture and paragraph 5 of the Securities, it shall notify the Trustee in writing of the redemption date, the principal amount of Securities to be redeemed and that such redemption is being made pursuant to paragraph 5 of the Securities.
(b) The Company shall give each notice to the Trustee provided for in this Section 3.01 at least 30 days before the redemption date fixed by the Company unless the Trustee consents to a shorter period. Such notice shall be accompanied by an Officer’s Certificate of the Company and an Opinion of Counsel from the Company reasonably satisfactory to the Trustee to the effect that such redemption will comply with the conditions herein.
 
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SECTION 3.02. Notice of Redemption .
(a) At least 30 days, but not more than 60 days, before a date for redemption of Securities, the Company shall give a notice of redemption to each Holder of Securities to be redeemed in accordance with Section 12.01 hereof.
The notice shall identify the Securities to be redeemed and shall state:
(i) the redemption date;
(ii) the redemption price or the information specified in paragraph 5 of the Securities;
(iii) the name and address of the Paying Agent to whom the Securities called for redemption must be surrendered;
(iv) that Securities called for redemption must be surrendered to such Paying Agent to collect the redemption price;
(v) if fewer than all the outstanding Securities are to be redeemed, the identification and principal amounts of the particular Securities to be redeemed;
(vi) that, unless the Company defaults in making such redemption payment, interest on Securities (or portion thereof) called for redemption will cease to accrue on and after the redemption date;
(vii) the CUSIP or ISIN number; and
(viii) that no representation is made as to the correctness or accuracy of the CUSIP or ISIN number, if any, listed in such notice or printed on the Securities.
(b) At the Company’s request, the Trustee shall give the notice of redemption in the Company’s name and at the Company’s expense. In such event, the Company shall provide the Trustee with the information required by this Section 3.02 at least 45 days, but not earlier than 60 days, before the redemption date.
SECTION 3.03. Effect of Notice of Redemption . Once notice of redemption is given in accordance with Section 12.01 hereof, subject to the satisfaction or waiver by the
 
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Company of any conditions precedent to such redemption set forth in the notice, Securities called for redemption will become due and payable on the redemption date and at the redemption price stated in the notice. Upon surrender to the Paying Agent, such Securities shall be paid at the redemption price stated in the notice, plus accrued interest to the redemption date (subject to the right of Holders of record on the relevant Record Date to receive interest due on the related Interest Payment Date that is on or prior to the date of redemption). Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder.
SECTION 3.04. Deposit of Redemption Price . On or before 12:00 p.m. (New York) time, at least one Business Day prior to the redemption date, the Company shall deposit with the Paying Agent (or, if the Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued interest (subject to the right of Holders of record on the relevant Record Date to receive interest due on the related Interest Payment Date that is on or prior to the date of redemption) on all Securities to be redeemed on that date other than Securities called for redemption that have been delivered by the Company to the Trustee for cancellation.
ARTICLE IV
Optional Redemption
SECTION 4.01. Tax Redemption . The Securities may be redeemed, in whole but not in part, at the Company’s option, by the giving of notice as provided in Article III hereof, at a redemption price equal to 100% of the outstanding principal amount of the Securities, together with accrued and unpaid interest to the redemption date and Additional Amounts, if any, if, as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of Chile or any jurisdiction from or through which any payment under the Securities is made by or at the direction of the Company or the Guarantor, as applicable (each a “Relevant Jurisdiction”) or any political subdivision or taxing authority thereof or therein, or any change in the official application, administration or interpretation of such laws, regulations or rulings (including a holding by a court of competent jurisdiction) in a Relevant Jurisdiction, or any other jurisdiction with the power to impose, levy or assess a Tax, the Company has or will become obligated to pay Excess Additional Amounts, if such change or amendment is announced or occurs on or after the date of this Indenture and such obligation cannot be avoided by the Company taking reasonable measures available to it; provided that no such notice of redemption shall be given earlier than 60 days prior to the earliest date on which the Company would be obligated to pay such Excess Additional Amounts, were a payment in respect of the Securities then due. For the avoidance of doubt, reasonable measures shall include a change in the jurisdiction of the paying agent. Prior to the giving of notice of redemption of Securities pursuant to this Indenture, the Company will deliver to the Trustee (i) an Officer’s Certificate to the effect that the Company is or at the time of the redemption will be entitled to effect such a redemption pursuant to this Indenture and (ii) a written opinion of recognized counsel admitted to practice in the applicable Relevant Jurisdiction and independent of the Company to the effect that the Company is, or is expected to become, obligated to pay Excess Additional Amounts as a result of such change or amendment, as described above, and setting forth in reasonable detail the circumstances giving rise to such right of redemption.
 
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SECTION 4.02. Make-Whole Redemption . The Securities may be redeemed, in whole but not in part, at the Company’s option, at any time, by the giving of notice as provided in Article III hereof, at a redemption price equal to the greater of (a) 100% of the outstanding principal amount of the Securities to be redeemed and (b) the sum of the present values of the Remaining Scheduled Payments of principal and interest on the Securities to be redeemed discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable Treasury Rate plus 35 basis points, in each case plus accrued and unpaid interest on the principal amount of the Securities being redeemed to the redemption date and Additional Amounts, if any. Notwithstanding the foregoing, payments of interest on the Securities will be payable to the Holders of those Securities registered as such at the close of business on the relevant Record Dates according to the terms and provisions of this Indenture.
ARTICLE V
Covenants
SECTION 5.01. Payment of Securities .
(a) The Company shall promptly pay the principal of and interest on the Securities on the dates and in the manner provided in the Securities and in this Indenture. Principal and interest shall be considered paid on the date due if on such date the Trustee or a Paying Agent holds in accordance with this Indenture money sufficient to pay all principal and interest then due.
(b) The Company shall pay interest on overdue principal at the rate borne by the Securities, and it shall pay interest on overdue installments of interest at the rate borne by the Securities to the extent lawful.
SECTION 5.02. Limitation on Liens .
(a) The Company shall not, nor shall it permit any Subsidiary to, issue, assume or suffer to exist any Indebtedness, if such Indebtedness is secured by a Lien upon any property or assets of the Company or any Subsidiary, unless, concurrently therewith, the Securities shall be secured equally and ratably with (or prior to) such Indebtedness; provided , however , that the foregoing restriction shall not apply to:
(i) any Lien on property acquired, constructed, developed, extended or improved by the Company or any Subsidiary (individually or together with other Persons) after the date of this Indenture or any shares or other ownership interest in, or any Indebtedness of, any Person which holds, owns or is entitled to such property, to the extent such Lien is created, incurred or assumed (A) during the period such property was being constructed, developed, extended or improved or (B) contemporaneously with, or within 360 days after, such acquisition or the completion of such construction, development, extension or improvement in order to secure or provide for the payment of all or any part of the purchase price or other consideration of such property or the other costs of such acquisition, construction, development, extension or improvement (including costs such as escalation, interest during construction and financing and refinancing costs);
 
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(ii) any Lien on any property or assets existing at the time of acquisition thereof and which (A) is not created as a result of or in connection with or in anticipation of such acquisition and (B) does not attach to any other property or assets other than the property or assets so acquired (except for property affixed or appurtenant thereto);
(iii) any Lien on any property or assets acquired from a Person which is merged with or into the Company or any Subsidiary or any Lien existing on property or assets of any Person at the time such Person becomes a Subsidiary, in either such case which (A) is not created as a result of or in connection with or in anticipation of any such transaction and (B) does not attach to any other property or assets other than the property or assets so acquired or of such Person at the time it becomes a Subsidiary (except for property affixed or appurtenant thereto);
(iv) any Lien which secures Indebtedness owed by a Subsidiary to the Company or any other Subsidiary;
(v) any Lien securing Indebtedness of the type described in clause (a)(v) of the definition of “Indebtedness”; provided that such Indebtedness was entered into in the ordinary course of business and not for speculative purposes or the obtaining of credit;
(vi) any Lien in favor of any Person to secure obligations under the provisions of any letters of credit, bank guarantees, bonds or surety obligations required or requested by any governmental authority in connection with any contract or statute;
(vii) any Lien existing on the date of this Indenture or granted pursuant to an agreement existing on the date of this Indenture;
(viii) Liens for taxes, assessments or governmental charges or levies if such taxes, assessments, governmental charges or levies are not at the time due and payable, or if the same are being contested in good faith by appropriate proceedings and appropriate provisions, if any, have been established as required by IFRS;
(ix) Liens arising solely by operation of law:
(x) Liens created for the sole purpose of securing Indebtedness that, when incurred, will be applied to repay all (but not only part) of the Securities and all other amounts payable under the Securities; provided that the Securities and all other such amounts are fully satisfied within 30 days after the incurrence of such Indebtedness;
(xi) judgment Liens not giving rise to an Event of Default so long as any appropriate legal proceedings which may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceeding may be initiated has not expired and appropriate provisions, if any, have been established as required by IFRS; or
 
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(xii) any extension, renewal or replacement (or successive extensions, renewals or replacements) in whole or in part, of any Lien referred to in the foregoing clauses (i) through (xi) inclusive or any Lien securing any Indebtedness that refinances, extends, renews, refunds or replaces any other Indebtedness secured in accordance with the foregoing clauses (i) through (xi) inclusive; provided that the principal amount of Indebtedness secured thereby shall not exceed the principal amount of Indebtedness so secured at the time of such extension, renewal or replacement plus an amount necessary to pay any customary fees and expenses, including premiums and defeasance costs related to such transaction, and that such extension, renewal or replacement shall be limited to all or a part of the property which secured the Lien so extended, renewed or replaced (plus improvements on such property) and property affixed or appurtenant thereto.
(b) Notwithstanding Section 5.02(a) hereof, the Company or any Subsidiary may issue or assume Indebtedness secured by a Lien which would otherwise be prohibited under Section 5.02(a) hereof or enter into Sale and Leaseback Transactions that would otherwise be prohibited by Section 5.03 hereof; provided that the amount of such Indebtedness or the Attributable Value of such Sale and Leaseback Transaction, as the case may be, together with the aggregate amount (without duplication) of (i) Indebtedness outstanding at such time, that was previously incurred pursuant to this Section 5.02(b) by the Company and the Subsidiaries, plus (ii) the Attributable Value of all such Sale and Leaseback Transactions of the Company and the Subsidiaries outstanding at such time that were previously incurred pursuant to this Section 5.02(b) shall not exceed 20% of Consolidated Net Tangible Assets at the time any such Indebtedness is issued or assumed by the Company or any Subsidiary or at the time any such Sale and Leaseback Transaction is entered into.
SECTION 5.03. Limitation on Sale and Leaseback Transactions . The Company shall not, nor shall it permit any Subsidiary to, enter into any Sale and Leaseback Transaction with respect to any of their property or assets, unless (a) the Company or such Subsidiary would be entitled pursuant to Section 5.02 hereof to issue or assume Indebtedness (in an amount equal to the Attributable Value with respect to such Sale and Leaseback Transaction) secured by a Lien on such property or assets without equally and ratably securing the Securities, (b) the Company or such Subsidiary shall apply or cause to be applied, in the case of a sale or transfer for cash, the net proceeds thereof and, in the case of a sale or transfer otherwise than for cash, an amount equal to the fair market value (as determined in good faith by the Board of Directors) of the property or assets so leased, (i) to the retirement, within 360 days after the effective date of such Sale and Leaseback Transaction, of (A) Indebtedness of the Company ranking at least pari passu with the Securities or (B) Indebtedness of any Subsidiary, in each case owing to a Person other than the Company or any Affiliate of the Company, or (ii) to the acquisition, purchase, construction, development, extension or improvement of any property or assets of the Company or any Subsidiary used or to be used by or for the benefit of the Company or any Subsidiary in the ordinary course of business or (c) the Company or such Subsidiary equally and ratably secures the Securities. The restrictions set forth in this Section 5.03 shall not apply to any transactions providing for a lease for a term, including any renewal, of not more than three years or to arrangements between the Company and a Subsidiary or between Subsidiaries.
 
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SECTION 5.04. Reporting Requirements .
(a) The Company shall furnish to Holders and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so long as the Securities are not freely transferable under the Securities Act.
(b) So long as the Securities remain outstanding the Company shall:
(i) in the event the Company is not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, furnish (or in lieu of furnishing, make accessible electronically with notice to the Trustee) to the Trustee and the Holders as follows:
(A) as soon as they are available, but in any event within 120 calendar days after the end of each fiscal year of the Company (currently ending December 31), copies of its audited financial statements (on a consolidated basis) in respect of such fiscal year (including a profit and loss account, balance sheet and cash flow statement), in English, prepared in accordance with IFRS and audited by a member firm of an internationally recognized firm of independent accountants; and
(B) as soon as they are available, but in any event within 90 calendar days after the end of each of the first three fiscal quarters of each fiscal year of the Company, copies of its unaudited financial statements (on a consolidated basis) in respect of the relevant period (including a profit and loss account, balance sheet and cash flow statement), in English, prepared on a basis consistent with the audited financial statements of the Company and in accordance with IFRS, together with a certificate signed by the person then authorized to sign financial statements on behalf of the Company to the effect that such financial statements are true in all material respects and present fairly the financial position of the Company as at the end of, and the results of its operations for, the relevant quarterly period; and
(ii) in the event the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act,
(A) timely file with the Commission such annual and other reports as may be required by the rules and regulations of the Commission in effect at the relevant time and in the form required thereunder, and
(B) unless such information is publicly available on the Commission’s EDGAR System, provide the Trustee, for further delivery to a Holder upon request by any such Holder, with copies of the reports referred to in clause (b)(ii) within 15 days after such reports are required to be filed with the Commission; and
 
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(iii) so long as the Company is required to file the same with the SVS, will furnish (or in lieu of furnishing, make accessible electronically with notice to the Trustee) to the Trustee and Holders, as soon as they are available, but in any event within 120 calendar days after the end of each fiscal year of the Guarantor (currently ending December 31), copies of the Guarantor’s audited financial statements (on a consolidated basis) in respect of such fiscal year in the format required by the SVS, in English, prepared in accordance with IFRS and audited by a member firm of an internationally recognized firm of independent accountants.
(c) The Trustee shall upon written request forward to each registered Holder the reports received by the Trustee under this Section 5.04.
(d) Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including compliance by the Company or the Guarantor, as applicable, with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).
SECTION 5.05. Additional Amounts .
(a) The Company shall make all payments of principal, premium, if any, and interest in respect of the Securities free and clear of, and without withholding or deduction for or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature and interest, penalties and fines in respect thereof (collectively, “Taxes”) imposed, levied, collected, withheld or assessed by, within or on behalf of a Relevant Jurisdiction or by or within any political subdivision thereof or any authority therein or thereof having power to tax, unless such withholding or deduction is required by law or by the interpretation or administration thereof. In the event of any such withholding or deduction of Taxes, the Company or the Guarantor, as applicable, shall pay to Holders such additional amounts (“Additional Amounts”) as will result in the payment to such Holder of the net amount that would otherwise have been receivable by such Holder in the absence of such withholding or deduction, except that no such Additional Amounts shall be payable in respect of:
(i) any Taxes that would not have been so withheld or deducted but for the existence of any present or former connection (including, without limitation, a permanent establishment in a Relevant Jurisdiction) between the Holder, applicable recipient of payment or beneficial owner of a Security or any payment in respect of such Security (or, if the Holder or beneficial owner is an estate, nominee, trust, partnership, corporation or other business entity, between a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of power over, the Holder, applicable recipient of payment or beneficial owner) and an authority with the power to levy or otherwise impose or assess a Tax, other than the mere receipt of such payment or the mere holding or ownership of such Security or beneficial interest or the enforcement of rights thereunder;
 
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(ii) any Taxes that would not have been so withheld or deducted if a Security had been presented for payment within 30 days after the Relevant Date (as defined below) to the extent presentation is required (except to the extent that the Holder would have been entitled to Additional Amounts had such Security been presented for payment on the last day of such 30-day period);
(iii) any Taxes that would not have been so withheld or deducted but for the failure by the Holder or the beneficial owner of a Security or any payment in respect of such Security to (A) make a declaration of non-residence, or any other claim or filing for exemption, to which it is entitled or (B) comply with any certification, identification, information, documentation or other reporting requirement concerning its nationality, residence, identity or connection with a Relevant Jurisdiction; provided that such declaration or compliance was required as of the date of this Indenture as a precondition to exemption from all or part of such Taxes and the Company or the Guarantor, as applicable, has given the Holders at least 30 days prior notice that they will be required to comply with such requirements;
(iv) any estate, inheritance, gift, value added, sales, use, excise, transfer, capital gains, personal property or similar taxes, duties, assessments or other governmental charges;
(v) any Taxes that are payable otherwise than by deduction or withholding from payments on a Security;
(vi) any Taxes that would not have been so imposed if the Holder had presented a Security for payment (where presentation is required) to another paying agent;
(vii) any payment to a Holder of a Security that is a fiduciary or partnership (including an entity treated as a partnership for tax purposes) or any Person other than the sole beneficial owner of such payment or Security, to the extent that a beneficiary or settlor with respect to such fiduciary, a member of such partnership or the beneficial owner of such payment or Security would not have been entitled to the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the actual Holder of such Security;
(viii) any withholding or deduction imposed on a payment required to be made pursuant to European Council Directive 2003/48/EC or any other European Union directive implementing the conclusions of the ECOFIN Council meeting of November 26-27, 2000 on the taxation of savings income, or any law implementing or complying with, or introduced in order to conform to, such a directive; or
(ix) any combination of clauses (i) through (viii) above.
(b) For the purposes of this Section 5.05, “Relevant Date” means whichever is the later of (i) the date on which such payment first becomes due and (ii) if the full amount payable has not been received in The City of New York, New York by the Trustee on or prior to such due date, the date on which, the full amount having been so received, notice to that effect shall have been given to the Holders in accordance with this Indenture.
 
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(c) All references to principal, premium, if any, and interest in respect of the Securities shall be deemed also to refer to any Additional Amounts which may be payable as set forth in this Indenture or in the Securities.
(d) Notwithstanding the foregoing, the limitations on the obligations of the Company and the Guarantor to pay Additional Amounts set forth in clause (a)(iii) above shall not apply if the provision of any certification, identification, information, documentation or other reporting requirement described in such clause (a)(iii) would be materially more onerous, in form, in procedure or in the substance of information disclosed, to a Holder or beneficial owner of a Security (taking into account any relevant differences between U.S. and Chilean law, rules, regulations or administrative practice) than comparable information or other reporting requirements imposed under U.S. tax law, regulations and administrative practice (such as IRS Forms W-8BEN and W-9).
(e) At least 10 Business Days prior to the first Interest Payment Date (and at least 10 Business Days prior to each succeeding Interest Payment Date if there has been any change with respect to the matters set forth in the Officer’s Certificate referenced below), the Company or the Guarantor, as applicable, shall furnish to the Trustee and each Paying Agent an Officer’s Certificate instructing the Trustee and each Paying Agent whether payments of principal of or interest on the Securities due on such Interest Payment Date shall be without deduction or withholding for or on account of any Taxes. If any such deduction or withholding shall be required, prior to such Interest Payment Date, such Officer’s Certificate shall specify the amount, if any, required to be withheld on such payment to Holders and certify that the Company or the Guarantor, as applicable, shall pay such withholding or deduction to the relevant taxing authority. Any Officer’s Certificate required by this Indenture to be provided to the Trustee and any Paying Agent for these purposes shall be deemed to be duly provided if telecopied to the Trustee and each Paying Agent.
(f) The Company or the Guarantor, as applicable, will furnish to the Holders, within 60 days after the date the payment of any Taxes so deducted or withheld is due pursuant to applicable law, either certified copies of tax receipts evidencing such payment by the Company or the Guarantor, as applicable, or, if such receipts are not obtainable, other evidence of such payments by the Company or the Guarantor, as applicable, reasonably satisfactory to the Holders.
(g) Upon written request, the Company or the Guarantor, as applicable, shall furnish to the Trustee documentation reasonably satisfactory to the Trustee evidencing payment of Taxes.
(h) The Company or the Guarantor, as applicable, shall promptly pay when due any present or future stamp, court or similar documentary taxes or any other excise or property taxes, charges or similar levies that arise in any jurisdiction from the execution, delivery or registration of each Security or any other document or instrument referred to herein or therein, excluding any such taxes, charges or similar levies imposed by any jurisdiction outside of Chile and except, in certain cases, for taxes, charges or similar levies resulting from certain registration of transfer or exchange of Securities.
 
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SECTION 5.06. Rule 144A Information . The Company shall take all action necessary to provide information to permit resales of the Securities pursuant to Rule 144A under the Securities Act, including furnishing to any Holder of a Security or beneficial interest in a Global Security, or to any prospective purchaser designated by such Holder, upon written request of such Holder, financial and other information required to be delivered under Rule 144A(d)(4) (as amended from time to time and including any successor provision) unless, at the time of such request, the Company is subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act or is exempt from such requirements pursuant to Rule 12g3-2(b) under the Exchange Act (as amended from time to time and including any successor provision).
SECTION 5.07. Further Instruments and Acts . Upon request of the Trustee, the Company and the Guarantor shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out the purpose of this Indenture.
SECTION 5.08. Statement as to Compliance . As promptly as practicable beginning with the fiscal year ending December 31, 2011 and in any event within 120 days after the end of such fiscal year, the Company shall deliver to the Trustee an Officer’s Certificate stating whether or not to the best knowledge of the signer thereof the Company is in compliance (without regard to periods of grace or notice requirements) with all conditions and covenants under this Indenture, and if the Company shall not be in compliance, specifying such non-compliance and the nature and status thereof of which such signer may have knowledge.
SECTION 5.09. Corporate Existence . Subject to Article VI hereof, each of the Company and the Guarantor shall do or cause to be done all things necessary to preserve and keep in full force and effect:
(a) its existence as a corporation, and, in the case of the Company, the corporate, partnership, limited liability company or other existence of each Subsidiary, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company, the Guarantor or any such Subsidiary; and
(b) the rights (charter and statutory), licenses and franchises of the Company and the Subsidiaries; provided , however , that the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any Subsidiary (other than the Guarantor), if the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and the Subsidiaries, taken as a whole, or would otherwise not have a material adverse effect on the business, properties, management, financial position, results of operations or prospects of the Company and its Subsidiaries, taken as a whole.
SECTION 5.10. Listing . In the event that the Securities are listed on the Official List of the Luxembourg Stock Exchange for trading on the Euro MTF Market, the Company shall use its reasonable best efforts to maintain such listing; provided that if, as a result of the European Union regulated market amended Directive 2001/34/EC (the “Transparency
 
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Directive”) or any legislation implementing the Transparency Directive or other directives or legislation, the Company could be required to publish financial information either more regularly than it otherwise would be required to or according to accounting principles which are materially different from the accounting principles which the Company would otherwise use to prepare its published financial information, the Company may delist the Securities from the Luxembourg Stock Exchange in accordance with the rules of the exchange and seek an alternative admission to listing, trading and/or quotation for the Securities on a different section of the Luxembourg Stock Exchange or by such other listing authority, stock exchange and/or quotation system inside or outside the European Union as the Board of Directors may decide.
ARTICLE VI
Successor Company or Guarantor
SECTION 6.01. When the Company or the Guarantor May Merge or Transfer Assets .
(a) Neither the Company nor the Guarantor shall consolidate with or merge into any other Person or convey or transfer its properties and assets substantially as an entirety to any Person, unless:
(i) the successor Person (the “Surviving Person”) is a Person existing under the laws of Chile or the United States (or any State thereof or the District of Columbia) and expressly assumes, by a supplemental indenture, the due and punctual payment of the principal, premium, if any, and interest (and Additional Amounts, if any) on all the outstanding Securities and the performance of every covenant in this Indenture on the part of the Company or the Guarantor, as applicable, to be performed or observed;
(ii) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, has occurred and is continuing; and
(iii) the Company or the Guarantor, as applicable, has delivered to the Trustee an Officer’s Certificate and Opinion of Counsel stating that such consolidation, merger, conveyance or transfer and such supplemental indenture comply with this Section 6.01 relating to such transaction.
(b) In case of any consolidation, merger conveyance or transfer (other than a lease) that complies with Section 6.01(a) hereof, the Surviving Person shall succeed to and be substituted for the Company as obligor or the Guarantor, as guarantor, as applicable, on the Securities, with the same effect as if it had been named in this Indenture as such obligor or guarantor, as applicable.
 
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ARTICLE VII
Defaults and Remedies
SECTION 7.01. Events of Default . The following events shall be “Events of Default”:
(a) the Company defaults in the payment of the principal or premium, if any, of any Security at maturity, upon redemption or otherwise;
(b) the Company defaults in any payment of interest or Additional Amounts in respect of the Securities if such default continues for 30 days after any such interest or Additional Amount becomes due;
(c) the Company or the Guarantor fails to observe or perform any covenant or agreement contained in the Securities or in this Indenture (other than a payment default referred to in Section 7.01(a) or Section 7.01(b) hereof) and such failure continues for 60 days after notice is given by the Trustee to the Company or by the Holders of at least 25% of the aggregate principal amount of the outstanding Securities to the Company and the Trustee specifying such failure and requiring it to be remedied and stating that such notice is a “Notice of Default” under this Indenture;
(d) the Company or any Subsidiary fails to pay when due (whether at maturity, upon redemption or acceleration or otherwise) the principal of any Indebtedness in excess, individually or in the aggregate, of U.S.$50 million (or the equivalent thereof in other currencies), if such failure continues for more than the period of grace, if any, applicable thereto and the period for payment has not been expressly extended;
(e) one or more final and non-appealable judgments or decrees for the payment of money in excess of U.S.$50 million (or the equivalent thereof in other currencies) in the aggregate are rendered against the Company or any Subsidiary and are not paid (whether in full or in installments in accordance with the terms of the judgment) or otherwise discharged and, in the case of each such judgment or decree, either (i) an enforcement proceeding has been commenced by any creditor upon such judgment or decree and is not dismissed within 30 days following commencement of such enforcement proceedings or (ii) there is a period of 60 days following such judgment during which such judgment or decree is not discharged, waived or the execution thereof stayed;
(f) a decree or order by a court having jurisdiction has been entered adjudging the Company or any of its Significant Subsidiaries as bankrupt or insolvent, or approving as properly filed a petition seeking reorganization of or by the Company or any of its Significant Subsidiaries and such decree or order continues undischarged or unstayed for a period of 60 days; or a decree or order of a court having jurisdiction for the appointment of a receiver or liquidator or for the liquidation or dissolution of the Company or any of its Significant Subsidiaries, has been entered, and such decree or order continues undischarged and unstayed for a period of 60 days; provided that any
 
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Significant Subsidiary may be liquidated or dissolved if, pursuant to such liquidation or dissolution, all or substantially all of its assets are transferred to the Company or another Significant Subsidiary of the Company;
(g) the Company or any of its Significant Subsidiaries institutes any proceeding to be adjudicated as voluntary bankrupt, or consents to the filing of a bankruptcy proceeding against it, or files a petition or answer or consent seeking reorganization, or consents to the filing of any such petition, or consents to the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of it or its property; or
(h) the Subsidiary Guarantee ceases to be in full force and effect or the Guarantor denies or disaffirms its obligations under the Subsidiary Guarantee (other than as provided under Sections 9.01(a), 11.01(f), 11.02 and 11.07).
The foregoing will constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.
SECTION 7.02. Acceleration . If an Event of Default (other than an Event of Default specified in Section 7.01(f) or Section 7.01(g) hereof) occurs and is continuing, the Trustee by notice to the Company and the Guarantor, or the Holders of not less than 25% of the aggregate principal amount of the Securities then outstanding thereby written notice to the Company, the Guarantor and the Trustee, may declare the principal amount of the Securities, together with accrued and unpaid interest thereon, immediately be due and payable. Upon such a declaration, such principal and interest shall be immediately due and payable. If an Event of Default specified in Section 7.01(f) or Section 7.01(g) hereof occurs, the maturity of all outstanding Securities shall automatically be accelerated and the principal amount of the Securities, together with accrued and unpaid interest thereon, shall be immediately due and payable. The right of the Holders to give such acceleration notice shall terminate if the event giving rise to such right has been cured before such right is exercised. The Holders of a majority in aggregate principal amount of the outstanding Securities by written notice to the Company and the Guarantor may annul and rescind any declaration of acceleration if (a) all amounts then due with respect to the Securities are paid (other than amounts due solely because of such declaration), (b) all other defaults with respect to the Securities are cured and (c) the Company or the Guarantor has deposited with the Trustee a sum sufficient to pay all amounts owed to the Trustee pursuant to Section 8.06 hereof. No such rescission shall affect any subsequent Default or impair any right consequent thereto.
SECTION 7.03. Other Remedies .
(a) If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of or interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture.
(b) The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative.
 
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SECTION 7.04. Waiver of Past Defaults . Subject to Section 7.02, the Holders of a majority in aggregate principal amount of the Securities then outstanding by notice to the Trustee, the Company and the Guarantor may waive an existing Default and its consequences except (a) a Default in the payment of the principal of or interest on a Security or (b) a Default in respect of a provision that under Section 10.02 hereof cannot be amended without the consent of each Holder affected. When a Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or impair any consequent right.
SECTION 7.05. Control by Majority . The Holders of a majority in aggregate principal amount of the outstanding Securities may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee with respect to the Securities. However, the Trustee may refuse to follow any direction that conflicts with applicable law or this Indenture or, subject to Section 8.01 hereof, that the Trustee determines is unduly prejudicial to the rights of other Holders or would involve the Trustee in personal liability; provided , however , that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action hereunder, the Trustee shall be entitled to indemnification satisfactory to it against all losses and expenses caused by taking or not taking such action.
SECTION 7.06. Limitation on Suits .
(a) A Holder shall not have any right to institute any proceeding with respect to this Indenture or the Securities or for any remedy hereunder or thereunder unless:
(i) such Holder shall have previously given to the Trustee written notice of a continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount of the Securities then outstanding has made a written request to the Trustee to institute such proceeding in respect of such Event of Default in its own name as Trustee, and such Holders have offered indemnity to the Trustee satisfactory to it; and
(iii) the Trustee has failed to institute such proceeding for 60 days after the receipt of such notice and has not received from the Holders of at least a majority in aggregate principal amount of the Securities outstanding a direction inconsistent with such request, within 60 days after such notice.
(b) The foregoing limitations on the pursuit of remedies by a Holder shall not apply to a suit individually instituted by a Holder of Securities for the enforcement of payment of the principal, premium, if any, or interest on such Security on or after any respective due date specified in such Security. A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder.
 
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SECTION 7.07. Rights of Holders To Receive Payment . Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal of and interest together with any Additional Amounts then due on the Securities held by such Holder, on or after the respective due dates expressed in the Securities, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.
SECTION 7.08. Collection Suit by Trustee . If an Event of Default specified in Section 7.01(a) or Section 7.01(b) hereof occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount then due and owing (together with interest on any unpaid interest to the extent lawful) and the amounts provided for in Section 8.06 hereof.
SECTION 7.09. Trustee May File Proofs of Claim . The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Holders allowed in any judicial proceedings relative to the Company or the Guarantor, their respective creditors or property and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due to the Trustee under Section 8.06 hereof.
SECTION 7.10. Priorities .
(a) If the Trustee collects any money or property pursuant to this Article VII, it shall pay out the money or property in the following order:
FIRST: to the Trustee for amounts due under Section 8.06 hereof;
SECOND: to Holders for amounts due and unpaid on the Securities for principal interest and Additional Amounts, if any, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal, interest and Additional Amounts, if any, respectively; and
THIRD: to the Company or, to the extent the Trustee collects any amounts pursuant to the Subsidiary Guarantee, to the Guarantor.
(b) The Trustee may fix a special record date and payment date for any payment to Holders pursuant to this Section 7.10. At least 15 days before such special record date, the Company shall mail to each Holder and the Trustee a notice that states the special record date, the payment date and amount to be paid.
SECTION 7.11. Undertaking for Costs . In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the
 
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suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 7.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 7.07 hereof or a suit by Holders of more than 10% in aggregate principal amount of the Securities.
SECTION 7.12. Waiver of Stay or Extension Laws . Neither the Company nor the Guarantor (to the extent any of them may lawfully do so) shall at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and each of the Company and the Guarantor (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted.
ARTICLE VIII
Trustee
SECTION 8.01. Duties of Trustee .
(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Person’s own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own grossly negligent action, its own gross negligent failure to act or its own willful misconduct, except that:
(i) this paragraph does not limit the effect of Section 8.01(b) hereof;
 
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(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was grossly negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 7.05 hereof or exercising any trust or power conferred upon the Trustee under this Indenture with respect to the Securities; and
(iv) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers.
(d) Every provision of this Indenture that in any way relates to the Trustee is subject to Section 8.01(a), Section 8.01(b) and Section 8.01(c) hereof.
(e) The Trustee shall not be liable for interest on, or to invest, any money received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
(g) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 8.01 and the provisions of this Article VIII shall apply to the Trustee in its role as Registrar, Paying Agent and Transfer Agent.
(h) The Trustee shall not have any obligation or duty to monitor, determine or inquire as to compliance with any restriction on transfer imposed under this Indenture or under applicable law, with respect of any transfer of any interest in any Security (including any transfers between or among the depository, members or beneficial owners in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
SECTION 8.02. Rights of Trustee .
(a) The Trustee may rely conclusively on, and shall be protected in acting or refraining from acting upon, any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in such document. The Trustee may, however, in its discretion make such further inquiry or investigation into such facts or matters as it may see fit and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the sole cost and expense of the Company and it shall not incur any liability by reason of such inquiry or investigation.
 
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(b) Before the Trustee acts or refrains from acting hereunder, it may require an Officer’s Certificate or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on an Officer’s Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and attorneys and shall not be responsible for the acts or omissions of any agent appointed with due care.
(d) The Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture; provided that the Trustee’s conduct does not constitute willful misconduct or gross negligence.
(e) The Trustee may consult with counsel of its choice, and the advice or Opinion of Counsel with respect to legal matters relating to this Indenture and the Securities shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.
(f) The permissive rights of the Trustee to do things enumerated in this Indenture shall not be construed as a duty unless so specified herein.
(g) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.
(h) In no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
(i) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture.
(j) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.
(k) The Trustee may request that the Company and the Guarantor deliver an Officer’s Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.
 
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(l) The Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including without limitation, acts of God; earthquakes; fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots; interruptions, loss or malfunctions of utilities, computer (hardware or software) or communications service; accidents; labor disputes; acts of civil or military authority or governmental actions; it being understood that the Trustee shall use its best efforts to resume performance as soon as practicable under the circumstances.
(m) The Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion, rights or powers conferred upon it by this Indenture.
SECTION 8.03. Individual Rights of Trustee . The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar or co-registrar may do the same with like rights. However, the Trustee must comply with Section 8.09 hereof.
SECTION 8.04. Trustee’s Disclaimer . The Trustee shall not be responsible for, and makes no representation as to, the validity, priority, sufficiency or adequacy of this Indenture (including the Subsidiary Guarantee), any offering materials or the Securities. The Trustee shall not be accountable for the Company’s use of the proceeds from the Securities, and it shall not be responsible for any statement of the Company or the Guarantor in this Indenture or in any document issued in connection with the sale of the Securities or in the Securities other than the Trustee’s certificate of authentication.
SECTION 8.05. Notice of Defaults . If a Default or Event of Default occurs and is continuing and if it is known to a Trust Officer of the Trustee, the Trustee shall mail to each Holder notice of the Default or Event of Default within 90 days after it is known to a Trust Officer or written notice of it is received by the Trustee. Except in the case of a Default or Event of Default in payment of principal of or interest on any Security, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of Holders.
SECTION 8.06. Compensation and Indemnity .
(a) The Company shall pay to each of the Trustee and the Luxembourg Paying Agent, as applicable, from time to time such compensation for its services as shall have been agreed upon between the Company and each of the Trustee and the Luxembourg Paying Agent. Neither the Trustee’s nor the Luxembourg Paying Agent’s compensation shall be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse each of the Trustee and the Luxembourg Paying Agent, as applicable, upon request for all reasonable out-of-pocket expenses incurred or made by it, including reasonable costs of collection and the costs and expenses of its legal counsel, in addition to the compensation for its services. Such expenses shall include, as applicable, the commercially reasonable compensation and expenses, disbursements and advances of the Trustee’s or the Luxembourg Paying Agent’s agents, counsel,
 
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accountants and experts. The Company and the Guarantor jointly and severally agree to indemnify each of the Trustee and the Luxembourg Paying Agent, as applicable, against any and all loss, damages, claims, liability or expense (including commercially reasonable attorneys’ fees and costs) incurred by it in connection with the acceptance and administration of this trust, as applicable, and the performance of its duties and/or the exercise of its rights hereunder. Each of the Trustee and the Luxembourg Paying Agent, as applicable, shall notify the Company and the Guarantor promptly of any claim for which it may seek indemnity. Failure by the Trustee or the Luxembourg Paying Agent to so notify the Company and the Guarantor shall not relieve the Company or the Guarantor of their respective obligations hereunder except to the extent the Company or the Guarantor, as applicable, has been prejudiced by such failure to notify. Neither the Company nor the Guarantor need to reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee or the Luxembourg Paying Agent, as applicable, through the Trustee’s or the Luxembourg Paying Agent’s own willful misconduct, gross negligence or bad faith. Neither the Company nor the Guarantor need to pay for any settlement made by the Trustee or the Luxembourg Paying Agent, as applicable, without the consent of the Company and the Guarantor, such consent not to be unreasonably withheld. All indemnifications and releases from liability granted hereunder to the Trustee and the Luxembourg Paying Agent, as applicable, shall extend to each of their respective officers, directors, employees, agents, successors and assigns.
(b) To secure the payment obligations of the Company and the Guarantor in this Section 8.06, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest and Additional Amounts, if any, on particular Securities.
(c) The payment obligations of the Company and the Guarantor pursuant to this Section 8.06 shall survive the payment of the Securities, the resignation or removal of the Trustee and the satisfaction and discharge of this Indenture. When the Trustee incurs expenses after the occurrence of a Default specified in Section 7.01(f) or Section 7.01(g) hereof, the expenses are intended to constitute expenses of administration under bankruptcy law.
SECTION 8.07. Replacement of Trustee .
(a) The Trustee may resign at any time by so notifying the Company and the Guarantor. The Holders of a majority in aggregate principal amount of the Securities then outstanding may remove the Trustee by so notifying the Company, the Guarantor and the Trustee in writing. The Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 8.09 hereof;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the Trustee or its property; or
(iv) the Trustee otherwise becomes incapable of acting.
 
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(b) If the Trustee resigns, is removed by the Company or by the Holders of a majority in aggregate principal amount of the Securities then outstanding, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Company by a Board Resolution shall promptly appoint a successor Trustee.
(c) A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee, to the Company and to the Guarantor. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers, duties, protections, indemnities and immunities of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 8.06 hereof and the payment of its charges.
(d) If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of 10% in aggregate principal amount of the Securities then outstanding may petition any court of competent jurisdiction for the appointment of a successor Trustee or the retiring Trustee may itself appoint a successor Trustee.
(e) If the Trustee fails to comply with Section 8.09 hereof, any Holder who has been a bona fide Holder of a Security for at least six months may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
(f) Notwithstanding the replacement of the Trustee pursuant to this Section 8.07, the obligations of the Company and the Guarantor under Section 8.06 hereof shall continue for the benefit of the retiring Trustee.
SECTION 8.08. Successor Trustee by Merger .
(a) If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets (including its rights and obligations hereunder) to, another corporation or banking association, the resulting, surviving or transferee corporation or banking association without any further act shall be the successor Trustee.
(b) In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any such successor to the Trustee may authenticate such Securities in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture provided that the certificate of the Trustee shall have.
SECTION 8.09. Eligibility; Disqualification . The Trustee shall have (or, in the case of a corporation included in a bank holding company system, the related bank holding company shall have) a combined capital and surplus of at least U.S.$50,000,000 as set forth in its (or its related bank holding company’s) most recent published annual report of condition.
 
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SECTION 8.10. Appointment of Co-Trustee .
(a) Notwithstanding any other provisions of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the trust may at the time be located, the Trustee shall have the power and may execute and deliver all instruments necessary to appoint one or more Persons to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part of the trust, and to vest in such Person or Persons, in such capacity and for the benefit of the Holders, such title to the trust, or any part hereof, and subject to the other provisions of this Section 8.10, such powers, duties, obligations, rights and trusts as the Trustee may consider necessary or desirable. No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 8.09 hereof and no notice to Holders of the appointment of any co-trustee or separate trustee shall be required under Section 8.07 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed upon the Trustee shall be conferred or imposed upon and exercised or performed by the Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the trust or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Indenture and the conditions of this Article VIII. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Trustee or separately, as may be provided therein, subject to all the provisions of this Indenture, specifically including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection or rights (including the rights to compensation, reimbursement and indemnification hereunder) to, the Trustee. Every such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the Trustee, its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to
 
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do any lawful act under or in respect of this Indenture on its behalf and in its name. If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.
ARTICLE IX
Defeasance; Discharge of Indenture
SECTION 9.01. Legal Defeasance and Covenant Defeasance .
(a) The Company may, at its option, at any time, elect to have the obligations of the Company and the Guarantor with respect to all outstanding Securities discharged upon compliance with the conditions set forth in Section 9.02 hereof as provided in this Section 9.01. If the Company exercises its Legal Defeasance (as defined below) option, payment of the Securities may not be accelerated because of an Event of Default with respect thereto.
(b) Upon the Company’s exercise under such option, the Company shall, subject to the satisfaction of the conditions set forth in Section 9.02 hereof, be deemed to have paid and discharged the entire indebtedness represented by the outstanding Securities after the deposit specified in Section 9.02(a) hereof (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Securities, which shall thereafter be deemed to be outstanding only for the purposes of Section 9.03 hereof and the other Sections of this Indenture referred to in clause (i) or (ii) of this Section 9.01(b), and to have satisfied all its other obligations under such Securities and hereunder (and the Trustee, on written demand of and at the expense of the Company, shall execute instruments acknowledging the same), except for the following provisions, which shall survive until otherwise terminated or discharged hereunder:
(i) the rights of Holders to receive payments of the principal, premium, if any, and interest on the Securities when such payments are due;
(ii) the Company’s obligations with respect to the Securities concerning issuing temporary Securities, registration of Securities, mutilated, destroyed, lost or stolen Securities and the maintenance of an office or agency for payments;
(iii) the rights, powers, trusts, duties, protections, benefits, indemnities and immunities of the Trustee hereunder and the obligations of the Company and the Guarantor in connection therewith; and
(iv) this Article IX.
(c) Upon the Company’s exercise under Section 9.01(a) hereof of the option applicable to this Section 9.01(c), the Company shall, subject to the satisfaction of the conditions set forth in Section 9.02 hereof, be released from each of its obligations under the covenants contained in Section 5.02, Section 5.03, Section 5.04, Section 7.01(c) and Section 7.01(d) hereof with respect to the outstanding Securities on and after the date the conditions set forth in Section 9.02 hereof are satisfied (hereinafter, “Covenant Defeasance”), and the Securities will
 
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thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but will continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Securities will not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Securities, the Company may omit to comply with, and the Company shall have no liability in respect of, any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply will not constitute a Default or an Event of Default under Section 7.01 hereof, but, except as specified above, the remainder of this Indenture and such Securities will be unaffected thereby. In addition, upon the Company’s exercise under Section 9.01(a) hereof of the option applicable to this Section 9.01(c), subject to the satisfaction of the conditions set forth in Section 9.02, Section 7.01(c) and Section 7.01(d) hereof will not constitute Events of Default.
(d) Subject to compliance with this Article IX, the Company may exercise its option under this Section 9.01(b) notwithstanding the prior exercise of its option under Section 9.01(c) hereof.
SECTION 9.02. Conditions to Defeasance . The Company may exercise its Legal Defeasance option or its Covenant Defeasance option only if:
(a) the Company has irrevocably deposited with the Trustee, in trust, for the benefit of the Holders cash in U.S. dollars, U.S. Government Obligations, or a combination thereof, in such amounts as will be sufficient without reinvestment, in the opinion of an internationally recognized investment bank, appraisal firm or firm of independent public accountants, to pay the principal, premium, if any, and interest (including Additional Amounts) on the Securities on the stated date for payment thereof;
(b) in the case of Legal Defeasance, the Company has delivered to the Trustee an Opinion of Counsel from counsel in the United States independent of the Company to the effect that (subject to customary exceptions and exclusions):
(i) the Company has received from, or there has been published by, the U.S. Internal Revenue Service a ruling; or
(ii) since the Issue Date, there has been a change in the applicable U.S. Federal income tax law,
in either case to the effect that, and based thereon such Opinion of Counsel shall state that, the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;
(c) in the case of Covenant Defeasance, the Company has delivered to the Trustee an Opinion of Counsel from counsel in the United States independent of the Company (subject to customary exceptions and exclusions) to the effect that the Holders
 
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will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;
(d) in the case of Legal Defeasance or Covenant Defeasance, the Company has delivered to the Trustee an Opinion of Counsel from counsel in Chile independent of the Company (subject to customary exceptions and exclusions) to the effect that, based upon Chilean law then in effect, Holders will not recognize income, gain or loss for Chilean tax purposes, including withholding tax except for withholding tax then payable on interest payments due, as a result of such Legal Defeasance or Covenant Defeasance, as the case may be, and will be subject to Chilean taxes on the same amounts and in the same manner and at the same time as would have been the case if such Legal Defeasance or Covenant Defeasance, as the case may be, had not occurred;
(e) no Default or Event of Default has occurred and is continuing on the date of the deposit pursuant to Section 9.02(a) hereof (other than a Default or Event of Default arising in connection with the grant of any Lien securing a borrowing of funds to be applicable to such deposit);
(f) the Company has delivered to the Trustee an Officer’s Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders over any other creditors of the Company or any Subsidiary of the Company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company or others;
(g) the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel from counsel independent of the Company (subject to customary exceptions and exclusions), each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with; and
(h) the Company has delivered to the Trustee Opinions of Counsel from counsel in the United States and Chile reasonably acceptable to the Trustee and independent of the Company (subject to customary exceptions and exclusions and to assumptions as to factual matters, including the absence of an intervening bankruptcy, insolvency or reorganization during the applicable preference period following the date of such deposit and that no Holder or the Trustee is deemed to be an “insider” of the Company under the U.S. Bankruptcy Code and any equivalent law of Chile), to the effect that the transfer of trust funds pursuant to such deposit will not be subject to avoidance as a preferential transfer pursuant to the applicable provisions of the U.S. Bankruptcy Code or any successor statute and any equivalent law of Chile.
SECTION 9.03. Application of Trust Money . The Trustee shall hold in trust U.S. dollars or U.S. Government Obligations deposited with it pursuant to this Article IX. It shall apply the deposited money and the U.S. dollars from U.S. Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Securities.
 
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SECTION 9.04. Repayment to Company .
(a) The Trustee and each Paying Agent shall promptly turn over to the Company upon request of the Company any excess money or securities held by any of them upon payment of all the obligations under this Indenture.
(b) Subject to any applicable abandoned property law, the Trustee and each Paying Agent shall pay to the Company upon request any money held by any of them for the payment of principal of or interest on the Securities that remains unclaimed for two years, and, thereafter, Holders entitled to the money must look to the Company for payment as general creditors.
SECTION 9.05. Indemnity for U.S. Government Obligations . The Company and the Guarantor jointly and severally agree to pay and to indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations.
SECTION 9.06. Reinstatement . If the Trustee or a Paying Agent is unable to apply any U.S. dollars or U.S. Government Obligations in accordance with this Article IX by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the obligations of the Company and the Guarantor under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to this Article IX until such time as the Trustee or such Paying Agent is permitted to apply all such U.S. dollars or U.S. Government Obligations in accordance with this Article IX; provided , however , that, if the Company or the Guarantor has made any payment of principal of or interest on any Securities because of the reinstatement of its obligations, the Company or the Guarantor, as applicable shall be subrogated to the rights of the Holders of such Securities to receive such payment from the U.S. dollars or U.S. Government Obligations held by the Trustee or a Paying Agent.
SECTION 9.07. Satisfaction and Discharge . This Indenture will be discharged and will cease to be of further effect (except as to surviving rights and registration of transfer or exchange of the Securities, as expressly provided for herein and except as to the rights, powers, trusts, duties, protections, benefits, indemnities and immunities of the Trustee hereunder) as to all outstanding Securities when:
(a) either:
(i) all the Securities theretofore authenticated and delivered (except lost, stolen or destroyed Securities which have been replaced or paid and Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust) have been delivered to the Trustee for cancellation; or
 
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(ii) all Securities not theretofore delivered to the Trustee for cancellation have become due and payable or will become due and payable at their Stated Maturity within one year or will be called for redemption within one year, and the Company has irrevocably deposited or caused to be deposited with the Trustee funds or U.S. Government Obligations sufficient without reinvestment to pay and discharge the entire Indebtedness on the Securities not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and interest on the Securities to the date of deposit (in the case of Securities which have become due and payable) or to the date such Securities will become due and payable or to the date of redemption, as the case may be (in the case of Securities which will become due and payable at their Stated Maturity within one year or which will be called for redemption within one year), together with irrevocable instructions from the Company directing the Trustee to apply such funds to the payment;
(b) the Company has paid all other sums payable under this Indenture and the Securities by the Company; and
(c) the Company has delivered to the Trustee an Officer’s Certificate stating that all conditions precedent under this Indenture relating to the satisfaction and discharge of this Indenture have been complied with.
ARTICLE X
Amendments
SECTION 10.01. Without Consent of Holders .
(a) The Company, the Guarantor and the Trustee may amend, modify or supplement this Indenture (including, without limitation, the Subsidiary Guarantee) and the Securities without notice to or consent of any Holder:
(i) to cure any ambiguity, or to cure, correct or supplement any defect herein or therein;
(ii) to comply with Article VI hereof;
(iii) to provide for uncertificated Securities in addition to or in place of certificated Securities; provided that the uncertificated Securities shall be issued in registered form for purposes of Section 163(f) of the U.S. Internal Revenue Code of 1986, as amended, or in a manner such that the uncertificated Securities are described in Section 163(f)(2)(B) of the U.S. Internal Revenue Code of 1986, as amended;
(iv) to add Guarantees with respect to the Securities or to secure the Securities;
 
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(v) to add to the covenants of the Company or the Guarantor for the benefit of the Holders or to surrender any right or power herein conferred upon the Company or the Guarantor;
(vi) to issue Securities after the Issue Date in accordance with Section 2.01 hereof; and
(vii) in any manner which does not adversely affect the interests of any Holder in any material respect.
(b) After an amendment under this Section 10.01 becomes effective, the Company shall mail to Holders a notice briefly describing such amendment. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 10.01.
SECTION 10.02. With Consent of Holders .
(a) The Company, the Guarantor and the Trustee may modify or amend this Indenture or the terms and conditions of the Securities, and future compliance therewith or past Default by the Company or the Guarantor (other than a Default in the payment of any amount, including in connection with a redemption, due on the Securities or in respect of a covenant or provision which cannot be modified and amended without the consent of the Holders of all Securities so affected) with the written consent of the Holders of at least a majority in aggregate principal amount of the Securities then Outstanding (including consents obtained in connection with a tender offer or exchange offer for the Securities) or by the adoption of resolutions at a meeting of Holders of Securities by, or the consent of, the Holders of at least a majority of the outstanding Securities. However, without the consent or affirmative vote of each Holder affected thereby, an amendment may not:
(i) change the interest rate with respect to any Security or reduce the principal amount of any Securities or change the time for payment thereof;
(ii) modify the obligation to pay Additional Amounts;
(iii) change the prices at which any Security may be redeemed by the Company or change the time at which any Security may be redeemed in accordance with Article III or Article IV hereof;
(iv) change the currency in which, or change the required place at which, payment on principal, premium, if any, or interest on any Security is payable;
(v) impair the right to institute suit for the enforcement of any payment obligation on or with respect to any Security; or
(vi) reduce the percentage of principal amount of outstanding Securities whose Holders are required to consent to modify or amend this Indenture or the terms or conditions of the Securities or to waive any future compliance or past Default;
 
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(b) It shall not be necessary for the consent of the Holders under this Section 10.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof.
(c) After an amendment under this Section 10.02 becomes effective, the Company shall mail to Holders a notice briefly describing such amendment. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 10.02.
SECTION 10.03. Revocation and Effect of Consents and Waivers .
(a) A consent to an amendment or a waiver by a Holder of a Security shall bind the Holder and every subsequent Holder of that Security or portion of the Security that evidences the same debt as the consenting Holder’s Security, even if notation of the consent or waiver is not made on the Security. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder’s Security or portion of the Security if the Trustee receives the notice of revocation before the date the amendment or waiver becomes effective. After an amendment or waiver becomes effective, it shall bind every Holder. An amendment or waiver becomes effective upon the execution of such amendment or waiver by the Trustee.
(b) The Company may, but shall not be obligated to, fix a special record date for the purpose of determining the Holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a special record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Holders at such special record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such special record date. No such consent shall be valid or effective for more than 120 days after such special record date.
SECTION 10.04. Notation on or Exchange of Securities . If an amendment changes the terms of a Security, the Trustee may require the Holder of the Security to deliver such Security to the Trustee. The Trustee may place an appropriate notation on the Security regarding the changed terms and return such Security to the Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms. Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment.
SECTION 10.05. Trustee To Sign Amendments . The Trustee shall sign any modification, amendment or supplement authorized pursuant to this Article X if the modification, amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such modification, amendment or supplement the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and to receive, and (subject to Section 8.01 hereof) shall be fully protected in relying upon, in addition to the documents required by Section 12.02 hereof, an Officer’s Certificate and an Opinion of Counsel each stating that such modification, amendment or supplement is authorized or permitted by this Indenture and complies with the provisions of this Indenture.
 
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ARTICLE XI
Subsidiary Guarantee
SECTION 11.01. Subsidiary Guarantee .
(a) The Guarantor hereby irrevocably and unconditionally guarantees on a general unsecured and unsubordinated basis (the “Subsidiary Guarantee”), as a primary obligor and not merely as a surety, to each Holder and to the Trustee and its successors and assigns the full and punctual payment when due, whether by acceleration, by redemption or otherwise, of all obligations of the Company under this Indenture (including obligations to the Trustee) and the Securities, whether for payment of principal of, interest and Additional Amounts, if any, on, or liquidated damages, if any, in respect of, the Securities and all other monetary obligations of the Company under this Indenture and the Securities (all the foregoing being hereinafter collectively called the “Guaranteed Obligations”). The Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent therefrom, and that it shall remain bound under this Article XI notwithstanding any extension or renewal of any Guaranteed Obligation.
(b) The Guarantor waives, to the fullest extent permitted by law, presentation to, demand of payment from and protest to the Company of any of the Guaranteed Obligations and also waives notice of protest for nonpayment. The Guarantor waives notice of any Default under the Securities or the Guaranteed Obligations. The obligations of the Guarantor hereunder shall not be affected by (i) the failure of any Holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the Company or any other Person under this Indenture, the Securities or any other agreement or otherwise; (ii) any extension or renewal of any thereof; (iii) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Securities or any other agreement; (iv) the release of any security held by any Holder or the Trustee for the Guaranteed Obligations or any of them; or (v) any change in the ownership of the Guarantor.
(c) The Guarantor hereby waives, to the fullest extent permitted by law, any right to which it may be entitled to have the assets of the Company first be used and depleted as payment of the Company’s or the Guarantor’s obligations hereunder prior to any amounts being claimed from or paid by the Guarantor hereunder. The Guarantor hereby waives any right to which it may be entitled to require that the Company be sued prior to an action being initiated against it. The Guarantor hereby irrevocably waives the benefits to which it is entitled under articles 2357, 2339 and 2355 of the Chilean Civil Code.
(d) The Guarantor further agrees that the Subsidiary Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by any Holder or the Trustee to any security held for payment of the Guaranteed Obligations.
 
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(e) Except as expressly set forth in Sections 9.01(a), 11.01(f), 11.02 and 11.07, the obligations of the Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of the Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any Holder or the Trustee to assert any claim or demand or to enforce any remedy under this Indenture, the Securities or any other agreement, by any waiver or modification of any thereof, by any Default, failure or delay, willful or otherwise, in the performance of the obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of the Guarantor or would otherwise operate as a discharge of the Guarantor as a matter of law or equity.
(f) The Guarantor agrees that the Subsidiary Guarantee shall remain in full force and effect until payment in full of all the Guaranteed Obligations. The Guarantor further agrees that the Subsidiary Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest or liquidated damages, if any, on any Guaranteed Obligation is rescinded or must otherwise be restored by any Holder or the Trustee upon the bankruptcy or reorganization of the Company or otherwise.
(g) In furtherance of the foregoing and not in limitation of any other right which any Holder or the Trustee has at law or in equity against the Guarantor by virtue hereof, upon the failure of the Company to pay the principal of or interest or liquidated damages, if any, on any Guaranteed Obligation when and as the same shall become due, whether by acceleration, by redemption or otherwise, or to perform or comply with any other Guaranteed Obligation, the Guarantor hereby promises to and shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Paying Agent for the benefit of Holders or the Trustee or any agent appointed hereunder an amount equal to the sum of (i) the unpaid principal amount of such Guaranteed Obligations, (ii) accrued and unpaid interest and Additional Amounts, if any, on such Guaranteed Obligations and (iii) all other monetary obligations of the Company to the Holders, the Trustee and any agent appointed hereunder.
(h) The Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any Guaranteed Obligations guaranteed hereby until payment in full of all Guaranteed Obligations. The Guarantor further agrees that, as between it, on the one hand, and the Holders and the Trustee, on the other hand, (i) the maturity of the Guaranteed Obligations guaranteed hereby may be accelerated as provided in Article VII for the purposes of the Subsidiary Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of such Guaranteed Obligations as provided in Article VII, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantor for the purposes of this Section 11.01.
 
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(i) Upon request of the Trustee, the Guarantor shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.
SECTION 11.02. Limitation on Liability . Any term or provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the Guaranteed Obligations guaranteed hereunder by the Guarantor shall not exceed the maximum amount that can be hereby guaranteed without rendering this Indenture, as it relates to the Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.
SECTION 11.03. Successors and Assigns . This Article XI shall be binding upon the Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Securities shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture.
SECTION 11.04. No Waiver . Neither a failure nor a delay on the part of either the Trustee or the Holders in exercising any right, power or privilege under this Article XI shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee and the Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article XI at law, in equity, by statute or otherwise.
SECTION 11.05. Modification . No modification, amendment or waiver of any provision of this Article XI, nor the consent to the departure by the Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on the Guarantor in any case shall entitle the Guarantor to any other or further notice or demand in the same, similar or other circumstances.
SECTION 11.06. Non-Impairment . The failure to endorse a guarantee on any Security shall not affect or impair the validity thereof.
SECTION 11.07. Release of Subsidiary Guarantor . The Guarantor shall be released from its obligations under its Subsidiary Guarantee upon:
(a) subject to Section 9.06 hereof, satisfaction and discharge of this Indenture in compliance with Section 9.07 hereof;
(b) subject to Section 9.06 hereof, Legal Defeasance in compliance with Sections 9.01 and 9.02 hereof; and
(c) a sale or disposition of the Guarantor, whether by merger, consolidation, the sale of its Capital Stock or the sale of all or substantially all of its assets (other than by lease or to the Company) or otherwise and whether or not the Guarantor is the surviving corporation in such transaction, in compliance with Section 6.01 hereof; and
 
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in each case, upon delivery by the Company of written notice thereof to the Trustee in accordance with Section 12.01 hereof.
ARTICLE XII
Miscellaneous
SECTION 12.01. Notices .
(a) Any notice, request, demand, instruction or communication shall be in English and in writing and delivered in person or mailed by first-class mail, postage prepaid, or sent by facsimile (with a hard copy delivered in person or by mail promptly thereafter) or other electronic transmission and addressed as follows:
if to the Company and/or the Guarantor :
Cencosud S.A.
Av. Kennedy 9001, 6 th floor, Las Condes
Santiago, Chile
Attention: Gerardo Molinaro
Telephone: +56 (2) 959-0000
Fax: +56 (2) 959-0625
With a copy to :
Philippi Yrarrazaval, Pulido & Brunner Ltda.
Av. El Golf 40, Piso 20
Santiago, Chile
Attention: Juan Francisco Gutiérrez
Telephone: +56 (2) 364-3700
Fax: +56 (2) 364-3796
if to the Trustee, the Paying Agent, the Registrar or the Transfer Agent :
The Bank of New York Mellon
101 Barclay Street, Floor 4E
New York, New York 10286
USA
Attention: International Corporate Trust
Fax: 212-815-5603
 
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if to the Luxembourg Paying Agent or the Luxembourg Transfer Agent :
The Bank of New York Mellon (Luxembourg) S.A.
2-4 rue Eugene Ruppert
Vertigo Building - Polaris
L-2453 Luxembourg
Attention: Corporate Trust Services
(b) The Company, the Guarantor or the Trustee by notice to the other parties may designate additional or different addresses for subsequent notices or communications.
(c) Any notice or communication mailed to a Holder of a certificated, non-Global Security shall be mailed to the Holder at the Holder’s address as it appears on the Securities Register maintained by the Registrar. Any notice or communication to a Holder of a Global Security shall be given to the Depositary for such Global Security in accordance with its applicable procedures.
(d) Failure to deliver a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. All notices to Holders shall be deemed to have been given (whether or not the addressee receives it) upon the mailing by first class mail, postage prepaid, of such notices at the registered addresses of such Holders as they appear on the register of the Registrar not later than the latest date, and not earlier than the earliest date, prescribed in the Securities for the giving of such notice. Notices delivered to the Trustee shall only be effective upon actual receipt.
(e) In respect of this Indenture, the Trustee shall not have any duty or obligation to verify or confirm that the Person sending instructions, directions, reports, notices or other communications or information by electronic transmission is, in fact, a Person authorized to give such instructions, directions, reports, notices or other communications or information on behalf of the party purporting to send such electronic transmission; and the Trustee shall not have any liability for any losses, liabilities, costs or expenses incurred or sustained by any party as a result of such reliance upon or compliance with such instructions, directions, reports, notices or other communications or information. Each other party agrees to assume all risks arising out of the use of electronic methods to submit instructions, directions, reports, notices or other communications or information to the Trustee, including without limitation, the risk of the Trustee acting on unauthorized instructions, notices, reports or other communications or information, and the risk of interception and misuse by third parties.
(f) For as long as the Securities are listed on the Luxembourg Stock Exchange and the rules of the exchange so require, notices to Holders shall also be published in a leading newspaper having general circulation in Luxembourg, which is expected to be “ Luxemburger Wort. ” If such publication is not practicable, notice to Holders shall be considered to be validly given if otherwise made in accordance with the rules of the Luxembourg Stock Exchange. Any such notice will be deemed to have been delivered on the date of first publication. Any notice to Holders may also be published on the website of the Luxembourg Stock Exchange ( www.bourse.lu ).
 
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SECTION 12.02. Certificate and Opinion as to Conditions Precedent . Upon any request or application by the Company to the Trustee to take or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officer’s Certificate in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with.
SECTION 12.03. Statements Required in Certificate or Opinion . Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture shall include:
(a) a statement substantially to the effect that the individual making such certificate or opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(c) a statement substantially to the effect that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(d) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with.
SECTION 12.04. When Securities Disregarded . In determining whether the Holders of the required principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company or the Guarantor or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or the Guarantor shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities that a Trust Officer of the Trustee knows are so owned shall be so disregarded. Also, subject to the foregoing, only Securities outstanding at the time shall be considered in any such determination.
SECTION 12.05. Rules by Trustee, Paying Agent and Registrar . The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar and any Paying Agent or co-registrar may make reasonable rules for their functions.
SECTION 12.06. Legal Holidays . A “Legal Holiday” is a Saturday, a Sunday or a day on which banking institutions in The City of New York, New York or Santiago, Chile are
 
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authorized or required by law to close. If a payment date is a Legal Holiday in the place of payment, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue on such payment for the intervening period on account of such delay. If a Record Date or a special record date is a Legal Holiday, such Record Date or special record date shall not be affected.
SECTION 12.07. Governing Law; Consent to Jurisdiction and Service of Process .
(a) THIS INDENTURE (INCLUDING THE SUBSIDIARY GUARANTEE PROVIDED HEREIN) AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(b) Each of the parties hereto:
(i) agrees that any suit, action or proceeding against it arising out of or relating to this Indenture (including the Subsidiary Guarantee provided herein) or the Securities, as the case may be, may be instituted in any U.S. Federal or New York State court in the Borough of Manhattan, The City of New York, New York;
(ii) waives to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding, any claim that any suit, action or proceeding in such a court has been brought in an inconvenient forum and any right to which it may be entitled on account of place of residence or domicile;
(iii) irrevocably submits to the non-exclusive jurisdiction of such courts in any suit, action or proceeding;
(iv) agrees that final judgment in any such suit, action or proceeding brought in such a court shall be conclusive and binding and may be enforced in the courts of the jurisdiction of which it is subject by a suit upon judgment; and
(v) agrees, with respect to the Company and the Guarantor, that service of process by mail to the addressed specified herein shall constitute personal service of such process on it in any such suit, action or proceeding.
(c) Each of the Company and the Guarantor has appointed CT Corporation System with offices currently at 111 Eight Avenue, 13 th floor, New York, New York 10011, as its authorized agent (the “Authorized Agent”) upon whom all writs, process and summonses may be served in any suit, action or proceeding arising out of or based upon this Indenture (including the Subsidiary Guarantee provided herein) or the Securities which may be instituted in any U.S. Federal or New York State court in the Borough of Manhattan, The City of New York, New York. Each of the Company and the Guarantor hereby represents and warrants that the Authorized Agent has accepted such appointment and has agreed to act as said agent for service of process, and each of the Company and the Guarantor agrees to take any and all action, including the filing of any and all documents, that may be necessary to continue each such appointment in full force and effect as aforesaid so long as the Securities remain outstanding.
 
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Each of the Company and the Guarantor agrees that the appointment of the Authorized Agent shall be irrevocable so long as any of the Securities remain outstanding or until the irrevocable appointment by the Company or the Guarantor, as applicable, of a successor agent in the Borough of Manhattan, The City of New York, New York as its authorized agent for such purpose and the acceptance of such appointment by such successor. Service of process upon the Authorized Agent shall be deemed, in every respect, effective service of process upon the Company or the Guarantor, as applicable.
(d) If for the purpose of obtaining judgment in any court it is necessary to convert a sum due hereunder to the Holder of a Security from U.S. dollars into another currency, each of the Company and the Guarantor has agreed, and each Holder by holding such Security will be deemed to have agreed, to the fullest extent that the Company, the Guarantor and they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures such Holder could purchase U.S. dollars with such other currency in The City of New York, New York on the day two Business Days preceding the day on which final judgment is given.
(e) The obligation of each of the Company and the Guarantor in respect of any sum payable by it to a Holder shall, notwithstanding any judgment in a currency (the “judgment currency”) other than U.S. dollars, be discharged only to the extent that on the Business Day following receipt by the Holder of a Security of any sum adjudged to be so due in the judgment currency, the Holder of such Security may in accordance with normal banking procedures purchase U.S. dollars with the judgment currency; if the amount of the U.S. dollars so purchased is less than the sum originally due to the Holder in the judgment currency (determined in the manner set forth in the preceding paragraph), each of the Company and the Guarantor agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Holder of such Security against such loss, and if the amount of the U.S. dollars so purchased exceeds the sum originally due to such Holder, such Holder agrees to remit to the Company or the Guarantor, as applicable, such excess; provided that such Holder shall have no obligation to remit any such excess as long as the Company or the Guarantor shall have failed to pay such Holder any obligations due and payable under such Security, in which case such excess may be applied to the Company’s obligations under such Security in accordance with the terms thereof.
SECTION 12.08. Waiver of Immunity . To the extent that the Company, the Guarantor, the Subsidiaries or any of their respective properties, assets or revenues may have or may hereafter become entitled to, or have attributed to the Company, the Guarantor or the Subsidiaries, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding, from the giving of any relief in any such legal action, suit or proceeding, from setoff or from counterclaim from the jurisdiction of any Chilean, U.S. Federal or New York State court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution of judgment, or from execution of judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any such court in which proceedings may at any time be commenced, with respect to the obligations and liabilities of the Company, the Guarantor, or the Subsidiaries, or any other matter under or arising out of or in connection with, the Securities, the Subsidiary Guarantee or this Indenture, the Company, the Guarantor and the Subsidiaries irrevocably and unconditionally waive or will waive such right, and agree not to plead or claim any such immunity and consents to such relief and enforcement.
 
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SECTION 12.09. No Recourse Against Others . No director, officer, employee or stockholder, as such, of the Company or the Guarantor shall have any liability for any obligations of the Company or the Guarantor, as applicable, under the Securities or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Holder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issue of the Securities.
SECTION 12.10. Successors . All agreements of the Company and the Guarantor in this Indenture and the Securities shall bind their respective successors. All agreements of the Trustee in this Indenture shall bind its successors.
SECTION 12.11. Multiple Originals . The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture.
SECTION 12.12. Table of Contents; Headings . The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.
SECTION 12.13. Waiver of Jury Trial . EACH OF THE COMPANY, THE GUARANTOR, THE TRUSTEE AND EACH HOLDER BY ITS ACCEPTANCE OF A SECURITY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE (INCLUDING THE SUBSIDIARY GUARANTEE), THE SECURITIES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 12.14. Severability . In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 12.15. USA Patriot Act . The parties hereto acknowledge that, in accordance with Section 326 of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (as amended, modified or supplemented from time to time, the “USA Patriot Act”), the Trustee, like all financial institutions, is required to obtain, verify, and record information that identifies each person or legal entity that opens an account. The parties to this Indenture agree that they will provide the Trustee with such information as the Trustee may request in order for the Trustee to satisfy the requirements of the USA Patriot Act.
(Signature page follows)
 
50

IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.

CENCOSUD S.A., as Issuer	
		
By	 	
 	
	 	Name:	 	Daniel Rodriguez	
	 	Title:	 	Chief Executive Officer	

 
[Signature Page]
Indenture

					
CENCOSUD RETAIL S.A., as Guarantor	
		
By	 	
 	
	 	Name:	 	Daniel Rodriguez	
	 	Title:	 	Chief Executive Officer	
		
By	 	
 	
	 	Name:	 	Javier Luck	
	 	Title:	 	VP Planning and Controlling	

 
[Signature Page]
Indenture

						
THE BANK OF NEW YORK MELLON, as
Trustee, Paying Agent, Registrar and Transfer Agent		
			
By	 	
 		
	 	Name:	 	LUCIA JAKLITSCH		
	 	Title:	 	VICE PRESIDENT		
		
THE BANK OF NEW YORK MELLON (LUXEMBOURG) S.A., as Luxembourg Paying Agent and Luxembourg Transfer Agent		

		
			
By	 	
 		
	 	Name:	 	LUCIA JAKLITSCH		
	 	Title:	 	VICE PRESIDENT		
 
[Signature Page]
Indenture

APPENDIX A
RULE 144A/REGULATION S APPENDIX A
PROVISIONS RELATING TO SECURITIES
 
 	1.	Definitions	
The terms defined in Article I of the Indenture shall have the meaning assigned to such terms therein and, in addition, for the purposes of this Appendix A, the following additional terms shall have the meanings indicated below:
“Certificated Security” means a definitive, non-Global Security.
“Clearstream” means Clearstream Banking, société anonyme .
“Depositary” means, with respect to the Securities issuable or issued in whole or in part in the form of one or more Global Securities, the Person designated as Depositary by the Company pursuant to the Indenture, which must be a clearing agency registered under the Exchange Act and any successor to such Person and which shall initially be DTC.
“Distribution Compliance Period” means, with respect to any Regulation S Security (or beneficial interest therein), the 40 consecutive days beginning on and including the issue date of such Regulation S Security, as notified by the Company to the Trustee in writing; provided that the Company may, in its discretion and upon written notice to the Trustee, extend the termination of the Distribution Compliance Period.
“DTC” means The Depository Trust Company.
“Euroclear” means Euroclear Bank S.A./N.V.
“Global Securities” means the Regulation S Global Security and the Restricted Global Security.
“Non-U.S. Person” has the meaning given to it in Regulation S.
“Regulation S” means Regulation S as promulgated by the Commission under the Securities Act, as it may be amended from time to time.
“Regulation S Global Security” means one or more Regulation S Securities in definitive, fully registered book-entry form without interest coupons, representing a Regulation S Security.
“Regulation S Security” means a Security sold outside the United States to a Non-U.S. Person in reliance upon the exemptions from registration contained in Regulation S.
“Resale Restriction Termination Date” means, for any Restricted Security (or beneficial interest therein), one year (or such other period specified in Rule 144(d)) from the Issue Date or, if any Securities that are not Original Securities, but are Restricted Securities, have been issued before the Resale Restriction Termination Date for any Restricted Securities, from the latest such original issue date of such Restricted Securities; provided that the Company may, in its discretion and upon written notice to the Trustee, extend the Resale Restriction Termination Date.
 
A-1

“Restricted Global Security” means one or more global Securities in definitive, fully registered book-entry form without interest coupons, representing a Restricted Security.
“Restricted Securities Legend” has the meaning set forth in Section 2.1(b) of this Appendix A.
“Restricted Security” means a Security sold to QIBs in reliance upon the exemption from registration contained in Rule 144A.
“Rule 144A” means Rule 144A as promulgated by the Commission under the Securities Act, as it may be amended from time to time.
 
 	2.	The Securities	
 
 	2.1	Form and Registration .	
(a) Form and Registration . The certificates representing the Securities shall be issued in fully registered form without interest coupons.
(b) Regulation S Global Securities . Securities sold in reliance on the exemption from registration contained in Regulation S shall initially be represented by one or more Regulation S Global Securities, which shall be deposited with the Trustee as custodian for, and registered in the name of a nominee of, DTC. Each Regulation S Global Security shall bear a Restricted Securities Legend in the form set forth in Exhibit I to this Appendix A (the “Restricted Securities Legend”).
(c) Restricted Global Securities . Securities sold in reliance on the exemption from registration contained in Rule 144A shall be represented by one or more Restricted Global Securities and shall be deposited with the Trustee as custodian for, and registered in the name of a nominee of, DTC. Each Restricted Global Security shall bear the Restricted Securities Legend.
(d) Ownership . Each Global Security shall be subject to certain restrictions on transfer, set forth in the Indenture and in Section 2.2 and Section 2.3 of this Appendix A. Ownership of beneficial interests in a Global Security shall be limited to Persons who have accounts with DTC or Euroclear and Clearstream, as indirect participants in DTC (“participants”) or Persons who hold interests through participants. Ownership of beneficial interests in a Global Security shall be shown on, and the transfer of that ownership shall be effected only through, records maintained by DTC or its nominee (with respect to interests of participants) and the records of participants (with respect to interests of Persons other than participants). Beneficial owners of interests in a Global Security may hold their interests in such Global Security directly through DTC, if they are participants in such system, or indirectly through organizations that are participants in such system, including Clearstream and Euroclear. So long as DTC or its nominee is the registered owner or Holder of a Global Security, DTC or such nominee, as the case may be, shall be considered the sole owner or Holder of the Securities represented by such Global Security for all purposes under the Indenture and the Securities. No
 
A-2

beneficial owner of an interest in a Global Security shall be able to transfer that interest except in accordance with DTC’s applicable procedures, in addition to those provided for under the Indenture. Payments of the principal, premium, if any, and interest on a Global Security shall be made to DTC or its nominee, as the registered owner thereof. Neither the Company, the Trustee, nor any Paying Agent, Registrar or Transfer Agent shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Security or for maintaining, supervising, or reviewing any records relating to such beneficial ownership interests.
(e) No Responsibility for Clearing System Actions . None of the Company, the Guarantor, the Trustee, any Paying Agent, Registrar or Transfer Agent shall have any responsibility for the performance by DTC, Euroclear or Clearstream or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations.
(f) Successors; Certificated Securities . If (i) DTC is at any time unwilling or unable to continue as a Depositary for the Global Securities and a successor Depositary is not appointed by the Company within 90 days, (ii) the Company elects to discontinue use of the system of book-entry transfers through DTC or a successor Depositary or (iii) an Event of Default has occurred and is continuing and the Registrar and the Company have received a written request from a beneficial owner of Securities to issue Certificated Securities in respect of its proportionate interest in the Global Security, the Company shall issue Certificated Securities which may bear a Restricted Securities Legend to such requesting beneficial owner, in exchange for their beneficial interests in Global Securities. Holders of an interest in a Global Security may receive Certificated Securities, which may bear the Restricted Securities Legend, in accordance with DTC’s rules and procedures in addition to those provided for under the Indenture; provided , however , that if the Company is issuing Certificated Securities pursuant to the foregoing clause (iii), the Company shall only be required to issue Certificated Securities to the beneficial owners of the Securities who request Certificated Securities.
(g) Certificated Securities . Except as provided in this Section 2.1, owners of beneficial interests in Global Securities shall not be entitled to receive physical delivery of Certificated Securities. In the event of transfer of Global Security to the beneficial owners thereof in the form of Certificated Securities, the Company shall promptly make available to the Trustee a reasonable supply of Certificated Securities in definitive, fully registered form without interest coupons.
 
 	2.2	Global Securities .	
(a) Each Global Security shall (i) be registered in the name of DTC or its nominee, (ii) be delivered by the Trustee to DTC or pursuant to DTC’s instruction and (iii) bear a legend substantially to following effect:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME
 
A-3

OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (“DTC”) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY DEFINITIVE SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
(b) Members of, or participants in, DTC, Euroclear or Clearstream shall have no rights under the Indenture with respect to any Global Security held on their behalf by DTC or its nominee, or under a Global Security, and DTC may be treated by the Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor or the Trustee as the absolute owner of each Global Security for all purposes whatsoever under the Indenture. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Guarantor, the Trustee or any agent of the Company, the Guarantor or the Trustee from giving effect to any written certification, proxy or other authorization furnished by DTC or impair, as between DTC and its participants, the operation of customary practices governing the exercise of the rights of a Holder of any Security.
(c) Interests of beneficial owners in Global Securities may only be transferred or exchanged for Certificated Securities in accordance with the rules and procedures of DTC and the provisions of the Indenture, including this Appendix A. In addition, certificated Securities shall be transferred to all beneficial owners, in exchange for their beneficial interests in Global Securities in accordance with Section 2.1(f) of this Appendix A.
(d) Transfers between participants in DTC shall be effected in accordance with DTC’s procedures, and shall be settled in same-day funds. Transfers between participants in Euroclear and Clearstream shall be effected in the ordinary way in accordance with their respective rules and operating procedures.
(e) DTC has advised the Company that it will take any action permitted to be taken by a Holder (including the presentation of Securities for exchange) only at the direction of one or more participants to whose account the interest in a Global Security is credited and only in respect of such portion of the Securities as to which such participant or participants has or have given such direction. However, if there is an Event of Default under the Securities, DTC may exchange the applicable Global Securities for Certificated Securities which it shall distribute to its participants and which may bear the Restricted Securities Legend.
 
A-4

(f) Subject to compliance with the transfer restrictions applicable to the Global Securities, cross-market transfers between the participants in DTC, on the one hand, and Euroclear or Clearstream participants, on the other hand, shall be effected through DTC in accordance with DTC’s rules on behalf of each of Euroclear or Clearstream by its common depositary; however, such cross-market transactions shall require delivery of instructions to Euroclear or Clearstream by the counterparty in such system in accordance with the rules and procedures and within the established deadlines (Brussels, Belgium time) of such system. Euroclear or Clearstream shall, if the transaction meets its settlement requirements, deliver instructions to its common depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the Global Securities in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions directly to the common depositaries for Euroclear or Clearstream.
(g) In connection with any transfer or exchange of a portion of the beneficial interest in any Global Security to beneficial owners pursuant to Section 2.1(f) of this Appendix A the Registrar shall (if one or more Certificated Securities are to be issued) reflect on its books and records the date and a decrease in the principal amount of the Global Security in an amount equal to the principal amount of the beneficial interest in the Global Security to be transferred, and the Company shall execute, and the Trustee shall authenticate and deliver, one or more certificated Securities of like tenor and principal amount of authorized denominations.
(h) Any beneficial interest in one of the Global Securities that is transferred to a Person who takes delivery in the form of an interest in the other corresponding Global Security will, upon transfer, cease to be an interest in such Global Security and become an interest in the other corresponding Global Security and, accordingly, will thereafter be subject to all transfer restrictions and other procedures applicable to beneficial interest in such other Global Security for as long as it remains such an interest.
(i) In connection with the transfer of Global Securities as an entirety to beneficial owners pursuant to Section 2.1(f) of this Appendix A, such Global Securities shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by DTC in exchange for its beneficial interest in the Global Securities, an equal aggregate principal amount at maturity of Certificated Securities of authorized denominations.
(j) Any Certificated Security constituting a Restricted Security delivered in exchange for an interest in a Global Security pursuant to this Section 2.2 shall bear a Restricted Securities Legend.
(k) The registered Holder of any Global Security may grant proxies and otherwise authorize any Person, including participants in DTC and Persons that may hold interests through participants in DTC to take any action which a Holder is entitled to take under the Indenture or the Securities.
 
A-5

 	2.3	Special Transfer Provisions .	
The following provisions shall apply with respect to the Securities:
(a) Transfers to Non-U.S. Persons . The following provisions shall apply with respect to the registration of any proposed transfer of any Security bearing the Restricted Securities Legend to a Non-U.S. Person:
(i) if the Security to be transferred consists of (A) a Certificated Security, the Registrar shall register the transfer if such transfer is being made by a proposed transferor who has delivered to the Trustee a certification substantially in the form of Exhibit 2 to this Appendix A or (B) an interest in the Regulation S Global Security, the transfer of such interest may be effected only through the book entry system maintained by DTC after delivery to the Trustee of a certification substantially in the form of Exhibit 2 to this Appendix A;
(ii) if the Security to be transferred consists of a Certificated Security, upon receipt by the Registrar of instructions given in accordance with DTC’s and the Registrar’s procedures therefor, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Regulation S Global Security in an amount equal to the principal amount of the Certificated Security, to be transferred, and the Trustee shall cancel the Certificated Security so transferred; and
(iii) if the proposed transferor is a participant in DTC seeking to transfer an interest in a Global Security, upon receipt by the Registrar of written instructions given in accordance with DTC’s and the Registrar’s procedures, the Registrar shall register the transfer and reflect on its books and records the date and (A) a decrease in the principal amount of the Global Security from which interests are to be transferred in an amount equal to the principal amount of the Securities to be transferred and (B) an increase in the principal amount of the Regulation S Global Security in an amount equal to the principal amount of the Global Security to be transferred.
(b) Transfers to QIBs . The following provisions shall apply with respect to the registration of any proposed transfer of any Security bearing the Restricted Securities Legend to a QIB:
(i) if the Security to be transferred consists of (A) a Certificated Security, the Registrar shall register the transfer if such transfer is being made by a proposed transferor who has delivered to the Trustee a certification substantially in the form of Exhibit 3 to this Appendix A or (B) an interest in the Restricted Global Security, the transfer of such interest may be effected only through the book entry system maintained by DTC after delivery to the Trustee of a certification substantially in the form of Exhibit 3 to this Appendix A;
(ii) if the Security to be transferred consists of a Certificated Security, upon receipt by the Registrar of instructions given in accordance with DTC’s and the Registrar’s procedures therefor, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Restricted Global Security in an amount equal to the principal amount of the Certificated Security, to be transferred, and the Trustee shall cancel the Certificated Security so transferred; and
 
A-6

(iii) if the proposed transferor is a participant in DTC seeking to transfer an interest in a Global Security, upon receipt by the Registrar of written instructions given in accordance with DTC’s and the Registrar’s procedures, the Registrar shall register the transfer and reflect on its books and records the date and (A) a decrease in the principal amount of the Global Security from which interests are to be transferred in an amount equal to the principal amount of the Securities to be transferred and (B) an increase in the principal amount of the Restricted Global Security in an amount equal to the principal amount of the Global Security to be transferred.
(c) Restricted Securities Legend . Upon the registration of transfer, exchange or replacement of Securities not bearing the Restricted Securities Legend, the Registrar shall deliver Securities that do not bear the Restricted Securities Legend. Upon the registration of transfer, exchange or replacement of Securities bearing the Restricted Securities Legend, the Registrar shall deliver only Securities that bear the Restricted Securities Legend unless either (i) in the case of the Regulation S Security, the Distribution Compliance Period has terminated, or, in the case of a Restricted Security, the Resale Restriction Termination Date has occurred, (ii) there is delivered to the Registrar an Opinion of Counsel reasonably satisfactory to the Company to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act or (iii) such Security has been sold pursuant to an effective registration statement under the Securities Act. Notwithstanding the foregoing sentence, the Company may, in its sole discretion, by delivery of a Company Order to the Trustee, instruct the Trustee to remove the Restricted Securities Legend from a Security after determining that the Restricted Securities Legend is no longer required under applicable securities laws.
(d) Securities Purchased by the Company or the Guarantor . All Securities which are purchased or otherwise acquired by the Company, the Guarantor, any Subsidiary or any subsidiary of the Guarantor may not be resold or otherwise transferred, except in accordance with applicable requirements or exemptions under the relevant securities laws; provided , however , that none of the Trustee, any Paying Agent, the Registrar or any Transfer Agent shall have any obligation to monitor or ensure compliance therewith.
(e) Other Transfers . If a Holder proposes to transfer a Security constituting a Restricted Security pursuant to any exemption from the registration requirements of the Securities Act other than as provided for by this Section 2.3, the Registrar shall only register such transfer or exchange if such transferor delivers an Opinion of Counsel reasonably satisfactory to the Company that such transfer is in compliance with the Securities Act and the terms of the Indenture; provided , however , that the Company may, based upon the opinion of its counsel, instruct the Registrar by a Company Order not to register such transfer in any case where the proposed transferee is not a QIB or a Non-U.S. Person.
 
A-7

(f) General .
(i) By its acceptance of any Security (or any beneficial interest in any Global Security) bearing the Restricted Securities Legend, each Holder of such a Security or Holder of such beneficial interest acknowledges the restrictions on transfer of such Security set forth in Section 2.07(a) of the Indenture, this Appendix A and in the Restricted Securities Legend and agrees that it will transfer such Security only as provided in Section 2.07(a) of the Indenture and this Appendix A. The Registrar shall not register a transfer of any Security unless such transfer complies with the restrictions on transfer of such Security set forth in Section 2.07(a) of the Indenture and this Appendix A.
(ii) The Registrar shall retain copies of all certificates, letters, notices and other written communications received pursuant to this Section 2.3. The Company shall have the right to inspect and make copies of all such certificates, letters, notices or other written communications at any reasonable time upon the giving of reasonable prior written notice to the Registrar.
 
 	2.4	Cancellation or Adjustment of Global Security .	
At such time as all beneficial interests in a Global Security have either been exchanged for Certificated Securities, redeemed, purchased or canceled, such Global Security shall, upon written request by the Company to the Trustee, be returned to DTC for cancellation or retained and canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for Certificated Securities, redeemed, purchased or canceled, the principal amount of Securities represented by such Global Security shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the custodian for such Global Security) with respect to such Global Security, by the Trustee or the custodian, to reflect such reduction.
 
A-8

EXHIBIT 1
to
RULE 144/REGULATION S APPENDIX
[FORM OF FACE OF SECURITY]
[[RESTRICTED][REGULATION S] GLOBAL SECURITY]
Include the following legend on all Securities that are Global Securities
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (“DTC”) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY DEFINITIVE SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Include the following Restricted Securities Legend on all Securities that are Restricted Securities or Regulation S Securities.
NEITHER THIS GLOBAL SECURITY NOR ANY BENEFICIAL INTEREST HEREIN HAS BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). NEITHER THIS GLOBAL SECURITY NOR ANY BENEFICIAL INTEREST HEREIN MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) TO CENCOSUD S.A. OR A SUBSIDIARY THEREOF, (2) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER OR BUYERS IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT,
 
Exhibit 1-1

(3) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT (IF AVAILABLE) OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND, IN EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS. AS A CONDITION TO REGISTRATION OF TRANSFER OF THIS GLOBAL SECURITY AS SET FORTH IN CLAUSE (4) ABOVE, CENCOSUD S.A. MAY REQUIRE DELIVERY OF ANY DOCUMENTS OR OTHER EVIDENCE THAT IT, IN ITS ABSOLUTE DISCRETION, DEEMS NECESSARY OR APPROPRIATE TO EVIDENCE COMPLIANCE WITH SUCH EXEMPTION.
THIS LEGEND MAY BE REMOVED SOLELY IN THE DISCRETION AND AT THE DIRECTION OF CENCOSUD S.A.
Include the following legend on all Securities that are Certificated Securities
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND ANY TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH REGISTRAR OR TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
 
Exhibit 1-2

			
No.    	  	Principal Amount U.S.$[        ]	
	  	[If the Security is a Global Security, include the following two lines:	
	  	as revised by the Schedule of Increases and	
	  	Decreases attached hereto]	
CENCOSUD S.A.
5.500% Senior Notes due 2021

	  	[If the Security is a Restricted Security, insert	
		
	  	CUSIP NO. 15132H AA9	
		
	  	ISIN NO. US15132HAA95	
		
	  	COMMON CODE [        ]]	
		
	  	[If the Security is a Regulation S Security, insert	
		
	  	CUSIP NO. P2205J AE0	
		
	  	ISIN NO. USP2205JAE03	
		
	  	COMMON CODE [        ]]	
CENCOSUD S.A., a sociedad anónima organized under the laws of Chile, promises to pay to Cede & Co., or registered assigns, the principal amount of Dollars [as revised by the Schedule of Increases and Decreases attached hereto]* on [                    ] .
Interest Payment Dates: January 20 and July 20.
Record Dates: January 5 and July 5.
Additional provisions of this Security are set forth on the reverse of this Security.

*	Insert for Global Securities	
 
Exhibit 1-3

IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed.

CENCOSUD S.A.	
		
By	 	 	
	 	Name:	
	 	Title:	

Date:	
	
TRUSTEE’S CERTIFICATE OF AUTHENTICATION	
	
THE BANK OF NEW YORK MELLON,
as Trustee, certifies that this is one of the Securities referred to in the Indenture.	
		
By:	 	 	
	 	Authorized Signatory	
 
Exhibit 1-4

[FORM OF REVERSE OF SECURITY]
CENCOSUD S.A.
5.500% Senior Notes due 2021
 
1.	Interest	
Cencosud S.A., a sociedad anónima organized under the laws of Chile (such entity, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “Company”), promises to pay interest on the principal amount of this Security at the rate per annum shown above, plus Additional Amounts, if any. The Company will pay interest semi-annually in arrears on January 20 and July 20 of each year, or if any such day is not a Business Day, on the next succeeding Business Day, commencing July 20, 2011. Interest shall be computed on the basis of a 360-day year of twelve 30-day months.
 
2.	Method of Payment	
The Company shall pay interest and Additional Amounts, if any, on the Securities (except defaulted interest) to the Persons who are registered Holders of Securities at the close of business on the January 5 or July 5 next preceding the Interest Payment Date even if Securities are canceled after the Record Date and on or before the Interest Payment Date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company shall pay principal and interest in U.S. dollars. Payments in respect of the Securities represented by a Global Security (including principal, premium, if any, and interest) shall be made by wire transfer of immediately available funds to the account specified by The Depository Trust Company. Payments on non-Global Securities shall be made at the office or agency of the Paying Agent and Registrar within The City of New York, New York unless the Company elects to make interest payments by check mailed to the Holders at their address set forth in the Securities Register; provided , however , that payments on non-Global Securities may also be made, in the case of a Holder of at least U.S.$10,000,000 in aggregate principal amount of Securities, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Company and the Trustee to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).
 
3.	Paying Agent and Registrar	
Initially, The Bank of New York Mellon, a corporation duly authorized and existing under the laws of the State of New York authorized to conduct a banking business (the “Trustee”), will act as Registrar, Paying Agent and Transfer Agent and The Bank of New York Mellon (Luxembourg) S.A. will act as the Luxembourg Paying Agent (the “Luxembourg Paying Agent”) and Luxembourg Transfer Agent (the “Luxembourg Transfer Agent”). The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Company or any Subsidiary may act as Paying Agent or Registrar.
 
Exhibit 1-5

4.	Indenture	
The Company issued the Securities under an Indenture dated as of January 20, 2011 (the “Indenture”), among the Company, Cencosud Retail S.A., as guarantor (the “Guarantor”) the Trustee, as Trustee, Registrar, Paying Agent and Transfer Agent, the Luxembourg Paying Agent and the Luxembourg Transfer Agent. The terms of the Securities include those stated in the Indenture. Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Securities are subject to all such terms, and Holders are referred to the Indenture for a statement of those terms.
The Securities are unsecured and unsubordinated obligations of the Company unlimited in principal amount. [This Security is one of the Original Securities referred to in the Indenture issued in an aggregate principal amount of U.S.$[        ]. The Securities include the Original Securities and any Additional Securities that may be issued under the Indenture.] [This Security is one of the Additional Securities referred to in the Indenture. The Securities include such Additional Securities and the Original Securities in an aggregate principle amount of U.S.$[        ] previously issued under the Indenture.] The Indenture imposes certain limitations on the ability of the Company and the Subsidiaries to, among other things, create or incur Liens and enter into Sale and Leaseback Transactions. The Indenture also imposes limitations on the ability of each of the Company and the Guarantor to consolidate or merge with or into any other Person or convey or transfer its assets substantially as an entity.
To guarantee the due and punctual payment of the principal and interest on the Securities and all other amounts payable by the Company under the Indenture and the Securities (including the payment of Additional Amounts) when and as the same shall be due and payable, the Guarantor has irrevocably and unconditionally guaranteed the Guaranteed Obligations on a senior unsecured basis. Neither the Company nor the Guarantor shall be required to make any notation on this Security to reflect any guarantee or any release, termination or discharge thereof.
 
5.	Optional Redemption	
(a) Except as set forth below, the Securities may not be redeemed prior to their Stated Maturity. Neither the Company nor the Guarantor is, however, prohibited from acquiring the Securities by means other than a redemption, whether pursuant to a tender offer, open market purchase or otherwise, so long as the acquisition does not otherwise violate the terms of the Indenture.
(b) The Securities may be redeemed, in whole but not in part, at the Company’s option, at any time, by the giving of notice as provided in Article III of the Indenture, at a redemption price equal to the greater of (i) 100% of the outstanding principal amount of the Securities to be redeemed and (ii) the sum of the present values of the Remaining Scheduled Payments of principal and interest on the Securities to be redeemed discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable Treasury Rate plus 35 basis points, in each case plus accrued and unpaid interest on the principal amount of the Securities being redeemed to the date of redemption and Additional Amounts, if any. Notwithstanding the foregoing, payments of interest on the Securities will be payable to the Holders of those Securities registered as such at the close of business on the relevant Record Dates according to the terms and provisions of the Indenture.
 
Exhibit 1-6

(c) The Securities may be redeemed, in whole but not in part, at the Company’s option, by the giving of notice as provided in Article III of the Indenture, at a redemption price equal to 100% of the outstanding principal amount of the Securities, together with accrued and unpaid interest to the redemption date and Additional Amounts, if any, if, as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of a Relevant Jurisdiction or any political subdivision or taxing authority thereof or therein, or any change in the official application, administration or interpretation of such laws, regulations or rulings (including a holding by a court of competent jurisdiction) in a Relevant Jurisdiction, or any other jurisdiction with the power to impose, levy or assess a Tax, the Company has or will become obligated to pay Excess Additional Amounts, if such change or amendment is announced or occurs on or after the date of the Indenture and such obligation cannot be avoided by the Company taking reasonable measures available to it; provided that no such notice of redemption shall be given earlier than 60 days prior to the earliest date on which the Company would be obligated to pay such Excess Additional Amounts, were a payment in respect of the Securities then due. For the avoidance of doubt, reasonable measures shall include a change in the jurisdiction of the paying agent. Prior to the giving of notice of redemption of Securities pursuant to the Indenture, the Company will deliver to the Trustee (i) an Officer’s Certificate to the effect that the Company is or at the time of the redemption will be entitled to effect such a redemption pursuant to the Indenture and (ii) a written opinion of recognized counsel admitted to practice in the applicable Relevant Jurisdiction and independent of the Company to the effect that the Company is, or is expected to become, obligated to pay Excess Additional Amounts as a result of such change or amendment, as described above, and setting forth in reasonable detail the circumstances giving rise to such right of redemption.
 
6.	Notice of Redemption	
Notice of redemption shall be given in accordance with Section 12.01 of the Indenture at least 30 days, but not more than 60 days, before a redemption date to each Holder of Securities to be redeemed. Any notice to Holders of Securities of such a redemption pursuant to paragraph 5(b) shall include the appropriate calculation of the redemption price, but is not required to include the redemption price itself. The actual redemption price, calculated as described in such paragraph 5(b), must be set forth in an Officer’s Certificate delivered to the Trustee no later than two Business Days prior to the redemption date. If money sufficient to pay the redemption price of and accrued and unpaid interest on all Securities (or portions thereof) to be redeemed on the redemption date is deposited with a Paying Agent at least one Business Day prior to the redemption date and certain other conditions are satisfied, on and after such date interest shall cease to accrue on such Securities (or such portions thereof) called for redemption.
 
7.	Sinking Fund	
The Securities are not subject to any sinking fund.
 
Exhibit 1-7

8.	Denominations; Transfer; Exchange	
The Securities are in registered form without coupons in denominations of U.S.$150,000 and integral multiples of U.S.$1,000 in excess thereof. A Holder may transfer or exchange Securities in accordance with the Indenture. Upon any transfer or exchange, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture. Neither the Trustee nor any Registrar or Transfer Agent need register the transfer of or exchange definitive Securities for a period from the Record Date to the due date for any payment of principal of or interest on the Securities or register the transfer of or exchange any Securities for 15 days prior to selection for redemption through the redemption date.
 
9.	Persons Deemed Owners	
The registered Holder of this Security may be treated as the owner of it for all purposes.
 
10.	Unclaimed Money	
If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at the Company’s written request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment.
 
11.	Discharge and Defeasance	
Subject to certain conditions, the Company at any time may terminate some of or all its obligations under the Securities and the Indenture if the Company deposits with the Trustee cash or U.S. Government Obligations as specified in the Indenture for the payment of principal, interest and Additional Amounts, if any, on the Securities to redemption or maturity, as the case may be.
 
12.	Amendment; Waiver	
(a) Subject to certain exceptions and conditions set forth in the Indenture, without the consent of any Holder, the Company, the Guarantor and the Trustee may, among other things, amend, modify or supplement the Indenture or the Securities to cure any ambiguity, or to cure, correct or supplement any defect therein or herein, or in any manner which does not adversely affect the interests of any Holder in any material respect.
(b) Subject to certain conditions set forth in the Indenture, the Company, the Guarantor and the Trustee may modify or amend the Indenture or the terms and conditions of the Securities, and future compliance therewith or past Default by the Company or the Guarantor (other than a default in the payment of any amount, including in connection with a redemption, due on the Securities or in respect of covenant or provision which cannot be modified and amended without the consent of the Holders of all Securities so affected) with the written consent of the Holders of at least a majority in aggregate principal amount of the Securities then
 
Exhibit 1-8

Outstanding (including consents obtained in connection with a tender offer or exchange offer for the Securities) or by the adoption of resolutions at a meeting of Holders of Securities by the Holders of at least a majority of the outstanding Securities; provided , however , that without the consent or affirmative vote of each Holder affected thereby, an amendment may not: (i) change the interest rate with respect to the Securities or reduce the principal amount of the Securities or change the time for payment thereof; (ii) modify the obligation to pay Additional Amounts; (iii) change the prices at which the Securities may be redeemed by the Company or change the time at which the Securities may be redeemed in accordance with the Indenture; (iv) change the currency in which, or change the required place at which, payment on principal, premium, if any, or interest on the Securities is payable; (v) impair the right to institute suit for the enforcement of any payment obligation on or with respect to the Security; or (vi) reduce the percentage of principal amount of outstanding Securities whose Holders are required to consent to modify or amend the Indenture or the terms or conditions of the Securities or to waive any future compliance or past default.
 
13.	Defaults and Remedies	
If an Event of Default occurs and is continuing, the Trustee or the Holders of not less than 25% of the aggregate principal amount of the Securities then outstanding, subject to certain limitations, may declare all the Securities to be immediately due and payable. Certain events of bankruptcy or insolvency are Events of Default and shall result in the Securities being immediately due and payable upon the occurrence of such Events of Default without any further act of the Trustee or any Holder.
Holders of Securities may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Securities unless it receives reasonable indemnity or security. Subject to certain limitations, Holders of a majority in aggregate principal amount of the Securities then outstanding may direct the Trustee in its exercise of any trust or power under the Indenture. The Trustee or the Holders of a majority in aggregate principal amount of the outstanding Securities by written notice to the Company may annul and rescind any declaration of acceleration if all amounts then due with respect to the Securities are paid (other than amounts due solely because of such declaration) and all other defaults with respect to the Securities are cured. No such rescission shall affect any subsequent Default or impair any right consequent thereto.
 
14.	Trustee Dealings with the Company	
The Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee.
 
15.	No Recourse Against Others	
No director, officer, employee or stockholder, as such, of the Company or the Guarantor shall have any liability for any obligations of the Company or the Guarantor, as applicable, under the Securities or the Indenture or for any claim based on, in respect of or by
 
Exhibit 1-9

reason of such obligations or their creation. By accepting a Security, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities.
 
16.	Authentication	
This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the face of this Security.
 
17.	Abbreviations	
Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
 
18.	Governing Law	
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
 
19.	CUSIP and ISIN Numbers	
Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP or ISIN numbers to be printed on the Securities and has directed the Trustee to use CUSIP or ISIN numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.
 
20.	Currency of Account; Conversion of Currency	
U.S. dollars is the sole currency of account and payment for all sums payable by the Company under or in connection with the Securities or the Indenture, including damages. The Company shall indemnify the Holders as provided in respect of the conversion of currency relating to the Securities and the Indenture.
 
21.	Agent for Service; Submission to Jurisdiction; Waiver of Immunities	
Each of the Company and the Guarantor has appointed CT Corporation System with offices currently at 111 Eight Avenue, 13th floor, New York, New York 10011 as its authorized agent upon whom all writs, process and summonses may be served in any suit, action or proceeding arising out of or based upon the Indenture or the Securities which may be instituted in any U.S. Federal or New York State court in the Borough of Manhattan, The City of New York, New York. Each of the Company and the Guarantor has agreed that any suit, action or proceeding against the Company or the Guarantor, as applicable, brought by any Holder or the Trustee arising out of or based upon the Indenture or the Securities may be instituted in any U.S. Federal or New York State court in the Borough of Manhattan, The City of New York, New
 
Exhibit 1-10

York. Each of the Company and the Guarantor has irrevocably submitted to the non-exclusive jurisdiction of such courts for such purpose and waived, to the fullest extent permitted by law, trial by jury, any objection it may now or hereafter have to the laying of venue of any such suit, action or proceeding, any claim that any suit, action or proceeding in such a court has been brought in an inconvenient forum and any right to which it may be entitled on account of place of residence or domicile. The Company shall furnish to any Holder of Securities upon written request and without charge to the Holder a copy of the Indenture which has in it the text of this Security.
 
Exhibit 1-11

[FORM OF] ASSIGNMENT FORM
To assign this Security, fill in the form below and have your signature guaranteed: (I) or (we) assign and transfer this Security to:
(Insert assignee’s soc. sec. or tax I.D. no.)
(Print or type assignee’s name, address and zip code)
and irrevocably appoint                                          to transfer this Security on the books of the Company. The agent may substitute another to act for him.

			
Dated:	 	 	

	 		

	 		

			
Your Name:	 	 	
(Print your name exactly as it appears on the face of this Security)	

Your Signature:	 	 	
(Sign exactly as your name appears on the face of this Security)	

Signature Guarantee:	 	 	
(Signature must be guaranteed)	

The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to Exchange Act Rule 17Ad-15.
 
Exhibit 1-12

[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been made:

Date of increase or decrease	  	Amount of
decrease  in
principal
amount of this
Global Security	  	Amount of
increase in
principal
amount of this
Global Security	  	Principal
amount of this
Global Security
following such
decrease or
increase	  	Signature of
authorized
officer of
Trustee	

	  		  		  		  		
 
Exhibit 1-13

NOTATION OF GUARANTEE
Pursuant to the Indenture, dated as of January 20, 2011 (the “ Indenture ”), among Cencosud S.A., as issuer (the “ Company ”), Cencosud Retail S.A., as guarantor (the “ Guarantor ”), The Bank of New York Mellon, as trustee (the “ Trustee ”), Registrar, Paying Agent and Transfer Agent, and The Bank of New York Mellon (Luxembourg) S.A., as Luxembourg paying agent and transfer agent, the Guarantor, subject to the provisions of Article XI of the Indenture, hereby irrevocably and unconditionally guarantees to each Holder of a Security authenticated and delivered by the Trustee and to the Trustee and its successors and assigns and to any agent appointed thereunder and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Securities or the obligations of the Company thereunder, that: (a) the principal of and interest, Additional Amounts, if any, and premium, on the Securities, shall be promptly paid in full when due, whether at stated maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest and Additional Amounts on the Securities, if any, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder or any agent appointed under the Indenture, shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Securities or any of such other obligations, the same shall be promptly paid in full when due or performed in accordance with the terms of such extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantor shall be obligated to pay or perform the same immediately. The Guarantor agrees that this is a guarantee of payment and not a guarantee of collection. The obligations of the Guarantor to the Holders of Securities and to the Trustee and any such agents pursuant to the Subsidiary Guarantee and the Indenture are expressly set forth in Article XI of the Indenture and reference is hereby made to the Indenture for the precise terms of the Subsidiary Guarantee. Each Holder of a Security, by accepting the same, agrees to and shall be bound by such provisions. Capitalized terms used but not defined herein will have the meaning given them in the Indenture.
THIS NOTATION OF GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK

CENCOSUD RETAIL S.A., as Guarantor	
		
By	 	 	
	 	Name:	 		
	 	Title:	 		
		
By	 	 	
	 	Name:	 		
	 	Title:	 		
 
Exhibit 1-14

EXHIBIT 2
to
RULE 144/REGULATION S APPENDIX
FORM OF CERTIFICATE TO BE DELIVERED
BY TRANSFERORS IN CONNECTION WITH TRANSFERS
PURSUANT TO REGULATION S
[Date]
Cencosud S.A.
Av. Kennedy 9001, 6th floor, Las Condes
Santiago, Chile
Attention: Gerardo Molinaro
Telephone: +56 (2) 959-0000
Fax: +56 (2) 959-0625
The Bank of New York Mellon
101 Barclay Street, Floor 4E
New York, New York 10286
USA
Attention: International Corporate Trust
Fax: 212-815-5603
 
Re:	Cencosud S.A. (the “Company”)	
5.500% Senior Notes due 2021 (the “Securities”)
Ladies and Gentlemen:
Reference is hereby made to the Indenture dated as of January 20, 2011 in regard of the Securities among the Company, as issuer, Cencosud Retail S.A., as guarantor, The Bank of New York Mellon, as Trustee, Registrar, Paying Agent and Transfer Agent and The Bank of New York Mellon (Luxembourg) S.A., as Luxembourg Paying Agent and Luxembourg Transfer Agent (the “Indenture”). Capitalized terms used but not defined herein will have the meaning given them in the Indenture.
In connection with our proposed transfer of U.S.$         aggregate principal amount of Securities, which are held in [the form of a beneficial interest in the Regulation S Global Security (CUSIP No. P2205J AE0; ISIN Number USP2205JAE03) with DTC in the name of the undersigned] [certificated form], we confirm that such transfer has been effected pursuant to and in accordance with Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, we represent that:
(a) the offer of the Securities was not made to a Person in the United States;
(b) either (i) at the time the buy offer was originated, the transferee was outside the United States or we and any Person acting on our behalf reasonably believed that the transferee was outside the United States or (ii) the transaction was executed in, on or through the facilities of a designated off-shore securities market and neither we nor any Person acting on our behalf knows that the transaction has been pre-arranged with a buyer in the United States;
 
Exhibit 2-1

(c) no directed selling efforts have been made in the United States in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable;
(d) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act;
(e) we have advised the transferee of the transfer restrictions applicable to the Securities; and
(f) if the offer of the Securities was made prior to the expiration of the Distribution Compliance Period, the offer of the Securities was not made to a U.S. Person or for the account or benefit of a U.S. person.
You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings set forth in Regulation S.

Very truly yours,	
[Name of Transferor]	
		
By:	 	 	
	 	Authorized Signature	
 
Exhibit 2-2

EXHIBIT 3
to
RULE 144/REGULATION S APPENDIX
FORM OF TRANSFER CERTIFICATE TO BE DELIVERED
BY TRANSFERORS IN CONNECTION WITH TRANSFERS
PURSUANT TO RULE 144A
[Date]
Cencosud S.A.
Av. Kennedy 9001, 6th floor, Las Condes
Santiago, Chile
Attention: Gerardo Molinaro
Telephone: +56 (2) 959-0000
Fax: +56 (2) 959-0625
The Bank of New York Mellon
101 Barclay Street, Floor 4E
New York, New York 10286
USA
Attention: International Corporate Trust
Fax: 212-815-5603
 
Re:	Cencosud S.A. (the “Company”)	
5.500% Senior Notes due 2021 (the “Securities”)
Ladies and Gentlemen:
Reference is hereby made to the Indenture dated as of January 20, 2011 in regard of the Securities among the Company, as issuer, Cencosud Retail S.A., as guarantor, The Bank of New York Mellon, as Trustee, Registrar, Paying Agent and Transfer Agent and The Bank of New York Mellon (Luxembourg) S.A., as Luxembourg Paying Agent and Luxembourg Transfer Agent (the “Indenture”). Capitalized terms used but not defined herein will have the meaning given them in the Indenture.
This letter relates to U.S.$         aggregate principal amount of the Securities which are held in [the form of a beneficial interest in the Regulation S Global Security (CUSIP No. P2205J AE0; ISIN Number USP2205JAE03) with DTC in the name of the undersigned] [certificated form].
 
Exhibit 3-1

The undersigned has requested transfer of such Securities to a Person who will take delivery thereof in the form of a beneficial interest in the Restricted Global Security (CUSIP No. 15132H AA9; ISIN Number US15132HAA95). In connection with such transfer, the undersigned does hereby confirm that such transfer has been effected in accordance with the transfer restrictions set forth in the Indenture and on the Securities and pursuant to and in accordance with Rule 144A under the U.S. Securities Act of 1933, as amended, and accordingly, the undersigned represents that:
a. the Securities are being transferred to a transferee that the undersigned reasonably believes is purchasing the Securities for its own account or one or more accounts with respect to which the transferee exercises sole investment discretion; and
b. the undersigned reasonably believes that transferee and any such account is a “qualified institutional buyer” within the meaning of Rule 144A, in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any state of the United States or any other jurisdiction.

	 		 		 	[NAME OF TRANSFEROR]	
					
	 		 		 	By:	 	 	
	 		 		 		 	Name:	
	 		 		 		 	Title:	
					
Dated:	 	 	 		 		 		
 
Exhibit 3-2

Exhibit 4.4
INDENTURE
CENCOSUD S.A.,
as Issuer
CENCOSUD RETAIL S.A.,
as Guarantor
4.875% SENIOR NOTES DUE 2023
THE BANK OF NEW YORK MELLON,
as Trustee, Paying Agent, Registrar and Transfer Agent
and
THE BANK OF NEW YORK MELLON (LUXEMBOURG) S.A.,
as Luxembourg Paying Agent and Luxembourg Transfer Agent
Dated as of December 6, 2012

							
TABLE OF CONTENTS	  	
			
 	 	 	  	Page	 	
ARTICLE I	  	
		
Definitions; Incorporation by Reference and Rules of Construction	  				
			
SECTION 1.01.	 	Definitions	  	 	1	  	
SECTION 1.02.	 	Rules of Construction	  	 	7	  	
	
ARTICLE II	  	
	
The Securities	  	
			
SECTION 2.01.	 	Amount of Securities; Issuable in Series	  	 	7	  	
SECTION 2.02.	 	Form and Dating	  	 	8	  	
SECTION 2.03.	 	Execution and Authentication	  	 	8	  	
SECTION 2.04.	 	Registrar, Paying Agent and Transfer Agent	  	 	9	  	
SECTION 2.05.	 	Paying Agent To Hold Money in Trust	  	 	9	  	
SECTION 2.06.	 	Holder Lists	  	 	10	  	
SECTION 2.07.	 	Transfer and Exchange	  	 	10	  	
SECTION 2.08.	 	Replacement Securities	  	 	11	  	
SECTION 2.09.	 	Outstanding Securities	  	 	11	  	
SECTION 2.10.	 	Temporary Securities	  	 	11	  	
SECTION 2.11.	 	Cancellation	  	 	11	  	
SECTION 2.12.	 	Defaulted Interest	  	 	12	  	
SECTION 2.13.	 	CUSIP and ISIN Numbers	  	 	12	  	
SECTION 2.14.	 	Denomination	  	 	12	  	
SECTION 2.15.	 	Open Market Purchases	  	 	12	  	
	
ARTICLE III	  	
	
General Redemption Provisions	  	
			
SECTION 3.01.	 	Notices to Trustee	  	 	12	  	
SECTION 3.02.	 	Notice of Redemption	  	 	13	  	
SECTION 3.03.	 	Effect of Notice of Redemption	  	 	13	  	
SECTION 3.04.	 	Deposit of Redemption Price	  	 	14	  	
	
ARTICLE IV	  	
	
Optional Redemption	  	
			
SECTION 4.01.	 	Tax Redemption	  	 	14	  	
SECTION 4.02.	 	Make-Whole Redemption	  	 	15	  	
 
i

							
ARTICLE V	  	
	
Covenants	  	
SECTION 5.01.	 	Payment of Securities	  	 	15	  	
SECTION 5.02.	 	Limitation on Liens	  	 	15	  	
SECTION 5.03.	 	Limitation on Sale and Leaseback Transactions	  	 	17	  	
SECTION 5.04.	 	Reporting Requirements	  	 	18	  	
SECTION 5.05.	 	Additional Amounts	  	 	19	  	
SECTION 5.06.	 	Rule 144A Information	  	 	22	  	
SECTION 5.07.	 	Further Instruments and Acts	  	 	22	  	
SECTION 5.08.	 	Statement as to Compliance	  	 	22	  	
SECTION 5.09.	 	Corporate Existence	  	 	22	  	
SECTION 5.10.	 	Listing	  	 	23	  	
	
ARTICLE VI	  	
	
Successor Company or Guarantor	  	
			
SECTION 6.01.	 	When the Company or the Guarantor May Merge or Transfer Assets	  	 	23	  	
	
ARTICLE VII	  	
	
Defaults and Remedies	  	
			
SECTION 7.01.	 	Events of Default	  	 	24	  	
SECTION 7.02.	 	Acceleration	  	 	25	  	
SECTION 7.03.	 	Other Remedies	  	 	26	  	
SECTION 7.04.	 	Waiver of Past Defaults	  	 	26	  	
SECTION 7.05.	 	Control by Majority	  	 	26	  	
SECTION 7.06.	 	Limitation on Suits	  	 	26	  	
SECTION 7.07.	 	Rights of Holders To Receive Payment	  	 	27	  	
SECTION 7.08.	 	Collection Suit by Trustee	  	 	27	  	
SECTION 7.09.	 	Trustee May File Proofs of Claim	  	 	27	  	
SECTION 7.10.	 	Priorities	  	 	27	  	
SECTION 7.11.	 	Undertaking for Costs	  	 	28	  	
SECTION 7.12.	 	Waiver of Stay or Extension Laws	  	 	28	  	
	
ARTICLE VIII	  	
	
Trustee	  	
SECTION 8.01.	 	Duties of Trustee	  	 	28	  	
SECTION 8.02.	 	Rights of Trustee	  	 	29	  	
SECTION 8.03.	 	Individual Rights of Trustee	  	 	31	  	
SECTION 8.04.	 	Trustee’s Disclaimer	  	 	31	  	
SECTION 8.05.	 	Notice of Defaults	  	 	31	  	
 
ii

							
SECTION 8.06.	 	Compensation and Indemnity	  	 	31	  	
SECTION 8.07.	 	Replacement of Trustee	  	 	32	  	
SECTION 8.08.	 	Successor Trustee by Merger	  	 	33	  	
SECTION 8.09.	 	Eligibility; Disqualification	  	 	34	  	
SECTION 8.10.	 	Appointment of Co-Trustee	  	 	34	  	
	
ARTICLE IX	  	
	
Defeasance; Discharge of Indenture	  	
			
SECTION 9.01.	 	Legal Defeasance and Covenant Defeasance	  	 	35	  	
SECTION 9.02.	 	Conditions to Defeasance	  	 	36	  	
SECTION 9.03.	 	Application of Trust Money	  	 	38	  	
SECTION 9.04.	 	Repayment to Company	  	 	38	  	
SECTION 9.05.	 	Indemnity for U.S. Government Obligations	  	 	38	  	
SECTION 9.06.	 	Reinstatement	  	 	38	  	
SECTION 9.07.	 	Satisfaction and Discharge	  	 	39	  	
	
ARTICLE X	  	
	
Amendments	  	
			
SECTION 10.01.	 	Without Consent of Holders	  	 	40	  	
SECTION 10.02.	 	With Consent of Holders	  	 	40	  	
SECTION 10.03.	 	Revocation and Effect of Consents and Waivers	  	 	41	  	
SECTION 10.04.	 	Notation on or Exchange of Securities	  	 	42	  	
SECTION 10.05.	 	Trustee To Sign Amendments	  	 	42	  	
	
ARTICLE XI	  	
	
Subsidiary Guarantee	  	
			
SECTION 11.01.	 	Subsidiary Guarantee	  	 	42	  	
SECTION 11.02.	 	Amended and Restated Subsidiary Guarantee	  	 	44	  	
SECTION 11.03.	 	Limitation on Liability	  	 	45	  	
SECTION 11.04.	 	Successors and Assigns	  	 	45	  	
SECTION 11.05.	 	No Waiver	  	 	45	  	
SECTION 11.06.	 	Modification	  	 	45	  	
SECTION 11.07.	 	Non-Impairment	  	 	45	  	
SECTION 11.08.	 	Release of Subsidiary Guarantor	  	 	45	  	
	
ARTICLE XII	  	
	
Miscellaneous	  	
			
SECTION 12.01.	 	Notices	  	 	46	  	
SECTION 12.02.	 	Certificate and Opinion as to Conditions Precedent	  	 	48	  	
SECTION 12.03.	 	Statements Required in Certificate or Opinion	  	 	48	  	
 
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SECTION 12.04.	 	When Securities Disregarded	  	 	48	  	
SECTION 12.05.	 	Rules by Trustee, Paying Agent and Registrar	  	 	48	  	
SECTION 12.06.	 	Legal Holidays	  	 	48	  	
SECTION 12.07.	 	Governing Law; Consent to Jurisdiction and Service of Process	  	 	49	  	
SECTION 12.08.	 	Waiver of Immunity	  	 	50	  	
SECTION 12.09.	 	No Recourse Against Others	  	 	51	  	
SECTION 12.10.	 	Successors	  	 	51	  	
SECTION 12.11.	 	Multiple Originals	  	 	51	  	
SECTION 12.12.	 	Table of Contents; Headings	  	 	51	  	
SECTION 12.13.	 	Waiver of Jury Trial	  	 	51	  	
SECTION 12.14.	 	Severability	  	 	51	  	
SECTION 12.15.	 	USA Patriot Act	  	 	51	  	

Appendix A	    	–	  	Provisions Relating to Securities	
Exhibit 1 to Appendix A	    	–	  	Form of Security	
Exhibit 2 to Appendix A	    	–	  	Form of Regulation S Transfer Certificate	
Exhibit 3 to Appendix A	    	–	  	Form of Rule 144A Transfer Certificate	
 
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INDENTURE dated as of December 6, 2012, among Cencosud S.A., a sociedad anónima organized under the laws of Chile (the “Company”), Cencosud Retail S.A., a sociedad anónima organized under the laws of Chile and a majority-owned subsidiary of the Company, as guarantor (the “Guarantor”), The Bank of New York Mellon, a corporation duly organized and existing under the laws of the State of New York authorized to conduct a banking business, as Trustee (the “Trustee”), Registrar, Paying Agent and Transfer Agent (as such terms are defined below), and The Bank of New York Mellon (Luxembourg) S.A., as Luxembourg Paying Agent (the “Luxembourg Paying Agent”) and Luxembourg Transfer Agent (the “Luxembourg Transfer Agent”).
Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Company’s 4.875% Senior Notes due 2023, to be issued, from time to time, as in this Indenture provided (the “Securities”).
ARTICLE I
Definitions; Incorporation by Reference and Rules of Construction
SECTION 1.01. Definitions .
“Additional Amounts” has the meaning set forth in Section 5.05(a) hereof.
“Additional Securities” means Securities issued pursuant to Section 2.01(c) hereof, if any.
“Affiliate” means, with respect to any specified Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control,” when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.
“Attributable Value” means, as to any particular lease under which the Company or any Subsidiary is at any time liable as lessee and any date as of which the amount thereof is to be determined, the total net obligations of the lessee for rental payments during the remaining term of the lease (including any period for which such lease has been extended or may, at the option of the lessor, be extended) discounted from the respective due dates thereof to such date at a rate per annum equivalent to the interest rate inherent in such lease (as determined in good faith by the Company in accordance with generally accepted financial practice).
“Board of Directors” means the Board of Directors of the Company or any committee thereof duly authorized to act on behalf of such Board of Directors.
“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification.
“Business Day” means each day that is not a Legal Holiday.

“Chile” means the Republic of Chile.
“Commission” means the U.S. Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act.
“Company” means the party named as such in the first paragraph of this Indenture until a successor replaces it pursuant to the applicable provisions hereof and, thereafter, means the successor and, for purposes of any provision contained herein, each other obligor on the Securities.
“Company Order” has the meaning set forth in Section 2.03(d) hereof.
“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the Securities to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Securities.
“Comparable Treasury Price” means, with respect to a redemption date, (a) the average of four Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest Reference Treasury Dealer Quotations or (b) if the Independent Investment Banker obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.
“Consolidated Net Tangible Assets” means the total of all assets appearing on a consolidated balance sheet of the Company and the Subsidiaries, net of all applicable reserves and deductions, but excluding goodwill, trade names, trademarks, patents, unamortized debt discount and all other like intangible assets, less the aggregate of the current liabilities of the Company and the Subsidiaries appearing on such balance sheet as determined in accordance with IFRS.
“Corporate Trust Office” means the principal office of the Trustee at which at any time its corporate trust business shall be administered, which office at the date hereof is located at 101 Barclay Street, Floor 4E, New York, New York 10286, Attention: International Corporate Trust, or such other address as the Trustee may designate from time to time by notice to the Holders, the Company and the Guarantor, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders, the Company and the Guarantor).
“Covenant Defeasance” has the meaning set forth in Section 9.01(c) hereof.
“Default” means any event which is, or after notice or passage of time or both would be, an Event of Default.
“Event of Default” has the meaning set forth in Section 7.01 hereof.
“Excess Additional Amounts” means Additional Amounts in respect of interest received on the Securities at a rate of withholding or deduction in excess of 4.0%.
 
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“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
“Global Securities” has the meaning set forth in Appendix A.
“Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person, direct or indirect, contingent or otherwise, or entered into for the purpose of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided , however , that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning. The term “Guarantee” shall not apply to a guarantee of intercompany indebtedness among the Company and the Subsidiaries or among the Subsidiaries.
“Guaranteed Obligations” has the meaning set forth in Section 11.01(a) hereof.
“Guarantor” means the party named as such in the first paragraph of this Indenture until a successor replaces it pursuant to the applicable provisions hereof and, thereafter, including the successor for purposes of any provision contained herein.
“Holder” means the Person in whose name a Security is registered on the Security Register described in Section 2.04 hereof.
“IFRS” means International Financial Reporting Standards or other accounting standards generally accepted in Chile, as required by the SVS for Chilean public companies, in each case as in effect from time to time.
“Indebtedness” means, with respect to any Person (without duplication) (a) any obligation of such Person (i) for borrowed money, (ii) evidenced by bonds, debentures, notes or other similar instruments, (iii) under any reimbursement obligation relating to a letter of credit other than letters of credit in the ordinary course of business, (iv) for the payment of money relating to any obligations under any capital lease of real or personal property, (v) under any agreement or instrument in respect of an interest rate or currency swap, exchange or hedging transaction or other financial derivatives transaction, (vi) to pay the deferred and unpaid purchase price of property or services (other than trade accounts payable arising in the ordinary course of business), which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto or the completion of such service or (vii) a Guarantee of such Person; and (b) any amendment, supplement, modification, deferral, renewal, extension or refunding of any liability of the types referred to in clause (a) above. For the purpose of determining any particular amount of Indebtedness under this definition, Guarantees of (or obligations with respect to letters of credit) Indebtedness otherwise included in the determination of such amount shall not be included. For the avoidance of any doubt, any obligation that is non-recourse to any such Person shall not be deemed to be Indebtedness under this definition.
“Indenture” means this Indenture as amended or supplemented from time to time.
“Independent Investment Banker” means one of the Reference Treasury Dealers.
 
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“Interest Payment Date” means January 20 and July 20 of each year, commencing on July 20, 2013, or if such date is not Business Day on the next succeeding Business Day.
“Issue Date” means December 6, 2012.
“Legal Defeasance” has the meaning set forth in Section 9.01(b) hereof.
“Legal Holiday” has the meaning set forth in Section 12.06 hereof.
“Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind.
“Luxembourg Paying Agent” has the meaning set forth in the first paragraph of this Indenture and its successors and assigns.
“Luxembourg Transfer Agent” has the meaning set forth in the first paragraph of this Indenture and its successors and assigns.
“Officer” means the Chief Executive Officer, the President, the Chief Financial Officer or any Vice President of the Company or the Guarantor, as applicable.
“Officer’s Certificate” means a certificate signed by an Officer of the Company or the Guarantor, as applicable, and delivered to the Trustee. Any Officer’s Certificate required by this Indenture to be provided to the Trustee or any Paying Agent for these purposes shall be deemed to be duly provided if telecopied or emailed to the Trustee or such Paying Agent, as applicable.
“Opinion of Counsel” means a written opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Company, the Guarantor or the Trustee.
“Original Securities” has the meaning set forth in Section 2.03(d) hereof.
“Paying Agent” has the meaning set forth in Section 2.04(a) hereof.
“Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.
“principal” means, with respect to any Indebtedness (including the Securities), the principal amount of such Indebtedness plus the premium, if any, on such Indebtedness.
“Protected Purchaser” means a purchaser of a Security, or of an interest therein, who (a) gives value, (b) does not have notice of any adverse claim to the Security, and (c) obtains control of the Security.
“QIB” means a “qualified institutional buyer” as defined in Rule 144A under the Securities Act.
 
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“Record Date” means the close of business on January 5 or July 5, as applicable (whether or not a Business Day).
“Reference Treasury Dealer” means J.P. Morgan Securities LLC, BNP Paribas Securities Corp. and Mizuho Securities USA Inc. or their affiliates which are primary United States government securities dealers and not less than two other leading primary United States government securities dealers in New York City, New York reasonably designated by the Company; provided that if any of the foregoing cease to be a primary United States government securities dealer in New York City, New York (a “Primary Treasury Dealer”), the Company shall substitute therefor another Primary Treasury Dealer.
“Reference Treasury Dealer Quotation” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker by such Reference Treasury Dealer at or about 3:30 p.m. (New York City time) on the third Business Day preceding such redemption date.
“Registrar” has the meaning assigned to it in Section 2.04(a) hereof.
“Relevant Jurisdiction” has the meaning assigned to it in Section 4.01 hereof.
“Remaining Scheduled Payments” means, with respect to each Security to be redeemed, the remaining scheduled payments of the principal thereof and interest thereon that would be due after the related redemption date but for such redemption; provided , however , that, if that redemption date is not an Interest Payment Date with respect to such Securities, the amount of the next succeeding scheduled interest payment thereon shall be reduced by the amount of interest accrued thereon to that redemption date.
“Sale and Leaseback Transaction” means any transaction or series of related transactions pursuant to which the Company or any Subsidiary sells or transfers any property to any Person with the intention of taking back a lease of such property pursuant to which the rental payments are calculated to amortize the purchase price of such property substantially over the useful life thereof and such property is in fact so leased.
“Securities” has the meaning assigned to such term in the second paragraph of this Indenture.
“Securities Act” means the U.S. Securities Act of 1933, as amended.
“Securities Register” has the meaning assigned to it in Section 2.04 hereof.
“Significant Subsidiaries” means collectively, (a) each Subsidiary of the Company which would be a “significant subsidiary” within the meaning of Rule 1-02 under Regulation S-X promulgated by the Commission as in effect on the date of this Indenture, assuming the Company is the registrant referred to in such definition, and (b) to the extent not a “significant subsidiary” pursuant to clause (a) above, the Guarantor.
 
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“Stated Maturity” means, with respect to any security, the date specified in such security as the fixed date on which the payment of principal of such security is due and payable (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the Company unless such contingency has occurred).
“Subsidiary” means any corporation or other business entity of which the Company owns or controls (either directly or through one or more other Subsidiaries) more than 50% of the issued share capital or other ownership interests, in each case having ordinary voting power to elect or appoint directors, managers or trustees of such corporation or other business entity (whether or not capital stock or other ownership interests or any other class or classes have or might have voting power upon the occurrence of any contingency) including, without limitation, the Guarantor.
“Subsidiary Guarantee” has the meaning set forth in Section 11.01(a) hereof.
“SVS” means the Chilean Securities and Insurance Commission ( Superintendencia de Valores y Seguros ).
“Taxes” has the meaning set forth in Section 5.05(a) hereof.
“Transfer Agent” has the meaning set forth in Section 2.04(a) hereof.
“Transfer Restricted Securities” means Securities that bear or are required to bear the Restricted Securities Legend (as defined in Section 2.1(f) of the Appendix A).
“Treasury Rate” means, with respect to a redemption date, the rate per annum equal to the semi-annual equivalent yield-to-maturity or interpolated maturity (on a day count basis) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.
“Trust Officer” means, when used with respect to the Trustee, any officer within the Corporate Trust Office of the Trustee having direct responsibility for the administration of this Indenture, or any other officer to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject.
“Trustee” means the party named as such in the first paragraph of this Indenture until a successor replaces it pursuant to Article VIII of this Indenture and, thereafter, means the successor.
“U.S. Government Obligations” means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable or redeemable at the Company’s option.
 
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SECTION 1.02. Rules of Construction . Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with IFRS;
(c) “or” is not exclusive;
(d) “including” means including without limitation;
(e) words in the singular include the plural and words in the plural include the singular; and
(f) the principal amount of any noninterest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer thereof dated such date prepared in accordance with IFRS.
ARTICLE II
The Securities
SECTION 2.01. Amount of Securities; Issuable in Series .
(a) The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. All Securities shall be identical in all respects other than issue date, issue price and the first interest payment date. The Securities may be issued in one or more series; provided , however , that any Securities issued with original issue discount (“OID”) for U.S. Federal income tax purposes shall not be issued as part of the same series as any Securities that are issued with a different amount of OID or are not issued with OID, unless the Original Securities and the Additional Securities would be treated as part of the same issue for U.S. Federal income tax purposes.
(b) With respect to any Securities issued after the Issue Date (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, Original Securities pursuant to Section 2.07, Section 2.08 or Section 2.10 hereof), there shall be established in or pursuant to a resolution of the Board of Directors, and subject to Section 2.03 hereof, set forth, or determined in the manner provided in an Officer’s Certificate of the Company, or established in one or more indentures supplemental hereto, prior to the issuance of such Securities:
(i) whether such Securities shall be issued as part of a new or existing series of Securities and the title of such Securities (which shall distinguish the Securities of the series from Securities of any other series);
(ii) the aggregate principal amount of such Securities that may be authenticated and delivered under this Indenture;
 
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(iii) the issue price, issue date and first interest payment date of such Securities, including the date from which interest on such Securities shall accrue;
(iv) if applicable, that such Securities shall be issuable in whole or in part in the form of one or more Global Securities and, in such case, the respective depositories for such Global Securities, the form of any legend or legends that shall be borne by any such Global Security in addition to or in lieu of that set forth in Exhibit 1 to Appendix A and any circumstances in addition to or in lieu of those set forth in Section 2.2 of Appendix A in which any such Global Security may be exchanged in whole or in part for Securities registered, and any transfer of such Global Security in whole or in part may be registered, in the name or names of Persons other than the depository for such Global Security or a nominee thereof; and
(v) any CUSIP(s), ISIN(s) or other identifying numbers.
(c) If any of the terms of any Securities are established by action taken by the Board of Directors, a Board Resolution shall be delivered to the Trustee at or prior to the delivery of the Officer’s Certificate of the Company or the trust indenture supplemental hereto setting forth the terms of such Securities.
SECTION 2.02. Form and Dating . Provisions relating to the Securities are set forth in the Rule 144A/Regulation S Appendix attached hereto (the “Appendix A”) which is hereby incorporated in, and expressly made part of, this Indenture. The Original Securities and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit 1 to the Appendix A which is hereby incorporated in, and expressly made a part of, this Indenture. The Securities may have notations, legends or endorsements required by law, stock exchange rule, agreements to which each of the Company and the Guarantor is subject, if any, or usage; provided that any such notation, legend or endorsement is in a form acceptable to the Company and the Guarantor. Each Security shall be dated the date of its authentication.
SECTION 2.03. Execution and Authentication .
(a) An Officer of the Company shall sign the Securities for the Company by manual or facsimile signature.
(b) If an Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless.
(c) A Security shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Security. Such signature shall be conclusive evidence that the Security has been authenticated under this Indenture.
(d) On the Issue Date, the Trustee shall authenticate and deliver U.S.$1,200,000,000 aggregate principal amount of 4.875% Senior Notes due 2023 (the “Original Securities”) and, at any time and from time to time thereafter, the Trustee shall authenticate and deliver Securities for original issue in an aggregate principal amount specified in such order, in each case upon a written order of the Company signed by an Officer of the Company (the “Company Order”). Such order shall specify the amount of the Securities to be authenticated and the date on which the original issue of Securities is to be authenticated.
(e) The Trustee may appoint an authenticating agent reasonably acceptable to the Company to authenticate the Securities. Unless limited by the terms of such appointment, an authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such authenticating agent.
 
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SECTION 2.04. Registrar, Paying Agent and Transfer Agent .
(a) The Company shall maintain an office or agency in The City of New York, New York (which office or agency may be an office of the Trustee or an affiliate of the Trustee) where Securities may be presented for registration of transfer or for exchange (the “Registrar”) and an office or agency where Securities may be presented for payment (the “Paying Agent”). The Registrar shall keep a register of the Securities and of their transfer and exchange (the “Securities Register”). The Company shall also maintain an office or agency in The City of New York, New York (which office or agency may be an office of the Trustee or an affiliate of the Trustee) where Securities may be presented or surrendered for transfer or for exchange (the “Transfer Agent”). The Company may have one or more co-registrars and one or more additional paying agents and transfer agents. The term “Paying Agent” includes any additional paying agent and the term “Transfer Agent” includes any additional transfer agent.
(b) The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent, Transfer Agent or co-registrar not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such agent. The Company shall promptly notify the Trustee of the name and address of any such agent. If the Company fails to maintain a Registrar, Paying Agent or Transfer Agent, the Trustee shall act as such, to the extent that it is lawful to so act, and shall be entitled to appropriate compensation therefor pursuant to Section 8.06 hereof. The Company or any Subsidiary may act as Paying Agent, Registrar, Transfer Agent or co-registrar.
(c) The Company initially appoints the Trustee as Registrar, Paying Agent and Transfer Agent in connection with the Securities.
(d) So long as the Securities are listed on the Official List of the Luxembourg Stock Exchange and the Luxembourg Stock Exchange rules so require, there shall be a Paying Agent and Transfer Agent in Luxembourg. The Company initially appoints The Bank of New York Mellon (Luxembourg) S.A. as Luxembourg Paying Agent and Luxembourg Transfer Agent in connection with the Securities.
SECTION 2.05. Paying Agent To Hold Money in Trust . On or before 12:00 p.m. (New York) time, at least one Business Day prior to each due date of the principal and interest on any Security, the Company shall deposit with the Paying Agent a sum sufficient to pay such principal and interest, together with any Additional Amounts then due, when so becoming due. Each Paying Agent a party to this Indenture agrees that, and the Company shall require each Paying Agent not a party to this Indenture to agree in writing that, the Paying Agent
 
9

shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of or interest on the Securities and shall notify the Trustee of any default by the Company in making any such payment. If the Company or a Subsidiary acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon complying with this Section 2.05, the Paying Agent shall have no further liability for the money delivered to the Trustee.
SECTION 2.06. Holder Lists . The Registrar shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders. If the Trustee is not the Registrar, the Company shall furnish to the Trustee, in writing at least seven Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders.
SECTION 2.07. Transfer and Exchange .
(a) The Securities shall be issued in registered form and shall be transferable only upon the surrender of a Security for registration of transfer. When a Security is presented to the Registrar or a co-registrar with a request to register a transfer, the Registrar shall register the transfer only upon receipt by the Company and the Registrar of such Opinions of Counsel, certificates and/or other information reasonably required by and satisfactory to each in order to ensure compliance with the Securities Act. When Securities are presented to the Registrar or a co-registrar with a request to exchange them for an equal principal amount of Securities of other denominations, the Registrar shall make the exchange as requested if the same requirements are met. To permit registration of transfers and exchanges, the Company shall execute and the Trustee shall authenticate and deliver Securities at the Registrar’s or co-registrar’s request. The Company and the Registrar may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section 2.07. The Company shall not be required to make, and the Registrar need not register, transfers or exchanges of Securities selected and delivered for redemption or any Securities for a period of 15 days before a selection of Securities to be redeemed or 15 days before an Interest Payment Date.
(b) Prior to the due presentation for registration of transfer of any Security, the Company, the Guarantor, the Trustee, any Paying Agent, the Registrar or any co-registrar may deem and treat the person in whose name a Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of, interest and Additional Amounts, if any, on such Security and for all other purposes whatsoever, whether or not presentation of such Security is overdue, and none of the Company, the Guarantor, the Trustee, any Paying Agent, the Registrar or any co-registrar shall be affected by notice to the contrary.
(c) All Securities issued upon any registration of transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Securities surrendered upon such registration of transfer or exchange.
 
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SECTION 2.08. Replacement Securities . In the event that any Security shall become mutilated, defaced, destroyed, lost or stolen, the Company shall execute and, upon the Company’s request, the Trustee shall authenticate and deliver a new Security, of like tenor (including the same date of issuance) and equal principal amount, registered in the same manner, and bearing interest from the date to which interest has been paid on such Security, in exchange and substitution for such Security (upon surrender and cancellation thereof in the case of a mutilated or defaced Security) or in lieu of and substitution for such Security. In the event that such Security is destroyed, lost or stolen, the applicant for a substitute Security shall furnish to the Company, the Guarantor, the Trustee, any Paying Agent (including, without limitation, the Luxembourg Paying Agent), any Transfer Agent (including, without limitation, the Luxembourg Transfer Agent), the Registrar and any co-registrar such security or indemnity as may be required by them to hold each of them harmless, and, in every case of destruction, loss or theft of such Security, the applicant shall also furnish to the Company, the Guarantor and the Trustee satisfactory evidence of the destruction, loss or theft of such Security and of the ownership thereof. Upon the issuance of any substituted Security, the Company may require the payment by the registered Holder thereof of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other fees and expenses (including the fees and expenses of the Trustee) connected therewith.
SECTION 2.09. Outstanding Securities .
(a) Securities outstanding at any time are all Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section 2.09 as not outstanding. A Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the Security.
(b) If a Security is replaced pursuant to Section 2.08 hereof, it ceases to be outstanding unless the Trustee and the Company receive proof satisfactory to them that the replaced Security is held by a Protected Purchaser.
(c) If a Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest payable on that date with respect to the Securities (or portions thereof) to be redeemed or maturing, as the case may be, then on and after that date such Securities (or portions thereof) cease to be outstanding and interest on them ceases to accrue.
SECTION 2.10. Temporary Securities . Until definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Securities and deliver them in exchange for temporary Securities.
SECTION 2.11. Cancellation . The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar, each Transfer Agent and each Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel and dispose of (subject to the record
 
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retention requirements of the Exchange Act) all Securities surrendered for registration of transfer, exchange, payment or cancellation in accordance with its current practice unless the Company directs the Trustee in writing to deliver cancelled Securities to the Company. The Company may not issue new Securities to replace Securities it has redeemed, paid or delivered to the Trustee for cancellation.
SECTION 2.12. Defaulted Interest . If the Company defaults in a payment of interest on the Securities, the Company shall pay the defaulted interest (plus interest on such defaulted interest to the extent lawful) in any lawful manner. The Company may pay the defaulted interest (a) to the persons who are Holders on a subsequent special Record Date or (b) to persons who are Holders in any other lawful manner not inconsistent with the rules of any applicable securities exchange if deemed practicable by the Trustee. The Company or the Guarantor, as applicable, shall fix or cause to be fixed any such special Record Date (which special Record Date shall not be more than 15 nor less than 10 days prior to the payment date) and payment date to the reasonable satisfaction of the Trustee and shall promptly mail to each Holder a notice that states the special Record Date, the payment date and the amount of defaulted interest to be paid.
SECTION 2.13. CUSIP and ISIN Numbers . The Company in issuing the Securities may use CUSIP numbers (if then generally in use) and, if so, the Trustee shall use CUSIP or ISIN numbers in notices of redemption as a convenience to Holders; provided , however , that neither the Company nor the Trustee shall have any responsibility for any defect in the CUSIP or ISIN number that appears on any Security, check, advice of payment or redemption notice, and any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company shall notify the Trustee, in writing, of any change in any CUSIP or ISIN numbers.
SECTION 2.14. Denomination . The Securities will be issued in fully registered form without interest coupons attached and will be issued in denominations of U.S.$200,000 and integral multiples of U.S.$1,000 in excess thereof.
SECTION 2.15. Open Market Purchases . Each of the Company and the Guarantor may at any time purchase Securities in the open market or otherwise at any price. Any such purchased Securities shall not be resold, except in compliance with applicable requirements or exemptions under the relevant securities laws.
ARTICLE III
General Redemption Provisions
SECTION 3.01. Notices to Trustee .
(a) If the Company elects to redeem Securities pursuant to this Indenture and paragraph 5 of the Securities, it shall notify the Trustee in writing of the redemption date, the principal amount of Securities to be redeemed and that such redemption is being made pursuant to paragraph 5 of the Securities.
(b) The Company shall give each notice to the Trustee provided for in this Section 3.01 at least 45 days before the redemption date fixed by the Company unless the Trustee consents to a shorter period. Such notice shall be accompanied by an Officer’s Certificate of the Company and an Opinion of Counsel from the Company reasonably satisfactory to the Trustee to the effect that such redemption will comply with the conditions herein.
 
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SECTION 3.02. Notice of Redemption .
(a) At least 30 days, but not more than 60 days, before a date for redemption of Securities, the Company shall give a notice of redemption to each Holder of Securities to be redeemed in accordance with Section 12.01 hereof.
The notice shall identify the Securities to be redeemed and shall state:
(i) the redemption date;
(ii) the redemption price or the information specified in paragraph 5 of the Securities;
(iii) the name and address of the Paying Agent to whom the Securities called for redemption must be surrendered;
(iv) that Securities called for redemption must be surrendered to such Paying Agent to collect the redemption price;
(v) if fewer than all the outstanding Securities are to be redeemed, the identification and principal amounts of the particular Securities to be redeemed;
(vi) that, unless the Company defaults in making such redemption payment, interest on Securities (or portion thereof) called for redemption will cease to accrue on and after the redemption date;
(vii) the CUSIP or ISIN number; and
(viii) that no representation is made as to the correctness or accuracy of the CUSIP or ISIN number, if any, listed in such notice or printed on the Securities.
(b) At the Company’s request, the Trustee shall give the notice of redemption in the Company’s name and at the Company’s expense. In such event, the Company shall provide the Trustee with the information required by this Section 3.02 at least 45 days, but not earlier than 60 days, before the redemption date.
SECTION 3.03. Effect of Notice of Redemption . Once notice of redemption is given in accordance with Section 12.01 hereof, subject to the satisfaction or waiver by the
 
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Company of any conditions precedent to such redemption set forth in the notice, Securities called for redemption will become due and payable on the redemption date and at the redemption price stated in the notice. Upon surrender to the Paying Agent, such Securities shall be paid at the redemption price stated in the notice, plus accrued interest to the redemption date (subject to the right of Holders of record on the relevant Record Date to receive interest due on the related Interest Payment Date that is on or prior to the date of redemption). Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder.
SECTION 3.04. Deposit of Redemption Price . On or before 12:00 p.m. (New York) time, at least one Business Day prior to the redemption date, the Company shall deposit with the Paying Agent (or, if the Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued interest (subject to the right of Holders of record on the relevant Record Date to receive interest due on the related Interest Payment Date that is on or prior to the date of redemption) on all Securities to be redeemed on that date other than Securities called for redemption that have been delivered by the Company to the Trustee for cancellation.
ARTICLE IV
Optional Redemption
SECTION 4.01. Tax Redemption . The Securities may be redeemed, in whole but not in part, at the Company’s option, by the giving of notice as provided in Article III hereof, at a redemption price equal to 100% of the outstanding principal amount of the Securities, together with accrued and unpaid interest to the redemption date and Additional Amounts, if any, if, as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of Chile or any jurisdiction from or through which any payment under the Securities is made by or at the direction of the Company or the Guarantor, as applicable (each a “Relevant Jurisdiction”) or any political subdivision or taxing authority thereof or therein, or any change in the official application, administration or interpretation of such laws, regulations or rulings (including a holding by a court of competent jurisdiction) in a Relevant Jurisdiction, or any other jurisdiction with the power to impose, levy or assess a Tax, the Company has or will become obligated to pay Excess Additional Amounts, if such change or amendment is announced or occurs on or after the date of this Indenture and such obligation cannot be avoided by the Company taking reasonable measures available to it; provided that no such notice of redemption shall be given earlier than 60 days prior to the earliest date on which the Company would be obligated to pay such Excess Additional Amounts, were a payment in respect of the Securities then due. For the avoidance of doubt, reasonable measures shall include a change in the jurisdiction of the paying agent. Prior to the giving of notice of redemption of Securities pursuant to this Indenture, the Company will deliver to the Trustee (i) an Officer’s Certificate to the effect that the Company is or at the time of the redemption will be entitled to effect such a redemption pursuant to this Indenture and (ii) a written opinion of recognized counsel admitted to practice in the applicable Relevant Jurisdiction and independent of the Company to the effect that the Company is, or is expected to become, obligated to pay Excess Additional Amounts as a result of such change or amendment, as described above, and setting forth in reasonable detail the circumstances giving rise to such right of redemption.
 
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SECTION 4.02. Make-Whole Redemption . The Securities may be redeemed, in whole but not in part, at the Company’s option, at any time, by the giving of notice as provided in Article III hereof, at a redemption price equal to the greater of (a) 100% of the outstanding principal amount of the Securities to be redeemed and (b) the sum of the present values of the Remaining Scheduled Payments of principal and interest on the Securities to be redeemed discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable Treasury Rate plus 35 basis points, in each case plus accrued and unpaid interest on the principal amount of the Securities being redeemed to the redemption date and Additional Amounts, if any. Notwithstanding the foregoing, payments of interest on the Securities will be payable to the Holders of those Securities registered as such at the close of business on the relevant Record Dates according to the terms and provisions of this Indenture.
ARTICLE V
Covenants
SECTION 5.01. Payment of Securities .
(a) The Company shall promptly pay the principal of and interest on the Securities on the dates and in the manner provided in the Securities and in this Indenture. Principal and interest shall be considered paid on the date due if on such date the Trustee or a Paying Agent holds in accordance with this Indenture money sufficient to pay all principal and interest then due.
(b) The Company shall pay interest on overdue principal at the rate borne by the Securities, and it shall pay interest on overdue installments of interest at the rate borne by the Securities to the extent lawful.
SECTION 5.02. Limitation on Liens .
(a) The Company shall not, nor shall it permit any Subsidiary to, issue, assume or suffer to exist any Indebtedness, if such Indebtedness is secured by a Lien upon any property or assets of the Company or any Subsidiary, unless, concurrently therewith, the Securities shall be secured equally and ratably with (or prior to) such Indebtedness; provided , however , that the foregoing restriction shall not apply to:
(i) any Lien on property acquired, constructed, developed, extended or improved by the Company or any Subsidiary (individually or together with other Persons) after the date of this Indenture or any shares or other ownership interest in, or any Indebtedness of, any Person which holds, owns or is entitled to such property, to the extent such Lien is created, incurred or assumed (A) during the period such property was being constructed, developed, extended or improved or (B) contemporaneously with, or within 360 days after, such acquisition or the completion of such construction, development, extension or improvement in order to secure or provide for the payment of all or any part of the purchase price or other consideration of such property or the other costs of such acquisition, construction, development, extension or improvement (including costs such as escalation, interest during construction and financing and refinancing costs);
 
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(ii) any Lien on any property or assets existing at the time of acquisition thereof and which (A) is not created as a result of or in connection with or in anticipation of such acquisition and (B) does not attach to any other property or assets other than the property or assets so acquired (except for property affixed or appurtenant thereto);
(iii) any Lien on any property or assets acquired from a Person which is merged with or into the Company or any Subsidiary or any Lien existing on property or assets of any Person at the time such Person becomes a Subsidiary, in either such case which (A) is not created as a result of or in connection with or in anticipation of any such transaction and (B) does not attach to any other property or assets other than the property or assets so acquired or of such Person at the time it becomes a Subsidiary (except for property affixed or appurtenant thereto);
(iv) any Lien which secures Indebtedness owed by a Subsidiary to the Company or any other Subsidiary;
(v) any Lien securing Indebtedness of the type described in clause (a)(v) of the definition of “Indebtedness”; provided that such Indebtedness was entered into in the ordinary course of business and not for speculative purposes or the obtaining of credit;
(vi) any Lien in favor of any Person to secure obligations under the provisions of any letters of credit, bank guarantees, bonds or surety obligations required or requested by any governmental authority in connection with any contract or statute;
(vii) any Lien existing on the date of this Indenture or granted pursuant to an agreement existing on the date of this Indenture;
(viii) Liens for taxes, assessments or governmental charges or levies if such taxes, assessments, governmental charges or levies are not at the time due and payable, or if the same are being contested in good faith by appropriate proceedings and appropriate provisions, if any, have been established as required by IFRS;
(ix) Liens arising solely by operation of law:
(x) Liens created for the sole purpose of securing Indebtedness that, when incurred, will be applied to repay all (but not only part) of the Securities and all other amounts payable under the Securities; provided that the Securities and all other such amounts are fully satisfied within 30 days after the incurrence of such Indebtedness;
(xi) judgment Liens not giving rise to an Event of Default so long as any appropriate legal proceedings which may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceeding may be initiated has not expired and appropriate provisions, if any, have been established as required by IFRS; or
(xii) any extension, renewal or replacement (or successive extensions, renewals or replacements) in whole or in part, of any Lien referred to in the foregoing clauses (i) through (xi) inclusive or any Lien securing any Indebtedness that refinances, extends, renews, refunds or replaces any other Indebtedness secured in accordance with the foregoing clauses (i) through (xi) inclusive; provided that the principal amount of Indebtedness secured thereby shall not exceed the principal amount of Indebtedness so secured at the time of such extension, renewal or replacement plus an amount necessary to pay any customary fees and expenses, including premiums and defeasance costs related to such transaction, and that such extension, renewal or replacement shall be limited to all or a part of the property which secured the Lien so extended, renewed or replaced (plus improvements on such property) and property affixed or appurtenant thereto.
 
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(b) Notwithstanding Section 5.02(a) hereof, the Company or any Subsidiary may issue or assume Indebtedness secured by a Lien which would otherwise be prohibited under Section 5.02(a) hereof or enter into Sale and Leaseback Transactions that would otherwise be prohibited by Section 5.03 hereof; provided that the amount of such Indebtedness or the Attributable Value of such Sale and Leaseback Transaction, as the case may be, together with the aggregate amount (without duplication) of (i) Indebtedness outstanding at such time, that was previously incurred pursuant to this Section 5.02(b) by the Company and the Subsidiaries, plus (ii) the Attributable Value of all such Sale and Leaseback Transactions of the Company and the Subsidiaries outstanding at such time that were previously incurred pursuant to this Section 5.02(b) shall not exceed 20% of Consolidated Net Tangible Assets at the time any such Indebtedness is issued or assumed by the Company or any Subsidiary or at the time any such Sale and Leaseback Transaction is entered into.
SECTION 5.03. Limitation on Sale and Leaseback Transactions . The Company shall not, nor shall it permit any Subsidiary to, enter into any Sale and Leaseback Transaction with respect to any of their property or assets, unless (a) the Company or such Subsidiary would be entitled pursuant to Section 5.02 hereof to issue or assume Indebtedness (in an amount equal to the Attributable Value with respect to such Sale and Leaseback Transaction) secured by a Lien on such property or assets without equally and ratably securing the Securities, (b) the Company or such Subsidiary shall apply or cause to be applied, in the case of a sale or transfer for cash, the net proceeds thereof and, in the case of a sale or transfer otherwise than for cash, an amount equal to the fair market value (as determined in good faith by the Board of Directors) of the property or assets so leased, (i) to the retirement, within 360 days after the effective date of such Sale and Leaseback Transaction, of (A) Indebtedness of the Company ranking at least pari passu with the Securities or (B) Indebtedness of any Subsidiary, in each case owing to a Person other than the Company or any Affiliate of the Company, or (ii) to the acquisition, purchase, construction, development, extension or improvement of any property or assets of the Company or any Subsidiary used or to be used by or for the benefit of the Company or any Subsidiary in the ordinary course of business or (c) the Company or such Subsidiary equally and ratably secures the Securities. The restrictions set forth in this Section 5.03 shall not apply to any transactions providing for a lease for a term, including any renewal, of not more than three years or to arrangements between the Company and a Subsidiary or between Subsidiaries.
 
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SECTION 5.04. Reporting Requirements .
(a) The Company shall furnish to Holders and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so long as the Securities are not freely transferable under the Securities Act.
(b) So long as the Securities remain outstanding the Company shall:
(i) in the event the Company is not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, furnish (or in lieu of furnishing, make accessible electronically with notice to the Trustee) to the Trustee and the Holders as follows:
(A) as soon as they are available, but in any event within 120 calendar days after the end of each fiscal year of the Company (currently ending December 31), copies of its audited financial statements (on a consolidated basis) in respect of such fiscal year (including a profit and loss account, balance sheet and cash flow statement), in English, prepared in accordance with IFRS and audited by a member firm of an internationally recognized firm of independent accountants; and
(B) as soon as they are available, but in any event within 90 calendar days after the end of each of the first three fiscal quarters of each fiscal year of the Company, copies of its unaudited financial statements (on a consolidated basis) in respect of the relevant period (including a profit and loss account, balance sheet and cash flow statement), in English, prepared on a basis consistent with the audited financial statements of the Company and in accordance with IFRS, together with a certificate signed by the person then authorized to sign financial statements on behalf of the Company to the effect that such financial statements are true in all material respects and present fairly the financial position of the Company as at the end of, and the results of its operations for, the relevant quarterly period; and
(ii) in the event the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act,
(A) timely file with the Commission such annual and other reports as may be required by the rules and regulations of the Commission in effect at the relevant time and in the form required thereunder, and
(B) unless such information is publicly available on the Commission’s EDGAR System, provide the Trustee, for further delivery to a Holder upon request by any such Holder, with copies of the reports referred to in clause (b)(ii) within 15 days after such reports are required to be filed with the Commission; and
(iii) so long as the Company is required to file the same with the SVS, will furnish (or in lieu of furnishing, make accessible electronically with notice to the Trustee) to the Trustee and Holders, as soon as they are available, but in any event within 120 calendar days after the end of each fiscal year of the Guarantor (currently ending December 31), copies of the Guarantor’s audited financial statements (on a consolidated basis) in respect of such fiscal year in the format required by the SVS, in English, prepared in accordance with IFRS and audited by a member firm of an internationally recognized firm of independent accountants.
 
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(c) The Trustee shall upon written request forward to each registered Holder who so requests the reports received by the Trustee under this Section 5.04.
(d) The Company shall give the Trustee written notice of anytime it becomes or ceases to be subject to Section 13 or 15(d) of the Exchange Act. As of the date of this Indenture, the Company is subject to Section 13 and 15(d) of the Exchange Act.
(d) Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including compliance by the Company or the Guarantor, as applicable, with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).
SECTION 5.05. Additional Amounts .
(a) The Company shall make all payments of principal, premium, if any, and interest in respect of the Securities free and clear of, and without withholding or deduction for or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature and interest, penalties and fines in respect thereof (collectively, “Taxes”) imposed, levied, collected, withheld or assessed by, within or on behalf of a Relevant Jurisdiction or by or within any political subdivision thereof or any authority therein or thereof having power to tax, unless such withholding or deduction is required by law or by the interpretation or administration thereof. In the event of any such withholding or deduction of Taxes, the Company or the Guarantor, as applicable, shall pay to Holders such additional amounts (“Additional Amounts”) as will result in the payment to such Holder of the net amount that would otherwise have been receivable by such Holder in the absence of such withholding or deduction, except that no such Additional Amounts shall be payable in respect of:
(i) any Taxes that would not have been so withheld or deducted but for the existence of any present or former connection (including, without limitation, a permanent establishment in a Relevant Jurisdiction) between the Holder, applicable recipient of payment or beneficial owner of a Security or any payment in respect of such Security (or, if the Holder or beneficial owner is an estate, nominee, trust, partnership, corporation or other business entity, between a fiduciary, settlor, beneficiary, member or
 
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shareholder of, or possessor of power over, the Holder, applicable recipient of payment or beneficial owner) and an authority with the power to levy or otherwise impose or assess a Tax, other than the mere receipt of such payment or the mere holding or ownership of such Security or beneficial interest or the enforcement of rights thereunder;
(ii) any Taxes that would not have been so withheld or deducted if a Security had been presented for payment within 30 days after the Relevant Date (as defined below) to the extent presentation is required (except to the extent that the Holder would have been entitled to Additional Amounts had such Security been presented for payment on the last day of such 30-day period);
(iii) any Taxes that would not have been so withheld or deducted but for the failure by the Holder or the beneficial owner of a Security or any payment in respect of such Security to (A) make a declaration of non-residence, or any other claim or filing for exemption, to which it is entitled or (B) comply with any certification, identification, information, documentation or other reporting requirement concerning its nationality, residence, identity or connection with a Relevant Jurisdiction; provided that such declaration or compliance was required as of the date of this Indenture as a precondition to exemption from all or part of such Taxes and the Company or the Guarantor, as applicable, has given the Holders at least 30 days prior notice that they will be required to comply with such requirements;
(iv) any estate, inheritance, gift, value added, sales, use, excise, transfer, capital gains, personal property or similar taxes, duties, assessments or other governmental charges;
(v) any Taxes that are payable otherwise than by deduction or withholding from payments on a Security;
(vi) any Taxes that would not have been so imposed if the Holder had presented a Security for payment (where presentation is required) to another paying agent;
(vii) any payment to a Holder of a Security that is a fiduciary or partnership (including an entity treated as a partnership for tax purposes) or any Person other than the sole beneficial owner of such payment or Security, to the extent that a beneficiary or settlor with respect to such fiduciary, a member of such partnership or the beneficial owner of such payment or Security would not have been entitled to the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the actual Holder of such Security;
(viii) any withholding or deduction imposed on a payment required to be made pursuant to European Council Directive 2003/48/EC or any other European Union directive implementing the conclusions of the ECOFIN Council meeting of November 26-27, 2000 on the taxation of savings income, or any law implementing or complying with, or introduced in order to conform to, such a directive; or
(ix) any combination of clauses (i) through (viii) above.
 
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(b) For the purposes of this Section 5.05, “Relevant Date” means whichever is the later of (i) the date on which such payment first becomes due and (ii) if the full amount payable has not been received in The City of New York, New York by the Trustee on or prior to such due date, the date on which, the full amount having been so received, notice to that effect shall have been given to the Holders in accordance with this Indenture.
(c) All references to principal, premium, if any, and interest in respect of the Securities shall be deemed also to refer to any Additional Amounts which may be payable as set forth in this Indenture or in the Securities.
(d) Notwithstanding the foregoing, the limitations on the obligations of the Company and the Guarantor to pay Additional Amounts set forth in clause (a)(iii) above shall not apply if the provision of any certification, identification, information, documentation or other reporting requirement described in such clause (a)(iii) would be materially more onerous, in form, in procedure or in the substance of information disclosed, to a Holder or beneficial owner of a Security (taking into account any relevant differences between U.S. and Chilean law, rules, regulations or administrative practice) than comparable information or other reporting requirements imposed under U.S. tax law, regulations and administrative practice (such as IRS Forms W-8BEN and W-9).
(e) At least 10 Business Days prior to the first Interest Payment Date (and at least 10 Business Days prior to each succeeding Interest Payment Date if there has been any change with respect to the matters set forth in the Officer’s Certificate referenced below), the Company or the Guarantor, as applicable, shall furnish to the Trustee and each Paying Agent an Officer’s Certificate instructing the Trustee and each Paying Agent whether payments of principal of or interest on the Securities due on such Interest Payment Date shall be without deduction or withholding for or on account of any Taxes. If any such deduction or withholding shall be required, prior to such Interest Payment Date, such Officer’s Certificate shall specify the amount, if any, required to be withheld on such payment to Holders and certify that the Company or the Guarantor, as applicable, shall pay such withholding or deduction to the relevant taxing authority. Any Officer’s Certificate required by this Indenture to be provided to the Trustee and any Paying Agent for these purposes shall be deemed to be duly provided if telecopied to the Trustee and each Paying Agent.
(f) The Company or the Guarantor, as applicable, will furnish to the Holders, within 60 days after the date the payment of any Taxes so deducted or withheld is due pursuant to applicable law, either certified copies of tax receipts evidencing such payment by the Company or the Guarantor, as applicable, or, if such receipts are not obtainable, other evidence of such payments by the Company or the Guarantor, as applicable, reasonably satisfactory to the Holders.
(g) Upon written request, the Company or the Guarantor, as applicable, shall furnish to the Trustee documentation reasonably satisfactory to the Trustee evidencing payment of Taxes.
(h) The Company or the Guarantor, as applicable, shall promptly pay when due any present or future stamp, court or similar documentary taxes or any other excise or
 
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property taxes, charges or similar levies that arise in any jurisdiction from the execution, delivery or registration of each Security or any other document or instrument referred to herein or therein, excluding any such taxes, charges or similar levies imposed by any jurisdiction outside of Chile and except, in certain cases, for taxes, charges or similar levies resulting from certain registration of transfer or exchange of Securities.
SECTION 5.06. Rule 144A Information . The Company shall take all action necessary to provide information to permit resales of the Securities pursuant to Rule 144A under the Securities Act, including furnishing to any Holder of a Security or beneficial interest in a Global Security, or to any prospective purchaser designated by such Holder, upon written request of such Holder, financial and other information required to be delivered under Rule 144A(d)(4) (as amended from time to time and including any successor provision) unless, at the time of such request, the Company is subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act or is exempt from such requirements pursuant to Rule 12g3-2(b) under the Exchange Act (as amended from time to time and including any successor provision).
SECTION 5.07. Further Instruments and Acts . Upon request of the Trustee, the Company and the Guarantor shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out the purpose of this Indenture.
SECTION 5.08. Statement as to Compliance . As promptly as practicable beginning with the fiscal year ending December 31, 2012 and in any event within 120 days after the end of such fiscal year, the Company shall deliver to the Trustee an Officer’s Certificate stating whether or not to the best knowledge of the signer thereof the Company is in compliance (without regard to periods of grace or notice requirements) with all conditions and covenants under this Indenture, and if the Company shall not be in compliance, specifying such non-compliance and the nature and status thereof of which such signer may have knowledge.
SECTION 5.09. Corporate Existence . Subject to Article VI hereof, each of the Company and the Guarantor shall do or cause to be done all things necessary to preserve and keep in full force and effect:
(a) its existence as a corporation, and, in the case of the Company, the corporate, partnership, limited liability company or other existence of each Subsidiary, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company, the Guarantor or any such Subsidiary; and
(b) the rights (charter and statutory), licenses and franchises of the Company and the Subsidiaries; provided , however , that the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any Subsidiary (other than the Guarantor), if the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and the Subsidiaries, taken as a whole, or would otherwise not have a material adverse effect on the business, properties, management, financial position, results of operations or prospects of the Company and its Subsidiaries, taken as a whole.
 
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SECTION 5.10. Listing . In the event that the Securities are listed on the Official List of the Luxembourg Stock Exchange for trading on the Euro MTF Market, the Company shall use its reasonable best efforts to maintain such listing; provided that if, as a result of the European Union regulated market amended Directive 2001/34/EC (the “Transparency Directive”) or any legislation implementing the Transparency Directive or other directives or legislation, the Company could be required to publish financial information either more regularly than it otherwise would be required to or according to accounting principles which are materially different from the accounting principles which the Company would otherwise use to prepare its published financial information, the Company may delist the Securities from the Official List of the Luxembourg Stock Exchange in accordance with the rules of the exchange and seek an alternative admission to listing, trading and/or quotation for the Securities on a different section of the Luxembourg Stock Exchange or by such other listing authority, stock exchange and/or quotation system inside or outside the European Union as the Board of Directors may decide.
ARTICLE VI
Successor Company or Guarantor
SECTION 6.01. When the Company or the Guarantor May Merge or Transfer Assets .
(a) Neither the Company nor the Guarantor shall consolidate with or merge into any other Person or convey or transfer its properties and assets substantially as an entirety to any Person, unless:
(i) the successor Person (the “Surviving Person”) is a Person existing under the laws of Chile or the United States (or any State thereof or the District of Columbia) and expressly assumes, by a supplemental indenture, the due and punctual payment of the principal, premium, if any, and interest (and Additional Amounts, if any) on all the outstanding Securities and the performance of every covenant in this Indenture on the part of the Company or the Guarantor, as applicable, to be performed or observed;
(ii) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, has occurred and is continuing; and
(iii) the Company or the Guarantor, as applicable, has delivered to the Trustee an Officer’s Certificate and Opinion of Counsel stating that such consolidation, merger, conveyance or transfer and such supplemental indenture comply with this Section 6.01 relating to such transaction.
(b) In case of any consolidation, merger conveyance or transfer (other than a lease) that complies with Section 6.01(a) hereof, the Surviving Person shall succeed to and be substituted for the Company as obligor or the Guarantor, as guarantor, as applicable, on the Securities, with the same effect as if it had been named in this Indenture as such obligor or guarantor, as applicable.
 
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ARTICLE VII
Defaults and Remedies
SECTION 7.01. Events of Default . The following events shall be “Events of Default”:
(a) the Company defaults in the payment of the principal or premium, if any, of any Security at maturity, upon redemption or otherwise;
(b) the Company defaults in any payment of interest or Additional Amounts in respect of the Securities if such default continues for 30 days after any such interest or Additional Amount becomes due;
(c) the Company or the Guarantor fails to observe or perform any covenant or agreement contained in the Securities or in this Indenture (other than a payment default referred to in Section 7.01(a) or Section 7.01(b) hereof) and such failure continues for 60 days after notice is given by the Trustee to the Company or by the Holders of at least 25% of the aggregate principal amount of the outstanding Securities to the Company and the Trustee specifying such failure and requiring it to be remedied and stating that such notice is a “Notice of Default” under this Indenture;
(d) the Company or any Subsidiary fails to pay when due (whether at maturity, upon redemption or acceleration or otherwise) the principal of any Indebtedness in excess, individually or in the aggregate, of U.S.$50 million (or the equivalent thereof in other currencies), if such failure continues for more than the period of grace, if any, applicable thereto and the period for payment has not been expressly extended;
(e) one or more final and non-appealable judgments or decrees for the payment of money in excess of U.S.$50 million (or the equivalent thereof in other currencies) in the aggregate are rendered against the Company or any Subsidiary and are not paid (whether in full or in installments in accordance with the terms of the judgment) or otherwise discharged and, in the case of each such judgment or decree, either (i) an enforcement proceeding has been commenced by any creditor upon such judgment or decree and is not dismissed within 30 days following commencement of such enforcement proceedings or (ii) there is a period of 60 days following such judgment during which such judgment or decree is not discharged, waived or the execution thereof stayed;
(f) a decree or order by a court having jurisdiction has been entered adjudging the Company or any of its Significant Subsidiaries as bankrupt or insolvent, or approving as properly filed a petition seeking reorganization of or by the Company or any of its Significant Subsidiaries and such decree or order continues undischarged or unstayed for a period of 60 days; or a decree or order of a court having jurisdiction for the appointment of a receiver or liquidator or for the liquidation or dissolution of the Company or any of its Significant Subsidiaries, has been entered, and such decree or order continues undischarged and unstayed for a period of 60 days; provided that any
 
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Significant Subsidiary may be liquidated or dissolved if, pursuant to such liquidation or dissolution, all or substantially all of its assets are transferred to the Company or another Significant Subsidiary of the Company;
(g) the Company or any of its Significant Subsidiaries institutes any proceeding to be adjudicated as voluntary bankrupt, or consents to the filing of a bankruptcy proceeding against it, or files a petition or answer or consent seeking reorganization, or consents to the filing of any such petition, or consents to the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of it or its property;
(h) the Subsidiary Guarantee ceases to be in full force and effect or the Guarantor denies or disaffirms its obligations under the Subsidiary Guarantee (other than as provided under Sections 9.01(a), 11.01(f), 11.03 and 11.08); or
(i) failure of the Guarantor to increase the Subsidiary Guarantee to a full and unconditional guarantee, so that the Guarantor unconditionally, irrevocably and on a general unsecured and unsubordinated basis, guarantees the due and punctual payment of all amounts due and payable on the Securities (including the payment of Additional Amounts, if any) when due and as the same shall become due and payable within 45 days following the Issue Date;
The foregoing will constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.
SECTION 7.02. Acceleration . If an Event of Default (other than an Event of Default specified in Section 7.01(f), Section 7.01(g) or Section 7.01(i) hereof) occurs and is continuing, the Trustee by notice to the Company and the Guarantor, or the Holders of not less than 25% of the aggregate principal amount of the Securities then outstanding thereby written notice to the Company, the Guarantor and the Trustee, may declare the principal amount of the Securities, together with accrued and unpaid interest thereon, immediately be due and payable. Upon such a declaration, such principal and interest shall be immediately due and payable. If an Event of Default specified in Section 7.01(f), Section 7.01(g) or Section 7.01(i) hereof occurs, the maturity of all outstanding Securities shall automatically be accelerated and the principal amount of the Securities, together with accrued and unpaid interest thereon, shall be immediately due and payable. The right of the Holders to give such acceleration notice shall terminate if the event giving rise to such right has been cured before such right is exercised. The Holders of a majority in aggregate principal amount of the outstanding Securities by written notice to the Company and the Guarantor may annul and rescind any declaration of acceleration if (a) all amounts then due with respect to the Securities are paid (other than amounts due solely because of such declaration), (b) all other defaults with respect to the Securities are cured and (c) the Company or the Guarantor has deposited with the Trustee a sum sufficient to pay all amounts owed to the Trustee pursuant to Section 8.06 hereof. No such rescission shall affect any subsequent Default or impair any right consequent thereto.
 
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SECTION 7.03. Other Remedies .
(a) If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of or interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture.
(b) The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative.
SECTION 7.04. Waiver of Past Defaults . Subject to Section 7.02, the Holders of a majority in aggregate principal amount of the Securities then outstanding by notice to the Trustee, the Company and the Guarantor may waive an existing Default and its consequences except (a) a Default in the payment of the principal of or interest on a Security or (b) a Default in respect of a provision that under Section 10.02 hereof cannot be amended without the consent of each Holder affected. When a Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or impair any consequent right.
SECTION 7.05. Control by Majority . The Holders of a majority in aggregate principal amount of the outstanding Securities may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee with respect to the Securities. However, the Trustee may refuse to follow any direction that conflicts with applicable law or this Indenture or, subject to Section 8.01 hereof, that the Trustee determines is unduly prejudicial to the rights of other Holders or would involve the Trustee in personal liability; provided , however , that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action hereunder, the Trustee shall be entitled to security or indemnification satisfactory to it against all losses and expenses caused by taking or not taking such action.
SECTION 7.06. Limitation on Suits .
(a) A Holder shall not have any right to institute any proceeding with respect to this Indenture or the Securities or for any remedy hereunder or thereunder unless:
(i) such Holder shall have previously given to the Trustee written notice of a continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount of the Securities then outstanding has made a written request to the Trustee to institute such proceeding in respect of such Event of Default in its own name as Trustee, and such Holders have offered security or indemnity to the Trustee satisfactory to it; and
(iii) the Trustee has failed to institute such proceeding for 60 days after the receipt of such notice and has not received from the Holders of at least a majority in aggregate principal amount of the Securities outstanding a direction inconsistent with such request, within 60 days after such notice.
(b) The foregoing limitations on the pursuit of remedies by a Holder shall not apply to a suit individually instituted by a Holder of Securities for the enforcement of payment of the principal, premium, if any, or interest on such Security on or after any respective due date specified in such Security. A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder.
 
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SECTION 7.07. Rights of Holders To Receive Payment . Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal of and interest together with any Additional Amounts then due on the Securities held by such Holder, on or after the respective due dates expressed in the Securities, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.
SECTION 7.08. Collection Suit by Trustee . If an Event of Default specified in Section 7.01(a) or Section 7.01(b) hereof occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount then due and owing (together with interest on any unpaid interest to the extent lawful) and the amounts provided for in Section 8.06 hereof.
SECTION 7.09. Trustee May File Proofs of Claim . The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Holders allowed in any judicial proceedings relative to the Company or the Guarantor, their respective creditors or property and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due to the Trustee under Section 8.06 hereof.
SECTION 7.10. Priorities .
(a) If the Trustee collects any money or property pursuant to this Article VII, it shall pay out the money or property in the following order:
FIRST: to the Trustee for amounts due under Section 8.06 hereof;
SECOND: to Holders for amounts due and unpaid on the Securities for principal interest and Additional Amounts, if any, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal, interest and Additional Amounts, if any, respectively; and
THIRD: to the Company or, to the extent the Trustee collects any amounts pursuant to the Subsidiary Guarantee, to the Guarantor.
(b) The Trustee may fix a special record date and payment date for any payment to Holders pursuant to this Section 7.10. At least 15 days before such special record date, the Company shall mail to each Holder and the Trustee a notice that states the special record date, the payment date and amount to be paid.
 
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SECTION 7.11. Undertaking for Costs . In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 7.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 7.07 hereof or a suit by Holders of more than 10% in aggregate principal amount of the Securities.
SECTION 7.12. Waiver of Stay or Extension Laws . Neither the Company nor the Guarantor (to the extent any of them may lawfully do so) shall at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and each of the Company and the Guarantor (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted.
ARTICLE VIII
Trustee
SECTION 8.01. Duties of Trustee .
(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Person’s own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).
 
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(c) The Trustee may not be relieved from liability for its own grossly negligent action, its own gross negligent failure to act or its own willful misconduct, except that:
(i) this paragraph does not limit the effect of Section 8.01(b) hereof;
(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was grossly negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 7.05 hereof or exercising any trust or power conferred upon the Trustee under this Indenture with respect to the Securities; and
(iv) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers.
(d) Every provision of this Indenture that in any way relates to the Trustee is subject to Section 8.01(a), Section 8.01(b) and Section 8.01(c) hereof.
(e) The Trustee shall not be liable for interest on, or to invest, any money received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
(g) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 8.01 and the provisions of this Article VIII shall apply to the Trustee in its role as Registrar, Paying Agent and Transfer Agent.
(h) The Trustee shall not have any obligation or duty to monitor, determine or inquire as to compliance with any restriction on transfer imposed under this Indenture or under applicable law, with respect of any transfer of any interest in any Security (including any transfers between or among the depository, members or beneficial owners in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
SECTION 8.02. Rights of Trustee .
(a) The Trustee may rely conclusively on, and shall be protected in acting or refraining from acting upon, any document believed by it to be genuine and to have been signed
 
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or presented by the proper person. The Trustee need not investigate any fact or matter stated in such document. The Trustee may, however, in its discretion make such further inquiry or investigation into such facts or matters as it may see fit and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the sole cost and expense of the Company and it shall not incur any liability by reason of such inquiry or investigation.
(b) Before the Trustee acts or refrains from acting hereunder, it may require an Officer’s Certificate or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on an Officer’s Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and attorneys and shall not be responsible for the acts or omissions of any agent appointed with due care.
(d) The Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture; provided that the Trustee’s conduct does not constitute willful misconduct or gross negligence.
(e) The Trustee may consult with counsel of its choice, and the advice or Opinion of Counsel with respect to legal matters relating to this Indenture and the Securities shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.
(f) The permissive rights of the Trustee to do things enumerated in this Indenture shall not be construed as a duty unless so specified herein.
(g) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.
(h) In no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
(i) The Trustee shall not be deemed to have notice of any Default or Event of Default (other than a payment default of principal, premium or interest) unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture.
(j) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.
 
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(k) The Trustee may request that the Company and the Guarantor deliver an Officer’s Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.
(l) The Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including without limitation, acts of God; earthquakes; fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots; interruptions, loss or malfunctions of utilities, computer (hardware or software) or communications service; accidents; labor disputes; acts of civil or military authority or governmental actions; it being understood that the Trustee shall use its best efforts to resume performance as soon as practicable under the circumstances.
(m) The Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion, rights or powers conferred upon it by this Indenture.
SECTION 8.03. Individual Rights of Trustee . The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar or co-registrar may do the same with like rights. However, the Trustee must comply with Section 8.09 hereof.
SECTION 8.04. Trustee’s Disclaimer . The Trustee shall not be responsible for, and makes no representation as to, the validity, priority, sufficiency or adequacy of this Indenture (including the Subsidiary Guarantee), any offering materials or the Securities. The Trustee shall not be accountable for the Company’s use of the proceeds from the Securities, and it shall not be responsible for any statement of the Company or the Guarantor in this Indenture or in any document issued in connection with the sale of the Securities or in the Securities other than the Trustee’s certificate of authentication.
SECTION 8.05. Notice of Defaults . If a Default or Event of Default occurs and is continuing and if it is known to a Trust Officer of the Trustee, the Trustee shall mail to each Holder notice of the Default or Event of Default within 90 days after it is known to a Trust Officer or written notice of it is received by the Trustee. Except in the case of a Default or Event of Default in payment of principal of or interest on any Security, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of Holders.
SECTION 8.06. Compensation and Indemnity .
(a) The Company shall pay to each of the Trustee and the Luxembourg Paying Agent, as applicable, from time to time such compensation for its services as shall have been agreed upon between the Company and each of the Trustee and the Luxembourg Paying Agent. Neither the Trustee’s nor the Luxembourg Paying Agent’s compensation shall be limited
 
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by any law on compensation of a trustee of an express trust. The Company shall reimburse each of the Trustee and the Luxembourg Paying Agent, as applicable, upon request for all reasonable out-of-pocket expenses incurred or made by it, including reasonable costs of collection and the costs and expenses of its legal counsel, in addition to the compensation for its services. Such expenses shall include, as applicable, the commercially reasonable compensation and expenses, disbursements and advances of the Trustee’s or the Luxembourg Paying Agent’s agents, counsel, accountants and experts. The Company and the Guarantor jointly and severally agree to indemnify each of the Trustee and the Luxembourg Paying Agent, as applicable, against any and all loss, damages, claims, liability or expense (including commercially reasonable attorneys’ fees and costs) incurred by it in connection with the acceptance and administration of this trust, as applicable, and the performance of its duties and/or the exercise of its rights hereunder. Each of the Trustee and the Luxembourg Paying Agent, as applicable, shall notify the Company and the Guarantor promptly of any claim for which it may seek indemnity. Failure by the Trustee or the Luxembourg Paying Agent to so notify the Company and the Guarantor shall not relieve the Company or the Guarantor of their respective obligations hereunder. Neither the Company nor the Guarantor need to reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee or the Luxembourg Paying Agent, as applicable, through the Trustee’s or the Luxembourg Paying Agent’s own willful misconduct, gross negligence or bad faith. Neither the Company nor the Guarantor need to pay for any settlement made by the Trustee or the Luxembourg Paying Agent, as applicable, without the consent of the Company and the Guarantor, such consent not to be unreasonably withheld. All indemnifications and releases from liability granted hereunder to the Trustee and the Luxembourg Paying Agent, as applicable, shall extend to each of their respective officers, directors, employees, agents, successors and assigns.
(b) To secure the payment obligations of the Company and the Guarantor in this Section 8.06, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest and Additional Amounts, if any, on particular Securities.
(c) The payment obligations of the Company and the Guarantor pursuant to this Section 8.06 shall survive the payment of the Securities, the resignation or removal of the Trustee and the satisfaction and discharge of this Indenture. When the Trustee incurs expenses after the occurrence of a Default specified in Section 7.01(f) or Section 7.01(g) hereof, the expenses are intended to constitute expenses of administration under bankruptcy law.
SECTION 8.07. Replacement of Trustee .
(a) The Trustee may resign at any time by so notifying the Company and the Guarantor. The Holders of a majority in aggregate principal amount of the Securities then outstanding may remove the Trustee by so notifying the Company, the Guarantor and the Trustee in writing. The Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 8.09 hereof;
(ii) the Trustee is adjudged bankrupt or insolvent;
 
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(iii) a receiver or other public officer takes charge of the Trustee or its property; or
(iv) the Trustee otherwise becomes incapable of acting.
(b) If the Trustee resigns, is removed by the Company or by the Holders of a majority in aggregate principal amount of the Securities then outstanding, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Company by a Board Resolution shall promptly appoint a successor Trustee.
(c) A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee, to the Company and to the Guarantor. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers, duties, protections, indemnities and immunities of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 8.06 hereof and the payment of its charges.
(d) If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of 10% in aggregate principal amount of the Securities then outstanding may, at the expense of the Company, petition any court of competent jurisdiction for the appointment of a successor Trustee or the retiring Trustee may itself appoint a successor Trustee.
(e) If the Trustee fails to comply with Section 8.09 hereof, any Holder who has been a bona fide Holder of a Security for at least six months may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
(f) Notwithstanding the replacement of the Trustee pursuant to this Section 8.07, the obligations of the Company and the Guarantor under Section 8.06 hereof shall continue for the benefit of the retiring Trustee.
SECTION 8.08. Successor Trustee by Merger .
(a) If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets (including its rights and obligations hereunder) to, another corporation or banking association, the resulting, surviving or transferee corporation or banking association without any further act shall be the successor Trustee.
(b) In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any such successor to the Trustee may authenticate such Securities in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture provided that the certificate of the Trustee shall have.
 
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SECTION 8.09. Eligibility; Disqualification . The Trustee shall have (or, in the case of a corporation included in a bank holding company system, the related bank holding company shall have) a combined capital and surplus of at least U.S.$50,000,000 as set forth in its (or its related bank holding company’s) most recent published annual report of condition.
SECTION 8.10. Appointment of Co-Trustee .
(a) Notwithstanding any other provisions of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the trust may at the time be located, the Trustee shall have the power and may execute and deliver all instruments necessary to appoint one or more Persons to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part of the trust, and to vest in such Person or Persons, in such capacity and for the benefit of the Holders, such title to the trust, or any part hereof, and subject to the other provisions of this Section 8.10, such powers, duties, obligations, rights and trusts as the Trustee may consider necessary or desirable. No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 8.09 hereof and no notice to Holders of the appointment of any co-trustee or separate trustee shall be required under Section 8.07 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed upon the Trustee shall be conferred or imposed upon and exercised or performed by the Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the trust or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Indenture and the conditions of this Article VIII. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Trustee or separately, as may be provided therein, subject to all the provisions of this Indenture, specifically including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection or rights (including the rights to compensation, reimbursement and indemnification hereunder) to, the Trustee. Every such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the Trustee, its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Indenture on its behalf and in its name. If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.
 
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ARTICLE IX
Defeasance; Discharge of Indenture
SECTION 9.01. Legal Defeasance and Covenant Defeasance .
(a) The Company may, at its option, at any time, elect to have the obligations of the Company and the Guarantor with respect to all outstanding Securities discharged upon compliance with the conditions set forth in Section 9.02 hereof as provided in this Section 9.01. If the Company exercises its Legal Defeasance (as defined below) option, payment of the Securities may not be accelerated because of an Event of Default with respect thereto.
(b) Upon the Company’s exercise under such option, the Company shall, subject to the satisfaction of the conditions set forth in Section 9.02 hereof, be deemed to have paid and discharged the entire indebtedness represented by the outstanding Securities after the deposit specified in Section 9.02(a) hereof (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Securities, which shall thereafter be deemed to be outstanding only for the purposes of Section 9.03 hereof and the other Sections of this Indenture referred to in clause (i) or (ii) of this Section 9.01(b), and to have satisfied all its other obligations under such Securities and hereunder (and the Trustee, on written demand of and at the expense of the Company, shall execute instruments acknowledging the same), except for the following provisions, which shall survive until otherwise terminated or discharged hereunder:
(i) the rights of Holders to receive payments of the principal, premium, if any, and interest on the Securities when such payments are due;
(ii) the Company’s obligations with respect to the Securities concerning issuing temporary Securities, registration of Securities, mutilated, destroyed, lost or stolen Securities and the maintenance of an office or agency for payments;
(iii) the rights, powers, trusts, duties, protections, benefits, indemnities and immunities of the Trustee hereunder and the obligations of the Company and the Guarantor in connection therewith; and
(iv) this Article IX.
 
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(c) Upon the Company’s exercise under Section 9.01(a) hereof of the option applicable to this Section 9.01(c), the Company shall, subject to the satisfaction of the conditions set forth in Section 9.02 hereof, be released from each of its obligations under the covenants contained in Section 5.02, Section 5.03, Section 5.04, Section 7.01(c) and Section 7.01(d) hereof with respect to the outstanding Securities on and after the date the conditions set forth in Section 9.02 hereof are satisfied (hereinafter, “Covenant Defeasance”), and the Securities will thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but will continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Securities will not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Securities, the Company may omit to comply with, and the Company shall have no liability in respect of, any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply will not constitute a Default or an Event of Default under Section 7.01 hereof, but, except as specified above, the remainder of this Indenture and such Securities will be unaffected thereby. In addition, upon the Company’s exercise under Section 9.01(a) hereof of the option applicable to this Section 9.01(c), subject to the satisfaction of the conditions set forth in Section 9.02, Section 7.01(c) and Section 7.01(d) hereof will not constitute Events of Default.
(d) Subject to compliance with this Article IX, the Company may exercise its option under this Section 9.01(b) notwithstanding the prior exercise of its option under Section 9.01(c) hereof.
SECTION 9.02. Conditions to Defeasance . The Company may exercise its Legal Defeasance option or its Covenant Defeasance option only if:
(a) the Company has irrevocably deposited with the Trustee, in trust, for the benefit of the Holders cash in U.S. dollars, U.S. Government Obligations, or a combination thereof, in such amounts as will be sufficient without reinvestment, in the opinion of an internationally recognized investment bank, appraisal firm or firm of independent public accountants, to pay the principal, premium, if any, and interest (including Additional Amounts) on the Securities on the stated date for payment thereof;
(b) in the case of Legal Defeasance, the Company has delivered to the Trustee an Opinion of Counsel from counsel in the United States independent of the Company to the effect that (subject to customary exceptions and exclusions):
(i) the Company has received from, or there has been published by, the U.S. Internal Revenue Service a ruling; or
(ii) since the Issue Date, there has been a change in the applicable U.S. Federal income tax law,
in either case to the effect that, and based thereon such Opinion of Counsel shall state that, the Holders will not recognize income, gain or loss for U.S. federal income tax
 
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purposes as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;
(c) in the case of Covenant Defeasance, the Company has delivered to the Trustee an Opinion of Counsel from counsel in the United States independent of the Company (subject to customary exceptions and exclusions) to the effect that the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;
(d) in the case of Legal Defeasance or Covenant Defeasance, the Company has delivered to the Trustee an Opinion of Counsel from counsel in Chile independent of the Company (subject to customary exceptions and exclusions) to the effect that, based upon Chilean law then in effect, Holders will not recognize income, gain or loss for Chilean tax purposes, including withholding tax except for withholding tax then payable on interest payments due, as a result of such Legal Defeasance or Covenant Defeasance, as the case may be, and will be subject to Chilean taxes on the same amounts and in the same manner and at the same time as would have been the case if such Legal Defeasance or Covenant Defeasance, as the case may be, had not occurred;
(e) no Default or Event of Default has occurred and is continuing on the date of the deposit pursuant to Section 9.02(a) hereof (other than a Default or Event of Default arising in connection with the grant of any Lien securing a borrowing of funds to be applicable to such deposit);
(f) the Company has delivered to the Trustee an Officer’s Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders over any other creditors of the Company or any Subsidiary of the Company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company or others;
(g) the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel from counsel independent of the Company (subject to customary exceptions and exclusions), each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with; and
(h) the Company has delivered to the Trustee Opinions of Counsel from counsel in the United States and Chile reasonably acceptable to the Trustee and independent of the Company (subject to customary exceptions and exclusions and to assumptions as to factual matters, including the absence of an intervening bankruptcy, insolvency or reorganization during the applicable preference period following the date of such deposit and that no Holder or the Trustee is deemed to be an “insider” of the Company under the U.S. Bankruptcy Code and any equivalent law of Chile), to the effect that the transfer of trust funds pursuant to such deposit will not be subject to avoidance as a preferential transfer pursuant to the applicable provisions of the U.S. Bankruptcy Code or any successor statute and any equivalent law of Chile.
 
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SECTION 9.03. Application of Trust Money . The Trustee shall hold in trust U.S. dollars or U.S. Government Obligations deposited with it pursuant to this Article IX. It shall apply the deposited money and the U.S. dollars from U.S. Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Securities.
SECTION 9.04. Repayment to Company .
(a) The Trustee and each Paying Agent shall promptly turn over to the Company upon request of the Company any excess money or securities held by any of them upon payment of all the obligations under this Indenture.
(b) Subject to any applicable abandoned property law, the Trustee and each Paying Agent shall pay to the Company upon request any money held by any of them for the payment of principal of or interest on the Securities that remains unclaimed for two years, and, thereafter, Holders entitled to the money must look to the Company for payment as general creditors.
SECTION 9.05. Indemnity for U.S. Government Obligations . The Company and the Guarantor jointly and severally agree to pay and to indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations.
SECTION 9.06. Reinstatement . If the Trustee or a Paying Agent is unable to apply any U.S. dollars or U.S. Government Obligations in accordance with this Article IX by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the obligations of the Company and the Guarantor under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to this Article IX until such time as the Trustee or such Paying Agent is permitted to apply all such U.S. dollars or U.S. Government Obligations in accordance with this Article IX; provided , however , that, if the Company or the Guarantor has made any payment of principal of or interest on any Securities because of the reinstatement of its obligations, the Company or the Guarantor, as applicable shall be subrogated to the rights of the Holders of such Securities to receive such payment from the U.S. dollars or U.S. Government Obligations held by the Trustee or a Paying Agent.
 
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SECTION 9.07. Satisfaction and Discharge . This Indenture will be discharged and will cease to be of further effect (except as to surviving rights and registration of transfer or exchange of the Securities, as expressly provided for herein and except as to the rights, powers, trusts, duties, protections, benefits, indemnities and immunities of the Trustee hereunder) as to all outstanding Securities when:
(a) either:
(i) all the Securities theretofore authenticated and delivered (except lost, stolen or destroyed Securities which have been replaced or paid and Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust) have been delivered to the Trustee for cancellation; or
(ii) all Securities not theretofore delivered to the Trustee for cancellation have become due and payable or will become due and payable at their Stated Maturity within one year or will be called for redemption within one year, and the Company has irrevocably deposited or caused to be deposited with the Trustee funds or U.S. Government Obligations sufficient without reinvestment to pay and discharge the entire Indebtedness on the Securities not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and interest on the Securities to the date of deposit (in the case of Securities which have become due and payable) or to the date such Securities will become due and payable or to the date of redemption, as the case may be (in the case of Securities which will become due and payable at their Stated Maturity within one year or which will be called for redemption within one year), together with irrevocable instructions from the Company directing the Trustee to apply such funds to the payment;
(b) the Company has paid all other sums payable under this Indenture and the Securities by the Company; and
(c) the Company has delivered to the Trustee an Opinion of Counsel and an Officer’s Certificate each stating that all conditions precedent under this Indenture relating to the satisfaction and discharge of this Indenture have been complied with.
 
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ARTICLE X
Amendments
SECTION 10.01. Without Consent of Holders .
(a) The Company, the Guarantor and the Trustee may amend, modify or supplement this Indenture (including, without limitation, the Subsidiary Guarantee) and the Securities without notice to or consent of any Holder:
(i) to cure any ambiguity, or to cure, correct or supplement any defect herein or therein;
(ii) to comply with Article VI hereof;
(iii) to provide for uncertificated Securities in addition to or in place of certificated Securities; provided that the uncertificated Securities shall be issued in registered form for purposes of Section 163(f) of the U.S. Internal Revenue Code of 1986, as amended, or in a manner such that the uncertificated Securities are described in Section 163(f)(2)(B) of the U.S. Internal Revenue Code of 1986, as amended;
(iv) to add Guarantees with respect to the Securities or to secure the Securities;
(v) to add to the covenants of the Company or the Guarantor for the benefit of the Holders or to surrender any right or power herein conferred upon the Company or the Guarantor;
(vi) to issue Securities after the Issue Date in accordance with Section 2.01 hereof; and
(vii) in any manner which does not adversely affect the interests of any Holder in any material respect.
(b) After an amendment under this Section 10.01 becomes effective, the Company shall mail to Holders a notice briefly describing such amendment. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 10.01.
SECTION 10.02. With Consent of Holders .
(a) The Company, the Guarantor and the Trustee may modify or amend this Indenture or the terms and conditions of the Securities, and future compliance therewith or past Default by the Company or the Guarantor (other than a Default in the payment of any amount, including in connection with a redemption, due on the Securities or in respect of a covenant or provision which cannot be modified and amended without the consent of the Holders of all Securities so affected) with the written consent of the Holders of at least a majority in aggregate principal amount of the Securities then Outstanding (including consents obtained in connection
 
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with a tender offer or exchange offer for the Securities) or by the adoption of resolutions at a meeting of Holders of Securities by, or the consent of, the Holders of at least a majority of the outstanding Securities. However, without the consent or affirmative vote of each Holder affected thereby, an amendment may not:
(i) change the interest rate with respect to any Security or reduce the principal amount of any Securities or change the time for payment thereof;
(ii) modify the obligation to pay Additional Amounts;
(iii) change the prices at which any Security may be redeemed by the Company or change the time at which any Security may be redeemed in accordance with Article III or Article IV hereof;
(iv) change the currency in which, or change the required place at which, payment on principal, premium, if any, or interest on any Security is payable;
(v) impair the right to institute suit for the enforcement of any payment obligation on or with respect to any Security; or
(vi) reduce the percentage of principal amount of outstanding Securities whose Holders are required to consent to modify or amend this Indenture or the terms or conditions of the Securities or to waive any future compliance or past Default;
(b) It shall not be necessary for the consent of the Holders under this Section 10.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof.
(c) After an amendment under this Section 10.02 becomes effective, the Company shall mail to Holders a notice briefly describing such amendment. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 10.02.
SECTION 10.03. Revocation and Effect of Consents and Waivers .
(a) A consent to an amendment or a waiver by a Holder of a Security shall bind the Holder and every subsequent Holder of that Security or portion of the Security that evidences the same debt as the consenting Holder’s Security, even if notation of the consent or waiver is not made on the Security. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder’s Security or portion of the Security if the Trustee receives the notice of revocation before the date the amendment or waiver becomes effective. After an amendment or waiver becomes effective, it shall bind every Holder. An amendment or waiver becomes effective upon the execution of such amendment or waiver by the Trustee.
(b) The Company may, but shall not be obligated to, fix a special record date for the purpose of determining the Holders entitled to give their consent or take any other action
 
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described above or required or permitted to be taken pursuant to this Indenture. If a special record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Holders at such special record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such special record date. No such consent shall be valid or effective for more than 120 days after such special record date.
SECTION 10.04. Notation on or Exchange of Securities . If an amendment changes the terms of a Security, the Trustee may require the Holder of the Security to deliver such Security to the Trustee. The Trustee may place an appropriate notation on the Security regarding the changed terms and return such Security to the Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms. Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment.
SECTION 10.05. Trustee To Sign Amendments . The Trustee shall sign any modification, amendment or supplement authorized pursuant to this Article X if the modification, amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such modification, amendment or supplement the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and to receive, and (subject to Section 8.01 hereof) shall be fully protected in relying upon, in addition to the documents required by Section 12.02 hereof, an Officer’s Certificate and an Opinion of Counsel upon which the Trustee may conclusively rely, each stating that such modification, amendment or supplement is authorized or permitted by this Indenture and complies with the provisions of this Indenture.
ARTICLE XI
Subsidiary Guarantee
SECTION 11.01. Subsidiary Guarantee .
(a) The Guarantor hereby partially, irrevocably and unconditionally guarantees on a general unsecured and unsubordinated basis, as a primary obligor and not merely as a surety, to each Holder and to the Trustee and its successors and assigns the full and punctual payment when due, whether by acceleration, by redemption or otherwise, of the obligations of the Company under this Indenture (including obligations to the Trustee) and the Securities, up to an aggregate amount of U.S.$1,000,000,000 (the “Subsidiary Guarantee”), whether for payment of principal of, interest and Additional Amounts, if any, on, or liquidated damages, if any, in respect of, the Securities and all other monetary obligations of the Company under this Indenture and the Securities (all the foregoing being hereinafter collectively called the “Guaranteed Obligations”). The Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent therefrom, and that it shall remain bound under this Article XI notwithstanding any extension or renewal of any Guaranteed Obligation.
 
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(b) The Guarantor waives, to the fullest extent permitted by law, presentation to, demand of payment from and protest to the Company of any of the Guaranteed Obligations and also waives notice of protest for nonpayment. The Guarantor waives notice of any Default under the Securities or the Guaranteed Obligations. The obligations of the Guarantor hereunder shall not be affected by (i) the failure of any Holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the Company or any other Person under this Indenture, the Securities or any other agreement or otherwise; (ii) any extension or renewal of any thereof; (iii) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Securities or any other agreement; (iv) the release of any security held by any Holder or the Trustee for the Guaranteed Obligations or any of them; or (v) any change in the ownership of the Guarantor.
(c) The Guarantor hereby waives, to the fullest extent permitted by law, any right to which it may be entitled to have the assets of the Company first be used and depleted as payment of the Company’s or the Guarantor’s obligations hereunder prior to any amounts being claimed from or paid by the Guarantor hereunder. The Guarantor hereby waives any right to which it may be entitled to require that the Company be sued prior to an action being initiated against it. The Guarantor hereby irrevocably waives the benefits to which it is entitled under articles 2357, 2339 and 2355 of the Chilean Civil Code.
(d) The Guarantor further agrees that the Subsidiary Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by any Holder or the Trustee to any security held for payment of the Guaranteed Obligations.
(e) Except as expressly set forth in Sections 9.01(a), 11.01(f), 11.03 and 11.08, the obligations of the Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of the Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any Holder or the Trustee to assert any claim or demand or to enforce any remedy under this Indenture, the Securities or any other agreement, by any waiver or modification of any thereof, by any Default, failure or delay, willful or otherwise, in the performance of the obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of the Guarantor or would otherwise operate as a discharge of the Guarantor as a matter of law or equity.
(f) The Guarantor agrees that the Subsidiary Guarantee shall remain in full force and effect until payment in full of all the Guaranteed Obligations. The Guarantor further agrees that the Subsidiary Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest or liquidated damages, if any, on any Guaranteed Obligation is rescinded or must otherwise be restored by any Holder or the Trustee upon the bankruptcy or reorganization of the Company or otherwise.
 
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(g) In furtherance of the foregoing and not in limitation of any other right which any Holder or the Trustee has at law or in equity against the Guarantor by virtue hereof, upon the failure of the Company to pay the principal of or interest or liquidated damages, if any, on any Guaranteed Obligation when and as the same shall become due, whether by acceleration, by redemption or otherwise, or to perform or comply with any other Guaranteed Obligation, the Guarantor hereby promises to and shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Paying Agent for the benefit of Holders or the Trustee or any agent appointed hereunder an amount equal to the sum of (i) the unpaid principal amount of such Guaranteed Obligations, (ii) accrued and unpaid interest and Additional Amounts, if any, on such Guaranteed Obligations and (iii) all other monetary obligations of the Company to the Holders, the Trustee and any agent appointed hereunder.
(h) The Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any Guaranteed Obligations guaranteed hereby until payment in full of all Guaranteed Obligations. The Guarantor further agrees that, as between it, on the one hand, and the Holders and the Trustee, on the other hand, (i) the maturity of the Guaranteed Obligations guaranteed hereby may be accelerated as provided in Article VII for the purposes of the Subsidiary Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of such Guaranteed Obligations as provided in Article VII, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantor for the purposes of this Section 11.01.
(i) Upon request of the Trustee, the Guarantor shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.
SECTION 11.02. Amended and Restated Subsidiary Guarantee .
(a) The Guarantor agrees to take all corporate action necessary to amend and restate the Subsidiary Guarantee within 45 days of the Issue Date so that it irrevocably and unconditionally guarantees on a general unsecured and unsubordinated basis, as a primary obligor and not merely as a surety, to each Holder and to the Trustee and its successors and assigns the full and punctual payment when due, whether by acceleration, by redemption or otherwise, of the Guaranteed Obligations.
(b) Once the Guarantor has obtained all necessary corporate approvals for the amendment and restatement of the Subsidiary Guarantee, the Guarantor further agrees to notify a Trust Officer of the Trustee at the Corporate Trust Office of such approvals and to execute the notation of the amended and restated Subsidiary Guarantee as described in Section 11.02(a).
(c) Pursuant to Section 10.01(a), the Company, the Guarantor and the Trustee further agree to execute a supplemental indenture pursuant to which (i) the Guarantor will deliver a copy of the executed notation of the amended and restated Subsidiary Guarantee to the Trustee; and (ii) all references in this Indenture to the Subsidiary Guarantee shall be modified to refer to the full and unconditional guarantee on the Securities. Upon the execution of the supplemental
 
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indenture, the Company and the Guarantor agree to deliver to the Trustee an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, the full and unconditional guarantee on the Securities has been duly authorized by the Guarantor and constitute a valid and legally binding obligation of the Guarantor, enforceable against the Guarantor in accordance with its terms, subject to applicable enforceability exceptions and will be entitled to the benefits of this Indenture.
SECTION 11.03. Limitation on Liability . Any term or provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the Guaranteed Obligations guaranteed hereunder by the Guarantor shall not exceed the maximum amount that can be hereby guaranteed without rendering this Indenture, as it relates to the Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.
SECTION 11.04. Successors and Assigns . This Article XI shall be binding upon the Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Securities shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture.
SECTION 11.05. No Waiver . Neither a failure nor a delay on the part of either the Trustee or the Holders in exercising any right, power or privilege under this Article XI shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee and the Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article XI at law, in equity, by statute or otherwise.
SECTION 11.06. Modification . No modification, amendment or waiver of any provision of this Article XI, nor the consent to the departure by the Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on the Guarantor in any case shall entitle the Guarantor to any other or further notice or demand in the same, similar or other circumstances.
SECTION 11.07. Non-Impairment . The failure to endorse a guarantee on any Security shall not affect or impair the validity thereof.
SECTION 11.08. Release of Subsidiary Guarantor . The Guarantor shall be released from its obligations under its Subsidiary Guarantee upon:
(a) subject to Section 9.06 hereof, satisfaction and discharge of this Indenture in compliance with Section 9.07 hereof;
(b) subject to Section 9.06 hereof, Legal Defeasance in compliance with Sections 9.01 and 9.02 hereof; and
 
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(c) a sale or disposition of the Guarantor, whether by merger, consolidation, the sale of its Capital Stock or the sale of all or substantially all of its assets (other than by lease or to the Company) or otherwise and whether or not the Guarantor is the surviving corporation in such transaction, in compliance with Section 6.01 hereof; and
in each case, upon delivery by the Company of written notice thereof to the Trustee in accordance with Section 12.01 hereof.
ARTICLE XII
Miscellaneous
SECTION 12.01. Notices .
(a) Any notice, request, demand, instruction or communication shall be in English and in writing and delivered in person or mailed by first-class mail, postage prepaid, or sent by facsimile (with a hard copy delivered in person or by mail promptly thereafter) or other electronic transmission and addressed as follows:
if to the Company and/or the Guarantor :
Cencosud S.A.
Av. Kennedy 9001, 6 th floor, Las Condes
Santiago, Chile
Attention: Juan Manuel Parada
Telephone: +56 (2) 2959-0000
Fax: +56 (2) 2959-0625
With a copy to :
Morales & Besa Ltda.
Isidora Goyenechea 3477, Piso 19
Las Condes, C.P. 755 0106
Santiago, Chile
Attention: Guillermo Morales
Telephone: +56 (2) 2472-7000
Fax: +56 (9) 2472-7001
if to the Trustee, the Paying Agent, the Registrar or the Transfer Agent :
The Bank of New York Mellon
101 Barclay Street, Floor 4E
New York, New York 10286
USA
Attention: International Corporate Trust
Fax: 212-815-5603
 
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if to the Luxembourg Paying Agent or the Luxembourg Transfer Agent :
The Bank of New York Mellon (Luxembourg) S.A.
2-4 rue Eugene Ruppert
Vertigo Building - Polaris
L-2453 Luxembourg
Attention: Corporate Trust Services
(b) The Company, the Guarantor or the Trustee by notice to the other parties may designate additional or different addresses for subsequent notices or communications.
(c) Any notice or communication mailed to a Holder of a certificated, non-Global Security shall be mailed to the Holder at the Holder’s address as it appears on the Securities Register maintained by the Registrar. Any notice or communication to a Holder of a Global Security shall be given to the Depositary for such Global Security in accordance with its applicable procedures.
(d) Failure to deliver a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. All notices to Holders shall be deemed to have been given (whether or not the addressee receives it) upon the mailing by first class mail, postage prepaid, of such notices at the registered addresses of such Holders as they appear on the register of the Registrar not later than the latest date, and not earlier than the earliest date, prescribed in the Securities for the giving of such notice. Notices delivered to the Trustee shall only be effective upon actual receipt.
(e) In respect of this Indenture, the Trustee shall not have any duty or obligation to verify or confirm that the Person sending instructions, directions, reports, notices or other communications or information by electronic transmission is, in fact, a Person authorized to give such instructions, directions, reports, notices or other communications or information on behalf of the party purporting to send such electronic transmission; and the Trustee shall not have any liability for any losses, liabilities, costs or expenses incurred or sustained by any party as a result of such reliance upon or compliance with such instructions, directions, reports, notices or other communications or information. Each other party agrees to assume all risks arising out of the use of electronic methods to submit instructions, directions, reports, notices or other communications or information to the Trustee, including without limitation, the risk of the Trustee acting on unauthorized instructions, notices, reports or other communications or information, and the risk of interception and misuse by third parties.
(f) For as long as the Securities are listed on the Official List of the Luxembourg Stock Exchange and the rules of the exchange so require, notices to Holders shall also be published in a leading newspaper having general circulation in Luxembourg, which is expected to be “ Luxemburger Wort. ” If such publication is not practicable, notice to Holders shall be considered to be validly given if otherwise made in accordance with the rules of the Luxembourg Stock Exchange. Any such notice will be deemed to have been delivered on the date of first publication. Any notice to Holders may also be published on the website of the Luxembourg Stock Exchange ( www.bourse.lu ).
 
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SECTION 12.02. Certificate and Opinion as to Conditions Precedent . Upon any request or application by the Company to the Trustee to take or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officer’s Certificate in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with.
SECTION 12.03. Statements Required in Certificate or Opinion . Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture shall include:
(a) a statement substantially to the effect that the individual making such certificate or opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(c) a statement substantially to the effect that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(d) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with.
SECTION 12.04. When Securities Disregarded . In determining whether the Holders of the required principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company or the Guarantor or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or the Guarantor shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities that a Trust Officer of the Trustee knows are so owned shall be so disregarded. Also, subject to the foregoing, only Securities outstanding at the time shall be considered in any such determination.
SECTION 12.05. Rules by Trustee, Paying Agent and Registrar . The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar and any Paying Agent or co-registrar may make reasonable rules for their functions.
SECTION 12.06. Legal Holidays . A “Legal Holiday” is a Saturday, a Sunday or a day on which banking institutions in The City of New York, New York or Santiago, Chile are
 
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authorized or required by law to close. If a payment date is a Legal Holiday in the place of payment, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue on such payment for the intervening period on account of such delay. If a Record Date or a special record date is a Legal Holiday, such Record Date or special record date shall not be affected.
SECTION 12.07. Governing Law; Consent to Jurisdiction and Service of Process .
(a) THIS INDENTURE (INCLUDING THE SUBSIDIARY GUARANTEE PROVIDED HEREIN) AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(b) Each of the parties hereto:
(i) agrees that any suit, action or proceeding against it arising out of or relating to this Indenture (including the Subsidiary Guarantee provided herein) or the Securities, as the case may be, may be instituted in any U.S. Federal or New York State court in the Borough of Manhattan, The City of New York, New York;
(ii) waives to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding, any claim that any suit, action or proceeding in such a court has been brought in an inconvenient forum and any right to which it may be entitled on account of place of residence or domicile;
(iii) irrevocably submits to the non-exclusive jurisdiction of such courts in any suit, action or proceeding;
(iv) agrees that final judgment in any such suit, action or proceeding brought in such a court shall be conclusive and binding and may be enforced in the courts of the jurisdiction of which it is subject by a suit upon judgment; and
(v) agrees, with respect to the Company and the Guarantor, that service of process by mail to the addressed specified herein shall constitute personal service of such process on it in any such suit, action or proceeding.
(c) Each of the Company and the Guarantor has appointed CT Corporation System with offices currently at 111 Eight Avenue, 13 th floor, New York, New York 10011, as its authorized agent (the “Authorized Agent”) upon whom all writs, process and summonses may be served in any suit, action or proceeding arising out of or based upon this Indenture (including the Subsidiary Guarantee provided herein) or the Securities which may be instituted in any U.S. Federal or New York State court in the Borough of Manhattan, The City of New York, New York. Each of the Company and the Guarantor hereby represents and warrants that the Authorized Agent has accepted such appointment and has agreed to act as said agent for service of process, and each of the Company and the Guarantor agrees to take any and all action, including the filing of any and all documents, that may be necessary to continue each such appointment in full force and effect as aforesaid so long as the Securities remain outstanding.
 
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Each of the Company and the Guarantor agrees that the appointment of the Authorized Agent shall be irrevocable so long as any of the Securities remain outstanding or until the irrevocable appointment by the Company or the Guarantor, as applicable, of a successor agent in the Borough of Manhattan, The City of New York, New York as its authorized agent for such purpose and the acceptance of such appointment by such successor. Service of process upon the Authorized Agent shall be deemed, in every respect, effective service of process upon the Company or the Guarantor, as applicable.
(d) If for the purpose of obtaining judgment in any court it is necessary to convert a sum due hereunder to the Holder of a Security from U.S. dollars into another currency, each of the Company and the Guarantor has agreed, and each Holder by holding such Security will be deemed to have agreed, to the fullest extent that the Company, the Guarantor and they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures such Holder could purchase U.S. dollars with such other currency in The City of New York, New York on the day two Business Days preceding the day on which final judgment is given.
(e) The obligation of each of the Company and the Guarantor in respect of any sum payable by it to a Holder or to the Trustee shall, notwithstanding any judgment in a currency (the “judgment currency”) other than U.S. dollars, be discharged only to the extent that on the Business Day following receipt by the Trustee or the Holder of a Security of any sum adjudged to be so due in the judgment currency, the Trustee or the Holder of such Security may in accordance with normal banking procedures purchase U.S. dollars with the judgment currency; if the amount of the U.S. dollars so purchased is less than the sum originally due to the Trustee or the Holder in the judgment currency (determined in the manner set forth in the preceding paragraph), each of the Company and the Guarantor agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Trustee or the Holder of such Security against such loss, and if the amount of the U.S. dollars so purchased exceeds the sum originally due to the Trustee or such Holder, each of the Trustee and such Holder agrees to remit to the Company or the Guarantor, as applicable, such excess; provided that the Trustee and such Holder shall have no obligation to remit any such excess as long as the Company or the Guarantor shall have failed to pay the Trustee or such Holder any obligations due and payable under such Security, in which case such excess may be applied to the Company’s obligations under such Security in accordance with the terms thereof.
SECTION 12.08. Waiver of Immunity . To the extent that the Company, the Guarantor, the Subsidiaries or any of their respective properties, assets or revenues may have or may hereafter become entitled to, or have attributed to the Company, the Guarantor or the Subsidiaries, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding, from the giving of any relief in any such legal action, suit or proceeding, from setoff or from counterclaim from the jurisdiction of any Chilean, U.S. Federal or New York State court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution of judgment, or from execution of judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any such court in which proceedings may at any time be commenced, with respect to the obligations and liabilities of the Company, the Guarantor, or the Subsidiaries, or any other matter under or arising out of or in connection with, the Securities, the Subsidiary Guarantee or this Indenture,
 
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the Company, the Guarantor and the Subsidiaries irrevocably and unconditionally waive or will waive such right, and agree not to plead or claim any such immunity and consents to such relief and enforcement.
SECTION 12.09. No Recourse Against Others . No director, officer, employee or stockholder, as such, of the Company or the Guarantor shall have any liability for any obligations of the Company or the Guarantor, as applicable, under the Securities or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Holder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issue of the Securities.
SECTION 12.10. Successors . All agreements of the Company and the Guarantor in this Indenture and the Securities shall bind their respective successors. All agreements of the Trustee in this Indenture shall bind its successors.
SECTION 12.11. Multiple Originals . The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture.
SECTION 12.12. Table of Contents; Headings . The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.
SECTION 12.13. Waiver of Jury Trial . EACH OF THE COMPANY, THE GUARANTOR, THE TRUSTEE AND EACH HOLDER BY ITS ACCEPTANCE OF A SECURITY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE (INCLUDING THE SUBSIDIARY GUARANTEE), THE SECURITIES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 12.14. Severability . In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 12.15. USA Patriot Act . The parties hereto acknowledge that, in accordance with Section 326 of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (as amended, modified or supplemented from time to time, the “USA Patriot Act”), the Trustee, like all financial institutions, is required to obtain, verify, and record information that identifies each person or legal entity that opens an account. The parties to this Indenture agree that they will provide the Trustee with such information as the Trustee may request in order for the Trustee to satisfy the requirements of the USA Patriot Act.
(Signature page follows)
 
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.

	 		 	CENCOSUD S.A., as Issuer	
				
	 		 	By	 		
	 		 		 	Name:	 	Juan Manuel Parada	
	 		 		 	Title:	 	CFO	
			
	 		 	CENCOSUD RETAIL S.A., as Guarantor	
				
	 		 	By	 		
	 	Dario Amenabar	 		 	Name:	 	Juan Manuel Parada	
	 	Regional Finance Manager	 		 	Title:	 	CFO	
 
[Signature Page]
Indenture

					
THE BANK OF NEW YORK MELLON, as
Trustee, Paying Agent, Registrar and Transfer Agent	
		
By	 		
	 	Name:	 	John T. Needham, Jr.	
	 	Title:	 	Vice President	
	
THE BANK OF NEW YORK MELLON (LUXEMBOURG) S.A., as Luxembourg Paying Agent and Luxembourg Transfer Agent	
		
By	 		
	 	Name:	 	John T. Needham, Jr.	
	 	Title:	 	Attorney-in-fact	
 
[Signature Page]
Indenture

APPENDIX A
RULE 144A/REGULATION S APPENDIX A
PROVISIONS RELATING TO SECURITIES
 
 	1.	Definitions	
The terms defined in Article I of the Indenture shall have the meaning assigned to such terms therein and, in addition, for the purposes of this Appendix A, the following additional terms shall have the meanings indicated below:
“Certificated Security” means a definitive, non-Global Security.
“Clearstream” means Clearstream Banking, société anonyme .
“Depositary” means, with respect to the Securities issuable or issued in whole or in part in the form of one or more Global Securities, the Person designated as Depositary by the Company pursuant to the Indenture, which must be a clearing agency registered under the Exchange Act and any successor to such Person and which shall initially be DTC.
“Distribution Compliance Period” means, with respect to any Regulation S Security (or beneficial interest therein), the 40 consecutive days beginning on and including the issue date of such Regulation S Security, as notified by the Company to the Trustee in writing; provided that the Company may, in its discretion and upon written notice to the Trustee, extend the termination of the Distribution Compliance Period.
“DTC” means The Depository Trust Company.
“Euroclear” means Euroclear Bank S.A./N.V.
“Global Securities” means the Regulation S Global Security and the Restricted Global Security.
“Non-U.S. Person” has the meaning given to it in Regulation S.
“Regulation S” means Regulation S as promulgated by the Commission under the Securities Act, as it may be amended from time to time.
“Regulation S Global Security” means one or more Regulation S Securities in definitive, fully registered book-entry form without interest coupons, representing a Regulation S Security.
“Regulation S Security” means a Security sold outside the United States to a Non-U.S. Person in reliance upon the exemptions from registration contained in Regulation S.
“Resale Restriction Termination Date” means, for any Restricted Security (or beneficial interest therein), one year (or such other period specified in Rule 144(d)) from the Issue Date or, if any Securities that are not Original Securities, but are Restricted Securities, have been issued before the Resale Restriction Termination Date for any Restricted Securities, from the latest such original issue date of such Restricted Securities; provided that the Company may, in its discretion and upon written notice to the Trustee, extend the Resale Restriction Termination Date.
 
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“Restricted Global Security” means one or more global Securities in definitive, fully registered book-entry form without interest coupons, representing a Restricted Security.
“Restricted Securities Legend” has the meaning set forth in Section 2.1(b) of this Appendix A.
“Restricted Security” means a Security sold to QIBs in reliance upon the exemption from registration contained in Rule 144A.
“Rule 144A” means Rule 144A as promulgated by the Commission under the Securities Act, as it may be amended from time to time.
 
 	2.	The Securities	
 
 	2.1	Form and Registration .	
(a) Form and Registration . The certificates representing the Securities shall be issued in fully registered form without interest coupons.
(b) Regulation S Global Securities . Securities sold in reliance on the exemption from registration contained in Regulation S shall initially be represented by one or more Regulation S Global Securities, which shall be deposited with the Trustee as custodian for, and registered in the name of a nominee of, DTC. Each Regulation S Global Security shall bear a Restricted Securities Legend in the form set forth in Exhibit I to this Appendix A (the “Restricted Securities Legend”).
(c) Restricted Global Securities . Securities sold in reliance on the exemption from registration contained in Rule 144A shall be represented by one or more Restricted Global Securities and shall be deposited with the Trustee as custodian for, and registered in the name of a nominee of, DTC. Each Restricted Global Security shall bear the Restricted Securities Legend.
(d) Ownership . Each Global Security shall be subject to certain restrictions on transfer, set forth in the Indenture and in Section 2.2 and Section 2.3 of this Appendix A. Ownership of beneficial interests in a Global Security shall be limited to Persons who have accounts with DTC or Euroclear and Clearstream, as indirect participants in DTC (“participants”) or Persons who hold interests through participants. Ownership of beneficial interests in a Global Security shall be shown on, and the transfer of that ownership shall be effected only through, records maintained by DTC or its nominee (with respect to interests of participants) and the records of participants (with respect to interests of Persons other than participants). Beneficial owners of interests in a Global Security may hold their interests in such Global Security directly through DTC, if they are participants in such system, or indirectly through organizations that are participants in such system, including Clearstream and Euroclear. So long as DTC or its nominee is the registered owner or Holder of a Global Security, DTC or such nominee, as the case may be, shall be considered the sole owner or Holder of the Securities represented by such Global Security for all purposes under the Indenture and the Securities. No
 
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beneficial owner of an interest in a Global Security shall be able to transfer that interest except in accordance with DTC’s applicable procedures, in addition to those provided for under the Indenture. Payments of the principal, premium, if any, and interest on a Global Security shall be made to DTC or its nominee, as the registered owner thereof. Neither the Company, the Trustee, nor any Paying Agent, Registrar or Transfer Agent shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Security or for maintaining, supervising, or reviewing any records relating to such beneficial ownership interests.
(e) No Responsibility for Clearing System Actions . None of the Company, the Guarantor, the Trustee, any Paying Agent, Registrar or Transfer Agent shall have any responsibility for the performance by DTC, Euroclear or Clearstream or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations.
(f) Successors; Certificated Securities . If (i) DTC is at any time unwilling or unable to continue as a Depositary for the Global Securities and a successor Depositary is not appointed by the Company within 90 days, (ii) the Company elects to discontinue use of the system of book-entry transfers through DTC or a successor Depositary or (iii) an Event of Default has occurred and is continuing and the Registrar and the Company have received a written request from a beneficial owner of Securities to issue Certificated Securities in respect of its proportionate interest in the Global Security, the Company shall issue Certificated Securities which may bear a Restricted Securities Legend to such requesting beneficial owner, in exchange for their beneficial interests in Global Securities. Holders of an interest in a Global Security may receive Certificated Securities, which may bear the Restricted Securities Legend, in accordance with DTC’s rules and procedures in addition to those provided for under the Indenture; provided , however , that if the Company is issuing Certificated Securities pursuant to the foregoing clause (iii), the Company shall only be required to issue Certificated Securities to the beneficial owners of the Securities who request Certificated Securities.
(g) Certificated Securities . Except as provided in this Section 2.1, owners of beneficial interests in Global Securities shall not be entitled to receive physical delivery of Certificated Securities. In the event of transfer of Global Security to the beneficial owners thereof in the form of Certificated Securities, the Company shall promptly make available to the Trustee a reasonable supply of Certificated Securities in definitive, fully registered form without interest coupons.
 
 	2.2	Global Securities .	
(a) Each Global Security shall (i) be registered in the name of DTC or its nominee, (ii) be delivered by the Trustee to DTC or pursuant to DTC’s instruction and (iii) bear a legend substantially to following effect:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME
 
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OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (“DTC”) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY DEFINITIVE SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
(b) Members of, or participants in, DTC, Euroclear or Clearstream shall have no rights under the Indenture with respect to any Global Security held on their behalf by DTC or its nominee, or under a Global Security, and DTC may be treated by the Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor or the Trustee as the absolute owner of each Global Security for all purposes whatsoever under the Indenture. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Guarantor, the Trustee or any agent of the Company, the Guarantor or the Trustee from giving effect to any written certification, proxy or other authorization furnished by DTC or impair, as between DTC and its participants, the operation of customary practices governing the exercise of the rights of a Holder of any Security.
(c) Interests of beneficial owners in Global Securities may only be transferred or exchanged for Certificated Securities in accordance with the rules and procedures of DTC and the provisions of the Indenture, including this Appendix A. In addition, certificated Securities shall be transferred to all beneficial owners, in exchange for their beneficial interests in Global Securities in accordance with Section 2.1(f) of this Appendix A.
(d) Transfers between participants in DTC shall be effected in accordance with DTC’s procedures, and shall be settled in same-day funds. Transfers between participants in Euroclear and Clearstream shall be effected in the ordinary way in accordance with their respective rules and operating procedures.
(e) DTC has advised the Company that it will take any action permitted to be taken by a Holder (including the presentation of Securities for exchange) only at the direction of one or more participants to whose account the interest in a Global Security is credited and only in respect of such portion of the Securities as to which such participant or participants has or have given such direction. However, if there is an Event of Default under the Securities, DTC may exchange the applicable Global Securities for Certificated Securities which it shall distribute to its participants and which may bear the Restricted Securities Legend.
 
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(f) Subject to compliance with the transfer restrictions applicable to the Global Securities, cross-market transfers between the participants in DTC, on the one hand, and Euroclear or Clearstream participants, on the other hand, shall be effected through DTC in accordance with DTC’s rules on behalf of each of Euroclear or Clearstream by its common depositary; however, such cross-market transactions shall require delivery of instructions to Euroclear or Clearstream by the counterparty in such system in accordance with the rules and procedures and within the established deadlines (Brussels, Belgium time) of such system. Euroclear or Clearstream shall, if the transaction meets its settlement requirements, deliver instructions to its common depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the Global Securities in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions directly to the common depositaries for Euroclear or Clearstream.
(g) In connection with any transfer or exchange of a portion of the beneficial interest in any Global Security to beneficial owners pursuant to Section 2.1(f) of this Appendix A the Registrar shall (if one or more Certificated Securities are to be issued) reflect on its books and records the date and a decrease in the principal amount of the Global Security in an amount equal to the principal amount of the beneficial interest in the Global Security to be transferred, and the Company shall execute, and the Trustee shall authenticate and deliver, one or more certificated Securities of like tenor and principal amount of authorized denominations.
(h) Any beneficial interest in one of the Global Securities that is transferred to a Person who takes delivery in the form of an interest in the other corresponding Global Security will, upon transfer, cease to be an interest in such Global Security and become an interest in the other corresponding Global Security and, accordingly, will thereafter be subject to all transfer restrictions and other procedures applicable to beneficial interest in such other Global Security for as long as it remains such an interest.
(i) In connection with the transfer of Global Securities as an entirety to beneficial owners pursuant to Section 2.1(f) of this Appendix A, such Global Securities shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by DTC in exchange for its beneficial interest in the Global Securities, an equal aggregate principal amount at maturity of Certificated Securities of authorized denominations.
(j) Any Certificated Security constituting a Restricted Security delivered in exchange for an interest in a Global Security pursuant to this Section 2.2 shall bear a Restricted Securities Legend.
(k) The registered Holder of any Global Security may grant proxies and otherwise authorize any Person, including participants in DTC and Persons that may hold interests through participants in DTC to take any action which a Holder is entitled to take under the Indenture or the Securities.
 
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 	2.3	Special Transfer Provisions .	
The following provisions shall apply with respect to the Securities:
(a) Transfers to Non-U.S. Persons . The following provisions shall apply with respect to the registration of any proposed transfer of any Security bearing the Restricted Securities Legend to a Non-U.S. Person:
(i) if the Security to be transferred consists of (A) a Certificated Security, the Registrar shall register the transfer if such transfer is being made by a proposed transferor who has delivered to the Trustee a certification substantially in the form of Exhibit 2 to this Appendix A or (B) an interest in the Regulation S Global Security, the transfer of such interest may be effected only through the book entry system maintained by DTC after delivery to the Trustee of a certification substantially in the form of Exhibit 2 to this Appendix A;
(ii) if the Security to be transferred consists of a Certificated Security, upon receipt by the Registrar of instructions given in accordance with DTC’s and the Registrar’s procedures therefor, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Regulation S Global Security in an amount equal to the principal amount of the Certificated Security, to be transferred, and the Trustee shall cancel the Certificated Security so transferred; and
(iii) if the proposed transferor is a participant in DTC seeking to transfer an interest in a Global Security, upon receipt by the Registrar of written instructions given in accordance with DTC’s and the Registrar’s procedures, the Registrar shall register the transfer and reflect on its books and records the date and (A) a decrease in the principal amount of the Global Security from which interests are to be transferred in an amount equal to the principal amount of the Securities to be transferred and (B) an increase in the principal amount of the Regulation S Global Security in an amount equal to the principal amount of the Global Security to be transferred.
(b) Transfers to QIBs . The following provisions shall apply with respect to the registration of any proposed transfer of any Security bearing the Restricted Securities Legend to a QIB:
(i) if the Security to be transferred consists of (A) a Certificated Security, the Registrar shall register the transfer if such transfer is being made by a proposed transferor who has delivered to the Trustee a certification substantially in the form of Exhibit 3 to this Appendix A or (B) an interest in the Restricted Global Security, the transfer of such interest may be effected only through the book entry system maintained by DTC after delivery to the Trustee of a certification substantially in the form of Exhibit 3 to this Appendix A;
(ii) if the Security to be transferred consists of a Certificated Security, upon receipt by the Registrar of instructions given in accordance with DTC’s and the Registrar’s procedures therefor, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Restricted Global Security in an amount equal to the principal amount of the Certificated Security, to be transferred, and the Trustee shall cancel the Certificated Security so transferred; and
(iii) if the proposed transferor is a participant in DTC seeking to transfer an interest in a Global Security, upon receipt by the Registrar of written instructions given in accordance with DTC’s and the Registrar’s procedures, the Registrar shall register the transfer and reflect on its books and records the date and (A) a decrease in the principal amount of the Global Security from which interests are to be transferred in an amount equal to the principal amount of the Securities to be transferred and (B) an increase in the principal amount of the Restricted Global Security in an amount equal to the principal amount of the Global Security to be transferred.
 
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(c) Restricted Securities Legend . Upon the registration of transfer, exchange or replacement of Securities not bearing the Restricted Securities Legend, the Registrar shall deliver Securities that do not bear the Restricted Securities Legend. Upon the registration of transfer, exchange or replacement of Securities bearing the Restricted Securities Legend, the Registrar shall deliver only Securities that bear the Restricted Securities Legend unless either (i) in the case of the Regulation S Security, the Distribution Compliance Period has terminated, or, in the case of a Restricted Security, the Resale Restriction Termination Date has occurred, (ii) there is delivered to the Registrar an Opinion of Counsel reasonably satisfactory to the Company to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act or (iii) such Security has been sold pursuant to an effective registration statement under the Securities Act. Notwithstanding the foregoing sentence, the Company may, in its sole discretion, by delivery of a Company Order to the Trustee, instruct the Trustee to remove the Restricted Securities Legend from a Security after determining that the Restricted Securities Legend is no longer required under applicable securities laws.
(d) Securities Purchased by the Company or the Guarantor . All Securities which are purchased or otherwise acquired by the Company, the Guarantor, any Subsidiary or any subsidiary of the Guarantor may not be resold or otherwise transferred, except in accordance with applicable requirements or exemptions under the relevant securities laws; provided , however , that none of the Trustee, any Paying Agent, the Registrar or any Transfer Agent shall have any obligation to monitor or ensure compliance therewith.
(e) Other Transfers . If a Holder proposes to transfer a Security constituting a Restricted Security pursuant to any exemption from the registration requirements of the Securities Act other than as provided for by this Section 2.3, the Registrar shall only register such transfer or exchange if such transferor delivers an Opinion of Counsel reasonably satisfactory to the Company that such transfer is in compliance with the Securities Act and the terms of the Indenture; provided , however , that the Company may, based upon the opinion of its counsel, instruct the Registrar by a Company Order not to register such transfer in any case where the proposed transferee is not a QIB or a Non-U.S. Person.
 
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(f) General .
(i) By its acceptance of any Security (or any beneficial interest in any Global Security) bearing the Restricted Securities Legend, each Holder of such a Security or Holder of such beneficial interest acknowledges the restrictions on transfer of such Security set forth in Section 2.07(a) of the Indenture, this Appendix A and in the Restricted Securities Legend and agrees that it will transfer such Security only as provided in Section 2.07(a) of the Indenture and this Appendix A. The Registrar shall not register a transfer of any Security unless such transfer complies with the restrictions on transfer of such Security set forth in Section 2.07(a) of the Indenture and this Appendix A.
(ii) The Registrar shall retain copies of all certificates, letters, notices and other written communications received pursuant to this Section 2.3. The Company shall have the right to inspect and make copies of all such certificates, letters, notices or other written communications at any reasonable time upon the giving of reasonable prior written notice to the Registrar.
 
 	2.4	Cancellation or Adjustment of Global Security .	
At such time as all beneficial interests in a Global Security have either been exchanged for Certificated Securities, redeemed, purchased or canceled, such Global Security shall, upon written request by the Company to the Trustee, be returned to DTC for cancellation or retained and canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for Certificated Securities, redeemed, purchased or canceled, the principal amount of Securities represented by such Global Security shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the custodian for such Global Security) with respect to such Global Security, by the Trustee or the custodian, to reflect such reduction.
 
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EXHIBIT 1
to
RULE 144/REGULATION S APPENDIX
[FORM OF FACE OF SECURITY]
[[RESTRICTED][REGULATION S] GLOBAL SECURITY]
Include the following legend on all Securities that are Global Securities
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (“DTC”) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY DEFINITIVE SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Include the following Restricted Securities Legend on all Securities that are Restricted Securities or Regulation S Securities.
NEITHER THIS GLOBAL SECURITY NOR ANY BENEFICIAL INTEREST HEREIN HAS BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). NEITHER THIS GLOBAL SECURITY NOR ANY BENEFICIAL INTEREST HEREIN MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) TO CENCOSUD S.A. OR A SUBSIDIARY THEREOF, (2) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER OR BUYERS IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT,
(3) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (4) PURSUANT
 
Exhibit 1

TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT (IF AVAILABLE) OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND, IN EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS. AS A CONDITION TO REGISTRATION OF TRANSFER OF THIS GLOBAL SECURITY AS SET FORTH IN CLAUSE (4) ABOVE, CENCOSUD S.A. MAY REQUIRE DELIVERY OF ANY DOCUMENTS OR OTHER EVIDENCE THAT IT, IN ITS ABSOLUTE DISCRETION, DEEMS NECESSARY OR APPROPRIATE TO EVIDENCE COMPLIANCE WITH SUCH EXEMPTION.
THIS LEGEND MAY BE REMOVED SOLELY IN THE DISCRETION AND AT THE DIRECTION OF CENCOSUD S.A.
Include the following legend on all Securities that are Certificated Securities
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND ANY TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH REGISTRAR OR TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
 
Exhibit 1

			
No.	  	Principal Amount U.S.$[        ]	
[If the Security is a Global Security, include the following two lines:
as revised by the Schedule of Increases and
Decreases attached hereto]
CENCOSUD S.A.
4.875% Senior Notes due 2023
[If the Security is a Restricted Security, insert
CUSIP NO. 15132H AD3
ISIN NO. US15132HAD35
COMMON CODE [         ]]
[If the Security is a Regulation S Security, insert
CUSIP NO. P2205J AH3
ISIN NO. USP2205JAH34
COMMON CODE [        ]]
CENCOSUD S.A., a sociedad anónima organized under the laws of Chile, promises to pay to Cede & Co., or registered assigns, the principal amount of Dollars [as revised by the Schedule of Increases and Decreases attached hereto]* on [    ] .
Maturity Date: January 20, 2023
Interest Payment Dates: January 20 and July 20.
Record Dates: January 5 and July 5.
Additional provisions of this Security are set forth on the reverse of this Security.

*	Insert for Global Securities	
 
Exhibit 1

IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed.

CENCOSUD S.A.	
		
By	 	 	
	 	Name:	
	 	Title:	
Date:
TRUSTEE’S CERTIFICATE OF AUTHENTICATION

THE BANK OF NEW YORK MELLON,
as Trustee, certifies that this is one of the Securities referred to in the Indenture.	
		
By:	 	 	
	 	Authorized Signatory	
[FORM OF REVERSE OF SECURITY]
CENCOSUD S.A.
4.875% Senior Notes due 2023
 
1.	Interest	
Cencosud S.A., a sociedad anónima organized under the laws of Chile (such entity, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “Company”), promises to pay interest on the principal amount of this Security at the rate per annum shown above, plus Additional Amounts, if any. The Company will pay interest semi-annually in arrears on January 20 and July 20 of each year, or if any such day is not a Business Day, on the next succeeding Business Day, commencing July 20, 2013. Interest shall be computed on the basis of a 360-day year of twelve 30-day months.
 
2.	Method of Payment	
The Company shall pay interest and Additional Amounts, if any, on the Securities (except defaulted interest) to the Persons who are registered Holders of Securities at the close of business on the January 5 or July 5 next preceding the Interest Payment Date even if Securities are canceled after the Record Date and on or before the Interest Payment Date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company shall pay principal and interest in U.S. dollars. Payments in respect of the Securities represented by a Global Security (including principal, premium, if any, and interest) shall be made by wire
 
Exhibit 1

transfer of immediately available funds to the account specified by The Depository Trust Company. Payments on non-Global Securities shall be made at the office or agency of the Paying Agent and Registrar within The City of New York, New York unless the Company elects to make interest payments by check mailed to the Holders at their address set forth in the Securities Register; provided , however , that payments on non-Global Securities may also be made, in the case of a Holder of at least U.S.$10,000,000 in aggregate principal amount of Securities, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Company and the Trustee to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).
 
3.	Paying Agent and Registrar	
Initially, The Bank of New York Mellon, a corporation duly authorized and existing under the laws of the State of New York authorized to conduct a banking business (the “Trustee”), will act as Registrar, Paying Agent and Transfer Agent and The Bank of New York Mellon (Luxembourg) S.A. will act as the Luxembourg Paying Agent (the “Luxembourg Paying Agent”) and Luxembourg Transfer Agent (the “Luxembourg Transfer Agent”). The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Company or any Subsidiary may act as Paying Agent or Registrar.
 
4.	Indenture	
The Company issued the Securities under an Indenture dated as of December 6, 2012 (the “Indenture”), among the Company, Cencosud Retail S.A., as guarantor (the “Guarantor”) the Trustee, as Trustee, Registrar, Paying Agent and Transfer Agent, the Luxembourg Paying Agent and the Luxembourg Transfer Agent. The terms of the Securities include those stated in the Indenture. Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Securities are subject to all such terms, and Holders are referred to the Indenture for a statement of those terms.
The Securities are unsecured and unsubordinated obligations of the Company unlimited in principal amount. [This Security is one of the Original Securities referred to in the Indenture issued in an aggregate principal amount of U.S.$[    ]. The Securities include the Original Securities and any Additional Securities that may be issued under the Indenture.] [This Security is one of the Additional Securities referred to in the Indenture. The Securities include such Additional Securities and the Original Securities in an aggregate principle amount of U.S.$[    ] previously issued under the Indenture.] The Indenture imposes certain limitations on the ability of the Company and the Subsidiaries to, among other things, create or incur Liens and enter into Sale and Leaseback Transactions. The Indenture also imposes limitations on the ability of each of the Company and the Guarantor to consolidate or merge with or into any other Person or convey or transfer its assets substantially as an entity.
To partially guarantee the due and punctual payment of the principal and interest on the Securities and all other amounts payable by the Company under the Indenture and the Securities (including the payment of Additional Amounts) when and as the same shall be due
 
Exhibit 1

and payable, the Guarantor has partially, irrevocably and unconditionally guaranteed the Guaranteed Obligations on a general unsecured and unsubordinated basis up to an aggregate amount of U.S.$1,000,000,000 (the “Subsidiary Guarantee”). The Guarantor further agreed under the Indenture to take all corporate action necessary to amend and restate the Subsidiary Guarantee within 45 days of the Issue Date so that it becomes a full, irrevocable and unconditional guarantee of the Guaranteed Obligations and to deliver a supplemental indenture when such amendment and restatement takes place. Neither the Company nor the Guarantor shall be required to make any notation on this Security to reflect any guarantee or any release, termination or discharge thereof.
 
5.	Optional Redemption	
(a) Except as set forth below, the Securities may not be redeemed prior to their Stated Maturity. Neither the Company nor the Guarantor is, however, prohibited from acquiring the Securities by means other than a redemption, whether pursuant to a tender offer, open market purchase or otherwise, so long as the acquisition does not otherwise violate the terms of the Indenture.
(b) The Securities may be redeemed, in whole but not in part, at the Company’s option, at any time, by the giving of notice as provided in Article III of the Indenture, at a redemption price equal to the greater of (i) 100% of the outstanding principal amount of the Securities to be redeemed and (ii) the sum of the present values of the Remaining Scheduled Payments of principal and interest on the Securities to be redeemed discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable Treasury Rate plus 35 basis points, in each case plus accrued and unpaid interest on the principal amount of the Securities being redeemed to the date of redemption and Additional Amounts, if any. Notwithstanding the foregoing, payments of interest on the Securities will be payable to the Holders of those Securities registered as such at the close of business on the relevant Record Dates according to the terms and provisions of the Indenture.
(c) The Securities may be redeemed, in whole but not in part, at the Company’s option, by the giving of notice as provided in Article III of the Indenture, at a redemption price equal to 100% of the outstanding principal amount of the Securities, together with accrued and unpaid interest to the redemption date and Additional Amounts, if any, if, as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of a Relevant Jurisdiction or any political subdivision or taxing authority thereof or therein, or any change in the official application, administration or interpretation of such laws, regulations or rulings (including a holding by a court of competent jurisdiction) in a Relevant Jurisdiction, or any other jurisdiction with the power to impose, levy or assess a Tax, the Company has or will become obligated to pay Excess Additional Amounts, if such change or amendment is announced or occurs on or after the date of the Indenture and such obligation cannot be avoided by the Company taking reasonable measures available to it; provided that no such notice of redemption shall be given earlier than 60 days prior to the earliest date on which the Company would be obligated to pay such Excess Additional Amounts, were a payment in respect of the Securities then due. For the avoidance of doubt, reasonable measures shall include a change in the jurisdiction of the paying agent. Prior to the giving of notice of redemption of Securities pursuant to the Indenture, the Company will deliver to the Trustee (i) an Officer’s
 
Exhibit 1

Certificate to the effect that the Company is or at the time of the redemption will be entitled to effect such a redemption pursuant to the Indenture and (ii) a written opinion of recognized counsel admitted to practice in the applicable Relevant Jurisdiction and independent of the Company to the effect that the Company is, or is expected to become, obligated to pay Excess Additional Amounts as a result of such change or amendment, as described above, and setting forth in reasonable detail the circumstances giving rise to such right of redemption.
 
6.	Notice of Redemption	
Notice of redemption shall be given in accordance with Section 12.01 of the Indenture at least 30 days, but not more than 60 days, before a redemption date to each Holder of Securities to be redeemed. Any notice to Holders of Securities of such a redemption pursuant to paragraph 5(b) shall include the appropriate calculation of the redemption price, but is not required to include the redemption price itself. The actual redemption price, calculated as described in such paragraph 5(b), must be set forth in an Officer’s Certificate delivered to the Trustee no later than two Business Days prior to the redemption date. If money sufficient to pay the redemption price of and accrued and unpaid interest on all Securities (or portions thereof) to be redeemed on the redemption date is deposited with a Paying Agent at least one Business Day prior to the redemption date and certain other conditions are satisfied, on and after such date interest shall cease to accrue on such Securities (or such portions thereof) called for redemption.
 
7.	Sinking Fund	
The Securities are not subject to any sinking fund.
 
8.	Denominations; Transfer; Exchange	
The Securities are in registered form without coupons in denominations of U.S.$200,000 and integral multiples of U.S.$1,000 in excess thereof. A Holder may transfer or exchange Securities in accordance with the Indenture. Upon any transfer or exchange, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture. Neither the Trustee nor any Registrar or Transfer Agent need register the transfer of or exchange definitive Securities for a period from the Record Date to the due date for any payment of principal of or interest on the Securities or register the transfer of or exchange any Securities for 15 days prior to selection for redemption through the redemption date.
 
9.	Persons Deemed Owners	
The registered Holder of this Security may be treated as the owner of it for all purposes.
 
10.	Unclaimed Money	
If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at the Company’s written request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment.
 
Exhibit 1

11.	Discharge and Defeasance	
Subject to certain conditions, the Company at any time may terminate some of or all its obligations under the Securities and the Indenture if the Company deposits with the Trustee cash or U.S. Government Obligations as specified in the Indenture for the payment of principal, interest and Additional Amounts, if any, on the Securities to redemption or maturity, as the case may be.
 
12.	Amendment; Waiver	
(a) Subject to certain exceptions and conditions set forth in the Indenture, without the consent of any Holder, the Company, the Guarantor and the Trustee may, among other things, amend, modify or supplement the Indenture or the Securities to cure any ambiguity, or to cure, correct or supplement any defect therein or herein, or in any manner which does not adversely affect the interests of any Holder in any material respect.
(b) Subject to certain conditions set forth in the Indenture, the Company, the Guarantor and the Trustee may modify or amend the Indenture or the terms and conditions of the Securities, and future compliance therewith or past Default by the Company or the Guarantor (other than a default in the payment of any amount, including in connection with a redemption, due on the Securities or in respect of covenant or provision which cannot be modified and amended without the consent of the Holders of all Securities so affected) with the written consent of the Holders of at least a majority in aggregate principal amount of the Securities then Outstanding (including consents obtained in connection with a tender offer or exchange offer for the Securities) or by the adoption of resolutions at a meeting of Holders of Securities by the Holders of at least a majority of the outstanding Securities; provided , however , that without the consent or affirmative vote of each Holder affected thereby, an amendment may not: (i) change the interest rate with respect to the Securities or reduce the principal amount of the Securities or change the time for payment thereof; (ii) modify the obligation to pay Additional Amounts; (iii) change the prices at which the Securities may be redeemed by the Company or change the time at which the Securities may be redeemed in accordance with the Indenture; (iv) change the currency in which, or change the required place at which, payment on principal, premium, if any, or interest on the Securities is payable; (v) impair the right to institute suit for the enforcement of any payment obligation on or with respect to the Security; or (vi) reduce the percentage of principal amount of outstanding Securities whose Holders are required to consent to modify or amend the Indenture or the terms or conditions of the Securities or to waive any future compliance or past default.
 
13.	Defaults and Remedies	
If an Event of Default occurs and is continuing, the Trustee or the Holders of not less than 25% of the aggregate principal amount of the Securities then outstanding, subject to certain limitations, may declare all the Securities to be immediately due and payable. Certain events of bankruptcy or insolvency and the failure by the Guarantor to amend and restate the
 
Exhibit 1

Subsidiary Guarantee to constitute a full, irrevocable and unconditional guarantee of the Guaranteed Obligations within 45 days of the Issue Date are Events of Default and shall result in the Securities being immediately due and payable upon the occurrence of such Events of Default without any further act of the Trustee or any Holder.
Holders of Securities may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Securities unless it receives indemnity or security reasonably satisfactory to it. Subject to certain limitations, Holders of a majority in aggregate principal amount of the Securities then outstanding may direct the Trustee in its exercise of any trust or power under the Indenture. The Trustee or the Holders of a majority in aggregate principal amount of the outstanding Securities by written notice to the Company may annul and rescind any declaration of acceleration if all amounts then due with respect to the Securities are paid (other than amounts due solely because of such declaration) and all other defaults with respect to the Securities are cured. No such rescission shall affect any subsequent Default or impair any right consequent thereto.
 
14.	Trustee Dealings with the Company	
The Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee.
 
15.	No Recourse Against Others	
No director, officer, employee or stockholder, as such, of the Company or the Guarantor shall have any liability for any obligations of the Company or the Guarantor, as applicable, under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities.
 
16.	Authentication	
This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the face of this Security.
 
17.	Abbreviations	
Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
 
18.	Governing Law	
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
 
Exhibit 1

19.	CUSIP and ISIN Numbers	
Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP or ISIN numbers to be printed on the Securities and has directed the Trustee to use CUSIP or ISIN numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.
 
20.	Currency of Account; Conversion of Currency	
U.S. dollars is the sole currency of account and payment for all sums payable by the Company under or in connection with the Securities or the Indenture, including damages. The Company shall indemnify the Holders as provided in respect of the conversion of currency relating to the Securities and the Indenture.
 
21.	Agent for Service; Submission to Jurisdiction; Waiver of Immunities	
Each of the Company and the Guarantor has appointed CT Corporation System with offices currently at 111 Eight Avenue, 13th floor, New York, New York 10011 as its authorized agent upon whom all writs, process and summonses may be served in any suit, action or proceeding arising out of or based upon the Indenture or the Securities which may be instituted in any U.S. Federal or New York State court in the Borough of Manhattan, The City of New York, New York. Each of the Company and the Guarantor has agreed that any suit, action or proceeding against the Company or the Guarantor, as applicable, brought by any Holder or the Trustee arising out of or based upon the Indenture or the Securities may be instituted in any U.S. Federal or New York State court in the Borough of Manhattan, The City of New York, New York. Each of the Company and the Guarantor has irrevocably submitted to the non-exclusive jurisdiction of such courts for such purpose and waived, to the fullest extent permitted by law, trial by jury, any objection it may now or hereafter have to the laying of venue of any such suit, action or proceeding, any claim that any suit, action or proceeding in such a court has been brought in an inconvenient forum and any right to which it may be entitled on account of place of residence or domicile. The Company shall furnish to any Holder of Securities upon written request and without charge to the Holder a copy of the Indenture which has in it the text of this Security.
 
Exhibit 1

[FORM OF] ASSIGNMENT FORM
To assign this Security, fill in the form below and have your signature guaranteed: (I) or (we) assign and transfer this Security to:
(Insert assignee’s soc. sec. or tax I.D. no.)
(Print or type assignee’s name, address and zip code)
and irrevocably appoint                                                                                                        to transfer this Security on the books of the Company. The agent may substitute another to act for him.

Dated:	 	 	 		 	Your Name:	 	 	
	 		 		 	(Print your name exactly as it appears on the face of this Security)	

	 		 		 	 Your Signature:	 	 	
	 		 		 	 (Sign exactly as your name appears on the face of this Security)	

	 		 		 	Signature Guarantee:	 	 	
	 		 		 	(Signature must be guaranteed)	
The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to Exchange Act Rule 17Ad-15.
 
Exhibit 1

[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been made:

Date of increase
or decrease	  	Amount of
decrease in
principal
amount of this
Global  Security	  	Amount of
increase in
principal
amount of this
Global Security	  	Principal
amount of this
Global  Security
following such
decrease or
increase	  	Signature of
authorized
officer of
Trustee	
 
Exhibit 1

NOTATION OF GUARANTEE
Pursuant to the Indenture, dated as of December 6, 2012 (the “ Indenture ”), among Cencosud S.A., as issuer (the “ Company ”), Cencosud Retail S.A., as guarantor (the “ Guarantor ”), The Bank of New York Mellon, as trustee (the “ Trustee ”), Registrar, Paying Agent and Transfer Agent, and The Bank of New York Mellon (Luxembourg) S.A., as Luxembourg paying agent and transfer agent, the Guarantor, subject to the provisions of Article XI of the Indenture, hereby partially, irrevocably and unconditionally guarantees, to each Holder of a Security authenticated and delivered by the Trustee and to the Trustee and its successors and assigns and to any agent appointed thereunder and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Securities or the obligations of the Company thereunder, up to an aggregate amount of U.S.$1,000,000,000, that: (a) the principal of and interest, Additional Amounts, if any, and premium, on the Securities, shall be promptly paid in full when due, whether at stated maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest and Additional Amounts on the Securities, if any, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder or any agent appointed under the Indenture, shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Securities or any of such other obligations, the same shall be promptly paid in full when due or performed in accordance with the terms of such extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantor shall be obligated to pay or perform the same immediately. The Guarantor agrees that this is a guarantee of payment and not a guarantee of collection. The obligations of the Guarantor to the Holders of Securities and to the Trustee and any such agents pursuant to the Subsidiary Guarantee and the Indenture are expressly set forth in Article XI of the Indenture and reference is hereby made to the Indenture for the precise terms of the Subsidiary Guarantee. Each Holder of a Security, by accepting the same, agrees to and shall be bound by such provisions. Capitalized terms used but not defined herein will have the meaning given them in the Indenture.
THIS NOTATION OF GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK

CENCOSUD RETAIL S.A., as Guarantor	
		
By	 	 	
	 	Name:	 		
	 	Title:	 		
		
By	 	 	
	 	Name:	 		
	 	Title:	 		
 
Exhibit 1

EXHIBIT 2
to
RULE 144/REGULATION S APPENDIX
FORM OF CERTIFICATE TO BE DELIVERED
BY TRANSFERORS IN CONNECTION WITH TRANSFERS
PURSUANT TO REGULATION S
[Date]
Cencosud S.A.
Av. Kennedy 9001, 6th floor, Las Condes
Santiago, Chile
Attention: Juan Manuel Parada
Telephone: +56 (2) 2959-0000
Fax: +56 (2) 2959-0625
The Bank of New York Mellon
101 Barclay Street, Floor 4E
New York, New York 10286
USA
Attention: International Corporate Trust
Fax: 212-815-5603
 
Re:	Cencosud S.A. (the “Company”)	
4.875% Senior Notes due 2023 (the “Securities”)
Ladies and Gentlemen:
Reference is hereby made to the Indenture dated as of December 6, 2012 in regard of the Securities among the Company, as issuer, Cencosud Retail S.A., as guarantor, The Bank of New York Mellon, as Trustee, Registrar, Paying Agent and Transfer Agent and The Bank of New York Mellon (Luxembourg) S.A., as Luxembourg Paying Agent and Luxembourg Transfer Agent (the “Indenture”). Capitalized terms used but not defined herein will have the meaning given them in the Indenture.
In connection with our proposed transfer of U.S.$         aggregate principal amount of Securities, which are held in [the form of a beneficial interest in the Regulation S Global Security (CUSIP No. P2205J AH3; ISIN Number USP2205JAH34) with DTC in the name of the undersigned] [certificated form], we confirm that such transfer has been effected pursuant to and in accordance with Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, we represent that:
(a) the offer of the Securities was not made to a Person in the United States;
(b) either (i) at the time the buy offer was originated, the transferee was outside the United States or we and any Person acting on our behalf reasonably believed that the transferee was outside the United States or (ii) the transaction was executed in, on or through the facilities of a designated off-shore securities market and neither we nor any Person acting on our behalf knows that the transaction has been pre-arranged with a buyer in the United States;
 
Exhibit 2

(c) no directed selling efforts have been made in the United States in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable;
(d) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act;
(e) we have advised the transferee of the transfer restrictions applicable to the Securities; and
(f) if the offer of the Securities was made prior to the expiration of the Distribution Compliance Period, the offer of the Securities was not made to a U.S. Person or for the account or benefit of a U.S. person.
You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings set forth in Regulation S.

Very truly yours,	
[Name of Transferor]	
		
By:	 	 	
	 	Authorized Signature	
 
Exhibit 2

EXHIBIT 3
to
RULE 144/REGULATION S APPENDIX
FORM OF TRANSFER CERTIFICATE TO BE DELIVERED
BY TRANSFERORS IN CONNECTION WITH TRANSFERS
PURSUANT TO RULE 144A
[Date]
Cencosud S.A.
Av. Kennedy 9001, 6th floor, Las Condes
Santiago, Chile
Attention: Juan Manuel Parada
Telephone: +56 (2) 2959-0000
Fax: +56 (2) 2959-0625
The Bank of New York Mellon
101 Barclay Street, Floor 4E
New York, New York 10286
USA
Attention: International Corporate Trust
Fax: 212-815-5603
 
Re:	Cencosud S.A. (the “Company”)	
4.875% Senior Notes due 2023 (the “Securities”)
Ladies and Gentlemen:
Reference is hereby made to the Indenture dated as of December 6, 2012 in regard of the Securities among the Company, as issuer, Cencosud Retail S.A., as guarantor, The Bank of New York Mellon, as Trustee, Registrar, Paying Agent and Transfer Agent and The Bank of New York Mellon (Luxembourg) S.A., as Luxembourg Paying Agent and Luxembourg Transfer Agent (the “Indenture”). Capitalized terms used but not defined herein will have the meaning given them in the Indenture.
This letter relates to U.S.$         aggregate principal amount of the Securities which are held in [the form of a beneficial interest in the Regulation S Global Security (CUSIP No. P2205J AH3; ISIN Number USP2205JAH34) with DTC in the name of the undersigned] [certificated form].
 
Exhibit 3

The undersigned has requested transfer of such Securities to a Person who will take delivery thereof in the form of a beneficial interest in the Restricted Global Security (CUSIP No. 15132H AD3; ISIN Number US15132HAD35). In connection with such transfer, the undersigned does hereby confirm that such transfer has been effected in accordance with the transfer restrictions set forth in the Indenture and on the Securities and pursuant to and in accordance with Rule 144A under the U.S. Securities Act of 1933, as amended, and accordingly, the undersigned represents that:
a. the Securities are being transferred to a transferee that the undersigned reasonably believes is purchasing the Securities for its own account or one or more accounts with respect to which the transferee exercises sole investment discretion; and
b. the undersigned reasonably believes that transferee and any such account is a “qualified institutional buyer” within the meaning of Rule 144A, in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any state of the United States or any other jurisdiction.

[NAME OF TRANSFEROR]	
		
By:	 	 	
	 	Name:	
	 	Title:	

Dated:	 	 	
 
Exhibit 3

Exhibit 4.5

 
EXECUTION VERSION
CREDIT AGREEMENT
dated as of
October 17, 2012
among
CENCOSUD S.A.,
as Borrower
The Lenders Party Hereto
and
JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION,
as Administrative Agent

J.P. MORGAN SECURITIES LLC,
as Global Coordinator
J.P. MORGAN SECURITIES LLC,
as Bookrunner and Lead Arranger

 

TABLE OF CONTENTS

							
 	 	 	  	P AGE 	 	
	
ARTICLE I	  	
	
Definitions	  	
			
SECTION 1.01.	 	Defined Terms	  	 	1	  	
SECTION 1.02.	 	Terms Generally	  	 	19	  	
SECTION 1.03.	 	Accounting Terms; IFRS	  	 	19	  	
	
ARTICLE II	  	
	
The Credits	  	
			
SECTION 2.01.	 	Commitments	  	 	20	  	
SECTION 2.02.	 	Loans and Borrowings	  	 	20	  	
SECTION 2.03.	 	Requests for Borrowings; Interest Period Elections	  	 	20	  	
SECTION 2.04.	 	Funding of Borrowings	  	 	22	  	
SECTION 2.05.	 	Termination and Reduction of Commitments	  	 	22	  	
SECTION 2.06.	 	Repayment of Loans; Evidence of Debt	  	 	23	  	
SECTION 2.07.	 	Prepayment of Loans	  	 	24	  	
SECTION 2.08.	 	Fees	  	 	25	  	
SECTION 2.09.	 	Interest	  	 	26	  	
SECTION 2.10.	 	Increased Costs	  	 	26	  	
SECTION 2.11.	 	Break Funding Payments	  	 	27	  	
SECTION 2.12.	 	Taxes	  	 	28	  	
SECTION 2.13.	 	Payments Generally; Pro Rata Treatment; Sharing of Set-offs	  	 	29	  	
SECTION 2.14.	 	Mitigation Obligations; Replacement of Lenders	  	 	30	  	
SECTION 2.15.	 	Defaulting Lenders	  	 	31	  	
	
ARTICLE III	  	
	
Representations and Warranties	  	
			
SECTION 3.01.	 	Organization; Powers	  	 	31	  	
SECTION 3.02.	 	Authorization; Enforceability	  	 	32	  	
SECTION 3.03.	 	Governmental Approvals; No Conflicts	  	 	32	  	
SECTION 3.04.	 	Financial Condition; No Material Adverse Change	  	 	32	  	
SECTION 3.05.	 	Properties	  	 	33	  	
SECTION 3.06.	 	Litigation and Environmental Matters	  	 	33	  	
SECTION 3.07.	 	Compliance with Laws and Agreements; No Default	  	 	33	  	
SECTION 3.08.	 	Investment Company Status	  	 	33	  	
SECTION 3.09.	 	Ownership of Properties; Liens	  	 	33	  	
SECTION 3.10.	 	Taxes	  	 	33	  	
SECTION 3.11.	 	Intellectual Property	  	 	34	  	
SECTION 3.12.	 	Subsidiaries	  	 	34	  	
 
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SECTION 3.13.	 	Disclosure	  	 	34	  	
SECTION 3.14.	 	Foreign Exchange Regulations; Immunity; Enforcement	  	 	34	  	
SECTION 3.15.	 	OFAC; Patriot Act; Sanctions	  	 	34	  	
SECTION 3.16.	 	Federal Reserve Regulations	  	 	35	  	
SECTION 3.17.	 	Rank of Debt	  	 	35	  	
SECTION 3.18.	 	Legal Form	  	 	35	  	
SECTION 3.19.	 	Pledged Stock	  	 	35	  	
SECTION 3.20.	 	Solvency	  	 	35	  	
	
ARTICLE IV	  	
	
Conditions	  	
			
SECTION 4.01.	 	Closing Date	  	 	36	  	
SECTION 4.02.	 	Conditions to Disbursement Escrow Release Date	  	 	38	  	
	
ARTICLE V	  	
	
Affirmative Covenants	  	
			
SECTION 5.01.	 	Financial Statements; Ratings Change and Other Information	  	 	38	  	
SECTION 5.02.	 	Notices of Material Events	  	 	39	  	
SECTION 5.03.	 	Existence; Conduct of Business	  	 	40	  	
SECTION 5.04.	 	Payment of Obligations	  	 	40	  	
SECTION 5.05.	 	Maintenance of Properties; Insurance	  	 	40	  	
SECTION 5.06.	 	Books and Records; Inspection Rights	  	 	40	  	
SECTION 5.07.	 	Compliance with Laws and Contractual Obligations	  	 	40	  	
SECTION 5.08.	 	Use of Proceeds	  	 	41	  	
SECTION 5.09.	 	Accuracy of Information	  	 	41	  	
SECTION 5.10.	 	Pari Passu Status	  	 	41	  	
SECTION 5.11.	 	Post-Closing Obligations	  	 	41	  	
SECTION 5.12.	 	Further Assurances	  	 	42	  	
	
ARTICLE VI	  	
	
Negative Covenants	  	
			
SECTION 6.01.	 	Limitation on Liens	  	 	42	  	
SECTION 6.02.	 	Prohibition of Fundamental Changes; Conduct of Business	  	 	44	  	
SECTION 6.03.	 	Restricted Payments	  	 	44	  	
SECTION 6.04.	 	Limitation on Sales of Assets	  	 	45	  	
SECTION 6.05.	 	Transactions with Affiliates	  	 	45	  	
SECTION 6.06.	 	Restrictive Agreements	  	 	45	  	
SECTION 6.07.	 	Leverage Ratio	  	 	45	  	
SECTION 6.08.	 	Debt to Net Worth Ratio	  	 	46	  	
SECTION 6.09.	 	Limitations Regarding Acquisition Escrow Agreement	  	 	46	  	
 
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ARTICLE VII	  	
	
Events of Default	  	
	
ARTICLE VIII	  	
	
The Administrative Agent and the Collateral Agent	  	
			
SECTION 8.01.	 	General Provisions	  	 	49	  	
SECTION 8.02.	 	Collateral Documents and Guaranty	  	 	50	  	
	
ARTICLE IX	  	
	
Miscellaneous	  	
			
SECTION 9.01.	 	Notices	  	 	52	  	
SECTION 9.02.	 	Waivers; Amendments	  	 	53	  	
SECTION 9.03.	 	Expenses; Indemnity; Damage Waiver	  	 	54	  	
SECTION 9.04.	 	Successors and Assigns	  	 	55	  	
SECTION 9.05.	 	Survival	  	 	58	  	
SECTION 9.06.	 	Counterparts; Integration; Effectiveness	  	 	58	  	
SECTION 9.07.	 	Electronic Execution of Assignments	  	 	59	  	
SECTION 9.08.	 	Severability	  	 	59	  	
SECTION 9.09.	 	Right of Setoff	  	 	59	  	
SECTION 9.10.	 	Governing Law; Jurisdiction; Consent to Service of Process	  	 	59	  	
SECTION 9.11.	 	WAIVER OF JURY TRIAL	  	 	60	  	
SECTION 9.12.	 	Headings	  	 	60	  	
SECTION 9.13.	 	Confidentiality	  	 	60	  	
SECTION 9.14.	 	Interest Rate Limitation	  	 	61	  	
SECTION 9.15.	 	USA PATRIOT Act	  	 	61	  	
SECTION 9.16.	 	Waiver of Immunities	  	 	62	  	
SECTION 9.17.	 	Judgment Currency	  	 	62	  	
SECTION 9.18.	 	International Banking Facilities	  	 	62	  	
SECTION 9.19.	 	Electronic Execution of Assignments	  	 	62	  	
SECTION 9.20.	 	No Advisory or Fiduciary Relationship	  	 	62	  	

SCHEDULES :	  		  		
			
Schedule 1.01	  	—	  	Material Subsidiaries	
Schedule 2.01	  	—	  	Commitments	
Schedule 3.06	  	—	  	Disclosed Matters	
Schedule 3.12	  	—	  	Subsidiaries	
Schedule 6.01(f)	  	—	  	Existing Liens	
 
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EXHIBITS :
 	
Exhibit A	 	—	    	Form of Assignment and Assumption	
Exhibit B-1	 	—	    	Form of Opinion of Borrower’s New York Counsel	
Exhibit B-2	 	—	    	Form of Opinion of Borrower’s Chilean Counsel	
Exhibit C	 	—	    	Form of Guarantee	
Exhibit D	 	—	    	Form of Promissory Note	
Exhibit E	 	—	    	Form of Pledge Agreement	
Exhibit F	 	—	    	Form of Disbursement Escrow Agreement	
Exhibit G	 	—	    	Form of Escrow Pledge Agreement	
 
iv

CREDIT AGREEMENT dated as of October 17, 2012, among CENCOSUD S.A., a Chilean corporation (the “ Borrower ”), the LENDERS party hereto (the “ Lenders ”), and JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (in such capacity, the “ Administrative Agent ”).
WHEREAS, pursuant to the Acquisition Agreement (as defined below), the Borrower will acquire (the “ Acquisition ”), directly or indirectly, all of the issued and outstanding equity interests in the Target Companies (as defined below);
WHEREAS, the Company has requested the Lenders to extend credit in the form of term loans on the Closing Date, in an aggregate principal amount of up to $2,500,000,000;
WHEREAS, upon satisfaction of the conditions precedent set forth in Section 4.01, the Lenders shall fund the Loans and the proceeds thereof shall be held in the Disbursement Escrow Account (as defined below) and upon the earlier of (i) satisfaction of the Acquisition Escrow Release Conditions and (ii) the Escrow Termination Date, the proceeds of the Escrow Account will be released and distributed in accordance with Section 2.07(c) or Section 4.02 hereof;
WHEREAS, in order to induce the Lenders to make loans hereunder, the Borrower is willing to cause certain of its Subsidiaries, including the Target Companies, to guarantee its obligations hereunder and to cause the Dutch Target Companies to pledge to the Administrative Agent for the benefit of the Lenders all the Acquired Colombian Shares (as defined below); and
WHEREAS, the Borrower has requested that the Lenders and the Administrative Agent agree to enter into this Credit Agreement, and the Lenders and the Administrative Agent are willing to do so, all on terms and conditions herein set forth.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms . As used in this Agreement, the following terms have the meanings specified below:
“ Acquired Colombian Shares ” means all the issued and outstanding shares of capital stock of each of the Colombian Target Companies.
“ Acquisition ” has the meaning set forth in the recitals of this Agreement.
“ Acquisition Agreement ” means the Share Purchase Agreement to be entered into on or prior to the Closing Date, between the Purchaser and the Seller, together with all schedules, exhibits and disclosure letters related thereto. References herein to the Acquisition Agreement shall be deemed, except as otherwise provided herein, to mean the Acquisition Agreement in the last draft provided to the Lead Arranger and the Administrative Agent prior to the date hereof.
“ Acquisition Escrow Agreement ” means that certain escrow agreement to be entered into on or prior to the Closing Date among the Escrow Agent, the Borrower, and the Seller.

“ Acquisition Escrow Account ” means that certain interest bearing deposit account referred to as the “Second Escrow Account” under the Acquisition Escrow Agreement in the name of the Escrow Agent at ABN Amro into which, upon the occurrence of the Disbursement Escrow Release Date, the Disbursement Escrow Deposit Amount will be transferred by the Escrow Agent on such Closing Date, and held by the Escrow Agent until the earlier of (x) the Acquisition Escrow Release Date and (y) the Acquisition Escrow Termination Date.
“ Acquisition Escrow Deposit Amount ” means the Disbursement Escrow Deposit Amount transferred from the Disbursement Escrow Account to the Acquisition Escrow Account.
“ Acquisition Escrow Release Conditions ” means each of the conditions set forth in Section 4.03 and in the Escrow Agreement.
“ Acquisition Escrow Release Date ” means the date on which the Acquisition Escrow Release Conditions are satisfied or waived and the aggregate proceeds of the Acquisition Escrow Account are released therefrom to the Sellers, in accordance with the Acquisition Escrow Agreement, which date, in no event, shall be later than the Acquisition Escrow Termination Date.
“ Acquisition Escrow Termination Date ” means, unless the Acquisition Escrow Release Date has previously occurred, the date that is the earliest of (a) December 31, 2012, (b) the date on which the Acquisition Agreement shall terminate without the Acquisition being consummated, and (c) the date which the Borrower notifies the Administrative Agent in writing that the Acquisition Escrow Release Conditions shall not be met.
“ Acquisition Termination Fee Event ” means the occurrence of a termination of the Acquisition Agreement that results in a payment of a Termination Fee or Other Termination Fee (each as defined in the Acquisition Agreement) from the Acquisition Escrow Amount to the Seller.
“ Act ” has the meaning assigned to such term in Section 9.15.
“ Adjusted EBITDA ” means for any period, Net Income for such period plus (a) without duplication and in each case for the Borrower and its Consolidated Subsidiaries and to the extent deducted in determining Net Income for such period, the sum of: (i) Interest Expense for such period, (ii) income tax expense and employee profit sharing expenses for such period, (iii) all amounts attributable to depreciation and amortization for such period, (iv) any foreign exchange and monetary variation losses for such period, (v) any non-cash charges (other than the write-down of current assets) for such period and (vi) losses resulting from the elimination of price-level restatement of book-basis capital under IFRS, and minus (b) without duplication and in each case for the Borrower and its Consolidated Subsidiaries and to the extent included in determining Net Income, (i) any extraordinary and non-recurring gains and expenses and all non-cash items of income or losses for such period, (ii) interest income for such period, all determined in accordance with IFRS, (iii) increase in valuation of investment properties for such period and (iv) the value of negative goodwill associated with the acquisition by the Borrower of Johnson’s S.A.; provided that (A) “Adjusted EBITDA” of any Person acquired by the Borrower or any of its Subsidiaries during such period (determined on the same basis as Adjusted EBITDA is determined for the Borrower under this definition) shall be included on a pro forma basis for such period (assuming the consummation of such acquisition and the incurrence of any indebtedness in connection therewith occurred as of the first day of such period) and (B) “Adjusted EBITDA” of any Person or line of business Disposed of by the Borrower or any of its Subsidiaries during such period (determined on the same basis as Adjusted EBITDA is determined for the Borrower under this definition) shall be excluded for such
 
2

period (assuming the consummation of such Disposition and the repayment of any indebtedness in connection therewith occurred as of the first day of such period), in both cases as determined in accordance to IFRS or according to information provided by independent auditors of the Borrower.
“ Adjusted LIBO Rate ” means, for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.
“ Administrative Agent ” means JPMCB in its capacity as administrative agent for the Lenders hereunder.
“ Administrative Questionnaire ” means an Administrative Questionnaire in a form supplied by the Administrative Agent.
“ Affiliate ” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
“ Agreement ” means this Credit Agreement.
“ Alternate Base Rate ” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus  1 / 2 of 1% and (c) the Adjusted LIBO Rate for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day); provided that, notwithstanding the definition of “LIBO Rate”, the LIBO Rate for the purposes of clause (c) for any day shall be based on the rate determined on such day at approximately 11:00 a.m. (London time) by reference to the British Bankers’ Association Interest Settlement Rates for deposits in Dollars (as set forth by the British Bankers’ Association as an authorized vendor for the purpose of displaying such rates). Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.
“ Applicable Margin ” means, for any day, (i) 1.50% per annum from and including the Effective Date to and including the 90 th day after the Effective Date, (ii) 1.75% per annum from and including the 91 st day after the Effective Date to and including the 180 th day after the Effective Date; (iii) 2.00% per annum from and including the 181 st day after the Effective Date to and including the 270 th day after the Effective Date, (iv) 2.25% per annum from and including the 271 st day after the Effective Date to and including the first anniversary of the Effective Date; and (v) thereafter, 2.75% per annum.
“ Applicable Percentage ” means, with respect to any Lender, the percentage of the total Commitments represented by such Lender’s Commitment. If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments; provided that in the case of Section 2.15 when a Defaulting Lender shall exist, any such Defaulting Lender’s Commitment shall be disregarded in the calculation.
“ Approved Fund ” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
 
3

“ Asset Sale ” shall mean any Disposition (by way of merger, casualty, condemnation or otherwise) by the Borrower or any of the Subsidiaries to any Person other than the Borrower or any Subsidiary Guarantor of (a) any Equity Interests of any of the Subsidiaries (other than directors’ qualifying shares), (b) any other assets of the Borrower or any of the Subsidiaries (except for (i) Dispositions permitted under Sections 6.04(a), (c) or (d), provided that the Disposition of, or contribution into a joint venture, or any other Person that is not a Subsidiary of the Borrower, of any financing or credit card business or unit of the Borrower or its Subsidiaries shall constitute an Asset Sale for purposes of Section 2.07 and (ii) Asset Sales for fair market value resulting in no more than $10,000,000 in cash proceeds in the aggregate during the term of this Agreement).
“ Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.
“ Availability Period ” means the period from and including the Effective Date to and ending on the 10 th day after the Effective Date.
“ Bankruptcy Event ” means, with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment; provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof; provided further that such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.
“ Banco Paris ” means Banco Paris S.A.
“ Board ” means the Board of Governors of the Federal Reserve System of the United States of America.
“ Borrower ” means Cencosud S.A., a Chilean corporation.
“ Borrowing ” means Loans made or continued on the same date.
“ Borrowing Request ” means a request by the Borrower for a Borrowing in accordance with Section 2.03.
“ Business Day ” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City or Santiago, Chile are authorized or required by law to remain closed; provided that, when used in connection with setting the Adjusted LIBO Rate or determining the Interest Period, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.
 
4

“ Capital Lease Obligations ” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under IFRS, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with IFRS.
“ Cash Equivalents ” means, as at any date, for the Borrower and its Consolidated Subsidiaries on a consolidated basis in accordance with IFRS, and as most recently reported to the SVS, the sum of (a)  Efectivo y Equivalentes al Efectivo (cash and cash equivalents) and (b)  Otros Activos Financieros Corrientes (other liquid investments).
“ Cencosud Retail ” means Cencosud Retail S.A., a Chilean corporation.
“ Central Bank of Chile ” means the Banco Central de Chile or any successor Governmental Authority in Chile.
“ Change in Control ” means (a) the occurrence of any of the following: the Paulmann Holders collectively shall cease to beneficially own, directly or indirectly, at least (i) 50% of the aggregate outstanding Equity Interests of the Borrower and (ii) 50% of the Borrower’s Voting Stock, or (b) the Borrower shall at any time no longer beneficially own, directly or indirectly, at least 75% of the outstanding Equity Interests and at least 75% of the Voting Stock of Cencosud Retail.
“ Change in Law ” means the occurrence, after the date of this Agreement (or with respect to any Lender, if later, the date on which such Lender becomes a Lender), of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority, or (c) the making or issuance of any request, rules, guideline, requirement or directive (whether or not having the force of law) by any Governmental Authority; provided , however , that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements and directives thereunder, issued in connection therewith or in implementation thereof, and (ii) all requests, rules, guidelines, requirements and directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law” regardless of the date enacted, adopted, issued or implemented.
“ Charges ” has the meaning assigned to such term in Section 9.14.
“ Chile ” means the Republic of Chile.
“ Chilean Stamp Tax ” has the meaning assigned to such term in Section 3.18.
“ Closing Date ” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02), but which shall occur no later than October 25, 2012.
“ Code ” means the Internal Revenue Code of 1986, as amended.
 
5

“ Collateral ” means, collectively, all of the personal property (including Equity Interests) in which Liens are purported to be granted pursuant to the Collateral Documents as security for the Obligations.
“ Collateral Agent ” means JPMCB or its successors in such capacity.
“ Collateral Documents ” means the Pledge Agreements, the Escrow Pledge Agreement and all other instruments, documents and agreements delivered by or on behalf of any Loan Party pursuant to this Agreement or any of the other Loan Documents in order to grant to, or perfect in favor of, Administrative Agent, for the benefit of Secured Parties, a Lien on any personal property of that Loan Party as security for the Obligations.
“ Colombia ” means the Republic of Colombia.
“ Colombian Target Companies ” means, collectively, Grandes Superficies de Colombia S.A., a Colombian corporation, and Atacadão de Colombia S.A.S. , a Colombian corporation.
“ Commitment ” means, with respect to each Lender, the commitment of such Lender to make Loans, as such commitment may be (a) reduced from time to time pursuant to Section 2.05 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. The initial amount of each Lender’s Commitment is set forth on Schedule 2.01 , or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment, as applicable. The initial aggregate amount of the Lenders’ Commitments is $2,500,000,000.
“ Commitment Letter ” means the Commitment Letter dated October 10, 2012, among the Borrower, JPMCB and J.P. Morgan Securities LLC.
“ Commitment Reduction/Prepayment Event ” means:
(a) any Debt Incurrence;
(b) any Equity Issuance; and
(c) any Asset Sale.
“ Compendium ” has the meaning assigned to such term in Section 3.03.
“ Connection Income Taxes ” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“ Consolidated Subsidiaries ” means at any date or for any period the Subsidiaries of the Borrower that are required to be consolidated with those of the Borrower in the Borrower’s consolidated financial statements if such financial statements were prepared in accordance with IFRS as of such date or for such period, but excluding in any event Banco Paris and any other Subsidiaries principally engaged in banking activities even if the accounts of Banco Paris or such other banking Subsidiaries are required to be consolidated with those of the Borrower in accordance with IFRS.
 
6

“ Consolidated Total Assets ” means the total assets of the Borrower and its Consolidated Subsidiaries on a consolidated basis, as shown on the most recent balance sheet of the Borrower prepared in conformity with IFRS.
“ Contractual Obligation ” means, as to any Person, any provision of any security issued by such Person or of any instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
“ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“ Corresponding Obligations ” means the Obligations of the Borrower as they may exist from time to time, other than the Parallel Debt (as defined in Section 8.02(e)).
“ Credit Exposure ” means, with respect to any Lender at any time, the outstanding principal amount of such Lender’s Loans.
“ Credit Party ” means the Administrative Agent or any other Lender.
“ Debt Incurrence ” means any incurrence of indebtedness for borrowed money by the Borrower or any of its Subsidiaries, whether pursuant to a public offering or a Rule 144A or other private placement of debt securities (including debt securities convertible into equity securities) or an incurrence of loans under any loan or credit facility, other than (a) indebtedness owed by the Borrower or any of its Subsidiaries to the Borrower or any of its Subsidiaries, (b) capital leases, (c) purchase money indebtedness incurred in the ordinary course of business of the Borrower and its Subsidiaries, (d) local currency bilateral bank facilities of the Borrower and its Subsidiaries for working capital purposes in an aggregate principal amount of up to $200,000,000 (or its equivalent in any other currency) during the term of this Agreement, (e) Indebtedness of the Target Companies existing on the Acquisition Escrow Release Date permitted to remain outstanding on such date in accordance with the Acquisition Agreement, and (f) Refinancing Indebtedness.
“ Debt to Net Worth Ratio ” means, on any date of determination, the ratio of (a) Net Financial Debt to (b) the sum of (i) Net Worth and, without duplication, (ii) the amount of minority equity interests held in Persons other than the Borrower and its Subsidiaries.
“ Default ” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.
“ Defaulting Lender ” means any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans or (ii) pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrower or any Credit Party in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a loan under this Agreement cannot be
 
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satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by a Credit Party, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Credit Party’s receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of a Bankruptcy Event.
“ Disclosed Matters ” means the actions, suits and proceedings and the environmental matters disclosed in Schedule 3.06 .
“ Disbursement Escrow Account ” means that certain interest bearing deposit account referred to as the “First Escrow Account” under the Disbursement Escrow Agreement in the name of the Escrow Agent at ABN Amro into which, at the request of the Borrower in accordance with Section 2.03(a), the proceeds of the Loans will be transferred by the Administrative Agent on the Closing Date, and held by the Escrow Agent until the earlier of (x) the Disbursement Escrow Release Date and (y) the Disbursement Escrow Termination Date.
“ Disbursement Escrow Deposit Amount ” means the amount of Euros to be transferred to the Disbursement Escrow Account for the account of Easy Colombia in accordance with clause (y) of the series of transfers to be made by the Administrative Agent in accordance with Section 2.03(a).
“ Disbursement Escrow Agreement ” that certain escrow agreement to be entered into on or prior to the Closing Date among the Escrow Agent, the Administrative Agent, the Purchaser, substantially in the form of Exhibit G hereto.
“ Disbursement Escrow Release Conditions ” means each of the conditions set forth in Section 4.02 and each of Escrow Release Condition 1, Escrow Release Condition 2, Escrow Release Condition 3 and Escrow Release Condition 4 set forth in the Disbursement Escrow Agreement.
“ Disbursement Escrow Release Date ” means the date on which the Escrow Release Condition 1 set forth in the Disbursement Escrow Agreement is satisfied and the aggregate proceeds of the Disbursement Escrow Deposit Amount transferred therefrom to the Acquisition Escrow Account, in accordance with the Disbursement Escrow Agreement, which date, in no event, shall be later than the Disbursement Escrow Termination Date.
“ Disbursement Escrow Termination Date ” means, unless the Disbursement Escrow Release Date has previously occurred, the date that is the earliest of (a) October 22, 2012, (b) the date on which the Sellers and the Borrower shall have abandoned the Acquisition, and (c) the date which the Borrower notifies the Administrative Agent in writing that the Disbursement Escrow Release Conditions shall not be met.
“ Disposition ” or “ Dispose ” means the sale, conveyance, transfer or other disposition, whether in a single transaction or a series of related transactions, of property or assets of the Borrower or any Subsidiary, other than:
(a) any disposition of Cash Equivalents;
 
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(b) the making of any Restricted Payment that is permitted to be made, and is made, under Section 6.03; and
(c) any disposition of property or assets or issuance of securities (i) by a Subsidiary to the Borrower or (ii) by the Borrower or a Subsidiary to another Subsidiary.
“ dollars ” or “ $ ” refers to lawful money of the United States of America.
“ Dutch Target Companies ” means, collectively, Colombia Holdings Alpha BV, Thalie BV, Calliope BV, Uranie BV and Coledim BV.
“ Easy Colombia ” means Easy Colombia S.A., a Colombian corporation.
“ Effective Date ” means the date of this Agreement.
“ Environmental Laws ” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.
“ Environmental Liability ” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“ Equity Interests ” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.
“ Equity Issuance ” means any issuance or sale by the Borrower or any of its Subsidiaries of any Equity Interests of the Borrower or any such Subsidiary, as applicable, except in each case for (a) any issuance or sale to the Borrower or any Subsidiary, (b) any issuance of directors’ qualifying shares, and (c) sales or issuances of common stock of the Borrower to management or employees of the Borrower or any Subsidiary under any employee stock option or stock purchase plan or employee benefit plan in existence from time to time.
“ Escrow Agent ” means ABN Amro, as escrow agent under the Escrow Agreement, and its successor in such capacity.
“ Escrow Agreement ” means the Disbursement Escrow Agreement or the Acquisition Escrow Agreement, as the context may require.
 
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“ Escrow Pledge Agreement ” means the Deed of Disclosed Pledge over Receivables among the Borrower, as pledgor, the Collateral Agent and the Escrow Agent, substantially in the form of Exhibit G hereto.
“ Euro ” mean the lawful currency introduced in accordance with the EMU Legislation of each state described in any EMU Legislation as a Participating Member State. As used herein, “EMU Legislation” means the legislative measures of the European Council for the introduction of, changeover to or operation of a single or unified European currency.
“ Eurodollar ”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.
“ Event of Default ” has the meaning assigned to such term in Article VII.
“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
“ Excluded Taxes ” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. Federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 2.14(b)) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.12, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender acquired the applicable interest in a Loan or Commitment or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 2.12(e) and (d) any U.S. Federal withholding Taxes imposed under FATCA.
“ FATCA ” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof.
“ Federal Funds Effective Rate ” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.
“ Financial Officer ” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower.
 
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“ Financial Statements ” means the Borrower’s financial statements submitted periodically to the SVS in accordance with IFRS.
“ Governmental Authority ” means the government of the United States of America or Chile, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
“ Guarantee ” of or by any Person (the “ guarantor ”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.
“ Guaranty Agreement ” means the unconditional Guarantee by each of the Guarantors of all of the Borrower’s obligations under this Agreement, in the form of Exhibit C .
“ Guaranty Joinder ” has the meaning set forth in the Guaranty Agreement.
“ Guarantors ” means Cencosud Retail and each of the Target Companies.
“ Hazardous Materials ” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.
“ IFRS ” means the accounting principles known as the “International Financial Reporting Standards” adopted by the International Accounting Standards Board, as in effect from time to time.
“ Indebtedness ” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all net obligations under any agreement or instrument in respect of an interest rate or currency swap, exchange or hedging transaction or other financial derivatives transaction, (g) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (h) all Guarantees by such Person of Indebtedness of others, (i) all Capital Lease Obligations of such Person, (j)
 
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all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty and (k) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.
“ Indemnified Taxes ” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.
“ Indemnitee ” has the meaning assigned to it in Section 9.03(b).
“ Index Debt ” means senior, unsecured, long-term indebtedness for borrowed money of the Borrower that is not guaranteed by any other Person or subject to any other credit enhancement.
“ Information ” has the meaning assigned to it in Section 9.13.
“ Intangible Assets ” means, with respect to any Person and as of any date of determination, the assets of such Person that are properly classified as intangible assets or the equivalent concept in Spanish, in accordance with the regulations of the Superintendencia de Bancos e Instituciones Financieras and IFRS.
“ Interest Election Request ” means a request by the Borrower to continue a Borrowing in accordance with Section 2.03(b).
“ Interest Expense ” means, for a period consisting of the most recently ended four consecutive fiscal quarters reported to the SVS, with respect to the Borrower and its Consolidated Subsidiaries on a consolidated basis in accordance with IFRS, the aggregate interest expense for such period with respect to all outstanding indebtedness of the Borrower, which shall be determined as the difference between the account entry “ costos financieros ” set forth in the Borrower’s consolidated financial statements and the account entry “ ingresos financieros ”; provided that if at any time the Borrower is required to consolidate the accounts of Banco Paris or other Subsidiaries engaged in banking activities pursuant to IFRS, the Borrower shall exclude Banco Paris and any other such Subsidiaries from its consolidation of accounts.
“ Interest Payment Date ” means the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period.
“ Interest Period ” means the period commencing on the date of a Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as the Borrower may elect; provided that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month
 
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of such Interest Period and (iii) any Interest Period that would otherwise end after the Maturity Date shall end on the Maturity Date. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made.
“ JPMCB ” means JPMorgan Chase Bank, National Association and its successors.
“ Lead Arranger ” means J.P. Morgan Securities LLC and its successors in such capacity.
“ Lenders ” means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.
“ Leverage Ratio ” means, on any date, the ratio of (a) Net Financial Debt on such date to (b) Adjusted EBITDA for the period of four consecutive fiscal quarters ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the last day of the fiscal quarter most recently ended prior to such date).
“ LIBO Rate ” means, for any Interest Period, the rate per annum determined by the Administrative Agent to be the arithmetic mean of the offered rates for deposits in dollars with a term comparable to such Interest Period that appears on the Telerate British Bankers Assoc. Interest Settlement Rates Page (as defined below) at approximately 11:00 a.m., London, England time, on the second full Business Day preceding the first day of such Interest Period, except with respect to the Interest Period commencing on the Closing Date, for which the applicable “LIBO Rate” will be determined by the Administrative Agent acting in good faith (whether or not in a manner consistent with this definition); provided , however , that (i) if no comparable term for an Interest Period is available, the LIBO Rate shall be determined using the weighted average of the offered rates for the two terms most nearly corresponding to such Interest Period and (ii) if there shall at any time no longer exist a Telerate British Bankers Assoc. Interest Settlement Rates Page, “LIBO Rate” shall mean, with respect to each day during each Interest Period pertaining to Eurodollar Borrowings comprising part of the same Borrowing, the rate per annum equal to the rate at which the Administrative Agent is offered deposits in dollars at approximately 11:00 a.m., London, England time, two Business Days prior to the first day of such Interest Period in the London interbank market for delivery on the first day of such Interest Period for the number of days comprised therein and in an amount comparable to its portion of the amount of such Eurodollar Borrowing to be outstanding during such Interest Period; provided that in no event shall the LIBO Rate be less than zero. “ Telerate British Bankers Assoc. Interest Settlement Rates Page ” shall mean the display designated as Reuters Screen LIBOR01 Page (or such other page as may replace such page on such service for the purpose of displaying the rates at which dollar deposits are offered by leading banks in the London interbank deposit market).
“ Lien ” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
“ Loan Documents ” means this Agreement, the Guaranty Agreement, the Collateral Documents, any Promissory Notes (including, after the execution and delivery thereof, any endorsement ( avales ) of Cencosud Retail) executed and delivered pursuant to Section 2.06(e), and any other document executed in connection with this Agreement.
 
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“ Loan Parties ” means the Borrower and the Guarantors.
“ Loans ” means the loans made by the Lenders to the Borrower pursuant to this Agreement.
“ Margin Stock ” has the meaning assigned to such term in Regulation T, U or X of the Board.
“ Material Adverse Effect ” means any event, development or circumstance that has had or could reasonably be expected to have a material adverse effect on (x) the business, assets, property, or condition (financial or otherwise) of the Borrower, the Target Companies and their respective Subsidiaries, taken as a whole; provided that for purposes of the Specified Representations and as such term is used in Section 4.01(c) and for purposes of Section 4.01(i), this clause (x) shall be deemed to refer to the Borrower and its Subsidiaries (other than the Target Companies and their subsidiaries), taken as a whole, or (y) the validity or enforceability of this Agreement or the rights or remedies of the Administrative Agent and the Lenders hereunder.
“ Material Indebtedness ” means Indebtedness (other than the Loans), or obligations in respect of one or more Swap Agreements, of any one or more of the Borrower and its Subsidiaries in an aggregate principal amount exceeding $50,000,000. For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Borrower or any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such Swap Agreement were terminated at such time.
“ Material Subsidiary ” means, on any date, Cencosud Retail and any other Subsidiary (x) whose revenues represent more than 10% of the gross revenues of the Borrower and its Subsidiaries (determined on a consolidated basis without duplication in accordance with IFRS) and/or (y) whose assets represent more than 10% of Consolidated Total Assets; provided that the Material Subsidiaries, taken as a whole, shall at all times represent at least 80% of (i) the gross revenues of all of the Subsidiaries in the aggregate and (ii) the total assets of all of the Subsidiaries in the aggregate, in each case determined on a consolidated basis without duplication in accordance with IFRS and as reflected in the most recent financial statements delivered pursuant to Section 5.01 prior to such date and, if necessary to meet the preceding requirements of this proviso, the Borrower shall (from time to time) designate in writing to the Administrative Agent one or more additional Subsidiaries as Material Subsidiaries in order to satisfy such requirements. Schedule 1.01 sets forth the Material Subsidiaries as of the Effective Date. Notwithstanding the foregoing, as used in clauses (h), (i) and (j) of Article VII , “Material Subsidiary” shall mean (i) a “Material Subsidiary” determined as set forth in the first sentence of this definition, but with “2.5%” substituted for “10%” in each of the places in which it appears in clauses (x) and (y) therein and (ii) any group of Subsidiaries that, taken together as a single Subsidiary, would constitute a “Material Subsidiary” pursuant to clauses (x) and (y) of the first sentence of this definition.
“ Maturity Date ” means April 17, 2014 (or, if such day is not a Business Day, the next preceding Business Day).
“ Maximum Rate ” has the meaning assigned to such term in Section 9.14.
 
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“ Moody’s ” means Moody’s Investors Service, Inc.
“ Net Financial Debt ” means, as of any date of determination: (a) the aggregate principal amount of all Indebtedness of the Borrower and its Consolidated Subsidiaries at such date, determined on a consolidated basis in accordance with IFRS, of the type referred to in clauses (a), (b), (c), (d), (e), (f) and (i) thereof, but in each case if and to the extent that the foregoing (other than letters of credit) appears or is required to be accounted for as a liability upon a balance sheet (excluding contingencies disclosed solely in the footnotes thereto) of the Borrower and its Consolidated Subsidiaries prepared in accordance with IFRS, minus (b) the sum, determined for the Borrower and its Consolidated Subsidiaries, of (i) all unrestricted cash and Cash Equivalents (current and non-current) and (ii)  Otros Activos Financieros No Corrientes (other non-current investments), without duplication with clause (f) of the definition of “Indebtedness”, as most recently reported to the SVS for the Borrower and its Consolidated Subsidiaries on a consolidated basis (but excluding in any event Banco Paris or other banking Subsidiary excluded from the definition of “Consolidated Subsidiaries” even if included in such report).
“ Net Income ” means, for any period, the net income (or loss) of the Borrower and its Consolidated Subsidiaries determined on a consolidated basis in accordance with IFRS.
“ Net Proceeds ” shall mean (a) with respect to any Asset Sale, the cash proceeds (including cash proceeds subsequently received (as and when received) in respect of noncash consideration initially received), net of (i) selling expenses (including reasonable broker’s fees or commissions, legal fees, transfer and similar taxes and the Borrower’s good faith estimate of income taxes paid or payable in connection with such sale), (ii) amounts provided as a reserve, in accordance with IFRS, against any liabilities under any indemnification obligations or purchase price adjustment associated with such Asset Sale (provided that, to the extent and at the time any such amounts are released from such reserve, such amounts shall constitute Net Proceeds) and (iii) the principal amount, premium or penalty, if any, interest and other amounts on any Indebtedness for borrowed money which is secured by the asset sold in such Asset Sale and which is required to be repaid with such proceeds (other than any such Indebtedness assumed by the purchaser of such asset); provided , that, if (x) the Borrower shall deliver a certificate of a Financial Officer to the Administrative Agent at the time of receipt thereof setting forth the Borrower’s intent to reinvest such proceeds in a maximum aggregate amount of $50,000,000 during the term of this Agreement in productive assets of a kind then used or usable in the business of the Borrower and its Subsidiaries within 180-days of receipt of such proceeds; and (y) no Default or Event of Default shall have occurred and shall be continuing at the time of such certificate or at the proposed time of the application of such proceeds, then such proceeds shall not constitute Net Proceeds except to the extent not so used at the end of such 180 day period, at which time such proceeds shall be deemed to be Net Proceeds; except that (I) the cash proceeds from sales of accounts receivable in the ordinary of course of business (subject to the maximum aggregate reinvestment amount for all Asset Sales set forth in clause (x) above) may be reinvested solely in working capital of the Borrower and its Subsidiaries; and (II) cash proceeds from any Disposition of, or contribution into a joint venture, or any other Person that is not a Subsidiary of the Borrower, of any financing or credit card business or unit of the Borrower or its Subsidiaries may not be reinvested under the foregoing proviso; and (b) with respect to any Debt Incurrence or Equity Issuance, the cash proceeds thereof, net of all Taxes and customary fees, commissions, costs and other expenses incurred by the Borrower or, if applicable, any Subsidiary, in connection therewith.
“ Net Worth ” means, as of any date of determination, for the Borrower and its Consolidated Subsidiaries at such date, in each case determined on a consolidated basis in accordance with IFRS, the sum of the par amounts of capital stock, capital in excess of par or stated value of shares of stock, retained earnings and any other account which constitutes stockholders’ equity, but excluding any treasury stock.
 
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“ Obligations ” means all obligations of every nature of each Loan Party, including obligations from time to time owed to Administrative Agent or the Lenders or any of them under any Loan Document, whether for principal, interest (including interest which, but for the filing of a petition in bankruptcy with respect to such Loan Party, would have accrued on any Obligation, whether or not a claim is allowed against such Loan Party for such interest in the related bankruptcy proceeding), fees, expenses, indemnification or otherwise.
“ OFAC ” means the Office of Foreign Assets Control of the United States Department of the Treasury.
“ Other Connection Taxes ” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, enforced, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to, or enforced, any Loan Document), or sold or assigned an interest in any Loan or Loan Document).
“ Other Taxes ” means all present or future stamp, court or documentary intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.14(b)).
“ Parallel Debt ” has the meaning specified in Section 8.02(e).
“ Participant ” has the meaning assigned to such term in Section 9.04(c).
“ Participant Register ” has the meaning assigned to such term in Section 9.04(c).
“ Paulmann Family Entity ” means any trust or entity 100% owned and Controlled by or established for the sole benefit of, or the estate of, Horst Paulmann Kemna or his spouse or lineal descendants.
“ Paulmann Holder ” means (a) Horst Paulmann Kemna or any of his spouse or lineal descendants or (b) a Paulmann Family Entity.
“ Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“ Pledge Agreement ” means each of the pledge agreements entered into among the Dutch Target Companies, as grantors, and the Administrative Agent for the benefit of the Secured Parties in respect of the Acquired Colombian Shares and the other collateral referred to therein, substantially in the form attached hereto as Exhibit E .
“ Pledged Stock ” means the Acquired Colombian Shares and any other shares of capital stock issued in replacement or substitution of the Acquired Colombian Shares.
 
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“ Prime Rate ” means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank as its prime rate in effect at its office located at 270 Park Avenue, New York, New York; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.
“ Process Agent ” has the meaning assigned to such term in Section 9.10(c).
“ Promissory Note ” means a promissory note (which shall constitute a pagaré ( titulo ejecutivo ) under Chilean law) evidencing Loans, in the form of Exhibit D , delivered pursuant to Section 2.06(e).
“ Purchaser ” means the Borrower and/or one of its wholly owned Subsidiaries identified as the “Purchaser” in the Acquisition Agreement.
“ Recipient ” means, as applicable, (a) the Administrative Agent and (b) any Lender.
“ Refinancing Indebtedness ” means Indebtedness constituting a refinancing, refunding, renewal, modification or extension of Indebtedness outstanding on the Effective Date (the “ Refinanced Indebtedness ”) that (a) has an aggregate outstanding principal amount or accreted value, if applicable, not greater than the aggregate principal amount or accreted value, if applicable, of such Refinanced Indebtedness outstanding at the time of such refinancing or extension except by an amount equal to unpaid accrued interest and premium thereon plus other reasonable amounts paid, and fees and expenses reasonably incurred, in connection with such refinancing, refunding, renewal, modification or extension and by an amount equal to any existing commitments unutilized thereunder and (b) has a weighted average maturity (measured as of the date of such refinancing or extension) and maturity no shorter than that of such Refinanced Indebtedness.
“ Register ” has the meaning assigned to such term in Section 9.04(b).
“ Related Parties ” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.
“ Required Lenders ” means, at any time, Lenders having Commitments representing more than 50% of the sum of the total Credit Exposure; provided that for the purpose of determining the Required Lenders needed for any waiver, amendment, modification or consent, any Lender that is the Borrower, or any Affiliate of the Borrower, shall be disregarded.
“ Restricted Payment ” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in the Borrower or any option, warrant or other right to acquire any such Equity Interests in the Borrower.
“ S&P ” means Standard & Poor’s.
“ Sanctions ” has the meaning assigned to such term in Section 3.15.
 
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“ SEC ” means the United States Securities and Exchange Commission.
“ Secured Party ” means each of the Administrative Agent, the Collateral Agent and the Lenders.
“ Sellers ” means Carrefour Nederland B.V., a company incorporated under the laws of the Netherlands, and Carrefour S.A., a company incorporated under the laws of the French Republic.
“ Specified Representations ” means the representations and warranties set forth in Sections 3.01, 3.02, 3.03(ii), 3.03(iii), 3.04(a), 3.07, 3.08, 3.15, 3.16, 3.17, 3.19 and 3.20, but only insofar as they relate to the Borrower and its Subsidiaries (other than the Target Companies and their subsidiaries).
“ Statutory Reserve Rate ” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentage (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve percentage shall include those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.
“ subsidiary ” means, with respect to any Person (the “ parent ”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with IFRS as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.
“ Subsidiary ” means any subsidiary of the Borrower. For purposes of any representations and warranties made herein prior to the consummation of the Acquisition, the term “ Subsidiary ” shall not include any of the Target Companies or their respective Subsidiaries.
“ SVS ” means the Superintendencia de Valores y Seguros de Chile (Chilean Securities Commission).
“ Swap Agreement ” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.
 
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“ Target Companies ” means, collectively, the Colombian Target Companies and the Dutch Target Companies.
“ Tax Beneficial Owner ” means, with respect to any U.S. Federal withholding Tax, the beneficial owner, for U.S. Federal income tax purposes, to whom such Tax relates.
“ Taxes ” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“ The Netherlands ” means the Kingdom of the Netherlands.
“ Transactions ” shall mean, collectively, (a) the execution, delivery and performance by the Borrower of the Acquisition Agreement and the consummation of the transactions contemplated thereby, (b) the execution, delivery and performance by the Loan Parties of the Loan Documents to which they are a party and the making of the Borrowings hereunder, and (c) the payment of related fees and expenses.
“ U.S. Person ” means a “United States person” within the meaning of Section 7701(a)(30) of the Code.
“ Withholding Agent ” means any Loan Party and the Administrative Agent.
“ Voting Stock ” of any Person as of any date means the Equity Interests in such Person that are ordinarily entitled to vote in the election of the board of directors of such Person.
SECTION 1.02. Terms Generally . The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
SECTION 1.03. Accounting Terms; IFRS . Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with IFRS, as in effect from time to time; provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in IFRS or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such
 
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change in IFRS or in the application thereof, then such provision shall be interpreted on the basis of IFRS as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. Commitments . Subject to the terms and conditions set forth in this Agreement, each Lender severally agrees to lend to the Borrower on the Closing Date, in dollars such Lender’s pro rata share of the principal amount requested in a Borrowing Request pursuant to Section 2.03, not to exceed such Lender’s Commitment. None of the Loans are revolving in nature, and amounts paid or prepaid in respect of Loans may not be reborrowed.
SECTION 2.02. Loans and Borrowings . (a) Each Loan shall be made as part of a Borrowing consisting of Loans made by the Lenders ratably in accordance with their respective Commitments. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.
(b) Each Borrowing shall be comprised entirely of Eurodollar Loans. Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period, such Borrowing shall be in an aggregate amount that is an integral multiple of $5,000,000 and not less than $10,000,000.
SECTION 2.03. Requests for Borrowings; Interest Period Elections .
(a) To request a Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone or telecopy not later than 8:00 a.m., New York City time, on the date of the proposed Borrowing. Such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the amount corresponding to the Chilean Stamp Tax due thereunder;
(iii) the date of such Borrowing, which shall be a Business Day;
(iv) the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”;
(v) the location and number of the account to which funds are to be disbursed, which shall comply with the requirements of Section 2.04; and
(vi) the information of the accounts established by each of Cencosud Internacional Ltda. and Easy Colombia maintained with the Administrative Agent in New York City.
 
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The Borrowing Request shall contain an instruction from the Borrower to the Administrative Agent to transfer an amount equal to the proceeds of the Loans minus the amount specified in the Borrowing Request in accordance with clause (ii) above (x) from the account specified in the Borrowing Request in accordance to clause (v) above to the accounts of each of the Borrower’s Subsidiaries set forth in clause (vi) above and in the order specified therein, (y) from the account specified therein of Easy Colombia to an account of JPMCB for purposes of the conversion of such proceeds of the Loans into Euros, and (y) upon conversion of such amount into Euros, from the account of Easy Colombia S.A. to the Disbursement Escrow Account. Such instruction shall be irrevocable and shall not be modified without the Administrative Agent’s written consent.
The Borrowing of the Loans on the Closing Date shall be deemed an express and irrevocable authorization from the Borrower to the Administrative Agent to withhold from the proceeds of the Loan the amount of the Chilean Stamp Tax due thereunder in its equivalent in Chilean pesos to apply such amount to pay the Chilean Stamp Tax for the account and on behalf of the Borrower to Chile’s Tesorería General de la República (or any other Chilean agency or governmental body that may substitute or succeed it).
If no Interest Period is specified, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.
(b) Each Borrowing shall have an initial Interest Period as specified in such Borrowing Request and, thereafter, the Borrower may elect Interest Periods therefor, all as provided in this Section; provided that until the earlier of (i) the successful completion of the syndication of the facility under this Agreement, as notified in writing by the Lead Arranger to the Borrower, and (ii) the date that is six months after the Effective Date, the Borrower shall only be entitled to elect Interest Periods of one month’s duration.
(iii) To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by telephone not later than 11:00 a.m., New York City time, three Business Days before the end of the then current Interest Period. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by the Borrower.
(iv) Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:
(A) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day; and
(B) the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.
If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.
(v) In the event the Borrower elects to change the Interest Period as provided herein, it shall deliver to the Administrative Agent, concurrently with the written Interest Election Request, an executed allonge ( hoja de prolongación ) to the executed Promissory Notes in terms satisfactory to the Administrative Agent, with its signatures authorized by a Notary Public, amending the Interest Period set forth in the Promissory Notes to be consistent with the new Interest Period elected.
 
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SECTION 2.04. Funding of Borrowings . (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 12:00 noon, New York City time, on the Closing Date to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders. The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account of the Borrower maintained with the Administrative Agent in New York City and designated by the Borrower in the Borrowing Request.
(b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrower, the Alternate Base Rate. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.
SECTION 2.05. Termination and Reduction of Commitments . (a) Unless previously terminated, the Commitments shall terminate automatically at 5:00 p.m., New York City time on the last day of the Availability Period.
(b) The Borrower may at any time terminate, or from time to time reduce, the Commitments; provided that each reduction of the Commitments shall be in an amount that is an integral multiple of $1,000,000 and not less than $10,000,000.
(c) Any unused portion of the Commitments shall automatically terminate upon the making of the Loans on the Closing Date.
(d) In the event and on each occasion that, prior to the termination of the Commitments in accordance with Section 2.05(a), 2.05(b) or 2.05(c), any Net Proceeds are received by or on behalf of the Borrower or any of its Subsidiaries in respect of any Commitment Reduction/Prepayment Event, (i) the Borrower shall, on the day of such receipt, deliver to the Administrative Agent a notice thereof setting forth the nature of such Commitment Reduction/Prepayment Event and the amount of such Net
 
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Proceeds (together with a reasonably detailed calculation thereof), and (ii) the Commitments will be automatically and permanently reduced by the amount of such Net Proceeds (or, if less, the aggregate amount of the Commitments then in effect), such reduction to be effective on the day on which such Net Proceeds are received.
(e) The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) of this Section at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a notice of termination of the Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities or debt securities, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Commitments shall be permanent.
SECTION 2.06. Repayment of Loans; Evidence of Debt . (a) The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender the unpaid principal amount of each Loan as follows: (i) an amount equal to 50% of the amount of the Loans disbursed on the Closing Date, on October 17, 2013, and (ii) and the entire unpaid balance of the Loans on the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a Promissory Note, endorsed ( por aval ) by Cencosud Retail. In such event, the Borrower shall prepare, execute and deliver to such Lender a Promissory Note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent, which shall be duly endorsed ( por aval ) by Cencosud Retail by means of an allonge ( hoja de prolongación ) in the form included in Exhibit D, as soon as the required corporate approvals have been obtained in accordance with Section 5.11. Thereafter, the Loans evidenced by such Promissory Note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more Promissory Notes, endorsed ( por aval ) by Cencosud Retail after the required corporate approvals have been obtained, payable to the order of the payee named therein (or, if such Promissory Note so provides, to such payee and its registered assigns).
 
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SECTION 2.07. Prepayment of Loans . (a) The Borrower may upon at least three Business Days’ notice to the Administrative Agent, prepay any Loans, in whole or in part, in an amount that is an integral multiple of $1,000,000 and not less than $10,000,000 in the case of partial prepayments, by paying the principal amount to be prepaid together with accrued interest thereon to the date of prepayment.
(b) In the event and on each occasion that, after the Closing Date, any Net Proceeds are received by or on behalf of the Borrower or any of its Subsidiaries in respect of any Commitment Reduction/Prepayment Event, (i) the Borrower shall, on the date of such receipt, deliver to the Administrative Agent a notice thereof setting forth the nature of such Commitment Reduction/Prepayment Event and the amount of such Net Proceeds (together with a reasonably detailed calculation thereof) and (ii) within three Business Days after such Net Proceeds are received, the Borrower shall prepay Loans in an amount equal to such Net Proceeds (or, if less, the aggregate amount of the Loans then outstanding), together with accrued interest thereon to the date of prepayment.
(c) Subject to Section 2.07(h), upon the occurrence of the Disbursement Escrow Termination Date, the entire outstanding principal amount of the Loans shall become due and payable together with accrued and unpaid interest thereon, and the Borrower shall cause the Purchaser to instruct the Escrow Agent to transfer to an account designated by the Administrative Agent the entire Disbursement Escrow Deposit Amount. To the extent that the Disbursement Escrow Deposit Amount is not sufficient to pay the full amount of the Obligations that shall become due and payable on the Disbursement Escrow Termination Date, the Borrower shall pay the Administrative Agent any deficiency on such date.
(d) Subject to Section 2.07(h), upon the occurrence of the Acquisition Escrow Termination Date:
(i) The Borrower shall pay to the Administrative Agent an amount equal to the portion of the Acquisition Escrow Deposit Amount that the Purchaser shall be entitled to claim from the Escrow Agent in accordance with the Acquisition Escrow Agreement, which shall be applied to the prepayment of the outstanding principal amount of the Loans (or a portion thereof) together with accrued and unpaid interest thereon, and the Borrower shall cause the Purchaser to instruct the Escrow Agent to transfer to an account designated by the Administrative Agent such portion of the Acquisition Escrow Deposit Amount. Subject to clause (ii) of this Section 2.07(d) below, to the extent that the portion of the Acquisition Escrow Deposit Amount that the Purchaser shall be entited to claim from the Escrow Agent in accordance with the Acquisition Escrow Agreement is not sufficient to pay the full amount of the Obligations that shall become due and payable on the Acquisition Escrow Termination Date, the Borrower shall pay the Administrative Agent any deficiency on such date.
(ii) If and the extent that the portion of the Acquisition Escrow Deposit Amount that the Purchaser shall be entited to claim from the Escrow Agent in accordance with the Acquisition Escrow Agreement is not sufficient to pay the full amount of the Obligations that shall become due and payable on the Acquisition Escrow Termination Date as a result of the occurrence of an Acquisition Termination Fee Event, the Borrower shall pay the Administrative Agent the portion of the outstanding principal amount that remains outstanding after the prepayment of the Loans
 
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required by clause (i) of this Section 2.07(d) shall have been made, together with accrued and unpaid interest thereon and any other amounts that are due and payable under the Loan Documents on such date, on the date that is six months after the Acquisition Escrow Termination Date.
(e) Subject to Section 2.07(h), if the Purchaser shall have received any distributions from the Escrow Agent under either Escrow Agreement (other than as contemplated under Section 2.07(c), or (d) above) on any other date, the Borrower shall pay such amounts received to the Administrative Agent to be applied to the prepayment of the outstanding principal amount of the Loans (or a portion thereof) together with accrued and unpaid interest thereon.
(f) All prepayments of Loans shall be applied first to the principal amortization payment set forth in Section 2.06(a)(i) and second to the balance due on the Maturity Date. Each such prepayment shall be applied to prepay ratably the relevant Loans of the several Lenders. Prepayment of a Eurodollar Loan on any day other than the last day of an Interest Period applicable thereto shall be subject to Section 2.11.
(g) Upon receipt of a notice of prepayment pursuant to Section 2.07(a) or (b), the Administrative Agent shall promptly notify each Lender of the contents thereof and of such Lender’s ratable share of such prepayment, and such notice shall not thereafter be revocable by the Borrower.
(h) For the avoidance of doubt, any payment received pursuant to Section 2.07(c), (d) or (e) in any currency other than U.S. dollars shall be subject to the provisions of Section 9.17.
SECTION 2.08. Fees . (a) The Borrower agrees to pay to the Administrative Agent for the account of each Lender an undrawn commitment fee which shall accrue at a rate equal to 35% of the Applicable Margin in effect from time to time on the average daily amount of the undrawn Commitment of such Lender, which fee shall accrue during the period from October 17, 2012 (but only if the Closing Date shall not have occurred on or prior to such date) to but excluding the date on which such Commitment terminates. The accrued commitment fees, if any, shall be payable on the earlier of the Closing Date and the date of termination or expiration of the Commitments.
(b) If any Loans have not been repaid in full in cash on or prior to:
(i) the 181 th day after the Effective Date, a fully earned and non-refundable duration fee equal to 0.15% of the aggregate principal amount of Loans then outstanding shall be due and payable by the Borrower on such date to the Administrative Agent for the account of each Lender pro rata in accordance with its Applicable Percentage;
(ii) the 271 th day after the Effective Date, a fully earned and non-refundable duration fee equal to 0.20% of the aggregate principal amount of Loans then outstanding shall be due and payable by the Borrower on such date to the Administrative Agent for the account of each Lender pro rata in accordance with its Applicable Percentage;
(iii) the 361 st day after the Effective Date, a fully earned and non-refundable duration fee equal to 0.25% of the aggregate principal amount of Loans then outstanding shall be due and payable by the Borrower on such date to the Administrative Agent for the account of each Lender pro rata in accordance with its Applicable Percentage; and
(iv) the 451 st day after the Effective Date, a fully earned and non-refundable duration fee equal to 0.35% of the aggregate principal amount of Loans then outstanding shall be due and payable by the Borrower on such date to the Administrative Agent for the account of each Lender pro rata in accordance with its Applicable Percentage.
 
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(c) The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrower and the Administrative Agent.
(d) The Borrower shall pay the Lead Arranger or the Administrative Agent, as applicable, all fees and other amounts payable in connection with the occurrence of the Closing Date, not later than one Business Day after the Closing Date.
(e) The undrawn commitment fees payable pursuant to Section 2.08(a) shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).
(f) Except for the fees set forth in Section 2.08(d), all fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent for distribution, in the case of the commitment fees and duration fees, to the Lenders. Fees paid shall not be refundable under any circumstances.
SECTION 2.09. Interest . (a) The Loans comprising each Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Margin.
(b) Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided in paragraph (a) of this Section or (ii) in the case of any other amount, 2% plus the Applicable Margin plus the Alternate Base Rate.
(c) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan; provided that (i) interest accrued pursuant to paragraph (b) of this Section shall be payable on demand and (ii) in the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment.
(d) All interest hereunder shall be computed on the basis of a year of 360 days, and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.
SECTION 2.10. Increased Costs . (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or similar requirement (including any compulsory loan requirement, insurance charge or other assessment) against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate);
 
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(ii) impose on any Lender or the London interbank market any other condition, cost or expense affecting this Agreement or Eurodollar Loans made by such Lender; or
(iii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes and (B) Excluded Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;
and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Loan (or of maintaining its obligation to make any such Loan), then the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.
(b) If any Lender determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement or the Loans made by, such Lender, to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy and liquidity), then from time to time the Borrower will pay to such Lender, such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.
SECTION 2.11. Break Funding Payments . In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the failure to borrow, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto or (c) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.14, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (x) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow or continue, for the period that would have been the Interest Period for such Loan), over (y) the amount of interest which would accrue on such principal amount for such
 
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period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.
SECTION 2.12. Taxes .
(a) Payments Free of Taxes . Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings of Indemnified Tax applicable to additional sums payable under this Section 2.12) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.
(b) Payment of Other Taxes by the Borrower . The Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for, Other Taxes.
(c) Evidence of Payments . As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section 2.12, such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(d) Indemnification by the Borrower . The Loan Parties shall jointly and severally indemnify each Recipient, within 30 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.
(e) Status of Lenders . Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative
 
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Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.
Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.
(f) Treatment of Certain Refunds . If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.12 (including by the payment of additional amounts pursuant to this Section 2.12), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 2.12 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (f) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (f), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (f) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
(g) Survival . Each party’s obligations under this Section 2.12 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.
SECTION 2.13. Payments Generally; Pro Rata Treatment; Sharing of Set-offs . (a) The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest or fees, or of amounts payable under Section 2.10, 2.11 or 2.12, or otherwise) prior to 12:00 noon, New York City time, on the date when due, in immediately available funds, without set off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices at 270 Park Avenue, New York, New York, except that payments pursuant to Sections 2.10, 2.11, 2.12, and 9.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in dollars.
 
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(b) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.
(c) If any Lender shall, by exercising any right of set off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.04(b), 2.13(d) or 9.03(c), then the Administrative Agent may, in its discretion and notwithstanding any contrary provision hereof, (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid, and/or (ii) hold such amounts in a segregated account over which the Administrative Agent shall have exclusive control as cash collateral for, and application to, any future funding obligations of such Lender under any such Section, in the case of each of clause (i) and (ii) above, in any order as determined by the Administrative Agent in its discretion.
SECTION 2.14. Mitigation Obligations; Replacement of Lenders . (a) If any Lender requests compensation under Section 2.10, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.12, then
 
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such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.10 or 2.12, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.10, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.12, or if any Lender becomes a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.10 or payments required to be made pursuant to Section 2.12, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.
SECTION 2.15. Defaulting Lenders . Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:
(a) fees shall cease to accrue on the unfunded portion of the Commitment of such Defaulting Lender pursuant to Section 2.08(a); and
(b) the Commitment of such Defaulting Lender shall not be included in determining whether the Required Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 9.02); provided that this clause (b) shall not apply to the vote of a Defaulting Lender in the case of an amendment, waiver or other modification requiring the consent of such Lender or each Lender affected thereby.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. Organization; Powers . Each of the Borrower and each Material Subsidiary is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.
 
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SECTION 3.02. Authorization; Enforceability . The Transactions are within the Borrower’s corporate powers and have been duly authorized by all necessary corporate and, if required, stockholder action. This Agreement has been duly executed and delivered by the Borrower and constitutes (and each other Loan Document, when executed and delivered in accordance with its terms, will be) a legal, valid and binding obligation of the Borrower (or, in the case of the Guaranty Agreement, Cencosud Retail), enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts . The Transactions (i) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority or other third party, except (A) the delivery by the Borrower, pursuant to the provisions of Chapter XIV of the Compendium of Foreign Exchange Regulations of the Central Bank of Chile (the “ Compendium ”) and pursuant to the procedure set forth in Chapter XIV of the Procedure and Information Forms Manual of the Compendium, to a commercial bank of a report of the financial terms and conditions of the Loan Documents and other amounts payable pursuant to the Loan Documents, and the principal repayment and interest payment schedule thereof for further delivery by the commercial bank to the Central Bank of Chile, (B) such as have been obtained or made and are in full force and effect, (C) filings and notifications by the Borrower to the Central Bank of Chile in the event that the Borrower makes a payment from Chile and/or receives foreign currency from countries other than Chile in accordance with the Loan Documents through the Chilean Formal Exchange Market (in which case certain information must be provided to the participating institution in the Chilean Formal Exchange Market in order to acquire and remit foreign currency abroad and/or to receive foreign currency from countries other than Chile) and (D) an official Spanish translation of the Loan Documents is required to bring an action thereon in the courts of Chile, (ii) will not violate any applicable law or regulation (including regulations of the Central Bank of Chile) or the charter, by-laws or other organizational documents of the Borrower or any Material Subsidiary or any order of any Governmental Authority (including the Central Bank of Chile), (iii) will not violate or result in a default under any indenture, agreement or other instrument binding upon the Borrower or any Material Subsidiary or its assets, or give rise to a right thereunder to require any payment to be made by the Borrower or any Material Subsidiary, and (iv) will not result in the creation or imposition of any Lien on any asset of the Borrower or any Material Subsidiary.
SECTION 3.04. Financial Condition; No Material Adverse Change . (a) The Borrower has heretofore furnished to the Lenders (A) consolidated balance sheets and statements of income, stockholders equity and cash flows for the Borrower and Cencosud Retail, as of and for the fiscal years ended December 31, 2009, 2010 and 2011, reported on by PricewaterhouseCoopers, independent public accountants, and (B) consolidated unaudited balance sheets and statements of income, stockholders equity and cash flows for the Borrower and Cencosud Retail, as of and for the fiscal quarter and the portion of the fiscal year ended June 30, 2012, certified by the Borrower’s chief financial officer. Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower and its consolidated Subsidiaries as of such dates and for such period in accordance with IFRS.
(b) Since December 31, 2011, there has been no material adverse change in the business, assets, property, or condition (financial or otherwise), of the Borrower and its Subsidiaries, taken as a whole.
 
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SECTION 3.05. Properties . (a) Each of the Borrower and each Material Subsidiary has good title to, or valid leasehold interests in, all its real and personal property material to its business, except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes.
(b) Each of the Borrower and each Material Subsidiary owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its business, and the use thereof by the Borrower and its Material Subsidiaries does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.06. Litigation and Environmental Matters . (a) There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any Subsidiary (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve this Agreement or the Transactions.
(b) Except for the Disclosed Matters and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor any Subsidiary (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.
(c) Since the date of this Agreement, there has been no change in the status of the Disclosed Matters that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect.
SECTION 3.07. Compliance with Laws and Agreements; No Default . Each of the Borrower and each Subsidiary is in compliance with (i) all laws, rules, regulations and orders of any Governmental Authority (including without limitation Environmental Laws, and laws with respect to social security and pension or retirement fund obligations) applicable to it or its property, and (ii) all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is continuing.
SECTION 3.08. Investment Company Status . None of the Borrower, Cencosud Retail or any Material Subsidiary is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.
SECTION 3.09. Ownership of Properties; Liens . The Borrower and each Material Subsidiary has good record and marketable title to all of its material properties and assets, real and personal, tangible and intangible, of any nature whatsoever, free and clear of all Liens, except Liens permitted under Section 6.01.
SECTION 3.10. Taxes . Each of the Borrower and each Material Subsidiary has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith
 
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by appropriate proceedings and for which the Borrower or such Material Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.11. Intellectual Property . The Borrower and its Material Subsidiaries own or are licensed or otherwise have the right to use all of the material patents, trademarks, service marks, trade names, copyrights, contractual franchises, authorizations and other rights that are reasonably necessary for the operation of their respective businesses. Except as disclosed by the Borrower in writing from time to time to the Administrative Agent and the Lenders, no claim or litigation regarding any of the foregoing is pending or threatened, and no patent, invention, device, application, principle or any statute, law, rule, regulation, standard or code is pending or, to the knowledge of the Borrower, proposed, which, in either case, could reasonably be expected to have a Material Adverse Effect.
SECTION 3.12. Subsidiaries . Schedule 3.12 sets forth as of the Effective Date a list of all Subsidiaries, the jurisdiction of their formation or organization, as the case may be, and the percentage ownership interest of such Subsidiary’s parent company therein.
SECTION 3.13. Disclosure . The Borrower has disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which it or any Material Subsidiary is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No financial statements, certificates or other information furnished by or on behalf of the Borrower to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished and taken as a whole) contains (or if delivered after the Effective Date, shall contain, when delivered) any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.
SECTION 3.14. Foreign Exchange Regulations; Immunity; Enforcement . The Borrower has complied with all foreign exchange regulations, if any, and has made all necessary filings, the failure of which might affect any payment to be made under the Loan Documents, and there are no foreign exchange restrictions in effect in Chile which would adversely affect any payment to be made under the Credit Agreement. Under the laws of Chile, with respect to the execution, delivery and performance of this Agreement, the Borrower is subject to private commercial law and to suit, and neither it nor its properties have any immunity from the jurisdiction of any court or legal process (whether through service of notice, attachment prior to notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise).
SECTION 3.15. OFAC; Patriot Act; Sanctions To the extent applicable, the Borrower and each Subsidiary is in compliance, in all material respects, with (i) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (ii) the Act. No part of the proceeds of the Loans will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended. Neither the Borrower nor any Subsidiary, or any director or officer of the Borrower or any Subsidiary is a Person that is, or is controlled by Persons that are: (i) the subject of any
 
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sanctions (A) administered by OFAC, the European Union, Her Majesty’s Treasury or the United Nations Security Council or (B) pursuant to the U.S. Iran Sanctions Act, as amended (collectively, “ Sanctions ”), nor (ii) located, organized or resident in a country or territory that is, or whose government is, the subject of Sanctions (including, without limitation, Belarus, Burma/Myanmar, Democratic Republic of Congo, Cote D’Ivoire (Ivory Coast), Cuba, Eritrea, Iran, Iraq, Lebanon, Libya, Liberia, North Korea, Sierra Leone, Somalia, Sudan, Syria and Zimbabwe).
SECTION 3.16. Federal Reserve Regulations . (a) None of the Borrower or any Material Subsidiary is engaged principally, or as one of its important activities, in the business of purchasing or carrying Margin Stock or extending credit for the purpose of purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Loan have been or will be used (i) to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock or (ii) for a purpose in violation of Regulation T, U or X of the Board.
SECTION 3.17. Rank of Debt . Except for Liens permitted under Section 6.01 and any obligations in respect of employee compensation and benefits and taxes and other obligations having priority under applicable laws but which are immaterial in the aggregate to the Borrower and its Subsidiaries, taken as a whole, the obligations of the Borrower under this Agreement to pay any and all amounts due hereunder will rank at least pari passu in right of payment with all other present or future unsecured, unsubordinated indebtedness of the Borrower.
SECTION 3.18. Legal Form . Each Loan Document is (or, in the case of any Notes, will be when executed) in proper legal form under the laws of Chile for the enforcement thereof in accordance with its terms against the Borrower under such laws. The Guaranty Agreement, when executed will be in proper legal form under the laws of Chile, Colombia and the Netherlands, for the enforcement thereof in accordance with its terms under such laws against each Guarantor organized under the laws of each such jurisdiction, respectively. To ensure the legality, validity, enforceability or admissibility into evidence in Chile of this Agreement, it is not necessary that this Agreement or any other Loan Document be filed or recorded with any Governmental Authority in Chile (except for the (i) preparation of an official translation into Spanish of this Agreement by an approved translator, (ii) authorization by a notary public, (iii) consularization and legalization by the Chilean Ministry of Foreign Relations, and (iv) payment of a stamp tax to Chile’s Tesorería General de la República (or any other Chilean agency or governmental body that may substitute or succeed it) in an amount based on the principal amount and duration of the Loans, assuming for this purpose that the Loans therein remain outstanding and are repaid on the Maturity Date (the “ Chilean Stamp Tax ”), each in the manner prescribed by Chilean law).
SECTION 3.19. Pledged Stock . (a) The Pledge Agreements, upon execution and delivery thereof by the parties thereto, will create in favor of the Administrative Agent, for the ratable benefit of the Secured Parties, a legal, valid, fully and prior perfected and enforceable security interest in the Collateral.
SECTION 3.20. Solvency . After giving pro forma effect to the Acquisition on the Closing Date, (a) the fair value of the property of the Borrower and its Subsidiaries, on a consolidated basis, will be greater than the total amount of liabilities, including contingent liabilities, of the Borrower and its Subsidiaries, on a consolidated basis, (b) the present fair saleable value of the assets of the Borrower and its Subsidiaries, on a consolidated basis, will be greater than the amount that will be required to pay the probable liability of the Borrower and its Subsidiaries on their debts, on a consolidated
 
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basis, as they become absolute and matured, (c) the capital of the Borrower and its Subsidiaries, on a consolidated basis, is not unreasonably small in relation to their collective businesses, taken as a whole, as now conducted and as proposed to be conducted immediately following the Effective Date, and (d) the Borrower and its Subsidiaries, on a consolidated basis, do not intend to incur, or believe that they will incur, on or immediately following the Effective Date, debts, including current obligations, beyond their ability to pay such debts as they become absolute and matured. For the purposes of this Section 3.20, (i) the amount of any contingent liability at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability and (ii) it is assumed that the Indebtedness and the other obligations incurred under and in connection with this Agreement will come due in the amounts and on the dates set forth in Section 2.06(a).
ARTICLE IV
Conditions
SECTION 4.01. Closing Date . The obligations of the Lenders to make Loans hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have received from each party hereto either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement.
(b) The Administrative Agent shall have received such customary documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of the Borrower and incumbency of the officers acting on its behalf, the authorization of the Transactions and any other legal matters relating to the Borrower, this Agreement or the Transactions, all in form and substance satisfactory to the Administrative Agent and its counsel.
(c) The Specified Representations shall be true and correct in all material respects on and as of the date of such Borrowing.
(d) At the time of and immediately after giving effect to such Borrowing, no Default with respect to the Specified Representations shall have occurred and be continuing.
(e) [Reserved]
(f) All governmental and third party approvals necessary in connection with this Agreement and the Transactions contemplated hereby and the continuing operations of the Borrower and its Subsidiaries (including the Target Companies and their subsidiaries) shall have been obtained and be in full force and effect.
(g) The Lenders shall have received (i) audited consolidated financial statements of each of the Borrower and Cencosud Retail for the three most recent fiscal years ended prior to the Closing Date, (ii) unaudited interim consolidated financial statements of each of the Borrower for each fiscal quarterly period ended subsequent to the date of the latest financial statements delivered pursuant to clause (i) of this paragraph as to which such financial statements are available, and (iii) a pro forma
 
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consolidated balance sheet and related pro forma consolidated statement of income of the Borrower and its subsidiaries, including the Target Companies and its subsidiaries, as of and for (A) the most recently completed fiscal year prepared after giving pro forma effect to the Transactions as if the Transactions had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of such other financial statements).
(h) There shall not have occurred any event, development or circumstance, including any action, investigation, litigation or proceeding in any court or before any arbitrator or governmental authority, that has had or could reasonably be expected to have a Material Adverse Effect.
(i) The Administrative Agent shall have received a favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Closing Date) of Milbank Tweed, Hadley & McCloy LLP, New York counsel for the Borrower and Philippi Abogados, Chilean counsel for the Borrower and Cencosud Retail, of, substantially in the form of Exhibit B-1 and Exhibit B-2 , respectively, and covering such matters relating to the Borrower, this Agreement, the Guaranty Agreement, the Pledge Agreements or the Transactions as the Administrative Agent and the Lenders shall reasonably request. The Borrower hereby requests such counsel to deliver such opinions.
(j) The Administrative Agent shall have received irrevocable instructions and authorization from the Borrower to withhold from the Loans the necessary funds to pay the Chilean Stamp Tax applicable thereto in accordance with Section 2.03 of this Agreement.
(k) Each Lender, as applicable, shall have received a duly executed Promissory Note with respect to such Loan.
(l) The Administrative Agent shall have received a certificate, dated the Closing Date and signed by the President, a Vice President or a Financial Officer of the Borrower, confirming compliance with the conditions set forth in paragraphs (c) and (d) of this Section.
(m) The Administrative Agent shall have received a certificate from the chief financial officer of the Borrower certifying that the Borrower and its Subsidiaries on a consolidated basis after giving effect to the Acquisition and the other Transactions, are in compliance with the conditions set forth in clauses (a) through (d) of Section 3.20.
(n) The Administrative Agent shall have received from each of Easy Colombia and the Escrow Agent (i) counterparts of the Disbursement Escrow Agreement signed on behalf of each such party or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy transmission of a signed signature page of such agreement) that such party has signed a counterpart of such agreement.
(o) The Lenders shall have received prior to the Closing Date all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the Act.
The Administrative Agent shall notify the Borrower and the Lenders of the Closing Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at or prior to 3:00 p.m., New York City time, on October 25, 2012 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).
 
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The Borrowing of the Loans on the Closing Date shall be deemed to constitute a representation and warranty by the Borrower that all the representations and warranties set forth in this Agreement are true and correct in all material respects as of such date.
SECTION 4.02. Conditions to Disbursement Escrow Release Date . The release of the Disbursement Escrow Deposit Amount from the Disbursement Escrow Account and the occurrence of the Disbursement Escrow Release Date is subject to the satisfaction of the Disbursement Escrow Release Conditions in accordance with the Disbursement Escrow Agreement (or waiver in accordance with Section 9.02) prior to the occurrence of the Disbursement Escrow Termination Date.
The Administrative Agent shall notify the Lenders of the Disbursement Escrow Release Date, and such notice shall be conclusive and binding.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full, in each case, without any pending draw, the Borrower covenants and agrees with the Lenders that:
SECTION 5.01. Financial Statements; Ratings Change and Other Information . The Borrower will furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of the Borrower, audited consolidated balance sheets and related statements of operations, stockholders’ equity and cash flows for each of the Borrower and Cencosud Retail as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by PricewaterhouseCoopers or other independent public accountants of recognized national standing (without a “going concern” or like qualification, commentary or exception arising out of the scope of the audit, or without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its Consolidated Subsidiaries or Cencosud Retail and its Consolidated Subsidiaries, respectively, on a consolidated basis in accordance with IFRS consistently applied;
(b) within 60 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, consolidated balance sheets and related statements of operations, stockholders’ equity and cash flows for the Borrower as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of the Borrower’s Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its Consolidated Subsidiaries, on a consolidated basis in accordance with IFRS consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;
(c) prior to the disbursement of the Loans on the Closing Date, an unaudited pro forma consolidated balance sheet and related pro forma statements of income, stockholder’s equity and cash flows as of June 30, 2012 for the Borrower and its Consolidated Subsidiaries (including the Target Companies and their respective subsidiaries), prepared giving effect to the Transactions as if they had
 
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occurred, with respect to such balance sheet, on such date and, with respect to such other financial statements, on the first day of the 12-month period ending on such date, which pro forma financial statements will have been prepared in good faith by the Borrower, based on the assumptions believed by the Borrower on the date of delivery thereof and on the Closing Date to be reasonable, and based on the best information available to the Borrower as of the date of delivery thereof, accurately reflect in all material respects all adjustments required to be made to give effect to the Transactions and present fairly on a pro forma basis the estimated consolidated financial position of the Borrower and its consolidated Subsidiaries as of such date and for such period, assuming that the Transactions had actually occurred at such date or at the beginning of such period, as the case may be;
(d) concurrently with any delivery of financial statements under clause (a) or (b) above, a certificate of a Financial Officer of the Borrower (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance with Sections 6.07 and 6.08 and (iii) stating whether any change in IFRS or in the application thereof has occurred since the date of the audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate;
(e) concurrently with any delivery of financial statements under clause (a) above, a detailed consolidated budget for such fiscal year (including a projected consolidated balance sheet and related statements of projected operations and cash flows as of the end of and for such fiscal year and setting forth the material assumptions used for purposes of preparing such budget);
(f) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Borrower or any Subsidiary with the SVS, the SEC, or any Governmental Authority succeeding to any or all of the functions of said Commission, or with any national securities exchange, as the case may be;
(g) promptly after Moody’s or S&P shall have announced a change in the rating established or deemed to have been established for the Index Debt, written notice of such rating change;
(h) promptly following any request therefor, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of the Borrower by independent accountants in connection with the accounts or books of the Borrower or any Material Subsidiary, or any audit of any of them; and
(i) promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any Material Subsidiary, or compliance with the terms of this Agreement, as the Administrative Agent or any Lender may reasonably request.
SECTION 5.02. Notices of Material Events . The Borrower will furnish to the Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Borrower or any Affiliate thereof that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect;
 
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(c) the execution of the Acquisition Agreement together with a complete copy thereof upon the occurrence of the Disbursement Escrow Release Date;
(d) the termination of the Acquisition Agreement, any Escrow Agreement, the occurrence of the Acquisition Escrow Release Conditions, the determination by the Borrower that the Disbursement Escrow Release Conditions or Acquisition Escrow Release Conditions shall not be met, the receipt of any payments from the Escrow Agent or notice that any such payment shall be made, and any material dispute with the Sellers or the Escrow Agent relating to any of the foregoing; and
(e) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.
SECTION 5.03. Existence; Conduct of Business . The Borrower will, and will cause each of its Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.02.
SECTION 5.04. Payment of Obligations . The Borrower will, and will cause each of its Subsidiaries to, pay its obligations, including Tax liabilities, that, if not paid, could result in a Material Adverse Effect before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with IFRS and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.05. Maintenance of Properties; Insurance . The Borrower will, and will cause each of its Material Subsidiaries to, (a) keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, and (b) maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations.
SECTION 5.06. Books and Records; Inspection Rights . The Borrower will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. The Borrower will, and will cause each Guarantor and each other Material Subsidiary to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested.
SECTION 5.07. Compliance with Laws and Contractual Obligations . The Borrower will, and will cause each of its Subsidiaries to, comply with (i) all laws, rules, regulations and orders of any Governmental Authority (including without limitation, OFAC, Environmental Laws, and laws with
 
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respect to social security and pension or retirement fund obligations) applicable to it or its property and (ii) all Contractual Obligations, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to have or result in a Material Adverse Effect.
SECTION 5.08. Use of Proceeds . The proceeds of the Loans will only be used to finance the purchase price of 100% of the outstanding shares of capital stock of the Target Companies and pay the Chilean Stamp Tax and the fees and expenses related thereto. No part of the proceeds of any Loan will be used, whether directly or indirectly, to purchase or carry any Margin Stock, or to extend credit to others for the purpose of purchasing or carrying any Margin Stock, or for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X of the Board.
SECTION 5.09. Accuracy of Information . The Borrower will ensure that any information, including financial statements or other documents, furnished to the Administrative Agent or the Lenders in connection with this Agreement or any amendment or modification hereof or waiver hereunder contains no material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made and taken as a whole, not misleading, and the furnishing of such information shall be deemed to be representation and warranty by the Borrower on the date thereof as to the matters specified in this Section 5.09.
SECTION 5.10. Pari Passu Status . The Borrower will cause the obligations under this Agreement to rank at all times at least pari passu with all other present and future unsecured indebtedness of the Borrower and its Subsidiaries.
SECTION 5.11. Post-Closing Obligations
(a) The Borrower will cause the Guaranty Agreement to be executed and delivered by Easy Colombia as promptly as practicable an in any event not later than two Business Days after the Effective Date. Together therewith, the Borrower shall cause Easy Colombia to deliver to the Administrative Agent (i) all documents the Administrative Agent may reasonably request relating to the existence of Easy Colombia, the corporate authority for and the validity of the Guaranty Joinder and the Guaranty Agreement and any other matters relevant hereto, all in form and substance reasonably satisfactory to the Administrative Agent, (ii) favorable written opinions (addressed to the Administrative Agent and the Lenders) of Milbank Tweed, Hadley & McCloy LLP, New York counsel for the Loan Parties, and Posse Herrera & Ruiz, Colombian counsel for the Loan Parties, satisfactory in form and substance to the Administrative Agent and its counsel, and covering such matters relating to Easy Colombia and the Loan Documents as the Administrative Agent and the Lenders shall reasonably request, and (iv) such other documents required pursuant to the Guaranty Joinder.
(b) The Borrower will cause the Guaranty Agreement to be executed and delivered by Cencosud Retail as promptly as practicable an in any event not later than 40 days after the Effective Date. Together therewith, the Borrower shall cause Cencosud Retail to deliver to the Administrative Agent (i) all documents the Administrative Agent may reasonably request relating to the existence of Cencosud Retail, the corporate authority for and the validity of the Guaranty Joinder (as defined in the Guaranty Agreement) and the Guaranty Agreement and any other matters relevant hereto, all in form and substance reasonably satisfactory to the Administrative Agent, (ii) duly executed endorsements ( avales ) in respect of each Promissory Note then outstanding, to the extent made available by the Lenders to Cencosud Retail for purposes of such endorsement ( aval ), (iii) favorable written opinions (addressed to the Administrative Agent and the Lenders) of Milbank Tweed, Hadley & McCloy LLP, New York counsel for the Loan Parties, and of Philippi Abogados, Chilean counsel for the Borrower and Cencosud
 
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Retail, satisfactory, in form and substance to the Administrative Agent and its counsel, and covering such matters relating to Cencosud Retail and the Loan Documents as the Administrative Agent and the Lenders shall reasonably request, and (iv) such other documents required pursuant to the Guaranty Joinder.
(c) The Borrower will cause the Guaranty Agreement to be executed and delivered by each of the Target Companies and the Pledge Agreements to be executed by each of the Target Companies identified as party in the form of Pledge Agreement as promptly as practicable an in any event not later than 30 days after the Acquisition Escrow Release Date. Together therewith, the Borrower shall cause each Target Company to deliver to the Administrative Agent (i) all documents the Administrative Agent may reasonably request relating to the existence of each the Target Companies, the corporate authority for and the validity of the Guaranty Joinder, the Guaranty Agreement and each Pledge Agreement and any other matters relevant hereto, all in form and substance reasonably satisfactory to the Administrative Agent, (ii) favorable written opinions (addressed to the Administrative Agent and the Lenders) of Milbank Tweed, Hadley & McCloy LLP, New York counsel for the Loan Parties, Brauw Blackstone Westbroek N.V., Dutch counsel for the Loan Parties, and Posse Herrera & Ruiz, Colombian counsel for the Loan Parties, satisfactory in form and substance to the Administrative Agent and its counsel, and covering such matters relating to the Target Companies and the Loan Documents as the Administrative Agent and the Lenders shall reasonably request, and (iii) such other documents required pursuant to the Guaranty Joinder.
SECTION 5.12. Further Assurances . (a) The Borrower shall, and shall cause each other Loan Party to, execute any and all further documents, financing statements, agreements and instruments, and take all further action that may be required under applicable law, or that the Required Lenders or the Administrative Agent may reasonably request, in order to effectuate the transactions contemplated by the Loan Documents and in order to grant, preserve, protect and perfect the validity and first priority of the security interests created or intended to be created by the Pledge Agreements.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full, in each case, without any pending draw, the Borrower covenants and agrees with the Lenders that:
SECTION 6.01. Limitation on Liens . The Borrower shall not, and shall not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of its property, assets, income or profits, whether now owned or hereafter acquired, except:
(a) Liens for taxes, assessments or other governmental charges not yet delinquent or that are being contested in good faith by appropriate proceedings; provided, that such Person has posted a bond or other security in accordance with (and to the extent required by) applicable law or has established adequate reserves with respect to the contested items in accordance with IFRS;
(b) Liens, privileges or charges imposed by law, such as unemployment insurance and other types of social security, and carriers’, warehousemen’s, mechanics’, landlords’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business in respect of obligations that are not overdue for a period of more than 30 days or that are being contested in good faith by appropriate proceedings; provided that the Borrower or such Subsidiary has posted a bond or other security in accordance with (and to the extent required by) applicable law or has established adequate reserves with respect to the contested items in accordance with IFRS;
 
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(c) pledges or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security legislation;
(d) Liens or deposits to secure the performance of bids, tenders, trade or government contracts, leases, concessions, licenses, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case, incurred in the ordinary course of business;
(e) easements (including, without limitation, reciprocal easement agreements), rights-of-way, building, zoning and similar restrictions, utility agreements, covenants, reservations, restrictions, minor encroachments and other similar minor encumbrances, defects or irregularities in title which do not, individually or in the aggregate, (i) secure any Indebtedness, (ii) materially detract from the value of the real estate to which it relates or (iii) materially interfere with the ordinary conduct of business of the Borrower and its Subsidiaries, taken as a whole;
(f) Liens existing on the Effective Date and described in Schedule 6.01(f) ; provided that (i) no such Lien shall extend to or cover other assets or property of the Borrower or its Subsidiaries other than the respective assets or property encumbered by such Lien on the Effective Date and (ii) such Lien shall secure only those obligations which it secures on the Effective Date and extensions, renewals and replacements thereof that do not increase the outstanding principal amount of the obligations secured thereby;
(g) Liens on any property or asset acquired after the Effective Date and existing prior to the acquisition thereof by the Borrower or existing on any property or asset of any Person that becomes a Subsidiary of the Borrower after the Effective Date that exists prior to the time such Person becomes a Subsidiary of the Borrower; provided , however , that (i)such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be (ii) such Lien will not apply to any other property of the Borrower or any of its Subsidiaries and, and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be, and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;
(h) Liens on fixed or capital assets acquired (including real estate), constructed or improved by the Borrower or any of its Subsidiaries; provided that (i) such Liens and the Indebtedness secured thereby are incurred before or within 180 days after such acquisition or the completion of such construction or improvement, (ii) the Indebtedness secured thereby does not exceed 100% of the cost of acquiring, constructing or improving such fixed or capital assets, (iii) the aggregate principal amount of Indebtedness secured by such Liens permitted by this clause (h) shall not exceed at any time outstanding $25,000,000 at such time, and (iv) such Liens will not apply to any other property of the Borrower or any of its Subsidiaries;
(i) banker’s liens and rights of set-off relating to deposit accounts; provided that no such deposit account is a dedicated cash collateral account or is subject to restrictions against access by the depositor in excess of those set forth by regulations promulgated by the Board, and no such deposit account is intended by the Borrower or any of its Subsidiaries to provide collateral to the depository institution;
 
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(j) Liens securing judgments not constituting an Event of Default under Article VII;
(k) any Lien arising out of the refinancing, extension, renewal or refunding of any Indebtedness or other obligations secured by any Lien permitted by any of the clauses (f), (g) or (l) of this Section 6.01, upon or in the same property theretofore subject thereto without increase in the amount or change in any direct or contingent obligor of the Indebtedness or other obligations secured thereby; and
(l) Liens securing obligations of the Borrower or its Subsidiaries under any Swap Agreements entered in in the ordinary course of business and not for speculative purposes;
(m) any other Liens securing Indebtedness or other obligations of the Borrower or any of its Subsidiaries, provided that such Indebtedness or other obligations of the Borrower or its Subsidiaries secured by any such Liens shall not exceed, at any time, in the aggregate, $250,000,000;
provided , however , that the Borrower shall not, and shall not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any Equity Interests, assets or property of any of the Dutch Target Companies, or any Equity Interests of Easy Colombia S.A., Cencosud Shopping Centers S.A., Easy S.A., Cencosud Internacional Ltda., Cencosud Retail S.A. or Cencosud S.A. (Argentina).
SECTION 6.02. Prohibition of Fundamental Changes; Conduct of Business . (a) The Borrower shall not (i) enter into any merger or consolidation or amalgamation or reorganization, or sell or otherwise transfer or dispose of all or substantially all of its assets or the assets of the Borrower and its Subsidiaries, taken as a whole or (ii) liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or permit any of its Subsidiaries to liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution); provided that if at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred and is continuing, (x) any Person may merge with and into a Loan Party in a transaction in which the Loan Party is the surviving entity, (y) any Subsidiary may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders and (z) any Subsidiary may merge with and sell or otherwise Dispose of assets to another Subsidiary.
(b) The Borrower and its Subsidiaries (including the Colombian Target Companies and their respective subsidiaries), considered as a whole, will continue to engage in businesses of the same general type as now conducted by the Borrower and its Subsidiaries and activities deemed in good faith by the board of directors of the Borrower to be reasonably related or complementary thereto.
(c) None of Dutch Target Companies shall engage in any business or activity or enter into any transaction other than (i) holding Equity Interests in the Colombian Target Companies, (ii) paying taxes, (iii) preparing reports to Governmental Authorities and to their respective shareholders, (iv) holding directors and shareholders meetings, preparing corporate records and other corporate activities required to maintain their separate corporate structure, (v) incurring Indebtedness under the Guaranty Agreement and (vi) conducting all business and activities incidental to the foregoing.
SECTION 6.03. Restricted Payments . The Borrower will not declare or make any dividend, distribution or other Restricted Payment, unless required by law (including without limitation minimum distributions required in accordance with the Ley sobre Sociedades Anonimas of Chile).
 
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SECTION 6.04. Limitation on Sales of Assets . The Borrower shall not, and shall not permit any of its Subsidiaries to, make any Disposition of any of its property, business or assets (including, without limitation, other payments and receivables, but excluding leasehold interests), whether now owned or hereafter acquired, except:
(a) Dispositions of inventory in the ordinary course of business;
(b) sales or discounts of accounts receivable in the ordinary course of business (including for financing purposes) for cash;
(c) any Disposition of any property or assets that, in the reasonable judgment of the Borrower, has become uneconomic, obsolete or worn out;
(d) the disposition of all or substantially all of the assets of the Borrower and its Subsidiaries in a manner permitted pursuant to the provisions described under Section 6.02;
(e) the sale, lease or sub-lease of any real property in the ordinary course of business; and
(f) any Disposition or series of Dispositions of any property or asset of the Borrower or any Subsidiary not exceeding, individually or in the aggregate during the term of this Agreement, with other Dispositions actually made after the Effective Date pursuant to this Section 6.04(f), 15% of Consolidated Total Assets as of the date of such Disposition; provided that the consideration received for such property or assets shall be in an amount at least equal to the fair market value thereof (determined in good faith by the board of directors of Borrower) and shall be paid in cash.
SECTION 6.05. Transactions with Affiliates . The Borrower shall not and shall not permit any of its Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except for transactions in the ordinary course of business that are at the prices and on terms and conditions substantially as favorable to the Borrower or such Affiliate as could reasonably be obtained at that time from unaffiliated third parties in comparable arm’s length transactions; provided that the foregoing shall not apply to (i) transactions among Loan Parties and (ii) transactions permitted under Section 6.03.
SECTION 6.06. Restrictive Agreements . The Borrower shall not, and shall not permit its Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon the ability of the relevant Subsidiary to (a) pay dividends or make other distributions to the Borrower with respect to any shares of its capital stock or other equity interests or to (b) make or repay loans or advances to the Borrower or the Guarantor; provided that the foregoing shall not apply to (i) restrictions and conditions existing on the date hereof (but shall apply to any amendment or modification expanding the scope of, or any extension or renewal of, any such restriction or condition), (ii) restrictions under the Loan Documents, (iii) customary restrictions and conditions contained in agreements relating to the Disposition of a Subsidiary pending such Disposition, provided that such restrictions and conditions apply only to the Subsidiary that is to be Disposed of, (iv) restrictions imposed by applicable law, and (v) other customary restrictions and conditions that apply to any Subsidiary, which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
SECTION 6.07. Leverage Ratio . The Borrower will not permit the Leverage Ratio, at the end of any fiscal quarter (for the most recently completed period of four consecutive fiscal quarters
 
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ending at the end of such fiscal quarter), calculated based on the Financial Statements, to be greater than 5.25 to 1.0; provided that if an Acquisition Termination Fee Event shall have occurred, the Borrower will not permit the Leverage Ratio, at the end of any fiscal quarter ended after such occurrence (for the most recently completed period of four consecutive fiscal quarters ending at the end of such fiscal quarter), to be greater than 4.25 to 1.0.
SECTION 6.08. Debt to Net Worth Ratio . The Borrower will not permit the Debt to Net Worth Ratio at the end of any fiscal quarter (for the most recently completed period of four consecutive fiscal quarters ending at the end of such fiscal quarter), calculated based on the Financial Statements, to be greater than 1.2 to 1.0.
SECTION 6.09. Limitations Regarding Acquisition Escrow Agreement . The Borrower shall not, and shall not permit any of its Subsidiaries to: (i) amend, waive or otherwise modify or consent to any departure from any term of the Acquisition Escrow Agreement; (ii) permit, consent or enable the release of funds from the Acquisition Escrow Account, (A) to the Seller unless the Acquisition Escrow Release Conditions shall have been satisfied, or (B) to any other Person (including the Borrower or any of its Subsidiaries or any Target Company), except to the Administrative Agent in accordance with Section 2.07(c) hereof.
ARTICLE VII
Events of Default
If any of the following events (“ Events of Default ”) shall occur:
(a) the Borrower shall fail to pay any principal of any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or on behalf of the Borrower or any Guarantor in or in connection with this Agreement or any Loan Document, or any amendment or modification or waiver thereof or thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any Loan Document, or any amendment or modification or waiver thereof or thereunder, shall prove to have been incorrect in any material respects when made or deemed made;
(d) the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02, 5.03 (with respect to the Borrower’s existence), 5.08 or 5.11 or in Article VI;
(e) any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in clause (a), (b) or (d) of this Article) or in any other Loan Document, and such failure shall continue unremedied for a period of 30 days after notice thereof from the Administrative Agent to the Borrower (which notice will be given at the request of any Lender);
 
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(f) the Borrower or any Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable;
(g) any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower, any Guarantor or any Material Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower, any Guarantor or any Material Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;
(i) the Borrower, any Guarantor or any Material Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower, any Guarantor or any Material Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;
(j) the Borrower, any Guarantor or any Material Subsidiary shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate amount in excess of $50,000,000 shall be rendered against the Borrower, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any Subsidiary to enforce any such judgment;
(l) failure to maintain, in full force and effect, all governmental approvals necessary or, in the discretion of the Administrative Agent, advisable in connection with the continuing material operations of the Borrower and its Subsidiaries taken as a whole;
(m) the Borrower shall fail to satisfy its obligations to fund or make financial contributions with respect to social security, pension or retirement plans, except where such failure to do so, individually or in the aggregate, could not reasonably be expected to have or result in a Material Adverse Effect;
 
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(n) any government or Governmental Authority shall: (i) condemn, seize, nationalize, expropriate or otherwise appropriate (x) property, assets or interest of the Borrower or any Subsidiary which represent a substantial part of the consolidated property and assets, respectively, of the Borrower and its Subsidiaries taken as a whole, or (y) the stock of the Borrower or any Subsidiary which represent a substantial part of the consolidated property and assets of the Borrower and its Subsidiaries taken as a whole (in each case, with or without payment of compensation); or (ii) declare a general suspension of payments or a moratorium on the payment of any Indebtedness that would reasonably be expected to have a material adverse effect on the ability of the Borrower to repay its obligations under this Agreement or on the ability of any Guarantor to pay its obligations under the Guaranty Agreement; or
(o) (i) any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or satisfaction in full of all the Obligations, ceases to be legal, valid, binding, enforceable or effective, (ii) any obligation or obligations of the Borrower or any Guarantor under any Loan Document are not or cease to be legal, valid, binding or enforceable and the cessation individually or cumulatively materially and adversely affects the interest of the Lenders under the Loan Documents, (iii) it is or becomes unlawful for the Borrower or any Guarantor to perform any of its obligations under the Loan Documents, (iv) the Borrower or any Guarantor contests in any manner the validity or enforceability of any Loan Document, or (v) the Borrower or any Guarantor denies that it has any or further liability or obligation under any Loan Document or purports to revoke, terminate or rescind any Loan Document;
(p) any security interest purported to be created by any Pledge Agreement shall cease to be, or shall be asserted by the Borrower or any other Loan Party not to be, a valid, perfected, first priority (except as otherwise expressly provided in this Agreement or such Pledge Document) security interest in the securities, assets or properties covered thereby; or
(q) a Change in Control shall occur;
then, and in every such event (other than an event described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.
 
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ARTICLE VIII
The Administrative Agent and the Collateral Agent
SECTION 8.01. General Provisions .
Each of the Lenders hereby irrevocably appoints the Administrative Agent and the Collateral Agent as its agent and authorizes the Administrative Agent and the Collateral Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent and the Collateral Agent by the terms hereof, together with such actions and powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent and the Collateral Agent shall not have any duties or obligations except those expressly set forth herein. Without limiting the generality of the foregoing, (a) the Administrative Agent and the Collateral Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent and the Collateral Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that the Administrative Agent or the Collateral Agent, as applicable, is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02), and (c) except as expressly set forth herein, the Administrative Agent and the Collateral Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any Subsidiary that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent and the Collateral Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02) or in the absence of its own gross negligence or willful misconduct. The Administrative Agent and the Collateral Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent or the Collateral Agent, as applicable, by the Borrower or a Lender, and the Administrative Agent and the Collateral Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement, (ii) the contents of any certificate, report or other document delivered hereunder or in connection herewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
The Administrative Agent and the Collateral Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent and the Collateral Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent and the Collateral Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
 
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The Administrative Agent and the Collateral Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent or the Collateral Agent, as applicable. The Administrative Agent, the Collateral Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent, the Collateral Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative Agent or the Collateral Agent, as applicable as provided in this paragraph, the Administrative Agent or the Collateral Agent, as applicable may resign at any time by notifying the Lenders and the Borrower. Upon any such resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent or Collateral Agent, as applicable, gives notice of its resignation, then the retiring Administrative Agent or Collateral Agent, as applicable, may, on behalf of the Lenders, appoint a successor Administrative Agent or Collateral Agent, as applicable, which shall be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon the acceptance of its appointment as Administrative Agent or Collateral Agent, as applicable, hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent or Collateral Agent, as applicable, and the retiring Administrative Agent Collateral Agent, as applicable, shall be discharged from its duties and obligations hereunder. The fees payable by the Borrower to a successor Administrative Agent or Collateral Agent, as applicable, shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the Administrative Agent’s or Collateral Agent’s, as applicable, resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect for the benefit of such retiring Administrative Agent Collateral Agent, as applicable, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent or Collateral Agent, as applicable.
Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any related agreement or any document furnished hereunder or thereunder.
The Lead Arranger shall not, in its capacity as a Lead Arranger, have any obligation or responsibility to any party under this Agreement.
SECTION 8.02. Collateral Documents and Guaranty .
(a) Each Secured Party hereby further authorizes Administrative Agent or Collateral Agent, as applicable, on behalf of and for the benefit of Secured Parties, to be the agent for and representative of Secured Parties with respect to the Guaranty Agreement, the Collateral and the Collateral Documents. Subject to Section 9.02, without further written consent or authorization from any Secured Party, Administrative Agent or Collateral Agent, as applicable may execute any documents or instruments necessary to (i) in connection with a Disposition of assets permitted by this Agreement or any
 
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other Loan Document, release any Lien encumbering any item of Collateral that is the subject of such Disposition of assets or to which Required Lenders (or such other Lenders as may be required to give such consent under Section 9.02) have otherwise consented or (ii) release any Guarantor from the Guaranty Agreement in connection with a Disposition with respect to which Required Lenders (or such other Lenders as may be required to give such consent under Section 9.02) have consented.
(b) Anything contained in any of the Loan Documents to the contrary notwithstanding, Borrower, Administrative Agent, Collateral Agent and each Secured Party hereby agree that (i) no Secured Party shall have any right individually to realize upon any of the Collateral or to enforce the Guaranty Agreement, it being understood and agreed that all powers, rights and remedies hereunder and under any of the Loan Documents may be exercised solely by Administrative Agent or Collateral Agent, as applicable, for the benefit of the Secured Parties in accordance with the terms hereof and thereof and all powers, rights and remedies under the Collateral Documents may be exercised solely by Collateral Agent for the benefit of the Secured Parties in accordance with the terms thereof, and (ii) in the event of a foreclosure or similar enforcement action by Collateral Agent on any of the Collateral pursuant to a public or private sale or other Disposition, Collateral Agent may be the purchaser or licensor of any or all of such Collateral at any such sale or other Disposition and Collateral Agent, as agent for and representative of Secured Parties (but not any Lender or Lenders in its or their respective individual capacities) shall be entitled, upon instructions from Required Lenders, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such sale or Disposition, to use and apply any of the Obligations as a credit on account of the purchase price for any collateral payable by Collateral Agent at such sale or other Disposition.
(c) Notwithstanding anything to the contrary contained herein or any other Loan Document, when all Obligations (other than contingent indemnification and expense reimbursement obligations as to which no claim shall have been asserted) have been paid in full, and all Commitments have terminated or expired, upon request of Borrower, Collateral Agent shall, upon instruction from the Administrative Agent, take such actions as shall be required to release its security interest in all Collateral, and to release all guarantee obligations provided for in any Loan Document. Any such release of guarantee obligations shall be deemed subject to the provision that such guarantee obligations shall be reinstated if after such release any portion of any payment in respect of the Obligations guaranteed thereby shall be rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, Borrower or any Guarantor or any substantial part of its property, or otherwise, all as though such payment had not been made.
(d) The Collateral Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Collateral Agent’s Lien thereon, or any certificate prepared by any Credit Party in connection therewith, nor shall the Collateral Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral.
(e) Parallel Debt . (i) The Borrower hereby irrevocably and unconditionally undertakes to pay to the Collateral Agent an amount equal to the aggregate amount due by it in respect of the Corresponding Obligations as they may exist from time to time. The payment undertaking of the Borrower under this Section 8.02(e) is to be referred to as its “ Parallel Debt ”.
 
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(ii) The Parallel Debt will be payable in the currency or currencies of the Corresponding Obligations and will become due and payable as and when and to the extent one or more of the Corresponding Obligations become due and payable. An Event of Default in respect of the Corresponding Obligations shall constitute a default ( verzuim ) within the meaning of section 3:248 of the Dutch Civil Code with respect to the Parallel Debt without any notice being required.
(iii) Each of the parties to this Agreement hereby acknowledges that:
(a) the Parallel Debt constitutes an undertaking, obligation and liability to the Collateral Agent which is separate and independent from, and without prejudice to, the Corresponding Obligations; and
(b) the Parallel Debt represents the Collateral Agent’s own separate and independent claim to receive payment of the Parallel Debt from the Borrower,
it being understood, in each case, that pursuant to this Section 8.02(e) the amount which may become payable by the Borrower as the Parallel Debt shall never exceed the total of the amounts which are payable under or in connection with the Corresponding Obligations.
(iv) To the extent the Collateral Agent irrevocably receives any amount in payment of the Parallel Debt, the Collateral Agent shall distribute that amount in accordance with Section 2.13 of this Agreement as if received by it in payment of the Corresponding Obligations. Upon irrevocable receipt by the Collateral Agent of any amount in payment of the Parallel Debt (a “Received Amount”), the Corresponding Obligations shall be reduced by amounts totaling an amount (a “ Deductible Amount ”) equal to the Received Amount in the manner as if the Deductible Amount were received by the Collateral Agent as a payment of the Corresponding Obligations on the date of receipt by the Collateral Agent of the Received Amount.
(v) For the purpose of this Section 8.02(e), but subject to paragraph (iv) above, the Collateral Agent acts in its own name and on behalf of itself and not as agent, representative or trustee of any other Lender.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices . (a) Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:
(i) if to the Borrower, to it at Cencosud S.A., Avenida Presidente Kennedy 9001, Piso 6, Las Condes, Santiago de Chile, Attention of Juan Manuel Parada, Dario Amenábar and Santiago Mangiante (Telecopy No. (562) 959-0070);
 
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(ii) if to the Administrative Agent, to JPMorgan Chase Bank, Loan and Agency Services Group, 1111 Fannin, 10 th Floor, Houston, Texas 77002, Attention of Demetra Mayon (Telecopy No. (713) 750-2358); and
(iii) if to any other Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire.
(b) Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.
(c) Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments . (a) No failure or delay by the Administrative Agent or any Lender in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent or any Lender may have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any provision hereof or of any other Loan Document may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders, or by the Borrower and the Administrative Agent with the consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan, or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender affected thereby, (iv) change Section 2.13(b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender or (v) release all or substantially all of the Guarantors from their obligations under the Guaranty Agreement or release all or substantially all of the Pledged Stock from the security interest created under the Collateral Documents; provided further that without the written consent of each Lender (other than any Defaulting Lenders), no such agreement may change any of the provisions of this Section or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders
 
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required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder; provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent hereunder, including but not limited to the provisions set forth in Section 2.15, without the prior written consent of the Administrative Agent.
SECTION 9.03. Expenses; Indemnity; Damage Waiver . (a) The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent, the Collateral Agent, the Lead Arranger and their respective Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, the Collateral Agent and the Lead Arranger, in connection with the syndication of the credit facilities provided for herein, the preparation and administration of this Agreement, the other Loan Documents, the Escrow Agreements or any amendments, modifications or waivers of the provisions hereof (whether or not the transactions contemplated hereby or thereby shall be consummated, and including reasonable fees, disbursements and other charges of counsel), and (ii) all reasonable out-of-pocket expenses incurred by the Administrative Agent, the Collateral Agent or any Lender, including the fees, charges and disbursements of any counsel for the Administrative Agent, the Collateral Agent or any Lender, in connection with the enforcement or protection of its rights in connection with this Agreement, including its rights under this Section, the other Loan Documents, the Escrow Agreements, or in connection with the Loans, including all such out-of pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans.
(b) The Borrower shall indemnify the Administrative Agent, the Collateral Agent and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “ Indemnitee ”) against, and hold each Indemnitee harmless from, any and all losses, liabilities, costs and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, the other Loan Documents or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or the use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any Subsidiary, or any Environmental Liability related in any way to the Borrower or any Subsidiary, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee. This Section 9.03(b) shall not apply with respect to Taxes other than any Taxes that represent losses or damages arising from any non-Tax claim.
(c) To the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent or the Collateral Agent under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent or the Collateral Agent, as applicable, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent or the Collateral Agent in its capacity as such.
(d) To the extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or
 
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punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly after written demand therefor.
SECTION 9.04. Successors and Assigns . (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more Persons (other than any natural person or the Borrower or any of its Affiliates) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment, the Loans and the Promissory Notes at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld, conditioned or delayed) of:
(A) the Borrower; provided that the Borrower shall be deemed to have consented to an assignment unless it shall have objected thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof; provided further that no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, unless under applicable law in effect on the date of such assignment, the rate at which withholding tax would be imposed under Chilean law on a payment of interest from the Borrower to such Person would exceed the rate applicable to a payment from the Borrower to the assigning Lender; provided further that notwithstanding the prior clause, if an Event of Default has occurred and is continuing, the Borrower’s consent to any assignment shall not be required; and
(B) the Administrative Agent.
(ii) Assignments shall be subject to the following additional conditions:
(A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower and the Administrative Agent otherwise consent; provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing;
 
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(B) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement;
(C) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; and
(D) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire in which the assignee designates one or more Credit Contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower, the Loan Parties and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the assignee’s compliance procedures and applicable laws, including Federal and state securities laws.
(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.10, 2.11, 2.12 and 9.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.
(iv) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “ Register ”). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent, the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
(v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to above in this paragraph (b) and any written consent to such assignment required by paragraph (b), the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.04(b), 2.13(d) or 9.03(c), the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.
 
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(vi) In furtherance of the foregoing, if requested by the assigning Lender and upon notice to the Borrower of any such assignment, the Borrower and Cencosud Retail shall deliver to the assigning Lender, in exchange for the Promissory Notes, acknowledgements of debt and surety and joint and several liability agreements (as applicable) previously delivered by the Borrower and Cencosud Retail to the assigning Lender, either (x) appropriately completed Promissory Notes duly executed as aval by Cencosud Retail, evidencing the assignee’s assigned Loans or (y) an acknowledgment of debt ( Reconocimiento de Deuda) executed by the Borrower and a surety and joint and several liability agreement ( fianza y codeuda solidaria ) executed by Cencosud Retail, evidencing the assignee’s assigned Loans and aval by Cencosud Retail, in form and substance satisfactory to such assignee Lender and, upon the request of the assigning Lender, if the assigning Lender has retained a portion of its Loans, the Borrower shall execute and deliver to such Lender either (x) an allonge ( hoja de prolongación ) of the applicable Promissory Note previously delivered by the Borrower to the assigning Lender, amending the principal amount stated therein reflecting the principal amount of the Loans retained by the assigning Lender or (y) a replacement Promissory Note or Promissory Notes duly executed as aval by Cencosud Retail reflecting the principal amount of the Loans retained by the assigning Lender (such Note or Notes to be in exchange for, but not in payment of, the Promissory Note(s), if any, held by such Lender) or (z) an acknowledgment of debt ( Reconocimiento de Deuda) reflecting the principal amount of the Loans retained by the assigning Lender and a surety and joint and several liability agreement ( fianza y codeuda solidaria ) executed by Cencosud Retail, in form and substance satisfactory to such assigning Lender; provided , that the Borrower shall not be obligated to issue new Promissory Notes or replacement Promissory Notes pursuant to this Section 9.04(b) unless the assignee Lender (in the case of a new Promissory Note) and the assigning Lender (in the case of a replacement Promissory Note) shall have agreed to be liable for the amount of any applicable Chilean stamp tax that may result from the Borrower’s delivery of such new Promissory Note or replacement Promissory Note.
(c) Any Lender may, without the consent of the Borrower or the Administrative Agent, sell participations to one or more banks or other entities (a “ Participant ”), other than a natural person, in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.10, 2.11 and 2.12 (subject to the requirements and limitations therein, including the requirements under Section 2.12(e) (it being understood that the documentation required under Section 2.12(e) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Sections 2.13 and 2.14 as if it were an assignee under paragraph (b) of this Section; and (B) shall not be entitled to receive any greater payment under
 
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Sections 2.10 or 2.12, with respect to any participation, than its participating Lender would have been entitled to receive. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.09 as though it were a Lender, provided such Participant agrees to be subject to Section 2.13(c) as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a nonfiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement (the “ Participant Register ”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans or its other obligations under any Loan Document) except to the extent that such disclosure is necessary to establish that such Commitment, Loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.
(d) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
SECTION 9.05. Survival . All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid and so long as the Commitments have not expired or terminated. The provisions of Sections 2.10, 2.11, 2.12 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Commitments or the termination of this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness . This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and any separate letter agreements regarding the syndication of the facility provided under this Agreement and fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings (other than such letter agreements), oral or written, relating to the subject matter hereof. This Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or any other electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart of this Agreement.
 
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SECTION 9.07. Electronic Execution of Assignments . The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
SECTION 9.08. Severability . Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
SECTION 9.09. Right of Setoff . If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.
SECTION 9.10. Governing Law; Jurisdiction; Consent to Service of Process . (a) This Agreement shall be construed in accordance with and governed by the law of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County, Borough of Manhattan and of the United States District Court for the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement against the Borrower or its properties in the courts of any jurisdiction.
(c) The Borrower hereby appoints CT Corporation System, with an office currently located at 111 Eighth Avenue, New York, New York 10011, as its agent for service of writs, process and summonses in any matter, suit, action or proceeding in any matter related to this Agreement or the other Loan Documents (the “ Process Agent ”), and shall provide written evidence of acceptance of such appointment by such agent on or before the Closing Date. If the Process Agent shall cease to serve as
 
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agent for the Borrower to receive service of process hereunder, the Borrower shall promptly appoint a successor agent reasonably satisfactory to the Administrative Agent. The Borrower hereby further (i) irrevocably consents to the service of process in any suit, action or proceeding in any court referred to in paragraph (b) of this Section by the mailing thereof by the Administrative Agent by registered or certified mail, postage prepaid, to the Borrower at its address set forth in Section 9.01, and (ii) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law.
(d) The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(e) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.
SECTION 9.11. WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.12. Headings . Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
SECTION 9.13. Confidentiality . (a) Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (i) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (ii) to the extent requested or required by any governmental or regulatory authority (including any self-regulatory authority), (iii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (iv) to any other party to this Agreement, (v) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (vi) subject to an agreement containing provisions substantially the same as those of this Section, to (A) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (B) any actual or prospective counterparty (or its advisors) to any swap, derivative or other similar transaction relating to the Borrower and its obligations, (vii) with the consent of the Borrower or (viii) to the extent such Information (A) becomes publicly available other than as a result of a breach of this Section or (B) becomes available to
 
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the Administrative Agent or any Lender on a nonconfidential basis from a source other than the Borrower. For the purposes of this Section, “ Information ” means all information received from the Borrower relating to the Borrower or its business, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by the Borrower; provided that, in the case of information received from the Borrower after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
(b) EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 9.13(a) FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE BORROWER, THE LOAN PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.
(c) ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER AND ITS RELATED PARTIES OR ITS SECURITIES. ACCORDINGLY, EACH LENDER REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW.
SECTION 9.14. Interest Rate Limitation . Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the “ Charges ”), shall exceed the maximum lawful rate (the “ Maximum Rate ”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.
SECTION 9.15. USA PATRIOT Act . Each Lender that is subject to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ Act ”) hereby notifies the Borrower that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender to identify the Borrower in accordance with the Act.
 
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SECTION 9.16. Waiver of Immunities . To the extent that the Borrower has or hereafter may acquire any immunity (sovereign or otherwise) from any legal action, suit or proceeding, from jurisdiction of any court or from set-off or any legal process (whether service or notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) with respect to itself or any of its property, the Borrower hereby irrevocably waives and agrees not to plead or claim such immunity in respect of its obligations under the Loan Documents. The Borrower agrees that the waivers set forth above shall have the fullest extent permitted under the Foreign Sovereign Immunities Act of 1976 of the United States of America and are intended to be irrevocable and not subject to withdrawal for purposes of such Act.
SECTION 9.17. Judgment Currency . The obligation of the Borrower hereunder to make payments in U.S. dollars shall not be discharged or satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any currency other than U.S. dollars except to the extent to which such tender or recovery shall result in the actual receipt by the Administrative Agent and/or the Lenders of the full amount of U.S. dollars expressed to be payable hereunder, and the Borrower shall indemnify the Lenders (as an alternative or additional cause of action) for the amount (if any) by which such effective receipt shall fall short of the full amount of U.S. dollars expressed to be payable hereunder and such obligation to indemnify shall not be affected by judgment being obtained for any other sums due hereunder. The foregoing provisions of this Section 9.17 shall not apply to any payments hereunder in respect of obligations that have been redenominated into a currency other than U.S. dollars as a result of the application of any law, order, decree or regulation in any jurisdiction other than the United States, which obligations shall, for purposes of this Agreement, be deemed to remain denominated in U.S. dollars and payable to Lenders in accordance with the first sentence of this Section 9.17.
SECTION 9.18. International Banking Facilities . Certain Lenders intend to book extensions of credit hereunder on the books and records of their respective international banking facilities, which will constitute an extension of credit within the meaning of Section 204.8(a)(3) of Regulation D. Accordingly, pursuant to Regulation D, the Borrower acknowledges that such Lenders have notified it that it is the policy of the Board that extensions of credit by international banking facilities may be used only to finance operations outside of the United States of borrowers or their affiliates which are located outside the United States. The Borrower hereby agrees to comply with such directives.
SECTION 9.19. Electronic Execution of Assignments . The words “execution”, “signed”, “signature” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
SECTION 9.20. No Advisory or Fiduciary Relationship . In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower, on behalf of itself and the Guarantor, acknowledges and agrees that: (i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent, the Lenders and the Lead Arranger are arm’s-length commercial transactions between the Loan Parties and their Affiliates, on the one hand, and the Administrative Agent, the Lenders and the Lead Arranger, on the other, (B) each Loan Party has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) each Loan Party
 
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is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) each of the Administrative Agent, each Lender and the Lead Arranger is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for any Loan Party or any of their Affiliates, or any other Person; and (iii) the Administrative Agent, each Lender and the Lead Arranger and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Loan Parties and their Affiliates, and neither the Administrative Agent, any Lender nor any Lead Arranger has any obligation to disclose any of such interests to any Loan Party or any of their Affiliates. To the fullest extent permitted by law, each Loan Party hereby waives and releases any claims that it may have against the Administrative Agent, each Lender and the Lead Arranger with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.
[ Signature Pages follow ]
 
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

CENCOSUD S.A.,	
		
By	 		
	 	Name:	 	Juan Manuel Parada	
	 	Title:	 	CFO	
[ Signature Page to Credit Agreement ]

					
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as a Lender and as Administrative Agent,	
		
By	 		
	 	Name:	 	Christophe Vohmann	
	 	Title:	 	Executive Director	
[ Signature Page to Credit Agreement ]

Exhibit 4.6
CARREFOUR NEDERLAND B.V.
AND
CENCOSUD
SHARE PURCHASE AGREEMENT
18 OCTOBER 2012

SHARE PURCHASE AGREEMENT
BETWEEN:
 
(1)	Carrefour Nederland B.V., a company incorporated under the laws of The Netherlands, having its registered office located at Gebouw Spring Overshiestraat 186-D, 1062 XK Amsterdam, The Netherlands, registered with the commercial registry of Amsterdam under number 33261494,	
( “CNBV” or the “Seller” ),
ON THE FIRST PART
AND
 
(2)	Cencosud, a company incorporated under the laws of Chile, having its principal offices located at Avenida Kennedy N°9001,7th floor, Las Condes, Santiago, Chile, tax payer identification (“RUT”) N°93834000-5,	
(the “Purchaser” )
ON THE SECOND PART
(each a “ Party ” and, together, the “ Parties ”);
AND
 
(3)	Carrefour S.A., a company incorporated under the laws of France, having its registered office located at 33 AV Émile Zola 92100 BOULOGNE BILLANCOURT, registered with the commercial registry of Nanterre under number R.C.S. Nanterre 652014051,	
(“ Carrefour ”), but exclusively for purposes of Articles 5.5, 9.7.1, 9.7.2 below.
WHEREAS;
 
(A)	Seller holds (or will hold prior to the Completion Date), directly or indirectly, the entire issued share capital and voting rights in (i) Colombia Holdings Alpha BV, Thalie BV, Calliope BV, Uranie BV and Coledim BV (all the foregoing Netherlands BVs, collectively, the “ Colombia Holdings BVs ”), (ii) Grandes Superficies de Colombia S.A., a company incorporated under the laws of Colombia, having its registered office located at Avenida 9 No. 125-30, Bogota, registered under number 00757941 with the Chamber of Commerce of Bogota (“ GSC ”) and (ii) Atacadão de	
 
- 1 -

 	Colombia S.A.S., a company incorporated under the laws of Colombia, having its registered office located at Carrera 71 No. 17A-11, Colombia, registered under number 01954829 with the Chamber of Commerce of Bogota (“ Atacadão Colombia ” and together with GSC and Colombia Holdings BVs, the “ Target Group Entities ”). GSC and Atacadão Colombia operates the entire business which the Carrefour Group (including the Companies) carries out in Colombia.	
 
(B)	In accordance with the steps and timing of the process set out in Seller’s advisors’ email to Purchaser’s advisors dated 3 October 2012, Seller has made available to Purchaser and its representatives and advisers acting on its behalf (i) the information pack relating to GSC and Atacadao Colombia (collectively, the “ Companies ”), (ii) all written answers given by, or on behalf of, the Seller and the Companies, in respect of the Companies and their activities, to the questions asked by the Purchaser and its representatives and advisors acting on its behalf as set forth in Schedule C , (iii) the information and documents disclosed (as agreed to by the Purchaser in its binding offer letter dated 12 October 2012) in the letter set forth in Schedule C (the “ Disclosure Letter ”, and, together with the aforementioned information pack and written answers, the “ Disclosed Information ”), and (iv) the documents and other information included in an on-line “data room” opened from Monday, October 15 th 2012 onwards.	
 
(C)	On the basis of the foregoing, of its own knowledge of the Colombian market and the Companies’ business, as well as on its own diligence, assumptions, projections and estimates, the Purchaser has expressed its readiness and intent to move promptly forward and has therefore agreed to enter into this share purchase agreement and to complete the transactions provided for herein on the terms and subject to the conditions set forth in this Agreement.	
THE PARTIES AGREE AS FOLLOWS:
 
1.	DEFINITIONS AND INTERPRETATIONS	
 
1.1	For the purpose of this Agreement, capitalized terms and expressions shall have the meanings given to them in Schedule 1 , unless otherwise defined in this Agreement.	
SECTION 1 - SALE AND PURCHASE
 
2.	TRANSFER OF THE SOLD SHARES	
 
2.1	Subject to (i) the terms of this Agreement, (ii) the receipt by the Seller of the Purchase Price, (iii) the receipt by the Lenders of an amount corresponding to the Loan Amount and (iv) the fulfilment by the Purchaser of the obligations set out in Schedule 5 for which it is responsible, the Seller agrees to sell to the Purchaser all of the shares in each and every Colombia Holdings BV, representing (on a fully diluted basis) all of the issued share capital and voting rights of all Colombia Holdings BVs (hereafter, the “Sold Shares” ) free from any Encumbrances thereon.	
 
- 2 -

2.2	Subject to the performance by the Seller of the obligations set out in Schedule 5 for which it is responsible, the Purchaser agrees to purchase all, and not less than all, the Sold Shares free from any Encumbrances. The Purchaser shall be entitled, with effect from the Completion Date, to exercise directly all rights attaching or accruing to the Sold Shares, including, without limitation, the right to vote and to receive all dividends, distributions or any return on capital declared, paid or made by the Companies, on or after the Completion Date.	
 
3.	PAYMENT OF THE PURCHASE PRICE OUT OF ESCROWED AMOUNT	
 
3.1	On the date hereof, the Purchaser has, or has caused, an amount in Euros equal to the Purchase Price (as defined below) to be wired and credited to the Escrow Account (as defined in the executed Escrow Agreement attached hereto in Schedule 3.1) , with the same value date as the date hereof, all as set forth in further detail in the Escrow Agreement and pursuant thereto.	
 
3.2	The Purchase Price amount shall be held by the Escrow Agent (as defined in the Escrow Agreement) for and on behalf of the Seller and shall release such amount to the Seller at Completion as set forth in the Escrow Agreement.	
The “Purchase Price” means the amount in Euros equal to
 
 	(i)	1,905,000,000 (one billion nine hundred and five million) Euros, and	
 
 	(ii)	the Escrow Interest;	
the “Escrow Interest” means the amount in Euros accruing on the balance in the Escrow Account in accordance with the Escrow Agreement.
 
3.3	The Purchase Price shall be apportioned among the Sold Shares as set out in Schedule B .	
 
4.	NOTIFICATION COVENANT	
 
4.1	Purchaser represents to the Seller that its performance of all of its obligations under this Agreement including but not limited to the Sale of the Sold Shares are not subject to any condition precedent or subsequent (regulatory or otherwise).	
 
4.2	The Purchaser represents to the Seller that as regards Colombian competition law Completion requires only that a notification of the Sale of the Sold Shares (the “Acquisition Notification” ) be submitted to the Colombian Antitrust Authority (which, for the avoidance of doubt, does not need in any way to be approved or cleared for Completion to proceed). The Purchaser and the Seller shall work together in order to make the complete Acquisition Notification as required under Colombian law with the Colombian Antitrust Authority at the latest within five (5) Business Days after the Date of this Agreement.	
 
4.3	Without prejudice to the provisions of Articles 4.1, 4.2 and 4.5 hereof, the Purchaser shall supply promptly any additional information and documentary material that may be requested by the Colombian Antitrust Authority. To the extent the Seller is not also a recipient thereof, the Purchaser shall also provide the Seller with a copy of all material documents or correspondence exchanged with the Colombian Antitrust Authority in respect of the Acquisition Notification.	
 
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4.4	Should, notwithstanding the generality of the representations set forth in Article 4.1 above, any kind of regulatory or other similar authorisation or clearance be/become necessary for Completion to occur, the Purchaser shall offer any commitments, undertakings or divestments to any authority (and accept any commitments, undertakings or divestments imposed by any authority) as may be necessary to secure any and all such authorisations and clearance (including if need be with conditions) at the earliest opportunity. Such commitments, undertakings or divestments of or by the Purchaser shall have no impact on the Sale of the Sold Shares and/or on the payments to be made by the Purchaser to the Seller in accordance with Article 3. For the avoidance of doubt, failure to obtain any such authorisation or clearance by the time the Seller delivers to the Purchaser the Completion Notice shall in no event constitute an exception to the Purchaser’s obligation to proceed with Completion in accordance with this Agreement.	
 
4.5	The Seller shall cooperate in good faith and shall cause the Companies to cooperate in good faith with the Purchaser in connection with the submission of the Acquisition Notification.	
 
5.	COMPLETION	
 
5.1	Date and location of Completion	
 
 	5.1.1	Subject to the terms of this Agreement, the Completion will take place in Amsterdam, at the offices of the Notary, or in any other location mutually agreed in writing by the Parties, five (5) Business Days following the date on which the Seller shall have delivered to the Purchaser a notice informing the Purchaser that the Seller is ready to proceed with Completion (the “Completion Notice” ) or on such other date as the Parties may mutually agree in writing (the “Completion Date” ).	
 
 	5.1.2	The Parties will determine together the most efficient way to shorten the period between the Date of this Agreement and the Completion Date and will keep each other informed, on a regular basis, of the status of the main actions to be taken within this timeframe (and, in particular, the preparation of the documents to be remitted by the Parties on the Completion Date pursuant to Schedule 5 ) .	
 
5.2	Rights in case of absence of Completion	
 
 	5.2.1	If the Completion of the Sale of the Sold Shares does not occur prior to the Long Stop Date (i) for any reason which is not exclusively attributable to the Seller (other than as provided in (ii)), the amount in EUR equal to 25% of the Purchase Price (the “ Termination Fee ”) shall become due and payable by the Purchaser to the Seller and (ii) as a result of an injunction or similar order by a Governmental Authority in Colombia (other than the Colombian Antitrust Authority) effectively blocking the transfer of the Sold Shares to the Purchaser, the amount of EUR 50,000,000 (the “Other Termination Fee” ) shall become due and payable by the Purchaser to the Seller. The Parties agree that the failure of the Seller to hold the Sold Shares immediately prior to Completion (following a pre-Completion intra-Seller’s Group reorganisation in The Nertherlands) shall be deemed to be a reason exclusively attributable to the Seller under clause (i) above.	
 
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 	5.2.2	The Termination Fee (or as the case may be the Other Termination Fee) shall be paid on behalf of the Purchaser to the Seller by the Escrow Agent pursuant to the Escrow Agreement by wire transfer of funds, in Euros, within five (5) Business Days following the receipt by the Purchaser and the Escrow Agent of notification by the Seller of the absence of Completion of the Sale of the Sold Shares before the Long Stop Date.	
Such notification shall be delivered within the 45 (forty five) calendar day period following the Long Stop Date and shall contain the details of the bank accounts on which the Termination Fee (or as the case may be the Other Termination Fee) shall be paid on behalf of the Purchaser.
The Parties acknowledge and confirm that the amount of the Termination Fee (or as the case may be the Other Termination Fee) has been agreed by them following discussion in order to reflect the reasonably foreseeable consequences to the Seller should the Completion not occur prior to the Long Stop Date, in particular in view of the fundamental nature of the transactions contemplated hereby to the Seller.
This Agreement and the rights and obligations of the Parties hereunder shall automatically terminate upon payment of the Termination Fee (or as the case may be the Other Termination Fee), without prejudice to the provisions of Articles 15 and 16 (except for the avoidance of doubt Article 16.2), which shall remain in full force and effect notwithstanding the termination of this Agreement.
 
 	5.2.3	Without prejudice to any other rights, claims or remedies available to the Seller under this Agreement, including the right to receive damages, if the Purchaser fails to perform any action required from it in relation to the Completion (in particular, if the Purchaser fails to perform any obligation pursuant to Article 5.3 and Schedule 5 on the Completion Date), the Seller shall be entitled at its sole discretion to:	
 
 	(a)	proceed with the Completion of the Sale of the Sold Shares, to the extent possible and allowed by applicable Law; or	
 
 	(b)	terminate this Agreement with immediate effect, by giving written notice thereof to the Purchaser, and without any liability to the Seller.	
 
 	5.2.4	Termination of this Agreement pursuant to Article 5.2.3 shall be without prejudice to the provisions of Articles 5.2.1 and 5.2.2, and Articles 15 and 16, which shall remain in full force and effect notwithstanding the termination of this Agreement.	
 
5.3	Operations and obligations of the Parties on the Completion Date	
On the Completion Date, each Party shall procure that all obligations set out in Schedule 5 for which it is responsible are performed.
 
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5.4	Notifications prior to the Completion Date	
 
 	5.4.1	In addition to notices set forth in Article 4.4 above, the Seller shall deliver to the Purchaser, at the latest on the third (3 rd ) Business Day prior to the Completion Date (i) the details of the bank accounts on which the Loan Amount shall be made available, and (ii) the Loan Amount as at the Completion Date and its apportionment between each Lender and, therefore, each of the aforementioned bank accounts.	
 
 	5.4.2	For the purposes of Article 5.4.1, the Seller shall send any notification, by way of fax or email, to the following dedicated representative of the Purchaser: Carlos Mechetti, to the following address: Av. Kennedy 9001, piso 7, Las Condes, Santiago, Chile; fax n°: +5629590040.	
 
5.5	Carrefour shall make its best efforts to procure that the steps required to allow the Seller to hold the Target Group Entities in the manner described in Schedule A hereto are carried out as swiftly as possible so as to enable the Completion to occur before the Long Stop Date.	
SECTION 2 - REPRESENTATIONS AND WARRANTIES
 
6.	REPRESENTATIONS AND WARRANTIES OF THE SELLER	
 
6.1	Scope of the representations and warranties of the Seller	
The Seller makes to the Purchaser the representations and warranties set forth in Schedule 6 as at the Date of this Agreement and as at the Completion Date, except as otherwise expressly provided in Schedule 6 .
In the course of its investigation, the Purchaser has received from the Seller and its advisors certain projections, estimates and other forecasts and certain business plan information on the Companies. The Purchaser acknowledges that (i) there are uncertainties inherent in attempting to make such projections, estimates and other forecasts and plans, (ii) the Purchaser is familiar with such uncertainties, (iii) the Purchaser is taking full responsibility for making its own evaluation of the adequacy and accuracy of all projections, estimates and other forecasts and plans so furnished to it, (iv) any use of or reliance by the Purchaser on such projections, estimates and other forecasts and plans shall be at its sole risk, and that (v) the Purchaser shall have no claim against anyone with respect thereto. Accordingly, the Purchaser acknowledges that the Seller, the Companies and each of their respective Affiliates and Seller’s advisors, do not make any representation or warranty to the Purchaser, with respect to such projections, estimates, forecasts or plans.
The Purchaser agrees that the Seller does not give (whether at the Date of this Agreement or at the Completion Date) any representation or warranty, whether express or implied, whether resulting from documentation delivered by or for the account of the Seller or from statutory provisions in any jurisdiction, other than those representations and warranties expressly and specifically given by the Seller under Article 6 and Schedule 6 at the relevant date provided for in Schedule 6 .
 
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7.	REPRESENTATIONS AND WARRANTIES OF THE PURCHASER	
 
7.1	Scope of the Representations and Warranties of the Purchaser	
The Purchaser makes to the Seller the representations and warranties set forth in Schedule 7 as at the Date of this Agreement and as at the Completion Date, unless as otherwise expressly provided for in Schedule 7 .
The Seller agrees that the Purchaser does not give (whether at the Date of this Agreement or at the Completion Date) any representation or warranty, whether express or implied, whether resulting from documentation delivered by or for the account of the Purchaser or from statutory provisions in any jurisdiction, other than those representations and warranties expressly and specifically given by the Purchaser under Article 7 and Schedule 7 at the relevant date provided for in Schedule 7 .
SECTION 3 - FURTHER OBLIGATIONS OF THE PARTIES
 
8.	FURTHER OBLIGATIONS OF THE PARTIES PRIOR TO COMPLETION	
 
8.1	Management of the Companies up to the Completion Date	
 
 	8.1.1	During the period from the Date of this Agreement until the Completion Date, the Seller shall ensure that the Companies are managed in the ordinary course of business. In particular, subject to Article 8.1.2, the Seller shall ensure that none of the Companies takes without the prior consent of the representative of the Purchaser set out in Article 8.1.3 (such consent not to be unreasonably delayed or withheld), any of the following actions to the extent they are outside the ordinary course of its business or they are not contemplated under, pursuant to, or required in order to comply with or implement this Agreement:	
 
 	(a)	enter into any individual contract or commitment involving the payment by any of the Companies of an amount in excess of COP$ 2 345 253 300 per year; or	
 
 	(b)	enter into any agreement providing for a merger, consolidation or other transaction modifying its share capital or amending its articles of association; or	
 
 	(c)	issue additional securities; or	
 
 	(d)	grant any mortgage or pledge or issue any security undertaking or commitment whereby it would assume liability in lieu of any third party (other than any of the Companies); or	
 
 	(e)	appoint new auditors; or	
 
 	(f)	save as required by Laws, make any material amendment to the terms and conditions of employment of any Senior Employees or to execute any employment agreements with new Senior Employees; or	
 
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 	(g)	settle any dispute or claim for an amount in excess of COP$ 938 101 320 per claim; or	
 
 	(h)	enter into any joint venture or similar arrangements; or	
 
 	(i)	save as required by Laws, dispose of any fixed assets or other assets the aggregate value of which exceeds COP$ 1 172 626 650 per disposal; or	
 
 	(j)	enter into any borrowing or indebtedness with any third party in the nature of borrowing which exceeds an individual amount in principal of COP$ 1 172 626 650;	
 
 	(k)	enter into any agreement or arrangement to do any of the foregoing; or	
 
 	(l)	permit or effect any Leakage,	
it being however specified that, should the Purchaser fail to give its written answer five (5) Business Days after the Seller’s request for taking any of the aforementioned actions, it shall be deemed to have validly authorized the relevant Company to take such action in compliance with Article 8.1.
 
 	8.1.2	The Parties acknowledge that the limitations set out in Article 8.1.1 shall not apply (i) if the circumstances require immediate action to preserve the integrity of the business or activities of the Companies or to comply with any applicable Laws or if it was beyond the reasonable control of the Seller to prevent any of the actions listed herein from being taken; in which case the Seller shall inform the Purchaser of such action as soon as practicable after the Seller becomes aware of such action, (ii) to any actions of the Companies (including, as the case may be, any modifications and amendments to the Seller’s Guarantees or to the Loan Agreements) which may be required by the Lenders and the Secured Parties with a view to implementing the repayment of the Loan Amount and the release of the Seller’s Guarantees pursuant to Article 8.2, and, more generally, to allow the Seller to duly and timely perform its obligations under this Agreement (including, but not limited to, the obligations set out in Schedule 5 ), or (iii) to the actions listed in Schedule 8.1.2.	
 
 	8.1.3	For the purposes of this Article 8.1 and notwithstanding the provisions of Article 15.6, the Seller shall send any request for approving the actions listed in Article 8.1.1 above, by way of email to the following dedicated representative of the Purchaser for the purpose of Article 8.1:	
Carlos Mechetti, to the following address: Av. Kennedy 9001, piso 7, Las Condes, Santiago, Chile; fax n°: +5629590040.
 
 	8.1.4	During the period from the Date of this Agreement and the Completion Date, the Seller shall work in close coordination with the Purchaser, including by affording the Purchaser and its duly appointed representatives reasonable access to the Companies, in order to facilitate the swift integration of the business of the Target Group Entities with the Purchaser’s own business as from Completion.	
 
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8.2	Repayment of the Loan Agreements and release of the Seller’s Guarantees	
 
 	8.2.1 	Schedule 8.2.1 contains the list of the Loan Agreements.	
 
 	8.2.2	The Purchaser shall be responsible for the refinancing of the Loan Amount (in compliance with Colombian foreign exchange regulation) and shall either (i) obtain an effective waiver in writing from the corresponding Lender to such Lender’s right to accelerate the maturity of such Loan Amount as a result of the Completion or (ii) procure the repayment on the Completion Date by, or on behalf of, the Companies to the Lenders of the Loan Amount owed by the Companies to the Lenders under the Loan Agreements as at the Completion Date.	
 
 	8.2.3	At the latest on the fifth (5 th ) Business Day prior to the Completion Date, the Seller shall notify to the Purchaser, in accordance with Article 5.4, the Loan Amount as at the Completion Date and its apportionment between each of the Lenders.	
 
 	8.2.4	The Purchaser will procure that the Secured Parties will release on the Completion Date the Seller and, as the case may be, any other relevant member of the Carrefour Group from all obligations or liability arising from the Seller’s Guarantees which are listed in Schedule 8.2.1 with effect from the Completion Date. To this effect, the Purchaser will provide the Seller on or prior to the Completion Date, with evidence from the Secured Parties of irrevocable release or waiver of the Seller’s Guarantees.	
 
 	8.2.5	As from the Date of this Agreement until the Completion Date, the Seller shall provide and shall procure that the Companies provide the Purchaser with all information, cooperation and assistance reasonably necessary or useful for the Purchaser to put in place the refinancing of the Loan Amount under the Loan Agreements and release of the Seller’s Guarantees.	
 
9.	FURTHER OBLIGATIONS OF THE PARTIES AFTER THE COMPLETION DATE	
 
9.1	Financing of the Companies	
The Purchaser shall procure that the Companies shall benefit from any necessary new financing as from the Completion Date allowing them to repay when due all amounts owed by the Companies pursuant to any loan agreements entered into by the Companies other than the Loan Agreements and shall hold the Seller harmless in connection therewith.
 
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9.2	Release from guarantees	
 
 	9.2.1	The Purchaser shall, with the cooperation of the Seller, use its best efforts to procure by the Completion Date or, to the extent not completed prior to the Completion Date, promptly thereafter, the release of the Seller and, as the case may be, any of its Affiliates from all obligations or liabilities arising from security, cautions, endorsements, guarantees, comfort letters, joint undertakings or other similar undertakings (other than the Seller’s Guarantees) granted for the benefit or on account of the Companies up to and including the Completion Date. To this effect, the Purchaser will provide the Seller, as soon as possible after becoming aware of the existence of any such security, cautions, endorsements, guarantees, comfort letters, or other similar undertakings, with evidence from the relevant beneficiaries of the irrevocable release or waiver of such security, pledge, guarantee, promise, or undertaking.	
 
 	9.2.2	For so long as these security arrangements, pledges, guarantees, promises or undertakings remain binding upon the Seller (and/or, as the case may be, any relevant entity of the Carrefour Group), the Purchaser hereby undertakes to counter-guarantee or procure the counter-guarantee of the Seller (and/or, as the case may be, such entity of the Carrefour Group) and shall promptly indemnify or procure the indemnification of the Seller (and/or, as the case may be, such relevant entity of the Carrefour Group) from and against all liability in this respect, upon the receipt of the written request of the Seller (and/or such relevant entity of the Carrefour Group).	
 
9.3	Right of access to the Companies and to the corporate records	
 
 	9.3.1	For a period of six (6) years after the Completion Date, the Purchaser will grant and will procure that the Target Group Entities grant to the Seller, its advisers, representatives and corporate officers, upon reasonable prior written notice to the Purchaser, access to all the records, books and assets of the Target Group Entities which the Seller might need, in particular, in order to complete any Tax declarations, accounts or social documentation or to defend itself against any reasonably foreseeable judicial or other proceedings. The Purchaser will ensure that the managers and employees of the Target Group Entities co-operate with the Seller, its advisers, representatives and corporate officers, to the fullest extent possible in this respect. Furthermore, the Purchaser will be responsible for keeping all necessary records for the length of time required by the applicable regulations and the terms of this Article will apply to the aforementioned records.	
 
9.4	Carrefour and Atacadão Names	
 
 	9.4.1	It is expressly agreed that, except as set out in the following Articles 9.4.2 (inclusive) to 9.4.5 (inclusive), the Purchaser is not purchasing, acquiring or otherwise obtaining any right, title or interest in the name “Carrefour”, “Carrefour Express”, “Maxi” or “Atacadão”, in any trade names, trademarks, identifying logos (including the Carrefour’s logo), domain names or service marks related thereto or containing the word “Carrefour”, “Carrefour Express”, “Maxi” or “Atacadão” or any part or variation of any of the foregoing or any similar trade name, trademark, domain name or logo, or any other trademarks, domain names or logos owned by any entity of the	
 
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 	Carrefour Group (collectively the “Carrefour Trademarks and Logos” ). Therefore, except as set out in the following Articles 9.4.2 (inclusive) to 9.4.5 (inclusive), the Purchaser shall procure that, in any event within three (3) months following the Completion Date, each of the Companies shall:	
 
 	(a)	transfer to a member of the Carrefour Group (the identity of which will be notified by the Seller to the Purchaser) any name or registration which contains the word “Carrefour” or “Atacadão” or the Carrefour Trademarks and Logos, cease to use or display the Carrefour Trademarks and Logos and replace any and all references to any entity of the Carrefour Group, including inter alia the Carrefour Trademarks and Logos, which, in the reasonable opinion of the Seller, may imply that the Companies are still a member of the Carrefour Group, or may create confusion, mistake or deception with any of the entities members of the Carrefour Group or may be substantially or confusingly similar to any Carrefour Trademarks and Logos or which may suggest or represent an association or connection with Carrefour or any entity of the Carrefour Group;	
 
 	(b)	remove the Carrefour Trademarks and Logos from all marketing or other materials (including letters, faxes, brochures, business cards, websites, etc.) used, sent or issued by the Companies; and	
 
 	(c)	refrain from authorizing, encouraging or assisting any Person to use the Carrefour Trademarks and Logos anywhere in the world.	
 
 	9.4.2	Within three (3) months following the Completion Date, the Purchaser shall take and shall procure that all necessary actions be taken (including, but not limited to, any relevant corporate decisions, amendments to the Companies’ articles of association and registration formalities) by each Company to make publicly effective the change of the name of each of the Companies, if applicable, to a name which does not include the word “Carrefour”, “Maxi” or “Atacadão” or any Carrefour Trademarks and Logos. During this three (3)-month period, the Companies shall be entitled to continue to use any Carrefour Trademarks and Logos in their names.	
 
 	9.4.3	Within six (6) months following the Completion Date, the Purchaser shall take and shall procure that all necessary actions be taken by each Company, to stop displaying any Carrefour Trademarks and Logos (i) on Carrefour Stores’ external façade, and (ii) in the Carrefour Stores’ internal layout. During this six (6)-month period, the Companies shall be entitled to continue to display any Carrefour Trademarks and Logos (i) on Carrefour Stores’ external façade, and (ii) in the Carrefour Stores’ internal layout, in each case, in the same way it was displayed immediately prior to the Completion Date.	
 
 	9.4.4	Subject to the Purchaser complying with its obligations under this Article 9.4, the Seller grants, and shall procure that the relevant member of the Carrefour Group grant, to the Companies as from the Completion Date a non-exclusive, royalty-free and non-assignable licence to continue to use any Carrefour Trademarks and Logos exclusively for (i) the purpose of the Purchaser Information Advertising and (ii) the purposes set out in Articles 9.4.2, 9.4.3 and 9,4.5, in each case for a period of six (6) months maximum after the Completion Date.	
 
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 	9.4.5	Within six (6) months of the Completion Date, the Purchaser shall take and shall procure that all necessary actions be taken by each Company, to stop selling Carrefour Private Label Stock. Within this six (6)-month period, the Companies shall be entitled to sell Carrefour Private Label Stock. The Companies can advertise such products for a period of six (6) months after the Completion Date, provided that this advertising shall comply with the provisions of Article 9.4.6 below.	
 
 	9.4.6	During the periods set out in this Article 9.4, the Purchaser shall not and shall procure that none of its Affiliates and none of the Companies shall do or say anything which is detrimental to any Carrefour Trademarks and Logos or the reputation of the Carrefour Group and shall not present itself in such a way that a person might believe there is an association or connection between the Purchaser or any of its Affiliates (including the Companies) and the Carrefour Group.	
 
 	9.4.7	For the avoidance of doubt, all the direct and indirect costs, expenses (including those costs, expenses and liabilities resulting from third party claims or proceedings) incurred by the Purchaser, its Affiliates and/or the Companies to modify, change, or, as the case may be, dismantle or destroy any support bearing a Carrefour Trademarks and Logos (including, but not limited to, any banners on Carrefour Stores’ external facade) will be borne by the Purchaser, its relevant Affiliates and/or the Companies.	
 
 	9.4.8	The Purchaser shall indemnify and hold the Seller and its Affiliates harmless from any direct and indirect damages (including damages in terms of reputation), cost, loss, liability, claims or proceedings resulting from the use by the Companies of any reference to the Carrefour Group, including inter alia the Carrefour Trademarks and Logos and the Carrefour Private Label Stock, as from the Completion Date.	
 
 	9.4.9	If after the Completion, any of the Companies holds or owns any of the Carrefour Trademarks and Logos, such Company shall be deemed to hold this Carrefour Trademark and Logo for and on behalf of the Seller, and the Company shall, at the Seller” request, as soon as practicable and on terms stipulated by the Seller including that no consideration is provided for such transfer: (i) execute all such deeds or documents as may be necessary for the purpose of transferring (free of any Encumbrances) the relevant interest in the Carrefour Trademark and Logo to the Seller or to any of its Affiliates as the Seller may direct; and (ii) do or procure to be done at the Company’s cost all such further reasonable acts or things and procure the execution of all such other documents as the Seller (for itself and/or on behalf of the relevant Affiliate of the Carrefour Group) may reasonably request in order to and/or for the purpose of vesting the relevant interest in the Carrefour Trademark and Logo in the Seller or in any of its Affiliates as it may direct.	
 
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 	9.4.10	As soon as possible after the Completion Date, the Purchaser shall (at its own cost and expense) procure that the Companies cease to use and return to the Seller (and/or any of its relevant Affiliates) without undue delay, in any manner whatsoever, without limitation:	
(i) any documents, contracts, media regarding confidential methods, software, programs, literature, procedures and techniques associated with any Intellectual Property Rights, incorporating the Seller’s Know-How, the Carrefour Trademarks and Logos and distinctive trade dress, forms, slogans, uniforms, signs, symbols or devices associated with the Carrefour retail business;
(ii) all advertising materials, communication tools or promotional displays, uniforms, stationery, forms and any other articles which display the Carrefour Trademarks and Logos associated with the Carrefour retail business;
(iii) all copies of all proprietary materials of the Carrefour Group delivered by the Carrefour Group to the Companies and any material containing sensitive business information on the Carrefour Group, and all copies thereof (all of which are acknowledged to be the Carrefour Group property), and shall keep no copy or record of any of the foregoing.
 
9.5	Termination of the Carrefour Group Interco Agreements	
 
 	9.5.1	The Purchaser acknowledges and agrees that all the Carrefour Group Interco Agreements will terminate with effect as from the Completion Date. The Purchaser shall procure that the Companies pay in accordance with the terms of the relevant Carrefour Group Interco Agreement any and all amounts due and payable by the Companies to the relevant entities of the Carrefour Group to which such amounts are owed under the Carrefour Group Interco Agreements as promptly as practicable after Completion, if and to the extent that such amounts have not been paid on or prior to the Completion Date. Conversely, the Seller shall procure that the relevant entities of the Carrefour Group pay in accordance with the terms of the relevant Carrefour Group Interco Agreement any and all amounts due and payable by the relevant entities of the Carrefour Group to the Companies to which such amounts are owed under the Carrefour Group Interco Agreements as promptly as practicable after Completion, if and to the extent that such amounts have not been paid on or prior to the Completion Date.	
 
 	9.5.2	Subject to Article 9.5.1, following Completion, the Purchaser shall not, and shall procure that the Companies shall not, bring any claim (for compensation, damages, losses or otherwise, and whether arising under law, equity, contract, tort or otherwise) in any jurisdiction against the Seller or its Affiliates, arising out of or in connection with the Carrefour Group Interco Agreements.	
 
9.6	Insurance	
 
 	9.6.1	The Purchaser acknowledges and agrees that the benefit of all Carrefour Group insurance policies relating to the Companies, their activities and assets, will terminate as from the Completion Date. These insurance policies are listed in Schedule C .	
 
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 	9.6.2	The Purchaser undertakes to take all necessary actions at its own expense, to ensure that the Companies, their businesses and assets benefit from equivalent insurance cover as the one they benefited from on the Completion Date and the Seller shall not have any liability in this respect.	
 
9.7	Services to be provided by the Carrefour Group	
 
 	9.7.1	The Parties acknowledge that, as at the Date of this Agreement, the Companies are part of the Carrefour Group and therefore the Parties and Carrefour agree to cooperate in good faith in the resolution of the matters necessary to effect as soon as reasonably practicable from the Completion Date (i) the separation of the Companies from the information technology system of the Carrefour Group (in particular preventing the access by the Companies to commercially sensitive information of or regarding the Carrefour Group), and (ii) the integration of the Companies in the information technology system of the Purchaser’s group.	
 
 	9.7.2	For that purpose, as from the Date of this Agreement, the Parties and Carrefour will liaise and discuss in good faith through specifically designated information technology representatives of the Carrefour Group and the Purchaser in order to plan and supervise the tasks necessary to effect the separation referred to above and agree on interim services to be provided from the Completion Date by the Carrefour Group to the Companies, subject to the following:	
 
 	a)	the list of information technology services that shall continue to be provided by the Carrefour Group to the Companies as from the Completion Date for a period up to six (6) months shall exclusively be limited to such services which can be effectively provided by the Carrefour Group from a legal and technical point of view and which were already provided to the Companies before the Completion Date and which are necessary to avoid any disruption to the business of the Companies as it is currently being carried out which can be effectively provided by the Carrefour Group from a legal and technical point of view;	
 
 	b)	the designated representatives of the Purchaser shall not have access to commercially sensitive information (i) relating to the Companies until the Completion Date and (ii) relating to the Carrefour Group on or after the Completion Date;	
 
 	c)	such information technology services shall be provided at the same level of quality as currently provided to the Companies by the Carrefour Group and on the basis of an arm’s length remuneration.	
 
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9.8	Expatriate Employees	
 
 	9.8.1	The Purchaser acknowledges and agrees that all the Expatriate Employees shall cease to be employed by the Companies after the Completion Date and that they will be put at Carrefour Group’s disposal on the Completion Date, without prejudice to their right to receive the yearly performance bonuses and other compensation which would have been payable to them should the Completion not have occurred. All the compensation, salaries and benefits (included yearly performance bonuses pro-rata temporis and retention bonuses) owed to the Expatriate Employees by the Companies up to the Completion Date shall be borne and paid by the Companies pursuant to the terms and conditions of their respective employment agreements prior to Completion.	
 
 	9.8.2	The Expatriate Employees specifically identified in Exhibit 9.1 of Schedule C as being necessary for the transition of the business of the Companies from the Seller to the Purchaser will, subject to their agreement be made available to the Companies from the Completion Date by the relevant entity of the Carrefour Group pursuant to a secondment agreement with the relevant Company for a period not exceeding three (3) months. During this transition period, such Expatriate Employees shall continue to receive the same expatriate compensation package and benefits as they were receiving prior to the Completion Date. The compensation (fixed and variable pay related to performance) and benefits together with the amount of all costs and benefits associated with the expatriation package (expatriate allowances, French social security charges, etc.) of each such Expatriate Employee shall be paid by the relevant entity of the Carrefour Group and invoiced back every month to the relevant Company to which such Expatriate Employees will be seconded. The Purchaser shall procure that the invoiced Company shall pay the corresponding invoices in a timely manner and not later than ten (10) Business Days after the receipt of the invoice.	
 
 	9.8.3	All costs associated with the return of the Expatriate Employees (including notably travel and moving expenses), whether seconded or not to the Companies after the Completion Date, shall be borne by the Seller or the relevant entity of the Carrefour Group.	
 
 	9.8.4	The Purchaser shall not, and shall procure that the Companies shall not, bring any claim (for compensation, damages, losses or otherwise, and whether arising under law, equity, contract, tort or otherwise) in any jurisdiction against any of the Expatriate Employees arising out of or in connection with any act or omission in the performance and execution of their duties as employee, seconded employee or director of the Companies.	
 
9.9	Former directors and employees	
 
 	9.9.1	Subject to Article 9.9.2, the Purchaser shall not, and shall cause its Affiliates and the Companies not to, make claim against or otherwise seek the liability of any former or current director, manager, officer, employees of the Companies who would resign on the Completion Date or the employment contract of whom will be terminated in connection with the Completion (the “Former Staff Members” and each a “Former Staff Member” ) with respect to any decisions adopted by any of such Former Staff Member prior to the Completion.	
 
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 	9.9.2	The foregoing provision shall not apply to the liabilities arising from criminal actions for which the relevant person(s) are held personally liable.	
SECTION 4 - INDEMNIFICATION
 
10.	INDEMNIFICATION	
 
10.1	Principle	
Subject to the terms of Articles 10, 11, 12 and 13 of this Agreement, the Seller undertakes to indemnify the Purchaser for each individual direct financial loss qualifying as a direct damage under French Law (excluding special, contingent, unforeseen, consequential or indirect or unpredictable losses, notably any loss of profit or earnings and any loss of an opportunity and excluding also any punitive damages) ( “Loss” ) incurred by the Target Group Entities or the Purchaser as a result of any breach of this Agreement by the Seller including an inaccuracy in the representations and warranties given by the Seller in Schedule 6 , but only if and to the extent that:
 
 	(a)	the events or facts giving rise to such inaccuracy are not disclosed or permitted by this Agreement, disclosed in the Disclosed Information or publicly disclosed or publicly available prior to the Date of this Agreement;	
 
 	(b)	such inaccuracy arises out of or results from events or facts existing on or prior to the date on which the relevant representation and warranty is given by the Seller under Schedule 6; and	
 
 	(c)	with regard to the representations and warranties given by the Seller under Sections 3, 7, 8 and 9 of Schedule 6 , there is a Third Party Claim (as defined below) in respect of the events or facts out of which or from which the relevant inaccuracy arises or results.	
 
10.2	Conditions for indemnification	
A Loss will be eligible for indemnification only on the following conditions:
 
 	10.2.1	The Seller is required to indemnify the Purchaser pursuant to this Agreement only to the extent that the Loss has effectively been fully paid by the Purchaser or the Target Group Entities;	
 
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 	10.2.2	The decrease or loss of a Tax credit (including tax loss carry forwards) will not be considered an indemnifiable Loss and shall not give rise to an indemnification pursuant to this Agreement;	
 
 	10.2.3	If the event giving rise to a Loss is insured or the Loss is recoverable from a third party for the benefit of one of Target Group Entities or the Purchaser, the amount of the indemnifiable Loss will be accordingly reduced;	
 
 	10.2.4	Following a VAT reassessment, if an amount of reassessed VAT is recoverable by the Purchaser or any relevant Target Group Entity, the Loss will be determined only on the basis of the penalties, late payment interest and associated sums due, but will exclude the amount of recoverable VAT;	
 
 	10.2.5	Any Loss arising from a Tax adjustment (i) resulting from a delay in its imposition or levy, (ii) which has the effect of transferring an expense, income or deduction from one financial year to another, (iii) giving rise to a corresponding Tax credit (except if the Purchaser can reasonably demonstrate that the Company will not be in a position to effectively utilize such Tax credit), or (iv) permitting the Target Group Entities to avoid or reduce an effective Tax for an amount corresponding to the Loss, will be limited in amount to the amount of applicable interest and late payment penalties due by the Companies;	
 
 	10.2.6	Any Tax saving, in particular reductions in Tax or increases in available deductible losses made by the Purchaser or the Target Group Entities by virtue of the Loss or the circumstances giving rise to the Loss, shall be deducted from the Loss with respect to any matter;	
 
 	10.2.7	Any amount recovered by the Target Group Entities or the Purchaser in respect of Taxes paid in connection with the period prior to the Completion Date shall be deducted from the amount of any indemnified Loss;	
 
 	10.2.8	The Loss shall be calculated on a net consolidated basis including all Target Group Entities and to the extent any Loss represents or gives rise to a transfer of value to the benefit of one of the Target Group Entities it shall not give rise to indemnification. In addition, any liability incurred by any of the Companies will not constitute a Loss for the portion of such liability which has been included as a reserve in the Accounts;	
 
 	10.2.9	Any Loss suffered by the Purchaser or any of the Target Group Entities in respect of any inaccuracy or breach of the representations and warranties of the Seller provided for in Schedule 6 shall be calculated on a Local Currency-for-Local Currency basis (and then converted into Euros based on the Exchange Rate) without applying a multiplier or any other valuation principles used, directly or indirectly, by the Parties in determining all or part of the Purchase Price;	
 
 	10.2.10	In respect of any breach of the representations and warranties of the Seller provided for in Sections 3, 7, 8 and 9 of Schedule 6 , only the direct consequences of the claim(s) made by the relevant Third Party(ies) shall be subject to indemnification;	
 
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 	10.2.11	The Seller shall not be held liable for indemnification to the extent the Loss may be attributed to any voluntary action or omission on the part of the Purchaser and/or the Target Group Entities including (i) any change in the Accounting Policies (including consolidation methods), the generally accepted accounting principles in Colombia (Colombian Accounting Standards) or tax reporting practices applicable to the Companies after the Completion Date (including any change required pursuant to any Law coming into force after the Date of this Agreement or having retrospective effect prior to the Date of this Agreement), (ii) any actions taken by the Target Group Entities which have been approved by the Purchaser pursuant to Article 8.1, (iii) any actions taken by the Companies (including, as the case may be, any modifications and amendments to the Seller’s Guarantees, Loan Agreements) which may be required by the Lenders and the Secured Parties with a view to implementing the repayment of the Loan Amount and release of the Seller’s Guarantees pursuant to Article 8.2 or (iv) any restructuring transaction implemented after the Completion Date by the Purchaser (and/or any of its Affiliates) involving (in whole or in part) assets or liabilities of any Target Group Entity.	
 
10.3	If any of the circumstances referred to in Article 10.2 above is only known after the payment by the Seller further to its obligations to indemnify under the terms of this Agreement, the Purchaser shall immediately repay to the Seller a sum equal to the difference between the sum paid and the sum which should have been paid if the circumstances in question had been known before the date of payment.	
 
10.4	Exclusivity of remedy	
Unless otherwise expressly provided for under this Agreement, the indemnification obligation provided in this Article 10 shall be the exclusive remedy of the Purchaser against the Seller in respect of any breach of any representation or warranty, covenant, undertaking or obligation of the Seller in connection with this Agreement, and the Purchaser hereby waives any rights to rescission, cancellation, termination or remedy of any nature it may have in this respect, unless otherwise expressly provided for in this Agreement.
 
11.	LIMITATIONS ON SELLER’S LIABILITY	
The total liability of the Seller to indemnify any Loss shall be limited in the following manner:
 
11.1	The Purchaser acknowledges that the Disclosed Information has been disclosed to it during the investigations and reviews it conducted with its advisors in the context of the transactions contemplated under this Agreement. As a result, the Purchaser shall not be entitled to make any claim against the Seller in respect of any events, facts, or circumstances set out in the Disclosed Information, this Agreement (including for the avoidance of doubt its Schedules and Exhibits) or any information publicly available as at the Completion Date and also represents and warrants that, as at the Date of this Agreement and as at the Completion Date, it has no knowledge of events, facts or circumstances which may give rise under the terms of this Agreement to a claim against the Seller.	
 
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11.2	Any fact or event disclosed in Schedules or Exhibits shall be deemed to be disclosed against the Seller’s representations and warranties.	
 
11.3	Recovery from another person	
 
 	11.3.1	If the Seller pays to the Purchaser an amount with respect to a Claim, the Purchaser and/or any of its Affiliates (including the Companies) subsequently recovers or is or becomes entitled to recover from another person an amount which is referable to the matter giving rise to the Claim, the Purchaser shall immediately notify the Seller and, if relevant, shall (at the cost of the Seller) procure that the relevant entity of the Purchaser’s group will take such action as the Seller may reasonably require to enforce the recovery against the person in question; and	
 
 	(a)	if the Seller has already paid an amount in satisfaction of a Claim and the amount paid by the Seller in respect of the Claim is more than the Sum Recovered, the Purchaser shall immediately pay to the Seller the Sum Recovered less any Taxes applicable therein;	
 
 	(b)	if the Seller has already paid an amount in satisfaction of a Claim and the amount paid by the Seller in respect of this Claim is less than or equal to the Sum Recovered, the Purchaser shall immediately pay or procure the payment to the Seller of an amount equal to the amount paid by the Seller.	
 
 	11.3.2	If the Seller has not already paid an amount in satisfaction of a Claim, the amount of the Claim for which the Seller would have been liable shall be reduced by and to the extent of the Sum Recovered.	
 
11.4	In the event the Purchaser and/or the Companies alter, after the Completion Date, the insurance cover existing as at the Date of this Agreement, with the effect that all or part of a Loss is no longer insured, the indemnification due by the concerned Seller in respect of such Loss will be reduced by the amount which is no longer insured.	
 
11.5	The same Loss or the same event or circumstances giving rise to a Loss will not be taken into account more than once under the terms of this Agreement even if such Loss, event or circumstances have actually not given rise to an indemnification payment.	
 
11.6	No indemnification will be due by the Seller to the Purchaser if the Loss arises from the entry into force or the modification of a law, decree, regulation, guideline, a change in the judicial or administrative interpretation of a matter of a legislative or regulatory nature or constituting case-law and/or the levy or modification of any Tax after the Date of this Agreement, even if such modification, change or levy has a retrospective effect or was announced or could have been foreseen as of the Date of this Agreement.	
 
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11.7	No indemnification will be due by the Seller to the Purchaser if the Target Group Entities and/or the Purchaser have not taken all reasonably practicable steps to minimise and mitigate the Loss in respect of which the request for indemnification under the terms of this Agreement has been made.	
 
11.8	The Seller will not be liable for an individual Loss which, after having applied the conditions and limitations provided for under Articles 10, 11, 12 and 13, is less than EUR 250,000. For the purpose of calculating the foregoing de minimis (i) the amounts of individual Losses arising from substantially identical facts or circumstances will not be amalgamated, and (ii) the amounts of individual Losses resulting from different circumstances or events but having substantially similar consequences will not be amalgamated.	
 
11.9	The Seller will not be liable for any Losses until and unless the aggregate amount of the Losses for which the Seller is required to indemnify the Purchaser hereunder (after having applied, for the avoidance of doubt, the conditions and limitations provided for under Articles 10, 11, 12 and 13) exceeds EUR 50,000,000; such amount being construed as a deductible, the Seller being only liable to indemnify the Purchaser once such threshold is reached and then only for the amount which is in excess of such threshold, subject to the de minimis set out in Article 11.8 above and the other terms of Articles 10, 11, 12 and 13.	
 
11.10	The amounts of any Loss incurred to be taken into account for the purpose of calculating the foregoing thresholds will be based on the conversion of COP$ into Euros on the basis of the Exchange Rate.	
 
11.11	Claims relating to Losses arising from a breach by the Seller of its representations and warranties given under Section 13.1 of Schedule 6 or its covenant given under Article 8.1.1(k) shall not be subject to the de minimis set out in Article 11.8 or the deductible set out in Article 11.9.	
 
11.12	The total liability of the Seller arising from a breach by the Seller of its representations and warranties, covenants, undertakings and/or obligations under this Agreement shall not exceed, in aggregate, an amount equal to EUR 125,000,000 (after giving effect to the deductible referred to in Article 11.9) with the exception of the Claims relating to Losses arising from a breach by the Seller of any of its representations and warranties given under Section 1 of Schedule 6 ( Capacity, authority and validity ), Section 2 of Schedule 6 ( Title over the Sold Shares - Structure of the share capital of the Target Group Entities ), Section 13.1 of Schedule 6 or the covenant given under Article 8.1.1(k) of this Agreement, in respect of which the total liability of the Seller shall not exceed, in aggregate, an amount equal to the Purchase Price, provided expressly that the total liability of the Seller arising from a breach by the Seller of its representations and warranties, covenants, undertakings and/or obligations under this Agreement shall never exceed in aggregate an amount equal to the Purchase Price.	
 
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12.	DURATION OF INDEMNIFICATION	
 
12.1	Claims arising from a breach of the Seller’s representations and warranties, covenants, undertakings and/or obligations under this Agreement must be notified by the Purchaser before the expiry of a twelve (12)-month period from the Completion Date, except for those Claims arising from a breach of the Seller’s representations and warranties under (i) Section 1 of Schedule 6 ( Capacity, authority and validity ) and Section 2 of Schedule 6 ( Title over the Sold Shares - Structure of the share capital of the Target Group Entities ) which must be notified by the Purchaser to the Seller before the expiry of the applicable statute of limitation, and (ii) Section 8 of Schedule 6 ( Tax ) which must be notified by the Purchaser to the Seller before the expiry of a twenty four (24) month period following the Completion Date.	
 
12.2	With the exception of Third Party Claims, a Claim notified in accordance with Articles 12 and 13.1 shall no longer be enforceable against the Seller upon the expiry of a period of six (6) months starting on the day of receipt by the Seller of the notification of such Claim, unless proceedings in respect of the Claim have been properly issued and validly served on the Seller pursuant to Article 16.	
 
12.3	No Claim with respect to any Losses may validly be served after the dates set out in Article 12.1.	
 
13.	NOTIFICATION PROCEDURE AND CONDUCT OF THIRD PARTY CLAIMS	
 
13.1	Notifications of Claims	
 
 	13.1.1	The Seller shall not be liable to the Purchaser in respect of any claim for indemnification under this Agreement, unless a valid claim shall have been notified in accordance with Article 15.6 and shall comply with the following requirements (a “Claim” ):	
 
 	(a)	such Claim shall state, in reasonable details, the specific grounds of the claim and the amount of the Loss alleged expressed in the relevant Local Currency, with the specific indication of the article(s) of the Agreement on which such Claim is based, in order to enable the Seller to assess the merits of the Claim, to take the necessary action to preserve evidence and to take such further steps as the Seller deems necessary;	
 
 	(b)	such Claim shall express confirmation from the Purchaser that all the conditions for indemnification as provided for in Articles 10 and 11 are met, with (i) the indication of the tax consequences of the Loss for the relevant Target Group Entities (including the amount of any Tax savings resulting from the Loss), and (ii) confirmation and justification of the absence of insurance coverage for that Loss or the possibility to recover such Loss from a third party; and	
 
 	(c)	a Claim shall be notified by the Purchaser to the Seller as soon as practicably possible after the Purchaser or the Target Group Entities become aware of any matter or circumstance that has caused a Loss.	
 
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 	13.1.2	The failure to promptly notify a Claim pursuant to paragraph (c) above shall not relieve the Seller from its indemnification obligation, unless (i) such a notification is delivered more than ten (10) Business Days after the date on which the Target Group Entities or the Purchaser became aware of any matter or circumstance that may reasonably be expected to give rise to a Claim, or (ii) such notification relates to a Third Party Claim, in which case Articles 13.5.1 and 13.5.2 shall apply.	
 
 	13.1.3	Notwithstanding the generality of the provisions of paragraphs 13.1.1. and 13.1.2. above, with respect to a Third-Party Claim relating to Taxes, Purchaser shall, or shall cause the Target Group Entities to:	
 
 	(i)	Inform the Seller of any notice of a Tax audit relating to pre-Completion Taxes, as soon as reasonably practicable (and in any event no later than ten (10) Business Days calendar days after the receipt of the respective order or notice of a Tax audit by the Target Group Entities; and	
 
 	(ii)	Inform the Seller of any notice of Tax assessments relating to pre-Completion Taxes, as soon as reasonably practicable (and in any event no later than ten (10) Business Days after the receipt of the notice of Tax assessment by the Target Group Entities.	
 
13.2	Access to information	
 
 	13.2.1	From the date of receipt of the notification of any Claim until the payment of the indemnification in accordance with the terms of Article 13.7, the Purchaser shall provide the Seller with a copy of all documentation or information relating to the Loss or the Claim which may be useful or necessary (i) for the defence of the interests of the Seller, (ii) to confirm that the conditions for indemnification as provided for in Article 10.2 are met, or (iii) to verify whether the limitations on Seller’s liability as provided for in this Agreement (in particular under Article 11) apply. In this respect, the Purchaser will permit the Seller (or its nominees and/or advisers) and will procure that the Target Group Entities will grant access to the premises of the Target Group Entities for the purpose of consulting and copying such documentation or information as well as conducting interviews with the relevant personnel of the Target Group Entities during business hours.	
 
 	13.2.2	Any failure or delay by the Purchaser or the Target Group Entities in providing access to the Seller to the documentation or information requested pursuant to the paragraph above shall increase accordingly any deadline to be complied with under this Agreement.	
 
 	13.2.3	In any event, the Purchaser shall inform the Seller, as promptly as possible, of any requests or correspondence received by the Target Group Entities from or exchanged with Tax authorities in respect of any Tax examination or reassessment of the Target Group Entities, the subject matter of which relates in full or in part to the period prior to the Completion Date and falls within the scope of the Seller’s representations and warranties provided for in Schedule 6 or Article 14.	
 
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13.3	Remedy of breach	
Notwithstanding any other provision of this Agreement, to the extent that any breach of the Seller’s obligations hereunder is capable of remedy, the Seller shall have the right to take appropriate measures and actions to remedy in full or in part any breach, promptly after having received the notice of Claim. The Purchaser shall not be entitled to claim any Loss in respect of a breach if and to the extent that such breach has been remedied without causing additional Losses to the Target Group Entities or to the Purchaser.
 
13.4	Processing of Claims	
 
 	13.4.1	The Seller shall be entitled, following receipt of a Claim, to serve any written objection to the Purchaser as regards the merits and validity of the Claim.	
 
 	13.4.2	In the event that the Seller and the Purchaser are unable to reach an agreement with respect to the validity of any Claim (other than a Third Party Claim as defined below) and the amount of the corresponding Loss to be indemnified by the Seller pursuant to this Agreement within a period of fifty (50) Business Days following the date of receipt by the Seller of a Claim, the dispute shall be settled in accordance with the provisions of Article 16.	
 
13.5	Third Party Claims	
 
 	13.5.1	In the event of any third party claim, judicial, arbitration or legal or administrative action or proceedings (including any investigation by any Governmental Authority) filed or initiated against any of the Companies or the Purchaser which could give rise to a Claim (the “ Third Party Claim ”), the Purchaser shall give written notice in the form required by Article 13.1 to the Seller, and in any event in respect of any proceedings that require a response within a shorter period of time than the ten (10)-Business Day period provided under Articles 13.1.2 and 13.1.3, within such shorter period of time after Purchaser’s receipt of notice of such Third Party Claim, with a view to enabling the Seller to have at least four (4) Business Days to respond thereto before the expiry of the relevant deadline.	
 
 	13.5.2	The failure to promptly notify a Third Party Claim shall not relieve the Seller from its indemnification obligation under Article 10, except if such notification is delivered later than the expiry of the relevant deadline provided under Article 13.5.1.	
 
 	13.5.3	In relation to a Third Party Claim, the Seller may elect:	
 
 	(a)	to have exclusive conduct of the Third Party Claim, provided, that if the Seller so opts to take exclusive control of such Third Party Claim, it shall be deemed to have accepted to indemnify the Purchaser in accordance with this Agreement in respect of the corresponding Claim.	
 
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In this case:
 
 	(i)	the provisions of Article 13 shall continue to apply throughout the duration of the Third Party Claim;	
 
 	(ii)	the Seller shall have the right, at its own expense, to negotiate and settle any Third Party Claim and the Purchaser shall, and shall cause the Target Group Entities to, cooperate with the Seller including by (a) giving it and its designees and legal advisers reasonable access to all relevant documents, books and records (with the right to photocopy such documents, books and records) and to the Target Group Entities’ employees and informing the Seller promptly of any correspondence received in connection with such Third Party Claim (including, without limitation, any notice from a Tax authority for the launching or conducting of a Tax audit), (b) following the Seller’s instructions as regards the conduct of the Third Party Claim, including serving any notice, filing any memorandum in defence, appealing against any judgment or administrative or arbitration decision, taking any legal action against a decision of a Governmental Entity (including, without limitation, any assessment of Taxes) and/or sending any correspondence and (c) more generally, permitting the Seller to participate in the relevant proceedings (including without limitation in any Tax audits) and negotiations;	
 
 	(iii)	the Seller, on its behalf and on behalf of the Purchaser and the Target Group Entities, shall be entitled to settle such Third Party Claim at such time and upon such terms as the Seller deems fit and reasonable provided that the terms of such proposed settlement (the “ Proposed Settlement ”) are notified to the Purchaser with supporting documentation showing the third party’s agreement to the Proposed Settlement. Within ten (10) Business Days of receipt of the notification of the Proposed Settlement, the Purchaser may deliver to the Seller (i) a notice disputing the Proposed Settlement, in which case the provisions of Article 13.5.3(a)(iv) will apply, or (ii) a notice approving the Proposed Settlement, in which case the Seller will be entitled to enter into the Proposed Settlement with the third party not only on its behalf but also on behalf of the Purchaser and the Target Group Entities. If no notice is received by the Seller from the Purchaser within ten (10) Business Days from receipt by it of the notification referred to in this Article 13.5.3(a)(iii), the Purchaser shall be deemed to have approved the Proposed Settlement; and	
 
 	(iv)	in the event that the Purchaser disputes the Proposed Settlement in accordance with Article 13.5.3(a)(iii), it shall take over and assume the defence of the Third Party Claim and shall be deemed to have waived its indemnification right to the corresponding Loss under this Agreement without any further liability from the Seller in respect of this Third Party Claim.	
 
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 	(b)	that the Purchaser shall have the exclusive conduct of the Third Party Claim, provided that if the Seller so opts that the Purchaser takes exclusive conduct of the Third Party Claim, it shall not be deemed to have accepted to indemnify the Purchaser of the corresponding Claim.	
In this case:
 
 	(i)	the advisers selected by the Purchaser for the conduct of the proceedings shall be approved by the Seller (which approval shall not be unreasonably withheld or delayed);	
 
 	(ii)	the Purchaser shall (x) inform the Seller, on a regular basis, of the progress of the relevant proceedings and shall (y) provide, and procure that any of the relevant Target Group Entities provides, to the Seller and its legal advisers, any relevant documents or other information in the possession of the Purchaser or such Target Group Entities in respect of those matters giving rise to the relevant Third Party Claim, including without limitation, copies of any correspondence exchanged in relation to such proceedings;	
 
 	(iii)	the Seller may participate, with the assistance of any counsel and legal advisers of its choice, (i) in the elaboration of arguments, which, in order to mitigate the Loss, may be required to be put forward on behalf of the Target Group Entities, (ii) in any negotiation which may take place to reach a settlement, and, more generally, (iii) in any possible proceedings relating to such Third Party Claim;	
 
 	(iv)	any recommendation made by the Seller or its counsels or advisers in the course of the proceedings shall be duly considered and taken into account by the Purchaser and the Target Group Entities; In any event, the Purchaser shall, and shall cause the relevant Target Group Entities to, reasonably and prudently defend such Third Party Claim;	
 
 	(v)	the Purchaser shall inform the Seller of any proposal relating to a settlement, agreement, withdrawals or voluntary payments, received by the Purchaser or any of the Target Group Entities, with respect to the Third Party Claim. The Purchaser and the Target Group Entities shall not conclude any settlement, agreement or withdrawals (including giving up the right to appeal a decision), nor make any voluntary payments or admit liability, with respect to any Third Party Claim without the prior written consent of the Seller;	
 
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 	(vi)	the Purchaser, the Seller and the Target Group Entities shall be liable for the costs and expenses of their respective own advisors;	
 
 	(vii)	the participation of the Seller in any proceedings in relation to any Third Party Claim, the acceptance or refusal by the Seller of a settlement or an appeal pursuant to the above paragraphs shall not be deemed to be a recognition by the Seller of the existence of any obligation to indemnify the Purchaser. The Seller may at any time object to the fact that the Third Party Claim may result in a Loss, in which case any resulting dispute shall be settled in accordance with the terms of Article 16.	
 
 	(c)	It is specified that in the event of a Claim with respect to pre-Completion Taxes, the Purchaser shall upon the request of the Seller cause the relevant Target Group Entity to elect for any applicable payment deferral and the Purchaser shall give all guarantees at Seller’s costs as may be required in connection with such payment deferral.	
 
 	13.5.4	All other provisions of this Agreement applicable to Claims in general and limitations on liability of the Seller will equally apply to any Third Party Claim.	
 
13.6	Beneficiary of indemnification	
The Purchaser shall be the sole beneficiary of any indemnification.
 
13.7	Payment of indemnification	
 
 	13.7.1	Subject to the provisions of Articles 10, 11, 12 and 13, the indemnification of a Loss as determined in accordance with Articles 10, 11, 12 and 13 will be payable by the Seller as a reduction of the Purchase Price to the Purchaser within the following deadlines:	
 
 	(a)	in connection with a Claim other than a Third Party Claim, within thirty (30) Business Days following the acceptance of the Claim by a duly authorized representative of the Seller in writing, or in the event of disagreement between the Parties, within thirty (30) Business Days following the final arbitration decision rendered in accordance with Article 16 in respect of such disagreement between the Parties;	
 
 	(b)	in connection with a Third Party Claim in respect of which the Seller has elected to have exclusive conduct of the Third Party Claim, within thirty (30) Business Days following the final and binding judgment, decision or settlement enforceable against the Purchaser or the Companies obtained in respect of such Third Party Claim and receipt by the Seller of a notice sent by the Purchaser evidencing that full payment of the corresponding amount has been made by any of the Companies or the Purchaser.	
 
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 	(c)	in connection with a Third Party Claim in respect of which the Seller has elected not to have exclusive conduct of the Third Party Claim, within thirty (30) Business Days following the later of (a) the final and binding judgment, decision or settlement enforceable against the Purchaser or the Companies obtained in respect of such Third Party Claim and the receipt by the Seller of a notice sent by the Purchaser evidencing that full payment of the corresponding amount has been made by any of the Companies or the Purchaser, and (b) the acceptance of the Claim by a duly authorized representative of the Seller in writing, or in the event of disagreement between the Parties, the final arbitration decision rendered in accordance with Article 16 in respect of such disagreement between the Parties.	
 
 	13.7.2	Any payment to be made by the Seller to the Purchaser under Article 13.7 shall be made (i) by wire transfer of funds to such bank account notified by the Purchaser at least five (5) Business Days prior to the relevant date of payment to be made pursuant to this Article 13.7, and (ii) in Euros, based on a conversion of the Local Currency into Euros at the Exchange Rate.	
 
14.	COLOMBIA HOLDINGS BVS INDEMNITY	
The Seller hereby represents and warrants to the Purchaser that each of the five Colombia Holdings BVs will at Completion (i) have no trading history, (ii) hold no assets other than GSC Shares and Atacadão Shares as described in Schedule A hereto, and (iii) have no on - or off-balance sheet liabilities or obligations (including as a result of any pre-Completion intra-Seller’s Group reorganisation). Seller will indemnify the Purchaser against any Loss incurred by the Purchaser and/or any of the Colombia Holdings BVs as a result of any inaccuracy of (a) the representations set forth in the foregoing phrase or (b) the representations expressly referring to and covering the Colombia Holdings BVs in Schedule 6 of this Agreement (the “Colombia Holdings BVs Indemnity” ). The Seller’s obligation to indemnify a Loss under the Colombia Holdings BVs Indemnity will not be subject to any of the limitations set forth in Articles 11.8, 11.9, 11.12 and 12 of this Agreement.
SECTION 5 - MISCELLANEOUS PROVISIONS
15.	MISCELLANEOUS	
 
15.1	Sale and transfer	
Without prejudice to the provisions of Article 15.12 below, no Party may assign or transfer (including by way of transfer of security, including the purchase of any of the Companies, by way of sales, transfers, contributions, including disposals of the Companies’ assets or business, in whole or in part) or undertake to assign or transfer its rights or obligations (including for the avoidance of doubt its indemnification right) under the terms of this Agreement without the prior written consent of all other Parties, it being however specified that the Seller may proceed with any such assignment or transfer of rights or obligations to any of its Affiliates without the prior written consent of the Purchaser;
 
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15.2	Entire Agreement	
 
 	15.2.1	This Agreement, together with the Schedules and Exhibits attached hereto, represents the entire agreement between the Parties.	
 
 	15.2.2	This Agreement supersedes and renders void all letters of intent, prior understanding, agreements, representations or other arrangements between the Parties, written or oral, with respect to the subject matter of this Agreement entered into prior to the Date of this Agreement. Notwithstanding the foregoing, the Confidentiality Agreement will remain in full force and effect in accordance with its terms.	
 
15.3	Amendments, waivers and consent	
 
 	15.3.1	The Parties agree that the Agreement may be amended only in writing by a duly empowered representative of each Party. Neither Party will be deemed to have waived a right under this Agreement unless expressly specified in writing by a duly empowered representative.	
 
 	15.3.2	Any consent granted under this Agreement shall not be effective, unless given in writing and signed by a duly empowered representative of the consenting Party pursuant to terms of this Agreement.	
 
15.4	Confidentiality	
This Agreement is confidential between the Parties. Consequently, the Parties agree to keep this Agreement confidential and more generally not to disclose any information directly or indirectly in relation to this Agreement, unless the disclosure is required pursuant to the order of a court or administrative authority of a competent jurisdiction, or a lawsuit or any law or governmental regulation in force, in which case the disclosing Party ( “Disclosing Party” ) shall promptly and, in any event, to the extent legally permissible, before complying with any such requirement, provide the other Parties with written notice of such requirement so that the other Parties may seek a protective order or other appropriate remedy to protect the confidential nature of the concerned information or the other Parties’ interests, as the case may be. In such event, the Disclosing Party shall provide the other Parties with reasonable assistance for safeguarding the confidentiality of this information and, in all events, comply with the other Parties’ reasonable requirements as to timing, content and manner of making available or communicating the concerned information and preserve the other Parties’ interests. The Disclosing Party shall furnish only that portion of information which is legally required to be disclosed.
 
15.5	Announcement and public relations	
 
 	15.5.1	No announcement or press release in respect of this Agreement or as to the content of this Agreement may be issued without the prior mutual written consent between the Purchaser and the Seller (which consent is not to be unreasonably withheld) on the date and the key terms of this announcement or press release (including the disclosure of the financial terms).	
 
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 	15.5.2	The Parties shall proceed with the announcement of the execution of this Agreement pursuant to the terms of the press release in the agreed form of Schedule 15.5.	
 
 	15.5.3	If an announcement or press release by a Party is required by applicable law or any stock exchange regulations, the consent from the other Party shall not be required. In such case, such requirement shall be notified to the other Party within a reasonable time and the content of such announcement or press release shall be discussed by reference to this Article 15.5.	
 
 	15.5.4	Without prejudice to the preceding paragraphs of this Article 15.5, the Parties will cooperate and consult with each other in all public relations matters as they arise in connection with the transactions referred to in this Agreement.	
 
15.6	Notices	
 
 	15.6.1	Unless otherwise required by this Agreement, all notices in connection with this Agreement must be in writing in the English language and shall be either (i) delivered by hand personally with acknowledgement of receipt, (ii) sent by courier or by an international express delivery service provider, (iii) sent by registered post with acknowledgment of receipt requested; or (iv) sent by fax provided that a confirmatory hard copy is sent by registered post with acknowledgement of receipt or through an international express delivery service provider (at the latest one Business Day after the fax).	
 
 	15.6.2	All notices shall be addressed to the Parties at the following addresses:	

(a)	 	To the Purchaser
To the attention of
Address
 
Fax n°	 	:
:
:
 
:	  	Cencosud
Daniel Rodriguez / Carlos Mechetti
Av. Kennedy 9001, piso 7, Las Condes,
Santiago, Chile
+5629590040	
				
	 	With a copy to
To the attention of
Address
 
Fax n°	 	:
:
:
 
:	  	Philippi
Juan Francisco Gutiérrez and Federico Grebe
Avda. El Golf N° 40, piso 20, Las Condes,
Santiago, Chile
+(562) 364 3796	
(b)	 	To CNBV as Seller
To the attention of
Address
 
Fax n°	 	 
:
:
:
 
:	  	 
Managing Director
Gebouw Spring Overshiestraat 186-D,
1062 XK Amsterdam, The Netherlands
+ 31 20 669 6847	
 
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	 	With a copy to
To the attention of
Address
 
Fax n °	 	:
:
:
 
:	  	Carrefour
Group General Counsel
33 Avenue Emile Zola, 92100
Boulogne-Billancourt, France
+33 1 41 04 27 08	
				
	 	With a copy to
To the attention of	 	:
:	  	Bredin Prat
Benjamin Kanovitch and José María Pérez	
	 	Address
 
Fax n°	 	:
 
:	  	130, rue du Faubourg Saint-Honoré,
75008 Paris, France
+ 33 1 42 89 10 73	
 
 	15.6.3	The Purchaser and the Seller will be authorised to amend at any time their relevant address, addressee or fax number above subject to informing the other party in accordance with this Article 15.6.	
 
15.7	Costs and Expenses	
 
 	15.7.1	Any registration fees, stamp duties, Taxes or levy (except for corporate income taxes due by the Seller) payable on the execution of this Agreement or as a result of or in connection with the transfer of the Sold Shares (or any related formalities) or the performance of this Agreement including in respect of Claims and indemnification from Seller shall be borne by the Purchaser, either on its own behalf or on behalf of the Companies.	
 
 	15.7.2	Each Party shall bear the fees, costs and commissions of its own legal advisers and agents in connection with the preparation, negotiation and execution of this Agreement and all related agreements, provided, however, that the costs of the preparation of the notarial deed referred to in Schedule 5 shall be borne by the Purchaser.	
 
15.8	Severability	
If, for any reason whatsoever, any provisions of this Agreement are declared null or void, this shall not affect or impair the validity of the remaining provisions of the Agreement. In lieu of the invalid or unenforceable provision, or in order to account for an omission, a reasonable replacement provision shall be discussed in good faith and agreed upon by the Parties which closely reflects, to the extent permitted by law, that which the Parties intended, or according to the intent and purpose of this Agreement would have intended, had they considered the particular point.
 
15.9	No third party beneficiaries	
The terms and provisions of this Agreement are intended solely for the benefit of each Party and their respective successors or permitted assigns, and it is not the intention of the Parties to confer third-party beneficiary rights upon any other Person than those Persons entitled to indemnification pursuant to Article 10. Each Party is acting for its own account for the purposes of this Agreement. In this respect, the Purchaser is acquiring the Sold Shares for its own account and investment purposes.
 
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15.10	Further assurance	
Each of the Parties agrees to use all reasonable endeavors to perform (or use reasonable endeavors to procure the performance of) all further acts and things and execute and deliver (or use all reasonable endeavors to procure the execution and delivery of) such further documents, as the other may reasonable require, to implement and/or give effect to this Agreement and the transactions contemplated hereunder.
 
15.11	Notary	
With reference to the Rules of Professional Conduct (Verordeningberoeps-en gedragsregels) of the Royal Dutch Organisation of Civil Law Notaries (Koninklijke Notariële Beroepsorganisatie) all parties expressly agree that the Notary acts as their civil law notary and executes deeds connected with this Agreement or any related agreement.
On the Date of this Agreement, the Parties have remitted to the Notary an executed copy of this Agreement including a full set of the Schedules and Exhibits (the “Documentation Set” ). The Notary shall be in charge of holding the Documentation Set in escrow and the Parties agree on referring to this Documentation Set in case of dispute in relation to this Documentation Set. A copy of the Documentation Set shall be made available by the Notary to each Party upon the request of such Party and at such Party’s expenses.
 
15.12	Designated Purchaser	
The Purchaser shall be entitled to designate Easy Colombia S.A. (a company incorporated under the laws of Colombia, with address in Calle 175, n° 22-13, Bogota, Colombia, NIT 9001551071, registered in the Cámara de Comercio under number 01711122) a wholly-owned subsidiary of the Purchaser ( “Designated Purchaser” ) to purchase the Sold Shares on the terms provided for in this Agreement, provided however that:
 
 	(i)	the Purchaser shall remain jointly and severally ( solidairement ) liable with the Designated Purchaser for all of Purchaser’s obligations under this Agreement; and	
 
 	(ii)	all references to the Purchaser in this Agreement shall be deemed to refer to both the Purchaser and the Designated Purchaser, acting jointly and severally ( solidairement ).	
 
16.	APPLICABLE LAW AND SETTLEMENT OF DISPUTES	
 
16.1	This Agreement shall be governed by, and construed in accordance with French law, except for the provisions of this Agreement governing the transfer of legal title of the Sold Shares which shall be governed by the law of the Netherlands.	
 
16.2	Notwithstanding any provision of this Agreement, it is expressly agreed and understood that, as an essential condition to this Agreement being entered into by the Parties, each of the Parties has agreed to waive to the fullest extent possible its rights	
 
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 	under articles 1142 and subsequent of the French Civil Code ( Code civil ) so that the other parties are entitled to seek specific performance as a remedy, including specific performance with respect to the Parties’ obligations under Article 5 (including for the avoidance of doubt Schedule 5 ) and their obligation to proceed with Completion.	
 
16.3	Any dispute arising in any way out of or in connection with this Agreement (including, without limitation: (1) any contractual, pre-contractual or non-contractual rights, obligations or liabilities; and (2) any issue as to the existence, interpretation, performance, validity or termination of this Agreement) (a “Dispute” ), shall be finally settled by binding arbitration under the Rules of Arbitration of the International Chamber of Commerce in force as at the Date of this Agreement (the “Rules” ), which Rules are deemed to be incorporated by reference into this Article as may be amended by the rest of this Article.	
 
16.4	The arbitral tribunal ( “Tribunal” ) shall consist of three arbitrators. The Purchaser shall appoint one arbitrator. The Seller shall appoint one arbitrator. The two arbitrators thus appointed shall appoint the third arbitrator who shall be the chairman of the Tribunal. If within ten (10) Business Days after a request from another Party to do so a Party fails to appoint an arbitrator, or if the two arbitrators fail to appoint the third arbitrator within this ten (10) Business-Day period after the appointment of the second arbitrator, the appointment shall be made, upon request of any Party, by the ICC Court in accordance with the Rules. The seat of arbitration shall be Paris, France	
 
16.5	The language of the arbitration proceedings shall be English and the applicable law of the arbitration proceedings shall be French law, which shall also be the law governing the arbitration agreement set forth in this Article 16. Any award of the Tribunal shall be made in writing and shall be final and binding on the parties from the day it is made and shall not be subject to any right of appeal. The Parties undertake to carry out the award without delay. The Parties waive any right to apply to any court of law and/or other judicial authority to determine any preliminary point of law and/or review any question of law and/or the merits, insofar as such waiver may validly be made. The Parties shall not be deemed, however, to have waived any right to challenge any award on the ground that the Tribunal lacked substantive jurisdiction and/or on the ground of serious irregularity affecting the Tribunal, the proceedings or the award to the extent allowed by the law of the seat of arbitration. Nothing in this Article 16 shall be construed as preventing any Party from seeking conservatory or interim relief from any court of competent jurisdiction.	
 
- 32 -

Executed in Amsterdam, on 18 October 2012 in four (4) originals together with four (4) sets of Schedules and Exhibits, one original copy of this Agreement, together with one set of Schedules and Exhibits remitted to the Notary,

CENCOSUD	 		 	CARREFOUR NEDERLAND B.V.	
			
/s/ Horst Paulmann	 		 	/s/ Franck Tassan	
Represented by Horst Paulmann	 		 	Represented by Franck Tassan	
Title:	 		 	Title:	

	 		 	CARREFOUR S.A.	
			
 	 		 	/s/ Georges Plassat	
	 		 	Represented by Georges Plassat	
	 		 	Title:	
 
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SCHEDULE 1
DEFINITIONS AND INTERPRETATIONS
 
1.	Unless otherwise defined in this Agreement, the following capitalized words and expressions shall have the following meanings:	
“Accounting Policies” means the Carrefour Group accounting principles, past practices and estimates consistently applied by the Carrefour Group in accordance with the generally accepted accounting principles under the International Financial Reporting Standards ( “IFRS” ) established by the International Accounting Standards Board, for the purposes of preparing any relevant consolidated balance sheet and profit and loss statement;
“Accounts” means the IFRS subconsolidation reporting packages, audited in connection with the preparation of the Carrefour Group consolidation for the period ended June 30, 2012, expressed in Local Currency, composed of a combined balance sheet and a profit & loss statement of the Companies, a copy of which is set forth in Schedule D .
“Acquisition Notification” has the meaning given to it in Article 4.2.
“Affiliate” means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, is Controlling, is Controlled by, or is under common Control with, such specified Person;
“Agreement” means this share purchase agreement and the Schedules and Exhibits hereto;
“Articles” means the Articles of this Agreement unless the context requires otherwise;
“ Atacadão Colombia” has the meaning set forth in the recitals of this Agreement;
“Atacadao Shares” means all the issued shares and voting rights of Atacadao Colombia;
“Business Day” means a day other than a Saturday or Sunday or a public holiday in France, The Netherlands or Colombia;
“Carrefour Group” means the Seller and its Affiliates which shall not include the Target Group Entities;
“Carrefour Group Interco Agreements” means the agreements entered into between the Seller and/or any other entity of the Carrefour Group including the Companies;
“Carrefour Private Label Stock” means products bearing the Carrefour Trademarks and Logos which are in the possession of the Companies or ordered by the Companies as at the Completion Date, together with the Carrefour private label products which do not bear the Carrefour Trademarks and Logos which are in the possession of the Companies or ordered by the Companies as at the Completion Date;
 
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“Carrefour Stores” means the hypermarkets, gas stations, drugstores and other stores and shopping malls operated by the Companies, which are listed in Schedule 2 ;
“Carrefour Trademarks and Logos” has the meaning given to it in Article 9.4.1;
“Claim” has the meaning given to it in Article 13.1;
“Colombian Antitrust Authority” means the Superintendence of Industry and Commerce of Colombia;
“Colombia Holdings Alpha BV” means the Dutch law BV that will hold at Completion the number of shares in the Companies set forth in Schedule A above;
“Thalie BV” means the Dutch law BV that will hold at Completion the number of shares in the Companies set forth in Schedule A above;
“Calliope BV” means the Dutch law BV that will hold at Completion the number of shares in the Companies set forth in Schedule A above;
“Uranie BV” means the Dutch law BV that will hold at Completion the number of shares in the Companies set forth in Schedule A above;
“Coledim BV” means the Dutch law BV that will hold at Completion the number of shares in the Companies set forth in Schedule A above;
“Colombia Holdings BVs” has the meaning given to it in the Preamble of this Agreement;
“Colombia Holdings BVs Indemnity” has the meaning given to it in Article 14;
“Companies” and “ Company ” have the meaning given to them in the Preamble of this Agreement;
“Completion” means the completion of the Sale of the Sold Shares to the Purchaser pursuant to the terms of this Agreement;
“Completion Date” has the meaning set out in Article 5.1;
“Completion Notice” has the meaning set out in Article 5.1;
“Confidentiality Agreement” means the non disclosure agreement entered into between Carrefour and the Purchaser on or about 11 September 2012;
“Control” (including the terms “Controlled by” , “Controlling” and “under common Control with” ), means with respect to one Person the holding directly or indirectly of more than fifty percent (50%) of such Person’s share capital and voting rights, or the power to direct or cause the direction of the business or management of this Person, whether through the ownership of voting rights or pursuant to any contractual arrangements;
 
- 35 -

“Date of this Agreement” means the date of signature of this Agreement;
“Designated Purchaser” has the meaning given to it in Article 15.12;
“Disclosed Information” has the meaning set forth in the recitals of this Agreement;
“Disclosing Party” has the meaning given to it in Article 15.4;
“Dispute” has the meaning given to it in Article 16.3;
“Documentation Set” has the meaning given to it in Article 15.11;
“Employees” means the Companies’ employees;
“Encumbrance” means a mortgage, charge, pledge, lien, option, right of retention, right of first refusal, right of pre-emption, third-party right or interest, right of way or other encumbrances or security having similar effect.
“Exchange Rate(s)” means the exchange rate which shall be used by the Parties to convert any amount expressed in Local Currency into Euro pursuant to this Agreement and which shall be 2,345.2533 COP/EUR;
“Exhibit” means each Exhibit of this Agreement, and “Exhibits” mean all and every Exhibits, to be attached to the present Agreement either in paper form or in electronic format;
“Expatriate Employees” has the meaning given to it in Section 9 of Schedule 6;
“Former Staff Member” has the meaning given to it in Article 9.9.1;
“GSC” has the meaning set forth in the recitals of this Agreement;
“GSC Shares” means all the issued shares and voting rights of GSC;
“Governmental Authority” means any national, provincial, regional, or local government, in Colombia, The Netherlands, in France or in Chile in each case where applicable, and any instrumentality, subdivision, court, tribunal, administrative or regulatory agency or commission or other authority thereof, or any quasi-governmental body exercising or entitled to exercise any administrative, judicial, regulatory, governmental or quasi-governmental authority;
“Group” means, with respect to any specified Person, such Person and its Affiliates;
“Intellectual Property Rights” has the meaning given to it in Section 11 of Schedule 6 ;
“Last Accounting Date” means 30 June 2012;
“Laws” means all laws, statutes, decrees, rules, regulations, municipal ordinances and other pronouncements having the effect of law in Colombia, The Netherlands or in France, in each case as applicable;
 
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“Leakage” means:
 
 	(i)	any distribution, including any dividend or interim dividend, whether in cash or in kind, paid or made by any Company, other than a dividend paid by Atacadao Colombia to GSC; or	
 
 	(ii)	any other payment made on behalf, or for the benefit, of the Seller or any other entity of the Carrefour Group (including without limitation any such payments made in connection with the redemption, purchase or repayment of any securities of any Company); or	
 
 	(iii)	the payment by any Company of transaction boni to any employee or director of the Companies in connection with the Sale of the Sold Shares	
 
 	(iv)	the waiver by any Company of an amount owed to that Company by any member of the Carrefour Group;	
 
 	(v)	any agreements or arrangements relating to any of the matters referred to above;	
with the exception of:
 
 	(i)	any remuneration paid or agreed to be paid to employees or directors of any Company in accordance with the terms of their employment as set out in the Disclosed Information;	
 
 	(ii)	any amount paid or agreed to be paid by the Companies to another member of the Carrefour Group in the ordinary course of business or pursuant to the currently existing terms of the Carrefour Group Interco Agreements listed in Schedule C ; and	
 
 	(iii)	payments contemplated by, made pursuant to or required in order to comply with or implement this Agreement.	
“Lenders” means those banks and financial institutions which are parties to the Loan Agreements;
“Licences” means the material written public authorizations, consents, permits and licences which are legally required to be held by each Company under Colombian Law, to operate the Carrefour Stores in the places and in the manner in which it is carried on as at the Date of this Agreement pursuant to this applicable Law;
“Loan Agreements” means the loan agreements entered into between the Companies and the Lenders where the accelerated payment of any or all outstanding amounts thereunder may be required by the corresponding Lenders as a result of the Completion and which are listed in Schedule 8.2.1;
“Loan Amount” means any and all amounts outstanding under the Loan Agreements including any interest accrued (or to be accrued) thereon up to and including the Completion Date, and further including any early settlement or cancellation payments or penalties or fees required to be paid pursuant to the Loan Agreements in order to settle the sums owed under the Loan Agreements as of the Completion Date;
 
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“Local Currency” means the Colombian Peso ( “COP$” );
“Long Stop Date” means 31 December 2012;
“Loss” has the meaning given to it in Article 10.1;
“Notary” means civil law notary Mr R.W. Clumpkens, Notaris, De Brauw Blackstone Westbroek, or any other civil law notary of De Brauw Blackstone Westbroek N.V., or such notary’s substitute;
“Owned Real Estate” has the meaning given to it in Section 3 of Schedule 6 ;
“Other Termination Fee” has the meaning given to it Article 5.2.1;
“Party” and “Parties” have the meanings set forth in the recitals of this Agreement;
“Person” means any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity;
“Proposed Settlement” has the meaning given to it in Article 13.5.3(a)(iii);
“Purchase Price” has the meaning given to it in Article 3.1;
“Purchaser” has the meaning given to it in the Parties description above;
“Purchaser Information Advertising” means the use of the Carrefour Trademarks and Logos and associated Carrefour’s logo to inform customers that the relevant Carrefour Store has become a store of the Purchaser and to direct them to such store, including without limitation, use in information leaflets and road signs;
“Rented Real Estate” has the meaning given to it in Section 3 of Schedule 6 ;
“Rules” has the meaning given to it in Article 16.3;
“Sale of the Sold Shares” means the sale of the Sold Shares on the Completion Date pursuant to this Agreement;
“Schedule” means each Schedule to this Agreement, and “Schedules” means all and every Schedule, to be attached to this Agreement either in paper form or in electronic format;
“Sections” means the sections or paragraphs of the Schedules to this Agreement unless the context requires otherwise;
“Secured Parties” means any and all Persons which are the beneficiaries of the undertakings, securities, and other similar guarantees of the Seller (and/or any other entity of the Carrefour Group) under the Seller’s Guarantees which are listed in Schedule 8.2.1 ;
 
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“Seller” has the meaning given to it in the Parties description above;
“Seller’s Guarantees” means the guarantees, pledges, liens, counter guarantees (or any other similar undertakings) benefiting to the Companies or on account of the Companies and which are given by the Seller (and/or any other entity of the Carrefour Group), which are listed in Schedule 8.2.1 , to guarantee or counter guarantee certain obligations of the Companies under the Loan Agreements and which shall be released on the Completion Date pursuant to this Agreement;
“Seller’s Know-How” means the specific and original commercial methods and technical, accounting, commercial and management rules and know-how developed and implemented by the Carrefour Group in the Companies;
“Seller’s Knowledge” means the Seller’s actual knowledge as at Date of this Agreement, after having done the reasonable enquiries expected of a diligent seller.
“Senior Employees” means Employees whose gross annual remuneration exceeds COP$ 234 525 330;
“Sold Shares” has the meaning given to it in Article 2.1;
“Sum Recovered” means for the purposes of Article 11.3, an amount equal to the total of the amount recovered from the other Person plus any interest in respect of the amount recovered from the Person less all reasonable costs incurred by the Purchaser or the relevant entity of the Purchaser’s group in recovering this amount from this Person;
“Target Group Entities” has the meaning given to it in the Preamble of this Agreement;
“Tax” means taxes, duties, contributions and levies, national and local, direct and indirect, and shall include corporate income taxes, registration taxes, business taxes, payroll taxes, stamp duties, sales taxes, custom duties, service or other charges, any tax deductions (asset taxes to be construed as tax credits) or withholdings, registration duties, property tax, and all social welfare charges imposed by any supra-governmental, state or local authority, and all penalties, costs, charges and interests relating thereto save to the extent that such penalties, costs, charges and interests are attributable to the unreasonable delay or default of the Purchaser or the Companies after the Completion Date;
“Termination Fee” has the meaning given to it in Article 5.2.1;
“Third Party Claim” has the meaning given to it in Article 13.5.1;
“Tribunal” has the meaning given to it in Article 16.4; and
“VAT” means the consumption tax levied on any value added to a product (either goods or services) in any country including any tax of a similar nature substituted for, or levied in addition to, such tax.
 
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 	2.	In this Agreement:	
 
 	(a)	whenever used: (i) the words “include”, “includes” and including” shall be deemed to be followed by the phrase “without limitation,” (ii) the words “hereof”, “herein” and similar words shall be construed as references to this Agreement as a whole and not limited to the particular Article or paragraph in which the reference appears, and (iii) the word “or” shall be non-exclusive (i.e., where two items or qualities are separated by the word “or” the existence of one item or quality shall not be deemed to be exclusive of the existence of the other, such that the word “or” shall be deemed to include the word “and”);	
 
 	(b)	a reference to any statutory or regulatory provision shall be construed as a reference to the same as in force at the Date of this Agreement;	
 
 	(c)	references to a “company” or “entity” shall be construed so as to include any company, corporation or other body corporate, wherever and however incorporated or established;	
 
 	(d)	references to a “share” shall mean any security, share or other right which is part of, or which could grant a right to participate in the share capital of a company and/or which confers upon its holder a right to participate in the daily running of the company;	
 
 	(e)	if a period of time is specified as from a given day, or from the day of an act or event, it shall be calculated exclusive of that day and including the relevant last day of this period of time;	
 
 	(f)	references to years, quarters, months, days and the passage of time shall be construed in accordance with the Gregorian calendar;	
 
 	(g)	words importing the singular shall also import the plural and vice versa; and	
 
 	(h)	the recitals and the Schedules and Exhibits form part of this Agreement and shall have the same force and effect as if expressly set out in the body of this Agreement.	
 
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Exhibit 4.9
English Language Summary of the Retention Plan-Stock Option Plan
Subscription of Shares: Each executive may subscribe to the maximum number of shares granted under the plan, or to a portion thereof. The shares may be subscribed between the time when the company files its audited financial statements for the year 2012, and April 22th, 2013.
Further, if the shares are not subscribed by April 22 th 2013, the option is deemed waived and expires.
Notice: The executive shall indicate his/her intent to exercise the option within 5 days of the exercise deadline. Such notice must also indicate the number of shares for which the option will be exercised.
Payment of the Shares: The subscription of the Shares should be paid in cash, promissory note and/or wire-transfer at the time of subscription.
Sales of subscribed shares: If the executive would like to sell the shares granted under the plan, he/she will be limited, as follows:
 
 	1)	Up to 66% of acquired shares after the company files its audited financial statements for the year 2012.	
 
 	2)	Up to 83% of acquired shares after the company files its audited financial statements for the year 2013.	
 
 	3)	Up to 100% of the acquired shares after the company files its audited financial statements for the year 2014.	
As a condition of selling the shares, the executive must be an employee of the company or any of its affiliates at the time of each of the sales, and his/her employment must be continuous since the date the option plan is granted until the date of the selling of the shares.
The shares must be sold on the Santiago Stock Exchange and the sale price shall not be less than market value. The company in no way guarantees the share price at the time of sale by the executive.
Fine for noncompliance: The executive is subject to fine if any of the following are applicable at the time the executive sells his/her shares:
 
 	1)	The executive has not complied with the requirement to remain employed by the company or any of its affiliates.	
 
 	2)	It is determined that the executive has committed serious misconduct.	
 
 	3)	The executive has not complied with the requirements set forth above under “Sales of subscribed shares.”	
The fine is equal to the sales price of the shares, less the cost of acquiring the shares. The sales price is measured by the price of the shares on the Santiago Stock Exchange, as follows:
 
 	A)	With respect to (1) above, at the time the executive breaches the requirement to remain an employee of the company or any of its affiliates;	
 
 	B)	With respect to (2) above, at the time the executive committed the serious misconduct; and	
 
 	C)	With respect to (3) above, over the period of time that the shares were sold in violation of the requirements set forth above under “Sales of subscribed shares.”	
To ensure compliance with the option agreement, the executive is expected to appoint a representative from the Company to sell his/her shares and pay any resulting fines to the company on behalf of the executive.
Pledge agreement: At the time the executive exercises the stock option, he/she will enter into a pledge agreement limiting the transfer of the shares (in accordance with the installment periods outlined above). The pledge agreement will be in effect until March 31, 2015. The pledge agreement is a condition precedent to the obligations set forth in the option plan.
Expiration: The plan expires on the earlier of a) the date the executive is no longer employed by the company or any of its affiliates; b) the date it is determined that the executive has committed a serious breach of his/her employment contract; and c) March 31, 2015.

Taxes and expenses: The executive is responsible for all taxes and expenses related to the subscription and sale of the shares. The executive is responsible for complying with all applicable tax regulations and the company is exempt from all such liability.
Termination and Transfer of Rights: The executive may only transfer his/her option rights in the event of his/her death, by means of a will or through intestacy. In the case of the former, the executive’s heirs may immediately subscribe for and sell the shares granted under the plan. If the executive transfers his/her option rights in violation of these restrictions, the executive is subject to a fine, up to the market value of the shares at the time of the violation.
Future Option Plans: Upon the expiration of the option plan, the company is not obligated to provide an equivalent plan.
The plan also includes general provisions related to confidentiality, dispute resolution, notices, domicile and counterparts.

Exhibit 8.1
Subsidiaries

Company	  	Country	  	Percentage owned	 	
ACC Alto las Condes Ltda.	  	Chile	  	 	44.9	% 	
Administradora de Servicios Paris Ltda.	  	Chile	  	 	99.7	% 	
Administradora TMO S.A.	  	Chile	  	 	99.7	% 	
Banco Paris S.A.	  	Chile	  	 	99.9	% 	
Banparis Corredores de Seguros Ltda.	  	Chile	  	 	99.9	% 	
Cencosud Administradora de Procesos S.A.	  	Chile	  	 	99.9	% 	
Cencosud Administradora de Tarjetas S.A.	  	Chile	  	 	99.9	% 	
Cencosud Argentina SpA	  	Chile	  	 	99.9	% 	
Cencosud Corredores de Seguros y Servicios Ltda.	  	Chile	  	 	99.7	% 	
Cencosud Internacional Argentina SpA	  	Chile	  	 	99.9	% 	
Cencosud Internacional Ltda.	  	Chile	  	 	99.9	% 	
Cencosud Retail S.A.	  	Chile	  	 	99.7	% 	
Cencosud Retail Administradora Ltda.	  	Chile	  	 	99.6	% 	
Cencosud Servicios Integrales S.A.	  	Chile	  	 	99.9	% 	
Cencosud Shopping Centers S.A.	  	Chile	  	 	99.9	% 	
Cencosud Tiendas S.A.	  	Chile	  	 	85.6	% 	
Circulo Más S.A.	  	Chile	  	 	99.9	% 	
Comercial Food and Fantasy Ltda.	  	Chile	  	 	90.0	% 	
Comercializadora Costanera Center S.p.A	  	Chile	  	 	99.9	% 	
Costanera Center S.A.	  	Chile	  	 	99.9	% 	
Easy Administradora Norte S.A.	  	Chile	  	 	99.6	% 	
Easy S.A.	  	Chile	  	 	99.6	% 	
Eurofashion Ltda.	  	Chile	  	 	99.7	% 	
Inmobiliaria Bilbao Ltda.	  	Chile	  	 	99.9	% 	
Inmobiliaria Mall Vina Del Mar S.A.	  	Chile	  	 	33.3	% 	
Inmobiliaria Santa Isabel S.A.	  	Chile	  	 	99.9	% 	
Johnson’s Mega San Bernardo S.A.	  	Chile	  	 	99.7	% 	
Jumbo Administradora Norte S.A.	  	Chile	  	 	99.7	% 	
Jumbo Administradora S.A.	  	Chile	  	 	99.7	% 	
Jumbo Administradora Temuco S.A.	  	Chile	  	 	99.7	% 	
Jumbo Argentina SpA	  	Chile	  	 	99.9	% 	
Jumbo Supermercados Administradora Ltda.	  	Chile	  	 	99.6	% 	
Logistica y Distribución Paris Ltda.	  	Chile	  	 	99.7	% 	
MegaJohnson’s Administradora S.A.	  	Chile	  	 	99.7	% 	
MegaJohnson’s Maipu S.A.	  	Chile	  	 	99.7	% 	
MegaJohnson’s Puente Alto S.A.	  	Chile	  	 	99.7	% 	
MegaJohnson’s Puente S.A.	  	Chile	  	 	99.7	% 	
MegaJohnson’s S.A.	  	Chile	  	 	99.7	% 	
MegaJohnson’s Vina del Mar S.A.	  	Chile	  	 	99.7	% 	
MegaJohnson’s Quilin S.A.	  	Chile	  	 	99.9	% 	
Meldar Capacitación Ltda.	  	Chile	  	 	98.3	% 	
Mercado Mayorista P y P Ltda.	  	Chile	  	 	90.0	% 	
Paris Administradora Centro Ltda.	  	Chile	  	 	99.6	% 	
Paris Administradora Ltda.	  	Chile	  	 	99.6	% 	
Paris Administradora Sur Ltda.	  	Chile	  	 	99.6	% 	
Paris Administradora Norte Ltda.	  	Chile	  	 	99.6	% 	
Santa Isabel Administradora Norte Ltda.	  	Chile	  	 	99.6	% 	
Santa Isabel Administradora S.A.	  	Chile	  	 	99.6	% 	
Santa Isabel Administradora Sur Ltda.	  	Chile	  	 	99.6	% 	
Sociedad Comercial de Tiendas S.A.	  	Chile	  	 	99.9	% 	
Sociedad Comercializadora de Vestuario FES Ltda.	  	Chile	  	 	99.7	% 	
Viajes Paris S.A.	  	Chile	  	 	99.6	% 	
Agrojumbo S.A.	  	Argentina	  	 	87.4	% 	
Agropecuaria Anjullon S.A.	  	Argentina	  	 	99.9	% 	
Blaisten S.A.	  	Argentina	  	 	99.9	% 	

							
Company	  	Country	  	Percentage owned	 	
Cavas y Viñas El Acequion S.A.	  	Argentina	  	 	99.9	% 	
Carnes Huinca S.A.	  	Argentina	  	 	50	% 	
Cencosud S.A.	  	Argentina	  	 	99.9	% 	
Corminas S.A.	  	Argentina	  	 	99.9	% 	
Invor S.A.	  	Argentina	  	 	99.9	% 	
Jumbo Retail Argentina S.A.	  	Argentina	  	 	99.9	% 	
Pacuy S.A.	  	Argentina	  	 	99.9	% 	
Supermercados Davi S.A.	  	Argentina	  	 	99.9	% 	
Unicenter S.A.	  	Argentina	  	 	99.9	% 	
SUDCO Servicios Regionales S.A.	  	Uruguay	  	 	100	% 	
Easy Colombia S.A.	  	Colombia	  	 	99.9	% 	
Grandes Superficies de Colombia S.A.	  	Colombia	  	 	99.9	% 	
Supermercados Mayoristas S.A.	  	Colombia	  	 	99.9	% 	
Colombia Holdings Alpha BV	  	Netherlands	  	 	99.9	% 	
Thalie BV	  	Netherlands	  	 	99.9	% 	
Uranie BV	  	Netherlands	  	 	99.9	% 	
Calliope BV	  	Netherlands	  	 	99.9	% 	
Coledim BV	  	Netherlands	  	 	99.9	% 	
Cencosud Brasil S.A.	  	Brazil	  	 	99.9	% 	
Cencosud Brasil Comercial Ltda.	  	Brazil	  	 	99.9	% 	
GBarbosa Holding S.A.	  	Brazil	  	 	99.9	% 	
Mercantil Rodriguez Comercial Ltda.	  	Brazil	  	 	99.9	% 	
Perini Comercial de Alimentos Ltda.	  	Brazil	  	 	99.9	% 	
GBarbosa Holding LLC	  	U.S.	  	 	99.9	% 	
Almacenes Metro S.A.	  	Peru	  	 	99.9	% 	
Banco Cencosud S.A.	  	Peru	  	 	99.9	% 	
Cencosud Perú S.A.	  	Peru	  	 	99.9	% 	
Cinco Robles SAC	  	Peru	  	 	99.9	% 	
E. Wong S.A.	  	Peru	  	 	99.9	% 	
Hipermercados Metro S.A.	  	Peru	  	 	99.9	% 	
ISMB Supermercado S.A.	  	Peru	  	 	99.6	% 	
Las Hadas Inversionistas S.A.	  	Peru	  	 	99.9	% 	
Teledistribución S.A.	  	Peru	  	 	42.5	% 	
Loyalty Perú SAC	  	Peru	  	 	99.9	% 	
Travel Interntional Partners Peru S.A.	  	Peru	  	 	99.9	% 	
Tres Palmeras S.A.	  	Peru	  	 	99.9	% 	
Banco Cencosud S.A.	  	Peru	  	 	99.9	% 	
Cencosud (Shanghai) Trading Co. Ltd.	  	China	  	 	100	% 	

Exhibit 12.1
CERTIFICATION PURSUANT TO
RULE 13a-14(a)/RULE 15d-14(a) UNDER
THE EXCHANGE ACT
I, Daniel Rodriguez, certify that:
1. I have reviewed this annual report on Form 20-F of Cencosud S.A.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)[intentionally omitted];
(c)Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
Date: May 7, 2013

By:	 	/s/ Daniel Rodriguez	
	 	Daniel Rodriguez	
	 	Chief Executive Officer	

Exhibit 12.2
CERTIFICATION PURSUANT TO
RULE 13a-14(a)/RULE 15d-14(a) UNDER
THE EXCHANGE ACT
I, Juan Manuel Parada, certify that:
1. I have reviewed this annual report on Form 20-F of Cencosud S.A.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)[intentionally omitted];
(c)Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
Date: May 7, 2013

By:	 	/s/ Juan Manuel Parada	
	 	Juan Manuel Parada	
	 	Chief Financial Officer	

Exhibit 13.1
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER AND CHIEF
FINANCIAL OFFICER PURSUANT TO
RULE 13a-14(b)/RULE 15d-14(b) UNDER THE EXCHANGE ACT
AND 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Cencosud S.A. (the “Company”) on Form 20-F for the period ended December 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Daniel Rodriguez, Chief Executive Officer of the Company, and Juan Manuel Parada, Chief Financial Officer of the Company, certify, pursuant to Rule 13a-14(b)/Rule 15d-14(b) under the Securities Exchange Act of 1934, as amended and 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: May 7, 2013

	 	By:	 	/s/ Daniel Rodriguez	
	 		 	Daniel Rodriguez	
	 		 	Chief Executive Officer	
			
	 	By:	 	/s/ Juan Manuel Parada	
	 		 	Juan Manuel Parada	
	 		 	Chief Financial Officer