Press 4q 2014 ingles by Nueva Polar

Earnings Release 4th Quarter

2014

EARNINGS RELEASE 4th QUARTER 2014

4Q 2014 Highlights

Recent Events

Consolidated Income Statements

Retail Business Indicators

Stores

Financial Business Indicators

Financial Statements La Polar S.A. - IFRS

Consolidated income statements by function

Consolidated Balance Sheet

Cash Flow

Debt Restructure Stages a. Debt Restructure b. Debt Restructure Essential Facts

Annex

Notes:     

Quarters are named as: 1Q, 2Q, 3Q, 4Q accordingly Semesters are named as: 1H, 2H accordingly and 12M for year to date Calendar years are named LTM (Last twelve months) Simbología Monedas: $ Pesos chilenos, US$ Dólares de Estados Unidos, MM Millones, MMM Miles de Millones Exchange rate used in this 4Q report: 1 US $ = CLP $ 607.32 Source: Internal Revenues Service ( Servicio de Impuestos Interno – SII – Chile)

EARNINGS RELEASE 4th QUARTER 2014

4Q 2014 Highlights

ď&#x192;ź On December the 19th of 2014, after the successful negotiation process of the company debt, the Securities and Insurance Supervisor proceeded to the registration of the issuance of the convertible bond called Bond H with the registration number 796, for a total of CLP $ 163,633,000,000. As was duly communicated to the market, this agreement was achieved after a unanimous decision at the creditors meeting on September the 1st of 2014. The effects of this restructure will allow the company to develop its full growth potential, especially in its credit card. (See detail of the instrumentalization of the agreement on page 18). Considering that the restructuring ended on the 6th of February of 2015, the change in the financial position generated by this process will only be reflected in the financial statements of the first quarter of 2015. The effect on the financial statement of the company, if it had been reflected in the end of December 2014, would be the following Proforma. (See detail in Proforma Balance on page 23): Actual Situation 31-12-2014

Proforma 31-12-2014

136 144 Other Liabilities 47

347

Financial Liabilities Equity

230

Assets 156

Assets

-19 Lia. And Equity

Lia. And Equity

EARNINGS RELEASE 4th QUARTER 2014

 Retail business revenues in the fourth quarter were CLP B $ 100, which represents a decrease of 4.2% compared to the 4Q13. This is explained by a decrease of 14% in the sales of electronics and appliances which was mainly due to a restriction of credit lines from suppliers of this kind of products, due to the financial restructuring process experienced by the company during 2014. In addition there was a lower consumption of durable goods as reported by The National Chamber of Commerce in recent quarters. In the retail segment the SSS variation was -3.3% while in the last twelve months was -1.3%. However, despite the fall in revenue and a rise in the exchange rate, gross retail margin last quarter grew 5.4%. This is due to improved product mix, which had a larger share of private labels. Additionally significant operational efficiencies in inventory control were achieved.

 In the financial business, the revenues for the fourth quarter of 2014 reached CLP B$ 17 versus CLP B$ 21 for the same period of 2013. This decrease was mainly due to lower product placement cash flow constraints during the negotiation of the debt restructure that gave us a lower loans portfolio. Additionally, during 2014 interest revenue was affected by the decline in conventional maximum rate. However, 2014 ended with a 4% increase in financial revenues compared to 2013. The risk rate at the end of the year 2014 was 10.3%. This level of provision is considered adequate for the segment in which the company operates. (See page 9 for more detail and portfolio indicators)  The SG&A of the 4th quarter of 2014, decrease considerably compared to the same quarter of the last year, with CLP B$ 34.6, which means a reduction of 14.4% over the same period of 2013. This is due largely to the significant efforts made by the company to optimize its processes, and as it was announced during this year 2014, the efficiency plan began, which includes initiatives such as the reduction of executive staff, efficiency in back office of stores, close of regional warehouses, closing Panamericana and San Fernando stores, implementation of self-service model in retail and financial retail and rationalization of expenditures on marketing, among others.

 During the fourth quarter of 2014, the company made a major innovation in the area of financial retail with the launch of the new La Polar card “Blanc”, with a vertical design, where users can access to attractive offers through the Circle of Benefits, including special discounts, shopping coupons and events invitations.

EARNINGS RELEASE 4th QUARTER 2014

Recent Events

 On February the 6th of 2015, the partial prepayment of the Senior and Junior debt was done, mainly through convertible bonds called Bond H. This is equivalent to 1,997,235,044 shares and should be converted entirely in shares representing the 66.6% ownership of the company. The remaining of the modified Bond F and G with nominal value CLP B$ 65 and CLP B$ 236 are payable in a single coupon with maturity date of the 31st of December of 2113, without amortization or interest, At the end of these financial statements, 197,199,516 shares have been converted equivalent to CLP $ 16,156,484,439 convertibles bonds.

 On March the 17th of 2015, the Board announced the resignation of Mr. César Barros Montero, as Chairman and Director of Empresas La Polar. Such resignation shall be effective from the March the 31st of 2015. In its place and until the Ordinary Shareholders Meeting the Board of Directors designated as Chairman of the Board, current director Mr. Alberto Marraccini Valenzuela.

EARNINGS RELEASE 4th QUARTER 2014

Consolidated Income Statements1 4Q 2014

CLP $ B Revenues Costs Gorss Margin % Revenues SG&A (w/o depreciation) % Revenues EBITDA % Revenues Depretiation Operating Income Non - Operating Income Profit (Loss) Before Taxes Benefits (Expenses) Income Tax Profit (Loss)

4Q 2014 115.5 (77.7) 37.8 32.8% (34.6) -29.9% 3.3 2.8% (1.9) 1.4 (8.5) (7.1) 2.9 (4.2)

Consolidated r 4Q 2013 -7.9% 125.4 (82.4) -12.2% 43.1 34.3% -14.4% (40.4) -32.2% 2.7 2.1%

4Q 2014 100.1 (70.0) 30.2 30.1% (27.2) -27.1% 3.0 3.0%

Retail r -4.2% 5.4% -1.1%

4Q 2013 104.5 (75.8) 28.6 27.4% (27.5) -26.3% 1.2 1.1%

4Q 2014 16.6 (7.9) 8.7 52.1% (8.4) -50.6% 0.3 1.5%

Financial r -21.8% -40.0% -35.0%

4Q 2013 21.2 (6.8) 14.4 68.0% (12.9) -60.9% 1.5 7.1%

(1.6) 1.1 (7.0) (5.9) 4.0 (1.9)

Revenues from retail business in the fourth quarter were CLP B$ 100, representing a decrease of 4.2% compared to 4Q13, which added to a 21.8% reduction in financial income it reaches a 7.9% decrease in total revenues for the quarter. The SG&A decreased by 14.4%, demonstrating the effectiveness of efforts to company level with its efficiency plan, which includes among others the model of self-service and closures wineries of regional warehouses and stores. Likewise this plan continues to show efficiency savings during 2015. Consolidated EBITDA for the fourth quarter improved by obtaining a margin of 2.8% compared with the same period last year that was 2.1%.

It only includes the operations in Chile 5

EARNINGS RELEASE 4th QUARTER 2014

12M 20142

CLP $ B Revenues Costs Gorss Margin SG&A (w/o depreciation) EBITDA

Depretiation Operating Income Non - Operating Income Profit (Loss) Before Taxes Benefits (Expenses) Income Tax Profit (Loss)

Consolidated 12M 2014 r 12M 2013 392.6 -1.6% 399.2 (260.8) (257.5) 131.8 -7.0% 141.6 % Revenues 33.6% 35.5% (137.0) 3.2% (132.8) % Revenues -34.9% -33.3% (5.2) 8.9 -1.3% 2.2% % Revenues (7.5) (12.8) (31.0) (43.8) 7.4 (36.3)

12M 2014 325.5 (235.1) 90.4 27.8% (99.1) -30.4% (8.7) -2.7%

Retail r -1.4% 1.5% 12.0%

12M 2013 330.1 (241.1) 89.1 27.0% (88.5) -26.8% 0.6 0.2%

12M 2014 72.6 (26.9) 45.7 62.9% (42.2) -58.1% 3.5 4.8%

Financial r 12M 2013 3.5% 70.2 (17.6) -13.1% 52.6 74.9% -4.7% (44.3) -63.1% 8.3 11.8%

(6.4) 2.5 (25.6) (23.1) 7.7 (15.4)

EBITDA for the year 2014 ended with losses of CLP B$ 5.2 that includes extraordinary settlements for approximately CLP B$ 4.5. This reflects a difficult year for the retail industry where the market downturn impacted negatively on earnings. As for non-operating expense this includes financial accrued interests of the F and G bonds during 2014 for approximately CLP B$ 28.

It only includes the operations in Chile 6

EARNINGS RELEASE 4th QUARTER 2014

Retail Business Indicators

4Q´13

1Q´14

2Q´14

3Q´14

4Q´14

104,489

72,942

82,811

69,605

100,134

4Q´13

4Q´14

104,489

100,134

-4%

Retail Revenues (CLP $ M)

LTM 4Q13

LTM 4Q14

Retail Revenues (CLP $ M) 330,149

0.3%

1.3%

325,493

-1.7%

-1%

Retail Revenues LTM

-1.3%

Revenues (CLP B$)

335 334

330

325

4Q 13

1Q 14

2Q 14

3Q 14

4Q 14

EARNINGS RELEASE 4th QUARTER 2014

Retail Margin % LTM

27,8% 27,0%

26,9%

4Q 13

26,9%

26,7%

1Q 14

2Q 14

3Q 14

4Q 14

Sales UF/ sqm 1Q

2013

6.2

7.4

6.8

9.3

2014

6.4

7.2

6.0

8.5

Var %

-3%

-11%

-9%

The UF/sqm sales for the end of the fourth quarter of 2014 were 8.5, which represents a decrease of 9% over the same period last year and year to date this indicator was 7.1.

Stores

2013

Number of Stores Sales Surface (Thousands sqm) Revenues ( Th. $ /sqm)

2014

40 160,700 427

40 160,300 510

40 160,500 468

40 161,300 648

40 161,500 452

40 160,700 515

38 159,700 436

38 159,000 630

EARNINGS RELEASE 4th QUARTER 2014

Financial Business Indicators

4Q´13

1Q´14

2Q´14

3Q´14

4Q´14

21,232

20,087

19,018

16,902

16,606

4Q´13

4Q´14

21,232

16,606

-22%

Financial Revenues (CLP $ M)

LTM 4Q13

LTM 4Q14

Financial Revenues (CLP $ M) 70,151

72,613

Financial Revenues LTM -1.4%

3.8%

-5.7%

7.6% 78 76

4Q 13

Revenues ( CLP B$)

1Q 14

2Q 14

3Q 14

4Q 14

EARNINGS RELEASE 4th QUARTER 2014

Financial Margin % LTM

76%

75%

72% 66% 63%

4Q 13

1Q 14

2Q 14

3Q 14

4Q 14

Financial Indicators

2013 FINANCIAL BUSINESS

2014

1Q´13

2Q´13

3Q´13

4Q´13

1Q´14

2Q´14

3Q´14

4Q´14

Credit Card Loan Stock (CLP $ B)

112

121

139

179

163

153

133

144

Provision for loan losses (CLP $ B)

12.9%

10.8%

8.3%

7.9%

9.1%

9.9%

10.4%

10.3%

% Provision for loan losses Net loan losses ( CLP $ B) Open accounts w/balance (Th.) Average Debt (CLP $ Th.) % of sales with credit card

453

461

464

519

508

524

492

531

247

263

299

344

322

292

271

45.3%

50.3%

52.0%

51.1%

49.2%

56.0%

52.5%

51.4%

The cards with balance present a growth of 2% which responds to the enhancement of using the card as a payment method. It is also observed an accumulative credit card sales percentage for 2014 of 51.4% compared with the same value in 2013, to 51.1%.

EARNINGS RELEASE 4th QUARTER 2014

Credit Card Loans3 (CLP B$)

Credit Card Loan Portfolio (CLP B$)

102 71

-26%

158

118

4Q´

DEC´13

DEC´14

Normal

2013

Renegociated

2014

The credit card loans fell by 31% during the fourth quarter of 2014 compared to the same period last year. With the funding obtained by Inversiones LP for an amount of CLP M$ 10,000, the negative trend of the decline in the portfolio was reverse to finish 2014 with a portfolio of CLP B$ 144.

Risk Rate 26.2% 22.7% 19.1%

16.1% 12.4%

12.9% 10.8%

8.3%

7.9%

9.1%

9.9%

10.4% 10.3%

DEC´11

MAR´12

JUN´12

SEP´12

DEC´12

MAR´13

JUN´13

SEP´13

DEC´13

MAR´13

JUN´14

SEP´14

DEC´14

Credit card loans with credit card La Polar includes: Cash Advances, and use in Associated Business and finance in La Polar Retail stores. Includes VAT. 11

EARNINGS RELEASE 4th QUARTER 2014

Loan Portfolio Indicators â&#x20AC;&#x201C; Gross Loans (%)

44%

56%

37%

63%

29%

71%

24%

76%

19%

17%

15%

13%

12%

81%

83%

85%

87%

88%

Normal

14%

18%

20%

18%

86%

82%

80%

82%

Renegociated

The structure of the portfolio in the fourth quarter of 2014, shows a 82% normal portfolio, which represented an improvement of 2 percentage points compared to the previous quarter.

EARNINGS RELEASE 4th QUARTER 2014

Loan Portfolio Indicators – Portfolio by aging segments 5% 5% 10%

7% 6% 8%

91 to 180 31 to 90 80%

79%

01 to 30 Current

DEC´13

DEC´14

EARNINGS RELEASE 4th QUARTER 2014

Financial Statements of La Polar S.A. - IFRS

Complete Financial Statements of Empresas La Polar S.A are available on the website of the Securities and Insurance Supervisor (www.svs.cl) and the website of Empresas La Polar, www.nuevapolar.cl

a. Consolidated Income Statements 4

Revenues

31-dec-14

31-dec-13

CLP $ M

392,639

399,167

Cost of Sales

(260,844)

(257,524)

Gross Profit

131,795

141,643

Distribution Costs

(1,797)

(1,632)

(142,673)

(137,530)

Other Profit (Loss)

1,699

162

Financial Revenue

849

3,912

Administrative Expenses

Financial Costs

(30,877)

(31,016)

Foreign Currency Exchange Differemces

(1,135)

1,887

Income from Indexation Units

(1,611)

(504)

Profit (Loss) Before Taxes

(43,750)

(23,079)

7,410

7,680

(36,340)

(15,399)

Profit (Loss) Income Taxes Profit (Loss) After Taxes Discontinue Operations

(44,329)

Profit (Loss) of the Discontinue Operations of the Period Profit (Loss)

(36,340)

(59,728)

(36,340)

(59,728)

(36,340)

(59,728)

Loss (gain) attributable to: The ow ners of the company Non-controlling interests Loss

In 2013 it was added the Profit (loss) from the discontinued operations of the period, referring to the decision by the Board to put on sale La Polar S.A.S. 14

EARNINGS RELEASE 4th QUARTER 2014

b. Consolidated Balance Sheet 5 31-dec-14 CLP $ M

31-dec-13 CLP $ M

Current Assets Cash and cash equivalents Other current financial assets Other current non financial assets Current trade and accounts receivables Inventory Tax assets Total current assets

20,882 593 7,620 110,031 51,456 37,338 227,920

26,024 839 7,599 128,520 51,026 32,956 246,962

Non - Current Assets Fees receivable Other non - current financial assets Intangible assets other than goodwill Properties, plant and equipment Deferred tax assets Total Non - Current Assets

31,129 314 20,066 59,215 8,230 118,954

48,710 437 19,333 61,173 2,865 132,518

Non Current Assets held for sale

20,146

Total Assets

346,874

399,627

Current Liabilities Other current financial liabilities Other trade and other accounts payable Other current provisions Current tax liabilities Employee benefits provisions Other current non - financial liabilities Total Current Liabilities

44,125 60,942 3,385 4,098 4,949 4,201 121,700

29,724 76,912 3,987 4,039 5,961 3,145 123,767

Non - Current Liabilities Other non - current financial liabilities Other long term provisions Defered tax liabilities Total non - current liabilities

186,050 1,730 56,552 244,332

177,260 3,059 44,941 225,261

Liabilities directly associated with non - current assets held for sale Total Liabilities Equity Issued capital Retained earnings Other reserves Equity attibutable to: Owners of the parent Non - controlling interests Total Patrimonio Total Liabilities and Equity

20,631 366,031

369,659

302,678 (338,389) 16,554

302,678 (289,937) 17,227

(19,157)

29,967

(19,157)

29,967

346,874

399,627

For 2013 it is added Non-Current assets held for sale and liabilities directly associated with Non-Current assets held for sale, referring to the decision by the Board to put on sale La Polar S.A.S. 15

EARNINGS RELEASE 4th QUARTER 2014

Indicators Indicators Current Ratio Acid Ratio

Unit Times Times

Dec´14 1.87 1.45

Sep´14 2.03 1.50

Jun´14 2.18 1.65

Mar´14 2.04 1.50

Dec´13 2.03 1.61

The current ratio decreased in December 2014 compared to December 2013 due to decrease of the most liquid assets.

Indicators Inventory Turnover Inventory Turnover

Unit Times Days

Dec´14 5 79

Sep´14 4 92

Jun´14 4 89

Mar´14 4 97

Dec´13 5 78

Despite lower sales in the fourth quarter of 2014, inventories indicator remains stable over the previous year. Indicators Average Payment Period

Unit Days

Dec´14 59

Sep´14 62

Jun´14 70

Mar´14 80

Dec´13 70

The decrease in the average payment period compared to December 2013 is due to a reduction in credit from suppliers during the second half of 2014. Indicators Current Liabilities Non - Current Liabilities

Unit % %

Dec´14 33.2% 66.8%

Sep´14 30.6% 69.4%

Jun´14 30.8% 69.2%

Mar´14 32.5% 67.5%

Dec´13 32.6% 67.4%

Indicators Average Collection Period

Unit Days

Dec´14 201

Sep´14 169

Jun´14 171

Mar´14 172

Dec´13 192

The average collection period had an increase of 9 days compared to December of previous year.

EARNINGS RELEASE 4th QUARTER 2014

c. Cash Flow Statements Cash Flow Statements

31-dec-14

31-dec-13

CLP $ M

Cash Flow from (used in ) operating activities Proceeds from sales of goods providing activities

510,218

302,722

(378,763)

(294,171)

Payment to and on behalf of employees

(60,393)

(41,146)

Other payments related to operating activities

(65,356)

(48,792)

2,686

3,657

Payment to suppliers for goods and services

Interest received Interest paid

(411)

(260)

Cash Flow from (used in ) operating activities

7,981

(76,374)

Cash Flow from (used in ) investing activities Cash receipts from the loss of control of subsidaries and other businesses Loans to related entities Proceeds from the sale of property, plant and equipment Acquisition of property, plant and equipment Proceeds from sales of intangible assets

(16,133) 73 (7,346) (114)

Other incomes (outflows) of cash

Cash Flow from (used in ) investing activities

(10,847) (715) (1,998)

(7,388)

(29,694)

Cash Flow from (used in ) financing activities Proceeds from shot - term borrowings

20,000

5,355

(14,517)

(13,636)

Payments for finance leases

(1,639)

(1,212)

Interest payments

(9,580)

(7,537)

Cash Flow from (used in ) financing activities

(5,735)

(17,030)

Net decrease in cash and equivalents

(5,142)

(109,911)

Cash and cash equivalents at the beginning of the period

26,024

135,935

Cash and cash equivalents at the end of the period

20,882

26,024

Loan payments

EARNINGS RELEASE 4th QUARTER 2014

Operating activities generated a positive cash flow of CLP M$ 7,981 that was higher than the negative flow of the same period last year for CLP M$ 63,188, this is mainly because during 2014 there were minor placements of various financial products. Investment activities generated a negative cash flow of CLP M$ 7,388, that is lower than the CLP M$ 29,694 of the previous period, this decrease is because in 2014 was implemented a Financing activities generated a negative cash flow of CLP M$ 5,735, where most of this amount is due to interest payments of the F Bond and the Separate Asset and the amortization of the G Bond. External financial loans CLP M$ 10,000 was also obtained.

EARNINGS RELEASE 4th QUARTER 2014

Debt restructure stages a. Debt restructure On April 10th, the Board of La Polar announced the decision to initiate the process of renegotiating the debt with various creditors, after several instances of negotiation (shareholders and bondholders meetings), it was obtained the approval of the creditors meeting on September 1st, of the terms proposed in the shareholders meeting held on August 8th; finally the restructuring agreement can be summarized in the following points 

 

The issuance of a convertible bond into shares was approved in the amount CLP $ B 163,633 with a maturity year 2113 (payable in one payment at zero interest rate) and the issuance of 1,997,235,044 shares for payment, which implies a dilution of 66.66% from current shareholders. It was agreed to continue with the payment of interest on the F Bond that currently accrue, until the realization of the exchange. The contracts of F and G Bonds are modified to be prepaid through convertible bonds.

This process of debt restructuring will allow the company to have a great improvement in financial indicators, especially in its debt, as well as better financial position.

EARNINGS RELEASE 4th QUARTER 2014

You can see the bond modification in the next table:

Bond Modification F Series

G Series

Par Value

CLP $ M 196,217

CLP $ M 269,053

Amortization

1 in 2113

N° of shares to convert

1,597,778,035

399,447,009

Prepaid Value

CLP $ M 130,906

CLP $ M 32,727

Interest Rate

None

CLP B $ 196

Changes in term and prepayment option

F Bond and Senior Modification CLP $ B 65*

1,597,778,035 Shares

Convertible Bond CLP $ B 131

(53%)

Issuance of the convertible bond Convertible Bond CLP $ B 33

Conversion Option for 3 years

66,6%

399,447,009 Shares (13%)

CLP B $ 269 Changes in term and prepayment option



G Bond and Senior Modification CLP $ B 236*

Paid in one coupon, without interest or amortization and with one maturity in 2113

EARNINGS RELEASE 4th QUARTER 2014

Essentials Facts of the debt restructure

Extraordinary Shareholders' Meeting On July 1st, it was held the Extraordinary Shareholders Meeting in which the most important points are the following:  An issue of convertible bonds into shares was approved for $ 81,816,733,577 without interest or amortization and one maturity in 2113. It was approved an exchange ratio of 12.20533 shares per $ 1,000 par value of each convertible bond.  Due to the approval of the issuance of these convertible bonds, a capital increase by $ 81,816,733,577 and the issuance of 998,617,522 shares for payment were approved.  These agreements were subject to approval by the creditors of the company.

Bondholders' Meeting On July 21st, 2014 the Board of Bondholders was held for the F and G series where the following was reported:  The proposed modification that was agreed at the Extraordinary Shareholders Meeting held on July 1, 2014 was rejected.  Banco de Chile was empowered as the representative of the F and G Bondholders to present two new proposals to La Polar on the debt restructuring, which are summarized below: i. Counterproposal A: That the issuance of the Convertible Bonds, after its capital increase and the conversion exercise, the bondholders will have at least 80% ownership of La Polar. i. Counterproposal B: The interest and capital payments of the Bonds are in accordance with the current development table, during the period of this table. If La Polar does not have sufficient funds, it, may be able to preferably offer to its shareholders a capital increase of an amount sufficient to do the payment.

EARNINGS RELEASE 4th QUARTER 2014

Extraordinary Shareholders' Meeting On August 8th, it was held again an extraordinary Shareholder´s meeting which includes the following:  It was agreed to reject the counter A and B presented by Banco de Chile for the Bonds Series F and G.  It was approved the issuance of a convertible bond so there will be a capital increase of $ 163,333 billion and the issuance of 1,997,235,044 shares for payment. This issuance of shares and capital increase involves a dilution of current shareholders of the company by 66.66%.

Shareholder´s Meeting On August 27th, the Bondholders meeting was held for the F and G Series where the following was reported:  The issuance of a convertible bond into shares was approved in the amount of $ 163,633 billion with a maturity year 2113 (payable in one payment with zero interest rate) and the issuance of 1,997,235,044 shares for payment, which implies at a dilution of 66.67% from current shareholders.  It was agreed to continue the payment of interest on the F series that currently accrue to the realization of the exchange.  Contracts for F and G Bonds are modified to be prepaid through convertible bonds.

Creditors Meeting On September 1st, the Creditors Meeting was held where the following was communicated:  27th.

I was approved all previously agreed in the Bondholders meeting that took place on August

EARNINGS RELEASE 4th QUARTER 2014

Approval of the Securities and Insurance Supervisor On the 19th of December 0f 2014, the Securities and Insurance Supervisor approved the modification of the F and G Bonds on the following terms:  Maturity until the 31st of December of 2015.  Elimination of interest accrual.  Elimination of amortization payments.  Pay table, with one coupon. On the 19th of December 0f 2014, the Securities and Insurance Supervisor approved the issuance of a convertible bond, called H Bond with the following characteristics:  Maximum amount of emission of CLP $ 163.633 billion  1.997.235.044 debt instruments for an amount of CLP $ 81.92976 each  The H Bond will not accrue interest  This issue includes a single payment of capital on the 31st of December of 2015.  A preferred option of 30 days.

Preferential Option Period On the 29th of December of 2014, it was published in the “ Diario Financiero”, the start of the preferential option period where the following was announced:  The Securities and Insurance Supervisor approved and inscribed on the 19th of December of 2014 the so called H Bond.  In accordance with Article 25 of Law 18,046 on Corporations, this issue of convertible bonds will preferably be offered to existing shareholders of La Polar.  The preferred option period will be extended for a period of 30 days from the date 29th of December of 2014 until the 27th of January of 2015..

Debt Partial Prepayment Notice On the 30th of January of 2015, it was published in the “ Diario Financiero” the notice of the debt partial prepayment of the “ Convenio Judicial Preventivo”, where it is stated the following:  The amount of CLP $ 1,372,732 was raised in money for the preferential option period.  The debt was partially prepaid with 1,997,218,289 convertible bonds for a total of CLP $ 163,631,615,085 for the remaining of the Convertible Bonds H Series that were not subscribed or paid by the shareholders of the company during the Preferential Option Period at the same subscription price (CLP $ 81,92976).  Of this amount, 80% was used to prepay the F Bond and Senior Debt that was not exchanged at the time, and 20% was used to prepay the G Bond and Junior Debt that was not exchanged at the time.  It was paid CLP M$ 6,214 corresponding to the interest of the Senior Debt until the prepayment day.  It was issued new pay tables for the amounts that weren’t prepaid of the F and G Bonds. 23

EARNINGS RELEASE 4th QUARTER 2014

Ending of the partial prepayment On the 6th of February of 2015, it was announced it was announced through an essential fact to the Securities and Insurance Supervisor and the Stock Exchange ( Bolsa de Santiago, Bolsa Electronica and Bolsa de Valparaiso), the ending of the debt partial prepayment, explaining the following:  La Polar proceeded to prepay the “Convenio Judicial Preventivo” debt as follows: i. With the amount of CLP $ 1,372,732 in cash for the preferential option period. ii. By paying with debt instruments for the amount of 1,997,218,219 H Bond.  Also, on this date La Polar made the payment of the last installment of interest of the Senior Debt, for a total of CLP $ 6,213,549,242.

Proforma Balance For the Proforma note purposes, it was given a special consideration to minimizing the amount of financial debt corresponding to that portion of the debt that has been exchanged for Convertible Bonds (H th Bonds) on the 6 of February of 2015.

Consolidated Statement of Financial Position

31-dec-14

Statutory

Proforma adjustment

Proforma

MMM$

MM$

Total Assets

347

Total Liabilities

366

Total Fi na nci a l Li a bi l i ties

230

Total Other Li a bi l i ties

136

Effect of deferred tax l i a bi l i ties

Equity

-19

Total Liabilities and Equity

347

347 191 -183

47 136

175

156 347

EARNINGS RELEASE 4th QUARTER 2014

Annex

EBITDA CLP $M Retail Business Revenues Costs Gross Margin % Revenues

SG&A (w/o depreciation) EBITDA % Revenues

Financial Business Revenues Costs Gross Margin % Revenues

SG&A (w/o depreciation) EBITDA % Revenues

Consolidation Adjustments¹ Revenues Costs SG&A (w/o depreciation)

1Q 2013

2Q 2013

3Q 2013

4Q 2013

1Q 2014

2Q 2014

3Q 2014

4Q 2014

68,673 -51,361 17,312

81,818 -57,406 24,412

75,169 -56,428 18,741

104,489 -75,849 28,640

72,942 -54,865 18,078

82,811 -58,603 24,208

69,605 -51,639 17,966

100,134 -69,961 30,173

25.2%

29.8%

24.9%

27.4%

24.8%

29.2%

25.8%

30.1%

-19,704 -2,392

-21,305 3,107

-20,010 -1,269

-27,507 1,133

-22,002 -3,925

-26,450 -2,241

-23,484 -5,518

-27,174 3,000

-3.5%

3.8%

-1.7%

1.1%

-5.4%

-2.7%

-7.9%

3.0%

14,736 -5,251 9,485

16,150 -3,052 13,098

18,033 -2,495 15,538

21,232 -6,798 14,434

20,087 -5,849 14,238

19,018 -6,619 12,399

16,902 -6,506 10,395

16,606 -7,946 8,660

64.4%

81.1%

86.2%

68.0%

70.9%

65.2%

61.5%

52.1%

-9,880 -395

-9,055 4,043

-12,437 3,101

-12,899 1,535

-12,070 2,168

-11,483 917

-10,249 147

-8,407 253

-2.7%

25.0%

17.2%

7.2%

10.8%

4.8%

0.9%

1.5%

-268 268

-280 280

-298 298

-286 286

-1,388 333 1,055

-1,459 292 1,167

-1,378 277 1,100

-1,242 242 1,001

83,141 -56,343 26,797

97,688 -60,178 37,510

92,904 -58,625 34,279

125,435 -82,361 43,074

91,641 -60,380 31,261

100,371 -64,930 35,441

85,129 -57,868 27,261

115,498 -77,665 37,833

Consolidated² Revenues Costs Gross Margin % Revenues

SG&A (w/o depreciation) EBITDA % Revenues

32.2%

38.4%

36.9%

34.3%

34.1%

35.3%

32.0%

32.8%

-29,584 -2,787

-30,360 7,150

-32,447 1,832

-40,406 2,668

-33,018 -1,757

-36,765 -1,325

-32,633 -5,372

-34,580 3,253

-3.4%

7.3%

2.0%

2.1%

-1.9%

-1.3%

-6.3%

2.8%

¹ Intercompany billing, of the financial business to the retail business for purchases made with the TLP card ² Financial interests that are related to the portfolio financing , which are considered in the cost of sales