B2W Companhia Digital. Financial statements ITR at March 31, 2017 and independent auditors report on quarterly information

Transcription

1 B2W Companhia Digital and independent auditors report on quarterly information 1

2 Balance Sheet Period ended In thousands of reais KPMG Auditores Independentes Av. Almirante Barroso, 52-4º andar Rio de Janeiro/RJ - Brasil Caixa Postal CEP Rio de Janeiro/RJ - Brasil Telefone 55 (21) , Fax 55 (21) Review report on Quarterly Information (A free translation of the original report in Portuguese, as filed with the Brazilian Securities and Exchange Commission (CVM), prepared in accordance with the accounting practices adopted in Brazil, rules of the CVM and the International Financial Reporting Standards - IFRS) To Management and Stockholders of B2W Companhia Digital Rio de Janeiro - RJ Introduction We have reviewed the individual and consolidated interim accounting information of B2W Companhia Digital ( Company ), included in the quarterly information form - ITR for the quarter ended, which comprises the balance sheet as of and the respective statements of operations and comprehensive income (loss) for the three-month periods then ended, changes in shareholders equity and cash flows for the three-month period then ended, including explanatory notes. The Company s Management is responsible for the preparation of the interim accounting information in accordance with the Accounting Pronouncement CPC 21(R1) and the international accounting rule IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board - IASB, as well as the presentation of this information in accordance with the standards issued by the Brazilian Securities and Exchange Commission (CVM), applicable to the preparation of quarterly information - ITR. Our responsibility is to express our conclusion on this interim accounting information based on our review. 2

3 Balance Sheet Period ended In thousands of reais Scope of the review We conducted our review in accordance with Brazilian and International Interim Information Review Standards (NBC TR Revisão de Informações Intermediárias Executada pelo Auditor da Entidade and ISRE Review of Interim Accounting Information Performed by the Independent Auditor of the Entity, respectively). A review of interim information consists of making inquiries primarily of the management responsible for financial and accounting matters and applying analytical procedures and other review procedures. The scope of a review is significantly less than an audit conducted in accordance with auditing standards and, accordingly, it did not enable us to obtain assurance that we were aware of all the significant matters that could have been identified in an audit. Therefore, we do not express an audit opinion. Conclusion on the individual interim accounting information Based on our review, we are not aware of any fact that might lead us to believe that the individual interim accounting information included in the aforementioned quarterly information were not prepared, in all material respects, in accordance with the Accounting Pronouncement CPC 21(R1) applicable to the preparation of the quarterly review - ITR and presented in accordance with the standards issued by the Brazilian Securities and Exchange Commission. Conclusion on the consolidated interim accounting information Based on our review, we are not aware of any fact that might lead us to believe that the consolidated interim accounting information included in the aforementioned quarterly information were not prepared, in all material respects, in accordance with the Accounting Pronouncement CPC 21(R1) and international accounting rule IAS 34, issued by the IASB applicable to the preparation of the quarterly review - ITR, and presented in accordance with the standards issued by the Brazilian Securities and Exchange Commission. Other matters Statements of added value We also reviewed the individual and consolidated Statements of added value (DVA) for the threemonth period ended, prepared under the responsibility of Company s Management, for which presentation is required in the interim information in accordance with the standards issued by the Brazilian Securities and Exchange Commission (CVM) applicable to the preparation of quarterly information - ITR, and considered as supplementary information by IFRS, which does not require the presentation of the statements of added value. These statements were submitted to the same review procedures described previously and, based on our review, we are not aware of any fact that might lead us to believe that they were not prepared, in all material respects, in accordance with the individual and consolidated interim accounting information, taken as a whole. 3

4 Balance Sheet Period ended In thousands of reais Rio de Janeiro, May 5, KPMG Auditores Independentes CRC SP /O-6 F-RJ Original in Portuguese signed by Carla Bellangero Contadora CRC 1SP196751/O-4 4

5 Balance Sheet Period ended In thousands of reais ASSETS 03/31/ 12/31/ 03/31/ 12/31/ CURRENT Cash and cash equivalents 448, , , ,248 Marketable securities 1,432,119 1,452,747 1,752,552 1,742,541 Accounts receivables 550, , , ,083 Inventories 1,212,828 1,518,638 1,238,912 1,541,324 Recoverable taxes 351, , , ,343 Prepaid expenses 30,283 31,793 46,504 51,952 Other current assets 294, , , ,909 Total current assets 4,321,435 4,519,715 4,782,366 4,936,400 NON CURRENT Long-term assets: Marketable securities 37,377 35, Recoverable taxes 1,134,982 1,067,452 1,134,982 1,067,452 Deferred income tax and social contribution 762, , , ,770 Judicial deposits 18,881 17,550 19,027 17,707 Related parties 67,939 62, Other non current assets 67,093 67,188 73,530 73,620 Investments 490, , Fixed assets 501, , , ,290 Intangible 2,363,798 2,375,029 2,873,384 2,885,110 Total non current assets 5,445,310 5,293,048 5,445,714 5,304,949 TOTAL ASSETS 9,766,745 9,812,763 10,228,080 10,241,349 5

6 Balance Sheet Period ended In thousands of reais (continued) LIABILITIES AND SHAREHOLDERS' EQUITY 03/31/ 12/31/ 03/31/ 12/31/ CURRENT Suppliers 1,114,075 1,966,972 1,158,153 2,107,960 Borrowings and financing 504, , , ,129 Debentures 8, , Salaries, provisions and social contributions 37,725 45,717 60,559 65,341 Accounts payable - Business combination 12,935 12,555 17,493 36,229 Taxes payable 19,304 49,840 29,816 68,400 Income tax and social contribution - - 4,113 5,252 Advances received from clients 24,734 35,798 24,734 35,798 Other current liabilities 128, , , ,555 Total current liabilities 1,850,203 2,710,087 2,080,654 3,119,426 NON CURRENT LIABILITIES Long-term liabilities: Borrowings and financing 3,885,052 3,527,560 4,024,770 3,539,288 Debentures 200, , , ,000 Provisions for contingencies 59,584 55, , ,212 Related parties 84, ,064 37,589 81,820 Accounts payable - Business combination 11,590 11,250 24,811 27,395 Other non current liabilities 13,270 16,053 15,123 16,206 Total non current liabilities 4,254,316 4,024,724 4,485,292 4,043,921 SHAREHOLDERS' EQUITY Capital 4,483,041 4,483,041 4,483,041 4,483,041 Advance for future capital increase 752, ,163 - Capital reserve 47,808 38,927 47,808 38,927 Carrying value adjustments (914) (905) (914) (905) Accumulated losses (1,619,872) (1,443,111) (1,619,872) (1,443,111) 3,662,226 3,077,952 3,662,226 3,077,952 Participation of non controllers - - (92) 50 Total shareholders's equity 3,662,226 3,077,952 3,662,134 3,078,002 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 9,766,745 9,812,763 10,228,080 10,241,349 6

7 Statement of Operations Period ended In thousands of reais 03/31/ 03/31/ 03/31/ 03/31/ Net revenue 1,463,089 1,623,866 1,600,654 1,732,581 Cost of goods and services sold (1,114,252) (1,244,014) (1,282,860) (1,409,638) Gross profit 348, , , ,943 Operating income (expenses) Selling expenses (237,491) (239,762) (189,402) (173,978) General and administrative expenses (101,930) (90,607) (109,902) (95,373) Other operating income (expenses) (8,874) (7,981) (6,315) (11,548) Result before financial result ,502 12,175 42,044 Financial revenue 119, , , ,811 Financial expenses (398,304) (366,610) (408,555) (387,400) Financial result (278,893) (239,781) (282,439) (249,589) Equity accounting 6,542 (1,778) - - Loss before income tax and social contribution (271,809) (200,057) (270,264) (207,545) Income tax and social contribution Current - - (4,266) (2,384) Deferred 95,048 67,415 97,627 77,307 Loss of the period (176,761) (132,642) (176,903) (132,622) Atributed to controlling shareholers (176,761) (132,642) (176,761) (132,642) Atributed to non controlling shareholers - - (142) 20 Loss of the period (176,761) (132,642) (176,903) (132,622) 7

8 Statement of Comprehensive Result Period ended In thousands of reais 03/31/ 03/31/ 03/31/ 03/31/ Loss of the period (176,761) (132,642) (176,903) (132,622) Itens to be posteriorly reclassified to the result Accumulated conversion adjustment of foreign investments (9) (480) (9) (480) Total comprehensive result (176,770) (133,122) (176,912) (133,102) Atributed to controlling shareholers (176,770) (133,122) (176,770) (133,122) Atributed to non controlling shareholers - - (142) 20 8

9 Statement of Changes in Shareholders Equity Period ended In thousands of reais Capital Stock Capital Reserve Valuation Adjustment Acumulated losses Non controlling shareholders participation Total Balance at January 1st, 4,483,041 38,927 (905) (1,443,111) 50 3,078,002 Total Comprehensive result Net loss for the period (176,761) (142) (176,903) Foreign exchange variation of offshore investments (9) (9) Contribution of shareholders and distributions to shareholders Advance for future capital increase 752, ,163 Stock option plan 8,881 8,881 Balance at 4,483, ,971 (914) (1,619,872) (92) 3,662,134 Capital Valuation Acumulated shareholders Capital Stock Reserve Adjustment losses participation Total Balance at January 1st, 3,635,970 27,691 (368) (957,251) 91 2,706,133 Total Comprehensive result Net loss for the period (132,642) 20 (132,622) Increase of participation in controlled companies - Foreign exchange variation of offshore investments (480) (480) Contribution of shareholders and distributions to shareholders Stock option plan 2,683 2,683 Balance at December 31, 3,635,970 30,374 (848) (1,089,893) 111 2,575,714 9

10 Statement of Cash Flows Period ended In thousands of reais Cash flows from operating activities 03/31/ 03/31/ 03/31/ 03/31/ Loss of the period (176,761) (132,642) (176,903) (132,622) Adjustments to net loss: Depreciation and amortization 89,148 72,094 91,227 73,576 Deferred income tax and social contribution (95,048) (67,415) (97,627) (77,307) Interest and indexation and exchange variances 135, , , ,095 Equity accounting (6,542) 1, Others (4,026) (14,983) (2,959) (21,985) Adjusted loss (58,023) (23,831) (47,721) (34,243) Decrease (increase) in operational assets: Accounts receivable 158, , , ,821 Inventories 305, , , ,154 Recoverable taxes (894) (12,584) 2,528 (16,161) Prepaid expenses 1,510 5,509 5,448 7,712 Judicial deposits (1,331) 1,155 (1,320) 1,179 Other accounts receivable (current and non-current) (49,777) (46,910) (51,857) (48,477) 413, , , ,228 Decrease (increase) in operational liabilities: Suppliers (915,146) (877,322) (1,012,056) (906,565) Payroll and related charges (7,992) (5,178) (4,782) (4,589) Taxes and contributions (current and non current) (30,536) 3,625 (40,388) 908 Other accounts payable (current and non current) (34,016) (43,606) (81,767) (78,792) Accounts payble affiliate companies (134,618) (87,783) (44,231) (13,966) (1,122,308) (1,010,264) (1,183,224) (1,003,004) Interest Expense on Loans and Debentures (69,119) (44,481) (75,047) (48,767) Paid Income Tax and Social Contribution - - 1,804 1,303 Net cash provided by (used in) operational activities (835,857) (455,524) (905,371) (449,483) Cash flow from investing activities: Marketable securities 18, ,915 (10,011) 503,214 Fixed assets (1,029) (15,083) (1,550) (17,344) Intangible (63,837) (112,161) (63,880) (112,959) Value paid for the acquisition of subsidiaries - - (23,099) (200) Net cash used in investment activities (46,137) 528,671 (98,540) 372,711 Fluxo de caixa das atividades de financiamento Borrowings and financing 496,000 1, ,971 6,858 Payments of borrowings and financing (140,410) (208,986) (111,392) (65,743) Capital increase 752, ,163 - Net cash provided by financing activities 1,107,753 (207,128) 1,229,742 (58,885) Increase (decrease) in cash and cash equivalents 225,759 (133,981) 225,831 (135,657) Opening balance of cash and cash equivalents 223, , , ,424 Closing balance of cash and cash equivalents 448, , , ,767 Increase in cash and cash equivalents 225,759 (133,981) 225,831 (135,657) 10

11 Statement of Value Added Period ended 31, In thousands of reais 03/31/ 03/31/ 03/31/ 03/31/ Revenues Sales of goods and services 1,794,215 1,990,665 1,976,300 2,152,901 Other revenues (306) (263) (347) (263) Reversal (allowance) for doubtful accounts (9,638) (2,481) (11,098) 6,454 1,784,271 1,987,921 1,964,855 2,159,092 Goods acquired from third parties Costs of goods and services sold (1,337,774) (1,587,366) (1,549,839) (1,792,499) Materials, energy, third party services and others (151,571) (134,610) (65,736) (61,755) Lost / Recuperation of asset value - 12,063-12,080 (1,489,345) (1,709,913) (1,615,575) (1,842,174) Gross value added 294, , , ,918 Depreciation and amortization (89,148) (72,094) (91,227) (73,576) Net value added generated 205, , , ,342 Value added received in transfer Equity result 6,542 (1,778) - - Financial income 119, , , ,811 Total value added to distribute 331, , , ,153 Distribution of value added Employees Direct compensation 53,937 80,181 77,746 97,574 Benefits 21,616 17,290 27,157 21,324 Guarantee fund for years of service 6,860 9,014 9,197 10,686 82, , , ,584 Taxes and contributions Federal (93,828) (57,446) (94,246) (60,968) State 88,496 13,118 92,900 16,311 Municipal 1,626 2,324 3,392 3,661 (3,706) (42,004) 2,046 (40,996) Compensation of third party capital Interest 398, , , ,400 Rentals 31,191 32,213 36,080 37,484 Others , , , ,187 Remuneration of own capital Loss for the period (176,761) (132,642) (176,761) (132,642) Participation of non controlling shareholers in retained profits - - (142) 20 (176,761) (132,642) (176,903) (132,622) Distribution of value added 331, , , ,153 11

12 Explanatory Notes to the Individual and Quarterly Information In thousands of reais, except when otherwise mentioned 1 Operational context B2W - Companhia Digital ("B2W" or "Company ), with head offices at Rua Sacadura Cabral, 102, in the City and State of Rio de Janeiro, incorporated through the merger of Americanas.com S.A. - Comércio Eletrônico (Americanas.com) and Submarino S.A., with shares traded on the Brazilian Securities, Commodities and Futures Exchange (BM&FBOVESPA), under the ticker symbol BTOW3. B2W is controlled by Lojas Americanas S.A. ("LASA" or ""), an also publicly held company with shares traded on BM&FBOVESPA under the ticker symbols LAME3 - ON and LAME4 - PN. The Company and its subsidiaries are engaged in the following sectors: e-commerce, through its brands, Americanas.com, Submarino, Shoptime and Sou Barato; its consumer finance service platforms, Submarino Finance and Digital Finance; technology platform; logistics, distribution and customer service platform; and its Marketplace. B2W offers technology services through BIT Services, which is the result of the construction of a disruptive, robust and innovative technology platform to support the growth of the Company. On the logistics vertical, B2W offers services on storage, distribution and customer services to its partners through its B2W Fulfillment (BFF) platform. Finally, consumer finance services are another of B2W Digital s platforms, through which the Company offers private label credit cards for its four main brands, Americanas.com, Submarino, Shoptime and Sou Barato. The issue of these individual and consolidated quarterly information was authorized by the Board on May 5th,. 2 Summary of significant accounting policies 2.1 Intermediate financial information The quarterly information, individual and consolidated, are being presented in accordance with the Brazilian Securities Exchange Comission (CVM), with the technical pronouncement CPC 21 (R1) Intermediate Demonstration, issued by Brazilian Accounting Pronouncements Committee (CPC), and with the international rules IAS 34, issued by the International Accounting Standards Board (IASB). 2.2 Accounting practices and policies In the individual and consolidated quarterly information the accounting practices are being presented consistently with the accounting practices adopted in the individual and consolidated financial statements as of December 31,, issued on February 8,. Because of that these individual and consolidated quarterly information should be read together with the information as disclosed in the financial statements for the year ended December 31,. 12

13 2.3 Presentation of segment information The Company's activities are concentrated in the marketing of products and delivery of services by various means of non-presence marketing, especially the Internet. Despite the diversity of products sold and services provided by the Company (e-commerce retail, consumer finance platform; technology platform; logistics, distribution and customer services; and Marketplace), such activities are not controlled and managed by the Management as independent operational segments, as their accompanying results are monitored, tracked and evaluated in an integrated manner. Thus, Management understands that the Company is organized, basically, as a single business unit. The Company also operates in the area of financial products through the subsidiary Submarino Finance Promotora de Crédito Ltda., which, by not achieving the minimum quantitative and qualitative parameters, is not being presented as a separate operating segment. 2.4 Explanatory notes not presented The individual and consolidated quarterly information is presented in accordance with CPC 21 (R1), IAS 34 and the regulations issued by CVM. Based on this and management's evaluation of the material impacts of the information to be disclosed, the explanatory notes described below are not being presented. The others are being presented so as to allow the complete understanding of this individual and consolidated quarterly information when read in conjunction with the accompanying notes disclosed in the financial statements of December 31,. Explanatory notes not presented: Quality of financial assets credit; Advance revenue; Insurance coverage; 2.5 Present value adjustment The operations of long-term purchases, primarily from suppliers of goods and services, were adjusted to their present value taking into account the maturities of these transactions. The average rate used of 12.69% per annum (p.a.) at (14.06% p.a. at December 31, ), was based on funding for the respective periods. The constitution of the present value adjustment of purchases is recorded under "Inventory" (Note 9) and the counterpart entries are shown under the heading "Financial Expenses", on Note 26, through the maturity date, in the case of suppliers, and for the realization of inventories based on the amounts recorded under the heading "Cost of goods sold and services provided." The operations of long-term transactions, at the same previously-agreed prices as represented, mainly, through credit card installment sales, were brought to their present value taking into account the payment deadlines of the aforementioned transactions. The average rate used of 13.69% p.a. as of (15.35% p.a. on December 31, ), was based on receivable discounts on their respective base dates. On the identified adjustments, the tax rates were applied on the respective base of dates. The present value adjustment of installment sales has a counterpart entry under the heading 13

14 "Accounts receivable from clients" (Note 8) and its realization is recorded under "Financial revenues" in note 26 through the maturity date. 3 Critical accounting estimates and judgment Accounting estimates and judgment are continually evaluated, and are based on historical experience and various other factors, including expectations of future events, which are believed to be reasonable under the circumstances. Until the period of 3 months, ended on there have not occurred changes in the accounting assumptions and estimates in relation to the financial statements disclosed at December 31,. 4 Management of financial risk 4.1 Financial risk factors In the normal course of business, the Company and its affiliates are exposed to market risks related to the fluctuation of interest rates and exchange variations, as well as credit risk on its installment sales and liquidity risk. Under monitoring carried out by its officers and management, and supervised by the Board of Directors, the Company and its affiliates use hedge instruments to minimize exposure to these risks. These administrators determine what strategies are to be adopted and Management contracts appropriate hedge instruments for each circumstance and inherent risk. The Company and its affiliates have no term contracts, options, swap options, zero cost collars, flexible options, derivatives built into other products, operations structured with derivatives and "exotic derivatives." The Company and its affiliates do not operate using derivative financial instruments for speculative purposes, thereby reaffirming its commitment to conservative policies for cash management, in relation to financial liabilities or available resources. (a) Market risk (i) Exchange rate risk The Company and its subsidiaries make use of derivatives, such as traditional swaps, for the purpose of canceling exchange losses resulting from sharp devaluations of the Real (R$) against foreign currency denominated funding. On, the position of these derivative financial instruments was the following: Traditional swaps (registered in the borrowings and financing account): The counterparts to these traditional swaps are the financial institutions that provide borrowings in foreign currency (American dollars). These CDI-referenced swaps aim to cancel exchange risk, transforming the cost of the debt (Note 17) to local currency and interest rates, at 121.5% to 139.0% of the CDI. These contracts, at, amounted to a reference value of R$ 1,046,000 for the (R$ 866,324 in the ). These operations are matched in terms of amount, terms, and interest rates. The Company always seeks to liquidate such contracts, together with the respective borrowings that are the subject of the hedge transactions simultaneously. There 14

15 are no contractual clauses for margin calls in this type of transaction. December 31, December 31, Amortized cost 955, ,025 1,000, ,430 Hedge object (debt) Adjusted for the fair value of applicable risks (998,561) (770,955) (1,044,686) (818,064) (43,323) (29,930) (44,574) (31,634) Swaps Active position Amortized cost (955,238) (741,025) (1,000,112) (786,430) (Dollar + Pre) Fair value 998, ,955 1,044, ,064 43,323 29,930 44,574 31,634 Passive position (% CDI) Amortized cost (1,095,919) (854,222) (1,145,042) (901,410) Fair value 1,139, ,921 1,190, ,824 44,011 6,699 45,292 8,414 44,011 6,699 45,292 8,414 Considering that the Company's exposure to the risk of wide swings in currency exchange rates is mitigated by traditional swap operations, contracted for exchange protection purposes and, therefore, simultaneously with the respective foreign currency borrowings, the change in the rate of the US dollar compared to the real due to the current market conditions does not produce any significant impacts on the Company's financial information. (ii) Interest rate risk The Company and its subsidiaries use resources produced by operational activities to manage its operations, as well as to guarantee investments and growth. To meet the cash requirements for growth, the Company and its subsidiaries obtain borrowings and financing from Brazil's principal financial institutions, and raises funds through debentures, which is substantially (around 60% of total) indexed to the variation of the Interbank Deposit Certificate (CDI). Relevant fluctuations in the CDI (see sensitivity analysis in item (d) below) raise the possibility of inherent risk. Financial investment policies indexed by the CDI partially mitigate this effect. 15

16 (b) (c) Credit risk Credit risk is managed at the corporate level. Credit risk stems from cash and cash equivalents, derivative financial instruments, deposits in banks and other financial institutions as well as exposure to client credit. With regard to banks and other financial institutions, the individual risk limits are determined based on internal or external classifications according to the limits set by the Board of Directors. The use of credit limits is regularly monitored. Sales to retail clients are settled in cash or through the main credit cards existing in the market. The credit risk is minimized by the fact that approximately 75% of the Company's sales and those of its subsidiaries are conducted through credit cards administered by the main credit card operators, which have excellent levels of risk classification. The Company and its subsidiaries maintain provisions for doubtful accounts at an amount that is considered by Management sufficient to cover possible losses on its receivables. Liquidity risk Management continuously monitors forecasts for the liquidity requirements of the Company in order to ensure that it has sufficient cash to satisfy its operating needs. This forecast takes into consideration plans for financing the Company's debt, compliance with clauses, compliance with internal targets for the asset balance quotient and, if applicable, external or legal regulatory requirements - for example, currency restrictions. The Treasury invests excess cash in interest-bearing bank accounts, term deposits, short-term deposits and securities, choosing instruments with appropriate maturities with sufficient liquidity that offer a sufficient margin as determined by the aforementioned forecasts. The following table analyzes the non-derivative financial liabilities of the Group and the derivative financial liabilities that are settled on a liquid basis by the Group, through common maturity periods that correspond to the period remaining between the date of the calculation of the net equity balance and the contracted date of maturity. Derivative financial liabilities are included in the analysis if their maturities are essential for an understanding of the cash flows. Less than one year Between one and two years Between two and five years Parent Company More than five years At Suppliers 1,114, Borrowings, financing and debentures 541,006 1,754,023 2,559, ,706 At December 31, Suppliers 1,966, Borrowings, financing and debentures 477,986 1,509,281 2,404, ,127 16

17 Less than one year Between one and two years Between two and five years More than five years At Suppliers 1,158, Borrowings, financing and debentures 616,343 2,373,653 2,559, ,706 At December 31, Suppliers 2,107, Borrowings, financing and debentures 563,043 2,058,312 2,404, ,127 (d) Analysis of additional sensitivity Sensitivity analysis of swap transactions Swap transactions recorded by the Company and its affiliates were contracted, simultaneously, for foreign currency loan transactions, contemplating terms, rates, and equivalent values, exchanging the borrowings' exchange exposure for exposure to the CDI. At the Company's gross debt, in U.S. dollars, was R$ 955,238 () and R$ 1,000,112 (). According to data drawn from the Brazilian Central Bank ("Relatório Focus") April 20, market expectations were indicating an exchange rate for the end of the year (probable scenario) of R$ /US$ compared to R$ /US$ at. Scenarios I and II were estimated with a deterioration from 25% to 50%, respectively. Above the probable expectation, as shown in the table below: Operation Risk Probable scenario Scenario I - Deterioration of 25% Scenario II - Deterioration of 50% Dollar Exchange rate at March 31, Estimated exchange rate at December 31, Foreign currency borrowings (variation US$) 18, , ,477 Swaps (Long position in foreign currency) (variation US$) (18,572) (262,024) (505,477) 17

18 Net effect Zero Zero Zero Operation Risk Probable scenario Scenario I - Deterioration of 25% Scenario II - Deterioration of 50% Dollar Exchange rate at March 31, Estimated exchange rate at December 31, Foreign currency borrowings Swaps (Long position in foreign currency) (variation US$) 19, , ,222 (variation US$) (19,444) (274,333) (529,222) Net effect Zero Zero Zero 18

19 CDI rate sensitivity analysis The Company and its affiliates maintain a large part of their debt and cash and equivalents indexed to the variation of the CDI (considering the exchange of debts in foreign currency for variation in the CDI with traditional swaps). As of, the Company () had net debt of R$ 2,679,797 (net cash of R$ 2,465,150 at December 31, ), which represented the borrowings, financing and debentures, net cash and negotiable securities. In the, the net cash was R$ 2,604,621 (R$ 2,299,390 at December 31, ). According to data from the Brazilian Central Bank ("Relatório Focus") at Apryl 20,, market expectations were indicating an effective average CDI rate of 8.48% (probable scenario) for the calendar year, against the effective rate of 12.13% as applied in. In addition, Management ran sensitivity tests for adverse scenarios, CDI rate deterioration at 25% or 50% above the probable scenario (Management's opinion), as shown below: Operation Probable scenario Scenario I - Deterioration of 25% Scenario II - Deterioration of 50% CDI effective annual interest rate on March 31, - % 12.13% 12.13% 12.13% Net debt 2,679,797 2,679,797 2,679,797 CDI estimated annual interest rate in - % 8.48% 10.60% 12.72% Annual effect on net debt: Reduction (97,813) (41,001) - Increase ,811 Scenario I - Scenario II - Operation Probable scenario Deterioration of 25% Deterioration of 50% CDI effective annual interest rate on March 31, - % 12.13% 12.13% 12.13% Net debt 2,604,621 2,604,621 2,604,621 CDI estimated annual interest rate in - % 8.48% 10.60% 12.72% Annual effect on net debt: Reduction (95,069) (39,851) - Increase ,367 19

20 4.2 Capital management The goal of the Company and its subsidiaries with regard to capital management is to ensure the continuity of its operations, to offer a return to shareholders and benefits to other stakeholders, as well as maintaining the ideal capital structure to minimize associated costs. The Company monitors the levels of its indebtedness through the Net Debt/EBITDA ratio, which in its understanding represents the most appropriate manner to present the debt metric, because it reflects consolidated net financial obligations requiring immediate cash for payments, considering its operating cash generation. 4.3 Fair value estimate It is assumed that the book value of the balances of client accounts receivable and suppliers accounts payable, minus impairment in the case of accounts receivable, are close to their fair value. The fair value of financial liabilities, for disclosure purposes, is estimated using discounted contractual future cash flows at existing market interest rates, which are available to the Group through similar financial instruments. The Group applies CPC 46/IFRS 13 to the financial instruments measured in the balance sheet at fair value, which requires disclosure of the fair value measurements by level in the following hierarchy: Price quotes (unadjusted) in asset markets for identical assets and liabilities (Level 1). Insertions different from the price quotes negotiated in active market included in Level 1 that are observed for assets or liabilities, whether directly (that is, as prices) or indirectly (that is, price derivatives) (Level 2). Insertions for assets or liabilities that are not based on data adopted by the market (that is, non-observable insertions) (Level 3). The following table presents the Group's assets and liabilities measured by fair value ats of. 20

21 Level 1 Level 2 Level 3 Total balance Assets Fair value through results Investment Fund in Credit Rights - FIDC 18, , ,218 Bank Deposit Certificates - CDB - 238, ,255 Other marketable securities - 1,337,079-1,337,079 Total assets 18,628 1,733,924-1,752,552 Liabilities Fair value through results Borrowings and financing (Foreign currency) - 1,000,112-1,000,112 Derivatives used for hedge - swap - 144, ,930 Total liabilities - 1,145,042-1,145,042 The following table presents the Group's assets and liabilities measured by fair value at December 31,, Level 1 Level 2 Level 3 Total balance Assets Investment Fund in Credit Rights - FIDC 15,491 11,823-27,314 Bank Deposit Certificates - CDB - 385, ,763 Other marketable securities - 1,329,464-1,329,464 Total assets 15,491 1,727,050-1,742,541 Liabilities Fair value through results Borrowings and financing (Foreign currency) - 786, ,430 Derivatives used for hedge - swap - 114, ,980 Total liabilities - 901, ,410 There are no relevant financial assets and liabilities subject to the netting agreement. 21

22 5 Financial instruments by category At Loans and Receivables Fair Value Through Results Assets, according to the balance sheet Marketable securities - 1,752,552 1,752,552 Clients accounts receivable and other 923, ,034 accounts Cash and cash equivalents 4, , , ,983 2,197,682 3,125,665 Total At Fair Value Through Results Other Financial Liabilities Liabilities, according to the balance sheet Borrowings National currency - 3,453,819 3,453,819 Foreign currency 1,000,112-1,000,112 Derivatives financial instruments - swap 144, ,930 Suppliers and other liabilities, excluding - 1,403,684 1,403,684 Debentures Borrowings - 208, ,391 1,145,042 5,065,894 6,210,936 At December 31, Loans and Receivables Fair Value Through Results Total Assets, according to the balance sheet Marketable securities - 1,742,541 1,742,541 Clients accounts receivable and other 934, ,992 accounts Cash and cash equivalents 4, , , ,706 1,962,075 2,901,781 At December 31, Fair Value Through Results Other Financial Liabilities Liabilities, according to the balance sheet Borrowings National currency - 3,164,007 3,164,007 Foreign currency 786, ,430 Derivatives financial instruments - swap 114, ,980 Suppliers and other liabilities, excluding - 2,453,542 2,453,542 Debentures Borrowings - 200, , ,410 5,818,311 6,719,721 Total Total 22

23 6 Cash and cash equivalents December 31, December 31, Cash and cash equivalents 3,741 3,578 4,949 4,714 Certificates of bank deposits - CDBs 445, , , , , , , ,248 Certificates of Bank Deposits are remunerated at a rate of up to 102.8% of CDI as of (and of up to 102.8% on December 31, ). CDI s classified as cash have immediate liquidity without risk of value change in the event of early redemption. 7 Marketable Securities December 31, December 31, Fair value through result Investment Fund in Credit Rights - FIDC ,590 11,823 Titles of National Treasure - FIDC ,628 15,491 Bank Deposit Certificates - CDB 204, , , ,763 Committed operations 1,227,212 1,123,447 1,337,079 1,329,464 Junior Quota (FIDC) 37,377 35, ,469,496 1,488,225 1,752,552 1,742,541 Non-current 1,432,119 1,452,747 1,752,552 1,742,541 Current 37,377 35,

24 (a) Fênix Retail Credit Rights Investment Fund The Fênix Fund ("FIDIC FIDC of Retail") has the purpose of acquiring creditor rights owned by Lojas Americanas and the Company ("Grantors"), originating from credit card operations used for the purchase and sale of products and Services between the Grantors and their final customers, whose electronic transactions were captured and processed by their processing systems. The Fenix FIDC of Retail will exist for an indefinite period of time, where every issue / series of shares has a specific maturity date. The structure of the Fênix FIDC of Retail, as well as the remuneration of the quotas is thus represented: Quotas Amount %Fund NAV March, 17 December,16 Benchmark - DI Sênior 11, ,186,924 1,184, % Mezanino ,911 51, % ,238,835 1,236,082 Junior ,295 59, ,301,131 1,295,212 Balance Sheet at and December 31, : December 31, Assets Cash and cash equivalents Marketable securities 357,005 64,205 Accounts receivable 944,374 1,231,261 B2W 468, ,804 Lojas Americanas 475, ,456 Other accounts receivable - 1 Total assets 1,301,415 1,295,489 Liabilities Accounts payable (current) Accounts payable (non-current) 1,238, 835 1,236,082 Shareholders' equity 62,295 59,130 Total liabilities and shareholders' 1,301,415 1,295,489 Income statements for the quarters ended and, respectively: 24

25 Financial Revenues 45,383 47,918 Financial Results (42,218) (45,126) Net Result 3,165 2,792 The FIDC securities portfolio is made up of: National Treasury Bills (LFTN), Bank Deposit Certificates (CDB) and Financial Investment Fund Quotas, which are available at any moment, for acquisition of receivables originating in operations with sellers. (b) Other financial assets The Certificates of Deposit, all from top-ranked financial institutions, are remunerated at a rate of up to 102.8% of the CDI at (up to 102.8% of the CDI at December 31, ). There is no intention to dispose of such securities in a period superior to 1 year, so they are classified in current assets. The committed operations are composed by debentures issued by a top-ranked financial institution, and are recorded at fair value, remunerated up to 101.5% of CDI, parent company and consolidated at (up to 102.0% of the CDI, parent company and consolidated, at December 31, ) and can be traded at any time. Parent Company At January 1, 2,012,198 2,239,205 Additions 891,233 1,349,542 Disposals (1,636,123) (1,940,055) Transfer to cash and cash equivalents 87,299 87,299 At 1,354,607 1,735,991 Additions 4,185,032 5,047,052 Disposals (3,951,088) (4,904,698) Transfer to cash and cash equivalents (135,804) (135,804) At December 31, 1,452,747 1,742,541 Additions 1,640,021 1,978,887 Disposals (1,215,519) (1,523,746) Transfer to cash and cash equivalents (445,130) (445,130) At 1,432,119 1,752,552 25

26 8 Clients accounts receivable December 31, December 31, Credit cards (i) 20,964 54,919 20,967 54,923 FIDC (iv) 468, , , ,805 Other accounts receivable (ii) 77,235 71, , , , , , ,595 Present value adjustments (iii) (675) (2,145) (675) (2,145) Provision for doubtful accounts (15,377) (17,508) (25,884) (26,367) 550, , , ,083 (i) The operations with credit cards can be paid in installments of up to twelve months. The Company's and its subsidiaries' credit risks are minimized as the portfolio receivables are monitored by the credit card management companies. (ii) Other accounts receivable mainly represent sales to companies through corporate transactions, consumer loyalty projects and commercial agreements. (iii) Present value adjustment was calculated on accounts receivable, net of FIDC anticipations. (IV) The Company securitized its credit righs represented by accounts receivable from credit card companies, through the Retail Credit Rights Investment Fund (FIDC), Note 7(a), whose quarterly information are consolidated by the Company. In the parent company, the Company maintained the acknowledgement of the receivable in the amount of R$ 468,787 (R$ 523,804 on December 31, ), as a counterparty to borrowings and financing in non current liabilities, as described in Note

27 Parent December 31, December 31, Falling due 518, , , ,453 Overdue: up to 30 days 18,315 9,173 24,876 17, to 60 days 12,046 5,821 20,896 9, to 90 days 5, ,452 3, to 120 days 2,212 3,347 3,823 4, to 180 days 2,076 3,192 3,483 4,930 > 180 days 8,199 4,217 17,912 18, , , , ,595 The amount of the provision for doubtful accounts considers the average of the effect of losses over the last 180 days, combined with a Management analysis of the probable losses from due and past due accounts. Changes in the provisions for doubtful accounts is shown as follows: Parent Company Balance at January 1, (12,136) (21,725) Reversals 802 7,650 Balance at (11,334) (14,075) Additions (6,174) (12,292) Balance at December 31, (17,508) (26,367) Reversals 2, Balance at (15,377) (25,885) 9 Inventories December 31, December 31, Goods for resale 1,204,551 1,511,657 1,230,635 1,534,343 Supplies and packaging 8,277 6,981 8,277 6,981 1,212,828 1,518,638 1,238,912 1,541,324 27

28 The provision for losses is presented in the above accounts, by its net amount. The movement of the provision for losses is shown as follows: and Balance at January 1, (54,614) Additions (9,339) Balance at 2015 (63,953) Additions (9,264) Balance at December 31, (73,217) Reversals 1,145 Saldo em 31 de março de (72,072) 28

29 10 Recoverable taxes December 31, December 31, Income tax withheld at source 2,687 28,298 9,507 33,969 Social Integration Program (PIS) and Contribution for the financing of social 991, , , ,704 security (COFINS) Taxes on Goods and Services (ICMS) 232, , , ,142 Deferred income tax ("IRPJ") and Contribution 252, , , ,113 Others 8,335 8,321 12,037 9,867 1,486,879 1,485,985 1,506,267 1,508,795 Current portion 351, , , ,343 Non-current portion 1,134,982 1,067,452 1,134,982 1,067,452 Considering the taxation rules currently in effect, the expectation of the main recoverable taxes is as follows: - Social Integration Program tax (PIS) and Contribution for the financing of social security (COFINS): The Company expects to recover R$ 61,454 in and R$ 929,728 in up to 4 years by offsetting other federal taxes. Additionally, the Company filed a refund claim with the Federal Revenue Service totaling R$ 404, , , , , , ,182 - Tax on goods and services (ICMS): The Company expects to recover the ICMS credit with its own operations in the amount of R$ 193,605 in and R$ 38,675 at The Company's management, aiming at the realization of the ICMS credit balance arising from the marketing of goods, conducted technical studies based on the normal course of its business operations for the next fiscal years. The study was based on current operations and future expectations, always backed by the Company s strategic plan of long-term business. 193, , ,280 29

30 - Income tax and social contribution (IRPJ/CSLL): The Company expects to recover R$ 255,082 within 4 years (-2020), by order of restitution and/or compensation with other federal taxes. 131, , , , ,082 30

31 11 Income tax and social contribution (a) Deferred income tax and social contribution March 31, December 31, March 31, Assets December 31, Tax losses 521, , , ,695 Negative bases for social contribution 187, , , ,689 Temporary differences: Contingencies 20,357 19,070 20,357 19,070 Unsettled swaps 15,970 12,376 30,194 26,186 Present value adjustments receivables 46,829 42,078 46,829 42,078 Provision for doubtful accounts 12,845 12,164 16,416 15,241 Provisions for losses on inventories 24,505 24,894 24,505 24,894 Other 204 7,263 8,152 14, , , , ,650 December 31, Liabilities December 31, Capitalization of interest 58,331 60,887 58,331 60,887 Review of the useful life of fixed 7,909 6,517 7,909 6,517 assets Others 1,267 1,076 4,667 4,476 67,507 68,480 70,907 71,880 Net balance 762, , , ,770 For the quarter ended, the company performed better than the business plan realized in the previous year, constituting deferred taxes. The Company's management reiterates confidence in its Business Plan and will continue monitoring internal and external indicators in order to better assess the evolution of its estimates. (b) Expected realization of deferred taxes 31

32 ,367 32, ,857 91, , , , , , , ,536 62, , ,397 32

33 (c) Reconciliation between nominal and effective tax rates The reconciliation between the income tax and social contribution, computed by the nominal and effective rates is demonstrated as follows: December 31, December 31, Losses before income tax and social contribution (271,809) (200,057) (270,264) (207,545) Nominal rate - % 34% 34% 34% 34% 92,415 68,020 91,890 70,565 Effect of (additions) or deductions on net income Participation in controlled and jointy controlled companies 2,224 (605) - - Other permanent deductions (additions), net 409-1,471 4,358 Income tax and social contribution at effective rates 95,048 67,415 93,361 74,923 Current - - (4,266) (2,384) Deferred 95,048 67,415 97,627 77,307 Income tax and social contribution 95,048 67,415 93,361 74,923 Effective rate 35% 34% 35% 34% 33

34 12 Related party transactions Balances Transactions Receivable (payable) Sales Purchases Others Financial Revenue (Expenses) March 31, December 31, March 31, March 31, Operations with Lojas Americanas S.A. (iv) (37,589) (81,820) 120,556 73,038 (56,256) (47,454) (16,067) (19,476) - Rental of headquarters, distribution (2,933) (4,062) (5,106) (9,669) - Goods for resale sale 1,220 2, ,138 - Goods for resale purchase (42,679) (117,426) (56,256) (47,454) - Operations in Kiosks (ii) 6,803 26,454 (10,961) (9,807) -Operations with Click Rodo - 3,587 1, Operations with QSM - 7, ,061 43,900 -Operações with Direct 3,203 - Operations with subsidiaries (ii) 91,437 70,777 (293) (133) B2W Rental 39,267 39,234 Submarino Finance Click Rodo (152) (79) BIT Services (former Ideais) 47,878 27,459 Direct 3,325 3,003 (123) (54) QSM (722) (730) B2W México Infoprice (18) - Others accounts receivable Others accounts payable - (399) Other operations with affiliates (70,729) (129,487) (160,778) (168,863) Transportationd of merchanside Click Rodo 39,13 (3,137) (20,546) (18,233) (46,765) Direct 7 (46,805) (90,547) (135,111) (109,537) Systems development B2W Services (former Uniconsult) (4,627) BIT Services (former Ideais) (20,787) (18,394) (7,434) (7,934) Current Assets 67,939 62,565 Non-Current Liabilities (84,820) (214,064) Debentures (iii) (208,391 (200,762) (7,629) (7,290) BWU (208,391) ) (200,762) (7,629) (7,290) 34

35 march 31, and independente autitors (i) (ii) (iii) (iv) The Company has a contract with its Controlling Shareholder, LASA, to jointly implement actions to increase synergy of its operations with the installation Americanas.com brand kiosks in LASA s commercial premises. Under that agreement, the payments for transactions on the Americanas.com website can also be made by customers in any of the LASA stores cash registers. Refers mainly to reimbursement of expenses and loan agreements and advances for future capital increase. The loan agreements are paid based on the daily CDI factor plus 4%. On December 7, 2010, the Board of Directors approved the first private issue of the Company s simple debentures, not convertible into shares, subordinated, in a single series, totaling R$ 200,000. The issue was not subject to registration with CVM, since the debentures were a private placement without any effort to sell to investors, fully subscribed by BWU Comércio Entretenimento SA, a wholly owned subsidiary of Lojas Americanas S.A. The requirements and characteristics of emissions are listed in Note 18. The Company entered into a license agreement for use of the brand with LASA, through which the license to use the brand Americanas.com and similar brands was granted, exclusively, for the activities included in its corporate bylaws. As established in the referred agreement, the licensing of the brand will be free while the LASA holds a significant equity interest in the Company. 35

36 13 Investments (a) Change in parent company s investments 8M BFF Finance ST Imp. B2W Chile Viajes Argentina QSM Tarkena BIT Services Digital Finance Rental B2W Argentina Mesaexpress Total Balance on January 1, 280,752-58,919 46, ,729 3,979 53, (22,864) ,209 Equity accounting (3,557) 1, (40) (219) 911 (450) (274) 5 (6) (1,556) Conversion adjustment (207) (44) (52) (177) (480) Capital increase - Goodwill in investment acquisition (6,373) (6,373) Added value 6,373 6,373 Added value write-off (220) (220) Balance on 276,988-60,359 46, (123) 12,640 3,529 53, (23,138) ,953 Equity accounting (21,500) 3,604 5,561 3,009 (95) 2,961 2,845 (87) (630) (14) (17) (3,734) Conversion adjustment 470 (9) (85) 219 (73) 522 Capital increase 30,000 22, ,750 60,341 Goodwill in investment acquisition (6,373) (6,373) Added value 6,373 6,373 Added value write-off (669) (669) Investment write-off (139,531) (139,531) Acquisition of equity interest 139, ,531 Investiment Alienation (3,057) (3,057) Tarkena Incorporation (11,192) 11,192-8M Incorporation (146,427) 146,427 - Balance on December 31, - 165,626 65,920 49, , , (23,768) ,356 Conversion adjustment 32 2,345 2,584 (45) 882 1, (143) 3 (6) 6,764 Capital increase (5) (4) (9) Goodwill in investment acquisition - Added value (6,373) (6,373) Added value write-off 6,373 6,373 Investment write-off (222) (222) Conversion adjustment (1,071) (1,071) Balance on - 164,581 68,265 52, , , (23,911) ,818 36