EARNINGS RELEASE. [Third Quarter 2018]

Transcription

1 EARNINGS RELEASE [Third Quarter 2018] 1 Conference Call: Date: November 16, 2018 Time: 9:00 am EST / 11:00 am Santiago Participants calling from the US (toll free): Chile (toll free): International: Participant Elite Entry Number: Contacts: Tori Creighton (Head of Investor Relations) Francisco Moyano (Corporate Finance Manager) Claudio Chamorro Carrizo (CFO) Tel: (562) ir@parauco.com

2 DISCLAIMER IMPORTANTE This document has been prepared by Parque Arauco for the purpose of providing general information about the company. The Company assumes no responsibility for, or makes any representation or warranty, express or implied, with respect to, the accuracy, adequacy or completeness of the information contained herein. The Company expressly disclaims any liability based on such information, errors therein or omissions therefrom. This presentation includes certain statements, estimates and forecasts provided by the Company with respect to its anticipated future performance and involves significant elements or subjective judgment and analysis that may or may not prove to be accurate or correct. There can be no assurance that these statements, estimates and forecasts will be attained and actual outcomes and results may differ materially from what is estimated or forecast herein. 2 The information contained herein has been prepared to assist interested parties in making their own evaluation of the company and does not purport to be all - inclusive or to contain all the information that a potential counterparty may desire. In all cases, interested parties should conduct their own independent investigation and analysis of the Company. Interested parties can only rely on the result of their own investigation and the representations and warranties. INOUTLET PREMIUM LURÍN / LURÍN

3 EXECUTIVE SUMMARY» Tenant sales, lead by Peru and Colombia, increased 2.0% during the third quarter of 2018 and amounted to a total of Ch$ 446,374 millon.» Revenues also increased by a solid 5.6% during the quarter, reaching Ch$ 46,327 million.» EBITDA increased 6.2% in the third quarter of 2018, amounting to Ch$ 33,497 million, mainly due to strong growth in the Colombia operation.» The EBITDA margin improved from 71.9% in the third quarter of 2017 to 72.3% in the third quarter of 2018, an improvment of 42 basis points during the period.» Net Operating Income (NOI) increased 6.0% during the quarter, amounting to Ch$ 36,738 million.» AFFO attributable to the shareholders increased 4.5% during the third quarter of 2018, amounting to Ch$ 22,276 million, an increase in line with EBTIDA growth.» Profit attributable to the shareholders amounted to Ch$ 13,972 million, decreasing 4.4% during the third quarter as a result of higher taxes. for UF 1 million at a 1.69% yield and the ten-year V bond was issued for UF 4 million at a 2.34% yield, the lowest yield for a Chilean corporate bond issuance for 10-year duration bonds (excluding banks and stateowned companies).» Parque Angamos, Parque Arauco s first neighborhood mall in Chile, opened in September. The mall (10,500 m 2 ) is located in Antofagasta, in the north of Chile, and required a total investment of 811,000 UF.» Owned Gross Leasable Area (GLA) increased 3.5%, amounting to 909,709 m 2, compared with the same quarter of the previous year, as a result of the incorporation of MegaPlaza Villa El Salvador II, Premium Outlet Arauco Sopó, Viamix Colonial and Parque Angamos in the last twelve months.» Consolidated Gross Leasable Area (GLA) increased 4.2%, reaching 1,030,500 m 2, due to the recently incorporated assets mentioned above.» Consolidated occupancy levels have maintained stable at 92.8% during the third quarter of PARQUE CARACOLÍ / BUCARAMANGA» In August, we issued bonds in Chile, Series T and V, for UF 5 million. The seven-year T bond was issued

4 CONTENT ARAUCO QUILICURA / SANTIAGO Financial and Operating Results Summarized Balance Sheet Summarized Cash Flow Main Financial Indicators Asset Level Results Property Level Results Highlights by Country Future Developments Land Bank Case Study Consolidated Financial Statements Market Risk Analysis Glossary 4

5 FINANCIAL AND OPERATING RESULTS CONSOLIDATED INCOME STATEMENT ThCh$ Consolidated Income Statement 3Q18 3Q17 Chg, % 9M18 9M17 Chg, % LTM 3Q18 LTM 3Q17 Chg, % Revenues 46,326,550 43,877, % 134,792, ,645, % 186,362, ,905, % (+) Cost of sales (9,681,709) (9,409,789) 2.9% (29,522,061) (29,420,266) 0.3% (39,448,510) (39,252,864) 0.5% Gross profit 36,644,841 34,467, % 105,270, ,224, % 146,913, ,652, % (+) Administrative expenses (3,870,194) (3,900,872) -0.8% (10,963,099) (12,050,038) -9.0% (15,465,069) (16,405,858) -5.7% (+) Other gains, by function 334, , % 32,010, , % 34,238, , % (+) Other losses, by function (860,310) (1,262,120) -31.8% (4,889,490) (3,883,708) 25.9% (7,549,523) (7,027,085) 7.4% Operational results 32,248,482 29,466, % 121,428,049 86,052, % 158,569, ,213, % (+) Financial income 1,724,838 1,012, % 5,237,757 4,540, % 6,427,386 6,861, % (+) Financial expenses (8,314,678) (9,663,419) -14.0% (26,502,329) (29,311,256) -9.6% (35,277,815) (39,440,693) -10.6% (+) Share of profit (loss) of associates accounted 1,642,284 2,407, % 6,092,684 6,712, % 11,044,142 11,212, % (+) Foreign exchange differences 93,135 (44,542) % 9,259 (83,580) % 12,324 (57,430) % (+) Income (loss) for indexed assets and liabilities (4,572,236) (1,083,881) 321.8% (12,250,798) (7,483,111) 63.7% (15,481,680) (10,022,320) 54.5% (+) Gains (losses) from the difference between the previous book value and the fair value of financial assets - - N/A - - N/A 51,569,506 55,842, % Profit before income tax 22,821,826 22,095, % 94,014,622 60,427, % 176,431, ,609, % (+) Current taxes (4,226,460) (3,361,016) 25.7% (21,268,959) (10,116,437) 110.2% (24,509,689) (16,130,852) 51.9% (+) Deferred taxes (2,664,795) (2,992,364) -10.9% (71,308,309) (5,861,515) 21.3% (31,266,481) (29,619,073) 5.6% Net profit (loss) 15,930,570 15,741, % 65,637,354 44,449, % 120,655,126 93,860, % Net profit (loss) attributable to: Equity holders of the company 13,972,445 14,619, % 60,400,139 39,430, % 109,959,380 76,433, % Non-controlling interests 1,958,126 1,122, % 5,237,215 5,019, % 10,695,745 17,426, % 1,380,577 EBITDA 3Q18 3Q17 Chg. % 9M18 9M17 Chg. % LTM 3Q18 LTM 3Q17 Chg. % Revenues 46,326,550 43,877, % 134,792, ,645, % 186,362, ,905, % (+) Cost of sales (9,681,709) (9,409,789) 2.9% (29,522,061) (29,420,266) 0.3% (39,448,510) (39,252,864) 0.5% (+) Administrative expenses (3,870,194) (3,900,872) -0.8% (10,963,100) (12,050,038) -9.0% (15,465,069) (16,405,858) -5.7% (-) Amortization and depreciation (722,687) (975,193) -25.9% (2,051,506) (2,896,076) -29.2% (3,065,084) (4,050,154) -24.3% EBITDA 33,497,334 31,542, % 96,358,969 92,070, % 134,513, ,296, % 5

6 FINANCIAL AND OPERATING RESULTS KEY PERFORMANCE INDICATORS Key Performance Indicators 3Q18 3Q17 Chg. LTM 3Q18 LTM 3Q17 Chg. EBITDA margin (%) 72.3% 71.9% % 70.8% 135 Net income margin (%) 34.4% 35.9% % 53.1% 1169 Adjusted FFO margin (%) 53.9% 50.0% % 49.4% 505 Owned mall NOI (Ch$ million) 1 39,493 35, % 156, , % Owned GLA (m²) 2 909, , % 909, , % Controlling FFO (Ch$ million) 3 14,640 15, % 92,135 80, % Controlling Adjusted FFO (Ch$ million) 4 22,276 21, % 89,766 77, % NOI (Ch$ million) 5 36,738 34, % 148, , % Consolidated GLA (m²) 6 1,030, , % 1,030, , % Total tenant sales (Ch$ million) 7 446, , % 1,884,735 1,775, % Weighted average shares (million) % % EPS (Ch$) % % Stock Price (Ch$) 1, , % 1, , % Market Capitalization (Ch$ million) 1,538,081 1,569, % 1,538,081 1,569, % Daily traded volume (Ch$ million) 1, , % 1, , % 6 (1) The sum of the controlled portion of the NOI of our malls. This does not include corporate overhead. (2) GLA of Grupo Marina is included. (3) FFO = Net Profit - Depreciation & Amortization - Share of Profit (Loss) of Associates Accounted + Associates Accounted FFO. (4) Adjusted FFO = Net Profit - Depreciation & Amortization - Other Income/expenses - Share of Profit (Loss) of Associates Accounted - Foreign Exchange Differences - Income (Loss) for indexed assets and liabilities - Gains (losses) from the difference between the previous book value and the fair value of financial assets - Deferred tax+ Associates accounted Adjusted FFO. (5) NOI = Revenues + Cost of Sales + Administration Expenses - Depreciation & Amortization + Associates accounted NOI. (6) GLA of Grupo Marina not included. (7) Total tenant sales = sales of tenants in our malls (8) EPS = Net income attributable to the equity holders of the company/weighted ave- MEGAPLAZA NORTE / LIMA «Destaca en el segundo trimestre de 2018 las sólidas ventas de locatarios, las cuales aumentaron 2,9% a nivel consolidado. Cabe destacar el buen desempeño de las ventas de Peru, los cuales aumentaron 7,1% en moneda local y las ventas de Colombia, las cuales aumentaron 14,8% en moneda local durante el trimestre. Seguimos nuestra tendencia del último año, mejorando el margen EBITDA consolidado de Parque Arauco, aumentando este indicador a 71.3% durante el trimestre, representando una mejora de 71 puntos base. Debido al sólido desempeño no operacional de la compañía, fuimos capaces de aumentar la utilidad atribuible a la participación controladora en 5.1% y el Adjusted FFO atribuible a la participación controladora en 17,0%. Finalmente, destaco que nuestra tasa de ocupación se mantuvo estable en el trimestre, alcanzando un nivel de 92,2%, a pesar de nuevas aperturas en los últimos doce meses a MegaPlaza Villa El Salvador II, Premium Outlet Arauco Sopó y Viamix Colonial.» Juan Antonio Álvarez, Vicepresidente Ejecutivo

7 FINANCIAL AND OPERATING RESULTS NOI AND FFO RECONCILIATION ThCh$ NOI 3Q18 3Q17 Chg, % 9M18 9M17 Chg, % LTM 3Q18 LTM 3Q17 Chg, % Revenues 46,326,550 43,877, % 134,792, ,645, % 186,362, ,905, % (+) Cost of sales (9,681,709) (9,409,789) 2.9% (29,522,061) (29,420,265) 0.3% (39,448,510) (39,252,863) 0.5% (+) Administrative expenses (3,870,194) (3,900,872) -0.8% (10,963,100) (12,050,038) -9.0% (15,465,069) (16,405,857) -5.7% (-) Depreciation & amortization (722,687) (975,193) -25.9% (2,051,506) (2,896,077) -29.2% (3,065,084) (4,050,154) -24.3% (+) Associates accounted NOI 3,240,861 3,119, % 10,206,033 9,593, % 14,137,559 13,252, % NOI 36,738,195 34,661, % 106,565, ,664, % 148,651, ,548, % FFO 3Q18 3Q17 Chg. % 9M18 9M17 Chg. % LTM 3Q18 LTM 3Q17 Chg. % Net profit (loss) 1 15,930,570 15,741, % 45,456,746 44,449, % 100,474,518 93,860, % (-) Depreciation & amortization (722,687) (975,193) -25.9% (2,051,506) (2,896,077) -29.2% (3,065,084) (4,050,154) -24.3% (-) Share of profit (loss) of 1,642,284 2,407, % 6,092,684 6,712, % 11,044,142 11,212, % (+) Associates accounted FFO 1,695,453 2,436, % 6,219,381 6,805, % 11,227,068 11,336, % FFO 16,706,427 16,746, % 47,634,948 47,438, % 103,722,527 98,033, % Attributable to: FFO minority interests 2,065,967 1,190, % ,018,763 12,5% 11,587,499 17,643, % FFO equity holders of the company 14,640,460 15,556, % 41,988,006 42,419, % 92,135,028 80,390, % 7 Adjusted FFO 3Q18 3Q17 Chg. % 9M18 9M17 Chg. % LTM 3Q18 LTM 3Q17 Chg. % EBITDA 33,497,334 31,542, % 96,358,969 92,070, % 134,513, ,296, % (+) Financial income 1,724,838 1,012, % 5,237,757 4,540, % 6,427,386 6,861, % (+) Financial expenses (8,314,678) (9,663,419) -14.0% (26,502,330) (29,311,256) -43.8% (35,277,815) (39,440,693) -10.6% (+) Current taxes 2 (4,226,460) (3,361,016) 25.7% (11,517,762) (10,116,437) 13.9% (14,758,492) (16,130,852) -8.5% (+) Associates Accounted Adjusted FFO 2,287,656 2,413, % 7,682,104 7,556, % 10,523,324 10,761, % Adjusted FFO 24,968,690 21,944, % 71,258,738 64,740, % 101,428,381 87,348, % Attributable to: Adjusted FFO minority interests 2,692, , % 7,652,683 6,709, % 11,662,532 9,630, % Adjusted FFO equity holders of the company 22,276,264 21,310, % 63,606,055 58,030, % 89,765,849 77,717, % (1) Does not include profit related to the sale of the land in Peru during the first quarter of (2) Does not inlcude current taxes related to the sale of land in Peru during the first quarter of 2018.

8 FINANCIAL & OPERATING RESULTS SAME STORE SALES & SAME STORE RENT Same Store Sales (SSS) during the third quarter of 2018 had a positive performance in Peru and Colombia, increasing 2.8% and 8.1% respectively. In Chile, SSS decreased 4.0%, mainly due to slowdown in tourism that affected some of our malls in the country during the third quarter of 2018 compared to the third quarter of Same Store Rent (SSR) was positive in all three countries, increasing 1.3% in Peru, 6.6% in Colombia and 2.1% in Chile, reversing the negative trend of the past quarters. CHILE Nominal Same Store Sales (Chg%) Nominal Same Store Rent (Chg%) PERU 1 Nominal Same Store Sales (Chg%) Nominal Same Store Rent (Chg%) COLOMBIA Nominal Same Store Sales (Chg%) Nominal Same Store Rent (Chg%) Q Q Q Q Q18 3Q17 4Q17 1Q18 2Q18 3Q Q17 4Q17 1Q18 2Q18 3Q18 (1) Same Store Sales and Same Store Rent in the fourth quarter of 2016 and 2017 do not include Larcomar due to a contingency.

9 FINANCIAL AND OPERATING RESULTS OCCUPANCY COST Occupancy Cost is a relevant performance measurement in the real estate industry as it allows the measurement of our tenant s financial health. This indicator measures the relevance of what tenants pay in rent in relation to their sales. Specifically, it is calculated as the minimum rent, plus variable rent, plus common expenses, plus the promotion fund tenants pay to Parque Arauco divided by the sales of the tenant. OCCUPANCY COST 1 / % Chile Peru Colombia Compared with the third quarter of 2017, occupancy costs increased slightly in Chile to 11.4% and maintained stable in Peru at 7.4% and Colombia at 13.2%. The differences between countries are explained mainly by the relevance of anchor stores in the three countries. In countries where there is an important portion of the GLA rented out to anchor stores, such as Peru, the occupancy cost is lower because anchor stores normally pay a lower rent as a percentage of their sales. 10.7% 11.4% 7.4% 7.4% 13.2% 13.2% 9 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18 1 Occupancy cost calculation: (fixed rent + variable rent + common expenses + promotion fund)/ sales

10 FINANCIAL AND OPERATING RESULTS REVENUES Third quarter 2018 revenues increased 5.6% compared to 2017, amounting to Ch$ 46,327 million. During the last twelve months the increase was 5.3%, or Ch$ 186,362 million. The average Colombian peso appreciated 3.7% during the third quarter of 2018 and the average Peruvian sol appreciated 1.5% with respect to the Chilean peso. The higher revenues during the year and quarter are mainly related to the increase in GLA. The total GLA of 1,030,500 m 2 at the end of the third quarter 2018 represents a 4.2% increase compared to the same quarter of the previous year. During the last twelve months we have incorporated several new assets including MegaPlaza Villa El Salvador II, Premium Outlet Arauco Sopó, Viamix Colonial and Parque Angamos. Total tenant sales during the quarter increased by 2.0% compared to the same quarter from the previous year, amounting to Ch$446,374 million. Colombia s results stand out, as tenant sales grew 17.3% during the quarter in local currency, due to the especially strong performance of La Colina. The consolidated occupancy level maintained stable at 92.8%, slightly lower than 93.0% of the third quarter of REVENUES / CH$ MILLION TENANT SALES / CH$ MILLION % +5.3% +2.0% +6.2% 43,878 46, , , , ,374 1,775,431 1,884,735 3Q17 3Q18 LTM 3Q17 LTM 3Q18 3Q17 3Q18 LTM 3Q17 LTM 3Q18 * Tenant sales in Peru and Colombia are expressed in CLP using the following exchange rates: US$ 1 = CLP US$ 1 = PEN ; US$ 1 = COP2,

11 FINANCIAL AND OPERATING RESULTS REVENUES In line with the regional expansion strategy, Parque Arauco has increased the importance of GLA and revenues that come from assets located outside of Chile. In fact, during the second quarter of 2018, the combined GLA of Peru and Colombia represented 54.7% of total GLA. During the third quarter of 2018, revenues from Peru and Colombia represented 41.8% of the total, a slight increase from the 41.1% from the same quarter of last year. This quarter, Colombia has continued its trend from last year and increased its participation in our consolidated revenues from 12.0% in the third quarter of 2017 to 14.1% in the third quarter of This quarter, total revenues in Chile were Ch$ 26,985 million, in Peru Ch$ 12,843 million, and in Colombia were Ch$ 6,498 million. During the last twelve months, revenues in Chile were Ch$ 110,597 million, in Peru Ch$ 50,371 million and in Colombia Ch$ 25,392 million. REVENUE DIVERSIFICATION Chile Peru Colombia 27.7% 29.1% % REVENUES BY COUNTRY 3Q % 58.9% REVENUES BY COUNTRY 3Q % 27.0% 28.6% 59.4% REVENUES BY COUNTRY LTM 3Q % REVENUES BY COUNTRY LTM 3Q % 11.6%

12 FINANCIAL AND OPERATING RESULTS OPERATIONAL RESULT The third quarter 2018 EBITDA was Ch$ 33,497 million, increasing 6.2% from the third quarter in During the last twelve months, the EBITDA grew 7.4%, amounting to Ch$ 134,514 million. In the third quarter of 2018, the consolidated EBITDA margin reached 72.3%, an improvment of 42 basis points compared with 71.9% from the third quarter of During the last twleve months, the EBITDA margin improved 135 basis points, reaching 72.2%. The improvement in the EBITDA margin during the quarter is explained by an overall increase in net revenue, which amounted to Ch$ 46,326 million, and stable administrative expenses and cost of sales, which helped the EBITDA margin to 72.3%. EBITDA / CH$ MILLION +6.2% +7.4% 33, ,514 31, ,297 In the third quarter of 2018, the account other gains by function reached Ch$ 334 million, which is mostly related to insurance returns. The account other losses, by function amounted to Ch$ 860 million and the variation is mainly due to costs related to new projects. Peru and Colombia s contribution to the company s consolidated EBITDA increased during the quarter, from 39.8% in the third quarter of 2017 to 40.7% in Colombia improved its participation this quarter, reaching 13.2%. During the period, EBITDA from our Chilean operation reached Ch$ 19,863 million, EBITDA from Peru was Ch$ 9,202 million and EBITDA from Colombia was Ch$ 4,433 million. EBITDA DIVERSIFICATION Chile Peru Colombia 3Q17 3Q18 LTM 3Q17 LTM 3Q % 27.9% 59.3% EBITDA BY COUNTRY 3Q % 60,.% EBITDA BY COUNTRY 3Q % 26.8% 27.1% 60.2% EBITDA BY COUNTRY LTM 3Q % 61.7% EBITDA BY COUNTRY LTM 3Q %

13 FINANCIAL AND OPERATING RESULTS OPERATIONAL EXCELLENCE In the past years we have put forth many initiatives to improve efficiency levels in our Company. In the last year, these initiatives have begun to bear fruit. During the third quarter of 2018 Chile s EBITDA margin improved from 73.4% to 73.6%. In Peru, the EBITDA margin improved from 69.1% in the third quarter of 2017 to 71.6%. In Colombia, however, the EBITDA margin decreased slightly from 71.0% to 68.2%. At a consolidated level, the EBITDA margin improved 42 basis points to 72.3% for the quarter. EBITDA MARGIN / % Chile Peru Colombia Consolidado 73.4% 73.6% 69.1% 71.6% The most relevant item in Parque Arauco s cost is maintenance, cleaning and security. Recently, we have focused on improving the bidding process for these services, by looking to improve service levels and at the same time reduce costs. Specifically, in Chile we have improved the conditions for our maintenance services, and in Peru and Colombia we have improved the conditions for cleaning and security. Another relevant item in Parque Arauco s cost structure is energy. Related to this we have been improving our competitiveness in the energy bidding process, achieving significant savings in this matter. 3Q % 3Q % 3Q % 3Q % 13 3Q17 3Q18 3Q17 3Q18

14 FINANCIAL AND OPERATING RESULTS EQUITY METHOD INVESTMENTS Share of profit (loss) of associates accounted mainly reflects our investment in Inmobiliaria Mall Viña del Mar S.A ( Grupo Marina ). This Chilean entity, controlled equally by Parque Arauco S.A. and Ripley Corp. S.A. is the owner of the Mall Marina (59,000 m 2 of GLA), Boulevard Marina Arauco (10,500 m 2 of GLA) and Curicó Mall (49,000 m 2 of GLA). PROPORTIONAL REVENUES CH$ MILLION +6.2% PROPORTIONAL EBITDA +7.0% +3.3% +6.5% According to International Financial Reporting Standard N 11 (IFRS 11), and International Accounting Standards N 28 (IAS 28), the investment in Inmobiliaria Mall Viña del Mar S.A. is not consolidated in the financial statements of Parque Arauco S.A. This entity is accounted for using the equity method of accounting and is presented in Parque Arauco s income statement in the line Share of profit ( loss) of associates accounted and in the balance sheet under investments in associates. 3,644 3,869 15,130 16,188 3,120 3,222 13,252 14,119 During the third quarter of 2018, proportional revenues of Mall Viña del Mar S.A. increased 6.2% compared to the same period of the previous year, amounting to Ch$ 3,869 million. The proportional EBITDA of the third quarter of 2018 reached Ch$ 3,222 million, an increase of 3.3% from the prior year. Finally, the proportional profit from the quarter fell 31.8% to Ch$ 1,642 million. 3Q17 3Q18 LTM 3Q17 LTM 3Q18 3Q17 3Q18 LTM 3Q17 LTM 3Q18 14 Inm, Viña del Mar (ThCh) 3Q18 3Q17 Chg, % LTM 3Q18 LTM 3Q17 Chg, % Proportional revenue 3,868,645 3,644, % 16,188,224 15,130, % Proportional EBITDA 3,222,273 3,119, % 14,118,972 13,252, % Proportional profit 1,642,284 2,407, % 11,044, % Proportional Net Financial Debt 74,946,808 38,250, % 74,946,808 38,250, %

15 FINANCIAL AND OPERATING RESULTS NON-OPERATIONAL RESULTS The account financial income increased by 70.3% with respect to the third quarter of 2017, reaching Ch$ 1,725 million. The increase in financial income is mainly due to the fact that the average cash during the second quarter was 137% greater than in the third quarter of 2017, driven largely by the issuance of two series of bonds in Chile. Financial costs decreased by 14.0% during the quarter, amounting to Ch$ 8,315 million. Our gross financial debt during the quarter increased 17.5% to Ch$ 969,770 million. Our financial expenses have decreased despite the increase in debt because we have been able to take on new debt at lower rates. Gain from associates accounted is related to our investment in Inmobiliaria Mall Viña del Mar S.A. decreased 31.8% to Ch$ 1,642 million during the third quarter of This lower profit from Inmobiliaria Viña del Mar is largely due to higher loss for indexed assets as a result of the higher inflation during the quarter. 15 Foreign exchange differences amounted to Ch$ 93 million, reflecting little change during the quarter in our respective positions in foreign currencies. Loss for indexed assets increased 321.8% in comparison to the third quarter of 2017, amounting to negative Ch$ 4,572 million, due to higher inflation and an increase in debt in UF compared to the same period in the previous year. Current taxes increased 25.7% during the third quarter of 2018 primarily due to a higher corporate income tax rate. Deferred taxes decreased 10.9% during the third quarter, amounting to Ch$ 2,665 million. Profit attributable to the equity holders decreased by 4.4%, similarly to earnings per share, which decreased by 8.7%, from Ch$16.97 to Ch$ The average number of shares during the quarter increased 0.4% in comparison with the same period of the last year. PARQUE ARAUCO KENNEDY / SANTIAGO

16 SUMMARIZED BALANCE SHEET ASSETS Current assets increased from Ch$ 230,267 million as of December 31, 2017, amounting to Ch$ 371,788 million as of September 30, 2018, which is primarily explained by the account cash and cash equivalents. This account increased Ch$ 157,936 million during the period, mainly due to the funds received from the sale of a piece of land in Peru during the first quarter of the year and the issuance of bonds, Series T and V, in the third quarter. Non-current assets increased from Ch$ 1,848,307 million as of December 31, 2017, reaching Ch$ 1,906,190 million at the end of the third quarter This increase is explained by the account investment properties, which increased Ch$ 74,209 million during the period due to investments the company made in all three countries. Ch$ Million Chg. % Current assets 371, , % Non-current assets 1,906,190 1,848, % Total Assets 2,277,979 2,078, % 16 MEGAPLAZA NORTE / LIMA

17 SUMMARIZED BALANCE SHEET LIABILITIES AND EQUITY Current liabilities increased from Ch$ 94,406 million as of December 31, 2017 to Ch$ 132,073 million as of September 30, This increase is largely due to the increase of the account other current financial liabilities, which increased Ch$ 49,358 million during the period due to the reclassification of long-term debt to short-term debt. Non-current liabilities increased from Ch$1,043,399 million as of December 31, 2017 to Ch$ 1,108,961 million by September 30, This is mainly a result of the increase of the account other non-current financial liabilities, which reached Ch$ 52,496 million after the issuance of bonds in Chile this quarter. Ch$ Million Chg. % Current liabilities 132,073 94, % Non-current liabilities 1,108,961 1,043, % Total liabilities 1,241,035 1,137, % Equity 1,036, , % Total liabilities and equity 2,277,979 2,078, % Total equity increased from Ch$ 940,769 million as of December 31, 2017 to Ch$ 1,036,944 million as of September 30, ARAUCO ESTACIÓN / SANTIAGO

18 SUMMARIZED CASH FLOW Ch$ Millon 3Q18 3Q17 Chg. % 9M18 9M17 Chg. % LTM 3Q18 LTM 3Q17 Chg. % FFO Propio 14,640 15, % 41,988 42, % 92,135 80, % AFFO Propio 22,276 21, % 63,606 58, % 89,765 77, % The AFFO attributable to equity holders increased 4.5% during the period, reaching Ch$ 22,276 million. This inflow of cash from operations was a result of higher EBITDA, though compensated by a higher tax cost. Ch$ Million 3Q18 3Q17 Chg. % 9M18 9M17 Chg. % LTM 3Q18 LTM 3Q17 Chg,.% From operating activities 34,136 32, % 101,862 86, % 132, , % From investment activities (13,946) (19,142) -27.1% 43,003 (69,931) N/A 14,197 (106,105) N/A From financing activities 83,675 (8,499) N/A 18,558 (67,237) N/A 58,297 (2,545) N/A Eff, of chg, exchange rate on cash and cash equiv, 747 (213) N/A 2, % (462) 1,462 N/A Net cash flow during the period 104,612 4, % 166,016 (50,364) N/A 204,171 7, % Cash and cash equivalents at beginning of period 208, , % 146, , % 108, , % 18 Cash flows from operating activities during the third quarter increased by 5.4%, amounting to Ch$ 34,136 million. During the first nine months of the year, the cash flows from operating activities increased 18.3%, reaching Ch$ 101,862 million. This increase in the quarter and the first half of the year is explained by an increase in receipts from sales of goods and services, in line with the increase in GLA during the period. Cash flows from investing activities during the third quarter of 2018 were negative, amounting to Ch$ 13,946 million, in part due to more interest recieved. Cash flows from investing activities during the first nine months of 2018 were positive, amounting to Ch$ 43,003 million. This increase is due to the dividends received in the second quarter as well as the inflows from the sale of the land in San Isidro during the first quarter of the year, which is reflected in the account inflows from long-term assets, classified as investment activities. PARQUE ARAUCO KENNEDY / SANTIAGO Finally, cash flows from financing activities increased during the third quarter and during the first nine months of the year as a result of the issuance of two series of bonds in Chile.

19 MAIN FINANCIAL INDICATORS Financial Indicators Unit Covenant Limit Net financial debt amounted to Ch$ 657,154 million as of September 30, The company continues to comply with its financial convenants, with a liabilities/equity indicator of 1.20x, below the upper limit of 1.4x ; with a net financial debt/equity indicator of 0.63, below the limit of 1.5x; and with an EBITDA/financial expenses indicator of 3.81, above the lower limit of 2.5x. The net financial debt/ebitda indicator reached 4.89x, a decrease explained by the increase in cash after the sale of the land in Peru and the issuance of bonds in Chile. Gross financial debt Ch$ million 969, , ,416 Net financial debt Ch$ million 657, , ,972 Owned net financial debt Ch$ million 589, , ,901 Net financial debt / EBITDA (LTM) times EBITDA / financial expenses (LTM) times >2.5 _ Liabilities / equity times <1.4 _ Net financial debt / equity times <1.5 _ Current liabilities % 11% 8% 8% Non current liabilities % 89% 92% 92% 19 PARQUE ARAUCO KENNEDY / SANTIAGO

20 OTHER RELEVANT INDICATORS Indicator Description Unit Liquidity level Current assets / current liabilities times Short term debt Current liabilities / total liabilities % 10.6% 8.30% 7.86% Long term debt Non current liabilities / total liabilities % 89.4% 91.70% 92.14% Net profit Net profit Ch$ MM 65,637 99,468 45,638 Basic EPS Net profit att. equity holders / N shares - treasury shares Ch$ Return on equity Net profit att. equity holders / average sareholders equity 1 % 13.30% 11.44% 10.05% Return on assets Net profit / average total assets 1 % 5.77% 4.99% 4.84% Return on operating assets Net profit / average operating assets (IP+PPE) 2 % 7.50% 6.32% 6.19% Dividend yield Dividends paid LTM / last share price % 2.05% 1.68% 1.92% Gross profit margin Operating profit / revenues % 90.1% 69.3% 65.4% 20 (1) The operational and financial indicators presented are calculated based on standards set out by the Chilean Financial Markets Comission, and they do not necessarily coincide with the calculations used to calculate the company s debt covenants. (2) Calculated using results from the last twelve months

21 ASSET LEVEL RESULTS CHILE / PERU / COLOMBIA 21 PARQUE ARAUCO KENNEDY / SANTIAGO

22 PORTFOLIO Total GLA (m 2 ) % ownership Owned GLA (m 2 ) Occupancy % Parque Arauco Kennedy 111, % 111, % Arauco Maipú 72, % 72, % Arauco Chillán 35, % 35, % Arauco Estación 67,000 83% 55, % Arauco San Antonio 28,500 70% 19, % Arauco Express (Stripcenters Chile) 1 33,000 53% 17, % Arauco Premium Outlets 2 47, % 47, % Arauco Quilicura 32, % 32, % Arauco Coronel 30, % 30, % Parque Angamos 10,500 55% 5, % Total Chile 466,500 91% 426, % MegaPlaza Norte 109,500 50% 54, % MegaPlaza Express Villa 8,000 50% 4, % Larcomar 27, % 27, % Parque Lambramani 30, % 30, % MegaPlaza Chimbote 28,000 50% 14, % MegaPlaza Express Villa El Salvador 9,000 50% 4, % MegaPlaza Express Chincha 10,500 50% 5, % InOutlet (Premium Outlets) and Viamix (Strip Centers) 3 25, % 25, % MegaPlaza Cañete 16,500 50% 8, % MegaPlaza Express Barranca 9,500 50% 4, % MegaPlaza Pisco 14,500 50% 7, % El Quinde Cajamarca 32, % 32, % El Quinde Ica 36, % 36, % Plaza Jesus María 14, % 14, % MegaPlaza Express Jaén 14,500 50% 7, % MegaPlaza Huaral 14,000 50% 7, % MegaPlaza Villa El Salvador II 9,000 50% 4, % Total Peru 408,500 70% 287, % Parque Arboleda 41,000 55% 22, % Parque Caracolí 38, % 38, % Parque La Colina 62, % 62, % Premium Outlet Arauco (Sopó) 13, % 13, % Total Colombia 155,500 88% 137, % Marina Group 4 59,250 Total 1,030,500 83% 909, % PARQUE LA COLINA / BOGOTÁ (1) Includes 14 strip centers located in: Santiago (11), Viña del Mar(1), Calama (1) and Antofagasta (1). (2) Includes four Premium Outlets located in: Santiago, Concepcion, Coquimbo y Curauma. (3) Includes InOutlet Premium Faucett, InOutlet Premium Lurín, Viamix Chorillos, Viamix Las Malvinas and Viamix Colonial (4) Owned GLA corresponds to 50% of Marina Group. 22

23 QUARTERLY PROPERTY LEVEL RESULTS Chile in MCLP/ Peru in ThPEN / Colombia in MCOP GLA Tenant Sales Revenues NOI Chg. % 3Q18 3Q17 Chg. % 3Q18 3Q17 Chg. % 3Q18 3Q17 Chg. % Parque Arauco Kennedy 111, , % 86,796 95, % 10,889 10, % 10,933 10, % Arauco Maipu 72,500 74, % 45,039 46, % 3,711 3, % 3,669 3, % Arauco Chillan 35,000 32, % 20,041 20, % 1,585 1, % 1,293 1, % Arauco Estacion 67,000 66, % 28,816 30, % 3,904 3, % 3,453 3, % Arauco San Antonio 28,500 28, % 10,607 9, % 1,132 1, % % Arauco Express (Strip Centers Chile) 33,000 33, % 12,301 9, % 1,362 1, % % Arauco Premium Outlets 47,000 47, % 24,105 23, % 2,310 2, % 1,782 1, % Arauco Quilicura 32,000 32, % 13,091 13, % 1,081 1, % % Arauco Coronel 30,000 30, % 12,120 11, % % % Parque Angamos 10,500 - N/A N/A N/A 86 - N/A Total Chile 466, , % 253, , % 26,985 25, % 24,534 23, % MegaPlaza Norte 109, , % 319, , % 24,684 23, % 22,935 21, % MegaPlaza Express Villa 8,000 8, % 21,771 20, % 1,433 1, % 1,257 1, % Larcomar 27,000 26, % 65,403 62, % 9,235 10, % 7,929 8, % Parque Lambramani 30,000 29, % 33,732 33, % 2,707 3, % 1,779 1, % MegaPlaza Chimbote 28,000 28, % 63,444 60, % 3,103 3, % 2,477 2, % MegaPlaza Express Villa El Salvador 9,000 9, % 14,035 14, % 1,336 1, % 1,072 1, % MegaPlaza Express Chincha 10,500 9, % 8,678 7, % 1, % % InOutlet (Premium Outlets) and Viamix (Strip Centers) 25,000 23, % 44,833 36, % 4,517 4, % 3,567 2, % MegaPlaza Cañete 16,500 16, % 29,639 28, % 1,512 1, % 1,243 1, % MegaPlaza Express Barranca 9,500 10, % 11,174 11, % 1,355 1, % 1, % MegaPlaza Pisco 14,500 14, % 23,649 21, % 1,495 1, % 1,243 1, % El Quinde Cajamarca 32,500 31, % 36,580 32, % 3,916 3, % 2,931 2, % El Quinde Ica 36,500 36, % 59,778 56, % 5,498 5, % 5,484 5, % Plaza Jesus Maria 14,500 14, % - - N/A % (39) (488) -92.0% MegaPlaza Express Jaen 14,500 14, % 24,211 19, % 1, % % MegaPlaza Huaral 14,000 9, % 7,252, N/A N/A N/A MegaPlaza Villa El Salvador II 9,000 - N/A 6,788 - N/A N/A (284) - N/A Total Peru 408, , % 770, , % 64,545 62, % 54,622 51, % Parque Arboleda 41,000 41, % 54,769 50, % 6,252 4, % 4,935 4, % Parque Caracolí 38,500 38, % 37,790 34, % 5,699 3, % 2,731 2, % Parque La Colina 62,500 62, % 121, , % 16,670 14, % 15,962 12, % Premium Outlet Arauco (Sopó) 13,500 - N/A 5,837 - N/A N/A N/A Total Colombia 155, , % 220, , % 29,060 22, % 23,796 19, % 23 Fuente: Parque Arauco

24 QUARTERLY PROPERTY LEVEL RESULTS Chile in CLP/ Peru in PEN Occupancy NOI Margin Monthly tenant sales per m² Monthly revenue per m² / Colombia in COP Chg. b.p. 3Q18 3Q17 Chg. b.p. 3Q18 3Q17 Chg. % 3Q18 3Q17 Chg. % Parque Arauco Kennedy 99.1% 97.1% % 96.8% , , % 32,993 32, % Arauco Maipú 98.8% 99.3% % 99.3% , , % 17,486 15, % Arauco Chillán 93.0% 99.4% % 84.0% , , % 16,187 16, % Arauco Estación 96.0% 97.6% % 90.0% , , % 20,209 20, % Arauco San Antonio 95.5% 95.7% % 71.5% , , % 13,866 12, % Arauco Express (Stripcenters Chile) 89.3% 81.9% % 66.8% , , % 15,778 14, % Arauco Premium Outlets 94.7% 94.9% % 81.8% , , % 17,226 16, % Arauco Quilicura 99.7% 100.0% % 79.0% , , % 11,305 11, % Arauco Coronel 97.1% 94.1% % 73.3% , , % 10,130 9, % Parque Angamos 64.3% - N/A 67.8% - N/A 92,251 - N/A 12,563 - N/A Average Chile 95.9% 96.3% % 90.2% , , % 12,563 19, % MegaPlaza Norte 98.3% 98.7% % 92.6% % % MegaPlaza Express Villa 97.4% 96.1% % 83.4% % % Larcomar 80.4% 95.0% -1, % 76.4% 947 1, % % Parque Lambramani 91.3% 91.1% % 64.8% % % MegaPlaza Chimbote 91.9% 93.2% % 75.9% % % MegaPlaza Express Villa El Salvador 92.9% 96.6% % 77.8% % % MegaPlaza Express Chincha 94.0% 76.3% 1, % 67.2% % % InOutlet (Premium Outlets) and Viamix (Strip Centers) 77.8% 76.6% % 72.9% % % MegaPlaza Cañete 100.0% 97.2% % 86.5% % % MegaPlaza Express Barranca 83.5% 94.7% -1, % 71.8% % % MegaPlaza Pisco 100.0% 95.0% % 86.6% % % El Quinde Cajamarca 93.7% 80.7% 1, % 75.4% % % El Quinde Ica 98.7% 98.6% % 99.1% % % Plaza Jesus María 38.4% 38.4% % % 9, N/A % MegaPlaza Express Jaén 94.0% 82.8% 1, % 56.2% % % MegaPlaza Huaral 79.2% 65.8% 1, % 57.8% % % MegaPlaza Villa El Salvador II 84.3% - N/A -76.3% - N/A N/A 17 - N/A Average Peru 90.9% 90.2% % 82.0% % % Parque Arboleda 96.5% 93.8% % 87.7% , , % 52,664 42, % Parque Caracolí 87.5% 86.4% % 74.2% , , % 56,526 38, % Parque La Colina 92.5% 90.1% % 87.0% , , % 95,410 83, % Premium Outlet Arauco (Sopó) 45.8% - N/A 38.5% - N/A 324,983 - N/A 24,438 - N/A Average Colombia 88.3% 90.1% % 85.0% , , % 70,497 59, % 24 Fuente: Parque Arauco

25 LAST TWELVE MONTHS PROPERTY LEVEL RESULTS Chile in MCLP/ Peru in MPEN GLA Tenant Sales Revenues NOI / Colombia in MCOP Chg. % LTM3Q18 LTM3Q17 Chg. % LTM3Q18 LTM3Q17 Chg. % LTM3Q18 LTM3Q17 Chg. % Parque Arauco Kennedy 111, , % 386, , % 45,873 44, % 45,413 43, % Arauco Maipú 72,500 74, % 199, , % 14,964 14, % 14,631 14, % Arauco Chillán 35,000 32, % 86,503 86, % 6,571 6, % 5,489 5, % Arauco Estación 67,000 66, % 122, , % 15,853 15, % 13,793 14, % Arauco San Antonio 28,500 28, % 45,539 42, % 4,633 4, % 3,238 3, % Arauco Express (Stripcenters Chile) 33,000 33, % 47,144 35, % 5,144 4, % 3,258 3, % Arauco Premium Outlets 47,000 47, % 105,329 99, % 9,610 8, % 7,646 7, % Arauco Quilicura 32,000 32, % 55,571 54, % 4,344 4, % 3,650 3, % Arauco Coronel 30,000 30, % 50,033 34, % 3,474 2, % 2,851 1, % Parque Angamos 10,500 - N/A N/A N/A 86 - N/A Total Chile 466, , % 1,099,821 1,093, % 110, , % 100,055 95, % MegaPlaza Norte 109, , % 1,315,390 1,264, % 96,826 93, % 88,890 84, % MegaPlaza Express Villa 8,000 8, % 86,205 80, % 5,939 5, % 5,082 4, % Larcomar 27,000 26, % 256, , % 39,005 37, % 31,935 26, % Parque Lambramani 30,000 29, % 137, , % 10,961 11, % 6,867 5, % MegaPlaza Chimbote 28,000 28, % 257, , % 12,647 13, % 10,529 11, % MegaPlaza Express Villa El Salvador 9,000 9, % 57,549 64, % 5,534 5, % 4,011 4, % MegaPlaza Express Chincha 10,500 9, % 32,505 30, % 4,101 4, % 2,875 2, % InOutlet (Premium Outlets) and Viamix (Strip Centers) 25,000 23, % 158, , % 18,310 15, % 14,547 12, % MegaPlaza Cañete 16,500 16, % 124, , % 6,397 6, % 5,059 5, % MegaPlaza Express Barranca 9,500 10, % 47,075 47, % 4,847 5, % 3,456 3, % MegaPlaza Pisco 14,500 14, % 95,487 86, % 6,381 6, % 5,203 5, % El Quinde Cajamarca 32,500 31, % 143, , % 14,905 14, % 11,035 9, % El Quinde Ica 36,500 36, % 245, , % 21,617 20, % 21,058 18, % Plaza Jesus María 14,500 14, % 0 0 N/A 1,550 2, % (553) (1,393) -60.3% MegaPlaza Express Jaén 14,500 14, % 94,072 75, % 4,637 3, % 2,791 2, % MegaPlaza Huaral 14,000 9, % 29,063 13, % 2,467 1, % 1, % MegaPlaza Villa El Salvador II 9,000 - N/A 20,364 - N/A 1,347 - N/A (731) - N/A Total Peru 408, , % 3,100,997 2,868, % 257, , % 213, , % Parque Arboleda 41,000 41, % 244, , % 26,831 24, % 21,505 19, % Parque Caracolí 38,500 38, % 161, , % 22,076 18, % 10,983 12, % Parque La Colina 62,500 62, % 511, , % 66,490 41, % 62,212 37, % Premium Outlet Arauco (Sopó) 13,500 - N/A 15,462 - N/A 1,133 - N/A N/A Total Colombia 155, , % 933, , % 116,530 84, % 94,602 69, % 25 Source: Parque Arauco

26 RESULTADOS LAST TWELVE ANUALES MONTHS PROPERTY LEVEL RESULTS Chile in CLP/ Peru in PEN Occupancy NOI Margin Monthly tenant sales per m² Monthly revenues per m² / Colombia in COP Chg. p.b. LTM3Q18 LTM3Q17 Chg. p.b. LTM3Q18 LTM3Q17 Chg. % LTM3Q18 LTM3Q17 Chg. % Parque Arauco Kennedy 99.1% 97.1% % 96.1% , , % 34,658 33, % Arauco Maipu 98.8% 99.3% % 99.3% , , % 17,158 16, % Arauco Chillan 93.0% 99.4% % 82.7% , , % 17,228 16, % Arauco Estacion 96.0% 97.6% % 91.7% , , % 20,384 20, % Arauco San Antonio 95.5% 95.7% % 72.6% , , % 14,165 13, % Arauco Express (Strip Centers Chile) 89.3% 81.9% % 68.6% , , % 15,335 15, % Arauco Premium Outlets 94.7% 94.9% % 79.1% , , % 17,860 17, % Arauco Quilicura 99.7% 100.0% % 79.9% , , % 11,332 11, % Arauco Coronel 97.1% 94.1% % 70.9% 1, ,839 - N/A 10,056 - N/A Parque Angamos 64.3% - N/A 67.8% - N/A - - N/A - - N/A Average Chile 95.9% 96.3% % 90.3% , , % 22,541 21, % MegaPlaza Norte 98.3% 98.7% % 89.5% 227 1, % % MegaPlaza Express Villa 97.4% 96.1% % 83.6% % % Larcomar 80.4% 95.0% -1, % 70.6% 1, % % Parque Lambramani 91.3% 91.1% % 50.9% 1, % % MegaPlaza Chimbote 91.9% 93.2% % 87.7% % % MegaPlaza Express Villa El Salvador 92.9% 96.6% % 80.6% % % MegaPlaza Express Chincha 94.0% 76.3% 1,779 70,1% 66,9% % % InOutlet (Premium Outlets) and Viamix (Strip Centers) 77.8% 76.6% % 77.4% % % MegaPlaza Cañete 100.0% 97.2% % 77.7% % % MegaPlaza Express Barranca 83.5% 94.7% -1, % 73.9% % % MegaPlaza Pisco 100.0% 95.0% % 82.4% % % El Quinde Cajamarca 93.7% 80.7% 1, % 70.5% % % El Quinde Ica 98.7% 98.6% % 93.0% % % Plaza Jesus Maria 38.4% 38.4% % -48.0% 1, N/A % MegaPlaza Express Jaen 94.0% 82.8% 1, % 54.6% % % MegaPlaza Huaral 79.2% 65.8% 1, % 60.4% % % MegaPlaza Villa El Salvador II 84.3% - N/A -54,2% - N/A N/A 38 - N/A Average Peru 90.9% 90.2% 65 82,9% 79,4% % % Parque Arboleda 96.5% 93.8% % 81.8% , , % 57,284 52, % Parque Caracolí 87.5% 86.4% % 69.1% , , % 55,255 46, % Parque La Colina 92.5% 90.1% N/A 93.6% - N/A 736,211 1,120,599 N/A 95,695,88 167,606, % Premium Outlet Arauco (Sopó) 45.8% - N/A 22.3% - N/A - - N/A - - N/A Average Colombia 88.3% 90.1% % 82.4% , , % 72,673 67, % 26 Source: Parque Arauco

27 CHILE ARAUCO CHILLÁN / CHILLÁN ARAUCO MAIPÚ / SANTIAGO ARAUCO QUILICURA / SANTIAGO With the opening of our Parque Angamos neighborhood mall, Parque Arauco Chile increased its GLA in 2.4% during this third quarter. Tenant sales decreased 2.2%, while revenues and EBITDA showed positive changes of 4.4% and 5.1%, respectively. During the quarter we continued the construction of the Parque Arauco Kennedy expansion, which considering the two phases will add 21,000 m 2 of retail GLA, the largest convention center in a hotel in the country as well as a Hilton by Hilton hotel with 401 rooms. Additionally, we have continued with the construction of the Bazar Gourmet in the mall, which is located next to the luxury district. This new food concept will open during the fourth quarter of We highlight the following activities and services during the third quarter of the year:» Entertainment activities including chess tournaments, Zumba fitness classes and a gastronomy festival that also included chilean handicraft.» Celebration of Día del Niño (Children s Day) with various activities, music and an artistic intervention in several of our shopping malls in Chile, including Parque Arauco Kennedy, Arauco Estación and Arauco Maipú.» Blood donation campaign for public hospitals, performed at Arauco Estación.» At Arauco San Antonio, there was a young adult orchestra performance, along with a lyrical song workshop and demonstration.» We welcomed a new food truck section at Arauco Quilicura. In sustainability matters during the third quarter, we highlight the following:» Our participation in a reforestation project for the chilean native forest in September.» Parque Arauco is the only real estate company in Latinamerica to be in the Dow Jones Sustainability Index for emerging markets, for three years in a row.

28 Peru LARCOMAR / LIMA EL QUINDE CAJAMARCA/ CAJAMARCA With the opening of MegaPlaza Villa El Salvador II and Viamix Colonial, our GLA in Perú increased 4.5% in comparison with the third quarter of In addition, in this quarter tenant sales grew 5.6%, revenues increased 2.5% and our EBITDA improved by 5.9%. As usual, in this quarter we also performed several activities in our shopping malls, providing community services and having new openings. Among them, we highlight the following:» In July, we celebrated the independence holiday in several shopping malls with live cultural shows, artisan good fairs and typical food.»this quarter we welcomed several new stores at Larcomar, including Ripcurl, Brooks Brothers and Strata, among others.» In August, we had a campaign at Quinde Ica mall for the Mes del Niño (Children s Month) celebration, complete with activities like a mini chefs workshop, dance exhibitions, thematic shows and photo sessions with our favorite caracters from the movie Coco. In sustainability matters during the third quarter, we highlight the following:» We launched an entrepreneurship contest at Lambramani mall. This contest reinforces innovation as a driving principle of new business and supports local entrepreneurs.

29 COLOMBIA PARQUE LA COLINA / BOGOTÁ PARQUE CARACOLÍ / BUCARAMANGA The GLA in Colombia increased 9.5% compared to the third quarter of 2017, due to the opening of Arauco Premium Outlet in Sopó toward the end of Tenant sales increased 17.3%, revenue 26.8% and EBITDA 22.2% during the third quarter of This quarter in Parque La Colina we celebrated Father s Day, the World Cup, winter vacations and a month dedicated to mothers, which meant a large variety of activites and events. As part of the Mother s Month celebration there was a contest to win one of four clothing and accessory collections from the mall. Additionally, there was a children s toy and clothing drive for donation to the Casa de la Madre y el Niño Foundation. Finally, we welcomed several new stores to Parque La Colina, including Rosen and Semolina. In sustainability matters during the third quarter, several malls, including Parque Arboleda and Parque La Colina, focused on social responsability education through the campaign Sumémonos por un mundo mejor. During the entire month of August they promoted our committment to sustainability and among other activities, hosted a sustainable entrepreneurs fair and conversation series of talks led by local experts who gave their advice on how we can all do our part to better the environment. At our Premium Outlet Sopó, we began a new Farmer s Market style initiative, an open-air market with products for sale, directly from small and local producers.

30 FUTURE DEVELOPMENTS 2018 AND ONWARDS New Projects Type Country Format Estimated Opening Date Total GLA m² % ownership Total GLA m² Total Investment Local Currency¹ Total Investment MUSD 2 Arauco Express Coquimbo Development Chile Strip Center 4Q18 3,000 53% 1, ,000 6 La Molina Development Peru Vecinal TBD 19, % 19, , Subtotal 22,500 21, Expansions Type Country Format Estimated Opening Date Total GLA m² % ownership Total GLA m² Total Investment Local Currency¹ Total Investment MUSD 2 Parque Arauco Kennedy - Phase 1³ Expansion Chile Regional/ Hotel 2H21 11, % 11,000 5,355, Parque Arauco Kennedy - Phase 2 4 Expansion Chile Regional/Tower 2H24 10, % 10,000 2,200, Bazar Gourmet- Parque Arauco Kennedy Expansion Chile Regional 4Q18 N/A 100% N/A 120,000 5 Arauco Express Ossandón Expansion Chile Strip Center 1H19 1,000 53% ,500 3 Arauco Premium Outlet Buenaventura Expansion Chile Outlet 2H19 2, % 2,000 97,000 4 Subtotal 24,000 23, New Projects Type Country Format MegaPlaza 5 Minority Interest Estimated Date Total GLA m² % ownership Total GLA m² Total Investment Local Currency¹ Total Investment MUSD 2 Peru Various 2H19 N/A 50% 121, , Subtotal - 121, Projects Incorporated in 2018 Type Country Format Opening Date Total GLA m² % ownership Total GLA m² Total Investment Local Currency¹ Total Investment MUSD 2 Viamix Colonial Development Peru Neighborhood 1Q18 3, % 3,000 25,000 7 El Quinde Cajamarca Expansion Peru Regional 2Q18 2, % 2,500 40, Parque Angamos Development Chile Neighborhood 3Q18 10,500 55% 5, , Subtotal 16,000 11, Total 62, , Remaining to invest 472 1) Projects in Chile in UF, in Peru in ThPEN, in Colombia in MCOP 2) Considering the exchange rate as of September 30, 2018: ,27 CLP/UF, 660,42 CLP/USD, 2.963,85 COP/USD, 3,30 PEN/USD. 3) In addition to the 11,000 m 2, this expansion includes a 401 room Hilton by Hilton Hotel and the largest hotel convention center in Santiago. 4) This project also includes a 15,000 m 2 tower. 5)In accordance with the relevant event reported on June 1, 2018, this is realted to a binding agreement with the Wiese Group for a business combination. The execution of this agreement requires various restructurings and legal matters,

31 FUTURE DEVELOPMENTS 2018 ONWARDS WE ANNOUNCED A NEW EXPANSION AT PARQUE ARAUCO KENNEDY Phase I Details Construction start: 2017 Opening date: 2021 Hotel Operator Investment: UF 5,355,000 Additional GLA: 11,000 m 2 5 start hotel: Hilton by Hilton Rooms: 401 Construction Company: 31 Convention Center: 3,000 m 2 Additional parking: 700 New flagship Falabella with 25,000 m 2 Phase II Details Construction start: 2021 Opening date: 2024 Investment: UF 2,200,000 Additional GLA: 10,000 m 2 Tower: 15,000 m 2

32 LAND BANK Name m 2 % ownership Total cost (local currency) 1 Total cost (MUSD) 2 Quilicura 25, % 78,000 3 Buenaventura 115, % 455, Chicureo 47, % 206,000 9 Los Andes 39, % 117,000 5 Otros en Chile 55, % 445, Total Chile 283, % 1,301, Chimbote 42, % 18,000 5 Talara 30, % 9,400 3 Ica 12, % 13,500 4 Chiclayo 6, % 6,300 2 Pomalca Chiclayo 45, % 6,565 2 Lambayeque- MegaPlaza 25,260 50% 18,900 6 San Juan de Lurigancho- MegaPlaza 80,000 50% 10,415 3 Otros MegaPlaza 106,157 50% 85, Total Peru 349,043 70% 168, Neiva 49, % 18,000 6 Valledupar 46, % 30, Barranquilla 56, % 76, Total Colombia 151, % 124, Total 784,531 87% ) Landbank in Chile in UF, in Peru in ThPEN, in Colombia in MCOP. 2) Considering the exchange rate as of September 30, 2018: ,27 CLP/UF, 660,42 CLP/USD, 2.963,85 COP/USD, 3,30 PEN/USD.

33 EBITDA Margin and IFRS 15 EBITDA MARGIN CASE STUDY The EBITDA margin of a company is the proportion of the revenues obtained as part of the EBITDA, simply calculated as the EBITDA divided by the revenues, for a given period. However, even though the indicator is simple and direct in its calculation, it does not always make for a direct comparison between companies, since the EBITDA margin and any resulting conclusions depend on the accounting policies considered in the financial statements. Therfore, it is important to be familiar with the accounting practices used to allocate revenues, expenses and costs, when evaluating the EBITDA margin presented. 33 Accounting Principles Under IFRS 15 The accounting principles under IFRS 15, establish that the company can act in different ways when generating its revenues: - As a Principal Entity: The entity controls the goods or service before their transference to the client. It can carry out the service by itself or by contracting a third party. - As an Agent: The nature of the entity s work consists of organizing the supply of goods or services carried out by another entity. Under this scheme, IFRS indicates that those revenues related to an activity in which the entity participates as the Principal, it should present the revenues apart from the costs and expenses involved in the activity. In contrast, in the cases in which the entity participates as an Agent, the revenue is presented net from the cost of the activity that generate that revenue. PARQUE CARACOLÍ / BUCARAMANGA

34 Example Calucation of EBITDA Margin One clear example in a shopping center operator acting as an Agent is with regard to the Common Expenses. Common Expenses are costs that the operator assumes to ensure the proper functioning of the shopping center, including costs of basic services such as water, plus maintenance and security costs, among others. These common expenses are recovered by the operator through a monthly charge, along with the rent charged under the lease contract of the store. Since the company acts as an Agent in the activities related with the common expense, not directly controlling the related costs, it should present the revenue from those charges net of its costs, thereby reducing its level of revenues, costs and expenses of the period. To better understand how this is relevant when evaluating EBITDA margins, the following is an example comparison of two different companies, both of which have the same revenues, costs and expenses: EBITDA MARGIN CASE STUDY Financial Statements before offsetting revenues and common expenses company A company B Revenue from Rent $80 $75 Revenue for Common Area $20 $25 Total Revenue $100 $100 Costs and Expenses for Common Area $20 $25 Other Costs and Expenses $20 $15 Total Costs and Expenses $ 40 $ Total Revenue $100 Considering rent as well as income from common area expenses Costs and Expenses $40 Considering the costs and expenses related to the shopping center operation, as well as costs associated with the common areas. EBITDA $60 = $100 - $40 EBITDA margin 60% = $60 / $100 EBITDA $ 60 $ 60 EBITDA margin 60% 60% Even when both companies have equal revenues and costs, their financial statements, under IFRS, would look as follows: However, company A has common expenses for $20, while company B has common expenses $25:

35 EBITDA MARGIN CASE STUDY Financial Statements after offsetting revenues and common expenses company A company B Revenue from Rent $ 80 $ 75 Total Revenue $ 80 $ 75 Other Costs and Expenses $ 20 $ 15 Total Costs and Expenses $ 20 $ 15 Therefore, companies that present the same EBITDA and EBITDA margin may have different levels of common expenses, not allowing for a real analysis of the operator s efficiency with regard to the expense. In our opinion, the EBITDA margin is useful when comparing assets within the same company. Nevertheless, it can lead to misleading conclusions when comparing between companies with different commercial policies, those of which affect the ability to recoup certain expenses and ultimately affect its EBITDA margin, as we have explained. 35 EBITDA $ 60 $ 60 EBITDA margin 75% 80% We observe that both companies present an identical EBITDA, as in the previous scenario, prior to offsetting revenues from common expenses. However, since revenues are presented separately from the common expenses costs, the companies show different EBITDA margins. Company A has a 75% EBITDA margin, while company B has 80%. Consequently, mainly due to the different allocation of revenues, costs and expenses, two companies that have the same performance, could present different EBITDA margins under IFRS. A second consideration regarding this issue is the fact that common expenses are cancelled out in the financial statements. They are not visible, thereby complicating the analysis of the company. As we see in the examples above, the revenue and cost related to common expenses offset each other, leaving only the resulting figures from activities where the company act as a Principal entity.

36 CONSOLIDATED FINANCIAL STATEMENTS BALANCE SHEET Assets CURRENT ASSETS ThCh$ ThCh$ Cash and cash equivalents 312,615, ,599,021 Other current financial assets 221,738 2,315 Other current non financial assets 27,670,887 26,932,053 Trade accounts receivable and other receivables 24,999,850 28,990,488 Accounts receivable from related compies 2,200 3,963,250 Current tax receivable 6,278,179 7,365,468 Total current operating assets 371,788, ,852,595 Non-current assets held for sale - 16,414,324 Total current assets 371,788, ,266,919 NON-CURRENT ASSETS Other non current financial assets 5,127,869 4,566,674 Other non current non financial assets 36,205,868 35,964,751 Non current accounts receivable 55,264 56,940 Non current acounts receivable to rel. entities Share of profit (loss) of associates accounted 6,329,474 1,699,267 86,492, ,466,856 Intangible assets excluding surplus value 15,396,016 14,136,589 Surplus value 15,736,400 14,881,438 Property, plant and equipment 11,737,164 10,222,368 Investment properties 1,678,702,155 1,604,493,473 Deferred tax assets 50,407,668 48,818,915 Total non-current assets 1,906,190,473 1,848,307,271 Total assets 2,277,978,732 2,078,574,190 Liabilities and Equity CURRENT LIABLITIES ThCh$ ThCh$ Other current financial liabilities 82,495,300 33,137,658 Commercial credits and other accounts payable 22,803,527 41,203,712 Current accounts payable to related parties - 2,676,599 Current provisions 1,237,028 1,895,703 Current tax liabilities 14,070,053 3,401,183 Current provisions for employees 3,564,039 3,701,448 Other current non financial liabilities 7,903,364 8,389,473 Total current liabilities 132,073,311 94,405,776 NON CURRENT LIABILITIES Other non current financial liabilities 887,274, ,778,444 Non current accounts payable to related entities 3,009,089 - Deferred tax liabilities 203,337, ,594,351 Other non current non financial liabilities 15,340,099 17,026,200 Total non current liabilities 1,108,961,266 1,043,398,995 Total liabilities 1,241,034,577 1,137,804,771 EQUITY Issued share capital 420,016, ,047,240 Accumulated earnings (losses) 465,103, ,884,616 Premium on new issued shares 289, ,355 Other reserves -4,555,179 (35,046,341) Equity attributable to shareholders of the company 880,854, ,174,870 Minority interest 156,089, ,594,549 Total equity 1,036,944, ,769,419 TOTAL LIABILITIES AND EQUITY 2,277,978,732 2,078,574,190 36

37 CONSOLIDATED FINANCIAL STATEMENTS CASH FLOW STATEMENT ThCh$ 3Q18 3Q17 Chg.% 9M18 9M17 Chg.% LTM 3Q18 LTM 3Q17 Chg.% Net cash flow from operating activities Receipts from sales of goods and services 74,205,154 67,791, % 219,438, ,954, % 290,758, ,551, % Payments to suppliers for goods and services (22,450,051) (20,547,807) 9.3% (66,300,821) (66,470,002) -0.3% (91,909,720) (90,059,135) 2.1% Payments on behalf of employees (4,527,016) (4,357,894) 3.9% (15,844,526) (16,607,786) -4.6% (19,921,085) (21,228,574) -6.2% Income taxes refunded (paid) (2,724,329) (3,058,767) -10.9% (9,912,383) (11,945,096) -17.0% (13,177,154) (14,723,873) -10.5% Other inputs (outputs) in cash (10,367,797) (7,445,783) 39.2% (25,518,393) (22,819,743) 11.8% (33,611,554) (28,611,772) 17.5% Net cash flow from operating activities 34,135,961 32,381, % 101,862,442 86,111, % 132,138, ,928, % Net cash flow from investment activities Cash flows used for acquiring subsidiaries or other businesses 0 (1,815,818) % 0 (16,688,223) % 0 (18,753,082) % 37 Cash flows used for acquiring non-controlling interests 0 0 N/A 0 0 N/A 0 (1,400,324) % Other payments to acquire joint ventures 0 0 N/A 0 0 N/A 0 (0) % Inflows from long-term assets, classified as investment activities 478,370 0 N/A 50,508,331 0 N/A 50,508,331 0 N/A Interests received 0 0 N/A 0 0 N/A 0 0 N/A Purchases of property, plant and equipment 1,617,181 1,070, % 4,863,262 3,995, % 5,735,902 5,853, % Purchase of intangible assets (131,742) 1, % (405,729) (366,684) 10.6% (1,141,002) (667,696) 70.9% Dividends received (616,122) (353,995) 74.0% (1,874,004) (433,604) 332.2% (2,281,842) (1,482,242) 53.9% Dividendos recibidos % 33,857,834 6,659, % 33,857,834 8,062, % Purchase of other long-term assets (13,553,625) (17,574,069) -22.9% (38,705,815) (63,043,608) -38.6% (69,112,099) (98,883,300) -30.1% Taxes on gains, classified as investment activities (5,888) 0 N/A (621,635) 0 N/A (621,635) 0 N/A Other inputs (outputs) of cash, classified as investment activities (1,734,469) (469,763) 269.2% (4,619,259) (53,663) % (2,748,205) 1,165, % Net cash flow from investment activities (13,946,295) (19,141,740) -27.1% 43,002,985 (69,930,662) % 14,197,285 (106,104,838) %

38 CONSOLIDATED FINANCIAL STATEMENTS CASH FLOW STATEMENT ThCh$ 3Q18 3Q17 Chg.% 9M18 9M17 Chg.% LTM 3Q18 LTM 3Q17 Chg.% Net cash flow from financing activities Share issuance 4,525,223 3,884, % 4,840,883 4,161, % 4,840,883 4,298, % Proceeds from long term debt 0 2,024, % 0 26,153, % 49,054,747 44,703, % Loans to related entities 1,878,839 (1,893,225) % 65,772,769 2,995, % 62,777,378 11,782, % Total proceeds from loans 1,878, , % 65,772,769 29,149, % 111,832,125 56,486, % Cash flow from issuance of public debt 134,950,685 (1,443,726) % 131,233,572 31,517, % 128,545, ,622, % Loan payments (49,411,763) (2,584,727) % (120,788,134) (71,207,285) 69.6% (117,271,079) (148,088,010) -20.8% Financial leasing payments (882,311) (460,561) 91.6% (2,117,435) (2,066,229) 2.5% (4,910,593) (4,597,115) 6.8% Dividends paid (2,924) (38,170) -92.3% (34,788,734) (31,840,098) 9.3% (34,727,987) (31,856,208) 9.0% Interest paid (7,363,227) ( ) -7.8% (25,127,989) (27,022,018) -7.0% (29,527,668) ( ) -14.4% Other inputs (outputs) in cash (19,745) (3,179) 521.1% (466,709) 68, % (483,676) 64, % Net cash flow from financing activities 83,674,777 (8,499,209) % 18,558,223 (67,236,536) % 58,297,284 (2,544,639) % Net increase (decrease) in cash and cash equivalents 103,864,443 4,740, % 163,423,650 (51,055,452) % 204,633,130 6,278, % Effects of variation in the exchange rate on cash and cash equivalents 747,255 (212,753) % 2,592, , % (462,193) 1,461, % Increase (decrease) in net cash and cash equivalent 104,611,698 4,527, % 166,016,384 (50,364,236) % 204,170,937 7,740, % Cash and cash equivalents at beginning of period 208,003, ,916, % 146,599, ,808, % 108,444, ,704, % Cash and cash equivalents at end of period 312,615, ,444, % 312,615, ,444, % 312,615, ,444, % 38

39 MARKET RISK ANALYSIS The following are potential risks that the Company may face: Economic and market conditions could adversely impact our operations, causing sales to fall. However, 86% of our lease income is from fixed leases (14% variable leases). The company is also diversifying its shopping center formats and types of real estate property. The interest rates in the countries where we operate could spike, causing the value of our assets to fall and making our financial liabilities more expensive. However, we have matched the average term of our tenants leases with the average term of our financial liabilities. Also, 90% of our liabilities are fixed-rate. We operate our shopping centers in a competitive environment that could lead to an over-supply of shopping centers and, as a result, diminished revenue. However, our long-term contracts have an average term of 5.8 years and 86% of our lease income comes from fixed leases (14% from variable leases). The company is also diversifying its shopping center formats and types of real estate property. We fund all our projects with equal portions of debt and capital. Consequently, our financing costs could increase, driving down results. However, we have a responsible financing strategy and have raised capital when necessary to remain faithful to the company s financing policies. Our debt is in each country s local currency, mostly at fixed interest rates. Additionally, the average duration of our debt is similar to the average duration of our tenants contracts. Consumer purchasing is proving to be an omni-channel process. Consequently, despite the growing importance of online sales, physical sales still play a key role. Given the risk that shopping center sales could fall as a result of e-commerce, we have diversified into different formats, including outlets and new, non-retail projects. Furthermore, our shopping centers are, for the most part, the predominant center in their neighborhoods. Lastly, we are working to enhance the buying experience at our shopping centers, leveraging technology such as smart parking, wifi and applications, among others. 39 ARAUCO PREMIUM OUTLET /BUENAVENTURA

40 GLOSSARY Adjusted FFO Margin - AFFO / revenues AFFO -Adjusted Funds From Operations: Net Profit - Depreciation & Amortization - Other Income/ expenses - Share of Profit (Loss) of Associates Accounted - Foreign Exchange Differences - Income (Loss) for indexed assets and liabilities - Gains (losses) from the difference between the previous book value and the fair value of financial assets - Deferred tax+ Associates accounted Adjusted FFO Controlling Adjusted FFO-AFFO attributable to the shareholders of the company Controlling FFO -FFO attributable to the shareholders of the company EBITDA - Earnings Before Income Tax Depreciation and Amortization: Revenues + Cost of Sales + Administration Expenses - Depreciation and Amortization EBITDA margin -EBITDA divided by revenues EPS -Earnings Per Share: Net income attributable to the equity holders of the company/weighted average number of shares outstanding FFO -Funds From Operations: Net Profit - Depreciation & Amortization - Share of Profit (Loss) of Associates Accounted + Associates Accounted FFO GLA -Gross Leasable Area. Equivalent to the sum of the areas available for lease Green Field Projects - Organic development of new shopping centers Landbank -Land held by the company for future development LTM -Refers to information from the last twelve months Monthly Revenues / m 2 -Monthly revenues divided by GLA weighted by average occupancy for the period Monthly Sales/m2 -Monthly tenant sales divided by GLA weighted y average occupancy for the period Neighborhood Mall -A shopping mall with a GLA between 6,000 and 20,000 m 2 Net income margin -Net profit / revenues NOI -Net Operating Income: Revenues + Cost of Sales + Administration Expenses - Depreciation & Amortization + Associates accounted NOI Occupancy -GLA paying rent divided by total GLA Occupancy cost -Minimum rent, plus variable rent, plus common expenses, plus a promotion fund that the tenants pay Parque Arauco divided by the sales of the tenant. Owned GLA -Total GLA weighted by Parque Arauco s interest in the mall Pipeline -Greenfield and expansion projects under development Premium Outlet - Shopping center located outside of the city offering name brand clothing and goods for a reduced price Regional Mall - A shopping mall with a GLA over 20,000 m 2. SSR -Same Store Rent: Percentage change in rent collected from tenants that paid rent in both of the periods compared SSS -Same Store Sales: Percentage change in sales from tenants that reported sales in both of the periods compared Strip Center -A shopping center with a GLA less than 6,000 m 2 Tenant Sales - Tenant sales of the consolidated assets UF -Unidad de Fomento: A chilean currency unit indexed according to inflation daily rcial 40

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