U.S.$800,000,000 4.50% Notes Due 2022

OFFERING MEMORANDUM U.S.$800,000,000

4.50% Notes due 2022 Guaranteed by Bimbo, S.A. de C.V., Barcel, S.A. de C.V., Bimbo Bakeries USA, Inc., Bimbo Foods, Inc. and Earthgrains Bakery Group, Inc. We are offering U.S.$800,000,000, aggregate principal amount of our 4.50% notes due 2022, or the notes. Interest on the notes will accrue at a rate of 4.50% per year. We will pay interest on the notes semi-annually in arrears on January 25 and July 25 of each year, commencing on July 25, 2012. The notes will mature on January 25, 2022. The notes will be our senior obligations and will be guaranteed by certain of our subsidiaries. The notes will rank at least pari passu in right of payment with all of our unsecured and unsubordinated debt, and the guarantees will rank at least pari passu in right of payment with all unsecured and unsubordinated debt of each subsidiary guarantor (in each case, subject to any priority rights pursuant to applicable law). We may redeem the notes in whole or in part at any time at a redemption price equal to the greater of par and a make- whole amount described herein. See “Description of the Notes – Optional Redemption.” In addition, we may redeem the notes, in whole but not in part, at 100% of their principal amount plus accrued interest and additional amounts, if any, upon the occurrence of specified events relating to Mexican tax law, all as described under “Description of the Notes –Redemption.” Application has been made to the Irish Stock Exchange for the notes to be admitted to the Official List and trading on the Global Exchange Market, which is the exchange-regulated market of the Irish Stock Exchange. Investing in the notes involves significant risks. See “Risk Factors” beginning on page 13 for a discussion of certain information that you should consider before investing in the notes.

Price: 99.190% plus accrued interest, if any, from January 25, 2012. THE NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE NATIONAL SECURITIES REGISTRY (REGISTRO NACIONAL DE VALORES) MAINTAINED BY THE MEXICAN NATIONAL BANKING AND SECURITIES COMMISSION (COMISIÓN NACIONAL BANCARIA Y DE VALORES, OR CNBV), AND MAY NOT BE OFFERED OR SOLD PUBLICLY, OR OTHERWISE BE THE SUBJECT OF BROKERAGE ACTIVITIES IN MEXICO, EXCEPT PURSUANT TO AN EXEMPTION UNDER ARTICLE 8 OF THE LEY DEL MERCADO DE VALORES, OR THE MEXICAN SECURITIES MARKET LAW. WE WILL NOTIFY THE CNBV OF THE TERMS AND CONDITIONS OF THIS OFFERING FOR INFORMATIONAL PURPOSES ONLY, AND DELIVERY OR RECEIPT OF SUCH NOTICE DOES NOT CONSTITUTE OR IMPLY A CERTIFICATION AS TO THE INVESTMENT QUALITY OF THE NOTES OR OF OUR SOLVENCY, LIQUIDITY OR CREDIT QUALITY OR THE ACCURACY OR COMPLETENESS OF THE INFORMATION SET FORTH HEREIN. THIS OFFERING MEMORANDUM IS SOLELY OUR RESPONSIBILITY AND HAS NOT BEEN REVIEWED OR AUTHORIZED BY THE CNBV. IN MAKING AN INVESTMENT DECISION, ALL INVESTORS, INCLUDING ANY MEXICAN INVESTOR, WHO MAY ACQUIRE NOTES FROM TIME TO TIME, MUST RELY ON THEIR OWN EXAMINATION OF GRUPO BIMBO, S.A.B. DE C.V. AND THE SUBSIDIARY GUARANTORS. We have not registered the notes under the U.S. Securities Act of 1933, as amended, or the Securities Act, or under any state securities laws. Therefore, we may not offer or sell the notes within the United States to, or for the account or benefit of, any U.S. person unless the offer or sale would qualify for a registration exemption from the Securities Act and applicable state securities laws. Accordingly, we are only offering the notes (1) to qualified institutional buyers (as defined in Rule 144A under the Securities Act) and (2) to non-U.S. persons outside the United States in compliance with Regulation S under the Securities Act. See “Notice to Investors” for additional information about eligible offerees and transfer restrictions. The notes are not being offered to the public within the meaning of Directive 2003/71/EC of the European Union, and this offer is not subject to the obligation to publish a prospectus under that Directive. The notes will be delivered to purchasers in book-entry form through The Depository Trust Company and its direct and indirect participants, including Clearstream Banking, société anonyme and Euroclear S.A./N.V., as operator of the Euroclear System, on or about January 25, 2012. Joint Bookrunners BBVA Citigroup Santander Co-Manager Mitsubishi UFJ Securities

The date of this offering memorandum is January 25, 2012

TABLE OF CONTENTS

Page Market and Industry Information ...... iv Trademarks, Service Marks and Trade Names ...... v Enforceability of Civil Liabilities ...... vi Cautionary Statements Regarding Forward-Looking Statements ...... vii Presentation of Financial and Other Information ...... ix Summary ...... 1 The Offering ...... 6 Summary Consolidated Financial and Other Information ...... 9 Risk Factors ...... 13 Use of Proceeds ...... 23 Exchange Rates ...... 24 Capitalization ...... 25 Selected Consolidated Financial and Other Information ...... 26 Management’s Discussion and Analysis of Financial Condition and Results of Operations ...... 29 Industry ...... 44 Business ...... 49 Management ...... 69 Shareholders ...... 76 Certain Transactions with Related Parties ...... 77 Description of the Notes ...... 79 Form of Notes, Clearing and Settlement ...... 96 Taxation ...... 99 Plan of Distribution ...... 104 Transfer Restrictions ...... 109 Legal Matters ...... 111 Independent Auditors ...... 112 Available Information ...... 113 Summary of Certain Differences Between MFRS and U.S. GAAP/IFRS ...... 114 Index to Financial Statements ...... F-1

You should only rely on the information contained in this offering memorandum. We are responsible for the information contained in this offering memorandum. To the best of our knowledge (having taken all reasonable care to ensure that such is the case) the information contained in this offering memorandum is true and accurate in all material respects and there are no other facts, the omission of which makes this offering memorandum misleading in any material respect. Neither we nor the initial purchasers have authorized anyone to provide you with different information, and neither we nor the initial purchasers take any responsibility for any other information that others may give to you. Neither we nor the initial purchasers are making an offer of the notes in any jurisdiction where the offer is not permitted. You should not assume that the information contained in this offering memorandum is accurate as of any date other than the date on the cover of this offering memorandum regardless of time of delivery or any sale of the notes.

This offering memorandum is based on information provided by us and by other sources we believe to be reliable. This offering memorandum summarizes certain documents and other information, and we refer you to those sources for a more complete understanding of what we discuss in this offering memorandum. The initial purchasers assume no responsibility for, and make no representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this offering memorandum or any other information provided by the issuer. Nothing contained in this offering memorandum is or shall be relied upon as, or a promise or representation by the initial purchasers as to the past or future.

i This offering memorandum does not constitute an offer to sell, or a solicitation of an offer to buy, any notes offered hereby by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation. Neither the delivery of this offering memorandum nor any sale made hereunder shall under any circumstances imply that there has been no change in our affairs or the affairs of our subsidiaries or that the information set forth in this offering memorandum is correct as of any date subsequent to the date of this offering memorandum.

This offering memorandum has been prepared by us solely for use in connection with the proposed offering of the notes. We reserve the right to reject any offer to purchase, in whole or in part, for any reason, or to sell less than all of the notes offered by this offering memorandum. Banco Bilbao Vizcaya Argentaria, S.A., Citigroup Global Markets Inc., Santander Investment Securities Inc. and Mitsubishi UFJ Securities (USA), Inc., will act as initial purchasers with respect to the offering of the notes. This offering memorandum is personal to you and does not constitute an offer to any other person or to the public in general to subscribe for or otherwise acquire the notes. The proposed offering of the notes was authorized by our board of directors on December 13, 2011.

Distribution of this offering memorandum by you to any person other than those persons retained to advise you is unauthorized, and any disclosure of any of the contents of this offering memorandum without our prior written consent is prohibited.

You must (i) comply with all applicable laws and regulations in force in any jurisdiction in connection with the possession or distribution of this offering memorandum and the purchase, offer or sale of the notes, and (ii) obtain any required consent, approval or permission for the purchase, offer or sale by you of the notes under the laws and regulations applicable to you in force in any jurisdiction to which you are subject or in which you make such purchases, offers or sales, and neither we nor the initial purchaser or its agents have any responsibility therefor. See “Notice to Investors” for information concerning some of the transfer restrictions applicable to the notes.

By accepting this offering memorandum you acknowledge that: • you have been afforded an opportunity to request from us, and to review, all additional information considered by you to be necessary to verify the accuracy of, or to supplement, the information contained in this offering memorandum; • you have not relied on the initial purchasers or their respective agents or any person affiliated with the initial purchasers or their respective agents in connection with your investigation of the accuracy of such information or your investment decision; and • no person has been authorized to give any information or to make any representation concerning us or the notes other than those as set forth in this offering memorandum. If given or made, any such other information or representation should not be relied upon as having been authorized by us, the initial purchasers or their respective agents.

In making an investment decision, you must rely on your own examination of our business and the terms of this offering, including the merits and risks involved. The notes have not been recommended by the Securities and Exchange Commission, or the SEC, or any state securities commission or the CNBV, or any other regulatory authority. Furthermore, these authorities have not confirmed the accuracy or determined the adequacy of this offering memorandum. Any representation to the contrary is a criminal offense. In connection with this offering, the initial purchasers may over-allot notes or effect transactions with a view to supporting the market price of the notes at a level higher than that which might otherwise prevail. However, there is no assurance that the initial purchasers will undertake stabilization action at all. Any stabilization action may begin on or after the date on which adequate public disclosure of the terms of the offer of the notes is made and, if begun, may discontinue at any time, but must end no later than 30 days after the issuance of the notes or 60 days after the date of the allotment of the notes.

ii We are relying on an exemption from registration under the Securities Act for offers and sales of securities that do not involve a public offering. The notes may not be transferred or resold except as permitted under the Securities Act and related regulations and applicable state securities laws. In making your purchase, you will be deemed to have made certain acknowledgements, representations and agreements set forth in this offering memorandum under the caption “Transfer Restrictions.” You should be aware that you may be required to bear the financial risks of this investment for an indefinite period of time.

This offering memorandum may only be used for the purpose for which it has been published. Nothing contained in this offering memorandum is, or shall be relied upon as, a promise or representation, whether as to the past or the future.

See “Risk Factors” for a description of certain factors relating to an investment in the notes, including information about our business. None of us, the initial purchasers or any of our or their representatives is making any representation to you regarding the legality of an investment by you under applicable legal investment or similar laws. You should consult with your own advisors as to legal, tax, business, financial and related aspects of a purchase of the notes. The notes will be available initially only in book-entry form. We expect that the notes offered and sold in the United States to qualified institutional buyers, or QIBs, in reliance upon Rule 144A under the Securities Act will be represented by beneficial interests in a single, permanent global note in fully registered form without interest coupons, or the Rule 144A note. We expect that the notes offered and sold outside the United States to non-U.S. persons pursuant to Regulation S under the Securities Act will be represented by beneficial interests in a single, permanent global note in fully registered form without interest coupons, or the Regulation S note and, together with the Rule 144A note, the global notes). The global notes will be deposited with The Depository Trust Company. Notes will be issued in minimum denominations of U.S.$100,000 and integral multiples of U.S.$1,000 in excess thereof. See “Description of the Notes” for further discussion of these matters.

We are not making any representation to any purchaser of the notes regarding the legality of an investment in the notes by such purchaser under any legal investment or other laws or regulations. You should not consider any information in this offering memorandum to be legal, business or tax advice. You should consult your own attorney, business advisor and tax advisor for legal, business and tax advice regarding an investment in the notes.

We have applied to have the notes admitted to listing on the Global Exchange Market of the Irish Stock Exchange. We expect the total fees and expenses in connection with the admission of the notes to trading on the Global Exchange Market to be approximately €2,940.

Application has been made to the Irish Stock Exchange for the approval of this document as Listing Particulars. Application has been made to the Irish Stock Exchange for the notes to be admitted to the Official List and trading on the Global Exchange Market which is the exchange – regulated market of the Irish Stock Exchange. The Global Exchange Market is not a regulated market for the purposes of Directive 2004/39/EC.

Arthur Cox Listing Services Limited is acting solely in its capacity as our listing agent in connection with the notes and is not itself seeking admission of the notes to trading on the Global Exchange Market of the Irish Stock Exchange.

This document is only being distributed and is only directed (i) to persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (or the FSMA) (Financial Promotion) Order 2005, or the Order, or (iii) to high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as Relevant Persons). The notes are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such notes will be engaged in only with, Relevant Persons. Any person who is not a Relevant Person should not act or rely on this document or any of its contents.

iii To the extent that the offer of the notes is made in any European Economic Area, or EEA, member state that has implemented Directive 2003/71/EC (the “Prospectus Directive”) (together with any applicable implementing measures in any member state) before the date of publication of a prospectus in relation to the notes that has been approved by the competent authority in that member state in accordance with the Prospectus Directive (or, where appropriate, published in accordance with the Prospectus Directive and notified to the competent authority in that member state in accordance with the Prospectus Directive), the offer (including any offer pursuant to this document) is only addressed to qualified investors in that member state within the meaning of the Prospectus Directive or has been or will be made otherwise in circumstances that do not require us to publish a prospectus pursuant to the Prospectus Directive.

NOTICE TO NEW HAMPSHIRE RESIDENTS

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY, OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

MARKET AND INDUSTRY INFORMATION

Statements in this offering memorandum with respect to market and other industry data are based on statistics and other information from independent industry publications and reports by research firms or other published independent sources, as well as our own internal studies derived from our review of internal surveys and other independent sources. Although we believe that we have taken reasonable care to ensure that the facts and statistics presented are accurately reproduced from such sources, they have not been independently verified by us, the initial purchasers or our respective advisors and therefore we make no representation as to the accuracy of such facts and statistics, which may not be consistent with other information compiled within or outside the jurisdictions specified.

In addition, we have based certain statements contained in this offering memorandum regarding our industry and our position in the industry on certain assumptions concerning our customers and competitors. These assumptions are based on our experience in the industry, conversations with our principal vendors and our own investigation of market conditions. We cannot assure you as to the accuracy of any such assumptions, and such assumptions may not be indicative of our positions in our industry.

The statements in this offering memorandum with respect to the market and other industry data have been accurately reproduced from independent industry publications and reports by research firms or other published independent sources and, as far as we are aware and are able to ascertain from such sources, no facts have been omitted which would render such information inaccurate or misleading.

iv TRADEMARKS, SERVICE MARKS AND TRADE NAMES

We own or have rights to various trademarks used in our business, including, Bimbo, Oroweat, Arnold, Brownberry, Marinela, Thomas’, Barcel, Sara Lee, Entenmann’s, Ricolino, Tía Rosa, Pullman, Stroehmann, Mrs. Baird’s, Fargo, Freihofer’s, Wonder, Vero, Nutrella, Plus Vita, El Globo, Milpa Real, Lara, Coronado, Earthgrains, Maiers, Ana María, Gabi, La Corona, Del Hogar, Holsum, Heiners, Rainbo, Sunbeam, D’Italiano, Colonial, Firenze, San Luis Sourdough, Saníssimo, Lonchibon, Chick’s, Ball Pack, Monarca, Cena, Sunmaid, Laura, Europa, Tradição, Fuchs, Mamá Inés, Los Sorchantes and El Maestro Cubano. We do not intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.

v ENFORCEABILITY OF CIVIL LIABILITIES

We and certain of our subsidiary guarantors are companies organized and existing under the laws of the United Mexican States, or Mexico. Most of our directors and officers, and most directors and officers of certain of the subsidiary guarantors, reside outside of the United States. A significant portion of our assets and the assets of certain of the subsidiary guarantors are located, and a majority of our revenues and the revenues of certain of the subsidiary guarantors are derived from sources, outside the United States. As a result, it may not be possible for investors to effect service of process upon such persons or entities outside Mexico, as the case may be, or to enforce against such parties any judgment obtained in courts located outside of Mexico predicated on civil liabilities under the laws of jurisdictions other than Mexico, including judgments predicated in the civil liability provisions of the U.S. federal securities laws or other laws of the United States.

We have been advised by our Mexican counsel, Ritch Mueller, S.C. that no treaty exists between the United States and Mexico for the reciprocal enforcement of judgments issued in the other country. Generally, Mexican courts would enforce final judgments rendered in the United States if certain requirements are met, including the review in Mexico of the U.S. judgment to ascertain compliance with certain basic principles of due process and the non-violation of Mexican law or public policy, provided that U.S. courts would grant reciprocal treatment to Mexican judgments. Additionally, there is doubt as to the enforceability, in original actions in Mexican courts, of liabilities predicated, in whole or in part, on U.S. federal securities laws and as to the enforceability in Mexican courts of judgments of U.S. courts obtained in actions predicated on the civil liability provisions of U.S. federal securities laws. See “Risk Factors.”

In the event that proceedings are brought in Mexico seeking to enforce our or our subsidiary guarantors’ obligations in respect of the notes, we would not be required to discharge such obligations in a currency other than the Mexican peso. Pursuant to Mexican law, an obligation in a currency other than the Mexican peso, which is payable in Mexico, may be satisfied in Mexican currency at the rate of exchange in effect on the date on which payment is made. Such rate of exchange is currently determined by Banco de México each business day in Mexico and published the following business – banking day in the Official Gazette of Mexico.

In connection with the issuance of the notes, we have appointed CT Corporation System as our authorized agent upon whom process may be served in connection with any action instituted in any United States federal or state court having subject matter jurisdiction in the Borough of Manhattan in New York arising out of or based upon the indenture governing the notes, the notes or the guarantees of the subsidiary guarantors. See “Description of the Notes.”

vi CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

This offering memorandum contains statements that constitute estimates and forward-looking statements, including but not limited to the sections “Summary,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements appear in a number of places in this offering memorandum and include statements regarding our intent, belief or current expectations, and those of our officers, with respect to (among other things) our financial condition. Our estimates and forward-looking statements are based mainly on current expectations and estimates of future events and trends, which affect, or may affect, our business and results of operations. Although we believe that these estimates and forward-looking statements are based upon reasonable assumptions, they are subject to several risks and uncertainties and are based on information currently available to us.

Our estimates and forward-looking statements may be influenced by, among others, the following factors: • our ability to integrate and benefit from our recent or future acquisitions and strategic alliances; • the effects of the global economic recession; • competition and loss of market share; • our ability to implement our strategy; • the loss of one or more significant customers; • the performance of our customers which are retailers and any preference they give to products of our competitors; • changes in consumer preferences; • risks related to fluctuations in foreign exchange or interest rates and stock market volatility; • disruption of our supply chain; • the buying power of our customers; • increases in commodity or other raw material costs; • the failure of our suppliers to perform in a timely manner; • health and product liability risks related to the food industry; • changes in health-related regulations in the jurisdictions in which we operate; • trade barriers; • the imposition of price controls over our products; • costs, difficulties, uncertainties and regulations related to mergers, acquisitions or joint ventures; • risks inherent in international operations; • health epidemics and other outbreaks in the markets in which we operate; • compliance with health, environmental and other governmental laws and regulations; • deterioration of labor relations with our associates or increase in labor costs; • loss of key personnel; • interruptions or failures in our information technology systems; • increases in our operating costs or our inability to meet efficiency or cost reduction objectives; • possible disruptions to commercial activities due to natural and human-induced disasters, including terrorist activities and armed conflict;

vii • limitation on our access to sources of financing on competitive terms and compliance with covenants; and • other factors, some of which are described under “Risk Factors” and elsewhere in this offering memorandum.

The words “believe,” “may,” “may have,” “would,” “estimate,” “continue,” “anticipate,” “intend,” “hope,” and similar words are intended to identify estimates and forward-looking statements. Estimates and forward- looking statements refer only to the date when they were made, and neither we nor the initial purchasers undertake any obligation to update or review any estimate or forward-looking statement whether as a result of new information, future events or any other factors. Estimates and forward-looking statements involve risks and uncertainties and do not guarantee future performance, as actual results or developments may be substantially different from the expectations described in the forward-looking statements. In light of the risks and uncertainties described above, the events referred to in the estimates and forward-looking statements included in this offering memorandum may or may not occur, and our business performance and results of operations may differ materially from those expressed in our estimates and forward-looking statements, due to factors that include but are not limited to those mentioned above. Investors are warned not to place undue reliance on any estimates or forward-looking statements in making decisions regarding investment in the notes.

viii PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Financial Statements This offering memorandum includes our audited consolidated financial statements as of and for the years ended December 31, 2010 and 2009 stated in Mexican pesos and our unaudited condensed consolidated interim financial statements as of and for the three and nine months ended September 30, 2011 and 2010.

Our audited consolidated financial statements (i) as of and for the years ended December 31, 2010 and 2009, and (ii) our unaudited condensed consolidated interim financial statements as of and for the three and nine months ended September 30, 2011 and 2010 have been prepared in accordance with Mexican Financial Reporting Standards, or MFRS (Normas de Información Financiera), as issued by the Mexican Board for Research and Development of Financial Reporting Standards (Consejo Mexicano para la Investigación y Desarrollo de Normas de Información Financiera, A.C.) or CINIF, which differ in certain significant respects from accounting principles generally accepted in the United States, or U.S. GAAP, and International Financing Reporting Standards, or IFRS, as adopted by the International Accounting Standards Board.

See “Summary of Certain Differences between MFRS and U.S. GAAP/IFRS.” We are not providing any reconciliation to U.S. GAAP or IFRS of our consolidated financial statements or other financial information in this offering memorandum. We cannot assure you that a reconciliation would not identify material quantitative differences between our consolidated financial statements and other financial information as prepared on the basis of MFRS if such information were to be prepared on the basis of U.S. GAAP or IFRS.

Additionally, pursuant to the General Provisions Applicable to Securities Issuers and Other Participants in the Securities Market (Disposiciones de Carácter General Aplicables a las Emisoras de Valores y a Otros Participantes del Mercado de Valores), beginning with the year ending December 31, 2012, Mexican companies with securities listed on a Mexican securities exchange, including Grupo Bimbo, are required to prepare and present financial information in accordance with IFRS. Accordingly, beginning in 2012, we will be required to prepare our consolidated financial statements under IFRS. We are currently in the process of quantifying the effects of the differences between MFRS and IFRS on our consolidated financial information; therefore we are not providing any reconciliation between MFRS and IFRS in this offering memorandum. While our identification and quantification of differences through the date of this offering memorandum identified certain adjustments to our consolidated financial information as presented under MFRS, we do not believe such differences will materially affect our consolidated financial position, financial performance or cash flows. However, as we are still in the conversion process, we cannot assure you that, once completed, our consolidated financial information under IFRS will not differ materially from that reported under MFRS. We are providing certain information regarding our process of adoption below, but we are unable to provide a reliable estimate of the effects of adoption of IFRS on our consolidated financial statements as we are still in the conversion process.

As our consolidated financial statements for the year ending December 31, 2012 will be the first annual financial statements prepared in accordance with IFRS, our date of transition to IFRS will be January 1, 2011. Accordingly, our consolidated financial information for the year ended December 31, 2011 will be part of the period covered by the first IFRS annual financial statements and as of January 1, 2011, we will adopt IFRS 1, First-time Adoption of International Financial Reporting Standards. In accordance with IFRS 1, we will apply the mandatory exceptions and certain of the optional exemptions from full retrospective application of IFRS as described below.

Mandatory Exceptions: • Estimates – Estimates under IFRS at the transition date will be consistent with estimates made as of such date under MFRS, unless there is evidence that those estimates were made in error.

ix • Non-Controlling Interests – We will prospectively apply the guidance with respect to certain recognition and presentation requirements related to non-controlling interests from our date of transition. • Hedge Accounting – We will claim hedge accounting for our derivative financial instruments from the date of transition only if the hedge relationship meets all the hedge accounting criteria required under IFRS.

Optional Exemptions: • Deemed Cost – We plan to elect the option to measure certain items of property, plant and equipment at their revalued amount under MFRS as “deemed cost” under IFRS as of our date of transition. • Employee Benefits – We are electing to recognize all cumulative unrecognized actuarial gains and losses as of our date of transition. • Cumulative Translation Differences – We are electing to set the previously accumulated cumulative translation balance recognized within stockholders’ equity to zero at our transition date. • Business Combinations – We are electing to prospectively apply the guidance in IFRS regarding accounting for business combinations, such that we will not restate the accounting for any business combination that occurred before our transition date.

The information presented above has been prepared based on assumptions our management has made about the standards and interpretations under IFRS that are expected to be effective as of December 31, 2012, as well as the accounting policies management expects to adopt when it prepares its first complete set of IFRS financial statements for the year ending December 31, 2012.

Beginning January 1, 2008, MFRS modified the accounting for the recognition of the effects of inflation and defines two economic environments: (i) an “inflationary environment,” where the cumulative inflation of the three preceding years is 26.0% or more, in which case the effects of inflation should be recognized using the comprehensive method; and (ii) a “non-inflationary environment,” where the cumulative inflation of the three preceding years is less than 26.0%, in which case no inflationary effects should be recognized in the financial statements.

Since the cumulative inflation in Mexico for the three fiscal years prior to those ended December 31, 2010 and 2009 was less than 26%, the economic environment of Grupo Bimbo is considered non-inflationary under MFRS. Inflation rates in Mexico for the years ended December 31, 2010 and 2009 were 4.4% and 3.6%, respectively. For those years, Mexico and the other countries in which we operate where the economic environment was considered non-inflationary represented 97.3% and 94.8%, respectively, of our business in terms of net sales. Accordingly, beginning on January 1, 2008, we discontinued recognition of the effects of inflation in our consolidated financial statements. However, assets, liabilities and stockholders’ equity include inflationary effects recognized through December 31, 2007 for all countries.

In certain countries in which we operate, consisting of Argentina, Costa Rica, Guatemala, Honduras, Nicaragua, Paraguay, Uruguay and Venezuela, cumulative inflation for the three years preceding either 2010 or 2009 or both years was greater than 26%. Accordingly, we continued the recognition of the comprehensive effects of inflation in those countries. Through December 31, 2007 for all entities, and in 2010 and 2009 only for those entities operating in inflationary economic environments, recognition of the effects of inflation results in inflationary gains or losses on non-monetary and monetary items that are presented within equity and within results.

Except as described in this offering memorandum, there has been no material adverse change in our business prospects since December 31, 2010 nor a significant change in our financial or trading position since September 30, 2011.

x Currency Unless otherwise specified, references herein to “U.S. dollars,” “dollars” or “U.S.$” are to United States dollars, the legal currency of the United States; references to “Mexican peso,” “peso,” “pesos” or “Ps.” are to the Mexican peso, the legal currency of Mexico.

This offering memorandum contains translations of various peso amounts into U.S. dollars at specified rates solely for the convenience of the reader. You should understand these translations are not representations that the peso amounts actually represent these U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated. Unless otherwise indicated, we have translated U.S. dollar amounts for the year ended December 31, 2010 and the nine months ended September 30, 2011 in the sections entitled Summary Consolidated Financial and Other Information, and Selected Consolidated Financial and Other Information in this offering memorandum at the exchange rate of Ps.12.3825 to U.S.$1.00 and Ps.13.7701 to U.S.$1.00, respectively, which were the exchange rates published by the Board of Governors of the Federal Reserve System, as certified by the Federal Reserve Bank of New York, expressed in pesos per U.S. dollar on December 30, 2010 and September 30, 2011, respectively.

Rounding Certain figures included in this offering memorandum have been rounded for ease of presentation. Percentage figures included in this offering memorandum have not in all cases been calculated on the basis of such rounded figures but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this offering memorandum may vary from those obtained by performing the same calculations using the figures in our consolidated financial statements. Certain numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them due to rounding.

Industry and Market Data Statements in this offering memorandum with respect to market and other industry data are based on industry sources, such as The Datamonitor Group, or Datamonitor, The Nielsen Company, SymphonyIRI Group and IBISWorld Inc., or IBISWorld, as well as our internal studies. Industry publications and forecasts may state that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of included information. Although we believe the information in this offering memorandum from third-party sources is reliable in all material respects, we have not independently verified such data or ascertained the underlying assumptions relied upon therein.

We track our products through the use of stock-keeping units, or SKUs.

xi SUMMARY

This summary highlights selected information described in greater detail elsewhere in this document. It does not contain all of the information that may be important to you. This offering memorandum describes the terms of the notes that we are offering, as well as information regarding our business and detailed financial information. You should read the entire offering memorandum carefully, including the risk factors and financial statements. The terms “Grupo Bimbo,” “Issuer,” “we,” “us,” and “our” in this offering memorandum refer to Grupo Bimbo, S.A.B. de C.V. together with its subsidiaries on a consolidated basis except as otherwise specified. The term subsidiary guarantors in this offering memorandum refers collectively, to Bimbo S.A. de C.V., or Bimbo, Barcel, S.A. de C.V., or Barcel, Bimbo Bakeries, USA Inc., or Bimbo Bakeries, Bimbo Foods, Inc., or Bimbo Foods, and Earthgrains Bakery Group, Inc., or Earthgrains.

Overview We are one of the largest baked goods companies in the world and one of the largest food companies in the Americas, with a diversified portfolio of over 7,000 products and more than 150 renowned brands, including Bimbo, Oroweat, Arnold, Marinela, Thomas’, Barcel, Sara Lee, Entenmann’s, Ricolino, Tía Rosa, Pullman, Rainbo and Nutrella. We produce, distribute and market a wide variety of baked goods, salted snacks, wheat tortillas, tostadas, confectionery goods and packaged foods. Through brand development, fresh and quality products and continuous innovation, we have established a leading market share in bakery products in the United States, Mexico, most of the Central and South American countries in which we operate, and more recently, in Spain and Portugal. According to Datamonitor and our own market research, as of 2010, we were the number-one or number-two market participant in our primary markets (the United States, Mexico, Central and South America, and Spain) in our bread and rolls and cakes and pastries categories, and one of the leading participants in the cookies, salted snacks, confectionery goods, tostadas and wheat tortillas categories. The shares of Grupo Bimbo, S.A.B. de C.V. are publicly traded in Mexico and listed on the Mexican Stock Exchange under the ticker symbol “BIMBOA.” As of January 2, 2012, our market capitalization was Ps.133,853 million.

Since our formation in 1945, we have expanded broadly through organic growth as well as acquisitions and have experienced significant growth in our business over the last few years. From 2005 to 2010, our EBITDA increased from Ps.7,191 million to Ps.15,468 million (in nominal terms) at a compounded annual growth rate, or CAGR, of 16.6%. Also, from 2005 to 2010, our net sales grew in nominal terms at a CAGR of 15.9%, fueled by a CAGR of 28.7% in the United States, 7.7% in Mexico and 29.0% in Central and South America, the increase in the United States driven in part by our acquisition of Weston Foods Inc., or WFI, in January 2009. Following our acquisition of WFI in 2009, we became the largest baked goods market participant in the United States, where we believe we have renowned brands in every market segment of the baking industry. Consistent with our continued growth strategy, on November 6, 2011, we completed the acquisition of Earthgrains Bakery Group, Inc., or Earthgrains, Sara Lee Corporation’s North American fresh bakery business, and on December 5, 2011, the acquisition of Bimbo, S.A. Sociedad Unipersonal and Earthgrains European Investments B.V., or Bimbo Iberia, Sara Lee Corporation’s fresh bakery business in Spain and Portugal. With these acquisitions, we have further consolidated our penetration in the United States and gained access to an entry point to the Iberian market through a well-established baked goods business, see “Business – Recent Developments.”

We operate in 19 countries, including the United States, Mexico, most of Central and South America, Spain and, to a lesser extent, Portugal and China. Currently, we operate 155 plants worldwide, with the capacity to produce and distribute commercial quantities of a variety of products in our primary markets. To ensure the freshness and quality of our products, we have developed an extensive direct-distribution network, which fields one of the largest sales fleets in the Americas. As of December 31, 2011, our direct-distribution network consisted of approximately 50,000 distribution routes, spread across more than 1,600 distribution centers and reaching more than two million points of sale. We believe that this network is one of our key competitive advantages.

1 For the year ended December 31, 2010, we reported net sales and EBITDA of Ps.117.2 billion (U.S.$9,462 million) and Ps.15.5 billion (U.S.$1,249 million), respectively. For this period, our operations in the United States accounted for 41% and 34% of our net sales and EBITDA, respectively, and our operations in Mexico accounted for 49% and 62% of our net sales and EBITDA, respectively.

Our Strengths We have grown rapidly over the last five years and we believe our business strengths will allow us to continue to grow and successfully fulfill our strategy: • Leading Market Position. We are one of the largest baked goods companies in the world and one of the largest food companies in the Americas, with a diversified portfolio of approximately 7,000 products and more than 150 renowned brands, which allows us to reach all market categories in most of the countries in which we operate. We are the number-one or number-two market participant in our primary markets (the United States, Mexico, Central and South America and Spain) in our bread and rolls and cakes and pastries categories, and one of the leading participants in the cookies, salted snacks, confectionery goods, tostadas and wheat tortillas categories. Our other product lines are also top players in their respective markets. For example, in the United States, our packaged bread, muffins and bagels are purchased by approximately 73.8% of the households and Thomas’ is a highly recognized brand in the English muffins subcategory. In Mexico, Marinela is the market leader in the cakes and pastries category, and Barcel and Ricolino are the number-two market participants in the salted snacks and fragmented confectionery market, respectively. • Strong Brand Recognition. Our brands are leaders in market recognition in the United States, Mexico, Central and South America, Spain and Portugal. We believe our understanding of the needs and preferences of our consumers allows us to offer them superior quality products at competitive prices. We believe our strong brands give us a competitive advantage and allow us to more effectively leverage our new product launches in the markets in which we operate. Through the acquisition of WFI, Dulces Vero, Fargo, Earthgrains, and Bimbo Iberia, we have significantly strengthened our brand portfolio in the United States, Mexico, Argentina, Spain and Portugal, with brands including Thomas’, Arnold, Entenmann’s, Vero, Fargo, Lactal, Sara Lee, Earthgrains, Sunbeam, Rainbo, Silueta, Martínez and Eagle. Each of our brands is targeted to a specific audience and supported by a comprehensive marketing plan. Some of our brand symbols, such as the Bimbo bear, the Gansito goose and the Paleta Payaso clown have developed iconic status and are immediately recognizable to millions of consumers. • Extensive Direct-Distribution Network. We have developed an extensive direct-distribution network, which fields one of the largest sales fleets in the Americas and represents a major competitive advantage. Our network allows us to distribute products from our 155 plants, 1,600 distribution centers and warehouses to more than two million points of sale every day to ensure the freshness and quality of our products and to meet the needs of every type of customer from hypermarkets to small convenience stores. We also maintain a highly efficient and sophisticated logistics operation to address distribution requirements across the markets we serve. Through the acquisitions of WFI and Earthgrains, we significantly extended and leveraged our distribution network in the United States. We have also developed strong relationships with our customers that enable us to tailor our approach and response to their diverse and changing needs, including with respect to frequency of delivery, in a cost-effective manner. We believe this results in strong customer loyalty. • Market Intelligence and Consumer Satisfaction. We offer our consumers, through our different brands, a wide variety of baked goods spanning a broad range of product types, pricing levels, flavors and sizes. We frequently expand and create innovative product lines to address specific needs and desires of consumers, based on a unique understanding of their needs and preferences in the markets in which we operate. We have gained this unique understanding by continuously conducting market research

2 and retrieving and analyzing key information from our consumers, including through the use of sophisticated technology by our sales force. Our market intelligence allows us to target the right products to each point of sale at the right time. We believe we are the leading innovator within our product categories and have consistently introduced new products that have been well received by consumers. • Experienced Management Team. Our strong management team has proven industry expertise, with an average of 26 years with us and over 366 years of collective experience in the baked goods industry. It has successfully developed and consolidated our market leadership by focusing on our baked goods business and by their effective and rapid response to the constantly changing consumer demands and competitive environment in the markets in which we operate. They have completed and integrated 38 acquisitions over the past ten years and disseminated innovative ideas and best practices in manufacturing and distribution across Grupo Bimbo. • Strong Corporate Culture with a Commitment to Social and Environmental Responsibility. We place great emphasis on our relationship with our associates and are strongly committed to developing and supporting socially responsible and environmentally sustainable initiatives. We view workforce satisfaction and an active corporate social responsibility as essential to the development of a strong corporate culture and customer loyalty. For example, as part of our sustainability strategies, we have made arrangements to consume most of the energy required by our production plants in Mexico from a 90 megawatt wind farm project in the state of Oaxaca, Mexico, known as “Piedra Larga,” estimated to be completed in 2012. Once this project is completed, we will substantially reduce our environmental impact by consuming approximately 50% of our current global energy needs from renewable sources. In addition to our sustainable development efforts, we continuously introduce innovative products that offer healthy choices to our customers. For example, we have engaged in efforts to eliminate trans fatty acids from our products. In recognition of our transnational campaign to promote the benefits of whole grains, in February 2011 we received the WGC Global Award by the Whole Grains Council.

3 Our packaged bread is found in virtually every household in Mexico. We believe that this experience provides a platform for us to develop new product lines under our existing brands as well as entirely new categories. As we expand into new markets, we expect to increase the recognition of our existing brands in those markets, including our Bimbo brand in the United States and Europe, and strengthen our brand portfolio with new brands targeted to those markets. • Increase Market Penetration. To meet the needs of each of our customer segments, we use a range of analytical tools to divide regions by distribution channel, size, brand and products and continuously develop new channels. Our recent market penetration efforts have resulted in customer base growth in almost every segment in Mexico, increased penetration of the United States convenience store channel and significant growth of our Central and South American customer base. We intend to continue our efforts to increase market penetration, expand our product base and enhance our brand recognition in the markets in which we have gained entrance. For example, in 2010, our customer base in Central and South America increased by approximately 64,000 customers. Building on this success, we believe that the strength of our brands and the reach of our distribution network provide a major opportunity for increased market penetration, including into the market for baked goods in the United States, Central and South America and the Iberian market. • Increase Cost Efficiencies Throughout Our Business. Our growth has generated valuable economies of scale in production, distribution and marketing as well as dissemination of best practices and innovation. We remain focused on driving additional efficiencies and improved profitability in our business. In particular, we aim for constant improvement in the use of our production and distribution resources and in periodically reinvesting in our plants and equipment. We strive to maintain a low-cost operation with a focus on environmentally sustainable and effective cost controls. • Continued Growth. We believe that we have benefited from our acquisition and integration of new brands and products and our expansion into new markets. We seek to continue to expand our geographic reach through organic growth and to pursue selective strategic acquisitions in regions and categories that provide a platform for growth and acquisition of strong brands that complement our existing portfolio and increase the penetration of our brands. Given the fragmented nature of the food industry, we will continue to evaluate our expansion through organic growth as well as acquisition opportunities. We believe our presence in various markets around the world will provide a platform for us to identify selective growth opportunities.

Recent Developments • Acquisition of Bimbo Iberia. On December 5, 2011 we completed our acquisition of Bimbo Iberia, Sara Lee Corporation’s fresh bakery business in Spain and Portugal, for an all-cash purchase price of €115 million. • Acquisition of Earthgrains. On November 6, 2011, we completed our acquisition of Earthgrains, Sara Lee Corporation’s North American fresh bakery business from Sara Lee Corporation, one of the largest food processing and distribution companies in the world, for an all-cash purchase price of U.S.$709 million. • Acquisition of Fargo in Argentina. On September 19, 2011, we concluded our acquisition of Compañía de Alimentos Fargo, S.A., or Fargo, following the exercise of a purchase option for the remaining 70% of Fargo’s equity interests.

See “Business – Recent Developments” in this offering memorandum for more information regarding these acquisitions.

4 Corporate Structure Set forth below is our simplified corporate structure:

GRUPO BIMBO, S.A.B. de C.V.

Bimbo, S.A. Barcel, S.A. Gastronomía Avanzada Tía Rosa de Bimbo Holanda SANALP 2005, BBU, Inc. de C.V.* de C.V.* Pastelerías, S.A. de C.V. España B.V. S.L.

Earthgrains Bimbo S.A. Compañía de Bimbo Foods, Bimbo Bakeries Operating companies Bakery Group, Operating companies Sociedad Alimentos Fargo, Inc.* USA, Inc.* including: Inc.* including: Unipersonal S.A. Bimar S.A. Bimbo de Argentina S.A. Bimar de Argentina Bimbo do Brasil Ltda. S.A. Bimbo de Colombia S.A. Bimbo (Beijing) Food Panificadora Bimbo del Bimbo Perú S.A. *Subsidiary guarantors of the notes, Co., Ltd. Productos Sara Lee Bakery See “Description of the Notes – Note Alimetares Iberian Investments, Guarantees” Sociedade S.L.U. Unipessoal, Lda.

Company Information Our principal executive offices are located at Prolongación Paseo de la Reforma No. 1000, Colonia Peña Blanca Santa Fe, Delegación Álvaro Obregón, México D.F., 01210, México, and our telephone number is +52(55) 5268-6600. Our commercial registry (folio mercantil) number is 9506 and our taxpayer’s identification number is GBI 810615 RI8.

5 THE OFFERING

Issuer ...... Grupo Bimbo, S.A.B. de C.V.

Guarantors ...... Thenotes will be irrevocably and unconditionally guaranteed on a senior basis by Bimbo, S.A. de C.V., Barcel, S.A. de C.V., Bimbo Bakeries USA, Inc., Bimbo Foods, Inc. and Earthgrains Bakery Group, Inc. Other existing and future subsidiaries of the issuer may, at our option, become guarantors of the notes. See “Description of the Notes – Note Guarantees.”

Maturity Date ...... January 25, 2022.

Interest ...... Thenotes will bear interest from and including January 25, 2012 at the rate of 4.50% per annum, payable semi-annually in arrears.

Interest Payment Dates ...... January 25 and July 25 of each year, commencing on July 25, 2012.

Ranking ...... Thenotes will be unsecured obligations and will, other than with respect to certain obligations given preferential treatment pursuant to the laws of Mexico, rank pari passu in right of payment with all of our unsecured and unsubordinated indebtedness. The notes will not have the benefit of any collateral securing any of our existing or future secured indebtedness.

Each subsidiary guaranty will be an unsecured obligation and will, other than with respect to certain obligations given preferential treatment pursuant to the laws of Mexico with respect to the Mexican subsidiary guarantors, rank pari passu in right of payment with such subsidiary guarantor’s other existing and future unsecured and unsubordinated indebtedness. The subsidiary guaranties will not have the benefit of any collateral securing any of our existing and future secured indebtedness. See “Risk Factors – Risk Factors Related to the Notes – The notes and the subsidiary guarantees will be effectively subordinated to our secured debt.”

At September 30, 2011, our total consolidated indebtedness was Ps.40,624 million (U.S.$2,950 million), (i) none of which was secured indebtedness and (ii) of which Ps.1,446 million (U.S.$105 million) constituted indebtedness of our subsidiaries that are not subsidiary guarantors.

Use of Proceeds ...... Weintend to use the net proceeds of this offering to refinance existing indebtedness and for general corporate purposes. See “Use of Proceeds.”

Certain Covenants ...... Theindenture relating to the notes contains certain covenants, including limitations on liens, limitations on sale and leaseback transactions, and limitations on consolidations, mergers, sales or conveyances. All of these limitations and restrictions are subject to a number of significant exceptions. See “Description of the Notes – Covenants.”

6 Change of Control ...... Ifweexperience a Change of Control Triggering Event (as defined in the indenture governing the notes), we must offer to repurchase the notes at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any. See “Description of the Notes – Repurchase at the Option of Holders Upon a Change of Control Triggering Event.”

Additional Amounts ...... Wearerequired by Mexican law to deduct Mexican withholding taxes from payments of interest to holders who are not residents of Mexico for tax purposes as described under “Taxation – Mexican Tax Considerations.” We will pay additional amounts in respect of those payments of interest so that the amount holders receive after withholding tax will equal the amount that they would have received if no such withholding tax had been applicable, subject to limitations and exceptions as described under “Description of the Notes – Payment of Additional Amounts.”

Redemption for Taxation Reasons ..... Wemayredeem all, but not less than all, of the notes at any time at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, if, as a result of certain changes in tax laws, there is an increase in the additional amounts we are obligated to pay under the notes. See “Description of the Notes – Redemption for Taxation Reasons.”

Optional Redemption ...... Wemay, at our option, at any time and from time to time, redeem the notes, in whole or in part, at the greater of (i) 100% of their principal amount, and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the notes, discounted to the date of redemption at the applicable treasury rate plus 30 basis points, plus accrued interest on the principal amount of the notes to the redemption date. See “Description of the Notes – Optional Redemption.”

Transfer Restrictions ...... Wehave not registered the notes under the Securities Act. The notes are subject to restrictions on transfer and may only be offered in transactions exempt from or not subject to the registration requirements of the Securities Act. See “Notice to Investors.”

Further Issuances ...... Subject to the covenants in the indenture governing the notes, we may from time to time, without the consent of the holders of the notes, issue further securities having the same terms and conditions as the notes in all respects. Any further issue may be consolidated with, and form a single series with, the notes sold in this offering.

Form and Denomination ...... Thenotes will be issued in the form of global notes in fully registered form. The global notes will be exchangeable or transferable, as the case may be, for definitive certificated notes in fully registered form without interest coupons only in limited circumstances. The notes will be issued in registered form in denominations of U.S.$100,000 and integral multiples of U.S.$1,000 in excess thereof. See “Description of the Notes – Book – Entry, Delivery and Form.”

7 The notes will be delivered in book-entry form through the facilities of The Depository Trust Company, or DTC, for the accounts of its participants, including Euroclear S.A./N.V., as operator of the Euroclear System, or Euroclear, and Clearstream Banking, société anonyme, or Clearstream, and will trade in DTC’s Same-Day Funds Settlement System.

Governing Law ...... NewYork.

Trustee, Registrar, Paying Agent and Transfer Agent ...... Wells Fargo Bank, National Association.

Irish Listing Agent ...... Arthur Cox Listing Services Limited.

Listing ...... Application has been made to list the notes on the Global Exchange Market of the Irish Stock Exchange.

Risk Factors ...... Investing in the notes involves significant risks. See “Risk Factors” beginning on page 13 for a discussion of certain risk factors you should carefully consider in evaluating an investment in the notes.

Securities Codes ...... Thenotes will be assigned the following securities codes:

144A: CUSIP: 40052VAB0 ISIN: US40052VAB09 Regulation S: CUSIP: P4949BAH7 ISIN: USP4949BAH70

8 SUMMARY CONSOLIDATED FINANCIAL AND OTHER INFORMATION

The following tables present our selected consolidated financial and operating information, as of the dates and for each of the periods indicated. This information should be read in conjunction with, and is qualified in its entirety by reference to our audited consolidated and unaudited condensed consolidated interim financial statements, including the notes thereto, contained elsewhere in this offering memorandum and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this offering memorandum.

The consolidated financial information as of and for the years ended December 31, 2010 and 2009 has been derived from our audited consolidated financial statements contained elsewhere in this offering memorandum.

The consolidated financial information as of and for the nine months ended September 30, 2011 and 2010 has been derived from our unaudited condensed consolidated interim financial statements contained elsewhere in this offering memorandum. The results of operations for the nine months ended September 30, 2011 are not necessarily indicative of the results to be expected for the year ending December 31, 2011 or for any other period.

Our audited consolidated and unaudited condensed consolidated interim financial statements have been prepared in accordance with MFRS as issued by the CINIF and our audited consolidated financial statements have been audited in accordance with auditing standards generally accepted in Mexico. We are not providing any reconciliation to U.S. GAAP or IFRS of our consolidated financial statements or other financial information in this offering memorandum. We cannot assure you that a reconciliation would not identify material quantitative differences between our consolidated financial statements and other financial information as prepared on the basis of MFRS if such information were to be prepared on the basis of U.S. GAAP or IFRS. See “Summary of Certain Differences between MFRS and U.S. GAAP/IFRS.”

Our consolidated financial statements are stated in Mexican pesos. Certain financial information concerning us as of and for the year ended December 31, 2010 and the nine months ended September 30, 2011 included in this offering memorandum is presented in U.S. dollars for the convenience of the reader.

For additional information regarding financial information presented in this offering memorandum, see “Presentation of Financial and Other Information.”

9 Year Ended December 31, Nine Months Ended September 30, 2010 2010 2009 2011 2011 2010 (in millions of (in millions of Ps.) (in millions of (in millions of Ps.) U.S. dollars) U.S. dollars) CONSOLIDATED STATEMENTS OF INCOME Net sales ...... 9,462 117,163 116,353 6,672 91,871 86,732 Cost of sales ...... 4,467 55,317 54,933 3,243 44,654 40,677 Gross profit ...... 4,995 61,846 61,420 3,429 47,217 46,055 General expenses: Distribution and selling ..... 3,467 42,933 41,724 2,420 33,330 32,145 Administrative ...... 607 7,520 7,642 431 5,938 5,191 4,075 50,453 49,366 2,852 39,268 37,336 Income after general expenses .... 920 11,393 12,054 577 7,949 8,719 Other expenses, net ...... 77 950 1,176 40 552 564 Net comprehensive financing cost: Interest expense, net ...... 208 2,574 2,318 104 1,435 1,898 Exchange (gain) loss, net .... 8 94 (207) (44) (606) 92 Monetary position gain ..... (4) (45) (99) (7) (90) (42) 212 2,623 2,012 54 739 1,948 Equity in income of associated companies ...... 7 87 42 0 (6) 51 Income before income taxes ..... 639 7,907 8,908 483 6,652 6,258 Income tax expense ...... 191 2,363 2,827 162 2,228 2,130 Consolidated net income ...... 448 5,544 6,081 321 4,424 4,128 Net income of controlling stockholders ...... 436 5,395 5,956 314 4,327 4,022 Net income of non-controlling stockholders ...... 12 149 125 7 97 106 Basic earnings per common share* ...... 0.09 1.15 1.27 0.07 0.92 0.86 Weighted average number of shares outstanding (000’s)* .... 4,703,200 4,703,200 4,703,200 4,703,200 4,703,200 4,703,200 * Effective April 29, 2011, as a result of a four-to-one stock split, Grupo Bimbo’s authorized capital stock increased from 1,175,800,000 to 4,703,200,000 common shares. Basic earnings per common share are presented above as if the stock split had occurred at the beginning of the first period presented in the statements above.

10 As of December 31, As of September 30, 2010 2010 2009 2011 2011 2010 (in millions of (in millions of Ps.) (in millions of (in millions of Ps.) U.S. dollars) U.S. dollars) CONSOLIDATED BALANCE SHEETS Assets Current assets: Cash and cash equivalents ...... 269 3,325 4,981 906 12,478 4,934 Total current assets ...... 1,632 20,212 21,025 2,202 30,326 20,678 Total assets ...... 8,001 99,069 99,666 8,405 115,742 97,794 Liabilities and stockholders’ equity Current liabilities: Total current liabilities ...... 1,293 16,015 20,446 1,431 19,706 15,448 Current portion of long-term debt ...... 131 1,624 4,656 155 2,137 990 Long-term debt ...... 2,551 31,586 32,084 2,795 38,487 31,681 Total liabilities ...... 4,404 54,532 58,709 4,930 67,892 54,432 Stockholders’ equity: Controlling stockholders’ equity . . . 3,530 43,710 40,104 3,413 46,998 42,541 Non-controlling interest in consolidated subsidiaries ...... 67 827 853 62 852 821 Total stockholders’ equity...... 3,597 44,537 40,957 3,475 47,850 43,362 Total liabilities and stockholders’ equity . . . 8,001 99,069 99,666 8,405 115,742 97,794 OTHER FINANCIAL DATA EBITDA1 ...... 1,249 15,468 15,837 768 10,577 11,465 Total debt/EBITDA1 ...... 2.15 2.15 2.32 3.84 3.84 2.85 Net debt2 /EBITDA1 ...... 1.93 1.93 2.01 2.66 2.66 2.42 EBITDA/Interest Expense ...... 4.35 4.35 4.84 3.81 3.81 4.14

1 EBITDA represents income after general expenses plus depreciation and amortization. Our management uses this measure as an indicator of our operating results and financial condition; however you should not consider it in isolation, as an alternative to net income, as an indicator of our operating performance or as a substitute for analysis of our results as reported under MFRS, since, among others: • it does not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments; • it does not reflect changes in, or cash requirements for, our working capital needs; • it does not reflect our interest expense; and • it does not reflect any cash income taxes we may be required to pay.

11 Because of the above, our EBITDA measure should not be considered a measure of discretionary cash available to us to invest in the growth of our business or as a measure of cash that will be available to us to meet our obligations. EBITDA is not a recognized financial measure under MFRS and it may not be comparable to similar titled measures presented by other companies in our industry because not all companies use the same definition. As a result, you should rely primarily on our MFRS results and use our EBITDA measurement only as a supplement. The following is a reconciliation of EBITDA for the periods presented:

Nine Months Ended Years Ended December 31, September 30, 2010 2010 2009 2011 2011 2010 (in millions of (in millions of Ps.) (in millions of (in millions of Ps.) U.S. dollars) U.S. dollars) EBITDA ...... 1,249 15,468 15,837 768 10,577 11,465 Deduct: Depreciation and amortization ...... (329) (4,075) (3,783) (191) (2,628) (2,746) Income after general expenses ...... 920 11,393 12,054 577 7,949 8,719 2 Net debt represents our long-term debt (including the current portion) minus cash and cash equivalents. Net debt measures may not be comparable to similarly titled measures used by other companies. Net debt is not a measurement presented in accordance with generally accepted accounting principles, or GAAP, and we do not intend net debt to represent debt as defined by GAAP. You should not consider net debt to be an alternative to debt or any other items calculated in accordance with GAAP. We believe net debt, which is a non-GAAP measure, provides useful information to investors as a measure of our debt obligations. The following is a reconciliation as of the dates indicated:

As of December 31, As of September 30, 2010 2010 2009 2011 2011 2010 (in millions of (in millions of Ps.) (in millions of (in millions of Ps.) U.S. dollars) U.S. dollars) Current portion of long-term debt . . 131 1,624 4,656 155 2,137 990 Long-term debt ...... 2,551 31,586 32,084 2,795 38,487 31,681 Deduct: Cash and cash equivalents ...... (269) (3,325) (4,981) (906) (12,478) (4,934) Net debt ...... 2,413 29,885 31,759 2,044 28,146 27,737

12 RISK FACTORS

You should consider carefully the following risk factors, as well as the other information presented in this offering memorandum, before buying the notes. The risks and uncertainties described below are not the only ones that we face. Additional risks and uncertainties may also affect us that we do not know about or that we currently think are immaterial or we do not view as risks. Any of the following risks, if they actually occur, could materially and adversely affect our business, results of operations, financial condition and our ability to service our debt. In that event, the market price and liquidity of the notes could be materially adversely affected, and you could lose all or part of your investment in the notes.

Risks Related to our Business and Industry Increases in prices and shortages of raw materials, fuels and utilities could cause our costs to increase. Raw materials, including, among others, wheat flour, sugar, plastics used to package our products and edible oils and fats, are subject to substantial price and supply fluctuations. The prices for raw materials are influenced by a number of factors, including the weather, crop production, transportation and processing costs, government regulation and policies and worldwide market supply and demand for raw materials. The prices of many commodities have recently been at record levels, and commodity markets are experiencing unprecedented volatility. Any substantial increase in the prices of raw materials that is not reflected as an increase of the price of our products may adversely affect our financial condition, results of operations and cash flows. Any reduction in sales revenue as a result of competitive pressures would negatively affect profit margins and, if our sales volumes fail to grow sufficiently to offset any reduction in margins, our results of operations will suffer.

We also rely on utilities to operate our business. For example, our bakeries and other facilities use natural gas, liquefied petroleum gas and electricity to operate. In addition, our distribution operations use gasoline and diesel fuel to deliver our products. For these reasons, substantial future increases in prices for, or shortages of, these fuels or electricity could adversely affect our financial condition, results of operations and cash flows.

We enter into wheat, natural gas and other hedging arrangements to cover our exposure from increases in prices. These contracts could cause us to pay higher prices for raw materials than those available in the spot markets.

Competition could adversely affect our results of operations. The baked goods industry is highly competitive and increased competition could reduce our market share or force us to reduce prices or increase promotional spending in response to competitive pressures, all of which would adversely affect our results of operations. Competitive pressures may also restrict our ability to increase prices, including in response to commodity and other cost increases. Competition is based on product quality, price, customer service, brand recognition and loyalty, effective promotional activities, access to retail outlets and sufficient shelf space and the ability to identify and satisfy consumer preferences.

We compete with large national and transnational companies, local traditional bakeries, smaller regional operators, small family owned bakeries, supermarket chains with their own bakeries, grocery stores with their own in-store bakery departments or private label products and diversified food companies. To varying degrees, our competitors may have strengths in particular product lines and regions as well as greater financial resources. We expect that we will continue to face strong competition in all of our markets and anticipate that existing or new competitors may broaden their product lines and extend their geographic scope.

In particular, from time to time, we experience price pressure in certain of our markets as a result of our competitors’ promotional pricing practices, which could be exacerbated by excess industry capacity. As a result, we may need to reduce the prices for some of our products to respond to competitive and customer pressures and to maintain market share. Such pressures also may restrict our ability to increase prices in response to raw

13 material and other cost increases. Our competitors may also improve their competitive position by introducing new products, or products that can be substituted for ours, improving manufacturing processes or expanding the capacity of manufacturing facilities. If we are unable to maintain our pricing structure and keep pace with our competitors’ product and manufacturing process initiatives, our results of operations and financial condition could be materially adversely affected.

The reputation of our brands and our intellectual property rights are key to our business. The substantial majority of our net sales derive from sales of products offered under brands that we own. Our brand names are a key asset of our business. Maintaining the reputation of our brands is essential to our ability to attract and retain retailers, consumers and associates and is critical to our future success. Failure to maintain the reputation of our brands could have a material adverse effect on our business, results of operations and financial condition. If we fail, or appear to fail, to deal with various issues that may give rise to reputational risk, we could harm our business prospects. These issues include, but are not limited to, appropriately dealing with potential conflicts of interest, legal and regulatory requirements, safety conditions in our operations, ethical issues, money-laundering, privacy, record-keeping, sales and trading practices and the proper identification of the legal, reputational, credit, liquidity and market risks inherent in our business.

Our principal trademarks are registered in the countries in which we use such trademarks. While we intend to enforce our trademark rights against infringement by third parties, our actions to establish and protect our trademark rights may not be adequate to prevent imitation of our products by others or to prevent others from seeking to block sales of our products on grounds that our products violate their trademarks and proprietary rights. If a competitor were to infringe on our trademarks, enforcing our rights would likely be costly and would divert resources that would otherwise be used to operate and develop our business. Although we intend to actively defend our brands and trademark rights, we may not be successful in enforcing our intellectual property rights. See “Business – Intellectual Property.”

Inability to anticipate changes in consumer preferences may result in decreased demand for products. Our success depends in part on our ability to anticipate the tastes and dietary habits of consumers and to offer products that appeal to their preferences. Changes in consumer preferences combined with our failure to anticipate, identify or react to these changes could result in reduced demand for our products, which could in turn adversely affect our financial condition, results of operations and cash flows. In particular, demand for our products could be impacted by the popularity of trends such as low carbohydrate diets and by concerns regarding the health effects of trans fats, sugar content and processed wheat.

In addition, our success depends in part on our ability to enhance our product portfolio by adding innovative new products in fast growing, profitable categories as well as increasing market share in our existing product categories.

Introduction of new products and product extensions requires significant research and development as well as marketing initiatives. If our new products fail to meet consumers’ preferences, then the return on that investment will be less than anticipated and our strategy to grow net sales and profits may not be successful.

Health and product liability risks related to the food industry could adversely affect our business, results of operation and financial condition. We are subject to risks affecting the food industry generally, including risks posed by contamination or food spoilage, evolving nutritional and health-related concerns, consumer product liability claims, product tampering, the availability and expense of liability insurance and the potential cost and disruption of product recalls. We may also become involved in lawsuits and legal proceedings if it is alleged that the consumption of any of our products causes injury, illness or death. A product recall or an adverse result in any such litigation could adversely affect our financial condition, results of operations and cash flows.

14 Any actual or perceived health risks associated with our products, including any adverse publicity concerning these risks, could cause customers to lose confidence in the safety and quality of our products. Even if our own products are not affected by contamination, our industry may face adverse publicity if the products of other producers become contaminated, which could result in reduced consumer demand for our products in the affected category. In addition adverse publicity about the safety and quality of certain food products, such as the publicity about foods containing genetically modified ingredients, whether or not valid, may discourage consumers from buying our products or cause production and delivery disruptions.

We maintain systems designed to monitor food safety risks throughout all stages of the production process. However, our systems and internal policies may not be fully effective in mitigating risks related to food safety. Any product contamination could have a material adverse impact on our business, results of operations and financial condition.

We rely on retailers and if they perform poorly or give preference to competing products, our financial performance could be negatively affected. We derive significant operating revenues from sales to retailers. We sell our products to non-traditional retailers, such as supermarkets and hypermarkets, and to traditional retailers, such as small family-owned stores. These retailers, in turn, sell our products to consumers. Any significant deterioration in the business performance of our major customers could adversely affect the sale of our products. Retailers also carry products that directly compete with our products for retail space and consumer purchases. There is a risk that retailers may give higher priority to products of, or form alliances with, our competitors or their own private labels other than with respect to products that we produce for such private labels. If retailers fail to purchase our products, or provide our products with promotional support, our financial performance could be adversely affected.

Further consolidation in the retail food industry may adversely impact profitability. As supermarket chains continue to consolidate and as mass merchants gain scale, our larger customers may seek more favorable terms for their purchases of our products, including increased spending on promotional programs. Sales to our larger customers on terms less favorable to us than our current terms could adversely affect our financial condition, results of operations and cash flows.

Changes in health-related regulations could have a negative impact on our business. Our U.S. products and packaging materials are regulated by the U.S. Food and Drug Administration, or FDA, or, for products containing meat or poultry, the Food Safety and Inspection Service of the U.S. Department of Agriculture, or USDA. These agencies enact and enforce regulations relating to the manufacturing, distribution and labeling of food products. In addition, various states regulate our U.S. operations by licensing plants, enforcing federal and state standards for selected food products, grading food products, inspecting plants and warehouses, regulating trade practices related to the sale of food products and imposing their own labeling requirements on food products.

Our operations in Mexico are subject to extensive laws, rules, regulations and standards of hygiene and quality regulation and oversight by designated authorities such as the Secretary of Health (Secretaría de Salud), the Secretary of Agriculture, Farming, Rural Growth, Fish and Food (Secretaría de Agricultura, Ganadería, Desarrollo Rural, Pesca y Alimentación), the Federal Commission for Protection from Sanitary Risks (Comisión Federal para la Protección contra Riesgos Sanitarios) and the Secretary of the Economy (Secretaría de Economía) and other authorities regarding the processing, packaging, labeling, storage, distribution and advertising of our products.

We are subject to comparable hygiene and quality local laws and regulations in other countries in which we operate. Government policies and regulations in the United States, Mexico and our other markets may adversely affect the supply of, demand for, and prices of, our products, restrict our ability to do business in existing and

15 target local and export markets and could adversely affect our results of operations and financial condition. In addition, if we are required to comply with future material changes in food safety or health-related regulations, we could be subject to material increases in operating costs and also be required to implement regulatory changes on schedules that cannot be met without interruptions in our operations. Increased governmental regulation of the food industry, such as proposed requirements designed to enhance food safety, impose health-related requirements or to regulate imported ingredients, could increase our costs and adversely affect our profitability.

We may not achieve our targeted cost savings and efficiencies from cost reduction initiatives. Our success depends in part on our ability to be an efficient producer in a highly competitive industry. We periodically make investments in our operations to improve our production facilities and reduce operating costs.

We may experience operational issues when carrying out major production, procurement, or logistical changes and these, as well as any failure by us to achieve our planned cost savings and efficiencies, could have a material adverse effect on our business and consolidated financial position and on the consolidated results of our operations and profitability.

Disruption of our supply chain and distribution network could adversely affect our operations. Our operations depend on the continuous operation of our supply chain and distribution network. Damage or disruption to our manufacturing or distribution capabilities due to weather, natural disaster, fire, electricity shortages, terrorism, pandemics, strikes, disputes with, or the financial and/or operational instability of, key suppliers, distributors, warehousing and transportation providers, or other reasons could impair our ability to manufacture or distribute our products.

To the extent that we are unable, or it is not financially feasible, to mitigate interruptions in our supply chain, whether through insurance arrangements or otherwise, or their potential consequences, there could be an adverse effect on our business and results of operations, and additional resources could be required to restore our supply chain.

We may be subject to unknown or contingent liabilities related to our recent and future acquisitions. Our recent and future acquisitions of assets and entities, including, among others, our acquisition of WFI, Earthgrains and Bimbo Iberia, may be subject to unknown or contingent liabilities for which we may have no recourse, or only limited recourse, against the former owners. Although in some of our acquisitions the former owners agreed, or may agree, to indemnify us for certain breaches of their representations and warranties, such indemnification obligations in some cases may be subject to various materiality thresholds, and in some cases such obligations may have expired. As a result, we may not recover any amounts with respect to losses due to breaches by the sellers of their representations and warranties. In addition, the total amount of costs and expenses that may be incurred with respect to liabilities associated with the acquired assets and entities may exceed our expectations, plus we may experience other unanticipated adverse effects, all of which may adversely affect our business, results of operations and financial condition.

Our future growth opportunities through mergers, acquisitions or joint ventures may be impacted by antitrust laws, access to capital resources and other challenges in integrating significant acquisitions. We may pursue further acquisitions in the future. We do not know if we will be able to successfully complete any acquisitions or whether we will be able to successfully integrate any acquired business into our business or retain key personnel, suppliers or distributors. Also, there can be no assurance that a challenge on antitrust grounds, in connection with our existing operations or any acquisition that we may pursue in the future, will not be made. If any such challenge is made, we may be required to sell or divest a significant portion of our business or prevented from consummating a specific acquisition. Our ability to successfully grow through

16 acquisitions depends upon our ability to identify, negotiate, complete and integrate suitable acquisitions and to obtain any necessary financing. These efforts could be expensive and time consuming, disrupt our ongoing business and distract management. If we are unable to integrate any acquired businesses effectively, including WFI, Earthgrains and Bimbo Iberia, our business, financial condition and results of operations will be materially adversely affected.

We may be unable to successfully expand our operations into new markets. If the opportunity arises, we may expand our operations into new markets. Each of the risks applicable to our ability to successfully operate in our current markets is also applicable to our ability to successfully operate in new markets. In addition to these risks, we may not possess the same level of familiarity with the dynamics and market conditions of any new markets that we may enter, which could adversely affect our ability to expand into or operate in those markets. We may be unable to create similar demand for our products and business, which could adversely affect our profitability. If we are unsuccessful in expanding our operations into new markets, it could adversely affect our business, financial condition and results of operations.

The current global economic crisis may adversely affect our business and financial performance. The global economic slowdown, market volatility and their lingering effects could negatively affect our business, results of operations or financial condition. When general economic conditions deteriorate, the demand for our products may experience declines, and we may suffer reductions in our sales and profitability. In addition, the financial stability of our customers and suppliers may be affected, which could result in decreased, delayed or canceled purchases of our products, increases in uncollectible accounts receivable or non-performance by suppliers. We may also find it more costly or difficult to obtain financing to fund operations or investment or acquisition opportunities, or to refinance our debt in the future.

The global economic slowdown has also negatively affected local credit markets and resulted in an increased cost of capital, which may negatively impact the ability of companies, including our customers, to meet their financial requirements. If the global economy continues to deteriorate, our business and financial performance may be adversely affected.

Our business and financial performance may be adversely affected by risks inherent in international operations. We currently maintain production facilities and operations in the United States, Mexico, Argentina, Brazil, Colombia, Costa Rica, Chile, El Salvador, Guatemala, Honduras, Nicaragua, Panama, Paraguay, Peru, Uruguay, Venezuela, Spain, Portugal, and China. Our ability to conduct and expand our business and our financial performance are subject to the risks inherent in international operations. Our liquidity, results of operations and financial condition may be adversely affected by trade barriers, currency fluctuations and exchange controls, political unrest, high levels of inflation and increases in duties, taxes and governmental royalties, as well as changes in local laws and policies of the countries in which we conduct business, including changes to environmental laws that could affect our manufacturing facilities or to health safety laws that could affect our products. The governments of the countries in which we operate, or may operate in the future, could take actions that materially adversely affect us, including the taking, expropriation or condemnation of our assets or subsidiaries.

We may be subject to interruptions or failures in our information technology systems. We rely on sophisticated information technology systems and infrastructure to support our business, including process control technology. Any of these systems may be susceptible to outages due to fire, floods, power loss, telecommunications failures and similar events. The failure of any of our information technology

17 systems may cause disruptions in our operations, adversely affecting our net sales and profitability. We have business continuity plans in place to reduce the negative impact of information technology system failures on our operations, but these plans may not be effective.

Failure to maintain our relationships with labor unions may have an adverse effect on our financial results. The majority of our workforce is represented by labor unions. While we have enjoyed satisfactory relationships with all of the labor organizations that represent our associates and we believe our relationships with labor organizations will continue to be satisfactory, labor-related disputes may still arise. Labor disputes that result in strikes or other disruptions could also cause increases in operating costs, which could damage our relationships with our customers and adversely affect our business and financial results.

In addition, our results may be materially and adversely impacted as a result of increases in labor costs. A shortage in the labor pool or other general inflationary pressures or changes in applicable laws and regulations could increase labor cost, which could have a material adverse effect on our consolidated operating results or financial condition.

Our labor costs include the cost of providing benefits for employees. We sponsor a number of defined benefit plans for employees, including, in the United States and Mexico, including pension, retiree health and welfare, active health care, severance and other post employment benefits. We also participate in a number of multiemployer pension plans for certain of our manufacturing locations. The annual cost of benefits can vary significantly from year to year and is materially affected by such factors as changes in the assumed or actual rate of return on major plan assets, a change in the weighted-average discount rate used to measure obligations, the rate or trend of health care cost inflation, and the outcome of collectively-bargained wage and benefit agreements.

We depend on the expertise of our senior management and skilled personnel, and our business may be disrupted if we lose their services. Our senior management team possesses extensive operating experience and industry knowledge. We depend on our senior management to set our strategic direction and manage our business and we believe that their involvement in us is crucial to our success. Furthermore, our continued success also depends upon our ability to attract and retain experienced professionals. The loss of the services of our senior management or our inability to recruit, train or retain a sufficient number of experienced personnel could have an adverse effect on our operations and profitability. We do not maintain any key person insurance on any of our senior management or associates. Our ability to retain senior management as well as experienced personnel will in part depend on us having in place appropriate staff remuneration and incentive schemes. The remuneration and incentive schemes we have in place may not be sufficient in retaining the services of our experienced personnel.

Political events in the markets in which we operate may result in disruptions to our business operations and decreases in our sales and revenues. The governments of the markets in which we operate exercise significant influence over many aspects of the economy of such markets. As a result, government action concerning the economy of such markets and the regulation of certain industries could have a significant effect on private segment entities, including us, and on market conditions, prices of and returns on securities from such markets.

The government of a market in which we operate may implement significant changes in laws, public policy and/or regulations that could affect such market’s political and economic situation, which could adversely affect our business. Social and political instability in such markets or other adverse social or political developments in or affecting such markets could affect us and our ability to obtain financing. It is also possible that political uncertainty in territories in which we operate may adversely affect financial markets.

18 Future political developments in the markets in which we operate, over which we have no control, may have an unfavorable impact on our financial position or results of operations.

Compliance with environmental and other governmental laws and regulations could result in added expenditures or liabilities. Our operations in the United States, Mexico and other markets are subject to federal, state and municipal laws, regulations and official standards, relating to the protection of the environment and natural resources.

In the United States, we are subject to federal, state and local laws and regulations relating to the protection of the environment. These laws and regulations include the Clean Air Act, the Clean Water Act and the Resource Conservation and Recovery Act and Superfund, which imposes joint and several liability on each responsible party. We have specific programs across our business units designed to meet applicable environmental compliance requirements.

In Mexico, we are subject to various Mexican federal, state and municipal environmental laws and regulations that govern the discharges into the environment, as well as the handling and disposal of hazardous substances and wastes. Environmental laws impose liability and clean-up responsibility for releases of hazardous substances into the environment. We are subject to regulation by, among other agencies, the Secretaría de Medio Ambiente y Recursos Naturales, or the Mexican Environmental and National Resources Ministry, the Secretaría del Trabajo y Previsión Social, or the Mexican Labor and Social Security Ministry, the Procuraduría Federal de Protección al Ambiente, the Federal Environmental Protection Bureau and the National Water Commission, the Comisión Nacional del Agua. These agencies may initiate administrative proceedings for violations of environmental and safety ordinances and impose economic penalties on violators. The Mexican government has recently imposed strict environmental and safety regulations.

Modifications of existing environmental laws and regulations or the adoption of more stringent environmental laws and regulations may result in the need for investments that are not currently provided for in our capital expenditures program and may otherwise result in a material adverse effect on our business, results of operations or financial condition.

Developments in other countries may result in decreases in the price of our securities. The market value of securities of Mexican companies is, to varying degrees, affected by economic and market conditions in other emerging market countries. Although economic conditions in these countries may differ significantly from economic conditions in Mexico, investors’ reactions to developments in any of these other countries may have an adverse effect on the market value of securities of Mexican issuers. In recent years, for example, prices of both Mexican debt securities and Mexican equity securities dropped substantially as a result of developments in Russia, Asia, Brazil and Greece.

In addition, the direct correlation between economic conditions in Mexico and the United States has sharpened in recent years as a result of the North American Free Trade Agreement, or NAFTA, and increased economic activity between the two countries. As a result of the slowing economy in the United States and the uncertainty it could have on the general economic conditions in Mexico and the United States, our financial condition and results of operations could be adversely affected. In addition, due to recent developments in the international credit markets, capital availability and cost could be significantly affected and could restrict our ability to obtain financing or refinance our existing indebtedness on favorable terms, if at all.

We are subject to different corporate disclosure and accounting standards than U.S. companies. A principal objective of the securities laws of the United States, Mexico and other countries is to promote full and fair disclosure of all material corporate information. However, there may be less or different publicly available information about foreign issuers of securities than is regularly published by or about U.S. issuers of listed securities.

19 Our international operations expose us to the risk of fluctuations in currency exchange rates. We generate revenues and incur operating expenses and indebtedness in local currencies in the countries in which we operate. The amount of our revenues denominated in a particular currency in a particular country typically varies from the amount of expenses or indebtedness incurred by our operations in that country given that certain costs may be incurred in a currency different from the local currency of that country (i.e. the U.S. dollar). This situation exposes us to potential losses resulting from currency fluctuations.

An impairment in the carrying value of goodwill or other acquired intangibles could negatively affect our consolidated operating results and net worth. The carrying value of goodwill represents the fair value of acquired businesses in excess of identifiable assets and liabilities as of the acquisition date. The carrying value of other intangibles represents the fair value of trademarks, trade names, and other acquired intangibles as of the acquisition date. Goodwill and other acquired intangibles expected to contribute indefinitely to our cash flows are not amortized, but must be evaluated by management at least annually for impairment. If carrying value exceeds current fair value, the intangible is considered impaired and is reduced to fair value via a charge to earnings. Events and conditions which could result in an impairment include changes in the industries in which we operate, including competition and advances in technology; a significant product liability or intellectual property claim; or other factors leading to reduction in expected sales or profitability. Should the value of one or more of the acquired intangibles become impaired, our consolidated earnings and net worth may be materially adversely affected.

We may incur additional indebtedness in the future that could adversely affect our financial health and our ability to generate sufficient cash to satisfy our outstanding debt obligations. After the offering of the notes, we may incur additional indebtedness that may have the following direct or indirect effects on you: • limit our ability to satisfy our obligations under the notes and other debt; • increase our vulnerability to adverse general economic and industry conditions; • require us to dedicate a portion of our cash flow from operations to servicing and repaying our indebtedness which may place us at a competitive disadvantage to our competitors with less debt; • limit our flexibility in planning for or reacting to changes in our business and the industry in which we operate; • limit, along with the financial and other restrictive covenants of our indebtedness, among other things, our ability to borrow additional funds, and • increase the cost of additional financing.

Our ability to generate sufficient cash to satisfy our outstanding and future debt obligations will depend upon our future operating performance, which will be affected by prevailing economic conditions and financial, business and other factors, many of which are beyond our control. If we are unable to service our indebtedness, we will be forced to adopt an alternative strategy that may include actions such as reducing or delaying capital expenditures, selling assets, restructuring or refinancing our indebtedness, or seeking equity capital. These strategies may not be instituted on satisfactory terms, if at all.

In addition, certain of our financing arrangements impose operating and financial restrictions on our business. These provisions may negatively affect our ability to react to changes in market conditions, take advantage of business opportunities we believe to be desirable, obtain future financing, fund needed capital expenditures, or withstand a continuing or future downturn in our business.

In the future, we may from time to time incur substantial additional indebtedness. If we or our subsidiaries incur additional debt, the risks that we face as a result of our existing indebtedness could further intensify.

20 Risk Factors Related to the Notes An active trading market for the notes may not develop. No active trading market for the notes may develop. If a trading market develops for the notes, the notes may trade at prices that may be higher or lower than the initial offering price depending on various factors, such as prevailing interest rates, our results of operations and financial condition, political and economic developments in and affecting markets where we have substantial operations and the market for similar securities. The initial purchasers of this offering have advised us that they currently intend to make a market in the notes but they are not under any obligation to do so, and any market making with respect to the notes may be discontinued at any time without notice at the sole discretion of the initial purchasers.

The notes are subject to transfer restrictions, which could limit your ability to resell your notes. The notes have not been registered under the Securities Act or any U.S. state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable U.S. state securities laws. These exemptions include those for offers and sales that occur outside the United States in compliance with Regulation S under the Securities Act and in accordance with any applicable securities laws of any other jurisdiction and sales to qualified institutional buyers as defined under Rule 144A under the Securities Act. For a discussion of certain restrictions on resale and transfer, see “Notice to Investors.”

We may not be able to fulfill our repurchase obligations with respect to the notes upon a change of control. If we experience certain change of control events, we are required by the indenture governing the notes to offer to repurchase all outstanding notes at a repurchase price equal to 100% of the principal amount of notes repurchased, plus accrued and unpaid interest, if any, to the applicable repurchase date. If a change of control event were to occur, we may not have sufficient funds to repay any notes tendered for purchase or that would become immediately due and payable as a result of such change of control event. We may require additional financing from third parties to fund any such repurchases, and we may not be able to obtain additional financing on satisfactory terms or at all. Our failure to repay holders who tender notes for repurchase following a change of control event could result in an event of default under the indenture governing the notes.

If we or the Mexican subsidiary guarantors were to be declared insolvent or bankrupt, holders of notes may find it difficult to collect payment on the notes. Under Mexico’s Ley de Concursos Mercantiles, or Business Reorganizations Act, if we or any of the Mexican subsidiary guarantors are declared bankrupt (en quiebra) or become subject to insolvency proceedings (concurso mercantil), our obligations and the obligations of such subsidiary guarantor under the notes, respectively, (i) would be converted to pesos and then from pesos into UDIs (unidades de inversión), which is a Mexican synthetic unit adjusted by inflation, and would not be adjusted to take into account any devaluation of the peso relative to the U.S. dollar occurring after such conversion, (ii) would cease to accrue interest from the date the concurso mercantil is declared, (iii) would be subject to the outcome of, and priorities recognized in, the relevant proceedings (including statutory preferences for tax, social security and labor claims) and (iv) would be satisfied at the time claims of all our creditors are satisfied.

Payments of judgments against us on the notes would be in pesos. In the event that proceedings are brought against us or the subsidiary guarantors in Mexico, either to enforce a judgment or as a result of an original action brought in Mexico, we and such subsidiary guarantors would not be required to discharge those obligations in a currency other than Mexican currency. Under the Monetary Law of the United Mexican States (Ley Monetaria de los Estados Unidos Mexicanos), an obligation, whether resulting from a judgment or by agreement, denominated in a currency other than Mexican pesos, which is payable in

21 Mexico, may be satisfied in Mexican pesos at the rate of exchange in effect at the time and place of payment or judgment. Such rate is currently determined by Banco de México and published every banking day in the Diario Oficial de la Federación, or Federal Official Gazette. As a result, you may suffer a United States dollar shortfall if you obtain a judgment or a distribution in bankruptcy in Mexico and we elect to make payments due under the notes in Mexican pesos.

It may be difficult to enforce civil liabilities against us or our directors, executive officers and controlling persons. Grupo Bimbo and certain of the subsidiary guarantors are organized under the laws of Mexico. A majority of our directors, executive officers and controlling persons reside outside the United States; a significant portion of the assets of our directors, executive officers and controlling persons, and a significant portion of our assets, are located outside the United States, and certain of the experts named in this offering memorandum also reside outside the United States. As a result, it may be difficult for you to effect service of process within the United States upon these persons or to enforce against them or us in U.S. courts judgments predicate upon the civil liability provisions of the federal securities laws of the United States. We have been advised by our Mexican counsel, Ritch Mueller, S.C., that there is doubt as to the enforceability, in original actions in Mexican courts, of liabilities predicated solely on U.S. federal securities laws and as to the enforceability in Mexican courts of judgments of U.S. courts obtained in actions predicated upon the civil liability provisions of U.S. federal securities laws.

The notes will be structurally subordinated to the liabilities of our non-guarantor subsidiaries. At issuance the notes will only be guaranteed by the subsidiary guarantors and therefore are effectively subordinated to all existing and future liabilities of our other non-guarantor subsidiaries. As of September 30, 2011, the aggregate amount of indebtedness of our non-guarantor subsidiaries was Ps.1,446 million (excluding intercompany liabilities). The non-guarantor subsidiaries are separate legal entities and have no obligation, contingent or otherwise, to pay any amounts due under the notes or to make any funds available for such purpose. The payment of dividends by such non-guarantor subsidiaries will be subject to legal and, in certain instances, contractual restrictions and will depend upon the earnings and cash flow of each non-guarantor subsidiary, which are speculative. In the event of a bankruptcy, liquidation or dissolution of one or more of our subsidiaries, following payment by such subsidiaries of their liabilities, they may not have sufficient assets to make payments to us.

The subsidiary guarantees may not be enforceable against the Mexican guarantors. The notes will be fully and unconditionally guaranteed jointly and severally by certain of our subsidiary guarantors; however, it is possible that the guarantees may not be enforceable under Mexican law. While Mexican law does not prohibit the giving of guarantees and, as a result, does not prevent the guarantees of the notes from being valid, binding and enforceable against the Mexican subsidiary guarantors, in the event that a Mexican subsidiary guarantor becomes subject to a reorganization proceeding (concurso mercantil)orto bankruptcy (quiebra), the relevant guarantee may be deemed to have been a fraudulent transfer and declared void based upon the subsidiary guarantor being deemed not to have received fair consideration in exchange for such guarantee.

The collection of interest on interest may not be enforceable in Mexico. Mexican law does not permit the collection of interest on interest and, as a result, the accrual of default interest on past due ordinary interest accrued in respect of the notes may be unenforceable in Mexico.

22 USE OF PROCEEDS

We estimate that the net proceeds from this offering, after deducting the underwriting discount and other estimated expenses payable in connection with this offering, will be approximately U.S.$789 million. We intend to use the net proceeds of this offering to refinance existing indebtedness and for general corporate purposes.

23 EXCHANGE RATES

The following table sets forth, for the periods indicated, the period-end, average, high and low exchange rate between the Mexican peso and U.S. dollar, based on buying rates published by the Board of Governors of the Federal Reserve System, as certified by the Federal Reserve Bank of New York. The average annual rates presented in the following table were calculated by using the average of the exchange rates on the last day of each month during the relevant period and the average monthly rates were calculated by using the daily average of the exchange rates on each day during the relevant period. All amounts are stated in pesos, and we have not restated the rates in constant currency units. We make no representation that the peso amounts referred to in this offering memorandum could have been or could be converted into U.S. dollars at any particular rate or at all. See “Risk Factors – Risks Factors Related to our Business and Industry – Our business and financial performance may be adversely affected by risks inherent in international operations.” On January 3, 2012, the exchange rate between the peso and U.S. dollar was 13.67. The exchange rates in this table are provided solely for reference of the investors.

Exchange Rate Low High Period Average Period End Year: 2003 ...... 10.11 11.41 11.24 11.24 2004 ...... 10.81 11.64 11.29 11.15 2005 ...... 10.41 11.41 10.89 10.63 2006 ...... 10.43 11.46 10.91 10.80 2007 ...... 10.67 11.27 10.93 10.92 2008 ...... 9.92 13.94 11.14 13.83 2009 ...... 12.63 15.41 13.50 13.06 2010 ...... 12.16 13.19 12.62 12.38

Month ended: January 31, 2011 ...... 11.51 12.25 12.13 12.15 February 28, 2011 ...... 11.97 12.18 12.06 12.11 March 31, 2011 ...... 11.92 12.11 12.00 11.92 April 30, 2011 ...... 11.51 13.93 12.28 11.52 May 31, 2011 ...... 11.51 11.77 11.65 11.58 June 30, 2011 ...... 11.64 11.97 11.81 11.72 July 31, 2011 ...... 11.57 11.80 11.67 11.72 August 31, 2011 ...... 11.75 12.48 12.24 12.33 September 30, 2011 ...... 12.26 13.87 13.06 13.77 October 31, 2011 ...... 13.10 13.93 13.44 13.17 November 30, 2011 ...... 13.38 14.25 13.70 13.62 December 31, 2011 ...... 13.49 13.99 13.77 13.95

24 CAPITALIZATION

The following table sets forth our capitalization and indebtedness under MFRS as of September 30, 2011 and as adjusted to give effect to the issuance of U.S.$800,000,000 of notes offered hereby and the use of the proceeds thereby.

This table should be read in conjunction with, and is qualified in its entirety by reference to, “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Selected Financial and Other Information” and the unaudited condensed consolidated interim financial statements and related notes of Grupo Bimbo included elsewhere in this offering memorandum.

As of September 30, 2011 As of September 30, 2011 Actual As adjusted Actual As adjusted (in millions of Ps.) (in millions of U.S. $) Debt: Denominated in U.S. dollars: Senior Term Loan ...... 17,448 6,710 1,300* 500* 4.875% Notes due 2020 ...... 10,738 10,738 800* 800* 4.50% Notes due 2022 ...... — 10,738 — 800* Total ...... 28,186 28,186 2,100 2,100 Denominated in Mexican Pesos: 10.15% Notes due 2012 ...... 750 750 54 54 TIIE28 + 1.55% Notes due 2014 ...... 5,000 5,000 363 363 10.60% Notes due 2016 ...... 2,000 2,000 145 145 6.05% Notes due 2016 ...... 3,242 3,242 235 235 Total ...... 10,992 10,992 798 798 Other debt (subsidiaries) ...... 1,446 1,446 105 105 Less current portion of long-term debt ...... 2,137 2,137 155 155 Long-term debt ...... 38,487 38,487 2,795* 2,795* Total stockholders’ equity ...... 47,850 47,850 3,475 3,475 Total capitalization ...... 86,337 86,337 6,270 6,270 Total debt as a percentage of total capitalization ...... 47% 47% 47% 47% * The U.S. dollar amount for debt denominated in U.S. dollars represents the outstanding balance in U.S. dollars of such debt as of the relevant date, and are not translations of the respective Mexican peso amount using the convenience translation exchange rate used throughout this offering memorandum. However, the total long- term debt in the U.S. dollar columns represents a translation of the respective amount in Mexican pesos using the convenience translation exchange rate used throughout this offering memorandum and, therefore, does not constitute the sum of the individual debt amounts listed on the U.S. dollar columns.

25 SELECTED CONSOLIDATED FINANCIAL AND OTHER INFORMATION

26 Our consolidated financial statements are stated in Mexican pesos. Certain financial information concerning us as of and for the year ended December 31, 2010 and for the nine months ended September 30, 2011 included in this offering memorandum is presented in U.S. dollars for the convenience of the investors.

Year Ended December 31, Nine Months Ended September 30, 2010 2010 2009 2011 2011 2010 (in millions of (in millions of Ps.) (in millions of (in millions of Ps.) U.S. dollars) U.S. dollars) CONSOLIDATED STATEMENT OF INCOME Net sales ...... 9,462 117,163 116,353 6,672 91,871 86,732 Cost of sales ...... 4,467 55,317 54,933 3,243 44,654 40,677 Gross profit ...... 4,995 61,846 61,420 3,429 47,217 46,055 General expenses: Distribution and selling ..... 3,467 42,933 41,724 2,420 33,330 32,145 Administrative ...... 607 7,520 7,642 431 5,938 5,191 4,075 50,453 49,366 2,852 39,268 37,336 Income after general expenses .... 920 11,393 12,054 577 7,949 8,719 Other expenses, net ...... 77 950 1,176 40 552 564 Net comprehensive financing cost: Interest expense, net ...... 208 2,574 2,318 104 1,435 1,898 Exchange (gain) loss, net .... 8 94 (207) (44) (606) 92 Monetary position gain ..... (4) (45) (99) (7) (90) (42) 212 2,623 2,012 54 739 1,948 Equity in income of associated companies ...... 7 87 42 0 (6) 51 Income before income taxes ..... 639 7,907 8,908 483 6,652 6,258 Income tax expense ...... 191 2,363 2,827 162 2,228 2,130 Consolidated net income ...... 448 5,544 6,081 321 4,424 4,128 Net income of controlling stockholders ...... 436 5,395 5,956 314 4,327 4,022 Net income of non-controlling stockholders ...... 12 149 125 7 97 106 Basic earnings per common share* ...... 0.09 1.15 1.27 0.07 0.92 0.86 Weighted average number of shares outstanding (000’s)* .... 4,703,200 4,703,200 4,703,200 4,703,200 4,703,200 4,703,200 * Effective April 29, 2011, as a result of a four-to-one stock split, Grupo Bimbo’s authorized capital stock increased from 1,175,800,000 to 4,703,200,000 common shares. Basic earnings per common share are presented above as if the stock split had occurred at the beginning of the first period presented in the statements above.

27 As of December 31, As of September 30, 2010 2010 2009 2011 2011 2010 (in millions of (in millions of Ps.) (in millions of (in millions of Ps.) U.S. dollars) U.S. dollars) CONSOLIDATED BALANCE SHEETS Assets Current assets: Cash and cash equivalents ...... 269 3,325 4,981 906 12,478 4,934 Accounts and notes receivable – net ...... 1,059 13,118 12,430 936 12,893 12,058 Inventories – net ...... 254 3,149 2,969 265 3,644 2,914 Prepaid expenses ...... 36 440 499 55 763 644 Derivative financial instruments ...... 15 180 146 5 67 128 Other current assets ...... — — — 35 481 — Total current assets ...... 1,632 20,212 21,025 2,202 30,326 20,678 Notes receivable from independent operators .... 173 2,140 1,940 164 2,252 2,094 Property, plant and equipment – net ...... 2,587 32,028 32,763 2,496 34,366 31,540 Investment in shares of associated companies and other permanent investments ...... 125 1,553 1,479 127 1,743 1,516 Derivative financial instruments ...... 32 393 159 25 343 212 Deferred income taxes ...... 124 1,539 635 166 2,285 1,347 Intangible assets – net ...... 1,568 19,415 19,602 1,532 21,097 18,740 Goodwill ...... 1,637 20,269 20,394 1,598 22,002 19,949 Other assets – net ...... 123 1,520 1,669 96 1,328 1,718 Total assets ...... 8,001 99,069 99,666 8,405 115,742 97,794 Liabilities and stockholders’ equity Current liabilities: Notes payable to financial institutions ...... 131 1,624 4,656 155 2,137 990 Trade accounts payable ...... 481 5,954 5,341 511 7,033 5,305 Other accounts payable and accrued liabilities ...... 509 6,302 6,228 617 8,498 7,959 Due to related parties ...... 65 802 238 43 591 381 Income taxes ...... 50 624 3,272 53 725 344 Statutory employee profit sharing ...... 57 709 637 31 428 455 Derivative financial instruments ...... — — 74 21 294 14 Total current liabilities ...... 1,293 16,015 20,446 1,431 19,706 15,448 Long-term debt ...... 2,551 31,586 32,084 2,795 38,487 31,681 Derivative financial instruments ...... 19 231 54 99 1,361 306 Employee labor obligations and workers’ compensation ...... 373 4,621 4,644 369 5,083 4,693 Deferred statutory employee profit sharing ...... 20 249 290 18 244 287 Deferred income taxes ...... 50 622 266 121 1,661 1,143 Other liabilities ...... 98 1,208 925 98 1,350 874 Total liabilities ...... 4,404 54,532 58,709 4,930 67,892 54,432 Stockholders’ equity: Capital stock ...... 647 8,006 8,006 581 8,006 8,006 Reserve for repurchase of shares ...... 61 759 759 55 759 759 Retained earnings ...... 2,867 35,505 30,698 2,846 39,186 34,132 Other concepts of accumulated other comprehensive income ...... (44) (541) 675 (59) (812) (201) Valuation of financial instruments ...... (2) (19) (34) (10) (141) (155) Controlling stockholders’ equity ...... 3,530 43,710 40,104 3,413 46,998 42,541 Non-controlling interest in consolidated subsidiaries ...... 67 827 853 62 852 821 Total stockholders’ equity ...... 3,597 44,537 40,957 3,475 47,850 43,362 Total liabilities and stockholder’s equity ...... 8,001 99,069 99,666 8,405 115,742 97,794

28 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read together with our audited consolidated and unaudited condensed consolidated interim financial statements, including the notes thereto, contained elsewhere in this offering memorandum. Our audited annual consolidated financial statements as of and for the years ended December 31, 2010 and 2009 and our unaudited condensed consolidated interim financial statements as of and for the three and nine months ended September 30, 2011 and 2010 contained elsewhere in this offering memorandum have been prepared in accordance with MFRS as issued by the CINIF, which differ in certain significant respects from U.S. GAAP and IFRS. For a description of the principal differences between MFRS and U.S. GAAP and IFRS as they apply to us, see “Summary of Certain Differences between MFRS and U.S. GAAP/ IFRS.” Commencing on January 1, 2012, we adopted IFRS as the accounting principles under which our financial statements will be prepared. Our adoption of IFRS at such date may have additional effects on our consolidated financial position and results of operations, see “Presentation of Financial and Other Information – Financial Statements.”

Overview We are one of the largest baked goods companies in the world and one of the largest food companies in the Americas, with a diversified portfolio of over 7,000 products and more than 150 renowned brands, including Bimbo, Oroweat, Arnold, Marinela, Thomas’, Barcel, Sara Lee, Entenmann’s, Ricolino, Tía Rosa, Pullman, Rainbo and Nutrella. We produce, distribute and market a wide variety of baked goods, salted snacks, packaged foods, wheat tortillas and confectionery goods. We operate in 19 countries, including the United States, Mexico, most of Central and South America, Spain and, to a lesser extent, Portugal and China. Currently, we operate 155 plants worldwide and have the capacity to produce and distribute commercial quantities of a variety of products in our primary markets. To ensure the freshness and quality of our products, we have developed an extensive direct-distribution network, which we believe fields one of the largest sales fleets in the Americas. We currently employ more than 128,000 associates worldwide.

The primary factors that impact our results of operations are: Raw material prices. We use a number of commodities in the manufacture of our products, including wheat flour, edible oils and fats, sugar and eggs. In addition, we use plastic to package our products. As a result, our consolidated operating results are impacted by changes in commodity prices.

Sales volume. Our consolidated sales volume is impacted by general economic conditions, product prices, new product launches and the extent and effectiveness of our advertising and promotion.

Cost of advertising and promotion. We support our brands and products as well as new product launches through extensive advertising and promotions tailored for our brands and targeted to the specific markets in which we operate. We typically increase advertising and promotional spending during periods where we are experiencing pressure on sales volume.

Product prices. Prices for our products are impacted by the cost of raw materials and distribution as well as the price sensitivity of consumers in the various food categories and markets in which we operate. In the years ended December 31, 2009 and 2010, we were able to introduce price increases for certain of our product lines to partially offset the increased cost of raw materials.

29 Distribution efficiencies. We consistently review our distribution processes to reduce cost and increase efficiency across our organization. For example, we have recently implemented initiatives that have improved our sales execution and leveraged our distribution, including customizing sales execution by type of customer and implement action of a more efficient sales mix.

Foreign exchange rates. Our consolidated financial statements are stated in Mexican pesos. We generate revenue primarily in Mexican pesos and U.S. dollars and, to a lesser extent, in other local currencies in the countries in which we operate. As a result, differences in the currency exchange rate can impact our financial statements, particularly with respect to our results of operations in the United States.

Factors Affecting Comparability of Recent Results of Operations and Financial Condition Acquisitions On December 5, 2011 we completed our acquisition of Bimbo Iberia for an all-cash purchase price of €115 million. On November 6, 2011, we completed our acquisition of Earthgrains, Sara Lee Corporation’s North American fresh bakery business from Sara Lee Corporation, one of the largest food processing and distribution companies in the world, for an all-cash purchase price of U.S.$709 million, and on September 19, 2011, we completed our acquisition of Fargo. These acquisitions are not yet reflected in our unaudited condensed consolidated interim financial statements as of and for the three and nine months ended September 30, 2011, see “Business – Recent Developments.”

The following chart shows other major acquisitions that we have consummated in the past four years:

Year Acquired Company /Assets Country 2011 December 5 Sara Lee Spain and Portugal November 6 Sara Lee United States September 19 Fargo Argentina 2010 December 3 Dulces Vero Mexico May 5 Jin Hong Wei China May 1 Biman Foods United States 2009 November 18 Saníssimo Mexico April 14 Million Land China January 21 Bimbo Foods, Inc. (formerly United States known as Weston Foods, Inc.) January 19 Guadalupe Colombia 2008 May 1 Assets and Trademarks of Mexico “Galletas Gabi” April 30 and June 16 Nutrella Alimentos S.A. Brazil April 2 Plucky, S.A. Uruguay March 25 Lido Pozuelo, S.A. Honduras February 21 Assets and Trademarks “Firenze” Brazil January 2 Panificio Laura, Ltda. Brazil

Inflationary Accounting Beginning January 1, 2008, MFRS modified the accounting for the recognition of the effects of inflation and defines two economic environments: (i) an “inflationary environment,” where the cumulative inflation of the

30 three preceding years is 26.0% or more, in which case the effects of inflation should be recognized using the comprehensive method; and (ii) a “non-inflationary environment,” where the cumulative inflation of the three preceding years is less than 26.0%, in which case no inflationary effects should be recognized in the financial statements.

Since the cumulative inflation in certain countries in which we operate for the three fiscal years prior to those ended December 31, 2010 and 2009 was less than 26%, the economic environment in those countries is considered non-inflationary under MFRS. Inflation rates in Mexico for the years ended December 31, 2010 and 2009 were 4.4% and 3.6%, respectively. For those years, Mexico and the countries in which the economic environment was considered non-inflationary, represented 97.3% for 2010 and 94.8% for 2009 of our business in terms of net sales. Accordingly, beginning on January 1, 2008, we discontinued recognition of the effects of inflation in our consolidated financial statements.

In certain countries in which we operate, consisting of Argentina, Costa Rica, Guatemala, Honduras, Nicaragua, Paraguay, Uruguay and Venezuela, cumulative inflation for the three years preceding either 2010 or 2009 or both years was greater than 26%. Accordingly, we continued the recognition of the comprehensive effects of inflation in those countries. Through 2010 and 2009 only for those entities operating in inflationary economic environments, recognition of the effects of inflation results in inflationary gains or losses on non-monetary and monetary items that are presented within equity and within results.

Critical Accounting Policies The preparation of financial statements in conformity with MFRS requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of our consolidated financial statements and revenues and expenses during the periods reported. Actual results could differ from these estimates, and changes in these estimates are recorded when known. The critical accounting policies used in the preparation of our consolidated financial statements included elsewhere in this offering memorandum are those that are important both to the presentation of financial condition and results of operations as well as those that require significant judgments with regard to estimates used in arriving at recognition of amounts in the financial statements. These critical judgments relate to future cash flows associated with impairment testing of long-lived assets and valuations of certain assets and liabilities, including derivatives and income taxes.

We disclose our significant accounting policies in the notes accompanying our audited consolidated financial statements, included elsewhere in this offering memorandum.

The following policies affect the more significant estimates and judgments used in the preparation of our financial statements and changes in these judgments and estimates may impact our future results of operations and financial condition.

Impairment of long-lived assets in use. We review the carrying amounts of long-lived assets in use when impairment indicators suggest that such amounts might not be recoverable, considering the greater of the present value of future net cash flows or the net sales price upon disposal. Impairment is recorded when the carrying amounts exceed the greater of such amounts. The primary impairment indicators we consider are: • operating losses or negative cash flows in the period, if they are combined with a history of losses or we project future losses; • depreciation and amortization charged to results, which in percentage terms in relation to revenues are substantially higher than in previous years; • obsolescence; • reduction in the demand for the products manufactured; • competition; and • other legal and economic factors.

31 Goodwill. Goodwill is recorded at acquisition cost, except for those entities operating in inflationary economic environments, in which case goodwill is restated for the effects of inflation by applying the National Consumer Price Index (Indice Nacional de Precios al Consumidor). Goodwill is not amortized, and at least once every year, is subject to impairment tests.

Financial risk management policy and derivative financial instruments. Our daily operations expose us to a number of inherent financial risks primarily related to interest and currency variations as well as risks related to fluctuations in the prices of the raw materials we use in our operations. As a result, we use derivative financial instruments to mitigate the potential impact of such fluctuations. We believe that these instruments provide us with greater flexibility, which results in more stable income and better visibility with increased certainty regarding future costs and expenses. We enter into derivative financial instruments only for hedging purposes.

We record all derivatives at fair value on our balance sheet, which we determine using market prices. If such instruments are not traded, fair value is determined by applying recognized valuation techniques. Changes in the fair value of derivative instruments designated as hedges are recognized as follows: • for fair value hedges, changes in both the derivative instrument and the hedged item are recognized in current earnings; • for cash flow hedges, changes in the effective portion are temporarily recognized as a component of other comprehensive income and then reclassified to current earnings when affected by the hedged item; • for hedges of an investment in a foreign subsidiary, the effective portion is recognized as a component of other comprehensive income as part of the cumulative translation adjustment. The ineffective portion of the gain or loss on the hedging instrument is recognized in current earnings, if it is a derivative financial instrument. If not, it is recognized as a component of other comprehensive income until the investment is sold or transferred.

To manage our exposure to interest rate and foreign currency fluctuations, we principally use interest rate swaps and foreign currency forward contracts. We also use futures contracts to fix the purchase price of raw materials. We formally document all hedging relationships, including their objectives and risk management strategies to carry out derivative transactions. Derivative trading is performed only with reputable financial institutions, and limits have been established for each institution.

Income taxes. Income taxes, or ISR, and the Business Flat Tax, or IETU, are recorded in the year in which they are incurred. To recognize deferred income taxes, based on financial projections, we determine whether we expect to incur ISR or IETU and accordingly recognize deferred taxes based on that expectation. Deferred taxes are calculated by applying the corresponding tax rate to the applicable temporary differences resulting from comparing the accounting and tax bases of assets and liabilities and including, if any, future benefits from tax loss carryforwards and certain tax credits. Deferred tax assets are recorded only when there is a high probability of recovery.

Results of Operations The following discussion comparing our financial results of operations for the years ended December 31, 2010 and 2009 and for the nine months ended September 30, 2011 and 2010 is based on our consolidated financial statements included elsewhere in this offering memorandum.

32 Nine Months Ended September 30, 2011 Compared to Nine Months Ended September 30, 2010 Net Sales Net sales for the nine months ended September 30, 2011 increased by Ps.5,139 million, or 5.9%, to Ps.91,871 million from Ps.86,732 million for the nine months ended September 30, 2010. The increase in net sales was primarily a result of higher pricing and increase in sales volumes in Mexico and Central and South America. By region, net sales increased as detailed below: • United States. Net sales from our operations in the United States for the nine months ended September 30, 2011 decreased by Ps.1,245 million, or 3.5%, to Ps.34,555 million from Ps.35,800 million for the nine months ended September 30, 2010, mainly as a result of an overall decrease in sales volumes due to a depressed consumer environment, despite our Bimbo and Marinela brands reporting an increase in sales volumes, coupled with the effect of converting U.S. dollar-denominated sales into Mexican pesos at a lower average exchange rate, which was partially offset by better pricing across our different categories and distribution channels. • Mexico. Net sales from our operations in Mexico for the nine months ended September 30, 2011 increased by Ps.4,316 million, or 10.1%, to Ps.47,111 million from Ps.42,795 million for the nine months ended September 30, 2010, mainly as a result of: • healthy volume growth across our portfolio carried mainly by a heightened performance in the cookies, sweet baked goods, salted snacks and confectionary categories; and • the implementation of pricing initiatives during the 12-month period ended September 30, 2011. • Central and South America. Net sales from our operations for the nine months ended September 30, 2011 increased by Ps.2,339 million, or 22.9%, to Ps.12,547 million from Ps.10,208 million for the nine months ended September 30, 2010, mainly as a result of better pricing and higher sales volumes across the region, reflecting our increased market penetration in Brazil, Colombia and Chile which all registered double-digit growth.

Net Sales

Nine Months Ended September 30, (in millions of Ps.) Region 2011 2010 % Change United States ...... 34,555 35,800 (3.5) Mexico1 ...... 47,111 42,795 10.1 Central and South America ...... 12,547 10,208 22.9 Consolidated2 ...... 91,871 86,732 5.9

1 These figures include results from operations in Asia, which were not material. 2 Consolidated figures include the effects of intercompany eliminations

Gross Margin Gross margin for the nine months ended September 30, 2011 decreased by 1.7 percentage points to 51.4% from 53.1% for the nine months ended September 30, 2010, primarily as a result of an increase in commodity prices across all regions and expenses associated with the construction and opening of new production plants in the United States and Brazil as detailed below. • United States. Gross margin from our United States operations for the nine months ended September 30, 2011 remained unchanged at 49.9% primarily as a result of increase in prices which were totally offset by expenses associated with the construction and opening of new production plants in the United States coupled with an increase in commodity prices.

33 • Mexico. Gross margin from our Mexican operations for the nine months ended September 30, 2011 decreased by 2.9 percentage points to 53.1% from 56.0% for the nine months ended September 30, 2010, mainly as a result of increase in commodity prices. • Central and South America. Gross margin from our Central and South American operations for the nine months ended September 30, 2011 decreased by 2.2 percentage points to 39.4% from 41.6% for the nine months ended September 30, 2010, mainly as a result of an increase in commodity prices and the construction and opening of operations of a new production plant in Brazil.

General Expenses General expenses for the nine months ended September 30, 2011 increased by Ps.1,932 million, or 5.17%, to Ps.39,268 million from Ps.37,336 million for the nine months ended September 30, 2010, primarily as a result of increased sales. However, the ratio of our general expenses to net sales, decreased by 0.3 percentage points for the nine months ended September 30, 2011 when compared to the nine months ended September 30, 2010, primarily as a result of achieving greater cost efficiencies in Mexico, Latin America and the United States. Such efficiencies were partially offset by increasing expenses as a result of the expansion of our distribution network in the United States and Latin America and the impact of inflation on costs such as fuel in the United States.

Income After General Expenses Income after general expenses for the nine months ended September 30, 2011 decreased by Ps.770 million, or 8.8%, to Ps.7,949 million from Ps.8,719 million for the nine months ended September 30, 2010. The decrease in income after general expenses was primarily a result of higher raw material costs and an increase in sales and distributions expenses in the United States and Central and South America as detailed below: • United States. Income after general expenses from our operations in the United States for the nine months ended September 30, 2011 decreased by Ps.208 million, or 6.6%, to Ps.2,932 million from Ps.3,140 million for the nine months ended September 30, 2010, mainly as a result of higher commodity costs, expansion of our distribution network and the impact of inflation on fuel costs, which was partially offset by increased efficiencies in sales and distribution. • Mexico. Income after general expenses in Mexico for the nine months ended September 30, 2011 decreased by Ps.81 million, or 1.5%, to Ps.5,371 million from Ps.5,452 million for the nine months ended September 30, 2010, mainly as a result of pressure on gross margin, which was partially offset by growth in sales volume and increased efficiencies in distribution. • Central and South America. Our operations in Central and South America for the nine months ended September 30, 2011, reported operating losses of Ps.322 million, as compared to an operating income of Ps.129 million for the nine months ended September 30, 2010, mainly as a result of gross margin pressure and higher distribution expenses associated with the creation of new routes and distribution centers, particularly in Brazil, as well as pre-operating expenses associated with the construction and opening of operations of a new production plant in Brazil as part of our growth strategy in the region.

Income after general expenses

Nine Months Ended September 30, (in millions of Ps.) Region 2011 2010 % Change United States ...... 2,932 3,140 (6.6) Mexico1 ...... 5,371 5,452 (1.5) Central and South America ...... (322) 129 NA Consolidated2 ...... 7,949 8,719 (8.8)

1 These figures include results from operations in Asia, which were not material. 2 Consolidated figures include the effect of intercompany eliminations.

34 EBITDA EBITDA for the nine months ended September 30, 2011 decreased by Ps.888 million, or 7.7%, to Ps.10,577 million from Ps.11,465 million for the nine months ended September 30, 2010. The decrease in EBITDA was primarily a result of higher raw material costs, an increase in sales and distributions expenses in the United States and Central and South America, and expenses associated with the construction and opening of new production plants in the United States and Brazil.

EBITDA

Nine Months Ended September 30, (in millions of Ps.) Region 2011 2010 % Change United States ...... 3,828 4,182 (8.5) Mexico1 ...... 6,567 6,670 (1.5) Central and South America ...... 214 615 (65.2) Consolidated2 ...... 10,577 11,465 (7.7)

1 These figures include results from operations in Asia, which were not material. 2 Consolidated figures include the effect of intercompany eliminations.

Comprehensive Financing Cost Comprehensive financing cost for the nine months ended September 30, 2011 decreased by Ps.1,209 million, or 62%, to Ps.739 million from Ps.1,948 million for the nine months ended September 30, 2010, primarily as a result of a lower interest expense following refinancing of certain debt and conversion to 100% U.S. dollar-denominated debt, which incurs interest at a lower interest rate, and exchange gains from cash holdings in U.S. dollars.

Income Taxes While the applicable tax rates did not undergo any change, income taxes for the nine months ended September 30, 2011 increased by Ps.98 million, or 4.6%, to Ps.2,228 million from Ps.2,130 million for the nine months ended September 30, 2010 primarily due to an increase of our taxable income. Our effective tax rate was 33.5% in the nine months ended September 30, 2011 and 34.0% in the nine months ended September 30, 2010.

Net Income of Controlling Stockholders Net income of controlling stockholders for the nine months ended September 30, 2011 increased by 7.6% to Ps.4,327 million, while the margin increased by 0.1 percentage point to 4.7% when compared against the same period in 2010. These increases primarily resulted from reductions in our comprehensive financing costs.

Year Ended December 31, 2010 Compared to Year Ended December 31, 2009 Net Sales Net sales for the year ended December 31, 2010 increased by Ps.810 million, or 0.7%, to Ps.117,163 million from Ps.116,353 million for the year ended December 31, 2009. The increase in net sales was primarily a result of our growth in net sales in Mexico and Central and South America, which offset our decline in net sales in United States which was primarily due to the effect of the exchange rate reflecting a devaluating U.S. dollar against the Mexican peso. • United States. Net sales from our United States operations for the year ended December 31, 2010 decreased by Ps.1,975 million, or 4.0%, to Ps.47,875 million from Ps.49,850 million for the year ended

35 December 31, 2009, primarily as a result of lower average product prices and the impact of currency conversion of U.S. dollars into Mexican pesos, which more than offset an increase in sales volume for such period. • Mexico. Net sales from our Mexican operations for the year ended December 31, 2010 increased by Ps.2,482 million, or 4.5%, to Ps.57,870 million from Ps.55,388 million for the year ended December 31, 2009, mainly as a result of an increase in sales volume of our snacks, sweet baked goods, and packaged bread categories. • Central and South America. Net sales from our Central and South America operations for the year ended December 31, 2010 increased by Ps.601 million, or 4.4%, to Ps.14,207 million from Ps.13,606 million for the year ended December 31, 2009, primarily due to growth in sales volume primarily in Brazil, Chile and Colombia, price increases across the region, a broader client base and continued expansion of our distribution network.

Net Sales

Year Ended December 31, (in millions of Ps.) Region 2010 2009 % Change United States ...... 47,875 49,850 (4.0) Mexico1 ...... 57,870 55,388 4.5 Central and South America ...... 14,207 13,606 4.4 Consolidated2 ...... 117,163 116,353 0.7

1 These figures include results from operations in Asia, which were not material. 2 Consolidated figures include the effect of intercompany eliminations.

Gross Margin Gross margin for the year ended December 31, 2010 remained unchanged at 52.8%, primarily as a result of a strengthened performance in Mexico which was enhanced by appreciation of the Mexican peso against the U.S. dollar, which offset the negative impact of increasing prices, in particular commodities, and lower average product prices in the United States, as detailed below. • United States. Gross margin from our United States operations for the year ended December 31, 2010 decreased by 1.0 percentage point to 49.5% from 50.5% for the year ended December 31, 2009 as a result of higher commodity costs and lower average product prices, despite an increase in sales volume for such period. • Mexico. Gross margin from our Mexican operations for the year ended December 31, 2010 increased by 0.9 percentage points to 56.0% from 55.1% for the year ended December 31, 2009, mainly as a result of an appreciation of the Mexican peso against the U.S. dollar which totally offset the increased pressure in commodity prices. • Central and South America. Gross margin from our operations in Central and South America for the year ended December 31, 2010 decreased by 1.7 percentage points to 40.5% from 42.2% for the year ended December 31, 2009, mainly due to an increase in commodity prices and expenses associated with the construction and opening of a new production plant in Brazil.

36 General Expenses General expenses for the year ended December 31, 2010 increased by Ps.1,087 million, or 2.2%, to Ps.50,453 million from Ps.49,366 million for the year ended December 31, 2009, primarily as a result of: • higher advertising and promotion expenses, intended to increase consumption and drive volumes; • the addition of new distribution routes, primarily in Central and South America; • a non-cash provision of Ps.346 million in Brazil that increased our estimates of reserves for anticipated contingencies, in connection with several pending litigation proceedings in order to provide a more conservative amount of reserves; and • an increase in general expenses due primarily to acquisition costs of Ps.222 million related to acquisitions in 2010 required to be recorded in the statement of income at the holding company level, as opposed to part of the allocated purchase price of the acquisition, due to a change in MFRS.

Income After General Expenses Income after general expenses for the year ended December 31, 2010 decreased by Ps.661 million, or 5.5%, to Ps.11,393 million from Ps.12,054 million for the year ended December 31, 2009, primarily related to an increase in the costs of raw materials and a non-cash provision in Brazil that increased our estimates of reserves for anticipated litigation contingencies, which reduced our operating margin for such period and, which was partially offset by an improved absorption of fixed expenses in all regions, as described below: • United States. Income after general expenses from our U.S. operations for the year ended December 31, 2010 decreased by Ps.523 million, or 12.3%, to Ps.3,738 million from Ps.4,261 million for the year ended December 31, 2009. This decrease was primarily the result of increased pressure on our gross margin due to the rising costs of raw materials in addition to the expansion of our distribution network to enhance the penetration of our brands, which was partially offset by increased administrative efficiencies. • Mexico. Income after general expenses from our Mexican operations for the year ended December 31, 2010 increased by Ps.514 million, or 6.9%, to Ps.8,013 million from Ps.7,499 million for the year ended December 31, 2009, mainly as a result of increase in our sales volume and improvement in our gross margin in the region, despite acquisition costs at the holding company level, following the implementation of a change in MFRS as described above. • Central and South America. Operations in Central and South America for the year ended December 31, 2010 reported a loss of Ps.340 million, as compared to the reported income after general expenses of Ps.301 million for the year ended December 31, 2009, mainly due to an increasing pressure on gross margins, increased investment in the expansion of our distribution network and a non-cash provision in Brazil as described above.

Income after general expenses

Year Ended December 31, (in millions of Ps.) Region 2010 2009 % Change United States ...... 3,738 4,261 (12.3) Mexico1 ...... 8,013 7,499 6.9 Central and South America ...... (340) 301 NA Consolidated2 ...... 11,393 12,054 (5.5)

1 These figures include results from operations in Asia, which were not material. 2 Consolidated figures include the effect of intercompany eliminations.

37 EBITDA EBITDA for the year ended December 31, 2010 decreased by Ps.369 million, or 2.3%, to Ps.15,468 million from Ps.15,837 million for the year ended December 31, 2009. The decrease in EBITDA was primarily due to an increase in the costs of raw materials and a non-cash provision in Brazil that increased our estimates of reserves for anticipated contingencies, in connection with several pending litigation proceedings as discussed above.

EBITDA

Year Ended December 31, (in millions of Ps.) Region 2010 2009 % Change United States ...... 5,196 5,727 (9.3) Mexico1 ...... 9,628 9,166 5.0 Central and South America ...... 662 951 (30.4) Consolidated2 ...... 15,468 15,837 (2.3)

1 These figures include results from operations in Asia, which were not material. 2 Consolidated figures include the effect of intercompany eliminations.

Comprehensive Financing Cost Comprehensive financing cost for the year ended December 31, 2010 increased by Ps.611 million, or 30.4%, to Ps.2,623 million from Ps.2,012 million for the year ended December 31, 2009, primarily as a result of a foreign exchange loss incurred in 2010 as compared to a foreign exchange gain incurred in 2009, coupled with higher interest rates associated with debt instruments with longer maturities that we entered into to establish an amortization profile consistent with our corporate strategy.

Income Taxes Income tax expense for the year ended December 31, 2010 decreased by Ps.464 million, or 16.4%, to Ps.2,363 million from Ps.2,827 million for the year ended December 31, 2009, primarily as a result of the benefit of deferred taxes available due to losses from previous periods. Our effective tax rate was 29.9% in the year ended December 31, 2010 and 31.7% in the year ended December 31, 2009.

Net Income of Controlling Stockholders Net income of controlling stockholders for the year ended December 31, 2010 decreased by Ps.561 million, or 9.4%, to Ps.5,395 million from Ps.5,956 million for the year ended December 31, 2009, primarily as a result of pressure on gross margin, as well as the increase in comprehensive financing costs.

Liquidity and Capital Resources Liquidity Liquidity represents our ability to generate sufficient cash flows from operating activities to meet our obligations as well as our ability to obtain appropriate financing. Therefore, liquidity cannot be considered separately from capital resources that consist primarily of current and potentially available funds for use in achieving our objectives. Currently, our liquidity needs arise primarily from working capital requirements, debt payments, capital expenditures and dividends. In order to satisfy our liquidity and capital requirements, we primarily rely on our own capital, including cash generated from operations, and our committed credit facilities.

We believe that our cash from operations, our existing credit facilities, and our long-term financing will provide sufficient liquidity to meet our working capital needs, planned capital expenditures, future contractual obligations and payment of dividends.

38 Cash Flows from Operating Activities Nine Months Ended September 30, 2011 and 2010 For the nine months ended September 30, 2011, net cash flows from operating activities increased by Ps.2,928 million to Ps.11,497 million as compared to Ps.8,569 million in 2010 as a result of recovered taxes and improvements in our operations, primarily at Bimbo Bakeries USA, Inc., or BBU.

Years ended December 31, 2010 and 2009 For the year ended December 31, 2010, net cash flows from operating activities decreased by Ps.2,074 million to Ps.11,375 million in 2010 as compared to Ps.13,449 million in 2009, primarily as a result of tax payments due at the end of the year.

Net Cash Flows from Investing Activities Nine Months Ended September 30, 2011 and 2010 For the nine months ended September 30, 2011, net cash used in investing activities increased by Ps.2,993 million to Ps.5,313 million as compared to Ps.2,320 million in the same period for 2010, primarily as a result of the acquisitions made during the nine months then ended.

Years ended December 31, 2010 and 2009 For the year ended December 31, 2010, net cash used in investing activities decreased by Ps.32,424 million to Ps. 5,974 million as compared to Ps.38,398 million in 2009, primarily as a result of the WFI acquisition in 2009 for Ps.35,014 million.

Net Cash Flows from Financing Activities Nine Months Ended September 30, 2011 and 2010 For the nine months ended September 30, 2011, net cash used in financing activities was Ps.2,910 million as compared to a net cash provided by financing activities of Ps.6,252 million in the same period of 2010. This change is due to the proceeds of a syndicated loan obtained in 2010 to refinance certain of our debt obligations and to fund the Earthgrains acquisition.

During the nine months ended September 30, 2011, we paid a dividend of Ps.0.14 per share totaling Ps.647 million.

Years ended December 31, 2010 and 2009 For the year ended December 31, 2010, net cash used in financing activities was Ps.6,983 million as compared to net cash from financing activities of Ps.22,606 million in the same period of 2009. This change is due primarily to debt obligations issued in 2009 to finance the WFI acquisition.

During 2010, we paid a dividend of Ps.0.50 per share totaling Ps.588 million.

Borrowings from Banks and Other Financial Institutions Our total net indebtedness decreased to Ps.29,885 million as of December 31, 2010 from Ps.31,759 million as of December 31, 2009, mainly as a result of the repayment of certain debt obligations during 2010.

On June 23, 2010 we obtained U.S.$800 million through our offering of 4.875% notes due 2020, or the 4.875% Notes due 2020, issued to refinance indebtedness incurred to finance the WFI acquisition and for other corporate purposes.

39 We also maintain a U.S.$1.3 billion senior unsecured term loan facility, or the Senior Term Loan, with a syndicate of banks, which bears interest at a rate of LIBOR plus 1.10%. We intend to use the net proceeds of this offering to repay a portion of our indebtedness under the Senior Term Loan. See “Use of Proceeds.”

We also maintain a U.S.$750 million committed dual-currency revolving credit facility, or the Syndicated Revolving Credit Facility, with a syndicate of banks, which currently bears interest at a rate of LIBOR plus 1.00%, in the case of U.S. dollar loans, and TIIE plus 0.90%, in the case of Mexican peso loans. The Syndicated Revolving Credit Facility matures on June 29, 2014. We have entered into an agreement pursuant to which, subject to the satisfaction of certain conditions, the Syndicated Revolving Credit Facility would be amended by, among others, increasing the lenders’ commitments to U.S.$1.5 billion and extending its maturity to December 2016. As of December 30, 2011, the aggregate outstanding principal amount under the Syndicated Revolving Credit Facility was U.S.$90 million.

We also maintain a Ps.5,200 million, Peso-denominated revolving credit facility, or the Peso Revolving Credit Facility, with a Mexican bank, which currently bears interest at a rate of TIIE plus 2.50%, which margin varies based on our debt/EBITDA ratio. The Peso Revolving Credit Facility matures on April 27, 2012. As of December 30, 2011, the aggregate outstanding principal amount under the Peso Revolving Credit Facility was Ps.2,100 million.

We also maintain a €65 million, bilateral Euro-denominated credit facility, or the Euro Facility, used to finance in part our acquisition of Bimbo Iberia. The Euro Facility bears interest at a rate of Eurolibor plus 1.00%. The Euro Facility matures on October 20, 2014. As of December 30, 2011, the aggregate outstanding principal amount under the Euro Facility was €65 million.

In addition, we have issued and outstanding the following notes (Certificados Bursátiles) in the Mexican capital markets, which were issued under a program, or the Program, authorized by the CNBV up to the amount of Ps.20,000 million: • Notes issued on May 17, 2002 in the aggregate amount of Ps.750 million, maturing in 2012 and bearing interest at a rate of 10.15%, or the 10.15% Notes due 2012; • Notes issued on June 15, 2009 in the aggregate amount of Ps.5,000 million, maturing in 2014 and bearing interest at a rate equal to the 28-day TIIE plus 1.55%, or the TIIE28 +1.55% Notes due 2014; • Notes issued on June 15, 2009 in the aggregate amount of Ps.2,000 million, maturing in 2016 and bearing interest at a rate of 10.60%, or the 10.60% Notes due 2016; and • Notes issued on June 15, 2009 in the aggregate amount of 706 million UDIs (approximately Ps.3,197 million), maturing in 2016 and bearing interest at a rate of 6.05%, or the 6.05% Notes due 2016.

40 The following table sets forth our outstanding financial indebtedness as of the dates indicated below:

As of As of December 31, September 30, (in millions of Ps.) 2011 2010 2009 (in millions (in millions (in millions (in millions (in millions of U.S.$) of Ps.) of U.S.$) of Ps.) of Ps.) 4.875% Notes due 2020 ...... 800* 10,738 800* 9,886 — Syndicated Credit Facility** ...... — — 867 10,736 21,250 Senior Term Loan ...... 1,300* 17,448 — — — Syndicated Revolving Credit Facility ...... 0 0 0 0 3,918 Peso Revolving Credit Facility ...... 0 0 — — — TIIE28 +1.55% Notes due 2014 ...... 363 5,000 404 5,000 5,000 10.60% Notes due 2016 ...... 145 2,000 162 2,000 2,000 6.05% Notes due 2016 ...... 235 3,242 258 3,197 3,066 10.15% Notes due 2012 ...... 54 750 61 750 750 Other loans ...... 105 1,446 133 1,641 756 Less – Current portion of long-term debt ...... 155 2,137 131 1,624 4,656 Long – term debt ...... 2,795* 38,487 2,551* 31,586 32,084 * The U.S. dollar amount for debt denominated in U.S. dollars represents the outstanding balance in U.S. dollars of such debt as of the relevant date, and are not translations of the respective Mexican peso amount using the convenience translation exchange rate used throughout this offering memorandum. However, the total long-term debt in the U.S. dollar columns represents a translation of the respective amount in Mexican pesos using the convenience translation exchange rate used throughout this offering memorandum and, therefore, does not constitute the sum of the individual debt amounts listed on the U.S. dollar columns. ** This credit facility was refinanced with the proceeds of the Senior Term Loan.

We continuously explore financing alternatives, which in the future may include issuances of additional notes (Certificados Bursátiles) under the Program.

Contractual Obligations The following table reflects our contractual obligations and commercial commitments as of September 30, 2011. Commercial commitments include our outstanding debt, operating leases and other potential cash outflows as follows:

Payments due by period (in millions of Ps.) 2014 and Total 2011 2012-2013 thereafter Current portion of long-term debt ...... 2,137 1,387 750 — Long-term debt ...... 38,487 — 558 38,486 Operating leases ...... 4,932 793 1,951 2,189

Quantitative and Qualitative Disclosure about Market Risk We are exposed to market risks arising from changes in prices, exchange rates and interest rates. Presented below is a description of our most significant risks.

We purchase raw materials and energy necessary to produce our products. The price and other terms of those purchases are subject to changes based on factors such as worldwide supply and demand. We continuously manage our exposure to increases in the price of our raw materials, including wheat. We have employed and may continue to employ hedging arrangements to manage our exposure to price fluctuations of our key raw materials.

41 Accordingly, our results of operations, cash flows and financial position are sensitive to the fluctuation of the Mexican peso and other currencies relative to the U.S. dollar, our ability to obtain wheat, sugar, edible oils and our other raw materials at a competitive cost, and the prices of energy.

As of September 30, 2011, our contracted futures and their main terms were:

Contracts

Fair Value (in Date of Commencement Position Number Maturity Region millions of Ps.) Futures contracts to fix the purchase price of wheat and soybean oil June through September, 2011 ...... Long 2,902 Between September, 2011 and Mexico (168) September, 2012 March through September, 2011 ...... Long 1,592 Between September, 2011 and USA (47) May, 2012 June through July, 2011 ...... Long 169 Between September, 2011 and OLA (7) May, 2012 Various (Soybean Oil) ...... Long 184 Various USA (2) Total ...... (224) Futures contracts to fix the purchase price of natural gas, diesel and gasoline Various (Natural Gas) ...... Long 589 Various Mexico (18) Various (Natural Gas) ...... Long 212 Various USA (11) Various (Diesel) ...... Long 353 Various USA (7) Various (Gasoline) ...... Long 468 Various USA (11) Total ...... (47)

Exchange Rate Risk As of September 30, 2011, 100% of our debt is denominated in U.S. dollars, either from origination or through cross currency swaps. These U.S. dollar-denominated liabilities are covered by the investment in U.S. dollar-denominated assets in BBU. As of December 31, 2010, 51% of our liabilities were denominated in U.S. dollars and 49% were denominated in Mexican pesos.

The table below presents the amounts, the contracted exchange rate, the amount and the fair value of those instruments, as of September 30, 2011 in millions of Mexican pesos unless otherwise noted:

Amount in Contracted Date of Commencement Maturity U.S. dollars exchange rate Amount Fair Value (in millions of Ps.) February through May, 2011 ...... Between October and 51,500,000 Between 622,761 (59,917) December, 2011 11.9342 and 12.5240

Interest Rate Risk A significant portion of our contracted debt as of September 30, 2011 is denominated in U.S. dollars. A severe depreciation of the peso may result in disruption of the international foreign exchange markets. This may limit our ability to transfer or convert pesos into U.S. dollars or other currencies for the purpose of making timely payments of interest and principal on the notes and any U.S. dollar-denominated debt that we may incur in the future.

42 In connection with our business activities, we have issued and hold financial instruments that currently expose us to market risks related to changes in interest rates. Interest rate risk exists, among others, with respect to our indebtedness that bears interest at floating rates. At September 30, 2011, we had outstanding indebtedness of Ps.40.6 billion, the majority of which bore interest at variable interest rates. The interest rate on our variable rate debt is determined by reference to the LIBOR rate. Increases in the LIBOR rate would, consequently, increase our interest payments.

The following table sets forth notional amounts by scheduled maturity, interest rates and estimated fair market value of swaps instruments as of September 30, 2011.

Interest rate Notional Amount (in millions of Ps. unless otherwise Fair Value Date of Commencement Maturity indicated) Paid Collected (in millions of Ps.) September 15, 2010 ...... May3,2012 58.6* 5.70% 10.15% (14) (U.S.$) (pesos) September 13, 2010 ...... June 6, 2016 155.3* 6.35% 10.60% (34) (U.S.$) (pesos) June 10, 2009 ...... June 6, 2016 1,000 10.54% 6.05% 116 (pesos) (UDI) June 24, 2009 ...... June 6, 2016 2,000 10.60% 6.05% 227 (pesos) (UDI) February 24, 2011...... June 9, 2014 1,000 8.00% 6.37% (40) February 24, 2011...... June 9, 2014 1,000 7.94% 6.37% (38) February 28, 2011...... June 9, 2014 1,000 8.03% 6.37% (40) February 11, 2011...... June 9, 2014 166.0* 5.06% 8.98% (217) February 17, 2011...... June 6, 2016 83.1* 6.47% 10.54% (253) February 17, 2011...... June 6, 2016 166.3* 6.53% 10.60% (125) April 27, 2011...... June 9, 2014 86.6* 3.73% 7.94% (140) April 25, 2011...... June 9, 2014 86.2* 3.83% 8.03% (139) April 28, 2011...... June 9, 2014 86.7* 3.79% 8.00% (146) June 26, 2009 ...... June 9, 2014 2,000 7.43% 4.82% (129) May 27, 2009 ...... January 15, 2014 150* 2.33% 0.23% (60) May 29, 2009 ...... January 13, 2012 25* 1.63% 0.23% (1) May 29, 2009 ...... January 13, 2012 100* 1.66% 0.23% (6) * Amounts in millions of U.S. dollars.

Off-Balance Sheet Arrangements We do not currently have transactions involving off-balance sheet arrangements.

43 INDUSTRY

Overview of the Bakery Industry Bread is one of the oldest manufactured food products in history and remains a staple product across the world, which is generally affordable to all market segments. According to IBISWorld, as of July 25, 2011, the bakery industry had an estimated global market size of over U.S.$373.8 billion in industry revenue and over the past five years has had an estimated annual growth in revenue at an annualized rate of 1.3%, a trend that is estimated by IBISWorld to continue through 2016 following a steady annualized revenue growth rate of 1.3% to total U.S.$398.2 billion.

According to IBIS World, the global bakery industry is comprised of a wide variety of products, generally divided into four different categories: • fresh and frozen breads and rolls; • cookies, crackers and pretzels; • fresh and frozen cakes, pies and other pastries; and • tortillas.

The table below shows as of July 25, 2011 the market share of each category in the global bakery industry:

Global Bakery Industry – Product Segmentation

Product/Services Share Cookies (including crackers and pretzels) 22.1% Fresh and frozen bread and rolls 53.3% Fresh and frozen cakes, pies and other pastries 18.2% Tortillas 6.4%

Source: IBISWorld as of July 25, 2011

According to Datamonitor, in 2010, the bread and rolls category had an overall annual consumption per capita of 17.3 kilograms.

As is the case throughout the consumer goods industry, performance of baked goods companies is driven mainly by brand recognition and product differentiation and the ability to deliver high-quality products that appeal to the necessities and tastes of the consumer base. The bakery industry is fairly stable and has benefited from a steady growth rate throughout the years and has not been significantly affected by global or local economic downturns. For example, in 2009, industry revenue increased by 2.5% and, in 2010, it is estimated to have increased 2.8% to U.S.$369.4 billion, according to IBISWorld.

44 The tables below show the observed revenue growth in the bakery industry as recorded by IBISWorld, and projected growth through 2014 in the global bakery and cereals industry according to Datamonitor:

Global Bakery Industry – Revenue and Revenue Growth Rate

* In millions of U.S. dollars.

Source: IBISWorld as of January 14, 2010

Global Bakery and Cereals Industry – Value by Category ($m), 2004-14**

Figure 1: Global, bakery and cereals, value by category ($m), 2004−14

450,000 400,000 350,000 300,000 250,000 200,000

Value ($m) Value 150,000 100,000 50,000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Bread and rolls Cakes and pastries Cookies (sweet biscuits)

Breakfast cereals Morning goods Crackers (savory biscuits)

Source: Datamonitor D A T A M O N I T O R

* In millions of U.S. dollars. ** Actual through 2009, forecast thereafter.

Source: Datamonitor as of January 2011

Sales and revenues generally depend on the industry’s ability to interpret and adapt to consumer demands and trends, such as health concerns and low-carbohydrate diets. In certain markets, such as the United States and

45 Europe, for example, there is also a movement towards functional bread products that include healthy ingredients such as organic grains, Omega-3 and calcium. Producers have focused in the past years on the health and well- being movement and have introduced products containing healthy additives such as whole grains, fortified breads and fruit infusions.

The bakery industry is highly competitive and fragmented in virtually every region across the world, due in part to the fact that the manufacturing process of baked goods in small volumes is fairly unsophisticated and utilizes only commodity raw materials which are generally available to the public, such as wheat, edible oils, eggs, sugar, milk and chocolate, allowing small producers to easily access regional or local markets. As a result, the worldwide bread and bakery industry has low concentration. Major competitors with global presence usually operate capital and labor – intensive business models with more structured supply arrangements and an extensive network of production facilities and distribution and transportation routes. In 2011, the global industry’s four major competitors captured an aggregate market share of approximately 11.7%.

The chart below shows as of July 25, 2011, the market share of the major participants in the global bakery industry:

Global Bakery Industry – Worldwide Market Share

Participant Estimated Market Share Kraft Foods Inc. 3.8% Yamazaki Baking Company, Limited 2.0% Grupo Bimbo, S.A.B. de C.V. 1.9% Hostess Brands 1.7% Sara Lee Corporation 1.2%1 Gruma S.A.B. de C.V. 1.1% Others 88.3%

1 These percentages of estimated market share, do not take into account our acquisition of Earthgrains in November 2011.

Source: IBISWorld as of July 25, 2011

Major participants in the industry include Kraft Foods Inc., Yamazaki Baking Company, Limited and Grupo Bimbo. Unlike our main competitors worldwide, Grupo Bimbo’s core business is focused on the bakery industry. Kraft Foods Inc. is the largest food and beverage company in North America and owns some of the world’s best known bakery products and brands across the cookie and cracker product segments such as Cadbury, Oreo, Chips Ahoy! and Ritz. Yamazaki Baking Company, Limited was founded in Tokyo in 1948 and manufactures a range of breads, sweet-buns, Japanese and Western style confectionery, processed bread and prepared rice, side dishes, jam desserts and prepared foods.

Other important participants in the industry include Hostess Brands and Gruma, S.A.B. de C.V. The majority of the remaining market is captured by regional family-owned bakeries, supermarkets and grocery stores with their own bakeries.

Main customers of commercial bakers include supermarkets, convenience stores, restaurants, hotels, fast food outlets, schools and other institutions. The sale of products is carried out by sales forces that in some cases are outsourced to third parties. Due to the perishable nature of bread and bakery products, difficulties associated with transportation of products and customers’ expectations to restock shelves several times a day, most industry participants are focused on local markets. Recent advancement in technology and packaging have significantly increased the durability of bakery products, increasing their ability to be delivered over longer distances.

46 United States North America represents the second largest baked goods market globally in terms of industry revenue and production according to IBISWorld as of July 25, 2011. In 2010, according to Datamonitor, in the United States, the aggregate market value of the bread and rolls, cakes and pastries, cookies and crackers segments was approximately U.S.$39.7 billion, with an aggregate annual per capita consumption level of approximately 29.6 kg., in contrast to a global average of approximately 23 kg. per year. The bakery industry in the United States is highly fragmented, with the top ten producers accounting for approximately 44.5% of market share.

We participate in the United States market through BBU, which produces, distributes and commercializes packaged bread and tortillas, and distributes more than 1,900 products exported and commercialized under the brands Bimbo, Oroweat Arnold, Marinela, Thomas’, Sara Lee, Entenmann’s, Stroehmann, Mrs. Baird’s, Freihofer’s, Earthgrains, Maier’s, Heiners, Rainbo, Sunbeam, D’Italiano, Colonial, San Luis Sourdough, Ball Park, Boboli and Sunmaid. Following our acquisition of Earthgrains on November 6, 2011, we increased our range of products offered in the United States by 295 and incorporated several household bakery brands into our portfolio, such as Sara Lee, Earthgrains, Sunbeam and Rainbo. Earthgrains’ strong array of products in the bread and rolls segments further consolidates our growth strategy in the United States. For example, following the acquisition of Earthgrains, we believe we increased our market participation in the United States to 28.1% from 17.7% in the bread and rolls segment. BBU is one of the largest baked goods market participants in the United States. Some of our major competitors include Flowers Foods, Hostess Brands, Pepperidge Farm and private label brands. The U.S. packaged baked goods industry is much more competitive than the Central and South American market and consumers have a higher interest in low-carbohydrate diets and whole-grain baked products. It is a mature market, with established brands. Thus, differentiated products, solid cost controls and distribution density and efficiency are key performance drivers in this market.

Earlier in this century, the industry was impacted by a consumer trend towards low-carbohydrate diets. However, the industry has adapted well to the trend and bread sales have recovered, attracting consumers to value-added breads and healthy alternatives. The bread market has regained traction, supported by campaigns such as “Grains for Life” by the American Bakers Association and the American Millers Association. We have introduced a variety of whole-grain products and a sophisticated array of healthy products. BBU offers products under the Oroweat, Arnold, Brownberry, Earthgrains and Sara Lee brands, which share common formulas with a strong presence in the wide-pan healthy bread sector. Other brands owned by BBU such as Thomas’, Boboli and D’Italiano are highly differentiated unique products with limited private-label competition.

The private-label segment, especially in the white-bread category, is a key segment that has continued to grow against basic, low-price brands. BBU’s mainstream regional brands are more affected by this trend; however, as each of the mainstream brands is a strong regional favorite, they are less likely to be affected than smaller, secondary local brands.

Mexico The Mexican bakery industry is primarily comprised of regional and traditional bakeries, in most cases, family-owned businesses, with a limited geographical reach, of which there are a significant number. However, there has been a significant amount of consolidation in the market over the past years.

According to Datamonitor, the Mexican bread and rolls category had a market value of U.S.$10.8 billion in 2010, while the annual per capita consumption, under the same category, was approximately 40.8 kg. The consumption of bread and cakes in Mexico has been traditionally lower than that of tortilla products.

Traditionally, white bread has been the most popular type of packaged bread in Mexico, with strong penetration in low-income households. However, consumers’ adoption of more healthy diets is hindering growth as sales of other substitute products such as multigrain bread increase. The share of private label baked goods is small but has reported a steady increase in market share.

47 We participate in the bread and rolls category with our iconic Bimbo brand and we are the leader in the packaged bread market in Mexico. The packaged bread industry faces intense competition at a national and regional level. At a national level, some of our major competitors include large international market participants, such as Nature’s Own and Butter Krust, produced by Flowers Foods, and Great Value, which is Walmart’s private label. At a regional level, the strongest competition comes from the significant number of artisanal bakeries, panaderías and in-store bakeries in supermarkets in addition to regional packaged bread competitors such as Dulcipán, El Panqué, Pan Filler, Industrializadora de Alimentos del Sureste, La Superior, Pan Panamá, Hill Country, produced by H.E.B. supermarkets, Bontri and Pantry Select.

According to Datamonitor, the cookies category reached a market value of approximately U.S.$1.2 billion in 2010. As of January 2011, we are the number-two cookie and cracker producer in Mexico and participate in this market through our brands Marinela, Lara, Gabi, Bimbo, Tía Rosa and Suandy. Our major competitors in the cookies category include global market participants such as Gamesa, a PepsiCo. brand, Nabisco, Kraft Foods Inc., and local market participants such as Cuétara, and Dondé, among others. The cereal bars subcategory, which has gathered attention in recent years, has had an extraordinary growth in less than a decade. We are a leading participant in this category and our main competitors are Kellogg Company, Quaker, General Mills and other imported bars.

Central and South America We participate actively in Central and South America, where the behavior and preferences of consumers are similar to those in Mexico. We are one of the world’s largest baked goods companies with a strong presence in all of the main markets in Central and South America. We believe the low penetration of packaged baked goods in Central and South America represents a major growth opportunity for us, especially, as more consumers join the workforce and lifestyles shift toward convenience products.

Europe On December 5, 2011, we completed our acquisition of Bimbo Iberia, Sara Lee Corporation’s fresh bakery business in Spain and Portugal. Following this acquisition we produce and commercialize over 300 products, in Spain and Portugal, under the brands Bimbo, Silueta, Ortiz, Martínez and Eagle. According to Datamonitor, the aggregate market value of the bread and rolls category in Spain and Portugal was approximately U.S.$8.1 billion in 2010, with an aggregate per capital consumption level of approximately 50 kg. per year in Spain and 65.1 kg. per year in Portugal, in the same year. According to Datamonitor, we are market leaders in the bread and rolls category in Spain with a 12.2% market share, competing mainly against Panrico Group and artisan producers that hold a market share of 3.7% and 71%, respectively, as of 2010.

Other Categories We also participate in the salted snacks category through the Barcel brand. According to Nielsen, as of January 18, 2011, the market size of the salted snacks category, including the peanuts subcategory, had an estimated market value of U.S.$3.2 billion. The salted snacks category is highly competitive and includes major participants, such as Sabritas, a PepsiCo. brand. Our Barcel brand has the second largest market share for salted snacks in Mexico, after Sabritas, which has 19% participation in the market. In addition, we participate in the confectionery goods market with our Ricolino brand, which is the number-two market participant. According to Datamonitor, the confectionery goods category in Mexico had an estimated value of U.S.$2.7 billion in 2010. This industry is highly fragmented, ranging from small local firms to large companies competing globally. Main competitors include Adams, Canels, Ferrero, Mars, Hershey’s, De la Rosa, Nestlé, Sonric’s, EFFEM and Turín. We also participate in the packaged tortilla market with our Tía Rosa, Milpa Real, Del Hogar and Wonder brands, which compete mainly with products from Gruma and Maseca, among others.

48 BUSINESS

Since our formation in 1945, we have expanded broadly through organic growth as well as acquisitions and have experienced significant growth in our business over the last few years. From 2005 to 2010, our EBITDA increased from Ps.7,191 million to Ps.15,468 million (in nominal terms) at a compounded annual growth rate, or CAGR, of 16.6%. Also, from 2005 to 2010, our net sales grew in nominal terms at a CAGR of 15.9%, fueled by a CAGR of 28.7% in the United States, 7.7% in Mexico and 29.0% in Central and South America, the increase in the United States driven in part by our acquisition of WFI, in January 2009. Following our acquisition of WFI in 2009, we became the largest baked goods market participant in the United States, where we believe we have renowned brands in every market segment of the baking industry. Consistent with our continued growth strategy, on November 6, 2011, we completed the acquisition of Earthgrains and on December 5, 2011, the acquisition of Bimbo Iberia. With these acquisitions, we have further consolidated our penetration in the United States and gained access to an entry point to the Iberian market through a well-established baked goods business, see “Business – Recent Developments.”

For the year ended December 31, 2010, we reported net sales and EBITDA of Ps.117.2 billion (U.S.$9,462 million) and Ps.15.5 billion (U.S.$1,249 million), respectively. For this period, our operations in the United States accounted for 41% and 34% of our net sales and EBITDA, respectively, and our operations in Mexico accounted for 49% and 62% of our net sales and EBITDA, respectively.

49 primary markets (the United States, Mexico, Central and South America and Spain) in our bread and rolls and cakes and pastries categories, and one of the leading participants in the cookies, salted snacks, confectionery goods, tostadas and wheat tortillas categories. Our other product lines are also top players in their respective markets. For example, in the United States, our packaged bread, muffins and bagels are purchased by approximately 73.8% of the households and Thomas’ is a highly recognized brand in the English muffins subcategory. In Mexico, Marinela is the market leader in the cakes and pastries category, and Barcel and Ricolino are the number-two market participants in the salted snacks and fragmented confectionery market, respectively. • Strong Brand Recognition. Our brands are leaders in market recognition in the United States, Mexico, Central and South America, Spain and Portugal. We believe our understanding of the needs and preferences of our consumers allows us to offer them superior quality products at competitive prices. We believe our strong brands give us a competitive advantage and allow us to more effectively leverage our new product launches in the markets in which we operate. Through the acquisition of WFI, Dulces Vero, Fargo, Earthgrains, and Bimbo Iberia, we have significantly strengthened our brand portfolio in the United States, Mexico, Argentina, Spain and Portugal, with brands including Thomas’, Arnold, Entenmann’s, Vero, Fargo, Lactal, Sara Lee, Earthgrains, Sunbeam, Rainbo, Silueta, Martínez and Eagle. Each of our brands is targeted to a specific audience and supported by a comprehensive marketing plan. Some of our brand symbols, such as the Bimbo bear, the Gansito goose and the Paleta Payaso clown have developed iconic status and are immediately recognizable to millions of consumers. • Extensive Direct-Distribution Network. We have developed an extensive direct-distribution network, which fields one of the largest sales fleets in the Americas and represents a major competitive advantage. Our network allows us to distribute products from our 155 plants, 1,600 distribution centers and warehouses to more than two million points of sale every day to ensure the freshness and quality of our products and to meet the needs of every type of customer from hypermarkets to small convenience stores. We also maintain a highly efficient and sophisticated logistics operation to address distribution requirements across the markets we serve. Through the acquisitions of WFI and Earthgrains, we significantly extended and leveraged our distribution network in the United States. We have also developed strong relationships with our customers that enable us to tailor our approach and response to their diverse and changing needs, including with respect to frequency of delivery, in a cost-effective manner. We believe this results in strong customer loyalty. • Market Intelligence and Consumer Satisfaction. We offer our consumers, through our different brands, a wide variety of baked goods spanning a broad range of product types, pricing levels, flavors and sizes. We frequently expand and create innovative product lines to address specific needs and desires of consumers, based on a unique understanding of their needs and preferences in the markets in which we operate. We have gained this unique understanding by continuously conducting market research and retrieving and analyzing key information from our consumers, including through the use of sophisticated technology by our sales force. Our market intelligence allows us to target the right products to each point of sale at the right time. We believe we are the leading innovator within our product categories and have consistently introduced new products that have been well received by consumers. • Experienced Management Team. Our strong management team has proven industry expertise, with an average of 26 years with us and over 366 years of collective experience in the baked goods industry. It has successfully developed and consolidated our market leadership by focusing on our baked goods business and by their effective and rapid response to the constantly changing consumer demands and competitive environment in the markets in which we operate. They have completed and integrated 38 acquisitions over the past ten years and disseminated innovative ideas and best practices in manufacturing and distribution across Grupo Bimbo. • Strong Corporate Culture with a Commitment to Social and Environmental Responsibility. We place great emphasis on our relationship with our associates and are strongly committed to developing and

50 supporting socially responsible and environmentally sustainable initiatives. We view workforce satisfaction and an active corporate social responsibility as essential to the development of a strong corporate culture and customer loyalty. For example, as part of our sustainability strategies, we have made arrangements to consume most of the energy required by our production plants in Mexico from a 90 megawatt wind farm project in the state of Oaxaca, Mexico, known as “Piedra Larga,” estimated to be completed in 2012. Once this project is completed, we will substantially reduce our environmental impact by consuming approximately 50% of our current global energy needs from renewable sources. In addition to our sustainable development efforts, we continuously introduce innovative products that offer healthy choices to our customers. For example, we have engaged in efforts to eliminate trans fatty acids from our products. In recognition of our transnational campaign to promote the benefits of whole grains, in February 2011 we received the WGC Global Award by the Whole Grains Council.

Strategy To achieve our goal of nourishing more people at each meal every day, we intend to continue to strengthen our position as one of the largest baked goods companies in the world and one of the world’s top food companies. Our strategy includes the following elements: • Develop Innovative New Products. We have successfully developed and introduced new products that have increased sales and satisfied consumers and we strive to ensure that our products suit the tastes and budget of our consumers according to the customs, needs and trends, as well as providing nutritional value. We intend to continue to invest in research and development to innovate across our product lines and new product categories, driving consumer demand and incremental revenue opportunities. We are a global company that strives to maintain a local character through a constant pipeline of new products that seek to address our diverse customers’ needs and desires and enhance our customer and consumer base. For example, we developed a process to add functional ingredients to certain of our products to improve the health of our consumers by lowering cholesterol or enhancing mineral absorption. In addition, we are also one of the first consumer products companies in Latin America to introduce biodegradable packaging technology. We believe that the strength of our brands and our low-cost manufacturing base provide us an opportunity for continued expansion of our product offerings. • Continued Development of Our Brands. We have had a strong track record of creating, nurturing and managing successful brands, which we believe reflects a deep understanding of consumer preferences and the rigor of our ongoing market research and testing programs. Based on our market research, our brands have an extraordinary “top of mind awareness” in the market of most of our product categories. Our packaged bread is found in virtually every household in Mexico. We believe that this experience provides a platform for us to develop new product lines under our existing brands as well as entirely new categories. As we expand into new markets, we expect to increase the recognition of our existing brands in those markets, including our Bimbo brand in the United States and Europe, and strengthen our brand portfolio with new brands targeted to those markets. • Increase Market Penetration. To meet the needs of each of our customer segments, we use a range of analytical tools to divide regions by distribution channel, size, brand and products and continuously develop new channels. Our recent market penetration efforts have resulted in customer base growth in almost every segment in Mexico, increased penetration of the United States convenience store channel and significant growth of our Central and South American customer base. We intend to continue our efforts to increase market penetration, expand our product base and enhance our brand recognition in the markets in which we have gained entrance. For example, in 2010, our customer base in Central and South America increased by approximately 64,000 customers. Building on this success, we believe that the strength of our brands and the reach of our distribution network provide a major opportunity for increased market penetration, including into the market for baked goods in the United States, Central and South America and the Iberian market.

51 • Increase Cost Efficiencies Throughout Our Business. Our growth has generated valuable economies of scale in production, distribution and marketing as well as dissemination of best practices and innovation. We remain focused on driving additional efficiencies and improved profitability in our business. In particular, we aim for constant improvement in the use of our production and distribution resources and in periodically reinvesting in our plants and equipment. We strive to maintain a low-cost operation with a focus on environmentally sustainable and effective cost controls. • Continued Growth. We believe that we have benefited from our acquisition and integration of new brands and products and our expansion into new markets. We seek to continue to expand our geographic reach through organic growth and to pursue selective strategic acquisitions in regions and categories that provide a platform for growth and acquisition of strong brands that complement our existing portfolio and increase the penetration of our brands. Given the fragmented nature of the food industry, we will continue to evaluate our expansion through organic growth as well as acquisition opportunities. We believe our presence in various markets around the world will provide a platform for us to identify selective growth opportunities.

Recent Developments Acquisition of Bimbo Iberia On December 5, 2011, we completed our acquisition of Bimbo Iberia, Sara Lee Corporation’s fresh bakery business in Spain and Portugal, for an all-cash purchase price of €115 million.

This acquisition will position Grupo Bimbo as the leading branded bread company in the Iberian Peninsula and will provide us with an entry point to the Iberian market through an established baked-goods business.

This acquisition includes the brands Bimbo, Silueta, Ortíz, Martínez and Eagle in Spain and Portugal, which have broad name recognition and market leadership in the bread, pastries and snack categories in these countries.

The table below shows some of our new brands following our acquisition of Bimbo Iberia: Bimbo Iberia Brands

Bimbo Iberia currently operates seven production plants in Spain and one in Portugal, over 800 distribution routes in Spain and over 70 distribution routes in Portugal, and employs approximately 2,000 associates in Spain and approximately 90 associates in Portugal.

Acquisition of Earthgrains On November 6, 2011, we completed the acquisition from Sara Lee Corporation, one of the largest food processing and distribution companies in the world, of Earthgrains, Sara Lee Corporation’s North American fresh bakery business, for an all-cash purchase price of U.S.$709 million.

52 As a result of this transaction, we also acquired the exclusive, royalty-free, perpetual license of the iconic brand Sara Lee, for its use in certain fresh bakery products in America, Asia, Africa and certain European countries, and other renowned brands such as Sunbeam, Colonial, Heiners, Grandma Sycamore’s Home-Maid Bread, Rainbo and Earthgrains. The table below shows some of our new brands and brands we have acquired rights to, following our acquisition of Earthgrains: Earthgrains Brands

Earthgrains currently operates 41 production plants and over 4,500 distribution routes, and employs approximately 13,000 associates in the United States. Following the consummation of this acquisition, Grupo Bimbo’s combined U.S. businesses currently employs more than 27,000 associates, operates 75 plants and distributes its products through more than 13,000 routes.

This acquisition represents one more step in our growth strategy to consolidate our global platform and continue to strengthen our position as one of the largest baked good companies in the world and one of the world’s top food companies.

With the integration of Earthgrains’ business we have expanded our geographic reach in the United States, resulting in a significant growth of our U.S. customer base. Such increased market penetration will strengthen our sales volume outside Mexico and enhance our brand recognition in the United States. We believe we will realize substantial economic benefits from our acquisition of Earthgrains through our continued generation of valuable economies of scale in production, distribution and marketing of our products, as well as dissemination of best practices and innovation.

The acquisition of Earthgrains was approved on October 21, 2011 by the United States Department of Justice, or the DoJ. Under the terms of the settlement reached with the DoJ in connection with the acquisition, we are required to divest certain of Earthgrains’ and BBU’s brands, for retail sliced bread, bread and rolls primarily in California and, to a lesser extent, in the Harrisburg/Scranton region in Central Pennsylvania and in Kansas City, Oklahoma City and Omaha metropolitan areas, together with associated marketing, distribution and manufacturing assets. We do not believe the assets required to be so divested are material to us.

Earthgrains Bakery Group, Inc. was incorporated under the laws of the State of Delaware, on August 13, 1982, and its principal executive offices are located at 255 Business Center Dr., Horsham, Pennsylvania, 19044, United States.

53 Acquisition of Fargo On September 19, 2011, we concluded our acquisition of Fargo, the largest producer and distributor of bread and bakery products in Argentina, following the exercise of a purchase option for the remaining 70% of Fargo’s equity interests.

This acquisition includes Fargo, Lactal and All Natural brands. The table below shows our new brands, following our acquisition of Fargo: Fargo Brands

Fargo currently operates five production plants and employs approximately 1,600 associates in Argentina. This acquisition will further strengthen our regional profile and growth strategy in Latin America. The combined businesses will benefit from Grupo Bimbo’s global expertise in the baked goods business and Fargo’s strong presence and robust profile in the Argentine market.

Operations We operate in the following main regions: United States, Mexico, Central and South America, Iberian Peninsula, and to a lesser extent, China. We sell our products in 19 countries: the United States, Mexico, Argentina, Brazil, Chile, Colombia, Costa Rica, El Salvador, Honduras, Guatemala, Nicaragua, Panama, Paraguay, Peru, Uruguay, Venezuela, Spain, Portugal and China.

The tables below set forth our net sales in each of the main markets in which we operate as of December 31, 2010 and 2009, and an approximate number of our production plants, distribution routes and points of sale in each such market as of December 31, 2011:

Net sales for the years ended December 31, Region 2010 2009 (in millions of Ps.) United States ...... 47,875 49,850 Mexico(1) ...... 57,870 55,388 Central and South America ...... 14,207 13,606

As of December 31, 2011 Production Distribution Points of Region Plants Routes Sale United States ...... 75 13,000 87,000 Mexico(1) ...... 43 29,000 1,400,000 Central and South America ...... 30 7,000 517,000 Europe ...... 7 800 48,000

(1) Includes operations in Asia, which were not material.

54 United States BBU is headquartered in Horsham, Pennsylvania and is the company under which we consolidate our Bimbo Bakeries and Bimbo Foods operations in the United States.

We have implemented an aggressive expansion strategy in the United States, through several major acquisitions, including the U.S.$709 million acquisition of Earthgrains, Sara Lee Corporation’s North American fresh bakery business, from Sara Lee Corporation, one of the largest food processing and distribution companies in the world, on November 6, 2011, and the U.S.$2.38 billion acquisition on January 21, 2009 of WFI, George Weston Bakeries’ U.S. fresh bakery business and related trademarks, from Dunedin Holdings, a subsidiary of George Weston Foods Limited, which was completed simultaneously with a U.S.$125 million acquisition of related financial assets, which included a portfolio of loans to independent operators entrusted with the distribution of WFI’s products. Other acquisitions that we have consummated in the United States include the acquisition of Biman Foods in the United States in 2010, Oroweat and Entenmann’s in the West of the United States from George Weston in 2002, Four-S in California in 1999 and Mrs Baird’s in Texas in 1998.

BBU is one of the leading baked goods market participant in the United States, where we believe we have renowned brands in every market segment of the bakery industry, with a portfolio that serves a variety of price points and eating occasions, from breakfast to snacking to mealtimes. BBU is the market leader in several categories, including premium and mainstream baked products, English muffins, and cakes. Currently, BBU operates 75 production plants across the United States and has over 13,000 distribution routes. Approximately 51% of BBU’s distribution network is conducted by independent operators under contracts with us.

BBU has an attractive brand portfolio comprised of leading national brands, such as Thomas’ English muffins and bagels, Entenmann’s snack cakes, Sara Lee’s packaged bread, brands in healthy wide-pan bread, such as Arnold, Brownberry, Oroweat and Earthgrains; and regional brands, such as Mrs Baird’s, Freihofer’s, Stroehmann, Francisco, Old Country, Boboli, Sunbeam, Rainbo, Heiners and Colonial.

Following our acquisition Earthgrains, we increased our range of products offered in the United States by 295 and incorporated several household bakery brands into our portfolio. Earthgrains’ strong array of products in the bread and rolls category further consolidates our growth strategy in the United States. For example, as a result of this acquisition, we believe we have increased our market participation in the United States to 28.1% from 17.7% in the bread and rolls segment. See “Business – Recent Developments – Acquisition of Earthgrains.”

BBU also distributes Bimbo’s Mexican brands in the United States. Utilizing BBU’s distribution network has allowed us to significantly expand our market share for those products in the United States.

55 The table below sets forth our main brands in the United States, which includes brands incorporated into our portfolio following our Earthgrains acquisition: BBU Brands

Bimbo Bakeries was incorporated under the laws of the State of Delaware, on July 13, 1993, and its principal executive offices are located at 255 Business Center Drive, Horsham, PA 19044.

Bimbo Foods was incorporated under the laws of the State of Delaware, on November 18, 1986, and its principal executive offices are located at 255 Business Center Drive, Horsham, PA 19044.

Mexico Our business in Mexico is divided into three major divisions: • bread and other baked goods, operated mainly through our operating subsidiary Bimbo, • salted snacks and confectionery goods, operated through our operating subsidiary Barcel, and • high-end pastry and artisan bread, operated through our operating subsidiary El Globo S.A. de C.V.

Bimbo We have been in operation in Mexico since 1945. Bimbo is headquartered in Mexico City and manufactures, distributes and sells sliced bread, sweet baked goods, buns, cakes, pastries, cookies, crackers, cereal bars, packaged wheat tortillas, and tostadas, among others. Bimbo has a strong presence in Mexico where some of our products are considered staple products, such as our packaged bread which is found in virtually every household in Mexico. These products are marketed, among others, under the Bimbo, Oroweat, Marinela, Tía Rosa, Wonder, Milpa Real, Lara, Del Hogar, Gabi, Saníssimo, Lonchibón and Suandy brands. These brands have high consumer recognition in the Mexican market and are supported by the country’s most extensive distribution network, making us the leader in the packaged bread market in Mexico, with continued gains in market share as consumer preferences evolve. We are also the Mexican snack cake market leader and the number-two cookie and cracker producer. The Mexican baked goods market, however, remains highly competitive and fragmented. In the relatively new category of cereal bars, we have quickly established market leadership through our brands Branfrut, Multigrano, Doble Fibra and Plus Vita, demonstrating our ability to

56 identify new consumer trends and satisfy them with innovative products. We have also steadily gained market share in packaged wheat tortillas market, as more Mexicans look for convenient, packaged wheat tortillas with longer shelf lives.

Bimbo was incorporated under the laws of Mexico on November 7, 2001. Bimbo’s principal executive offices are located at Mimosas 117 Col. Santa María Insurgentes, 06430, Mexico D.F., Mexico.

Barcel Barcel is headquartered in Mexico City and manufactures, distributes and markets salted snacks and confectionery goods including chocolates, goat milk caramel “cajeta,” gum and gummy candies. Among its main brands are Barcel, the second-ranked salted-snack brand in Mexico, and Ricolino, Mexico’s second-ranked candy and chocolate brands, as well as Coronado and La Corona. Barcel’s snack products are also exported to the United States and Central and South America. Barcel has consolidated its position and increased its participation in the market by offering innovative products, such as spicy snacks and confectionery goods.

On December 6, 2010, we completed the acquisition of the main assets of Mexican confectionary group Dulces Vero. With two operating plants, Dulces Vero’s acquired business produces a wide range of sweets and confections, including lollipops, gummies, caramels and marshmallows. This acquisition strengthens our position in the Mexican confectionary market, through our subsidiary Barcel, and will provide a strong platform for continued growth. This acquisition will also complement Barcel’s portfolio in the U.S. Hispanic market and provide an opportunity to expand our presence in the United States.

Barcel was incorporated under the laws of Mexico, on November 7, 2001. Barcel’s principal executive offices are located at Carretera Mexico Toluca KM 54, Col Industrial, 52000, Lerma, Estado de Mexico, Mexico.

El Globo Founded in 1884, El Globo produces, distributes and markets high-end pastry and artisan bread under the El Globo, La Balance and El Molino brands, through over 285 points of sale. El Globo was acquired by us in 2005 and targets high-end consumer segments. Over the last three years, El Globo has developed a complementary cafeteria business in some of its points of sale.

The table below sets forth our main brands in Mexico: Bimbo Brands

57 Central and South America Our Central and South American operations, Organización Latinoamérica, or OLA, are headquartered in Buenos Aires, Argentina. OLA’s main products include sliced bread, rolls, cakes, cookies, snack cakes, alfajores, wheat tortillas and pizza crust. OLA’s main brands are Bimbo, Marinela, Marisela, Pullman, Nutrella, Plus Vita, Ana María, Holsum, Ideal, Cena, Laura, Los Sorchantes, Fuchs, Trigoro, Pyc, Bontrigo, Agua de Piedra, Firenze, Lagos del Sur, Lalo, El Maestro Cubano, Mamá Inés, Plucky, Ricard and Ricolino. Currently, OLA operates 30 plants throughout 14 countries, including Argentina, Brazil, Chile, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama, Paraguay, Peru, Uruguay and Venezuela. Collectively, these countries represent a market of over 408 million consumers. In each of the Central and South American countries in which we operate, we have developed distribution systems that are responsive to the specific economic, social, geographic and political environment of such country.

We are one of the world’s largest baked goods companies with a strong presence in all of the main markets in Central and South America. We believe the low penetration of packaged baked goods in Central and South America represents a major growth opportunity for us, especially as more consumers join the workforce and lifestyles shift toward convenience products. A majority of our distribution network in Central and South America is conducted through our own operators.

58 The table below sets forth our main brands in Central and South America, which includes brands incorporated into our portfolio following our acquisition of Fargo: OLA Brands

On September 19, 2011, we concluded our acquisition of Fargo in Argentina, following the exercise of a purchase option for the remaining 70% of Fargo’s equity interests. Fargo is the largest producer and distributor of bread and bakery products in Argentina. This acquisition includes brands Fargo, Lactal and All Natural. See “Business – Recent Developments – Acquisition of Fargo.”

Europe On December 5, 2011, we completed our acquisition of Bimbo Iberia, Sara Lee Corporation’s fresh bakery business in Spain and Portugal, for an all-cash purchase price of €115 million. Following the acquisition we have a strong presence in the bread, pastries and snacks categories in Spain and Portugal, with a portfolio of over 300 products, under the brands Bimbo, Silueta, Ortiz, Martínez and Eagle and seven production plants. This acquisition sets our footprint in Europe and provides us with a strong entry through a well-established business with highly recognized local brands. See “Business – Recent Developments – Acquisition of Bimbo Iberia.”

59 The table below sets forth our main brands in Spain and Portugal: Bimbo Iberia Brands

China Bimbo Beijing Food Company, or Bimbo Beijing, is headquartered in Beijing where we market over 190 products mainly under the Bimbo, Million Land and Jinhongwei brands, including packaged bread, pastries, cookies and sweet bread and ready-to-eat food. Bimbo Beijing operates two production plants in Beijing, and 11 distribution centers, of which six are located in Beijing. Bimbo Beijing maintains a distribution network of over 700 routes and 8,400 points of sale in 26 cities.

We have developed new products, including rolls filled with sweet beans and bread filled with spicy meat, to adapt to the Asian market to satisfy region-specific tastes and to develop consistent demand for bread and similar products.

The table below sets forth our main brands in China: Bimbo Beijing Brands

Products As of December 31, 2010, we produced more than 7,000 products and more than 150 renowned brands. Our business has always focused on a large array of products tailored to the local markets spanning from bread products, pastries and cakes to salted snacks and confectionery goods. Demand for the majority of our products varies depending on the season.

As part of our marketing program and to enhance our brand recognition and market penetration, our various brands have distinctly different packages designed to cater to the desires and expectations of consumers in each market according to our market research. The most representative are the individual packages, the family packages, packages for our institutional customers and the breadboxes and the cookie boxes for wholesale.

Production Process Our plants use state-of-the-art technology and equipment. We have adopted and implemented modern automated production processes for each of our lines of business and maintain strict operation and control systems, resulting in efficiencies throughout our production processes within a competitive cost structure. Some

60 of our manufacturing plants may be programmed to manufacture a variety of products also contributing to production efficiencies. The production process of our products has slight variations between one another, but generally include the mixing of ingredients, baking, slicing, packaging and distribution of the products.

As part of our strategy to respond to the changing needs of the market, we have implemented and continuously update innovative systems to increase the capacity, quality, and production potential of our manufacturing lines. To that end, we have redesigned our current facilities and incorporated new technology (either developed by us or acquired from third parties), significantly increasing capacity and reducing production costs.

As a result of productivity improvements, and to take advantage of the resources of our production plants, each plant carries out its own analysis of its production processes and, together with the corporate support areas, we implement appropriate improvements. For example, in 2009 we closed six plants. Three of these six operations were relocated to existing plants to reduce unnecessary expenses and improve profitability.

Safety and Quality Control System Quality is essential for us. We have implemented a quality control system tailored to our individual needs and have adopted the highest international standards, driven by our commitment to ensure the satisfaction of our customers and consumers. This system involves quality control assurance and food safety, providing enhanced customer service, promoting and preserving a healthy labor environment and respecting the environment to contribute to the overall development of the community. Given the importance of food quality and safety, one part of our quality control system is aimed at controlling and continuously improving the quality of consumables, processes and finished products. With the implementation of our quality control system we have won several awards, including the Premio Nacional de Calidad Mexicano in 2007.

We have earned the loyalty of our customers and consumers by our adherence to the most rigorous international standards in the food industry, certified by independent organizations and agencies with a recognized international reputation. For example, in Mexico as of October 31, 2011, three of our plants have obtained the International Organization for Standardization 9001-2000 certification, or ISO 9001-2000, 33 of our plants have obtained the Hazard Analysis & Critical Control Points certification, or HACCP, eigth of our exporting plants have also obtained Business Alliance for Secure Commerce certification, or BASC, and 27 of our plants have obtained the BRC’s Global Standard for Food Safety, or BRC Standard. ISO 9001-2000 is a series of international standards that provide guidelines for a quality management system and HACCP is a management system in which food safety is addressed through the analysis and control of biological, chemical, and physical hazards from raw material production, procurement and handling, to manufacturing, distribution and consumption of finished products. BASC certification addresses and seeks to prevent the risks associated with narcotics, terrorism and merchandise smuggling, by controlling operating processes, personnel, access, infrastructure, suppliers, and even customers. The BRC Standard is awarded by the British Retail Consortium and seeks to establish a standard for due diligence and supplier approval for food manufacturers throughout the world.

Inventory Raw Materials The quality and continuous supply of our raw materials are critical factors in our production process. We have adopted rigorous supply policies under which we require our suppliers to adhere to detailed specifications for raw materials and to provide quality control certificates for their products. We also conduct laboratory testing on raw materials supplied by third parties and routinely inspect our suppliers’ production plants and facilities.

We have long-standing relationships with suppliers who adhere to our high quality standards. We seek to maintain low supply costs without sacrificing quality of raw materials.

61 Wheat flour is our main raw material. Wheat is generally traded in U.S. dollars and subject to price fluctuations depending upon factors such as weather, crop production and worldwide market supply and demand. We routinely review and revise our relationship with our wheat flour suppliers and we continuously enter into hedging arrangements to manage our exposure to price fluctuations of our key raw materials. See “Risk Factors – Increases in prices and shortages of raw materials, fuels and utilities could cause our costs to increase.” Other important raw materials for our lines of business are sugar, edible oils and fats and eggs, as well as plastics used to package our products. The table below sets forth our principal raw materials and our major suppliers in the main markets in which we operate: Raw Material Mexico USA Central and South America Wheat Grupo Altex Archer Daniels Midland Bunge Alimentos Flour Harinera La Espiga Cereal Food Processors Cargill Horizon Milling (Cargill) Conagra Inc Molinos Santa Mara Molinera del Valle Horizon Milling LLC Molino La Estampa Molinera de México Processor Inc. Cooperativa Agraria Okeene Milling Co. Agroindustrial Anaconda Indl e Agricola de Cereais Sugar Beta San Miguel Amalgamated Sugar Company LLC. Copersucar Coop Prod A Alc Cargill de México Indiana Sugar Inc. Est SP Quimper United Sugar Corp. ED&F Man Chile S.A. Química Industrial Neumann Domino Sugar Co. Riopaila Castilla S.A. Sweetener Products Co. Sucden Perú S.A. Archer Daniels Midland Co. Lodiser S.A. Imperial Sugar Iansagro S.A. Cosan Alimentos Cosan S/A Azucar e Alcohol Edible Aarhuskarlshamn Archer Daniels Midland Co. Cargill Agrícola S/A. Oils Cargill de México Bunge Foods Co. Bunge Alimentos S.A. and Fats Ragasa Industrias Cargill Refined Oils Camilo Ferron Chile S.A. Proteínas y Oléicos Perdue Farms Inc. Alicorp S.A.A. Industrializadora Oleofinos Soybean Oil Division Comercial Venser S.A. Industria Aceitera Stratas Foods LLC Team Foods Colombia S.A. Crista Industrial e Comercio Ltda. Grasas S.A. Umaco y Cia. Liquid and Ovoplus del Centro, S.A. de Debell DMR Distribuidora Productos Powdered C.V. Michael Foods Inc. Alimenticios Eggs Alimentos de la Granja Sonstegard Foods Co. Ovo Productos del Sur S.A. Granjas Orespi Primera Foods Inc. Santa Reyes S.A. Michael Foods General Mills Comercial Agricovial S.A. Procesadora de Alimentos Mex Pearsons Sales Co. Solar Comercio e Agroindustria Alimentos Mexicanos BCW Food Products Inc. Ltda. Bachoco We hold minority interests in some of our major suppliers of wheat flour, eggs and sugar. In addition to these raw materials, we also purchase plastic packaging from a number of suppliers. We currently are not dependent on any single supplier in any market in which we operate. We are not aware of any price controls in effect by any governmental authority with respect to any of our raw materials.

62 Our raw materials are managed using the first-in first-out method to preserve the freshness of our products. Due to the nature of our products, our inventories of raw materials, mainly perishable products, have a high turnover rate. We receive most of our supplies on a continuous basis, in some cases, with daily deliveries. Our corporate offices lead the negotiations of our main raw materials with our suppliers while our inventories are directly managed by each plant and storage facility. Local plants and storage facilities also manage and directly place orders of raw materials that may be obtained locally.

Finished Products We have strategically located production plants and distribution centers, which allows us to consolidate our operations in each region and to efficiently distribute our products. In addition, we have successfully implemented an interconnected system that allows us to synchronize our production capabilities with consumer demands, resulting in optimal levels of customer order management and thus, very low inventories of our finished products.

Once finished, our baked goods are immediately shipped to our distribution centers and points of sale. Inventories of our salted snacks and confectionery goods have an average turnover rate of three days. Inventories of dried products, such as toasted bread and breadcrumbs, cookies, candies and chocolates, have a longer turnover rate, due to the nature of the products and the use of certain preservation technologies. Our high inventory turnover rate is driven by our customers needs based on daily orders and consumer behaviors.

Innovation As one of the largest food companies in the world, Grupo Bimbo has always focused on offering delicious and nutritional products to its consumers. Our success is based on constantly adapting to consumer needs and preferences and in offering innovative products in line with industry trends, such as increasing the nutritional value and introducing new and healthy options.

We have had a strong track record of creating innovative products, which we believe reflects a deep understanding of consumer preferences and the rigor of our ongoing market research and testing programs. Innovation provides an informed consumer a choice of alternative products, particularly those that should be included in a healthy diet where bread has a predominant place. We strive to ensure that our products suit the tastes of our consumer base and are mindful of their customs and needs in the countries in which we operate.

We strive to find the proper balance between nutrition and taste in our products. Therefore, in 2008, we became a member of International Food and Beverage Alliance to implement the Global Strategy of the World Health Organization on Diet, Physical Activity and Health, with five fundamental commitments: • Developing healthier products with improved nutritional value; • Adopting responsible publicity and marketing for children under the age of 12 years; • Providing nutritional information to consumers through clear and user-friendly labeling; • Promoting physical activity and healthy life styles; and • Making alliances with health organizations and research institutions.

Additionally, we have agreed in Mexico to comply with self regulation programs setting health and nutritional advertising standards (Código PABI – Publicidad de Alimentos y Bebidas), to instill positive nutritional values to children in our markets, discourage over-consumption and avoid deceptive marketing.

Through our innovative products, we continue to implement and consolidate strategies focused on diversifying our brands and products in the regions in which we operate. Our goal is to take advantage of trends and opportunities in our markets. We have developed innovative products with unique nutritional features such

63 as lowering cholesterol, fat, salt and sugar to address the needs of different demographics. To promote the competitiveness of our products, we work with the Consejo Nacional de Ciencia y Tecnología in Mexico and form strategic alliances with universities and research centers to develop new technologies for our product development program.

We have also formed specialized groups for the development of new products and we have opened six innovation and nutrition institutes, two in Mexico, three in the United States and one in Brazil.

Additionally, we have laboratories and facilities engaged in the production of prototypes and the testing and validation of new ingredients, as well as conducting functionality studies and evaluating new products. Newly developed products are approved by committees and evaluated through market testing. Significant results from our innovation and nutrition centers include: • the launch of biodegradable packaging technology which, unlike normal polyethylene, is degraded in five years instead of 100 years; • the development of products with whole grains, such as Vitta Natural 100% Integral from Nutrella in Brazil, to provide consumers the full nutritional benefits of grains regularly used in bread manufacturing (such as wheat, oats and rye); and • the improvement of the nutritional value in certain product lines and the reduction of fat, salt and sugar and the elimination of trans fat in products in all categories, for example Sandwich Thins from Oroweat in the United States.

We continue to provide information regarding nutrition and healthy diet through printed publications, radio, television and the Internet and actively participate in consumer education programs. We also promote physical activity in our advertisements and in sporting events, and we distribute free brochures that encourage a balanced diet and a healthy life style. Each of our products have displayed in each of their labels its nutritional value and composition and nutrition Guideline Daily Amounts. Our whole grain-based products incorporate the WGC Whole Grains seal and, in recognition to our efforts to promote healthy food choices and the benefits of whole grains, in February 2011 we received the WGC Global Award by the Whole Grains Council.

Distribution Channels Distribution and Sales Process We use direct distribution channels to deliver our product to the points of sale. We believe that this has been key to our success. For example, we have developed one of the largest fleets in the Americas with approximately 50,000 distribution routes worldwide.

We have more than 1,600 distribution centers, each of which depends on the operations of one or several production plants. Every day our products are distributed from our plants, agencies and warehouses to more than two million points of sale. Our production plants, agencies and warehouses may house more than one brand.

Orders are placed a week in advance by our sales force and may be adjusted three to five days before being delivered to a distribution center, depending on the line and product. Our finished products are delivered to the dispatch area and are inspected to confirm compliance with our quality standards and loaded on semi-trailers for delivery.

Our sales force distributes our products to our customers from distribution centers according to predetermined itineraries. Currently, all of our routes can both deliver products and pick-up returned products from our customers on each visit. Products may be returned by our customers if they were not sold and are replaced by fresh products without cost to the client. The products that are picked up are considered no longer fresh although they could be consumed on the date on which they are retrieved.

64 We handle returned products by: • delivering the product for sale to outlets that sell “yesterday’s bread,” where the product is offered for sale from two to four days at a lower price (these outlets may be owned and operated by us or operated by third parties); or • selling the product by weight for use as cattle feed.

Each product is displayed for sale in accordance with its shelf life, which varies from 7 days, in the case of bread, or several months, in the case of chocolates, cookies and snacks.

Based on our production and the sale levels, visits to each client may be daily, every three days, two times a week or weekly. We classify our customers according to their purchase volume, type of distribution channel and by individual characteristics. Our customers include supermarkets, convenience stores, institutional customers, fast food chains, schools, customers with vending machines and traditional customers (such as grocery stores).

While we directly operate all of our routes in Mexico and a majority of our routes in Central and South America, over 51% of our routes in the United States are operated by independent operators. We generally enter into long-term contracts with these independent operators under which they agree to exclusively sell our products. Terms of these contracts also specify which territories independent operators will cover and the compensation which is based on sales performance. We have strict control over brand management, marketing strategies and pricing and a right to buy contracts from each of the independent operators under certain limited circumstances. We believe the use of independent operators reduces our distribution costs and increases flexibility to efficiently add points of sale, while maintaining the quality of our services.

Customers We have more than two million points of sales in our operations. We have strong relationships with our customers and strive to understand and meet their specific needs. We have a diverse client base among and within the countries in which we operate that range from large institutional customers to small family-owned businesses.

In the United States, more than half of our customers are supermarket chains, followed by price clubs, restaurant chains, institutional customers and convenience stores. Among our main customers in the United States are Basha’s, Denny’s, H.E.B., Kroger, Costco, Publix, Raley’s, Safeway, Sam’s, Supervalu, Target, Wal-Mart, Wegmans, 7 Eleven and the U.S. Army.

In Mexico, most of our customers are small family-owned convenience stores, but we also have a solid base of large institutional customers, including large retail stores, supermarkets, warehouses, price clubs, convenience stores and government-owned supermarkets, such as Al Super, Calimax, Casa Ley, Chedraui, Comercial Mexicana, Extra, HEB, Oxxo, 7 Eleven, Soriana, Smart and Wal-Mart. We also serve large fast food chains and other large institutional customers, such as Burger King, KFC, McDonald’s, Sistema Integral para el Desarrollo Integral de la Familia and hospitals belonging to the Mexican Social Security Institute (Instituto Mexicano del Seguro Social).

In South America, more than half of our sales are to supermarket chains and hypermarkets. Among our main customers in the region are Carrefour, Cativen, CBD, Cencosud, Central, Disco, Éxito, Coto, Olímpica, Santa Isabel, Selectos, Supermercados Peruanos and Wal-Mart.

In Spain and Portugal, nearly half of our sales are made to retail supermarket and hypermarkets. Our main customers in Spain and Portugal include Mercadona, Carrefour, Eroski, Día, Grupo Corte Inglés, Alcampo, Burger King, Caprabo, Consum, AhorraMás, Gadisa, El Árbol, Miguel Alimentació and LIDL Supermercados. None of our customers represents, individually, more than 10% of our total sales.

65 Intellectual Property Trademarks Our most important brands, slogans and logos are protected by trademarks in the countries in which we operate and in many other countries. We manufacture and/or commercialize more than 7,000 products and more than 150 brands, including, among others, Bimbo, Oroweat, Arnold, Brownberry, Marinela, Thomas’, Barcel, Sara Lee, Entenmann’s, Ricolino, Tía Rosa, Pullman, Stroehmann, Mrs. Baird’s, Fargo, Freihofer’s, Wonder, Vero, Nutrella, Plus Vita, El Globo, Milpa Real, Lara, Coronado, Earthgrains, Maiers, Ana María, Gabi, La Corona, Del Hogar, Holsum, Heiners, Rainbo, Sunbeam, D’Italiano, Colonial, Firenze, San Luis Sourdough, Saníssimo, Lonchibon, Chick’s, Ball Pack, Monarca, Cena, Sunmaid, Laura, Europa, Tradição, Fuchs, Mamá Inés, Los Sorchantes and El Maestro Cubano.

Currently, we have approximately 5,587 brand files and registries in Mexico and more than 12,827 abroad. We have brands registries in Africa, North and South America, Asia, Europe and the Middle East. However, the trademark for Bimbo is held by others in Chile and certain European countries and the trademark for Marinela is held by third parties in El Salvador and Honduras. Therefore, our products in those countries are sold under the brands Ideal and Marisela, respectively, notwithstanding that we use our designs and packages in those countries. We also operate registered websites targeting consumers in each of the geographies in which we operate.

Patents The protection of our inventions through patents, is of paramount importance to us. We operate primarily with machinery developed with state-of-the-art technology and our Research and Development Department regularly requests patent protection in Mexico and abroad for new technology.

As of November 30, 2011, we had 149 issued and pending patents in Mexico and 160 abroad, mainly in the United States, Argentina, Chile, China, Colombia, Korea, Costa Rica, El Salvador, the Philippines, Guatemala, India, Peru, the Czech Republic, Taiwan, Turkey, Venezuela and the European Union.

Copyright The major characters, publications, computer systems, logos and package designs used by us in our operations are protected by copyrights in Mexico and abroad.

Workforce Since our foundation, our policy and practice has been to align our interests with those of our associates and the outcome has been an excellent relationship with our labor force. We seek to extend this philosophy to the companies that we have acquired.

We place great importance on selection of our personnel. We also perform ongoing evaluations and provide guidance and continuing training to our associates. We work to address concerns of our associates and promote personal and professional development within our company.

The following table shows the number of our associates during the last three years, including in our production and storage facilities as well as throughout our distribution channels.

As of December 31, 2010 2009 2008 Unionized associates ...... 74,367 71,885 76,898 Non-unionized associates ...... 33,697 30,501 21,286 Total ...... 108,064 102,386 98,184 * Excludes associates in our Earthgrains, Bimbo Iberia and Fargo operations.

66 United States We have developed internal policies to maintain a positive relationship with our unionized staff. Most of our companies have collective labor agreements that are renewed annually with regard to salaries and every two years with regard to other labor terms.

Since our formation, we have attempted to promote and preserve a healthy labor force. We have been recognized for our day-to-day commitment to the safety and health of our associates and customers and a preventive approach to well-being, thus, we have earned acknowledgment as an exemplary company from the Mexican Employees Confederation (Confederación de Trabajadores de Mexico) and by labor authorities in Mexico.

We currently have labor relationships with various unions, including in the United States, the International Brotherhood of Teamsters and the Bakery, Confectionery, Tobacco and Grain Millers International Union, and in Mexico, the Sindicato Nacional de Trabajadores Harineros, Panificadores de Alimentos, del Transporte, Similares y Conexos de la República Mexicana and the Sindicato Nacional de Trabajadores de la Industria Alimenticia, Similares y Conexos de la República Mexicana.

Competition The baked goods industry is highly competitive and we compete with large domestic and multi-national baked goods companies, smaller regional operators, small family owned bakeries, supermarket chains with their own bakeries, grocery stores with their own in-store bakery departments or private label products and diversified food companies.

To varying degrees, our competitors have strengths in particular product lines and regions and different levels of availability and access to greater financial resources. We expect to continue to face strong competition in all of our markets and anticipate that existing or new competitors may broaden their product lines and extend their geographic scope. In particular, from time to time, we experience price pressure in certain of our markets as a result of our competitors’ promotional pricing practices. Excess industry capacity may also result in price pressure in certain markets.

Property As of December 31, 2011, we operated the following production plants: • 75 in the United States, in Alabama, Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Michigan, Minnesota, Mississippi, Nebraska, New Mexico, North Carolina, New York, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Washington, West Virginia and Wisconsin; • 41 in Mexico, in Baja California, Chihuahua, Distrito Federal, Durango, Estado de Mexico, Guanajuato, Hidalgo, Jalisco, Nuevo Leon, Puebla, San Luis Potosi, Sinaloa, Sonora, Tabasco, Veracruz and Yucatan; • 30 in Central and South America, in Argentina, Brazil, Chile, Colombia, Costa Rica, El Salvador, Honduras, Guatemala, Panama, Paraguay, Peru, Uruguay and Venezuela; • two in Asia, in China; and • seven in Europe, in Spain and Portugal.

These plants produce bread, buns, packaged wheat tortillas, tostadas, pastries, cookies, fast food, chewing gum, candy and confectionery goods, snacks and other similar products. We own approximately 95% of the production plants that we operate and lease the remainder from third parties.

67 Social Responsibility and Sustainability We believe our commitment to social responsibility and sustainability is a key component of our continued success. We have been recognized for our day-to-day commitment to the safety and health of our associates and consumers and a preventive approach to well-being. We are known for promoting a culture of environmental awareness, including through our contributions to not-for–profit organizations like Reforestamos Mexico,a project dedicated to the preservation and rehabilitation of forest ecosystems in Mexico. We are committed to pursuing alternative sources of energy, improved water usage and treatment and better waste management systems. As part of our sustainability strategies, we have made arrangements to consume most of the energy required by our production plants in Mexico from a 90 megawatt wind farm project in the state of Oaxaca, Mexico, known as “Piedra Larga,” which is estimated to be completed in 2012. Once this project is completed, we will substantially reduce our environmental impact by consuming approximately 50% of our current global energy needs from renewable sources. We are also one of the first consumer products companies in Central and South America to introduce biodegradable packaging technology. Through these policies and initiatives, we expect to continue to have a positive impact on the communities that we serve. We believe these commitments set us apart from our competitors.

Legal Proceedings We are currently a party to various legal proceedings. However, there are currently no legal, governmental or arbitration proceedings against us or any of our subsidiaries or involving any of our property or our subsidiaries’ property which we believe that, if adversely determined, will have a material adverse effect on our business, financial condition or results of operations.

68 MANAGEMENT

Grupo Bimbo is a sociedad anónima bursátil de capital variable incorporated on June 15, 1966 and existing under the laws of Mexico. Our current Board of Directors was elected on April 15, 2011. The term of the directors ends upon the election of the new members at the annual shareholders’ meeting, which will be held in April, 2012. Pursuant to our by-laws, at least 25% of the members of our Board of Directors are required to be independent directors. According to our by-laws, independent directors are those who may serve in the board and act free from conflicts of interests and who qualify as independent directors pursuant to the Mexican Securities Market Law. The following table sets forth the current members of our Board of Directors and their respective positions: Name Age Position Roberto Servitje Sendra ...... 84 Director/Chairman Henry Davis Signoret* ...... 71 Director José Antonio Fernández Carbajal* ...... 57 Director Arturo Manuel Fernández Pérez* ...... 58 Director Ricardo Guajardo Touché* ...... 63 Director Agustín Irurita Pérez* ...... 70 Director Luis Jorba Servitje ...... 53 Director Mauricio Jorba Servitje ...... 63 Director Fernando Lerdo de Tejada Luna ...... 61 Director Nicolás Mariscal Servitje ...... 42 Director José Ignacio Mariscal Torroella ...... 65 Director María Isabel Mata Torrallardona ...... 46 Director Raúl Obregón del Corral ...... 67 Director Javier de Pedro Espínola ...... 48 Director Ignacio Pérez Lizaur* ...... 59 Director Alexis E. Rovzar de la Torre* ...... 60 Director Lorenzo Sendra Mata ...... 73 Director Daniel Servitje Montull ...... 52 Director Luis Miguel Briola Clément** ...... 41 Secretary * Independent director. ** Not a member of our board of directors. The following sets forth biographical information for each of the members of our Board of Directors:

Roberto Servitje Sendra Mr. Servitje Sendra joined Grupo Bimbo in 1945 and has served as Chairman of our Board of Directors since 1994. Mr. Servitje Sendra served as Chief Executive Officer of Grupo Bimbo from 1983 to 1997 and as Executive Vice President of Grupo Bimbo from 1974 to 1983. Other positions of Mr. Servitje Sendra at Grupo Bimbo include General Manager of our Guadalajara, Monterrey and Mexico City production facilities. Mr. Servitje Sendra is member of the Board of Directors of Chrysler de Mexico, S.A. de C.V., Fomento Económico Mexicano, S.A.B. de C.V., or FEMSA, Grupo Altex, S.A. de C.V., Escuela Bancaria y Comercial, Memorial Hermann International Advisory Board (Houston, Texas) and Grupo Aeropuerto del Sureste, S.A.B. de C.V., or ASUR. Mr. Servitje Sendra is uncle of Daniel Servitje Montull, Luis Jorba Servitje and Mauricio Jorba Servitje.

Daniel Servitje Montull Mr. Servitje Montull joined Grupo Bimbo in 1978 and serves as Chief Executive Officer since 1997. Mr. Servitje Montull holds a degree in Business Administration from Universidad Iberoamericana and an MBA degree from Stanford University. Mr. Servitje Montull is a member of the Board of Directors of Coca-Cola

69 FEMSA S.A.B. de C.V., or Coca-Cola FEMSA, Grupo Financiero Banamex, The Consumer Goods Forum and Grocery Manufacturers of America (USA). Mr. Servitje Montull is the nephew of Roberto Servitje Sendra, brother-in-law of José Ignacio Mariscal Torroella and Raúl Obregón del Corral, uncle of Nicolás Mariscal Servitje, and cousin of Luis Jorba Servitje and Mauricio Jorba Servitje.

Henry Davis Signoret Mr. Davis is the Chairman of Promotora DAC, S.A. and member of the Board of Directors of Grupo Financiero IXE, S.A. de C.V., Kansas City Southern, Telefónica Móviles México, S.A. de C.V. and Afianzadora Aserta Insurgentes, S.A.

José Antonio Fernández Carbajal Mr. Fernández Carbajal is Chairman and Chief Executive Officer of FEMSA, Chairman of Coca-Cola FEMSA, Fundación FEMSA and US-Mexico Foundation, Co-Chairman of the Board of Directors of Woodrow Wilson Center Mexico Institute, Vice-Chairman of the Instituto Tecnológico y de Estudios Superiores de Monterrey, or ITESM. Mr. Fernández Carbajal is also a member of the Board of Directors of Grupo Financiero BBVA Bancomer, or BBVA Bancomer, Industrias Peñoles, S.A.B. de C.V., or Industrias Peñoles, Grupo Televisa, S.A.B., Volaris, Xignux, S.A. de C.V. and Cemex, S.A.B. de C.V.

Arturo Manuel Fernández Pérez Mr. Fernández Pérez is the Dean of the Instituto Tecnológico Autónomo de México, or ITAM, and member of the Board of Directors of Industrias Peñoles, Grupo Nacional Provincial, S.A.B. de C.V., or Grupo Nacional Provincial, Grupo Palacio de Hierro, S.A.B. de C.V., or Grupo Palacio de Hierro, Valores Mexicanos, Casa de Bolsa, S.A.B. de C.V., Crédito Afianzador, S.A., BBVA Bancomer, FEMSA, and Fresnillo, plc.

Ricardo Guajardo Touché Mr. Guajardo Touché is member of the Board of Directors of BBVA Bancomer, ITESM, FEMSA, Coca- Cola FEMSA, Grupo Industrial Alfa, El Puerto de Liverpool, ASUR, Grupo COPPEL. He is also Vice-Chairman of Fondo para la Paz and Chairman of SOLFI.

Agustín Irurita Pérez Mr. Irurita Pérez is member of the Board of Directors of Grupo ADO, Cámara Nacional de Autotransporte de Pasaje y Turismo (life member), Grupo Comercial Chedraui, S.A. de C.V., Fincomún Servicios Financieros Comunitarios, S.A. de C.V. and Grupo Financiero Aserta, S.A. de C.V. Mr. Irurita Pérez is member of the national board and executive committee of the Confederación Patronal de la República Mexicana, or Coparmex.

Luis Jorba Servitje Mr. Luis Jorba Servitje is Chief Executive Officer of Frialsa Frigoríficos, Chairman of Efform, S.A. de C.V. and member of the Board of Directors of Texas Mexico Frozen Food Council, International Association of Refrigerated Warehouses, World Food Logistics Organization and World Group of Warehouses. Mr. Luis Jorba Servitje is brother of Mauricio Jorba Servitje, cousin of Daniel Servitje Montull and nephew of Roberto Servitje Sendra.

Mauricio Jorba Servitje Mr. Mauricio Jorba Servitje is a member of the Board of Directors of VIDAX y Promociones Monser, S.A. de C.V. Mr. Mauricio Jorba Servitje is brother of Luis Jorba Servitje, cousin of Daniel Servitje Montull and nephew of Roberto Servitje Sendra.

70 Fernando Lerdo de Tejada Luna Mr. Lerdo de Tejada Luna is President and General Director of Asesoría Estrategia Total, S.C. and member of the Board of Directors of Consultoría Estratégica Primer Círculo, S.C., Get Digital, S.A. de C.V., Fundación Mexicana para el Desarrollo Rural, A.C., and Club de Golf Chapultepec, S.A.

Nicolás Mariscal Servitje Mr. Mariscal Servitje is Chief Executive Officer of Grupo MARHNOS, member of the Board of Directors of Fundación Mexicana para el Desarrollo Rural, A.C., and Vice-Chairman of Urban Land Institute-Mexico. Mr. Mariscal Servitje is nephew of Daniel Servitje Montull José Ignacio Mariscal Torroella and Raúl Obregón del Corral.

José Ignacio Mariscal Torroella Mr. Mariscal Torroella is President of Grupo MARHNOS and Una Sola Economía del CCE (Consejo Coordinador Empresarial). He is also a member of the board and executive committee of Coparmex and Comisión Ejecutiva de la Confederación USEM. Mr. Mariscal Torroella is Vice President of Fincomún Servicios Financieros Comunitarios and Fundación FinComún. Mr. Mariscal Torroella is member of the Board of Directors of Sociedad de Inversión de Capital de Posadas de México, Grupo Calidra, Uniapac Internacional, Grupo Financiero Aserta. Mr. Mariscal Torroella is brother-in-law of Daniel Servitje Montull and Raúl Obregón del Corral, and uncle of Nicolás Mariscal Servitje.

María Isabel Mata Torrallardona Ms. Mata Torrallardona is the General Director of Fundación José T. Mata and member of the Board of Directors of Tepeyac, A.C.

Raúl Obregón del Corral Mr. Obregón del Corral is the Managing Partner of Alianzas, Estrategia y Gobierno Corporativo, S.C. and He is affiliated to Proxy Gobernanza Corporativa, S.C. He also is a member of the Board of Directors of Industrias Peñoles, Grupo Nacional Provincial, Grupo Palacio de Hierro, Invermat, S.A. de C.V., Altamira Unión de Crédito, S.A. de C.V. and Comercializadora Círculo CCK, S.A. de C.V. Mr. Obregón del Corral is an Independent Member of Sub-Committee on Evaluation and Financing of Fondo Nacional de Infraestructura, and a member of the Government Board of ITAM. Mr. Obregón del Corral is brother-in-law of Daniel Servitje Montull and José Ignacio Mariscal Torroella, and uncle of Nicolás Mariscal Servitje.

Javier de Pedro Espínola Mr. de Pedro Espínola is the Manager and Finance Director of MXO Trade S.A. de C.V. and the President of the Board of Directors of Test Rite México, S.A. de C.V. He is a member of the board of directors of Industrias Rampe, MXO Trade, S.A. de C.V. and Fundación José T. Mata.

Ignacio Pérez Lizaur Mr. Pérez Lizaur is a partner of Consultores Pérez Lizaur, S.C. He is a member of the Board of Directors of Financiera Labor, S.A.P.I de C.V. and Chairman (Latin America) of Gold Buyers Inc.

Alexis E. Rovzar de la Torre Mr. Rovzar de la Torre is a partner of White & Case, LLP and member of the Board of Directors of Coca- Cola FEMSA, FEMSA, Grupo ACIR, Grupo COMEX, The Bank of Nova Scotia, Endeavor México, A.C., Appleseed México, A.C., Provivah, A.C., Philharmonic Orchestra of the Americas, Council of the Americas Procura, A.C. and Qualitas of Life Foundation. With great sadness we received the news of the passing, on January 7, 2012, of Mr. Rovzar de la Torre.

71 Lorenzo Sendra Mata Mr. Sendra Mata is Chairman of the Board of Directors of Proarce, S.A. de C.V. and Plasterex, S.A. de C.V. He is a member of the Board of Directors of Fundación Mexicana para el Desarrollo Rural, A.C., Financiera Finamigo, Frialsa, Equinoccio, S.A. de C.V. and Extended Suites, S.A. de C.V.

Luis Miguel Briola Clément Mr. Briola joined Grupo Bimbo in 2004 and serves as our General Counsel and Secretary of our board of directors. Mr. Briola holds a law degree from Escuela Libre de Derecho and a Master of Laws from Columbia University.

Except as indicated above, there are no potential material conflicts of interest between the duties of the members of our board of directors and their private interests.

Key Executive Officers Our chief executive officer is appointed by the Board of Directors and holds office at its discretion. Our current key executive officers are as follows:

Years in Officer Position Age Grupo Bimbo Roberto Servitje Sendra ...... Chairman of the Board of Directors 84 66 Daniel Servitje Montull ...... Chief Executive Officer 52 29 Guillermo Quiroz Abed ...... Chief Financial and Administrative Officer 58 12 Javier Millán Dehesa ...... Chief Human Relations Officer 63 34 Guillermo Sánchez Arrieta ...... Director of Auditing 57 33 Pablo Elizondo Huerta ...... Assistant Chief Executive Officer 58 34 Javier A. González Franco ...... President of Bimbo 56 34 Gabino Gómez Carbajal ...... President of Barcel 52 30 Gary Prince ...... President of Bimbo Bakeries 59 3 Reynaldo Reyna Rodríguez ...... Vice President of Strategic Analysis and Information 56 10 Jorge Zarate Lupercio ...... Organization Director Asian Operations 46 24 Miguel Angel Espinoza ...... General Manager of OLA 54 30 José Manuel González Guzmán ...... General Manager Bimbo Iberia 45 20 Jorge Esteban Giraldo Arango ...... Organization Director Central America and Colombia 58 7

The following sets forth selected biographical information for each of our executive officers:

Daniel Servitje Montull Mr. Servitje Montull joined Grupo Bimbo in 1982 and serves as Chief Executive Officer since 1997. Mr. Servitje Montull holds a degree in Business Administration from Universidad Iberoamericana and an MBA degree from Stanford University. Mr. Servitje is a member of the Board of Directors of Coca-Cola FEMSA, Grupo Financiero Banamex, The Consumer Goods Forum and Grocery Manufacturers of America.

72 Guillermo Quiroz Abed Mr. Quiroz Abed joined Grupo Bimbo in 1999 and serves as the Chief Financial and Administrative Officer of Grupo Bimbo. Mr. Quiroz Abed is in charge of the Finance, Comptroller and Legal departments of Grupo Bimbo. Mr. Quiroz Abed obtained a degree in Actuarial Studies from Universidad Anáhuac and an MBA degree from the Instituto Panamericano de Alta Dirección de Empresa, or IPADE, in Mexico City. Mr. Quiroz Abed is a member of the Board of Directors of Grupo Altex.

Javier Millán Dehesa Mr. Millán Dehesa joined Grupo Bimbo in 1977 and serves as Chief Human Relations Officer of Grupo Bimbo. He holds a degree in Philosophy and Business Administration from Universidad Iberoamericana and an MBA degree from IPADE, in Mexico. Mr. Millán is a member of the Board of Directors of Asociación Mexicana en Dirección de Recursos Humanos and Chairman of Reforestamos México, A.C. Mr. Millán Dehesa served as Chief Development Officer, Personnel Manager in Productos Marinela and Development Corporate Manager.

Guillermo Sánchez Arrieta Mr. Sánchez Arrieta joined Grupo Bimbo in 1978 and serves as Audit Director of Auditing since 1998. Mr. Sánchez Arrieta holds a degree in Accounting from Universidad Autónoma de Hidalgo and an MBA from IPADE. Among his previous positions in Grupo Bimbo, Mr. Sánchez Arrieta served as Comptroller of Marinela, Corporate Comptroller of Bimbo and Barcel, and General Manager of Ricolino and Barcel.

Pablo Elizondo Huerta Mr. Elizondo Huerta joined Grupo Bimbo in 1977 and serves as Assistant Chief Executive Officer of Grupo Bimbo since January 2008. Mr. Elizondo is also Vice Chairman of the Board of ConMéxico (Consejo Mexicano de la Industria de Productos de Consumo A.C.). Mr. Elizondo holds a degree in Chemical Engineering from UNAM. Among his previous positions at Grupo Bimbo, Mr. Elizondo Huerta served as General Manager of Wonder in Mexico City, General Manager of Bimbo in Hermosillo, Director of OLA, General Corporate Manager and Commercial Director of Bimbo and General Director of Bimbo.

Javier Augusto González Franco Mr. González Franco joined Grupo Bimbo in 1977 and serves as President of Bimbo since January 2008. He holds a degree in Chemical Engineering from UNAM and an MBA from Universidad Diego Portales, in Chile. Among his previous positions in Grupo Bimbo, Mr. González Franco served as Assistant General Manager of OLA, Assistant General Manager of Bimbo, Assistant and President of Barcel.

Gabino Gómez Carbajal Mr. Gómez Carbajal joined Grupo Bimbo in 1981 and serves as President of Barcel since January 2008. Mr. Gómez Carbajal holds a degree in Marketing from the ITESM, an MBA from Miami University and studies in the IPADE. He is a member of the Executive Board of ConMéxico (Consejo Mexicano de la Industria de Productos de Consumo A.C.) Among his previous positions at Grupo Bimbo, Mr. Gómez Carbajal served as Vice President of the Business Development Division and General Manager of Bimbo, General Management of OLA.

Gary Prince Mr. Prince joined Grupo Bimbo in 2009 following our acquisition of WFI, and serves as President of Bimbo Bakeries. Mr. Prince’s previous positions include President of Stroehman Bakeries, L.C. and President of Weston Foods, Inc. and George Weston Bakeries.

73 Reynaldo Reyna Rodríguez Mr. Reyna Rodríguez joined Grupo Bimbo in 2001 and serves as Vice President of Strategic Analysis and Information of Grupo Bimbo since January 2009. He studied Industrial and Systems Engineering at ITESM and holds a Masters degree in Operations, Analysis and Finance from the University of Pennsylvania, Wharton School. Among his previous positions in Grupo Bimbo, Mr. Reyna Rodríguez served as Corporate General Manager and General Manager of Bimbo Bakeries.

Jorge Zarate Lupercio Mr. Zarate Lupercio joined Grupo Bimbo in 1987 and serves as Director of our operations in Asia since October 2006. He holds a Biochemical degree from ITESM, a degree in Baking Science & Technology from AIP, in the U.S. an MBA from IAE, in Argentina, and a post-graduate degree in Strategic Marketing from UCA, in Argentina. Among his previous positions at Grupo Bimbo, Mr. Zarate Lupercio served as Production Manager of Bimbo del Noroeste, Operations Manager in Bimbo and Marinela, Planning Corporate Manager and General Manager of Bimbo in Argentina.

Miguel Ángel Espinoza Ramírez Mr. Espinoza Ramírez joined Grupo Bimbo in 1981 and serves as General Manager of OLA since April 2011. He holds a degree in Industrial Engineering from Instituto Tecnológico de Chihuahua, studies in the IPADE and the Advanced Management Program in the University of Harvard. Among his previous positions at Grupo Bimbo, Mr. Espinoza Ramírez served as Commercial Director of Bimbo, General Administrative Officer and Chief Executive Officer of Barcel.

José Manuel González Guzmán Mr. González Guzmán joined Grupo Bimbo in 1991 and serves as General Director of Bimbo Iberia since December 2011. He holds a degree in Administration and Finance, as well as studies in Advertising and Publicity at Universidad Panamericana. Among his previous positions at Grupo Bimbo, Mr. González Guzmán served as Advertising Director.

Jorge Esteban Giraldo Arango Mr. Giraldo Arango joined Grupo Bimbo in June 2004 and serves as General Director of Bimbo Central America and Colombia since July 2010. He holds a degree in Electrical Engineering.

Except as indicated above, there are no potential material conflicts of interest between the duties of our key officers and their private interests. Our key officers can be reached at our principal executive offices. See “Summary – Company Information.”

Committees of the Board of Directors The Board of Directors of Grupo Bimbo has formed an Audit Committee, a Corporate Practices Committee, a Compensation and Benefits Committee and a Finance and Planning Committee.

Audit Committee The Audit Committee is comprised of Messrs. Henry Davis, who serves as Chairman of the committee, Arturo Fernández Pérez, Agustín Irurita Pérez, Alexis Rovzar de la Torre and Ignacio Pérez Lizaur. All members of the Audit Committee are independent within the meaning of the Mexican Securities Market Law. All members of the Audit Committee are independent within the meaning of the Mexican Securities Market Law. The Audit Committee is responsible for reviewing and overseeing the internal audit function and approving annual internal

74 audit work plans and budgets. The Audit Committee also reviews and oversees the external audit function and all non-audit services to be conducted by external auditors, reviewing external auditor reports and significant findings and reviewing and recommending for approval to the Board of Directors Grupo Bimbo’s financial statements. The Audit Committee meets approximately four times per year, investigates any recommendations for improvement of internal and external controls and reviews significant audit and accounting findings and recommendations and management’s responses to such recommendations. The Audit Committee also issues opinions on any material changes in the accounting policies, criteria and practices applied in the preparation of Grupo Bimbo’s financial statements, as well as on matters concerning the execution of material or unusual transactions.

Corporate Practices Committee The Corporate Practices Committee is comprised of Messrs. Ricardo Guajardo Touché, who serves as Chairman of the committee, Henry Davis Signoret and José Antonio Fernández Carbajal. All members of the Corporate Practices Committee are independent within the meaning of the Mexican Securities Market Law. The Corporate Practices Committee is responsible for conducting corporate practices in accordance with the Mexican Securities Market Law, including, assessing and issuing recommendations and opinions in connection with related party transactions, the appointment, evaluation and dismissal of the Chief Executive Officer and other executive officers, and on policies for the overall compensation of the Chief Executive Officer and the other executive officers of Grupo Bimbo.

Compensation and Benefits Committee The Compensation and Benefits Committee is comprised of Messrs. Raúl Obregón del Corral, who serves as Chairman of the committee, Javier de Pedro Espínola, José Antonio Fernández Carbajal, Roberto Servitje Sendra and Daniel Servitje Montull. The Compensation and Benefits Committee is in charge of analyzing and approving the general compensation structure of Grupo Bimbo, as well as the policies and guidelines regarding compensation and the implementation of development programs for officers and associates of Grupo Bimbo.

Finance and Planning Committee The Finance and Planning Committee is comprised of José Ignacio Mariscal Torroella, who serves as Chairman of the committee, Ricardo Guajardo Touché, Luis Jorba Servitje, Raúl Obregón del Corral, Lorenzo Sendra Mata, Daniel Servitje Montull and Guillermo Quiroz Abed. The Finance and Planning Committee is in charge of analyzing and presenting for approval to the Board of Directors, Grupo Bimbo’s long-term strategies, investment and risk management policies.

Code of Ethics Grupo Bimbo relies on self-regulated measures that govern its business practices. For example, our Code of Ethics covers general aspects and policies for Grupo Bimbo’s interaction with: • associates, to ensure respect for their dignity and individuality and to facilitate an environment for their well-being and development; • shareholders, to provide them with a reasonable profit on a sustained basis; • suppliers, to maintain cordial relations and promote their development; • customers, to provide exemplary service and support their growth and development through the value of our brands; • our competitors, to compete vigorously and objectively on the basis of fair trade practices; • consumers, to guarantee healthy foods and a variety of products through continuous improvement; and • society, to promote the strengthening of universal ethical values and to support the economic and social growth of the communities in which we operate.

75 SHAREHOLDERS

Effective April 29, 2011, as a result of a four-to-one stock split, Grupo Bimbo’s authorized capital stock increased from 1,175,800,000 to 4,703,200,000 common shares. Certain rights and obligations of our shareholders are set forth in our by-laws (estatutos sociales). The shares of Grupo Bimbo are publicly traded in Mexico and listed on the Mexican Stock Exchange under the ticker symbol “BIMBOA.” As of September 30, 2011, our market capitalization was Ps.124,117 million.

The following table sets forth information concerning the percentage of our share ownership as of December 1, 2011:

Number of Shares Percentage Ownership Shareholder of Common Stock of Common Stock Normaciel, S.A. de C.V...... 1,756,513,140 37.3% Promociones Monser, S.A. de C.V...... 540,418,544 11.5% Banco Nacional de México, S.A. as trustee ...... 263,280,212 5.6% Philae, S.A. de C.V...... 232,692,104 5.0% Distribuidora Comercial Senda, S.A. de C.V...... 174,960,000 3.7% Marlupag, S.A. de C.V...... 161,213,536 3.4% Others ...... 1,574,122,464 33.5% Total ...... 4,703,200,000 100%

76 CERTAIN TRANSACTIONS WITH RELATED PARTIES

In the ordinary course of our business, we enter into commercial transactions with some of our affiliates, including in connection with the supply of raw materials, office supplies and employee uniforms. These transactions are approved by our board of directors and we believe are entered into on an arm’s length basis. In connection with material transactions with related parties, we regularly enter into transactions with: • Grupo Altex and certain of its subsidiaries, in connection with the supply of wheat flour and related raw materials; • Proarce, S.A. de C.V. in connection with the supply of certain trays and bins used in certain of our production processes; and • Ovoplus del Centro, S.A. de C.V. in connection with the supply of eggs.

The following table sets forth the approximate amount of transactions (mainly purchases of raw materials), carried out with related parties during the periods specified below:

For the Years Ended December 31, Related Party 2010 2009 (in millions of Ps.) Advance Design Center ...... 4 13 Asesoría Estrategia Total, S.A...... 5 5 Beta San Miguel, S.A. de C.V...... 1,438 560 Corporate Statler Ltd...... 8 8 East Dallas BW Ltd...... 8 8 Efform, S.A. de C.V...... 154 127 Fábrica de Galletas La Moderna, S.A. de C.V...... 215 169 Frexport, S.A. de C.V...... 537 434 Galerías Luis C. Morton S.A. de C.V...... 2 — Grupo Altex, S.A. de C.V...... 1,974 2,479 Grupo La Moderna, S.A. de C.V...... — — Industrial Molinera Montserrat, S.A. de C.V...... 273 320 Industrial Molinera San Vicente de Paul, S.A. de C.V...... — 120 Innovación en Alimentos, S.A. de C.V...... 273 — Makymat, S.A. de C.V...... 26 33 Marhnos Construcciones S.A. de C.V...... — — Marhnos Inmobiliaria S.A. de C.V...... 36 40 Mundo Dulce, S.A. de C.V...... 503 317 Ovoplus del Centro, S.A. de C.V...... 329 318 Pan-Glo de México, S. de R.L. de C.V ...... 108 89 Paniplus, S.A. de C.V...... 128 139 Proarce, S.A. de C.V...... 208 160 Uniformes y Equipo Industrial, S.A. de C.V...... 69 83 West Houston BBU Ltd...... 4 6 Total ...... 6,302 5,428

Certain of our shareholders and members of our board of directors control or otherwise have an interest in the related parties set forth above.

77 On May 28, 2010, Bimbo Foods repurchased from BMB Foods, LLC, or BMB Foods, the exclusive distribution rights in Florida, Georgia and Alabama for products sold under the Bimbo, Marinela and Tia Rosa brand names. Bimbo Foods, who had previously granted to BMB Foods exclusive distribution rights for such brands pursuant to a distribution agreement, exercised its buy-out right under such distribution agreement. The purchase price paid by Bimbo Foods was approximately U.S.$34 million and was calculated pursuant to a formula set forth in such distribution agreement. Also, as part of the transaction, an affiliate of Bimbo Foods, Orograin Bakeries Sales, Inc., assumed two facility leases, one in Dorazille, Georgia and another in Lakeland, Florida, from BMB Foods. The distribution agreement between BMB Foods and Bimbo Foods was terminated effective as of the closing date. Lorenzo Servitje Montull, brother of Grupo Bimbo’s Chief Executive Officer, holds approximately 10% of the outstanding shares of BMB Foods.

78 DESCRIPTION OF THE NOTES

This section of the offering memorandum summarizes the material terms of the indenture and the notes. It does not, however, describe all of the terms of the indenture and the notes. Upon request, we will provide you with copies of the indenture. See “Where You Can Find More Information” for information concerning how to obtain such copies.

In this section of the offering memorandum, references to “we,” “us” and “our” are to Grupo Bimbo, S.A.B. de C.V. only and do not include our subsidiaries or affiliates. References to “holders” mean those who have notes registered in their names on the books that we or the trustee maintain for this purpose, and not those who own beneficial interests in notes issued in book-entry form through The Depository Trust Company or in notes registered in street name. Owners of beneficial interests in the notes should refer to “Form of Notes, Clearing and Settlement.”

General Indenture The notes will be issued under an indenture to be dated as of January 25, 2012, among us, the subsidiary guarantors and Wells Fargo Bank, National Association, as trustee (the “trustee,” which term includes any successor as trustee.)

Principal and Interest The aggregate principal amount of the notes will initially be U.S.$800,000,000. The notes will mature on January 25, 2022.

The notes will bear interest at a rate of 4.50% per year from January 25, 2012. Interest on the notes will be payable semi-annually on January 25 and July 25 of each year, beginning on July 25, 2012, to the holders in whose names the notes are registered at the close of business on the January 10 or July 10 immediately preceding the related interest payment date.

We will pay interest on the notes on the interest payment dates stated above and at maturity. Each payment of interest due on an interest payment date or at maturity will include interest accrued from and including the last date to which interest has been paid or made available for payment, or from the issue date, if none has been paid or made available for payment, to but excluding the relevant payment date. We will compute interest on the notes on the basis of a 360-day year consisting of twelve 30-day months.

If any payment under the notes is due on a day that is not a Business Day, we will make such payment on the next Business Day. Payments postponed to the next Business Day in this situation will be treated under the indenture as if they were made on the original due date. Postponement of this kind will not result in a default under the notes or the indenture. No interest will accrue on the postponed amount from the original due date to the next Business Day.

Ranking of the Notes and the Guarantees We are a holding company and our principal assets are shares that we hold in our subsidiaries. The notes will be unsecured obligations and will, other than with respect to certain obligations given preferential treatment pursuant to the laws of Mexico, rank pari passu in right of payment with all of our unsecured and unsubordinated indebtedness. The notes will not have the benefit of any collateral securing any of our existing or future secured indebtedness.

79 Each subsidiary guaranty will be an unsecured obligation and will, other than with respect to certain obligations given preferential treatment pursuant to the laws of Mexico with respect to the Mexican subsidiary guarantors, rank pari passu in right of payment with such subsidiary guarantor’s other existing and future unsecured and unsubordinated indebtedness. The subsidiary guaranties will not have the benefit of any collateral securing any of our existing and future secured indebtedness.

At September 30, 2011, our total consolidated indebtedness was Ps.40,624 million (approximately U.S.$2,950 million), (i) none of which constituted secured indebtedness and (ii) of which Ps.1,446 million (approximately U.S.$105 million) constituted indebtedness of our subsidiaries that are not subsidiary guarantors.

Form and Denominations The notes will be issued only in registered form without coupons and in denominations of U.S.$100,000 and integral multiples of U.S.$1,000 in excess thereof.

Except in limited circumstances, the notes will be issued in the form of global notes. See “Form of Notes, Clearing and Settlement.”

Further Issues We reserve the right, from time to time without the consent of holders of the notes, to issue additional notes on terms and conditions identical to those of the notes, which additional notes will increase the aggregate principal amount of, and will be consolidated and form a single series with, the notes.

Note Guarantees On the issue date, five of our subsidiaries, Bimbo, S.A. de C.V., Barcel, S.A. de C.V., Bimbo Bakeries USA, Inc., Bimbo Foods, Inc. and Earthgrains Bakery Group, Inc., will each unconditionally guarantee the payment of all our obligations under the indenture and the notes. Each subsidiary guarantor will waive any right to which it may be entitled under any applicable law so that enforcement for the full amount due under the notes may be sought against such guarantor. The obligations of each subsidiary guarantor in respect of its applicable subsidiary guarantee will be limited to the maximum amount that will result in the obligations not constituting a fraudulent conveyance, fraudulent transfer or similar illegal transfer under applicable law. See “Risk Factors – Risk Factors Related to the Notes – The subsidiary guarantees may not be enforceable.”

Each subsidiary guarantor will be released and relieved of its obligations under its respective subsidiary guarantee in the event: • there is a legal defeasance or a covenant defeasance of the notes as discussed under “Defeasance;” • there is a sale or other disposition of capital stock of such subsidiary guarantor (including by way of merger, stock purchase or otherwise) following which such guarantor is no longer our direct or indirect subsidiary; or • in the event that, at any time, the fair market value of the assets of such subsidiary guarantor (as reasonably determined by our board) is less than U.S.$1 million.

To the extent that, any of our subsidiaries is not a guarantor, such non-guarantor subsidiary will pay its indebtedness (including trades payable) before such non-guarantor subsidiary will be able to distribute any of its assets to us in the event of a bankruptcy, concurso mercantil, liquidation or reorganization. In addition, holders of minority interests in such non-guarantor subsidiary may receive distributions prior to or pro rata with us depending on the terms of the equity interests. See “Risk Factors – Risk Factors Related to the Notes – The notes and the subsidiary guarantees will be effectively subordinated to our secured debt.”

80 Payment of Additional Amounts We will make payment of the principal of and interest on the notes without withholding or deduction for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or on behalf of any taxing authority, unless such withholding or deduction is required by law or by the interpretation or administration thereof (including as described under “Taxation – Mexican Tax Considerations”).

Subject to the limitations and exceptions described below, we will pay to holders of the notes all additional amounts that may be necessary so that every net payment of interest or principal to the holder will not be less than the amount provided for in the notes. By net payment, we mean the amount that we or our paying agent will pay the holder after deducting or withholding an amount for or on account of any present or future taxes, duties, assessments or other governmental charges imposed with respect to that payment by a taxing authority of Mexico or of any jurisdiction in which any applicable subsidiary guarantor is organized, or the jurisdiction in which any successor of us or successor of any applicable subsidiary guarantor is organized (wherein any successor assumes the obligations of the notes and the indenture following a merger, consolidation or transfer, lease or conveyance of substantially all of our assets and properties), or through which payments on the notes are made (each, a “Taxing Jurisdiction”).

Our obligation to pay additional amounts is, however, subject to several important exceptions. We will not pay additional amounts to any holder for or on account of any of the following: • any taxes, duties, assessments or other governmental charges imposed solely because at any time there is or was a connection between the holder or beneficial owner of such note, as the case may be, and Mexico (or a relevant Taxing Jurisdiction), including such holder or beneficial owner being or having been a citizen or resident of such relevant Taxing Jurisdiction or treated as a resident thereof or being or having been physically present or engaged in a trade or business or having had a permanent establishment therein (other than the mere receipt of a payment or the ownership or holding of a note); • any estate, inheritance, gift or other similar tax, assessment or other governmental charge imposed with respect to the notes; • any taxes, duties, assessments or other governmental charges imposed solely because the holder or any other person fails to comply with any certification, identification or other reporting requirement concerning the nationality, residence, identity or connection with Mexico (or a relevant Taxing Jurisdiction) of the holder or any beneficial owner of the note if compliance is required by law, regulation or by an applicable income tax treaty, as a precondition to exemption from, or reduction in the rate of, such tax, assessment or other governmental charge and we have given the holders at least 30 days’ notice prior to the first payment date with respect to which such certification, identification or reporting requirement is required to the effect that holders will be required to provide such information and identification; • any tax, duty, assessment or other governmental charge payable otherwise than by deduction or withholding from payments on the notes; • any taxes, duties, assessments or other governmental charges with respect to a note presented for payment more than 30 days after the date on which the payment became due and payable or the date on which payment thereof is duly provided for and notice thereof given to holders, whichever occurs later, except to the extent that the holders of such note would have been entitled to such additional amounts on presenting such note for payment on any date during such 30-day period; • any payment on a note to a holder that is a fiduciary or partnership or a person other than the sole beneficial owner of any such payment, to the extent that a beneficiary or settlor with respect to such fiduciary, a member of such a partnership or the beneficial owner of the payment would not have been entitled to the additional amounts had the beneficiary, settlor, member or beneficial owner been the holder of the note; and

81 • any tax, duty, assessment or governmental charge imposed on a payment to an individual and required to be made pursuant to any law implementing or complying with, or introduced in order to conform to, any European Union Directive on the taxation of savings.

The limitations on our obligations to pay additional amounts described in the third bullet point above will not apply if the provision of information, documentation or other evidence described in the applicable bullet point would be materially more onerous, in form, in procedure or in the substance of information disclosed, to a holder or beneficial owner of a note, in such holder’s reasonable judgment, taking into account any relevant differences between U.S. and Mexican law, regulation or administrative practice, than comparable information or other reporting requirements imposed under U.S. tax law (including the United States/Mexico Income Tax Treaty), regulations (including proposed regulations) and administrative practice (such as IRS Form W-8 BEN and W-9).

Applicable Mexican regulations currently allow us to withhold at a reduced rate, provided that we comply with certain information reporting requirements. The limitations on our obligations to pay additional amounts described in the third bullet point above also will not apply unless (a) the provision of the information, documentation or other evidence described in the applicable bullet point is expressly required by the applicable Mexican regulations, (b) we cannot obtain the information, documentation or other evidence necessary to comply with the applicable Mexican regulations on our own through reasonable diligence and (c) we otherwise would meet the requirements for application of the applicable Mexican regulations.

In addition, the limitation described in the third bullet point above does not require that any person, including any non-Mexican pension fund, retirement fund or financial institution, register with the Ministry of Finance and Public Credit to establish eligibility for an exemption from, or a reduction of, Mexican withholding tax.

We will remit the full amount of any Mexican or other taxes withheld to the applicable taxing authorities in accordance with applicable law. We will also provide the trustee with documentation satisfactory to the trustee evidencing the payment of Mexican or other taxes in respect of which we have paid any additional amounts. We will provide copies of such documentation to the holders of the notes or the relevant paying agent upon request.

To give effect to the foregoing, we will, upon the written request of any holder, indemnify and hold harmless and reimburse the holder for the amount of any such taxes (including interest and penalties) described above (other than any taxes for which the holder would not have been entitled to receive additional amounts pursuant to any of the conditions described above) so imposed on, and paid by, such holder as a result of any payment of principal or interest on the notes, so that the net amount received by such holder after such reimbursement will not be less than the net amount the holder would have received if such tax had not been imposed or levied and so paid. Holders will be obligated to provide reasonable documentation in connection with the foregoing.

We will also pay any stamp, administrative, court, documentary, excise or similar taxes arising in Mexico (or a relevant Taxing Jurisdiction) in connection with the notes and will indemnify the holders for any such taxes paid by holders.

Any reference in this offering memorandum, the indenture or the notes to principal, interest or any other amount payable in respect of the notes by us will be deemed also to refer to any additional amount that may be payable with respect to that amount under the obligations referred to in this subsection.

In the event that additional amounts actually paid with respect to the notes pursuant to the preceding paragraphs are based on rates of deduction or withholding in excess of the appropriate rate applicable to the holder of such notes, and as a result thereof such holder is entitled to make a claim for a refund or credit of such excess from the authority imposing such withholding tax, then such holder shall, by accepting such notes, be

82 deemed to have assigned and transferred all right, title and interest to any such claim for a refund or credit of such excess to us. However, by making such assignment, the holder makes no representation or warranty that we will be entitled to receive such claim for a refund or credit and incurs no other obligation with respect thereto.

Optional Redemption We will not be permitted to redeem the notes before their stated maturity, except as set forth below. The notes will not be entitled to the benefit of any sinking fund – meaning that we will not deposit money on a regular basis into any separate account to repay your notes. In addition, you will not be entitled to require us to repurchase your notes from you before the stated maturity, except as set forth under “– Repurchase at the Option of Holders Upon a Change of Control.”

Optional Redemption We will have the right at our option to redeem the notes in whole or in part, at any time or from time to time prior to their maturity, on at least 30 but not more than 60 days’ notice, at a redemption price equal to the greater of (i) 100% of the principal amount of such notes and (ii) the sum of the present values of each remaining scheduled payment of principal and interest thereon (exclusive of interest accrued to the date of redemption) discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 30 basis points, plus accrued interest on the principal amount of the notes to the date of redemption. In connection with such optional redemption, the following defined terms apply:

“Comparable Treasury Issue” means the United States Treasury security or securities selected by an Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term of the notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a comparable maturity to the remaining term of such notes.

“Comparable Treasury Price” means, with respect to any redemption date (i) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotation or (ii) if the Independent Investment Banker obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.

“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by us from time to time.

“Reference Treasury Dealer” means Citigroup Global Markets Inc. or its respective affiliates which are primary United States government securities dealers and two other leading primary United States government securities dealers in the city of New York selected from time to time by us; provided, however, that if any of the foregoing shall cease to be a primary United States government securities dealer in the city of New York (a “Primary Treasury Dealer”), we will substitute therefor another Primary Treasury Dealer.

“Reference Treasury Dealer Quotation” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Independent Investment Bank, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Bank by such Reference Treasury Dealer at 3:30 pm New York time on the third Business Day preceding such redemption date.

“Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity or interpolated maturity (on a day count basis) (as computed on the third Business Day immediately preceding that redemption date) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.

83 On and after the redemption date, interest will cease to accrue on the notes or any portion of the notes called for redemption (unless we default in the payment of the redemption price and accrued interest). On or before the redemption date, we will deposit with the trustee money sufficient to pay the redemption price of and (unless the redemption date shall be an interest payment date) accrued interest to the redemption date on the notes to be redeemed on such date. If less than all of the notes are to be redeemed, the notes to be redeemed shall be selected by the trustee by such method as the trustee shall deem fair and appropriate.

We may at any time purchase notes in the open market or otherwise at any price.

Redemption for Taxation Reasons If, as a result of any amendment to, or change in, the laws (or any rules or regulations thereunder) of Mexico or any political subdivision or taxing authority thereof or therein affecting taxation, or any amendment to or change in an official interpretation or application of such laws, rules or regulations, which amendment to or change of such laws, rules or regulations becomes effective on or after the date of this offering memorandum we, or a subsidiary guarantor, if a subsidiary guarantor is required to make payments, would be obligated, after taking such measures as we may consider reasonable to avoid this requirement, to pay additional amounts in excess of those attributable to a Mexican withholding tax rate of 10% with respect to the notes (see “– Payment of Additional Amounts” and “Taxation – Mexican Tax Considerations”), then, at our option, all, but not less than all, of the notes may be redeemed at any time on giving not less than 30 nor more than 60 days’ notice, at a redemption price equal to 100% of the outstanding principal amount, plus any accrued and unpaid interest and any additional amounts due thereon up to but not including the date of redemption; provided, however, that (i) no notice of redemption for tax reasons may be given earlier than 90 days prior to the earliest date on which we would be obligated to pay such additional amounts if a payment on the notes were then due and (ii) at the time such notice of redemption is given such obligation to pay such additional amounts remains in effect.

Prior to the publication of any notice of redemption pursuant to this provision, we will deliver to the trustee: • a certificate signed by one of our duly authorized representatives stating that we are entitled to effect the redemption and setting forth a statement of facts showing that the conditions precedent to our right of redemption for taxation reasons have occurred; and • an opinion of Mexican legal counsel (which may be our counsel) of recognized standing to the effect that we have or will become obligated to pay such additional amounts as a result of such change or amendment.

This notice, after it is delivered by us to the trustee, will be irrevocable.

Merger, Consolidation or Sale of Assets We may not consolidate with or merge into any other person or, directly or indirectly, transfer, convey, sell, lease or otherwise dispose of all or substantially all of our assets and properties and may not permit any person to consolidate with or merge into us unless all of the following conditions are met: • if we are not the successor person in the transaction, the successor is organized and validly existing under the laws of Mexico or the United States or any country that is a member of the European Union or any political subdivision thereof and expressly assumes our obligations under the notes and the indenture; • immediately after the transaction, no default under the notes has occurred and is continuing. For this purpose, “default under the notes” means an event of default or an event that would be an event of default with respect to the notes if the requirements for giving us default notice and for our default having to continue for a specific period of time were disregarded. See “– Defaults, Remedies and Waiver of Defaults;” and

84 • we have delivered to the trustee an officers’ certificate and opinion of counsel, each stating, among other things, that the conditions precedent under the indenture related to the consummation of the transaction have been met.

If the conditions described above are satisfied, we will not have to obtain the approval of the holders of the notes in order to merge or consolidate or to sell or otherwise dispose of our properties and assets substantially as an entirety. In addition, these conditions will apply only if we wish to merge into, consolidate with another person, or sell or otherwise dispose of all or substantially all of our assets and properties. We will not need to satisfy these conditions if we enter into other types of transactions, including any transaction in which we acquire the stock or assets of another person, any transaction that involves a change of control of our company, but in which we do not merge or consolidate and any transaction in which we sell or otherwise dispose of less than substantially all our assets.

Repurchase at the Option of Holders Upon a Change of Control Upon the occurrence of any Change of Control, each holder of notes will have the right to require us to repurchase all or any part of such holder’s notes pursuant to the offer described below (the “Change of Control Offer”) at a purchase price (the “Change of Control Purchase Price”) equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the purchase date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).

Within 30 days following the occurrence of a Change of Control, we shall send notice to each holder at such holders’ address appearing in the register of notes, which notice shall state: • that a Change of Control has occurred and a Change of Control Offer is being made and that all notes timely tendered will be accepted for payment; • the Change of Control Purchase Price and the purchase date, which shall be, subject to any contrary requirements of applicable law, a Business Day no earlier than 30 nor later than 60 days from the date such notice is mailed (such specified date, the “Change of Control Payment Date”); • the circumstances and relevant facts regarding the Change of Control; and • the procedures that holders of notes must follow in order to tender their notes (or portions thereof) for payment, and the procedures that holders of notes must follow in order to withdraw an election to tender notes (or portions thereof) for payment.

We will publish such notice pursuant to any rules of the Irish Stock Exchange.

On the Business Day preceding the Change of Control Payment Date, we will deposit with the paying agent funds in an amount equal to the Change of Control Purchase Price in respect of all notes or portions thereof so tendered.

“Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday that is not (i) a day on which banking institutions in New York or Mexico generally are authorized or obligated by law, regulation or executive order to close or (ii) a day on which banking and financial institutions in New York or Mexico are closed for business with the general public.

“Change of Control” means the occurrence of the following: (i) any event as a result of which the Permitted Holders shall cease, in the aggregate, to control, directly or indirectly, the power to direct or cause the direction of our management and policies, whether through the ownership of voting securities, by contract or otherwise, (ii) the adoption of a plan relating to our liquidation or dissolution or (iii) the direct or indirect sale, transfer, conveyance or other disposition in one or a series of related transactions, of all or substantially all of our and our subsidiaries’ properties or assets taken as a whole.

85 “Permitted Holders” means, collectively, one or more members of each of the following families: (i) Servitje Montull, (ii) Jorba Servitje, (iii) Servitje Achútegui, (iv) Sendra Mata and (v) Mata Torrallardona, including lineal descendents, estates and heirs, or any trust or other investment vehicle for the primary benefit of any of the foregoing.

We will not be required to make a Change of Control Offer following a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the indenture and purchases all notes validly tendered and not withdrawn under such Change of Control Offer.

We will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the covenant described above, we will comply with the applicable securities laws and regulations and will not be deemed to have breached our obligations under this covenant by virtue of such compliance.

Our obligation to make an offer to repurchase the notes as a result of a Change of Control may be waived or modified at any time prior to the occurrence of such Change of Control with the written consent of the holders of a majority in principal amount of the notes. See “– Modification and Waiver.”

Covenants The following covenants will apply to us and our subsidiaries for so long as any note remains outstanding. These covenants restrict our ability and the ability of our subsidiaries to enter into certain transactions. However, these covenants do not limit our ability to incur indebtedness or require us to comply with financial ratios or to maintain specified levels of net worth or liquidity.

Limitation on Liens We may not, and we may not allow any of our subsidiaries to, permit to exist any Indebtedness or Guarantee, if such Indebtedness or Guarantee is secured by a Lien upon any Operating Property, unless, concurrently with the issuance or assumption of such Indebtedness or Guarantee or the creation of such Lien, the notes (together with, at our option, any other indebtedness of or guarantee by us or our subsidiaries then existing or thereafter created which is not subordinated to the notes) shall be secured equally and ratably with (or at our option prior to) such Indebtedness or Guarantee for so long as such Indebtedness or Guarantee is so secured; provided, however, that the foregoing restriction shall not apply to: (i) any Lien on (a) any Operating Property acquired, constructed, developed, extended or improved by us or any of our subsidiaries (singly or together with other Persons) after the date of the indenture or any property reasonably incidental to the use or operation of such Operating Property (including any real property on which such Operating Property is located), or (b) any shares or other ownership interest in, or any Indebtedness of, any Person which holds, owns or is entitled to such property, products, revenue or profits, in each of clauses (a) and (b) above to the extent such Lien is created, incurred or assumed (x) during the period such Operating Property was being constructed, developed, extended or improved, or (y) contemporaneously with, or within 360 days after, such acquisition or the completion of such construction, development, extension or improvement in order to secure or provide for the payment of all or any part of the purchase price or other consideration of such Operating Property or the other costs of such acquisition, construction, development, extension or improvement (including costs such as escalation, interest during construction and financing and refinancing costs); (ii) any Lien on any Operating Property existing at the time of acquisition thereof and which (a) is not created as a result of or in connection with or in anticipation of such acquisition and (b) does not attach to any other Operating Property other than the Operating Property so acquired;

86 (iii) any Lien on any Operating Property acquired from a Person which is merged with or into us or any or our subsidiaries or any Lien existing on Operating Property of any Person at the time such Person becomes our subsidiary, in either such case which (a) is not created as a result of or in connection with or in anticipation of any such transaction and (b) does not attach to any other Operating Property other than the Operating Property so acquired; (iv) any Lien which secures Indebtedness or a Guarantee owing by any of our subsidiaries to us or any other of our subsidiaries; (v) any Lien existing on the date of the indenture; or (vi) any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any Lien referred to in the foregoing clauses (i) through (v) inclusive; provided, however, that the principal amount of Indebtedness or Guarantee secured thereby shall not exceed the principal amount of Indebtedness or Guarantee so secured at the time of such extension, renewal or replacement plus an amount necessary to pay any fees and expenses, including premiums and defeasance costs related to such transaction, and that such extension, renewal or replacement shall be limited to all or a part of the property which secured the Lien so extended, renewed or replaced (plus improvements on such property).

Notwithstanding the foregoing, we or any of our subsidiaries may issue or assume Indebtedness or a Guarantee secured by a Lien which would otherwise be prohibited under the provisions of the indenture described in this section or enter into a sale and leaseback transaction that would otherwise be prohibited by the provision of the indenture described below under “– Limitations on Sale and Leasebacks;” provided, however, that the aggregate amount of such Indebtedness, Guarantee or Attributable Debt of such sale and leaseback transaction together with the aggregate amount (without duplication) of (i) Indebtedness or Guarantees outstanding at such time that we or our subsidiaries previously incurred pursuant to this section, plus (ii) the Attributable Debt of all of our and our subsidiaries’ sale and leaseback transactions outstanding at such time that were previously incurred pursuant to the provisions of the indenture described below under the first bullet point of “– Limitation on Sales and Leasebacks,” shall not exceed 6% of Consolidated Total Assets.

“Attributable Debt” means, with respect to any sale and leaseback transaction, the lesser of (i) the fair market value of the asset subject to such transaction and (ii) the present value, discounted at a rate per annum equal to the discount rate inherent in the applicable lease, of the obligations of the lessee for net rental payments (excluding, however, any amounts required to be paid by such lessee, whether or not designated as rent or additional rent, on account of maintenance and repairs, services, insurance, taxes, assessments, water rates or similar charges and any amounts required to be paid by such lessee thereunder contingent upon monetary inflation or the amount of sales, maintenance and repairs, insurance, taxes, assessments water rates or similar charges) during the remaining term of the lease (as determined in good faith by us in accordance with MFRS).

“Consolidated Total Assets” means the total of all assets appearing on our consolidated balance sheet as set forth on our most recent consolidated balance sheet and computed in accordance with MFRS or IFRS, as applicable.

“Guarantee” means any obligation, contingent or otherwise (including an aval), of any Person directly or indirectly guaranteeing any Indebtedness of any other Person, direct or indirect, contingent or otherwise, or entered into for the purpose of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, however, that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning. The term “Guarantee” shall not apply to a guarantee of intercompany Indebtedness among us and our subsidiaries or among our subsidiaries.

“Indebtedness” means, with respect to any Person (without duplication) (i) any obligation of such Person (a) for borrowed money, under any reimbursement obligation relating to a letter of credit (other than letters of credit payable to suppliers in the ordinary course of business), under any reimbursement obligation relating to a

87 financial bond or under any reimbursement obligation relating to a similar instrument or agreement, (b) for the payment of money relating to any obligations under any capital lease of real or personal property or (c) under any agreement or instrument in respect of an interest rate or currency swap, exchange or hedging transaction or other financial derivatives transaction (other than any such agreements as are entered into in the ordinary course of business and are not for speculative purposes or the obtaining of credit); and (ii) any amendment, supplement, modification, deferral, renewal, extension or refunding of any liability of the types referred to in clause (i) above. For the purpose of determining any particular amount of Indebtedness under this definition, Guarantees of (or obligations with respect to letters of credit) Indebtedness otherwise included in the determination of such amount shall not be included.

“Lien” means any mortgage, pledge, lien or security interest.

“Operating Property” means as of any date of determination, any real and tangible property owned by us or any of our subsidiaries that constitutes all or any part of any production facility, warehouse or distribution center and is used in the ordinary course of our business, other than any such property which, individually or, in the case of a series of related transactions, in the aggregate, in the good faith opinion of the board of directors, is not of material importance to the business conducted or assets owned by us and our subsidiaries taken as a whole.

“Person” means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, limited liability company or government or other entity.

Limitation on Sales and Leasebacks We may not, and we may not allow any of our subsidiaries to, enter into any sale and leaseback transaction with respect to any Operating Property, unless: • the aggregate principal amount of all debt then outstanding that is secured by any lien on any Operating Property that does not ratably secure the notes (excluding any secured indebtedness permitted under (i) – (vi) of “ – Limitation on Liens” above) plus the aggregate amount of our Attributable Debt and the Attributable Debt of our subsidiaries in respect of sale and leaseback transactions then outstanding (other than any sale and leaseback transaction permitted under the following bullet point) would not exceed an amount equal to 6% of our Consolidated Total Assets; or • we or one of our subsidiaries, within 12 months of the sale and leaseback transaction, (i) retire an amount of our secured debt, which is not subordinated to the notes and which shall, at the time of incurrence, have a remaining maturity of at least 12 months, in an amount equal to the greater of (a) the net cash proceeds of the sale or transfer of the Operating Property that is the subject of the sale and leaseback transaction or (b) the fair market value (as determined in good faith by our board of directors) of the Operating Property leased, or (ii) apply the net cash proceeds of such sale or transfer, or, in the case such sale or transfer is other than for cash, the fair market value (as determined in good faith by our board of directors) to the acquisition, purchase, construction, development, extension or improvement of any property or assets constituting Operating Property.

A “sale and leaseback transaction” is an arrangement between us or one of our subsidiaries and a bank, insurance company or other lender or investor where we or our subsidiary leases Operating Property for an initial term of three years or more that was or will be sold by us or our subsidiary to that lender or investor for a sale price of U.S.$5 million or its equivalent or more.

Provision of Information For so long as the notes remain outstanding, we will provide to the holders (or to the trustee, with a written direction to send to the holders) a URL address providing access to the following items in English:

88 (i) our consolidated annual financial statements audited by an internationally recognized firm of independent public accountants within 120 days of the end of each fiscal year, and our consolidated quarterly financial statements within 60 days of the end of each of the first three fiscal quarters of each fiscal year. These annual and quarterly financial statements will be prepared in accordance with MFRS or International Financial Reporting Standards as approved by the International Accounting Standards Board and such annual financial statements will be accompanied by a management discussion on our results of operations for the periods presented;

(ii) copies of all public filings containing material information about our business made with any stock exchange or securities regulatory agency within 30 days after filing (or a summary thereof); and

(iii) any information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so long as the notes are not freely transferable under the Securities Act.

Listing Application has been made to list the notes on the Global Exchange Market of the Irish Stock Exchange Limited. If and so long as the notes are listed on the Global Exchange Market of the Irish Stock Exchange Limited, we will maintain a listing, paying and transfer agent having its specified office in a member state of the European Union with respect to the notes.

Defaults, Remedies and Waiver of Defaults You will have special rights if an event of default with respect to the notes that you hold occurs and is not cured, as described below.

Events of Default Each of the following will be an “event of default” with respect to the notes: • we fail to pay the principal of the notes on its due date; • we fail to pay interest on the notes within 30 days after its due date; • we remain in breach of any covenant in the indenture for the benefit of holders of the notes, for 60 days after we receive a notice of default (sent by the trustee or the holders of not less than 25% in principal amount of the notes) stating that we are in breach; • we file for bankruptcy, or other events of bankruptcy, insolvency, reorganization, concurso mercantil or similar proceedings relating to us occur; • we are in a default under any instrument relating to Indebtedness exceeding individually or in the aggregate U.S.$100 million (or its equivalent in other currencies) due to a failure to pay principal or interest when due or that results in the acceleration of the debt prior to its maturity and such default continues for more than the period of grace, if any, applicable thereto and the period for payment has not been expressly extended; or • a final judgment is rendered against us in an aggregate amount in excess of U.S.$100 million (or its equivalent in other currencies) that is not discharged or bonded in full within 60 days.

Remedies Upon Event of Default If an event of default with respect to the notes occurs and is not cured or waived, the trustee, at the written request of holders of not less than 25% in principal amount of the notes, may declare the entire principal amount of all the notes to be due and payable immediately, and upon any such declaration the principal, any accrued

89 interest and any additional amounts shall become due and payable. If, however, an event of default occurs because of bankruptcy, insolvency, reorganization or concurso mercantil relating to us, the entire principal amount of the notes and any accrued interest and any additional amounts will be automatically accelerated, without any action by the trustee or any holder and any principal, interest or additional amounts will become immediately due and payable.

Each of the situations described in the preceding paragraph is called an acceleration of the maturity of the notes. The right of the holders to give such acceleration notice shall terminate if the event giving rise to such right shall have been cured before such right is exercised. If the maturity of the notes is accelerated and a judgment for payment has not yet been obtained, the holders of a majority in aggregate principal amount of the notes may cancel the acceleration for all the notes, provided that all amounts then due (other than amounts due solely because of such acceleration) have been paid and all other defaults with respect to the notes have been cured or waived.

If any event of default occurs, the trustee will have special duties. In that situation, the trustee will be obligated to use those of its rights and powers under the indenture, and to use the same degree of care and skill in doing so, that a prudent person would use under the circumstances in conducting his or her own affairs.

Except as described in the prior paragraph, the trustee is not required to take any action under the indenture at the request of any holders unless the holders offer the trustee protection reasonably satisfactory to it, known as an indemnity, from expenses and liability. If the trustee receives an indemnity that is reasonably satisfactory to it, the holders of a majority in principal amount of the notes may direct the time, method and place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. These majority holders may also direct the trustee in performing any other action under the indenture with respect to the notes.

Before you bypass the trustee and bring your own lawsuit or other formal legal action or take other steps to enforce your rights or protect your interests relating to the notes, the following must occur: • the trustee must have received written notice that an event of default has occurred and the event of default has not been cured or waived; • the holders of not less than 25% in principal amount of the notes must make a written request that the trustee take action with respect to the notes because of the default and they or other holders must offer to the trustee indemnity reasonably satisfactory to the trustee against the cost and other liabilities of taking that action; • the trustee must not have taken action for 60 days after the above steps have been taken; and • during those 60 days, the holders of a majority in principal amount of the notes must not have given the trustee directions that are inconsistent with the written request of the holders of not less than 25% in principal amount of the notes.

You will be entitled, however, at any time to bring a lawsuit for the payment of money due on your note on or after its due date.

Book-entry and other indirect holders should consult their banks or brokers for information on how to give notice or direction to or make a request of the trustee and how to declare or cancel an acceleration of the maturity.

Waiver of Default The holders of not less than a majority in principal amount of the notes may waive a past default for all the notes. If this happens, the default will be treated as if it had been cured. No one can waive a payment default on any note, however, without the approval of the particular holder of that note.

90 Modification and Waiver There are three classes of changes we can make to the indenture or the outstanding notes under the indenture.

Changes Requiring Each Holder’s Approval The following changes cannot be made without the approval of each holder of an outstanding note affected by the change: • a change in the stated maturity of any principal or interest payment on the notes; • a reduction in the principal amount, the interest rate or the redemption price for the notes; • a change in the obligation to pay additional amounts; • a change in the obligation and price for repurchase following the occurrence of a Change of Control; • a change in the currency of any payment on the notes; • a change in the place of any payment on the notes; • an impairment of the holder’s right to sue for payment of any amount due on its notes; • a reduction in the percentage in principal amount of the notes needed to change the indenture, the outstanding notes under the indenture or the notes; and • a reduction in the percentage in principal amount of the notes needed to waive our compliance with the indenture or to waive defaults.

Changes Not Requiring Approval Some changes will not require the approval of holders of notes. These changes are limited to specific kinds of changes, like the addition of covenants, events of default or security, and other clarifications and changes that would not adversely affect the holders of outstanding notes under the indenture in any material respect.

Changes Requiring Majority Approval Any other change to the indenture or the notes will be required to be approved by the holders of a majority in principal amount of the notes affected by the change or waiver. The required approval must be given by written consent.

The same majority approval will be required for us to obtain a waiver of any of our covenants in the indenture. Our covenants include, among other restrictions, restrictions on our ability to merge and create liens on our interests, which we describe above under “– Mergers, Consolidation or Sale of Assets” and “– Covenants.” If the holders approve a waiver of a covenant, we will not have to comply with it. The holders, however, cannot approve a waiver of any provision in the notes or the indenture, as it affects any note, that we cannot change without the approval of each holder of that note as described under “– Changes Requiring Each Holder’s Approval” above, unless each holder approves the waiver.

Book-entry and other indirect holders should consult their banks or brokers for information on how approval may be granted or denied if we seek to change the indenture or the notes or request a waiver.

Defeasance We may, at our option, elect to terminate (i) all of our obligations with respect to the notes (“legal defeasance”), except for certain obligations, including those regarding any trust established for defeasance and obligations relating to the transfer and exchange of the notes, the replacement of mutilated, destroyed, lost or

91 stolen notes and the maintenance of agencies with respect to the notes, or (ii) our obligations under the covenants in the indenture, so that any failure to comply with such obligations will not constitute an event of default (“covenant defeasance”) in respect of the notes. In order to exercise either legal defeasance or covenant defeasance, we must irrevocably deposit with the trustee money or U.S. government obligations, or any combination thereof, in such amounts as will be sufficient (as certified by an independent financial professional), to pay the principal, premium, if any, and interest (including additional amounts) in respect of the notes then outstanding on the maturity date of the notes, and comply with certain other conditions, including, without limitation, the delivery of opinions of counsel as to specified tax and other matters, which must state that there has been a change in law or regulation, and the delivery of an officer’s certificate stating our election to terminate.

If we elect either legal defeasance or covenant defeasance with respect to the notes, we must so elect it with respect to all of the notes.

Special Rules for Actions by Holders When holders take any action under the indenture, such as giving a notice of default, declaring an acceleration, approving any change or waiver or giving the trustee an instruction, we will apply the following rules.

Only Outstanding Notes are Eligible for Action by Holders Only holders of outstanding notes will be eligible to vote or participate in any action by holders of notes. In addition, we will count only outstanding notes in determining whether the various percentage requirements for voting or taking action have been met. For these purposes, a note will not be “outstanding” if it has been surrendered for cancellation or if we have deposited or set aside, in trust for its holder, money for its payment or redemption and all other amounts due until such date. Notes held by us or any affiliate are not eligible to vote.

Determining Record Dates for Action by Holders We will generally be entitled to set any day as a record date for the purpose of determining the holders that are entitled to take action under the indenture. In some limited circumstances, only the trustee will be entitled to set a record date for action by holders. If we or the trustee set a record date for an approval or other action to be taken by holders, that vote or action may be taken only by persons or entities who are holders on the record date and must be taken during the period that we specify for this purpose, or that the trustee specifies if it sets the record date. We or the trustee, as applicable, may shorten or lengthen this period from time to time. This period, however, may not extend beyond the 180th day after the record date for the action. In addition, record dates for any global notes may be set in accordance with procedures established by the depositary from time to time.

Payment Provisions Payments on the Notes We will pay interest on the notes on the interest payment dates, and at maturity, to the holders in whose names the notes are registered at the close of business on the regular record date relating to the interest payment date, but we will pay the interest on the notes due at maturity but on a day that is not an interest payment date to the persons or entities entitled to receive the principal of such notes. We will pay the amount of principal due at maturity to the holders of the notes against surrender of such notes at the proper place of payment.

The regular record dates relating to the interest payment dates for the notes are January 10 and July 10. For the purpose of determining the holder at the close of business on a regular record date when business is not being conducted, the close of business will mean 5:00 p.m., New York City time, on that day.

92 Payments on Global Notes For notes issued in global form, we will make payments on the notes in accordance with the applicable policies of the depositary as in effect from time to time. Under those policies, we will make payments directly to the depositary, or its nominee, and not to any indirect holders who own beneficial interests in the notes. An indirect holder’s right to receive such payments will be governed by the rules and practices of the depositary and its participants.

Payments on Certificated Notes For notes issued in certificated form, if any, we will pay interest that is due on an interest payment date by check mailed on such interest payment date to the holder at the holder’s address appearing in the register of notes as of the close of business on the regular record date, and we will make all other payments by check against presentation of the note. All payments by check will be made in same-day funds, that is, funds that become available on the day the check is cashed. If we issue notes in certificated form, holders of notes in certificated form will be able to receive payments of principal and interest on their notes at the office of our paying agent maintained in the city of New York and, for so long as the notes are listed on the Global Exchange Market of the Irish Stock Exchange, at the office of our paying agent in Ireland.

Alternatively, upon the request of a holder of an aggregate principal amount of notes of at least U.S.$1,000,000, we will pay any amount that becomes due on such notes by wire transfer of immediately available funds to an account at a bank in the city of New York, on the due date. To request wire payment, the holder must give the paying agent appropriate wire transfer instructions at least 10 business days before the requested wire payment is due. In the case of interest payments due on interest payment dates, the instructions must be given by the person or entity who is the holder on the relevant regular record date. In the case of any other payment, payment will be made only after the notes are surrendered to the paying agent. Any wire instructions, once properly given, will remain in effect unless and until new instructions are given in the manner described above.

Paying Agents If we issue notes in certificated form, we may appoint one or more financial institutions to act as our paying agents, at whose designated offices the notes may be surrendered for payment at their maturity. We may add, replace or terminate paying agents from time to time, provided that if any notes are issued in certificated form, so long as such notes are outstanding, we will maintain a paying agent in the city of New York. In addition, we will, for so long as any notes are listed on the Global Exchange Market of the Irish Stock Exchange Limited and the rules of the Irish Stock Exchange Limited require, maintain a paying agent having a its specified office in a member state of the European Union. Initially, we have appointed the trustee, at its corporate trust office in the city of New York, as our principal paying agent. We must notify you of changes in the paying agents as described under “ – Notices” below.

Unclaimed Payments All money paid by us to a paying agent that remains unclaimed at the end of two years after the amount is due to a holder will be repaid to us. After the expiration of such two-year period, the holder may look only to us for payment and not to the trustee, any other paying agent or any other Person.

Transfer Agents We may appoint one or more transfer agents, at whose designated offices any notes in certificated form may be transferred or exchanged and also surrendered before payment is made at maturity. For so long as the notes remain outstanding, we will maintain a transfer agent in the city of New York. Initially, we have appointed the trustee, at its corporate trust office in the city of New York, as transfer agent. We must notify you of changes in

93 the transfer agents as described under “– Notices.” If we issue notes in certificated form, holders of notes in certificated form will be able to transfer their notes, in whole or in part, by surrendering the notes, with a duly completed form of transfer, for registration of transfer at the office of our transfer agent in the city of New York, Wells Fargo Bank, National Association, 45 Broadway, 14th Floor, New York, New York, 10006. We will not charge any fee for the registration or transfer or exchange, except that we may require the payment of a sum sufficient to cover any applicable tax or other governmental charge payable in connection with the transfer.

Notices As long as we issue notes in global form, notices to be given to holders will be given to DTC, in accordance with its applicable policies as in effect from time to time. If we issue notes in certificated form, notices, including upon the occurrence of a Change of Control, to be given to holders will be sent by mail to the respective addresses of the holders as they appear in the trustee’s records, and will be deemed given when mailed. From and after the date the notes are listed on the Global Exchange Market of the Irish Stock Exchange Limited we will provide notices to holders as required by the rules of such exchange for so long as it is required by its rules.

Neither the failure to give any notice to a particular holder, nor any defect in a notice given to a particular holder, will affect the sufficiency of any notice given to another holder.

Governing Law The indenture and the notes will be governed by, and construed in accordance with, the laws of the State of New York, United States of America without regard to conflicts of laws principles thereof.

Submission to Jurisdiction In connection with any legal action or proceeding arising out of or relating to the notes or the indenture (subject to the exceptions described below), we have agreed: • to submit to the jurisdiction of any U.S. federal or New York state court in the Borough of Manhattan, the city of New York; • that all claims in respect of such legal action or proceeding may be heard and determined in such New York state or U.S. federal court and will waive, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding and any right of jurisdiction in such action or proceeding on account of the place of residence or domicile of us; and • to appoint CT Corporation System, with an office at 111 Eighth Avenue, New York, New York 10011, United States of America as process agent.

The process agent will receive, on our behalf, service of copies of the summons and complaint and any other process which may be served in any such legal action or proceeding brought in such New York state or U.S. federal court sitting in the city of New York. Service may be made by mailing or delivering a copy of such process to us at the address specified above for the process agent.

A final judgment in any of the above legal actions or proceedings will be conclusive and may be enforced in other jurisdictions, in each case, to the extent permitted under the applicable laws of such jurisdiction.

In addition to the foregoing, the holders may serve legal process in any other manner permitted by applicable law. The above provisions do not limit the right of any holder to bring any action or proceeding against us or our properties in other courts where jurisdiction is independently established.

To the extent that we have or hereafter may acquire or have attributed to us any sovereign or other immunity under any law, we have agreed to waive, to the fullest extent permitted by law, such immunity in respect of any claims or actions regarding our obligations under the notes.

94 Currency Indemnity Our obligations under the notes, will be discharged only to the extent that the relevant holder is able to purchase U.S. dollars with any other currency paid to that holder in accordance with any judgment or otherwise. If the holder cannot purchase U.S. dollars in the amount originally to be paid, we have agreed to pay the difference. The holder, however, agrees that, if the amount of U.S. dollars purchased exceeds the amount originally to be paid to such holder, the holder will reimburse the excess to us. The holder will not be obligated to make this reimbursement if we are in default of our or its obligations under the notes. See “Risk Factors – Risk Factors Related to the Notes – Payments – Payments of judgments against us on the notes would be in pesos.”

Our Relationship with the Trustee Wells Fargo Bank, National Association is initially serving as the trustee for the notes. Wells Fargo Bank, National Association and its affiliates may have other business relationships with us from time to time.

95 FORM OF NOTES, CLEARING AND SETTLEMENT

Global Notes The notes will be issued in the form of two registered notes in global form, without interest coupons (the “global notes”), as follows: • notes sold to qualified institutional buyers under Rule 144A will be represented by the Rule 144A global note; and • notes sold in offshore transactions to non-U.S. persons in reliance on Regulation S will be represented by the Regulation S global note.

Upon issuance, each of the global notes will be deposited with the trustee as custodian for DTC and registered in the name of Cede & Co., as nominee of DTC.

Ownership of beneficial interests in each global note will be limited to persons who have accounts with DTC (“DTC participants”) or persons who hold interests through DTC participants (including Euroclear Bank S.A./N.V., or “Euroclear,” and Clearstream Banking, société anonyme, or “Clearstream”). We expect that under procedures established by DTC: • upon deposit of each global note with DTC’s custodian, DTC will credit portions of the principal amount of the global note to the accounts of the DTC participants designated by the initial purchasers; and • ownership of beneficial interests in each global note will be shown on, and transfer of ownership of those interests will be effected only through, records maintained by DTC (with respect to interests of DTC participants) and the records of DTC participants (with respect to other owners of beneficial interests in the global note).

Beneficial interests in the global notes may not be exchanged for notes in physical, certificated form except in the limited circumstances described below.

Each global note and beneficial interests in each global note will be subject to restrictions on transfer as described under “Transfer Restrictions.”

Exchanges Between the Global Notes Beneficial interests in one global note may generally be exchanged for interests in another global note. Depending on whether the transfer is being made during or after the 40-day period commencing on the original issue date of the notes, and to which global note the transfer is being made, the trustee may require the seller to provide certain written certifications in the form provided in the indenture.

A beneficial interest in a global note that is transferred to a person who takes delivery through another global note will, upon transfer, become subject to any transfer restrictions and other procedures applicable to beneficial interests in the other global note.

Book-Entry Procedures for the Global Notes All interests in the global notes will be subject to the operations and procedures of DTC, Euroclear and Clearstream. We provide the following summaries of those operations and procedures solely for the convenience of investors. The operations and procedures of each settlement system are controlled by that settlement system and may be changed at any time. Neither we nor the initial purchasers are responsible for those operations or procedures.

96 DTC has advised that it is: • a limited purpose trust company organized under the New York State Banking Law, • a “banking organization” within the meaning of the New York State Banking Law; • a member of the U.S. Federal Reserve System; • a “clearing corporation” within the meaning of the New York Uniform Commercial Code; and • a “clearing agency” registered under Section 17A of the Securities Exchange Act of 1934.

DTC was created to hold securities for its participants and to facilitate the clearance and settlement of securities transactions between its participants through electronic book-entry changes to the accounts of its participants. DTC’s participants include securities brokers and dealers, including the initial purchasers; banks and trust companies; clearing corporations; and certain other organizations. Indirect access to DTC’s system is also available to others such as banks, brokers, dealers and trust companies; these indirect participants clear through or maintain a custodial relationship with a DTC participant, either directly or indirectly. Investors who are not DTC participants may beneficially own securities held by or on behalf of DTC only through DTC participants or indirect participants in DTC (including Euroclear or Clearstream).

So long as DTC or its nominee is the registered owner of a global note, DTC or its nominee will be considered the sole owner or holder of the notes represented by that global note for all purposes under the indenture. Except as provided below, owners of beneficial interests in a global note: • will not be entitled to have notes represented by the global note registered in their names; • will not receive or be entitled to receive physical, certificated notes; and • will not be considered the registered owners or holders of the notes under the indenture for any purpose, including with respect to the giving of any direction, instruction or approval to the trustee under the indenture.

As a result, each investor who owns a beneficial interest in a global note must rely on the procedures of DTC to exercise any rights of a holder of notes under the indenture (and, if the investor is not a participant or an indirect participant in DTC, on the procedures of the DTC participant through which the investor owns its interest).

Payments of principal, premium, if any, and interest with respect to the notes represented by a global note will be made by the trustee to DTC’s nominee as the registered holder of the global note. Neither we nor the trustee will have any responsibility or liability for the payment of amounts to owners of beneficial interests in a global note, for any aspect of the records relating to or payments made on account of those interests by DTC, or for maintaining, supervising or reviewing any records of DTC relating to those interests.

Payments by participants and indirect participants in DTC to the owners of beneficial interests in a global note will be governed by standing instructions and customary practices and will be the responsibility of those participants or indirect participants and not of DTC, its nominee or us.

Transfers between participants in DTC will be effected under DTC’s procedures and will be settled in same-day funds. Transfers between participants in Euroclear and Clearstream will be effected in the ordinary way under the rules and operating procedures of those systems.

Cross-market transfers between DTC participants, on the one hand, and Euroclear or Clearstream, Luxembourg participants, on the other hand, will be effected within DTC through the DTC participants that are acting as depositaries for Euroclear and Clearstream. To deliver or receive an interest in a global note held in a Euroclear or Clearstream account, an investor must send transfer instructions to Euroclear or Clearstream, as the case may be, under the rules and procedures of that system and within the established deadlines of that system. If

97 the transaction meets its settlement requirements, Euroclear or Clearstream, as the case may be, will send instructions to its DTC depositary to take action to effect final settlement by delivering or receiving interests in the relevant global notes in DTC, and making or receiving payment under normal procedures for same-day funds settlement applicable to DTC. Euroclear or Clearstream participants may not deliver instructions directly to the DTC depositaries that are acting for Euroclear or Clearstream.

Because of time zone differences, the securities account of a Euroclear or Clearstream participant that purchases an interest in a global note from a DTC participant will be credited on the business day for Euroclear or Clearstream immediately following the DTC settlement date. Cash received in Euroclear or Clearstream from the sale of an interest in a global note to a DTC participant will be received with value on the DTC settlement date but will be available in the relevant Euroclear or Clearstream cash account as of the business day for Euroclear or Clearstream following the DTC settlement date.

DTC, Euroclear and Clearstream have agreed to the above procedures to facilitate transfers of interests in the global notes among participants in those settlement systems. However, the settlement systems are not obligated to perform these procedures and may discontinue or change these procedures at any time. Neither we nor the trustee will have any responsibility for the performance by DTC, Euroclear or Clearstream or their participants of indirect participants of their obligations under the rules and procedures governing their operations.

Certificated Notes Beneficial interests in the global notes may not be exchanged for notes in physical, certificated form unless: • DTC notifies us at any time that it is unwilling or unable to continue as depositary for the global notes and a successor depositary is not appointed within 90 days; • DTC ceases to be registered as a clearing agency under the Securities Exchange Act of 1934 and a successor depositary is not appointed within 90 days; • we, at our option, notify the trustee that we elect to cause the issuance of certificated notes; or • certain other events provided in the indenture should occur, including the occurrence and continuance of an event of default with respect to the notes.

In all cases, certificated notes delivered in exchange for any global note will be registered in the names, and issued in any approved denominations, requested by the depository and will bear a legend indicating the transfer restrictions of that particular global note.

For information concerning paying agents and transfer agents for any notes in certificated form, see “Description of the Notes – Payment Provisions – Paying Agents” and “– Transfer Agents.”

98 TAXATION

POTENTIAL PURCHASERS OF THE NOTES SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE PARTICULAR MEXICAN, UNITED STATES OR OTHER TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE NOTES, INCLUDING, IN PARTICULAR, THE APPLICATION TO THEIR PARTICULAR SITUATIONS OF THE TAX CONSIDERATIONS DISCUSSED BELOW.

Certain Mexican Federal Income Tax Considerations General The following is a general summary of the principal Mexican federal income tax consequences of the purchase, ownership and disposition of the notes by holders that are not residents of Mexico for tax purposes and that do not hold the notes through a permanent establishment in Mexico to which the holding of the notes is attributable for tax purposes. For purposes of this summary, each such holder is a “foreign holder”. This summary is based upon the provisions of the Ley del Impuesto Sobre la Renta, or the Mexican Income Tax Law, in effect on the date of this offering memorandum, which is subject to change or to new or different interpretations, which could affect the continued validity of this summary. This summary does not address all of the Mexican tax consequences that may be applicable to specific holders of the notes and does not purport to be a comprehensive description of all the Mexican tax considerations that may be relevant to a decision to purchase, own or dispose of the notes. This summary does not describe any tax consequences arising under the laws of any state, municipality or taxing jurisdiction other than under Mexican Income Tax Law.

An individual is a resident of Mexico for tax purposes, if such person has established his or her home in Mexico. When such person has a home in another country, the individual will be considered a resident of Mexico for tax purposes if his/her center of vital interests is located in Mexico, which is deemed to occur if (i) more than 50% of such individual’s total income, in any calendar year, is from a Mexican source, or (ii) such individual’s principal center of professional activities is located in Mexico. Unless proven otherwise, a Mexican national is deemed a resident of Mexico for tax purposes.

A legal entity is a resident of Mexico for tax purposes if it maintains the principal administration of its business or the effective location of its management in Mexico.

A permanent establishment of a foreign person in Mexico will be treated as a resident of Mexico for tax purposes and will be required to pay taxes in Mexico in accordance with applicable tax laws, for income attributable to such permanent establishment.

For purposes of Mexican taxation, residence in Mexico, for tax purposes, is a highly technical fact oriented definition.

Taxation of Payments of Interest Under the Mexican Income Tax Law, payments of interest (including original issue discount and premiums, which are deemed interest under the Mexican Income Tax Law) made by Grupo Bimbo or the subsidiary guarantors that are residents in Mexico for tax purposes in respect of the notes to a foreign holder will generally be subject to a Mexican withholding tax assessed at a rate of 4.9%, if, as expected, the following requirements are met: • the notes are placed outside Mexico through banks or broker-dealers, in a country with which Mexico has a treaty for the avoidance of double taxation in effect; • a notice is filed before the CNBV describing the main characteristics of the notes offering pursuant to Article 7 of the Mexican Securities Market Law (Ley del Mercado de Valores); and

99 • the information requirements specified from time to time by the Mexican Tax Administration Service (Servicio de Administración Tributaria) under its general rules, including, after completion of the offering of the notes, the filing of certain information related to the notes offering and this offering memorandum are duly complied with.

If any of such requirements is not met, the withholding tax applicable to interest payments under the notes made to non-residents of Mexico will be imposed at a rate of 10% or higher.

In addition, if the effective beneficiaries, whether directly or indirectly, severally or jointly with related parties, receiving more than 5% of the aggregate amount of each interest payment under the notes are (i) shareholders holding more than 10% of our voting stock, directly or indirectly, severally or jointly with related parties, or (ii) corporations or other entities having more than 20% of their stock owned, directly or indirectly, jointly or severally, by persons related to us, the Mexican withholding tax will be applied at substantially higher rates.

Payments of interest in respect of the notes made by us or any subsidiary guarantor that is a resident of Mexico for tax purposes to a non-Mexican pension or retirement fund will be exempt from Mexican withholding taxes if: • such fund is organized pursuant to the laws of its country of residence and is the effective beneficiary of the interest payment; • such income is exempt from income taxes in such country; and • such fund is registered with the Mexican Ministry of Finance and Public Credit for these purposes.

Holders or beneficial owners of the notes may be requested, subject to specified exemptions and limitations, to provide certain information or documentation necessary to enable us to apply the appropriate Mexican withholding tax rate on interest payments that we make to such holders or beneficial owners. In the event that the specified information or documentation concerning the holder or beneficial owner, if requested, is not timely or completely provided, we may withhold Mexican tax from that interest payment on the notes to that holder or beneficial owner at the maximum applicable rate, and our obligation to pay Additional Amounts relating to those withholding taxes would be limited as described under “Description of the Notes – Additional Amounts.”

Taxation of Principal Payments Under the Mexican Income Tax Law, payments of principal made by us or any subsidiary guarantor in respect of the notes to a foreign holder will not be subject to Mexican withholding tax.

Taxation of Dispositions and Acquisitions of the Notes Under the Mexican Income Tax Law, gains resulting from the sale or disposition of the notes by a foreign holder to another foreign holder are not subject to income or other tax in Mexico. Gains resulting from the sale of the notes by a foreign holder to a purchaser who is a Mexican resident for tax purposes or to a foreign holder deemed to have a permanent establishment in Mexico for tax purposes will be subject to Mexican federal income or other taxes pursuant to the rules described above in respect of interest payments, unless an applicable income tax treaty provides otherwise. The acquisition of the notes at a discount by a foreign holder will be deemed interest income, and subject to Mexican withholding taxes, if the seller is a Mexican resident or a foreign resident deemed to have a permanent establishment in Mexico.

Other Mexican Taxes Under current Mexican tax laws, there are no estate, inheritance, succession or gift taxes generally applicable to the purchase, ownership or disposition of the notes by a foreign holder. Gratuitous transfers of the

100 notes in certain circumstances may result in the imposition of Mexican income taxes upon the recipient. There are no Mexican stamp, issuer registration or similar taxes or duties payable by foreign holders of the notes with respect to the notes.

Certain United States Federal Income Tax Consequences The following is a general summary of certain U.S. federal income tax consequences associated with the purchase, beneficial ownership and disposition of the notes. This summary is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), Treasury regulations promulgated thereunder, rulings, official pronouncements and judicial decisions, all as in effect on the date of this offering memorandum and all of which are subject to change, possibly with retroactive effect, and different interpretations. This summary addresses tax considerations only for holders that purchase the notes pursuant to this offering at the original issue price and that hold the notes as “capital assets” (generally, property held for investment). Moreover, this summary is for general information only and does not address all of the tax consequences that may be relevant to specific investors in light of their particular circumstances or to investors subject to special treatment under U.S. federal income tax laws (such as banks, insurance companies, tax-exempt entities, dealers in securities, traders in securities that elect to use a mark to market method of accounting, brokers, expatriates, entities treated as partnerships for U.S. federal income tax purposes, persons who hold their notes as part of a straddle, hedge, conversion transaction or other integrated investment, U.S. holders (as defined below) whose functional currency is not the U.S. dollar, persons subject to the alternative minimum tax or persons deemed to sell the notes under the constructive sale provisions of the Code), all of whom may be subject to tax rules that differ significantly from those summarized below. The discussion below does not address U.S. federal estate and gift tax considerations or the effect of any state, local or non-U.S. tax law. We have not sought any ruling from the Internal Revenue Service (the “IRS”) or an opinion of counsel with respect to the statements made and the conclusions reached in this discussion, and there can be no assurance that the IRS will agree with such statements and conclusions.

HOLDERS OF THE NOTES ARE URGED TO CONSULT THEIR TAX ADVISORS AS TO THE PARTICULAR TAX CONSIDERATIONS TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE NOTES, INCLUDING THE APPLICABILITY OF U.S. FEDERAL, STATE OR LOCAL TAX LAWS OR NON-U.S. TAX LAWS, ANY CHANGES IN APPLICABLE TAX LAWS AND ANY PENDING OR PROPOSED LEGISLATION OR REGULATIONS.

TO ENSURE COMPLIANCE WITH TREASURY DEPARTMENT CIRCULAR 230, NOTEHOLDERS ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF FEDERAL TAX ISSUES IN THIS OFFERING MEMORANDUM IS NOT INTENDED OR WRITTEN TO BE RELIED UPON, AND CANNOT BE RELIED UPON, BY, NOTEHOLDERS FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON PROSPECTIVE NOTEHOLDERS UNDER THE INTERNAL REVENUE CODE; (B) SUCH DISCUSSION IS BEING USED IN CONNECTION WITH THE PROMOTION OR MARKETING (WITHIN THE MEANING OF CIRCULAR 230) BY THE ISSUER OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (C) PROSPECTIVE NOTEHOLDERS SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

For purposes of this summary, a “U.S. holder” is a beneficial owner of a note that is, for U.S. federal income tax purposes: • an individual who is a citizen or resident of the United States; • a corporation created or organized in or under the laws of the United States, any state thereof or the District of Columbia; • an estate the income of which is subject to U.S. federal income tax regardless of the source thereof; or

101 • a trust (1) if a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all of its substantial decisions, or (2) if it has made a valid election to be treated as a U.S. person for U.S. federal income tax purposes.

A “non-U.S. holder” is a beneficial owner of a note that is an individual, corporation, estate or trust and is not a U.S. holder.

If a partnership or an entity treated as a partnership for U.S. federal income tax purposes is a beneficial owner of a note, the treatment of a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership.

U.S. Holders Payment of Interest A U.S. holder must include in the U.S. holder’s gross income all payments of interest (which will include all Mexican tax withheld from the interest payments and all additional amounts paid) in respect of the notes, at the time accrued or paid, in accordance with the U.S. holder’s usual method of tax accounting for U.S. federal income tax purposes. Subject to applicable limitations (including minimum certain holding period requirements), a U.S. holder may be entitled to a credit against such U.S. holder’s U.S. federal income tax liability (or a deduction in computing such U.S. holder’s U.S. taxable income) for any foreign income taxes withheld. Interest on the notes generally will (1) be treated as foreign source income for U.S. federal income tax purposes, and (2) constitute passive income, or in the case of certain U.S. holders, general category income for foreign tax credit purposes. The rules governing the foreign tax credit are complex. Prospective noteholders are urged to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.

Sale, Exchange, Redemption, Retirement or Other Dispositions A U.S. holder generally will recognize gain or loss for U.S. federal income tax purposes upon the sale, exchange, redemption, retirement or other taxable disposition of the notes in an amount equal to the difference between the amount realized and the U.S. holder’s adjusted tax basis in the notes. For this purpose, the amount realized will not include any amount attributable to accrued but unpaid interest on the notes, which will be subject to tax as ordinary income as described above to the extent not previously included in income. A U.S. holder’s adjusted tax basis in the notes generally will equal the cost of such notes to such holder. The gain or loss upon the taxable disposition of the notes generally will be capital gain or loss. If, at the time of such disposition, the notes have been held for more than one year, the gain or loss will be a long-term capital gain or loss. Under current law, long-term capital gains recognized by individuals or other non-corporate U.S. holders are generally subject to a reduced U.S. federal income tax rate. Capital losses are subject to limits on deductibility. Any gain or loss recognized by a U.S. holder generally will be treated as from sources within the United States for U.S. federal income tax purposes; therefore, a U.S. holder may not be able to claim credit for the Mexican tax, if any, imposed upon a disposition of a note.

Information Reporting and Backup Withholding In general, information reporting requirements will apply to certain payments of principal and interest on the notes and to the proceeds from the sale of a note unless the recipient is an exempt recipient (such as a corporation). Backup withholding at the applicable rate (currently 28%) will apply to the payments if a U.S. Holder fails to provide its taxpayer identification number and otherwise comply with the applicable requirements of the U.S. backup withholding rules.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a U.S. Holder may be refunded or credited against the U.S. Holder’s U.S. federal income tax

102 liability, if any, if the U.S. Holder timely provides the required information to the IRS. Pursuant to the Hiring Incentives to Restore Employment Act, certain U.S. holders may be required to submit to the IRS certain information with respect to their beneficial ownership of the notes, if such notes are not held on their behalf by a financial institution. This new law imposes substantial penalties if a U.S. holder is required to submit such information to the IRS and fails to do so.

Non-U.S. Holders In general, a non-U.S. holder will not be subject to U.S. federal income tax or withholding tax on payments of interest on, or gain upon the sale, exchange, redemption, retirement or other disposition of, notes, unless: • the interest or gain is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States, or • in the case of gain, the non-U.S. holder is an individual present in the United States for 183 or more days in the taxable year of the sale or disposition and certain other conditions exist.

A non-U.S. holder will be subject to U.S. federal income tax in respect of any interest or gain on the notes that is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States in the same manner as if it were a U.S. holder, unless an applicable income tax treaty provides otherwise. A corporate non-U.S. holder will be subject to an additional “branch profits tax” at a 30% rate or at a lower applicable treaty rate. If a non-U.S. holder is an individual described in the second bullet point above under “Non-U.S. Holders,” any such gain (net of certain U.S. source capital losses) will be subject to 30% (or lower treaty rate) of U.S. federal income tax.

Payments within the United States of principal, interest and any additional amounts to a non-U.S. holder will not be subject to backup withholding tax and information reporting requirements if an appropriate certification is provided by the non-U.S. holder to the payor and the payor does not have actual knowledge or reason to know that the certificate is incorrect.

103 PLAN OF DISTRIBUTION

Subject to the terms and conditions set forth in a purchase agreement among us and the initial purchasers, we have agreed to sell to the initial purchasers, and each of the initial purchasers has agreed, severally and not jointly, to purchase from us, the principal amount of notes set forth opposite its name below.

Principal Initial Purchasers Amount of Notes Banco Bilbao Vizcaya Argentaria, S.A...... U.S.$253,333,000 Citigroup Global Markets Inc...... 253,334,000 Santander Investment Securities Inc...... 253,333,000 Mitsubishi UFJ Securities (USA), Inc...... 40,000,000 Total ...... U.S.$800,000,000

Subject to the terms and conditions set forth in the purchase agreement, the initial purchasers have agreed, severally and not jointly, to purchase all of the notes sold under the purchase agreement, if any of these notes are purchased. If an initial purchaser defaults, the purchase agreement provides that the purchase commitments of the non-defaulting initial purchasers may be increased or the purchase agreement may be terminated.

We have agreed to indemnify the several initial purchasers and their controlling persons against certain liabilities in connection with this offering, including liabilities under the Securities Act, or to contribute to payments the initial purchasers may be required to make in respect of those liabilities.

The initial purchasers are offering the notes, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, including the validity of the notes, and other conditions contained in the purchase agreement, such as the receipt by the initial purchasers of officer’s certificates and legal opinions. The initial purchasers reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.

The initial purchasers have advised us that they propose initially to offer the notes at the offering price set forth on the cover page of this offering memorandum. After the initial offering, the offering price or any other term of the offering may be changed.

Banco Bilbao Vizcaya Argentaria, S.A., one of the initial purchasers, is not a broker-dealer registered with the SEC. Banco Bilbao Vizcaya Argentaria, S.A. will only make sales of notes in the United States, or to nationals or residents of the United States, through one or more registered broker-dealers in compliance with applicable securities laws and regulations.

Notes Are Not Being Registered The notes have not been registered under the Securities Act or any state securities laws. The initial purchasers propose to offer the notes for resale in transactions not requiring registration under the Securities Act or applicable state securities laws, including sales pursuant to Rule 144A and Regulation S. The initial purchasers will not offer or sell the notes except to persons they reasonably believe to be qualified institutional buyers or pursuant to offers and sales to non-U.S. persons that occur outside of the United States within the meaning of Regulation S. In addition, until 40 days following the commencement of this offering, an offer or sale of notes within the United States by a dealer (whether or not participating in the offering) may violate the registration requirements of the Securities Act unless the dealer makes the offer or sale in compliance with Rule 144A or another exemption from registration under the Securities Act. Each purchaser of the notes will be deemed to have made acknowledgments, representations and agreements as described under “Transfer Restrictions.”

The notes have not been registered in Mexico with the National Securities Registry (Registro Nacional de Valores) maintained by the National Banking and Securities Commission (Comisión Nacional Bancaria y de

104 Valores). Accordingly, the notes may not be offered or sold in Mexico, absent an available exemption under the Mexican Securities Market Law (Ley del Mercado de Valores).

New Issue of Notes The notes are a new issue of securities with no established trading market. We do not intend to apply for listing of the notes on any national securities exchange or for inclusion of the notes on any automated dealer quotation system other than the Global Exchange Market of the Irish Stock Exchange. We have been advised by the initial purchasers that they presently intend to make a market in the notes after completion of the offering. However, they are under no obligation to do so and may discontinue any market-making activities at any time without any notice. We cannot assure the liquidity of the trading market for the notes. If an active trading market for the notes does not develop, the market price and liquidity of the notes may be adversely affected. If the notes are traded, they may trade at a discount from their initial offering price, depending on prevailing interest rates, the market for similar securities, our operating performance and financial condition, general economic conditions and other factors.

Settlement We expect that delivery of the notes will be made to investors on or about January 25, 2012, which will be the third business day following the date of this offering memorandum (such settlement being referred to as “T+5”). Under Rule 15c6-1 under the Securities Exchange Act of 1934, trades in the secondary market are required to settle in three business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade notes prior to the delivery of the notes hereunder will be required, by virtue of the fact that the notes initially settle in T+5, to specify an alternate settlement arrangement at the time of any such trade to prevent a failed settlement. Purchasers of the notes who wish to trade the notes prior to their date of delivery hereunder should consult their advisors.

No Sales of Similar Securities We have agreed that we will not, for a period of 30 days after the date of this offering memorandum, without first obtaining the prior written consent of Banco Bilbao Vizcaya Argentaria, S.A., Citigroup Global Markets Inc., Santander Investment Securities Inc. and Mitsubishi UFJ Securities (USA), Inc., directly or indirectly, issue, sell, offer to contract or grant any option to sell, pledge, transfer or otherwise dispose of, any debt securities or securities exchangeable for or convertible into debt securities offered or sold outside of Mexico in the international capital markets, except for the notes sold to the initial purchasers pursuant to the purchase agreement.

Short Positions In connection with the offering, the initial purchasers may purchase and sell the notes in the open market. These transactions may include short sales and purchases on the open market to cover positions created by short sales. Short sales involve the sale by the initial purchasers of a greater principal amount of notes than they are required to purchase in the offering. The initial purchasers must close out any short position by purchasing notes in the open market. A short position is more likely to be created if the initial purchasers are concerned that there may be downward pressure on the price of the notes in the open market after pricing that could adversely affect investors who purchase in the offering.

Similar to other purchase transactions, the initial purchasers’ purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of the notes or preventing or retarding a decline in the market price of the notes. As a result, the price of the notes may be higher than the price that might otherwise exist in the open market.

Neither we nor any of the initial purchasers make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of the notes. In addition,

105 neither we nor any of the initial purchasers make any representation that the representatives will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.

Certain Relationships Some of the initial purchasers and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us or our affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions.

Affiliates of Banco Bilbao Vizcaya Argentaria, S.A., Citigroup Global Markets Inc., Santander Investment Securities Inc. and Mitsubishi UFJ Securities (USA), Inc., are lenders under our credit facilities and will receive, in the aggregate, approximately U.S.$369 million, representing a portion of the net proceeds of this offering, which are being applied to repay such debt in full.

In the ordinary course of their various business activities, the initial purchasers and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve securities and instruments of us.

Sales Outside the United States The notes may be offered and sold in the United States and certain jurisdictions outside the United States in which such offer and sale is permitted by affiliates of the initial purchasers.

European Economic Area In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”) an offer to the public of any notes which are the subject of the offering contemplated by this offering memorandum may not be made in that Relevant Member State, except that an offer to the public in that Relevant Member State of any notes may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State: (a) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; (b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; (c) by the initial purchasers to fewer than 100 natural or legal persons (other than “qualified investors” as defined in the Prospectus Directive) subject to obtaining the prior consent of the representatives for any such offer; or (d) in any other circumstances falling within Article 3(2) of the Prospectus Directive; provided that no such offer of notes shall result in a requirement for the publication by us or any representative of a prospectus pursuant to Article 3 of the Prospectus Directive.

Any person making or intending to make any offer of notes within the EEA should only do so in circumstances in which no obligation arises for us or any of the initial purchasers to produce a prospectus for such offer. Neither we nor the initial purchasers have authorized, nor do they authorize, the making of any offer of notes through any financial intermediary, other than offers made by the initial purchasers which constitute the final offering of notes contemplated in this offering memorandum.

106 For the purposes of this provision, and your representation below, the expression an “offer to the public” in relation to any notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any notes to be offered so as to enable an investor to decide to purchase any notes, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

Each person in a Relevant Member State who receives any communication in respect of, or who acquires any notes under, the offer of notes contemplated by this offering memorandum will be deemed to have represented, warranted and agreed to and with us and each initial purchaser that: (a) it is a “qualified investor” within the meaning of the law in that Relevant Member State implementing Article 2(1)(e) of the Prospectus Directive; and (b) in the case of any notes acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (i) the notes acquired by it in the offering have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than “qualified investors” (as defined in the Prospectus Directive), or in circumstances in which the prior consent of the representatives has been given to the offer or resale; or (ii) where notes have been acquired by it on behalf of persons in any Relevant Member State other than qualified investors, the offer of those notes to it is not treated under the Prospectus Directive as having been made to such persons.

United Kingdom Each of the initial purchasers has represented and agreed that: (i) it has only communicated or caused to be communicated and will only communicate or cause to be communicated by an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of the notes in circumstances in which Section 21(1) of the FSMA does not apply to us; and (ii) it will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the notes in, from or otherwise involving the United Kingdom.

Notice to Prospective Investors in Switzerland This document, as well as any other material relating to the notes which are the subject of the offering contemplated by this offering memorandum, do not constitute an issue prospectus pursuant to Article 652a of the Swiss Code of Obligations. The notes will not be listed on the SWX Swiss Exchange and, therefore, the documents relating to the notes, including, but not limited to, this document, do not claim to comply with the disclosure standards of the listing rules of SWX Swiss Exchange and corresponding prospectus schemes annexed to the listing rules of the SWX Swiss Exchange. The notes are being offered in Switzerland by way of a private placement, i.e., to a small number of selected investors only, without any public offer and only to investors who do not purchase the notes with the intention to distribute them to the public. The investors will be individually approached by us from time to time. This document, as well as any other material relating to the notes, is personal and does not constitute an offer to any other person. This document may only be used by those investors to whom it has been handed out in connection with the offering described herein and may neither directly nor indirectly be distributed or made available to other persons without our express consent. It may not be used in connection with any other offer and shall in particular not be copied and/or distributed to the public in (or from) Switzerland.

Dubai International Financial Centre This document relates to an exempt offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority. This document is intended for distribution only to persons of a type specified in

107 those rules. It must not be delivered to, or relied on by, any other person. The Dubai Financial Services Authority has no responsibility for reviewing or verifying any documents in connection with exempt offers. The Dubai Financial Services Authority has not approved this document nor taken steps to verify the information set out in it, and has no responsibility for it. The notes which are the subject of the offering contemplated by this offering memorandum may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the notes offered should conduct their own due diligence on the notes. If you do not understand the contents of this document you should consult an authorized financial adviser.

Hong Kong The notes may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), and no advertisement, invitation or document relating to the notes may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to notes which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

Singapore This offering circular has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this offering circular and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the notes may not be circulated or distributed, nor may the notes be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where the notes are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not an accredited investor as defined in Section 4A of the SFA) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for 6 months after that corporation or that trust has acquired the notes under Section 275 except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (2) where no consideration is or will be given for the transfer; or (3) where the transfer is by operation of law.

Japan The notes have not been and will not be registered under the Securities and Exchange Law of Japan (the “Securities and Exchange Law”) and the Initial Purchaser has agreed that it will not offer or sell any notes, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Securities and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan.

108 TRANSFER RESTRICTIONS

The notes have not been registered, and will not be registered, under the Securities Act or any other applicable securities laws, and the notes may not be offered or sold except pursuant to an effective registration statement or pursuant to transactions exempt from, or not subject to, registration under the Securities Act. Accordingly, the notes are being offered and sold only: (1) in the United States to qualified institutional buyers (as defined in Rule 144A) in reliance on Rule 144A under the Securities Act; and (2) outside of the United States, to certain persons, other than U.S. persons, in offshore transactions meeting the requirements of Rule 903 of Regulation S under the Securities Act.

The notes have not been registered in Mexico with the National Registry of Securities (Registro Nacional de Valores) maintained by the CNBV. Accordingly, the notes may not be offered or sold publicly or otherwise be the subject of brokerage activities in Mexico, absent an available exemption under Article 8 of the Mexican Securities Market Law (Ley del Mercado de Valores).

Purchasers’ Representations and Restrictions on Resale and Transfer Each purchaser of notes (other than the initial purchasers in connection with the initial issuance and sale of notes) and each owner of any beneficial interest therein will be deemed, by its acceptance or purchase thereof, to have represented and agreed as follows: (1) It is purchasing the notes for its own account or an account with respect to which it exercises sole investment discretion and it and any such account is either (a) a qualified institutional buyer and is aware that the sale to it is being made in reliance on Rule 144A or (b) a non-U.S. person that is outside the United States. (2) It acknowledges that the notes have not been registered under the Securities Act or with any securities regulatory authority of any jurisdiction and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except as set forth below. (3) It understands and agrees that notes initially offered in the United States to qualified institutional buyers will be represented by one or more global notes and that notes offered outside the United States in reliance on Regulation S will also be represented by one or more global notes. (4) It will not resell or otherwise transfer any of such notes except (a) to us, (b) within the United States to a qualified institutional buyer in a transaction complying with Rule 144A under the Securities Act, (c) outside the United States in compliance with Rule 903 or 904 under the Securities Act, (d) pursuant to the exemption from registration under the Securities Act (if available) or (e) pursuant to an effective registration statement under the Securities Act. (5) It agrees that it will give to each person to whom it transfers the notes notice of any restrictions on transfer of such notes. (6) It acknowledges that prior to any proposed transfer of notes (other than pursuant to an effective registration statement or in respect of notes sold or transferred either pursuant to (a) Rule 144A or (b) Regulation S) the holder of such notes may be required to provide certifications relating to the manner of such transfer as provided in the indenture. (7) It acknowledges that the trustee, registrar or transfer agent for the notes will not be required to accept for registration transfer of any notes acquired by it, except upon presentation of evidence satisfactory to us and the trustee, registrar or transfer agent that the restrictions set forth herein have been complied with. (8) It acknowledges that we, the initial purchasers and other persons will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements and agrees that if any of the

109 acknowledgements, representations and agreements deemed to have been made by its purchase of the notes are no longer accurate, it will promptly notify us and the initial purchasers. If it is acquiring the notes as a fiduciary or agent for one or more investor accounts, it represents that it has sole investment discretion with respect to each such account and it has full power to make the foregoing acknowledgements, representations, and agreements on behalf of each account.

The following is the form of restrictive legend which will appear on the face of the Rule 144A Global Note, and which will be used to notify transferees of the foregoing restrictions on transfer: “This Note has not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or any other securities laws. The holder hereof, by purchasing this Note, agrees that this Note or any interest or participation herein may be offered, resold, pledged or otherwise transferred only (1) to us, (2) so long as this Note is eligible for resale pursuant to Rule 144A under the Securities Act (“Rule 144A”), to a person who the seller reasonably believes is a qualified institutional buyer (as defined in Rule 144A) in accordance with Rule 144A, (3) in an offshore transaction in accordance with Rule 903 or 904 of Regulation S under the Securities Act, (4) pursuant to an exemption from registration under the Securities Act (if available) or (5) pursuant to an effective registration statement under the Securities Act, and in each of such cases in accordance with any applicable securities laws of any state of the United States or other applicable jurisdiction. The holder hereof, by purchasing this Note, represents and agrees that it will notify any purchaser of this Note from it of the resale restrictions referred to above. The foregoing legend may be removed from this Note only with the consent of the issuer.”

The following is the form of restrictive legend which will appear on the face of the Regulation S Global Note and which will be used to notify transferees of the foregoing restrictions on transfer: “This Note has not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or any other securities laws. The holder hereof, by purchasing this Note, agrees that neither this Note nor any interest or participation herein may be offered, resold, pledged or otherwise transferred in the absence of such registration unless such transaction is exempt from, or not subject to, such registration. The foregoing legend may be removed from this Note after 40 days beginning on and including the later of (a) the date on which the notes are offered to persons other than distributors (as defined in Regulation S under the Securities Act) and (b) the original issue date of this Note.”

For further discussion of the requirements (including the presentation of transfer certificates) under the indenture to effect exchanges or transfers of interest in global notes and certificated notes, see “Form of Notes.”

110 LEGAL MATTERS

Certain legal matters in connection with this international offering will be passed upon for Grupo Bimbo with respect to New York law by Skadden, Arps, Slate, Meagher & Flom LLP, with respect to Mexican law by Ritch Mueller, S.C. Certain legal matters in connection with the international offering will be passed upon for the initial purchasers with respect to New York law by Cleary Gottlieb Steen & Hamilton LLP and with respect to Mexican law by Bufete Robles Miaja, S.C.

111 INDEPENDENT AUDITORS

Our consolidated financial statements as of and for the years ended December 31, 2010 and 2009, were audited by Galaz, Yamazaki, Ruiz Urquiza, S.C., member of Deloitte Touche Tohmatsu Limited. Galaz, Yamazaki, Ruiz Urquiza, S.C., member of Deloitte Touche Tohmatsu Limited, is a member of the Association of Public Accountants of Mexico (Colegio de Contadores Públicos de México, A.C.).

112 AVAILABLE INFORMATION

We will furnish, upon prior written request of any registered owner of a note, or note holder, or beneficial owner of a note, or note owner, such information as is specified in paragraph (d)(4) of Rule 144A under the Securities Act: (a) to such note holder or note owner, (b) to a prospective purchaser of such note (or beneficial interest therein) who is a qualified institutional buyer designated by such note holder or note owner or (c) to the trustee for delivery to such note holder or note owner or such prospective purchaser so designated, in each case in order to permit compliance by such note holder or note owner with Rule 144A in connection with the resale of such note (or a beneficial interest therein) in reliance upon Rule 144A unless, at the time of such request, (1) we are subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, or (2) we qualify for the exemption to Rule 12g3-2(b).

In addition, for so long as the notes are listed on the Global Exchange Market of the Irish Stock Exchange, copies of the following items will be available in physical form at Prolongación Paseo de la Reforma No. 1000, Colonia Peña Blanca Santa Fe, Delegación Álvaro Obregón, México D.F., 01210, México: • these Listing Particulars; • a copy of the By-laws (estatutos sociales) of Grupo Bimbo; • our audited consolidated financial statements for the years ended December 31, 2010 and 2009; • a copy of the indenture governing the notes; and • any other documents relating to the offering of the notes referred to herein.

113 SUMMARY OF CERTAIN DIFFERENCES BETWEEN MFRS AND U.S. GAAP/IFRS

Our financial statements are prepared and presented in accordance with MFRS issued by the Mexican Board for Research and Development of Financial Reporting Standards, or CINIF for its initials in Spanish. Certain differences exist between MFRS, U.S. GAAP and IFRS, which might be material to the financial information contained herein. The following summarizes certain differences between MFRS, U.S. GAAP and IFRS that may be material to our consolidated financial information included elsewhere this offering memorandum.

We are not providing any reconciliation to U.S. GAAP or IFRS of our consolidated financial statements or any other financial information in this offering memorandum. We cannot assure you that such a reconciliation would not identify additional quantitatively material differences between our consolidated financial statements and other financial information as prepared on the basis of MFRS if such information were to be prepared on the basis of U.S. GAAP or IFRS.

Additionally, although we are currently in the process of quantifying the effects of the differences between MFRS and IFRS on our consolidated financial information given the requirement to adopt IFRS for the year ending December 31, 2012, we are not providing any reconciliation to IFRS in this offering memorandum. While our identification and quantification of differences through the date of this offering memorandum have identified certain adjustments to those amounts recorded under MFRS, we do not anticipate that such differences will materially affect our consolidated financial position, financial performance or cash flows. However, as we are still in the conversion process, we cannot assure you that, once completed, our consolidated financial information under IFRS will not differ materially from that reported under MFRS. In making an investment decision, investors must rely upon their own examination of Grupo Bimbo, the terms of the offering and the financial information. Potential investors should consult their own professional advisors for an understanding of the differences between MFRS, U.S. GAAP and IFRS, and how those differences might affect the financial information herein.

Accounting for the effects of inflation MFRS Through December 31, 2007, MFRS required that the effects of inflation be recorded in financial information and that financial statements be restated to constant Mexican pesos as of the latest balance sheet date presented. Beginning January 1, 2008, MFRS modified the accounting for the recognition of the effects of inflation and defines two economic environments: (i) an “inflationary environment,” where the cumulative inflation of the three preceding years is 26.0% or more, in which case the effects of inflation should be recognized using the comprehensive method; and (ii) a “non-inflationary environment,” where the cumulative inflation of the three preceding years is less than 26.0%, in which case no inflationary effects should be recognized in the financial statements.

IFRS and U.S. GAAP Under U.S. GAAP and IFRS, companies are generally required to prepare financial statements using historical cost, whereby amounts are not subsequently adjusted for inflation except when the entity operates in a hyperinflationary environment, generally defined under both U.S. GAAP and IFRS as comprehensive inflation over the three-preceding years of greater than 100%.

Additionally, IFRS 1, First-time Adoption of International Financial Reporting Standards, is the standard applied by entities adopting IFRS for the first time, and allows for certain optional exemptions from retrospective application of its standards, for instance, with respect to the measurement of items of property, plant and equipment and the possible consideration of indexation previously included in the value of such assets or the fair value of the asset at a specified date. Such an option does not exist under U.S. GAAP.

114 Valuation of Property, Plant and Equipment MFRS and U.S. GAAP MFRS and U.S. GAAP require that investments in property, plant and equipment shall be valued at historical cost.

IFRS IFRS contains an accounting policy choice, permitting property, plant and equipment to be recognized at either historical cost or fair value.

Capitalization of comprehensive financing cost MFRS MFRS requires comprehensive financing cost to be capitalized on qualifying assets, which are assets that require a period of time to be ready for their intended use. Comprehensive financial results to be capitalized include interest expense, foreign currency exchange gains and losses and monetary gain or loss related to financial liabilities stemming from inflationary effects.

IFRS Under IFRS, borrowing costs must be capitalized for qualifying assets. Borrowing costs may include interest on bank overdrafts and short-term and long-term borrowings, amortization of ancillary costs incurred in connection with the arrangement of borrowings, finance charges in respect of finance leases recognized, and exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to the interest costs.

U.S. GAAP Under U.S. GAAP, interest expense incurred during the construction or acquisition of a qualifying asset must also be capitalized as part of the cost of the qualifying asset. When financing is denominated in Mexican pesos, the monetary gain related to the financing is included in this computation; when financing is denominated in U.S. dollars, only interest is capitalized and the monetary gains and losses are excluded. U.S. GAAP does not permit the capitalization of foreign exchange gains or losses.

Business Acquisitions MFRS MFRS requires that when consideration paid in a business acquisition is lower than the fair value of the identifiable assets acquired and liabilities assumed, a subsequent review must be performed of the values assigned to such assets and liabilities. If after such review, an excess persists, the acquired long-term non-monetary assets should be reduced by such excess, until they reach a value of zero, at which such point, any remaining excess shall be recognized as a gain within results as a non-ordinary item.

In addition, MRFS do not permit the recognition of a contingent liability acquired in a business acquisition when an outflow of resources is not likely to occur.

IFRS and U.S. GAAP IFRS and U.S. GAAP also require the acquirer to reassess the value of acquired assets and assumed liabilities when consideration paid in a business combination is lower than the fair value of such assets and

115 liabilities. While the entity shall recognize at fair value, any additional assets or liabilities identified in such review, it shall not decrease the value of any non-monetary assets, assuming the original estimate of their fair value was accurate. Any existing excess shall be recognized as a gain in the statement of income as of the acquisition date.

IFRS states that contingent liabilities acquired in a business acquisition shall be recognized if present obligation arising from past events exists and the fair value of the contingency can measured reliably, even though an outflow of resources reporting economic benefits is not probable.

U.S. GAAP requires that contingent liabilities are recognized at fair value if determinable during the measurement period. If fair value is not determinable, existing U.S. GAAP guidance with respect to contingencies is followed.

Various changes in the accounting for business combinations in all three sets of standards have taken place over the past several years. Therefore, additional differences may have existed with respect to business combinations that originated prior to such changes in the accounting literature. IFRS permits an exemption to retrospective application of IFRS to those prior business combinations upon the first-time adoption of IFRS in an entity’s financial statements. Likewise, changes in U.S. GAAP to the accounting for business combinations were generally only applicable to those combinations that originated after the effective date of the new U.S. GAAP standard.

Consolidation criteria MFRS and IFRS Under IFRS and MFRS, an entity is required to consolidate subsidiaries over which it is has established control, which is defined as the ability to govern the operating and financial policies so as to obtain benefits from the entity’s activities. Thus, the basis for consolidating an entity depends on governance and risks and rewards. Control is presumed to exist when an entity directly or indirectly holds more than half of the voting common stock of the subsidiary, considering currently exercisable or convertible potential voting rights. However, control can also exist despite not holding more than half of voting stock when other factors are present that demonstrate the entity’s ability to control based on an assessment of corporate governance and economic risk and benefits.

U.S. GAAP U.S. GAAP requires consolidation when a company has a controlling financial interest over another entity, either through a majority voting interest or through the existence of other control factors. Additionally, it permits consolidation of variable interest entities for which the company is the primary beneficiary. A variable interest entity, or VIE, is a legal entity, as that term is defined in the U.S. GAAP literature governing consolidation, in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the legal entity to finance its activities without additional subordinated financial support. VIEs are consolidated by the primary beneficiary, which is the entity that (i) has the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance; and (ii) has the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

In the instance that a non-controlling interest in an investment exists, and such non-controlling interest has substantive rights to effectively participate in significant decisions related to the investee’s ordinary course of business, the majority investor is precluded from consolidating such entity.

116 Financial assets MFRS Under MFRS, investments in equity instruments that are not consolidated or accounted for as equity method investments may be classified as trading, available-for-sale or other permanent investments, which can be measured at their cost basis.

IFRS Under IFRS, investments in equity instruments that are not consolidated or accounted for as equity method investments are usually classified as either fair value through profit and loss or available-for-sale and measured at fair value. Investments in equity instruments are only permitted to be measured at cost if such instruments do not have a quoted market price in an active market and their fair value cannot be reliably measured.

U.S. GAAP Under U.S. GAAP, investment in equity instruments that are not consolidated or accounted for as equity method investments are usually classified as trading or available-for-sale, which are valued at fair value, or cost- method investments, which are measured at their cost basis.

Fair value of financial instruments MFRS MFRS defines fair value as the amount an interested and informed market participant would be willing to exchange for the purchase or sale of an asset or to assume or settle a liability in a free market. As such, this definition can result in the use of either an entry or an exit price. An entity’s own credit risk is not considered in the valuation of financial instruments.

IFRS Under IFRS, the objective of determining fair value for a financial instrument that is traded in an active market is to arrive at the price at which a transaction would occur at the balance sheet date in that instrument (i.e., without modifying or repackaging the instrument) in the most advantageous active market to which the entity has immediate access. As such, assets are valued on the basis of an “in exchange” valuation premise; the fair value of a liability is determined on the basis of settlement of the liability. As well, fair value measurements should incorporate the bid price for assets and the asking price for liabilities and the midpoint of the bid-ask spread for offsetting market risk positions. Finally, IFRS requires that the fair value determination of financial liabilities include consideration of the entity’s own credit risk rating.

U.S. GAAP U.S. GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accordingly, this definition only considers an exit price. Furthermore, U.S. GAAP requires the consideration of the principal and most advantageous market and the highest and best use of the asset in order to determine its fair value, and not only the intentions of the entity with respect to such asset. As such, assets are valued on how they are best used, whether in conjunction with other assets (“in use”) or on a stand-alone basis (“in exchange”); the fair value of liabilities is determined on the basis of the price that would be paid to transfer the obligation to another market participant. U.S. GAAP also prioritizes the inputs to valuation techniques used to measure fair value into three different levels, depending on whether or not the input is observable in an active market. Like IFRS, U.S. GAAP also requires that the fair value determination of financial liabilities include consideration of the entity’s own credit risk rating.

117 Labor obligations MFRS Liabilities and costs related to pension plans, seniority premiums and severance payments are accounted in a similar manner under both MFRS and U.S. GAAP. The primary difference is that MFRS does not require recognition of the over-or under-funded status of a defined postretirement plan for which reason unrecognized items do not form part of the labor obligation liability until the amounts are amortized to such liability over future years.

IFRS IFRS requires the recognition of a provision only when an entity has a present obligation as a result of a past event and certain other conditions are met. Accordingly, while IFRS contemplates recognition of liabilities and costs related to pension plans and seniority premiums in a manner similar to that of MFRS, that the obligation for employee termination liabilities (severance payments) occurs on the date on which the labor relationship with the employee is terminated, for which reason, employee termination liabilities are generally not accrued over the service period of the employee, but rather recognized on the date of termination.

U.S. GAAP Under U.S. GAAP, the accounting for defined benefit postretirement plans, which include seniority premiums within Mexico, requires that the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) be recognized within the balance sheet, as an asset or liability, as the case may be. Changes in the funded status in the year must be recognized through other comprehensive income and are subsequently amortized from other comprehensive income to results in future years.

Deferred income tax and statutory employee profit sharing MFRS MFRS is similar to IFRS and U.S. GAAP with respect to accounting for deferred income taxes in that an asset and liability approach is required. Under this approach, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as the recognition of operating loss and tax credit carryforwards. These temporary differences are measured using enacted tax rates expected to apply to taxable income in the years in which such temporary differences are expected to be recovered or settled. Under MFRS, (i) any deferred tax assets recorded must be reduced by a valuation allowance if it is “highly probable” that all or a portion of the deferred tax asset will not be realized and (ii) the net deferred income tax asset or liability is presented as a long-term asset or liability.

In addition, during 2007, the Mexican tax authorities issued a new Business Flat Tax, or IETU. For MFRS purposes, companies must determine whether they will be subject to regular income tax or IETU in the future and recognize the deferred income tax accordingly. Therefore, deferred taxes are calculated by scheduling the reversal of temporary differences under each tax regime and applying either the income tax or IETU rate to such temporary differences, based on what the entity expects to pay in each period. If, based on its projections, a company determines that it will be subject to both IETU and ISR in the future, it is required to schedule out the reversal of temporary differences under each tax regime and record the amount that represents the larger liability or the smaller benefit.

Under MFRS, through 2007, deferred employee profit sharing was recognized based on timing differences arising from the reconciliation between accounting and taxable income for employee profit sharing purposes.

Effective January 1, 2008, MFRS was modified such that it now requires a balance sheet methodology for determining deferred employee profit sharing, similar to that used for deferred income taxes.

118 Finally, during 2009, the Mexican tax authorities exacted various tax reforms that included, among other changes, changes in tax rates and other changes with respect to the consolidation tax regime, such changes became effective in 2010. MFRS issued an interpretation specifically addressing the accounting for these tax changes enacted in 2009, indicating that certain effects could be recognized directly through retained earnings, as opposed to affecting results of 2009.

MFRS allows the recognition of a net statutory employee profit sharing asset.

IFRS and U.S. GAAP Both IFRS and U.S. GAAP also require a balance sheet approach to calculating deferred income taxes. However, under IFRS, a deferred tax asset shall be recognized to the extent that it is “probable” that taxable profit will be available against which the deductible temporary difference can be utilized; under U.S. GAAP, a valuation allowance is recognized against deferred income tax assets if, based on the weight of available evidence, it is “more likely than not” that all or a portion of the deferred tax asset will not be realized.

While the accounting for deferred income taxes is similar under MFRS, IFRS and U.S. GAAP, IFRS includes certain exceptions to the recognition of a deferred tax asset or liability for taxable or deductible temporary differences. One such exception includes the first-time recognition of an asset or liability in a transaction not deemed as a business combination and for which at the time of the transaction, recognition of the asset or liability does not affect either accounting or tax profit or loss. In such situations, the related deferred tax asset or liability must not be recognized for financial reporting purposes. U.S. GAAP permits the recognition of a deferred tax asset or liability, but they are calculated using specific equations.

Additionally, with respect to goodwill, neither IFRS nor U.S. GAAP permit the recognition of a deferred tax liability related to goodwill even though a taxable temporary difference exists. IFRS considers that goodwill is not frequently deductible in determining the entity’s taxable income, whether by impairment of the goodwill carrying value or when goodwill is cancelled upon the sale of business originating such goodwill.

In addition, with respect to IETU, similar to MFRS, companies must determine whether they will be subject to regular income tax or IETU in the future based on company projections, and accordingly recognize deferred taxes based on the tax they expect to pay in each period. However, if a company’s projections indicate that it will be subject to both IETU and ISR in the future, both IFRS and U.S. GAAP require the entity to schedule out the reversal of temporary differences for both ISR and IETU, by year, and recognize a corresponding deferred tax asset or liability accordingly. This approach results in the recognition of a deferred tax asset or liability that includes both income tax and IETU effects.

With respect to the Mexican income tax reforms enacted in 2009, both IFRS and U.S. GAAP would require that any and all changes resulting from application of the tax reforms be recorded through income tax expense in results of 2009, rather than the special treatment through retained earnings as permitted by MFRS.

IFRS requires deferred income taxes to be classified as long-term. U.S. GAAP requires that the deferred income tax asset or liability be classified as current or long-term, depending on the asset or liability which generates such deferred.

Finally, IFRS does not contemplate the recognition of deferred statutory employee profit sharing. U.S. GAAP does, and requires the use of the balance sheet methodology similar to MFRS, but U.S. GAAP does not allow the recognition of a net deferred employee profit sharing asset.

119 Impairment of long-lived assets other than goodwill MFRS MFRS requires long-lived assets with definite lives, such as property, machinery and equipment, including certain intangible assets, be evaluated periodically in order to determine whether there is an indication of potential impairment. When impairment indicators exist, an impairment loss is recognized based on the recoverable amount of the asset. The recoverable amount of the asset is the greater of the net selling price of the asset and its value in use, which such value is determined based on recognized valuation techniques, such as discounted future net cash flows.

In addition, under certain limited circumstances, the reversal of previously recognized impairment losses is permitted. Any recorded impairment losses are presented as non-ordinary expenses.

IFRS Under IFRS an impairment loss is measured as the excess of an asset’s carrying amount over its recoverable amount. Recoverable amount is defined as the higher of an asset’s fair value less costs to sell (i.e. net sale proceeds) and its value in use. Fair value less costs to sell is the amount obtainable from the sale of an asset or cash-generating unit in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal. The value in use involves discounting the expected future cash flows to be generated by the asset to their net present value.

U.S. GAAP U.S. GAAP requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of an asset is not recoverable when the estimated future undiscounted cash flows expected to result from the use of the asset are less than the carrying value of the asset. The impairment loss is measured as the difference between the carrying value of the asset and its fair value. Any impairment loss recorded for an asset to be held and used establishes a new cost basis and, therefore, cannot be reversed in the future. Any recorded impairment losses are presented in operating expenses.

Impairment of goodwill MFRS The determination of impairment of goodwill under MFRS is a one-step test which compares the carrying value of goodwill to its recoverable value. Recoverable value is the greater of net selling price of the asset, if obtainable, and its value in use. Value in use is determined based on recognized valuation techniques, including discounted future net cash flows. Goodwill impairments can be reversed under certain circumstances.

IFRS Under IFRS, impairment of goodwill is measured at the cash-generating unit level, or the smallest group of assets that includes the asset and that generates cash inflows from continuing use that are largely independent of the cash inflows from other asset groups or groups of assets. The carrying value of the cash-generating unit is compared to its recoverable amount to determine an impairment loss, if one exists. Goodwill impairments may not be reversed.

U.S. GAAP Impairment of goodwill is performed at the reporting unit level under U.S. GAAP, which is equivalent to an operating segment or one level below an operating segment. U.S. GAAP requires a two-step approach to

120 measuring impairment on goodwill, which includes (i) comparing the fair value of the reporting unit to its carrying value; if it is less, then goodwill is considered impaired; (ii) the goodwill impairment is measured as the excess of the carrying amount of goodwill over its implied fair value. The implied fair value of goodwill is determined by a hypothetical purchase price allocation in which the fair value determined in the first step is allocated to the various assets and liabilities included in the reporting unit in the same manner that goodwill is determined in a business combination. Goodwill impairments may not be reversed.

Other income and expense Under MFRS, other income (expense) includes items which have been excluded from the determination of operating income under MFRS. Certain items included therein, such as employee profit sharing and other labor costs and gains and losses on the sale of fixed assets, must be included as part of operating income (loss) for both IFRS and U.S. GAAP purposes.

121 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page Audited Consolidated Financial Statements ...... F-2 Consolidated balance sheets as of December 31, 2010 and 2009 ...... F-5 Consolidated statements of income for the years ended December 31, 2010 and 2009 ...... F-6 Consolidated statements of changes in stockholders’ equity for the years ended December 31, 2010 and 2009 ...... F-7 Consolidated statements of cash flows for the years ended December 31, 2010 and 2009 ...... F-8 Notes to consolidated financial statements ...... F-9 Unaudited Condensed Consolidated Interim Financial Statements ...... F-47 Unaudited condensed consolidated interim balance sheets as of September 30, 2011 and 2010 ...... F-49 Unaudited condensed consolidated interim statements of income for the three and nine months ended September 30, 2011 and 2010 ...... F-50 Unaudited condensed consolidated interim statements of changes in stockholders’ equity for the nine months ended September 30, 2011 and 2010 ...... F-51 Unaudited condensed consolidated interim statements of cash flows for the nine months ended September 30, 2011 and 2010 ...... F-52 Notes to unaudited condensed consolidated interim financial statements ...... F-53

F-1 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2010 and 2009, and Independent Auditors’ Report Dated March 14, 2011

F-2 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Independent Auditors’ Report and Consolidated Financial Statements for 2010 and 2009

Table of contents Page Independent Auditors’ Report ...... F-4 Consolidated Balance Sheets ...... F-5 Consolidated Statements of Income ...... F-6 Consolidated Statements of Changes in Stockholders’ Equity ...... F-7 Consolidated Statements of Cash Flows ...... F-8 Notes to Consolidated Financial Statements ...... F-9

F-3 Galaz, Yamazaki, Ruiz Urquiza, S.C. Paseo de la Reforma 489 Piso 6 Colonia Cuauhtémoc 06500 México, D.F. México Tel: +52 (55) 5080 6000 Fax: +52 (55) 5080 6001 www.deloitte.com/mx

Independent Auditors’ Report to the Board of Directors and Stockholders of Grupo Bimbo, S. A. B. de C. V.

We have audited the accompanying consolidated balance sheets of Grupo Bimbo, S. A. B. de C. V. and subsidiaries (the “Company”) as of December 31, 2010 and 2009, and the related consolidated statements of income, changes in stockholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in Mexico. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and that they are prepared in accordance with Mexican Financial Reporting Standards. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the financial reporting standards used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Grupo Bimbo, S. A. B. de C. V. and subsidiaries as of December 31, 2010 and 2009, and the results of their operations, changes in their stockholders’ equity and their cash flows for the years then ended in conformity with Mexican Financial Reporting Standards.

The accompanying consolidated financial statements have been translated into English for the convenience of users.

Galaz, Yamazaki, Ruiz Urquiza, S. C. Member of Deloitte Touche Tohmatsu Limited

C. P. C. Jorge Alamillo Sotomayor March 14, 2011

Deloitte se refiere a Deloitte Touche Tohmatsu -asociación suiza- y a su red de firmas miembro, cada una como una entidad única e independiente. Conozca en www.deloitte.com/mx/conozcanos la descripción detallada de la estructura legal de Deloitte Touche Tohmatsu y sus firmas miembro. Member of Deloitte Touche Tohmatsu

F-4 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Consolidated Balance Sheets As of December 31, 2010 and 2009 (In millions of Mexican pesos)

2010 2009 Assets Current assets: Cash and cash equivalents ...... $ 3,325 $ 4,981 Accounts and notes receivable – net ...... 13,118 12,430 Inventories – net ...... 3,149 2,969 Prepaid expenses ...... 440 499 Derivative financial instruments ...... 180 146 Total current assets ...... 20,212 21,025 Notes receivable from independent operators ...... 2,140 1,940 Property, plant and equipment – net ...... 32,028 32,763 Investment in shares of associated companies and other permanent investments ...... 1,553 1,479 Derivative financial instruments ...... 393 159 Deferred income taxes ...... 1,539 635 Intangible assets – net ...... 19,372 19,602 Goodwill ...... 19,884 20,394 Other assets – net ...... 1,948 1,669 Total ...... $99,069 $99,666 Liabilities and stockholders’ equity Current liabilities: Current portion of long-term debt ...... $ 1,624 $ 4,656 Trade accounts payable ...... 5,954 5,341 Other accounts payable and accrued liabilities ...... 6,302 6,228 Due to related parties ...... 802 238 Income taxes ...... 624 3,272 Statutory employee profit sharing ...... 709 637 Derivative financial instruments ...... — 74 Total current liabilities ...... 16,015 20,446 Long-term debt ...... 31,586 32,084 Derivative financial instruments ...... 231 54 Employee labor obligations and workers’ compensation ...... 4,621 4,644 Deferred statutory employee profit sharing ...... 249 290 Deferred income taxes ...... 622 266 Other liabilities ...... 1,208 925 Total liabilities ...... 54,532 58,709 Stockholders’ equity: Capital stock ...... 8,006 8,006 Reserve for repurchase of shares ...... 759 759 Retained earnings ...... 35,505 30,698 Accumulated translation effects of foreign subsidiaries ...... (541) 675 Valuation of financial instruments ...... (19) (34) Controlling stockholders’ equity ...... 43,710 40,104 Noncontrolling interest in consolidated subsidiaries ...... 827 853 Total stockholders’ equity ...... 44,537 40,957 Total ...... $99,069 $99,666

See accompanying notes to consolidated financial statements.

F-5 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Consolidated Statements of Income For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos, except basic earnings per common share)

2010 2009 Net sales ...... $ 117,163 $ 116,353 Cost of sales ...... 55,317 54,933 Gross profit ...... 61,846 61,420

General expenses: Distribution and selling ...... 42,933 41,724 Administrative ...... 7,520 7,642 50,453 49,366 Income after general expenses ...... 11,393 12,054 Other expenses, net ...... 950 1,176 Net comprehensive financing cost: Interest expense, net ...... 2,574 2,318 Exchange loss (gain), net ...... 94 (207) Monetary position gain ...... (45) (99) 2,623 2,012 Equity in income of associated companies ...... 87 42 Income before income taxes ...... 7,907 8,908 Income tax expense ...... 2,363 2,827 Consolidated net income for the year ...... $ 5,544 $ 6,081 Net income of controlling stockholders ...... $ 5,395 $ 5,956 Net income of noncontrolling stockholders ...... $ 149 $ 125 Basic earnings per common share ...... $ 4.59 $ 5.07 Weighted average number of shares outstanding (000’s) ...... 1,175,800 1,175,800

See accompanying notes to consolidated financial statements.

F-6 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Consolidated Statements of Changes in Stockholders’ Equity For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

Reserve Noncontrolling for Accumulated Valuation Controlling interest in Total Capital repurchase Retained translation of financial stockholders’ consolidated stockholders’ stock of shares earnings effect instruments equity subsidiaries equity Balances, January 1, 2009 ...... $8,006 $759 $24,473 $ 1,189 $(163) $34,264 $ 710 $34,974 Increase of capital stock of noncontrolling interest ...... — — — — — — 99 99 Dividends declared ...... — — (541) — — (541) (78) (619) Balances before comprehensive income . . . 8,006 759 23,932 1,189 (163) 33,723 731 34,454 Consolidated net income for the year ...... — — 5,956 — — 5,956 125 6,081 Effect of valuation of financial instruments .... — — — — 129 129 — 129 Translation effects of foreign subsidiaries ..... — — — (514) — (514) (3) (517) Income tax effect due to 2010 tax reform on tax

F-7 consolidation ...... — — 810 — — 810 — 810 Comprehensive income ...... — — 6,766 (514) 129 6,381 122 6,503 Balances, December 31, 2009 ...... 8,006 759 30,698 675 (34) 40,104 853 40,957 Dividends declared ...... — — (588) — — (588) (126) (714) Balances before comprehensive income . . . 8,006 759 30,110 675 (34) 39,516 727 40,243 Consolidated net income for the year ...... — — 5,395 — — 5,395 149 5,544 Effect of valuation of financial instruments .... — — — — 15 15 — 15 Translation effects of foreign subsidiaries ..... — — — (1,216) — (1,216) (49) (1,265) Comprehensive income ...... — — 5,395 (1,216) 15 4,194 100 4,294 Balances, December 31, 2010 ...... $8,006 $759 $35,505 $ (541) $ (19) $43,710 $ 827 $44,537

See accompanying notes to consolidated financial statements. Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Consolidated Statements of Cash Flows For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

2010 2009 Operating activities: Income before income taxes ...... $ 7,907 $ 8,908 Items related to investing activities: Depreciation and amortization ...... 3,729 3,783 Loss on sale of property, plant and equipment ...... 175 183 Equity in income of associated companies ...... (87) (42) Impairment of long-lived assets ...... 19 56 Items related to financing activities: Interest expense ...... 3,558 3,269 Interest income ...... (559) (371) Unrealized exchange loss on long-term debt ...... — 198 Changes in current assets and liabilities: Accounts and notes receivable ...... (1,195) (188) Inventories ...... (183) 39 Prepaid expenses ...... 4 (68) Trade accounts payable ...... 914 (361) Other accounts payable and accrued liabilities ...... 878 (619) Due to related parties ...... 564 134 Income tax paid ...... (4,415) (2,350) Derivative financial instruments ...... (143) 155 Statutory employee profit sharing ...... 31 52 Employee labor obligations and workers’ compensation ...... 178 671 Net cash flows from operating activities ...... 11,375 13,449 Investing activities: Acquisition of property, plant and equipment ...... (4,091) (3,613) Proceeds from sale of property, plant and equipment ...... 116 457 Acquisition of trademarks and other assets ...... — (83) Dividends received ...... 16 10 Investments in shares of associated companies ...... (3) (29) Acquisition of business ...... (2,012) (35,140) Net cash flows used in investing activities ...... (5,974) (38,398) Excess cash to apply to (to be obtained from) financing activities ...... 5,401 (24,949) Financing activities: Proceeds from long-term debt ...... 11,625 42,397 Payment of long-term debt ...... (14,826) (16,262) Interest paid ...... (2,675) (2,682) Payments of interest rate swaps ...... (853) (523) Interest collected ...... 460 295 Dividends paid ...... (714) (619) Net cash flows from (used in) financing activities ...... (6,983) 22,606 Adjustments to cash flows due to exchange rate fluctuations and inflationary effects ...... (74) (15) Net decrease in cash and cash equivalents ...... (1,656) (2,358) Cash and cash equivalents at the beginning of the year ...... 4,981 7,339 Cash and cash equivalents at the end of the year ...... $ 3,325 4,981

See accompanying notes to consolidated financial statements.

F-8 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

1. The Company Grupo Bimbo, S. A. B. de C. V. and subsidiaries (“Grupo Bimbo” or the “Company”) are engaged in the manufacture, distribution and sale of bread, cookies, cakes, candies, chocolates, snacks, tortillas and processed foods.

The Company operates in the following geographical areas: Mexico, the United States of America (“USA”), Central and South America (“OLA”), Europe and China. Due to its insignificance, the financial information of the European and Chinese regions is aggregated with Mexico in the disclosures that follow.

In 2009, a significant business acquisition was made in the USA as detailed in Note 2.

2. Basis of presentation Explanation for translation into English – The accompanying consolidated financial statements have been translated from Spanish into English for use outside of Mexico. These consolidated financial statements are presented on the basis of Mexican Financial Reporting Standards (“MFRS”), with individual standards referred to as Normas de Información Financiera (“NIF”). Certain accounting practices applied by the Company that conform with MFRS may not conform with accounting principles generally accepted in the country of use.

Monetary unit of the financial statements – The financial statements and notes as of December 31, 2010 and 2009 and for the years then ended include balances and transactions denominated in Mexican pesos of different purchasing power.

Consolidation of financial statements – At December 31, 2010 and 2009, the consolidated financial statements include those of Grupo Bimbo, S. A. B. de C. V. and its subsidiaries, of which the more significant subsidiaries are shown below:

Ownership Subsidiary percentage Principal business Bimbo, S. A. de C. V...... 97 Bakery Bimbo Bakeries USA, Inc. (“BBU”) ...... 100 Bakery Barcel, S. A. de C. V...... 97 Candies and snacks Bimbo do Brasil, Ltda...... 100 Bakery

All significant intercompany balances and transactions have been eliminated in these consolidated financial statements.

During 2010 and 2009, net sales of Bimbo, S. A. de C. V. and Barcel, S. A. de C. V. in Mexico represented approximately 47% and 45%, respectively, of consolidated net sales. Net sales of BBU in the USA during 2010 and 2009 represented 40% and 42%, respectively, of consolidated net sales.

Acquisitions – During 2010 and 2009, the Company acquired the following businesses:

Acquisition Company Country cost Date 2010: Various businesses ...... Mexico and China $2,012 Various

F-9 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

Business acquisitions On December 2, 2010, Grupo Bimbo acquired the main operating assets of the business called “Dulces Vero”. The acquisition of these assets strengthens the position of the Company in the confectionery market in Mexico through its subsidiary Barcel and supports the Company’s strategy to reach all socio-demographic segments. As of December 31, 2010, the valuation of assets acquired and liabilities assumed is in process and will be completed in 2011. In 2010, the Company also acquired a business in China which is focused on package bread, pastries, cookies, sweet bread and ready-to-eat food, which expands its product portfolio in that country.

Sara Lee On November 9, 2010, the Company announced an agreement to acquire the bakery business of Sara Lee Corporation in the USA (“North American Fresh Bakery”) for US$959 million. The closing of the transaction is subject to the resolution of regulatory approvals. If the transaction is not closed within one year, the Company could be exposed to a transaction cancellation fee up to US$100 million.

Acquisition Company Country cost Date 2009: Bimbo Foods, Inc. (previously Weston Foods, Inc. (“WFI”)) . . USA $35,014 January 21 Other businesses and trademarks ...... Various 188 Various $35,202

Acquisition of Bimbo Foods, Inc. On December 10, 2008, Grupo Bimbo entered into an agreement with Dunedin Holdings, S. A. R. L., Glendock Finance Company, and other legal entities, all subsidiaries of George Weston Limited, in which Grupo Bimbo agreed to acquire the common shares of WFI, as well as other assets, including trademarks and trade receivables related to the operations of WFI, which is a group of companies engaged in the production and distribution of bread in the eastern USA. The contract was settled on January 21, 2009, after complying with certain requirements included therein.

This transaction is aligned with Grupo Bimbo’s growth strategy to consolidate its global platform and its vision of becoming a global leader in the bakery segment and a relevant company in the global food segment. Goodwill generated by the acquisition, which has no income tax effects, amounted to $13,775 and is attributable to synergies that are expected to be obtained by combining WFI with Grupo Bimbo’s existing business in the USA.

The agreement establishes certain indemnifications for both the buyer and the seller. Among those are a net working capital adjustment final settlement paid by the buyer to the seller for US$29 million and an indemnification from the seller to the buyer for up to US$42.5 million if certain contingencies materialize, of which a substantial amount of approximately US$15.5 million did not materialize and therefore has no effect on the Company.

The purchase price of the shares and certain assets of WFI amounted to US$2,505 million.

F-10 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

Sources of Financing For this acquisition, the Company obtained financing in the amount of US$2,300 million, which was structured with a one-year bridge loan for the equivalent of US$600 million that was paid in June 2009 with the proceeds from the issuance of local bonds on the Mexican Stock Exchange, and a long-term loan for the equivalent of US$1,700 million, comprised of US$900 and US$800 million that mature in three and five years, respectively (see Note 11, Long-term debt). The remainder of the purchase price of US$205 million was paid with available funds.

The various contracts that formally document the financing include certain limitations on the incurrence of additional liabilities and other financial restrictions; additionally, the repayment obligations of Grupo Bimbo under such contracts are secured by the pledge of certain assets of its subsidiaries.

Accounting for the Transaction The acquisition was recorded in conformity with NIF B-7, Business Acquisitions. The fair value determination of net assets acquired was concluded as of December 31, 2009, and incorporated in the consolidated financial statements ended on that date.

Management of the Company engaged independent specialists to assist with the identification of intangible assets with finite and indefinite lives, as well as to determine the useful lives and fair values of acquired assets, considering the valuation rules of MFRS.

Given that the acquisition of Bimbo Foods, Inc., was completed on January 21, 2009, Management believes that the financial statements are comparable in both years, as the 21 days not consolidated in 2009 are not considered material.

Translation of financial statements of foreign subsidiaries – To consolidate the financial statements of foreign subsidiaries (located principally in the USA and other Latin American countries, which represent 52% and 55% of consolidated net sales and 64% and 65% of consolidated total assets in 2010 and 2009, respectively), the accounting policies of the foreign entities are converted to MFRS using the currency in which transactions are recorded, except for the application of NIF B-10 when the foreign entity operates in an inflationary environment. The financial statements are subsequently translated to Mexican pesos considering the following methodologies: • Foreign operations that operate in a non-inflationary environment whose functional currency is the same as the currency in which transactions are recorded translate their financial statements using the following exchange rates: 1) the closing exchange rate in effect at the balance sheet date for assets and liabilities; 2) historical exchange rates for stockholders’ equity and 3) the rate on the date of accrual of revenues, costs and expenses. Translation effects are recorded in stockholders’ equity. • Foreign operations that operate in an inflationary environment whose functional currency is the same as the currency in which transactions are recorded first restate their financial statements in currency of purchasing power as of the date of the balance sheet, using the price index of their country for the functional currency, and subsequently translate those amounts to Mexican pesos using the closing exchange rate in effect at the balance sheet date for all items. Translation effects are recorded in stockholders’ equity.

F-11 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

The activity in the accumulated translation effect caption within stockholders’ equity and on the related income tax effects for the years ended December 31, 2010 and 2009 are as follows:

2010 Amount Income taxes Net amount Beginning balance ...... $ 937 $(262) $ 675 Translation effect for the period ...... (3,214) 965 (2,249) Translation effect for hedge of net investment ...... 1,476 (443) 1,033 Ending balance ...... $ (801) $ 260 $ (541)

2009 Amount Income taxes Net amount Beginning balance ...... $1,699 $(510) $ 1,189 Translation effect for the period ...... (1,754) 546 (1,208) Translation effect for hedge of net investment ...... 992 (298) 694 Ending balance ...... $ 937 $(262) $ 675

The Company’s functional currency is the Mexican peso. Since the Company has investments in foreign subsidiaries whose functional currencies are other than the Mexican peso, the Company is exposed to foreign currency translation risk. In addition, the Company has monetary assets and liabilities denominated in foreign currencies, mainly in US dollars; therefore, the Company is also exposed to foreign exchange risks arising from transactions entered into over the normal course of business.

The Company’s risk management policy regarding exchange risks consists of hedging expected cash flows, principally those associated with future purchases of raw materials. Those future purchases of raw materials meet the requirements to be considered exposures associated with “highly probable” forecasted transactions for purposes of hedge accounting. When the future purchase is made, the Company adjusts the amount of the non-financial element that was hedged.

Hedging the exposure to this foreign currency translation risk is mitigated by designating one or more loans denominated in these non-functional currencies as exchange rate hedges, according to the hedge accounting model for net investments in foreign subsidiaries.

Comprehensive income – Comprehensive income presented in the accompanying statements of changes in stockholders’ equity represents the changes in stockholders’ equity during the year for items that are not distributions or movements of contributed capital and includes consolidated net income for the year plus other items that represent a gain or loss for the same period, which, in conformity with MFRS, are recorded directly in stockholders’ equity without affecting the results of operations. The items of other comprehensive income consist of the unrealized accrued effects of derivative instruments and the translation and restatement effects of foreign subsidiaries in 2010 and 2009, and the impact of tax effects related to the tax reform applicable to tax consolidation in 2009. When assets and liabilities included in other comprehensive income are realized, those amounts are reclassified to net income, except for the translation effect of the net investments.

F-12 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

Classification of costs and expenses – Costs and expenses presented in the consolidated statements of income were classified according to their function because this is the practice of the sector to which the Company belongs.

Income after general expenses – Income after general expenses is the result of subtracting cost of sales and general expenses from net sales. While NIF B-3, Statement of Income, does not require inclusion of this line item in the consolidated statements of income, it has been included for a better understanding of the Company’s economic and financial performance.

Reclassifications – Certain amounts in the consolidated financial statements as of and for the year ended December 31, 2009 have been reclassified to conform to the presentation of the 2010 consolidated financial statements. The only relevant reclassification is as follows: through December 31, 2009, the Company offset the majority of recoverable taxes with accrued taxes payable; however, beginning in 2010 the Company determined that in some cases, due to the different nature of the taxes and/or the inability to compensate one against the other, the balances will be independently paid and recovered, and accordingly in 2010 recoverable taxes and accrued taxes are presented separately. The effects of such reclassification were applied retroactively in the accompanying consolidated balance sheets as of December 31, 2009. The effects of the above-mentioned reclassifications is $2,825, increasing recoverable taxes within accounts receivable and other accounts payable and accrued expenses by the same amount.

3. Summary of significant accounting policies The accompanying consolidated financial statements have been prepared in conformity with MFRS, which require that management make certain estimates and use certain assumptions that affect the amounts reported in the financial statements and their related disclosures; however, actual results may differ from such estimates. The Company’s management, upon applying professional judgment, considers that the estimates made and assumptions used were adequate under the circumstances. The significant accounting policies of the Company are as follows: a. Accounting changes Beginning January 1, 2010, the Company adopted the following new NIFs: NIF C-1, Cash and Cash Equivalents – This standard requires presentation of cash and restricted cash equivalents together within the caption “cash and cash equivalents”, as opposed to Bulletin C-1, which required restricted cash to be presented separately. This standard also replaces the concept “temporary investments payable on demand” with “readily available investments” and permits their classification as cash equivalents only when they have a maturity within three months from the date of acquisition.

Improvements to NIF 2010 – The main improvements that generate accounting changes are as follows: NIF B-1, Accounting Changes and Correction of Errors – This improvement requires expanded disclosures when the Company applies a new standard. NIF B-2, Statement of Cash Flows – This improvement requires that the impact of changes in value of cash and cash equivalents resulting from exchange rate fluctuations be presented separately within the caption “Effects from exchange rate changes on cash”, presented below financing activities. In addition, this caption includes the effects of converting the cash flows and balances of foreign operations to the reporting currency as well as the effects of inflation associated with the cash flows and balances of any entities within the consolidated group that operate in an inflationary economic environment.

F-13 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

NIF B-7, Business Acquisitions – This improvement permits the recognition of intangible assets or provisions stemming from above- or below-market leases in a business acquisition only when the acquired business is the lessee of an operating lease . This accounting change may be recognized retroactively beginning January 1, 2010. NIF C-7, Investments in Associated Companies and Other Permanent Investments – This improvement modifies the manner in which the effects of increases in an investment in an associated company are determined. It also requires that the effects of increases or decreases in an investment in an associated company be recognized in equity in income (loss) of associated companies, instead of under non-ordinary items in the statement of income. NIF C-13, Related Parties – This improvement requires that if the direct parent company or the ultimate parent company of the reporting entity does not issue financial statements for public use, the reporting entity should disclose the name of the direct parent company or the closest indirect parent company that does issue financial statements available for public use. b. Recognition of the effects of inflation – The cumulative inflation in Mexico for the three fiscal years preceding 2010 and 2009 was less than 26%, and accordingly the economic environment is considered non-inflationary under MFRS. Effective January 1, 2008, the Company discontinued recognition of the effects of inflation in its financial statements, except for those foreign entities operating in inflationary economic environments; however, assets, liabilities and stockholders’ equity as of December 31, 2010 and 2009, include the restatement effects recognized through December 31, 2007 for all entities. The cumulative inflation in most countries where the Company operates other than Mexico for the three year preceding 2010 and 2009 is also lower than 26% and accordingly qualify as non-inflationary; however, there are countries in which the Company operates whose economic environments qualify as inflationary, for which the cumulative inflation rates of the three preceding years were as follows and for which inflationary effects were recognized in 2010 and 2009:

2010 2009 Argentina ...... 26% 28% Costa Rica ...... 31% 38% Venezuela ...... 100% 87% Nicaragua ...... 34% 49% The cumulative inflation for the three preceding fiscal years for those foreign entities operating in inflationary economic environments and which recognized the effects of inflation only in 2009 were as follows:

2009 Uruguay ...... 26% Guatemala ...... 26% Honduras ...... 27% Paraguay ...... 28%

F-14 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

Through December 31, 2007 for all entities and in 2010 and 2009 only for those foreign entities operating in inflationary economic environments, recognition of the effects of inflation resulted mainly in inflationary gains or losses on nonmonetary and monetary items. These effects are principally presented in the consolidated financial statements under the following line item: • Monetary position result – Monetary position result, which represents the erosion of purchasing power of monetary items caused by inflation, is calculated by applying National Consumer Price Index (NCPI) factors to monthly net monetary position. Gains (losses) result from maintaining a net monetary liability (asset) position. c. Cash and cash equivalents – Cash and cash equivalents consist mainly of bank deposits in checking accounts and readily available daily investments of cash surpluses, maturing within three months as of their acquisition date with minimal risk of value fluctuation. Cash is stated at nominal value and cash equivalents are stated at fair value. Fluctuations in carrying value are recognized in comprehensive financing cost (“CFC”) as they accrue. Cash equivalents are primarily represented by investments in sovereign debt with daily maturities. d. Inventories and cost of sales – Inventories are stated at the lower of average cost or realizable value for those entities operating in non-inflationary economic environments. For those foreign entities operating in inflationary economic environments, inventories are stated at average cost which is similar to their replacement value at year end, without exceeding net realizable value, and cost of sales is stated at the latest production cost, which is similar to replacement cost at the time goods are sold. e. Property, plant and equipment – Property, plant and equipment are recorded at acquisition cost for those entities operating in non-inflationary economic environments. Balances from acquisitions made through December 31, 2007 for all entities were restated for the effects of inflation by applying factors derived from the NCPI through that date. Subsidiaries operating in an inflationary environment continue to restate their balances by applying the NCPI. Depreciation rates are calculated using the straight-line method based on the useful lives of the related assets, as follows:

Buildings ...... 5 Manufacturing equipment ...... 8,10and35 Vehicles ...... 10and25 Office furniture and fixtures ...... 10 Computers ...... 30 f. Investment in shares of associated companies and other permanent investments – Permanent investments in entities where significant influence exists are initially recognized based on the net fair value of the entities’ identifiable assets and liabilities as of the date of acquisition. Such value is subsequently adjusted for the portion related both to comprehensive income (loss) of the associated company and the distribution of earnings or capital reimbursements thereof. When the fair value of the consideration paid is greater than the value of the investment in the associated company, the difference represents goodwill, which is presented as part of the same investment. When the fair value of the consideration paid is less than the value of the investment, the latter is adjusted to the fair value of the consideration paid. If impairment indicators are present, investment in shares of associated companies is subject to impairment testing. Permanent investments made by the Company in entities where it has no control, joint control, or significant influence, are initially recorded at acquisition cost, and any dividends received are recognized in current earnings, except when they are taken from earnings of periods prior to the acquisition, in which case they are deducted from the permanent investment.

F-15 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos) g. Impairment of long-lived assets in use – The Company reviews the carrying amounts of long-lived assets in use when an impairment indicator suggests that such amounts might not be recoverable, considering the greater of the present value of future net cash flows or the net sales price upon disposal. Impairment is recorded when the carrying amounts exceed the greater of the amounts mentioned above. Impairment indicators considered for these purposes are, among others, operating losses or negative cash flows in the period if they are combined with a history or projection of losses, depreciation and amortization charged to results, which in percentage terms in relation to revenues are substantially higher than that of previous years, obsolescence, reduction in the demand for the Company’s products, competition and other legal and economic factors. During 2009, an impairment loss of $56 was recognized in the Czech Republic subsidiary. This subsidiary was sold in January 2010 and is not material to the Company as a whole. In 2010, an impairment loss of $19 on certain trademarks was also recognized. h. Financial risk management policy – The daily activities carried out by the Company expose it to a number of inherent risks of different variables of a financial nature, as well as variations in the price of certain materials traded in formal international markets. For such reason, the Company uses derivative financial instruments to mitigate the potential impact of fluctuations in such variables and prices on its financial results. The Company believes that these instruments provide flexibility that allows greater stability of income and better visibility and certainty with regard to costs and expenses to which it will be exposed in the future. The design and implementation of the strategy of derivative financial instruments is formally supervised by two committees: 1) The Financial Risk Committee, responsible for risk management of interest and exchange rates and 2) the Subcommittee of Risk Commodity Markets that supervises commodity risk. Both committees continuously report their activities to the Corporate Business Risk Committee, who is responsible for issuing general guidelines for the risk management strategy of the Company and for establishing limits and restrictions on the operations they can perform. The Corporate Business Risk Committee in turn reports the risk positions of the Company to the Audit and Executive Committees of the Board of Directors. The Company’s policy is to enter into derivative financial instruments only for hedging purposes. Therefore, entering into a contract of a derivative financial instrument must necessarily be associated with a primary position that represents a specific risk. Consequently, the notional amounts of one or all derivative financial instruments contracted to hedge a specific risk will be consistent with the amounts of the primary positions that represent the risk position. The Company does not enter into transactions for which the objective is to benefit from premium income. If the Company decides to undertake a hedging strategy where options are combined, the net payment of associated premiums must represent an expenditure for the Company. i. Derivative financial instruments – The Company states all derivatives at fair value in the balance sheet, regardless of the purpose for holding them. Fair value is determined using prices quoted on recognized markets. If such instruments are not traded, fair value is determined by applying recognized valuation techniques. Changes in the fair value of derivative instruments designated as hedges are recognized as follows; (1) for fair value hedges, both the derivative instrument and the hedged item are stated at fair value and changes are recognized in current earnings: (2) for cash flow hedges, changes in the effective portion are temporarily recognized as a component of other comprehensive income and then reclassified to current earnings when affected by the hedged item; the ineffective portion is immediately recognized in current earnings; (3) for hedges of an investment in a foreign subsidiary, the effective portion is recognized as a component of other comprehensive income as part of the accumulated translation effect; the ineffective portion of the gain or loss

F-16 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

on the hedging instrument is recognized in current earnings, if it is a derivative financial instrument. If not, it is recognized as a component of other comprehensive income until the investment is sold or transferred. To manage its exposure to interest rate and foreign currency fluctuations, the Company principally uses interest rate swaps and foreign currency forward contracts, as well as futures to fix the purchase price of raw materials. The Company formally documents all hedging relationships at the beginning of the transaction, including their objectives and risk management strategies to carry out derivative transactions. Derivative trading is performed only with institutions of recognized solvency, and limits have been established for each institution. The hedging derivative instruments are recorded as assets or liabilities without offsetting them against the hedged items. j. Goodwill – Goodwill is recorded at acquisition cost in originating local currency and through December 31, 2007, was restated for the effects of inflation using the NCPI of the respective country. For subsidiaries operating in inflationary economic environments, goodwill continues to be restated using the applicable inflation rate. Goodwill is not amortized and, at least once a year, is subject to impairment tests. k. Intangible assets – These are primarily comprised of trademarks, rights of use and customer relationships and are recorded at acquisition cost and were restated through December 31, 2007 using the inflation rate of each country. For subsidiaries operating in inflationary economic environments, goodwill continues to be restated using the applicable inflation rate. They are derived mainly from the acquisition of the business in the USA and certain trademarks in South America. Trademarks and rights of use are not amortized; however, the carrying values are subject to impairment tests at least annually. As of December 31, 2010, the Company recognized impairment loss on certain trademarks of $19. Customer relationships have an estimated useful life of 18 years and are amortized on a straight-line basis based on such useful life. For the years ended December 31, 2010 and 2009, the amortization recorded for intangible assets with finite lives was $258 and $257, respectively. l. Provisions – Provisions are recognized when there is a present obligation as the result of a past event that is probable to result in the use of economic resources and that can be reliably estimated. m. Direct employee benefits – Direct employee benefits are calculated based on the services rendered by employees, considering their current salaries. The liability is recognized as it accrues. These benefits include mainly accrued statutory employee profit sharing, compensated absences, such as vacation and vacation premiums, and incentives and are presented in other accounts payable and accrued liabilities. n. Employee benefits from termination, retirement and other – The liability for seniority premiums, pensions and termination benefits is recorded as accrued and is calculated by independent actuaries based on the projected unit credit method using nominal interest rates. Other employee benefits relate to medical expenses for eligible employees in the USA incurred after retirement. Such liability is determined using the Company’s historical data according to actuarial calculations. o. Statutory employee profit sharing – Statutory employee profit sharing (“PTU”) is recorded in the results of the year in which it is incurred and presented in other expenses in the accompanying consolidated statements of income. Deferred PTU arising from Mexican subsidiaries is derived from temporary differences resulting from comparing the accounting and tax basis of assets and liabilities. p. Income taxes – Income taxes (“ISR”) of each country and the Business Flat Tax (“IETU”) in Mexico, if higher than ISR, are recorded in the results of the year in which they are incurred. To recognize deferred income

F-17 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

taxes, based on its financial projections, the Company determines whether it expects to incur ISR or IETU and accordingly recognizes deferred taxes based on the tax it expects to pay. Deferred taxes are calculated by applying the corresponding tax rate to the applicable temporary differences resulting from comparing the accounting and tax bases of assets and liabilities and including, if any, future benefits from tax loss carryforwards and certain tax credits. Deferred tax assets are recorded only when there is a high probability of recovery. q. Tax on assets – The tax on assets (“IMPAC”) generated in Mexico through 2007 that is expected to be recovered is recorded as a tax credit and is presented in the balance sheet under deferred taxes. r. Foreign currency transactions – Foreign currency transactions are recorded at the applicable exchange rate in effect at the transaction date. Monetary assets and liabilities denominated in foreign currency are translated into Mexican pesos at the applicable exchange rate in effect at the balance sheet date. Exchange fluctuations are recorded as a component of results of the period, except for those transactions that have been designated as a hedge of a foreign investment. s. Revenue recognition – Revenues are recognized in the period in which the risks and rewards of the products are transferred to the customers who purchased them, which generally occurs when these products are delivered to the customer. The Company deducts certain discounts and promotional expenses from sales. t. Earnings per share – Basic earnings per share are calculated by dividing net income attributable to the controlling interest by the weighted average number of shares outstanding during the year.

4. Accounts and notes receivable

2010 2009 Customers and agencies ...... $ 7,249 $ 7,059 Allowance for doubtful accounts ...... (310) (290) 6,939 6,769 Notes receivable ...... 601 513 Income, value-added and other recoverable taxes ...... 4,021 3,434 Sundry debtors ...... 338 393 Sanalp 2005, S. L., related party ...... 1,092 1,178 Madera, L. L. C., related party ...... 127 143 $13,118 $12,430

F-18 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

5. Inventories

2010 2009 Finished products ...... $1,095 $ 768 Orders in-process ...... 94 75 Raw materials, containers and wrapping ...... 1,735 1,725 Other ...... 47 102 Allowance for slow-moving inventories ...... (1) (3) 2,970 2,667 Advances to suppliers ...... 17 41 Raw materials in-transit ...... 162 261 $3,149 $2,969

6. Long-term notes receivable from independent operators The Company has sold certain equipment and distribution rights in the USA to former employees and certain third parties (collectively, the “independent operators”).

The Company finances 90% of the distribution rights sold to certain independent operators. The notes bear an annual interest rate ranging from 9.75% to 10.75% and are payable in 120 monthly installments.

7. Property, plant and equipment

2010 2009 Buildings ...... $11,221 $ 12,893 Manufacturing equipment ...... 29,488 28,915 Vehicles ...... 8,430 8,070 Office furniture and fixtures ...... 638 593 Computers ...... 2,044 1,815 51,821 52,286 Less- Accumulated depreciation ...... (25,298) (23,411) 26,523 28,875 Land ...... 3,550 2,717 Construction in-progress and machinery in-transit ...... 1,955 1,171 $ 32,028 $ 32,763

F-19 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

8. Investment in shares of associated companies and other permanent investments At December 31, 2010 and 2009, the investment in shares of associated companies and other permanent investments are as follows:

Associated companies % of ownership 2010 2009 Beta San Miguel, S. A. de C. V...... 8 $ 378 $ 327 Mundo Dulce, S. A. de C. V...... 50 291 320 Fábricas de Galletas La Moderna, S. A. de C. V...... 50 255 261 Grupo La Moderna, S. A. de C. V...... 3 156 140 Congelación y Almacenaje del Centro, S. A. de C. V...... 15 83 79 Fin Común, S. A. de C. V...... 30 79 71 Productos Rich, S. A. de C. V...... 18 78 72 Grupo Altex, S. A. de C. V...... 11 70 70 Ovoplus, S. A. de C. V...... 25 52 54 Innovación en Alimentos, S. A. de C. V...... 50 28 25 Pierre, L. L. C...... 30 14 15 Other ...... Various 69 45 $1,553 $1,479

9. Intangible assets The following is an analysis of the balance of intangible assets by geographical area:

2010 2009 Mexico ...... $ 2,016 $ 1,039 United States of America ...... 16,349 17,532 OLA...... 1,007 1,031 $19,372 $19,602

At December 31, 2010 and 2009, the breakdown of intangible assets is as follows:

Average life 2010 2009 Trademarks ...... Undefined $15,779 $15,533 Rights of use ...... Undefined 36 38 15,815 15,571 Customer relationships ...... 18years 3,794 4,009 Licensing agreements and software ...... 8and2years 247 261 Non-compete agreements ...... 5years 17 18 4,058 4,288 Accumulated amortization ...... (501) (257) 3,557 4,031 $19,372 $19,602

F-20 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

During 2010 and 2009, changes in trademarks were as follows:

2010 2009 Balance as of January 1 ...... $15,533 $ 4,762 Acquisitions ...... 1,001 10,668 Impairments ...... (19) — Disposals ...... — (6) Adjustments due to variations in exchange rates ...... (736) 109 Balance as of December 31 ...... $15,779 $15,533

10. Goodwill The following is an analysis of the balance of goodwill by geographical area:

2010 2009 Mexico ...... $ 1,258 $ 753 United States of America ...... 16,919 17,871 OLA...... 1,707 1,770 $19,884 $20,394

During 2010 and 2009, the changes in goodwill were as follows:

2010 2009 Balance as of January 1 ...... $20,394 $ 6,488 Acquisitions ...... 517 13,775 Adjustments due to variations in exchange rates ...... (1,027) 131 Balance as of December 31 ...... $19,884 $20,394

F-21 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

11. Long-term debt

2010 2009 Committed Revolving (Multi-currency) Line-of-Credit – On July 20, 2005, the Company entered into an agreement to amend its committed revolving line-of-credit dated May 21, 2004, increasing the line-of-credit up to the amount of US$600 million. The term of the debt was for five years with a maturity date July 2010; the balance due was paid in full as of December 31, 2010...... $ — $ 3,918 Local bonds – In addition to the local bonds issued in 2002, during 2009 the Company issued local bonds to refinance short-term liabilities contracted early in 2009 to acquire BFI. As of December 31, 2010, such bonds are as follows: Bimbo 09- Issued June 15, 2009, maturing in June 2014, with interest at the 28-day Mexican Interbank Equilibrium Offered rate (“TIIE”) plus 1.55%...... 5,000 5,000 Bimbo 09-2- Issued June 15, 2009, maturing in June 2016, with a fixed interest rate of 10.60%...... 2,000 2,000 Bimbo 09U- Issued June 15, 2009 in the amount of 706,302,200 Investment Units (“UDIs”), maturing in June 2016, with a fixed interest rate of 6.05%. The UDI value at December 31, 2010 and 2009 was $4.5263 and $4.3401 Mexican pesos per UDI, respectively...... 3,197 3,066 Bimbo 02-2- Issued in May 17, 2002, maturing in May 2012, with a fixed interest rate of 10.15%...... 750 750 International bond – On June 30, 2010, the Company issued a bond under U.S. Securities and Exchange Commission Rule 144 Regulation S for US$800 million maturing on June 30, 2020. Such bond pays a fixed interest rate of 4.875% with semiannual payments. The proceeds from this issuance were used to the refinance Company debt, extending the average term of such debt...... 9,886 — Bank loan – On January 15, 2009, the Company entered into a long-term bank loan in the amount of the equivalent of US$1,700 million, in which BBVA Bancomer, S. A. Institución de Banca Múltiple, Grupo Financiero BBVA Bancomer as lead agent, and a syndicate bank comprised of 8 institutions participate. The loan consists of two tranches, the first maturing in January 2012 (Tranche A) and the second with semiannual maturities from July 2012 to January 2014 (Tranche B). During the month of July 2010, the Company used the proceeds from the issuance of the International Bond, to settle Tranche A in full. The Company pays interest at the TIIE rate plus 1.00% for the portion denominated in Mexican pesos and the London Interbank Offered rate (“LIBOR”) plus 1.25% for the portion denominated in U.S. dollars. Up to 68% of the unpaid balance is denominated in Mexican pesos for the amount of $7,300 and 32% of the unpaid balance is denominated in U.S. dollars for the amount of $3,436. All proceeds obtained from this financing, plus those obtained from the multicurrency bridge loan, were used by Grupo Bimbo to partially pay for the acquisition of BFI...... 10,736 21,250 Other – Certain subsidiaries have entered into other direct loans maturing from 2011 to 2012, at various interest rates...... 1,641 756 33,210 36,740 Less – Current portion of long-term debt ...... (1,624) (4,656) Long-term debt ...... $31,586 $32,084

F-22 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

At December 31, 2010, long-term debt matures as follows:

Year Amount 2012 ...... $ 3,451 2013 ...... 5,368 2014 ...... 7,684 2016 ...... 5,197 2020 ...... 9,886 $31,586

The local bonds, international bond and the committed revolving line-of-credit are guaranteed by certain of the principal assets of the subsidiaries of Grupo Bimbo. The loan agreements establish certain covenants and also require that the Company maintain determined financial ratios based on consolidated financial statements. At December 31, 2010 and 2009, the Company has complied with all the obligations established in the loan agreements.

12. Derivative financial instruments

As of December 31, derivative financial instruments were comprised as follows:

2010 2009 Assets: Forwards ...... $ 6 $ 2 Future contracts Fair value of wheat and soybean oil ...... 131 6 Fair value of natural gas and diesel ...... 8 58 Forwards and options ...... — 11 Total value of financial instruments ...... 145 77 Warranty account ...... 35 69 Total current portion ...... $180 $146 Long-term swaps ...... $393 $159 Liabilities: Swaps ...... $— $(37) Future contracts ...... Fair value of wheat and natural gas ...... — (37) Total current portion ...... $— $(74) Swaps ...... $(230) $ (54) Forwards ...... (1) — Total long-term portion ...... $(231) $ (54)

F-23 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

2010 2009 Stockholders’ Equity: Total value of cash flow hedges ...... $(11) $ 108 Closed contracts for unused futures ...... (8) (149) (19) (41) Deferred income taxes, net ...... — 7 Cumulative other comprehensive income ...... $(19) $ (34)

Swaps – The Company entered into swaps to modify its debt profile in Mexico. The derivatives were designated as cash flow hedges and since their inception were assumed to have no ineffectiveness.

As of December 31, 2010, the operating characteristics and the fair value of the hedging instruments were as follows:

Amounts as of December 31, 2010 Date of Notional Interest rate Fair Commencement Maturity amount Paid Collected Value Swaps that convert debt from Mexican pesos to U.S. dollars and modifies the interest rate of the Bimbo 02-2 and Bimbo 09-2 local bonds: September 15, 2010 .... May3,2012 58.6(*) 5.70% (U.S. dollars) 10.15% 38 (Mexican pesos) September 13, 2010 .... June 6, 2016 155.5(*) 6.35% (U.S. dollars) 10.60% 105 (Mexican pesos) Swaps that modify the Bimbo 09U local bond currency and interest rate: June 10, 2009 ...... June 6, 2016 $1,000 10.54% (Mexican pesos) 6.05% (UDI) 85 June 24, 2009 ...... June 6, 2016 $2,000 10.60% (Mexican pesos) 6.05% (UDI) 165 Total long-term assets . . $ 393 Swaps that fix the Bimbo 09 local bond rate: June 26, 2009 ...... June 9, 2014 $2,000 7.43% 4.87% (TIIE) (87) Swaps that fix the rate of the long-term bank loan in U.S. dollars: May 27, 2009 ...... January 15, 2014 150(*) 2.33% (LIBOR) 0.26% (LIBOR) (59) May 29, 2009 ...... January 13, 2012 25(*) 1.66% (LIBOR) 0.26% (LIBOR) (3) May 29, 2009 ...... January 13, 2012 100(*) 1.63% (LIBOR) 0.26% (LIBOR) (12) Swaps that fix the rate of the long-term bank loan in Mexican pesos: June 5, 2009 ...... January 13, 2012 $1,500 6.51% (TIIE) 4.87% (TIIE) (23) June 5, 2009 ...... January 15, 2014 $1,500 7.01% (TIIE) 4.87% (TIIE) (46) Total long-term liabilities ...... $(230)

(*) Amounts in millions of U.S. dollars

F-24 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

In connection with the issuance of the Bimbo 02-2 and the Bimbo 09-2 local bonds, in September 2010 the Company entered into a foreign currency swap and an interest rate swap for $750 and $2,000, respectively, which convert the debt from Mexican pesos to US dollars and modify the related interest rates. The applicable exchange rates were 12.79 and 12.88, and the interest rates to be paid are 5.70% and 6.35%, respectively.

In connection with the issuance of the Bimbo 09U local bonds, between June 10 and 24, 2009, the Company entered into two foreign currency swaps for $1,000 and $2,000 that together cover the entire Bimbo 09U issue and convert the debt from UDIs to Mexican pesos at fixed rates of 10.54% and 10.60%, respectively.

To cover the interest rate risk on the issuance of the Bimbo 09 local bonds, on June 26, 2009 the Company entered into an interest rate swap for $2,000 that converts the variable rate to a fixed rate of 7.43% effective July 13, 2009.

To cover the interest rate risk on the dollar portion of Tranche A of the Bank Loan, between May 27 and 29, 2009, the Company entered into three swaps that totaled US$300 million and fix the one-month LIBOR to an average rate of 1.64%. On August 25, 2010 the Company prepaid US$175 million of Tranche A of the Bank Loan, so the remaining balance of the hedging instrument of US$125 million was assigned as hedge of the Tranche B Bank Loan. Additionally, to cover the interest rate risk on the U.S. dollar portion of Tranche B of the Bank Loan, on May 27, 2009, the Company entered into a swap for US$150 million that fixes the one-month LIBOR rate at 2.33%.

To cover the interest rate risk on the Mexican peso portion of Tranche A of the Bank Loan, on June 5, 2009, the Company entered into a swap for $1,500 that fixes the 28-day TIIE rate at 6.51%. Since the Company prepaid the portion of Tranche A on August 25, 2010, the related hedge was transferred to the Tranche B Bank Loan. Additionally, to cover the interest rate risk on the Mexican peso portion of Tranche B of the Bank Loan, on June 5, 2009, the Company entered into a swap for $1,500 that fixes the 28-day TIIE rate at 7.01%.

F-25 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

As of December 31, 2009, the operating characteristics and the fair value of the above hedging instruments were as follows:

Amounts as of December 31, 2009 Date of Notional Interest rate Fair Commencement Maturity amount Paid Collected value Swaps that fix the revolving credit line rate in U.S. dollars: July 23, 2008 ...... July 23, 2010 125(*) 3.82% 0.95% $ (37) Swaps that modify local bond currency and interest rates: June 26, 2009 ...... June 9, 2014 $2,000 7.43% 4.90% (8) June 10, 2009 ...... June 6, 2016 $1,000 10.54% 6.05% 55 June 24, 2009 ...... June 6, 2016 $2,000 10.60% 6.05% 104 Swaps that fix the rate of the long-term bank loan in U.S. dollars: May 27, 2009 ...... January 13, 2012 100(*) 1.63% 0.23% (6) May 29, 2009 ...... January 13, 2012 100(*) 1.66% 0.23% (7) May 29, 2009 ...... January 13, 2012 100(*) 1.63% 0.23% (6) May 27, 2008 ...... January 15, 2014 150(*) 2.33% 0.23% (10) Swaps that fix the rate of the long-term bank loan in Mexican pesos: June 5, 2009 ...... January 13, 2012 $1,500 6.51% 4.87% (8) June 5, 2009 ...... January 15, 2014 $1,500 7.01% 4.87% (9) Net fair value ...... $ 68 Total long-term assets ...... $159 Total current liabilities ...... $(37) Total long-term liabilities ...... $(54)

(*) Amounts in millions of U.S. dollars

Cross currency “Forwards” – As of December 31, 2010 and 2009, the Company had contracted forwards to hedge the cash flows of operating and financial liabilities denominated in foreign currency. These instruments cover a notional amount of 24.0 and 25.3 million Euros as of December 31, 2010 and 2009, respectively, which fix the exchange rate for the purchase of foreign currency at an average of $16.3261 and $18.6680 Mexican pesos per Euro, respectively. Their fair value is $6 and $2 at December 31, 2010 and 2009, respectively.

Hedges of wheat, natural gas prices and other commodities – The Company enters into wheat, natural gas and other commodities futures contracts to minimize the risk of variation in international prices of both consumables. Wheat, which is the primary component of flour and is the main input used by the Company, together with natural gas are used in the manufacture of its products. The transactions are carried out in recognized commodity markets, and through their formal documentation are designated as cash flow hedges of forecasted transactions.

The other comprehensive income at December 31, 2010 and 2009 includes closed contracts that have not been transferred to cost of sales due to the fact that the wheat under these contracts has not been used for flour consumption.

F-26 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

As of December 31, 2010 and 2009, the characteristics of these hedging instruments and their fair value at the contract date were as follows:

Amounts as of December 31, 2010 Contracts Fair Date of commencement Position Number Maturity Region value Futures contracts to fix the purchase price of wheat and soybean oil: November 2010 ...... Long 1,132 March 2011 Mexico $ 48 November 2010 ...... Long 1,160 March 2011 USA 75 November 2010 ...... Long 14 March 2011 OLA 1 Various (soybean oil) ...... Long 138 March and May 2010 USA 7 Total current assets ...... $131 Futures contracts to fix the purchase price of natural gas: August through December 2010 ..... Long 524 Between June 2011 and December 2012 Mexico $ 8 August through October 2010 ...... Long 315 Between March and December 2011 USA — Total current assets ...... $ 8

Amounts as of December 31, 2009 Contracts Fair Date of commencement Position Number Maturity Region value Futures contracts to fix the purchase price of wheat and soybean oil: August through November 2009 ..... Long 814 Between March and May 2010 Mexico $(11) June through September 2009 ...... Long 1,196 March 2010 USA (24) July through November 2009 ...... Long 170 March to July 2010 OLA (1) Various (Soybean oil) ...... Long 135 Various USA 6 Net fair value ...... $(30) Total current assets ...... $ 6 Total current liabilities ...... $(36) Futures contracts to fix the purchase price of natural gas and diesel: Various (Natural gas) ...... Long 170 Various Mexico $ 8 Various (Diesel) ...... Long 128 Various USA 50 Various (Natural gas) ...... Long 193 Various USA (1) Net fair value ...... $57 Total current assets ...... $58 Total current liabilities ...... $ (1)

F-27 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

Hedges of currency “Forwards” for purchase of wheat – During 2010 and 2009, the Company entered into exchange rate call options, which were designated as hedges of possible exchange rate fluctuations of the U.S. dollar, the foreign currency in which the majority of purchases of wheat flour are made. The covered purchases in 2010 are from January and April of 2011 and in 2009 were from January to March of 2010.

Amounts as of December 31, 2010 Date of Amounts in Fair Commencement Maturity U.S. dollars Contracted exchange rate Amount value (Mexican pesos) October through November Between January and 60,000,000 Between 12.3217 and 2010 ...... April 2011 12.6117 $745 $(1)

Amounts as of December 31, 2009 Date of Amount in Fair Commencement Maturity U.S. dollars Contracted exchange rate Amount value (Mexican pesos) August through December Between January and 50,000,000 Between 12.8295 and 2009 ...... March 2010 13.2695 $647 $11

Embedded derivative instruments – At December 31, 2010 and 2009, the Company does not have any contracts with embedded derivatives.

13. Long-term employee benefits

Long-term net projected liabilities of employee and welfare benefits plan, by geographical area, are as follows:

2010 2009 Net projected liability in Mexico: Retirement ...... $1,008 $ 745 Termination ...... 113 56 $1,121 $ 801 Net projected liability in USA and OLA: Retirement ...... $2,216 $2,584 Termination ...... 200 220 Workers’ compensation in USA ...... 1,084 1,039 $3,500 $3,843 a. Mexico

The Company has a defined benefit pension and seniority premium plan; it is also subject to termination benefit obligations. The funding policy of the Company is to make discretionary contributions. During 2010 the Company did not make contributions, and during 2009 the Company made contributions of $200.

F-28 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

Seniority premiums consist of a one-time payment of 12 days for each year worked based on the final salary, not exceeding double the minimum wage established by law for all its personnel, as stipulated in the respective employment contracts. Such benefits vest for employees with 15 or more years of service.

Employment termination benefits primarily include the estimate for settlement payments equivalent to three months of salary per year of service worked, which are paid to all workers that are involuntarily terminated.

The related liability and annual benefits costs are calculated by an independent actuary in conformity with the bases defined in the plans, using the projected unit credit method.

The following table presents the amounts recognized for the pension, seniority and termination premium plans, as well as the status of the fund shown in the balance sheet at December 31, 2010 and 2009:

2010 2009 Vested benefit obligation ...... $ 579 $ 514 Defined benefit obligation ...... 6,154 5,504 Less- Plan assets (funds in trust) ...... 4,561 4,360 Underfunded status ...... 1,593 1,144 Items to be amortized: Actuarial gain ...... (550) (451) Transition liability ...... 13 19 Past service costs and changes to the plan ...... 65 89 Total items to be amortized ...... (472) (343) Net projected liability ...... $1,121 $ 801

Net period costs are as follows:

2010 2009 Cost of services for the year ...... $346 $329 Amortization of transition asset ...... (6) (6) Amortization of past services and changes to the plan ...... (21) (12) Actuarial gain ...... (54) (87) Cost of financing for the year ...... 443 408 Less – yield on fund assets ...... (373) (321) Net cost of the period ...... $335 $311

The nominal rates used in the actuarial calculations are:

2010 2009 Discount of projected benefit obligation at present value ...... 7.64% 8.16% Wage increases ...... 4.54% 5.05% Yield on plan assets ...... 8.67% 8.67%

F-29 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

The unamortized amounts of retirement obligations for the transition asset are applied to results over a period of five years and for past services and actuarial (gains) and losses are applied to results over the remaining labor life of employees expected to receive plan benefits.

Changes in present value of the defined benefit obligation:

2010 2009 Present value of the defined benefit obligation as of January 1 ...... $5,504 $5,069 Service cost ...... 346 329 Interest cost ...... 443 408 Actuarial loss (gain) on the obligation ...... 52 (111) Benefits paid ...... (191) (191) Present value of the defined benefit obligation as of December 31 ..... $6,154 $5,504

Changes in fair value of plan assets:

2010 2009 Plan assets at fair value as of January 1 ...... $4,360 $3,753 Expected yield ...... 373 321 Actuarial gain ...... 4 240 Company contributions ...... — 200 Benefits paid ...... (176) (154) Plan assets at fair value as of December 31 ...... $4,561 $4,360

Categories of plan assets:

Expected yield Actual yield Equity instruments ...... 9.6% 17.6% Debt instruments ...... 6.1% 8.0%

Amounts of the current and previous four years:

2010 2009 2008 2007 2006 Defined benefit obligation ...... 6,154 5,504 5,069 4,810 4,495 Less- Fair value of plan assets ...... 4,561 4,360 3,753 4,256 4,192 Underfunded status ...... 1,593 1,144 1,316 554 303 Actuarial (gain) loss for estimation of defined benefit obligation ...... 52 (111) (248) (27) 120 Actuarial gain (loss) for estimation of fund ...... 4 240 (723) (72) 147 b. USA – The Company has established a defined benefit pension plan that covers eligible employees. Effective January 1, 2009, the benefits of the plan were frozen. The Company’s funding policy is to make discretionary contributions. During 2010 and 2009, the Company made contributions to such plan of $471 in both years.

F-30 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

The following table sets forth the amounts recognized for the pension plan and the status of the fund in the consolidated balance sheets, as well as the liability for workers’ compensation, as of December 31, 2010 and 2009:

2010 2009 Vested benefit obligation ...... $3,052 $3,043 Defined benefit obligation ...... $7,546 $7,528 Less- Plan assets ...... 4,286 4,183 Unfunded status ...... 3,260 3,345 Items to be amortized: Actuarial gain ...... (1,058) (770) Past service costs and plan modifications ...... 14 9 Total items to be amortized ...... (1,044) (761) Net projected liability ...... $2,216 $2,584

Net pension cost includes the following components:

2010 2009 Cost of services for the year ...... $132 $139 Financing cost of the year ...... 392 403 Less- Return on plan assets ...... (287) (259) Amortization of past services and plan modifications ...... 16 45 Effect on anticipated severance obligations ...... — (84) Net cost of the period ...... $253 $244

The nominal interest rates used in the actuarial calculations are:

2010 2009 Weighted average discount rates ...... 5.85% 5.75% Rates of increase in compensation levels ...... 3.75% 3.75% Expected long-term rate of return on plan assets ...... 7.50% 7.50%

Changes in present value of the defined benefit obligation:

2010 2009 Present value of the defined benefit obligation as of January 1 ...... $7,528 $2,248 Cost of services for the year ...... 132 139 Financing cost ...... 392 403 Actuarial loss (gain) on the obligation ...... 346 (46) Past services for plan modifications ...... (5) (3) Business acquisition ...... — 5,184 Changes in exchange rates ...... (405) — Benefits paid ...... (442) (397) Present value of the defined benefit obligation as of December 31 ..... $7,546 $7,528

F-31 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

Changes in fair value of plan assets:

2010 2009 Plan assets at fair value as of January 1 ...... $4,183 $1,154 Expected yield ...... 287 259 Actuarial gain ...... 1 490 Company contributions ...... 471 471 Business acquisition ...... — 2,206 Changes in exchange rates ...... (214) — Benefits paid ...... (442) (397) Plan assets at fair value as of December 31 ...... $4,286 $4,183

Categories of plan assets:

Expected yield Actual yield Equity instruments ...... 8.4% 13.6% Debt instruments ...... 5.0% 9.2%

Amounts of the current and previous four years:

2010 2009 2008 2007 2006 Defined benefit obligations ...... 7,546 7,528 2,248 1,631 1,640 Less- Fair value of plan assets ...... 4,286 4,183 1,154 1,254 1,191 Underfunded status ...... 3,260 3,345 1,094 377 449 Actuarial (gain) loss for estimation of defined benefit obligation ...... 346 (46) 570 — (64) Actuarial gain (loss) for estimation of fund ...... 1 490 (189) 10 (33)

Postretirement welfare benefit plans USA The Company maintains a postretirement welfare benefit plan that covers certain eligible employees’ postretirement medical expenses. As of December 31, 2010 and 2009, these liabilities were $1,402 and $1,293 respectively, of which the following amounts are classified as long term:

2010 2009 Welfare benefit plans ...... $1,084 $1,039 c. OLA – The Company has liabilities for termination benefits in accordance with the local legislation of each country. The related liability and annual cost of the benefits is calculated by an independent actuary using the projected unit credit method. As of December 31, 2010 and 2009, the recorded liabilities are $200 and $220, respectively. Other disclosures required by MFRS were considered not significant in this geographical segment.

F-32 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

14. Stockholders’ equity a. At December 31, 2010, stockholders’ equity consists of the following:

Restatement / Number of translation shares Par value effect Total Fixed capital- Series “A” ...... 1,175,800,000 $ 1,902 $ 6,104 $ 8,006 Reserve for repurchase of shares ...... 600 159 759 Retained earnings ...... 27,630 7,876 35,505 Accumulated translation effect ...... — (541) (541) Financial instruments ...... (19) — (19) Noncontrolling interest in consolidated subsidiaries ...... 693 134 827 Total ...... $30,806 $13,731 $44,537

Capital stock is fully subscribed and paid-in and represents fixed capital. Variable capital cannot exceed 10 times the amount of minimum fixed capital without right of withdrawal and must be represented by Series “B”, ordinary, nominative, no-par shares and/or limited voting, nominative, no-par shares of the Series to be named when they are issued. Limited voting shares cannot represent more than 25% of non-voting capital stock. b. Dividends declared in 2010 and 2009 were:

Value at Mexican pesos per December 31, share 2010 Approved at the stockholders’ meeting of: April 15, 2010 ...... $0.50 $588 April 9, 2009 ...... $0.46 $541

During 2010 and 2009, the dividends paid to non-controlling shareholders were $126 and $78, respectively. c. Retained earnings include the statutory legal reserve. Mexican General Corporate Law requires that at least 5% of net income of the year be transferred to the legal reserve until the reserve equals 20% of capital stock at par value (historical Mexican pesos). The legal reserve may be capitalized but may not be distributed unless the entity is dissolved. The legal reserve must be replenished if it is reduced for any reason. At December 31, 2010 and 2009, the legal reserve, in historical Mexican pesos, was $500. d. Stockholders’ equity, except restated paid-in capital and tax retained earnings, will be subject to income taxes payable by the Company at the rate in effect upon distribution. Any tax paid on such distribution may be credited against annual and estimated income taxes of the year in which the tax on dividends is paid and the following two fiscal years. e. In a stockholders’ meeting held on August 19, 2010, the merger of the nearly wholly-owned subsidiary Tecebim, S. A. de C. V. with the Company was approved. As a result of the merger, the tax paid-in capital account increased substantially. Also, as a result of the tax deconsolidation effective in January 2010, the net after tax income account decreased substantially. Both effects are shown in paragraph f) below.

F-33 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos) f. The balances in the stockholders’ equity tax accounts at December 31 are:

2010 2009 Paid-in capital ...... $24,473 $ 8,132 Net after-tax income ...... 18,253 32,830 Total ...... $42,726 $40,962

15. Foreign currency balances and transactions a. At December 31, 2010 and 2009, the foreign currency monetary position in millions of U.S. dollars, for the Mexican entities only, is as follows:

2010 2009 Current assets ...... 77 67 Liabilities- Short-term ...... (53) (342) Long-term ...... (1,076) (745) Total liabilities ...... (1,129) (1,087) Liability position, net ...... (1,052) (1,020) Mexican pesos equivalent ...... $(13,000) $(13,320) b. The Company has significant operations in the USA and OLA as indicated in Note 21. c. The transactions in millions of U.S. dollars, for the Mexican entities only, after elimination of the transactions between consolidated subsidiaries, were as follows:

2010 2009 Export sales ...... 6 12 Import purchases of raw materials ...... 87 46 Purchases of fixed assets from foreign countries ...... 21 27 d. The exchange rates in effect at the dates of the balance sheets and of issuance of these consolidated financial statements were as follows:

December 31, March 14, 2010 2009 2011 Mexican pesos per one U.S. dollar ...... $12.3571 $13.0587 $11.9441

F-34 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

16. Transactions and balances with related parties a. Transactions with related parties, carried out in the ordinary course of business, were as follows:

2010 2009 Interest income ...... $ 77 $ 76 Expenses on purchases of: Raw materials ...... $4,705 $4,403 Finished products ...... $1,099 $ 575 Supplies, uniforms and other ...... $ 467 $ 312 b. The net balances due to related parties are:

2010 2009 Beta San Miguel, S. A. de C. V...... $295 $ 89 Efform, S. A. de C. V...... 27 18 Fábrica de Galletas La Moderna, S. A. de C. V...... 21 4 Frexport, S. A. de C. V...... 80 14 Grupo Altex, S. A. de C. V...... 159 29 Industrial Molinera Montserrat, S. A. de C. V...... 20 14 Makymat, S. A. de C. V...... 6 5 Mundo Dulce, S. A. de C. V...... 64 5 Ovoplus del Centro, S. A. de C. V...... 48 13 Pan-Glo de México, S. de R. L. de C. V...... 4 1 Paniplus, S. A. de C. V...... 24 21 Proarce, S. A. de C. V...... 35 22 Uniformes y Equipo Industrial, S. A. de C. V...... 19 3 $802 $238 c. Employee benefits granted to Company key management were as follows:

2010 2009 Short and long-term direct benefits ...... $305 $290 Cash payments for purchase of shares ...... 45 71 Severance benefits ...... 408 368

17. Tax environment Income taxes in Mexico The Company is subject to ISR and IETU.

ISR – The ISR rate is 30% for 2010 through 2012 and was 28% in 2009; it will be 29% for 2013 and 28% for 2014. The entity is subject to ISR on an individual basis. Until 2009, the Company paid ISR, together with subsidiaries on a consolidated basis.

F-35 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

IETU – Revenues, as well as deductions and certain tax credits, are determined based on cash flows of each fiscal year. Beginning in 2010, the IETU rate is 17.5%, and it was 17% in 2009. The IMPAC Law was repealed upon enactment of the IETU Law; however, under certain circumstances, IMPAC paid in the ten years prior to the year in which ISR is paid may be recovered, according to the terms of the law.

Income tax expense is the larger of ISR and IETU.

Based on its financial projections, the Company determined that some of its Mexican subsidiaries will pay ISR in certain fiscal years, while in others they will pay IETU. Accordingly, the Company calculated both deferred ISR and deferred IETU and recognized the larger of the two liabilities in each subsidiary. In its other subsidiaries, based on its financial projections the Company determined that they will basically pay only ISR. Therefore, the enactment of IETU did not have any effects on the financial information for those subsidiaries, since they continue to recognize deferred ISR.

Due to changes in the tax law with respect to tax consolidation, the Company elected to deconsolidate for tax purposes beginning in 2010, recognizing the effects on the financial information of 2009 of such deconsolidation, applying some of the effects against retained earnings in accordance with the rules of Interpretations to Financial Information Standards (“INIF”) 18, Recognition of the Effects of the 2010 Tax Reform on Income Taxes. The effect of tax deconsolidation in the results of 2009 is minimal considering the effects on deferred taxes that result from the tax deconsolidation.

Income taxes in other countries The foreign subsidiaries calculate income taxes on their individual results, in accordance with the regulations of each country. The subsidiaries in the USA have authorization to file a consolidated income tax return.

F-36 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

The tax rates applicable in other countries where the Company operates and the period in which tax losses may be applied, are as follows:

Statutory income tax rate (%) Period of 2010 2009 expiration Argentina ...... 35.0 35.0 (a)5 Austria ...... 25.0 25.0 (b) Brazil ...... 34.0 34.0 (c) Colombia ...... 33.0 33.0 (d) Costa Rica ...... 30.0 30.0 3 Chile ...... (e)17.0 17.0 (f) China ...... 25.0 25.0 5 El Salvador ...... 25.0 25.0 (g) Spain ...... 30.0 30.0 15 USA...... (h)35.0 (h)35.0 20 Guatemala ...... (i)31.0 (i)31.0 (g) Netherlands ...... 25.5 25.5 9 Honduras ...... (j)25.0 (j)25.0 3 Hungary ...... 19.0 16.0 (f) Luxembourg ...... 21.0 21.0 (f) Nicaragua ...... 30.0 30.0 3 Panama ...... 27.5 30.0 5 Paraguay ...... 10.0 10.0 (g) Peru ...... 30.0 30.0 (k) Czech Republic ...... 19.0 20.0 (l) Uruguay ...... 25.0 25.0 (m) Venezuela ...... 34.0 34.0 (n) (a) Tax losses from sale of shares or other equity investments may only be offset against income of the same nature. The same applies for the losses on derivatives. Foreign source tax losses may only be amortized with income from foreign sources. (b) Losses generated after 1990 may be applied indefinitely but may only be offset each year up to an amount equal to 75% of the net taxable profit for the year. (c) Tax losses may be applied indefinitely, but may only be offset each year up to an amount equivalent to 30% of the net taxable profit for the year. (d) Tax losses generated in 2003, 2004, 2005 and 2006 may be amortized within the following eight years, but may only be up to 25% of the income tax of each year. Beginning 2007, tax losses may be amortized without limitation on the value or period. (e) Income tax rate will be 20% in 2011 and 18.5% in 2012 and in 2013, will return to 17%. (f) No expiration date. (g) Operating losses are not amortizable. (h) A state tax should be added to this percentage, which varies in each state of the USA. The weighted average combined statutory rate for 2010 and 2009 was 39.6% and 38.3%, respectively. (i) The general tax rate is 5% but the tax base is calculated as follows: Total gross revenues less non-taxable revenues. The optional tax rate is 31% but the tax basis is different: Net income plus nondeductible expenses, less non-taxable revenues and other deductions.

F-37 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

(j) In the case of a taxable income greater than 1 million Lempiras, an additional 10% must be paid as temporary solidarity tax. (k) There are two alternatives allowed for tax loss amortization: 1) four years or 2) unlimited amortization up to 50% of the net taxable profit of each year. Once made, an election may not be changed, until the accumulated losses of previous years are applied. (l) Tax losses generated since 2004 may be amortized in the following five years. Tax losses prior to 2004 in the following seven years. (m) Tax losses generated after 2007 may be amortized in the following five years. (n) Based on their nature the amortization period can change: 1) Operating losses over the following three years, 2) Losses from the adjustment for inflation tax, one year; 3) Overseas, which can only be amortized against earnings from abroad, over the following three years and 4) Losses from jurisdictions with preferential tax regulations only applied to profits in such jurisdictions, over the following three years.

Operations in Argentina, Colombia, Guatemala and Nicaragua are subject to minimum payments of income tax or tax based on assets.

Operations in Brazil and Venezuela are subject to profit sharing payments according to certain rules based on accounting income. During 2010 and 2009, there were no profit sharing payments in those countries.

Detail of provisions, effective rate and deferred effects a. Consolidated taxes on income are as follows:

2010 2009 ISR: Current ...... $2,308 $ 3,964 Deferred ...... 27 (1,203) $2,335 $ 2,761 IETU: Current ...... $ 1 $ 77 Deferred ...... 27 (11) 28 66 $2,363 $ 2,827

F-38 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos) b. The reconciliation of the statutory and effective ISR rates expressed as a percentage of income before taxes on income for the years ended December 31, 2010 and 2009 is:

% % 2010 2009 Statutory rate in Mexico ...... 30.0 28.0 Inflationary effects in the monetary balance sheet accounts for Mexican subsidiaries ...... 6.3 5.3 Nondeductible expenses, nontaxable revenues and other ...... 0.1 1.6 Difference in tax rates and currency of subsidiaries in different tax jurisdictions ...... 2.2 5.5 Inflationary tax effect of fixed assets ...... (1.2) (1.9) IETU ...... 0.3 0.7 Reversal of allowance of deferred taxes ...... (7.8) (7.4) Effects of increase in Mexican income tax rate in deferred taxes ..... — (0.1) Effective rate ...... 29.9 31.7

The main items originating a deferred ISR asset are:

2010 2009 Advances from customers ...... $ (3) $ (8) Allowance for doubtful accounts ...... (109) (89) Inventories ...... 9 52 Property, plant and equipment ...... 2,358 2,894 Intangible assets ...... 3,812 3,803 Other reserves ...... (3,254) (3,342) Current and deferred PTU ...... (287) (278) Tax loss carryforwards ...... (3,502) (4,602) Valuation allowance of tax loss carryforwards ...... 173 788 Changes in exchange rate ...... (260) 262 Other items ...... (59) (39) Deferred IETU ...... 205 190 Total asset, net ...... $ (917) $ (369)

The net deferred income tax asset and liability has not been offset in the accompanying consolidated balance sheet as they result from different taxable entities and tax authorities. Gross amounts are as follows:

2010 2009 Deferred income tax asset ...... $(1,539) $(635) Deferred income tax liability ...... 622 266 Total asset, net ...... $ (917) $(369)

F-39 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos) c. Certain tax losses will not be recoverable before their expiration date. Consequently, the Company has recognized a valuation allowance for a portion of such losses. d. Tax loss carryforwards for which the deferred ISR asset has been recorded may be recovered subject to certain conditions. Tax losses generated in countries and expiration dates are:

Years Amount 2011 ...... $ 4,958 2012 ...... 28 2013 ...... 125 2014 ...... 96 2015 ...... 28 2016 and thereafter ...... 5,100 10,335 Tax losses included in the valuation allowance ...... (576) Total ...... $ 9,759

18. Other expenses, net a. Other expenses are comprised as follows:

2010 2009 PTU ...... $653 $ 563 Prior year labor cost ...... — 150 Tax incentives ...... (47) (46) Loss on sale of fixed assets ...... 175 183 Other ...... 169 326 $950 $1,176 b. PTU is comprised as follows:

2010 2009 Current ...... $694 $624 Deferred ...... (41) (61) $653 $563

19. Commitments Guarantees and/or guarantors a. At December 31, 2010, Grupo Bimbo, S. A. B. de C. V. and certain subsidiary companies have guaranteed bonded issued letters of credit to guarantee commercial obligations and contingent risks related to the labor obligations of certain subsidiaries. The value of such letters of credit totals US$98.2 million, of which a liability of US$113 million has already been recorded for employment benefits in the USA.

F-40 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos) b. The Company has guaranteed certain contingent obligations of associated companies for the amount of US$1.2 million at December 31, 2010. Similarly, the Company has issued guarantees for third-party obligations derived from the sale of assets in prior years, for the amount of US$14 million.

Lease commitments a. The Company has long-term commitments under operating leases, principally for the facilities used to produce, distribute and sell its products. These commitments vary from three to 14 years, with a renewal option of between one and five years. Certain leases require the Company to pay all related expenses, such as taxes, maintenance and insurance for the term of the contracts. Rental expense was $1,209 in 2010 and $1,500 in 2009. The total amount of lease commitments is as follows:

Year Amount 2011 ...... 1,333 2012 ...... 962 2013 ...... 747 2014 ...... 599 2015 ...... 495 2016 and thereafter ...... 947 Total ...... $5,083

20. Contingencies Several significant contingencies exist, of varying nature, that have arisen in the normal course of business of the Company, for which management has evaluated the likelihood of loss as remote, probable or possible. Based on such evaluation, for those contingencies for which the Company believes it is probable it will be required to use future resources to settle its obligations, the Company has accrued the following amounts within long-term liabilities:

Type Amount Civil ...... $171 Criminal ...... 22 Labor ...... 100 Tax...... 426 Total ...... $719

Those contingencies for which management does not expect a material adverse effect are not accrued until other information becomes available to support the recognition of a liability.

F-41 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

21. Information by geographical area The following is the principal data by geographical area in which the Company operates for the years ended December 31, 2010 and 2009:

2010 Consolidation Mexico USA OLA eliminations Total Net sales ...... $57,870 $47,875 $14,207 $(2,789) $117,163 Income after general expenses ...... $ 8,013 $ 3,738 $ (340) $ (18) $ 11,393 Net income of controlling stockholders ...... $ 3,518 $ 2,576 $ (531) $ (168) $ 5,395 Depreciation, amortization and other ...... $ 1,615 $ 1,458 $ 1,002 $ — $ 4,075 Income after general expenses, plus depreciation, amortization and other (“EBITDA”) ...... $ 9,628 $ 5,196 $ 662 $ (18) $ 15,468 Total assets ...... $36,121 $49,380 $16,045 $(2,477) $ 99,069 Total liabilities ...... $44,080 $ 8,295 $ 5,679 $(3,522) $ 54,532

2009 Consolidation Mexico USA OLA eliminations Total Net sales ...... $55,388 $49,850 $13,606 $(2,491) $116,353 Income after general expenses ...... $ 7,499 $ 4,261 $ 301 $ (7) $ 12,054 Net income of controlling stockholders ...... $ 2,184 $ 3,889 $ (59) $ (58) $ 5,956 Depreciation and amortization ...... $ 1,667 $ 1,466 $ 650 $ — $ 3,783 Income after general expenses, plus depreciation and amortization (“EBITDA”) ...... $ 9,166 $ 5,727 $ 951 $ (7) $ 15,837 Total assets ...... $36,709 $53,361 $13,563 $(3,967) $ 99,666 Total liabilities ...... $50,515 $10,069 $ 3,259 $(5,134) $ 58,709

22. New accounting principles As part of its efforts to converge Mexican standards with international standards, in 2009 and 2010 the Mexican Board for Research and Development of Financial Information Standards (“CINIF”) issued the following NIFs, INIFs and improvements to NIFs, which become effective as follows: a. For fiscal years beginning January 1, 2011: B-5, Financial Segment Information B-9, Interim Financial Information C-4, Inventories

F-42 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

C-5, Advance Payments and Other Assets C-6, Property, Plant and Equipment (certain paragraphs become effective beginning in 2012) C-18, Obligations Associated with the Retirement of Property, Plant and Equipment Improvements to Mexican Financial Reporting Standards 2011 Some of the most important changes established by these standards are: NIF B-5, Financial Segment Information – This standard establishes a management approach to identifying and disclosing segment information, as opposed to Bulletin B-5, which, considered a management approach but also required segment disclosures to be classified by economic segments, geographical areas or homogeneous groups of customers. This standard also differs from the previous bulletin in that it does not require that business areas be subject to different risks in order to separate them into different segments. Additionally, a component in the development or pre-operational stage may be classified as a segment. This standard also requires the separate disclosure of interest income, interest expense and liabilities, as well as disclosure of entity-wide information, including products, services, geographical areas, and major customers and suppliers. Similar to Bulletin B-5, this standard is only mandatory for public companies or entities in process of becoming public. NIF B-9, Interim Financial Information – Unlike Bulletin B-9, this standard requires the presentation of a condensed statement of changes in stockholders’ equity and statement of cash flows as part of interim financial information. The standard also requires, for comparative purposes, information presented at the close of an interim period be presented together with information of the corresponding period in the previous year, and in the case of the balance sheet, presentation of the closing balance sheet of the immediately preceding year. NIF C-4, Inventories – This standard eliminates direct costing as a permitted method of costing and eliminates the last-in first-out method as a technique for the measurement of cost. The standard also amended inventory valuation to be the lower of cost or market where market value is represented by net realizable value. This standard also sets rules for valuing inventory of service providers. This standard clarifies that, for inventory acquisitions in installments, the difference between the cost of inventory under normal credit terms and the actual amount paid be recognized as a financial cost during the financing period. The standard also permits the reversal previous inventory impairment losses against current earnings of the period in which the change in estimate is determined. It also requires disclosure of the amount of inventories recognized in results of the period when cost of sales includes other elements, when a portion of cost of sales is included within discontinued operations, or when the statement of income is classified according to the nature of revenues and expenses, such that a cost of sales line item is not presented. The standard also requires disclosure of the amount of impairment losses on inventories recognized as a cost of the period. It also requires that any change in the cost allocation method be treated as an accounting change. Additionally, it requires that advances to suppliers be recognized as inventories on upon the time when the risks and benefits of ownership are transferred to the Company. NIF C-5, Advance Payments and Other Assets – This standard establishes that a basic feature of advance payments is the fact that they do not transfer the risks and rewards of the ownership of goods and services to the Company. Therefore, advances for the purchase of inventories or property, plant and equipment, among others, must be presented separately from inventory or property, plant and equipment if the risks and rewards of ownership of those goods have not transferred to the Company. The standard requires that advance payments be impaired when they lose their ability to generate future economic benefits. This standard also requires classification of advance payments as current or noncurrent, depending on their nature.

F-43 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

NIF C-6, Property, Plant and Equipment – This standard included within its scope property, plant and equipment used to develop or maintain biological assets as well as those of extractive industries. The standard also includes guidance with respect to the treatment of non-monetary exchanges with economic substance. The standard includes the basis for determining the residual value of a component, that being the amount that could be obtained currently from the disposal of the asset, assuming it is of the age and in the condition expected at the end of its useful life. The standard eliminates the requirement to record, at an appraised value, property, plant and equipment which was acquired at no cost or at a minimal cost that does not adequately represent the economic significance of the asset. The standard also establishes the obligation to separately depreciate significant components of an item of property, plant and equipment. This provision of the standard will be effective beginning January 1, 2012. Finally, the standard establishes a requirement to continue depreciating a component when it is not in use, except when depreciation methods are based on usage. NIF C-18, Obligations Associated with the Retirement of Property, Plant and Equipment – This standard establishes specific guidance for the initial and subsequent recognition of provisions related to obligations associated with the retirement of components of property, plant and equipment and consequently eliminates the requirement to apply International Financial Reporting Interpretations Committee No. 1, Changes in Existing Decommissioning, Restoration and Similar Liabilities, on a supplemental basis. Improvements to Mexican Financial Reporting Standards 2011: NIF B-1, Accounting Changes and Error Corrections – The improvement to this standard requires that if the entity has implemented an accounting change or corrected an error, it should present a statement of financial position at the beginning of the earliest period for which comparative financial information is required, retroactively presenting the accounting change or error correction. The improvement also requires that each affected line item in the statement of changes in stockholders’ equity shows: a) initial balances previously reported, b) the related adjustment, segregating the effects of accounting changes and corrections of errors, and c) the retroactively adjusted beginning balances. NIF B-2, Statement of Cash Flows – The improvement to this standard eliminates the requirement to present a total, between investing activities and financing activities, of the excess cash to be applied in or obtained from financing activities. Presentation of this total is now only a recommendation. Bulletin C-3, Accounts Receivable – The improvement to this Bulletin includes standards for the recognition of interest income on accounts receivable, and clarifies that recognition of accrued interest income on receivables whose collection is doubtful is prohibited. NIF C-10, Derivative Financial Instruments and Hedging Activities – The improvement to this standard establishes specific criteria in order to exclude certain components of a derivative financial instrument from the determination of hedge effectiveness. The standard also requires that for valuation of options and currency forwards, certain components be excluded for purposes of determining effectiveness, thus resulting in the following recognition, presentation and related disclosure requirements: a) valuation of derivative financial instruments such as an option or a combination of options: changes in fair value attributable to changes in the intrinsic value of the options may be separated from changes attributable to their extrinsic value; only the change attributable to the option’s intrinsic value, and not the extrinsic component, may be designated as effective hedging; and b) valuation of currency exchange forwards: separation of the change in fair value attributable to differences between interest rates of the currencies to be exchanged from the change in fair value attributable to changes in the spot prices of the currencies involved is permitted; the effect attributable

F-44 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

to the component that was excluded from the cash flow hedge may be recognized directly in current earnings. Hedge accounting is limited when a transaction is carried out with related parties who have different functional currencies. The standard requires that when a hedged position is a portion of a portfolio of financial assets or liabilities, the effect of the hedged risk relating to variances in the interest rate of the portion of such portfolio be presented as a supplement of the primary position, in a separate line item. It also states that contribution or margin accounts received, associated with transactions for trading or hedging with derivative financial instruments, be presented as a financial liability separately from the financial instruments line item when cash or marketable securities are received; additionally, only their fair value should be disclosed if securities in deposit or qualifying financial warranties are received that will not become the property of the entity. The standard also states that a proportion of the total amount of the hedging instrument, such as a percentage of its notional amount, may be designated as hedging instrument in a hedging relationship. However, a hedging relationship cannot be designated for only a portion of the term in which the instrument intended to be used as hedge is in effect.

NIF C-13, Related Parties – The improvement to this standard incorporates a close family member within the definition of a related party.

Bulletin D-5, Leases – The improvement to this Bulletin removes the obligation to determine the incremental interest rate when the implicit rate is too low; consequently, it establishes that the discount rate to be used by the lessor to determine the present value of minimum lease payment should be the implicit interest rate of the lease agreement, if it can be easily determined. If the implicit rate cannot be easily determined, then the incremental interest rate should be used. The improvement also requires more detailed disclosures by both lessors and lessees. As well, the improvement requires that when a gain or loss on the sale in a sale and leaseback transaction is deferred, it should be amortized over the term of the agreement and not in proportion to the depreciation of the leased asset. The gain or loss on the sale in a sale and leaseback transaction involving an operating lease should be recognized in results at the time of sale, provided that the transaction is established at fair value. If the sale price is below the carrying value of the asset, the result should be recognized immediately in current earnings, unless the loss is offset by future payments that are below the market price of the lease, in which case the loss should be deferred and amortized over the term of the agreement. If the sale price is greater than the carrying value of the asset, the excess should be deferred and amortized over the term of agreement. b. For fiscal years beginning January 1, 2012:

The provisions of standard NIF C-6, Property, plant and equipment that generate changes from the segregation of components of items of property, plant and equipment with different useful lives, will become effective on January 1, 2012.

At the date of issuance of these consolidated financial statements, the Company has not fully assessed the effects on its financial information of adopting these new standards.

23. International Financial Reporting Standards

In January 2009, the Mexican National Banking and Securities Commission published changes to the Issuers Official Bulletin to establish that beginning in 2012 all listed companies in Mexico will have to file their financial information under International Financial Reporting Standards, with early adoption allowed.

F-45 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

24. Financial statement issuance authorization The issuance of the consolidated financial statements was authorized by Lic. Daniel Servitje Montull, Chief Executive Officer, and the Board of Directors of the Company on March 14, 2011. These consolidated financial statements are subject to shareholder’s approval at the General Stockholders’ meeting, who may modify the financial statements, based on provisions set forth by Mexican General Corporate Law.

******

F-46 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries

Condensed Consolidated Interim Financial Statements as of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010

F-47 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Condensed Consolidated Interim Financial Statements for 2011 and 2010

Table of contents Page Unaudited Condensed Consolidated Interim Balance Sheets ...... F-49 Unaudited Condensed Consolidated Interim Statements of Income ...... F-50 Unaudited Condensed Consolidated Interim Statements of Changes in Stockholders’ Equity ...... F-51 Unaudited Condensed Consolidated Interim Statements of Cash Flows ...... F-52 Notes to Unaudited Condensed Consolidated Interim Financial Statements ...... F-53

F-48 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Condensed Consolidated Interim Balance Sheets (Unaudited) As of September 30, 2011, December 31, 2010 and September 30, 2010 (In millions of Mexican pesos)

September December September 2011 2010 2010 Assets Current assets: Cash and cash equivalents ...... $ 12,478 $ 3,325 $ 4,934 Accounts and notes receivable – net ...... 12,893 13,118 12,058 Inventories – net ...... 3,644 3,132 2,914 Prepaid expenses ...... 763 457 644 Derivative financial instruments ...... 67 145 128 Other current assets ...... 481 35 — Total current assets ...... 30,326 20,212 20,678 Notes receivable from independent operators ...... 2,252 2,140 2,094 Property, plant and equipment – net ...... 34,366 32,028 31,540 Investment in shares of associated companies and other permanent investments . . 1,743 1,553 1,516 Derivative financial instruments ...... 343 393 212 Deferred income taxes ...... 2,285 1,539 1,347 Intangible assets – net ...... 21,097 19,415 18,740 Goodwill ...... 22,002 20,269 19,949 Other assets – net ...... 1,328 1,520 1,718 Total ...... $115,742 $99,069 $97,794 Liabilities and stockholders’ equity Current liabilities: Current portion of long-term debt ...... $ 2,137 $ 1,624 $ 990 Trade accounts payable ...... 7,033 5,954 5,305 Other accounts payable and accrued liabilities ...... 8,498 6,302 7,959 Due to related parties ...... 591 802 381 Income taxes ...... 725 624 344 Statutory employee profit sharing ...... 428 709 455 Derivative financial instruments ...... 294 — 14 Total current liabilities ...... 19,706 16,015 15,448 Long-term debt ...... 38,487 31,586 31,681 Derivative financial instruments ...... 1,361 231 306 Employee labor obligations and workers’ compensation ...... 5,083 4,621 4,693 Deferred statutory employee profit sharing ...... 244 249 287 Deferred income taxes ...... 1,661 622 1,143 Other liabilities ...... 1,350 1,208 874 Total liabilities ...... 67,892 54,532 54,432 Stockholders’ equity: Capital stock ...... 8,006 8,006 8,006 Reserve for repurchase of shares ...... 759 759 759 Retained earnings ...... 39,186 35,505 34,132 Accumulated translation effects of foreign subsidiaries ...... (812) (541) (201) Valuation of financial instruments ...... (141) (19) (155) Controlling stockholders’ equity ...... 46,998 43,710 42,541 Noncontrolling interest in consolidated subsidiaries ...... 852 827 821 Total stockholders’ equity ...... 47,850 44,537 43,362 Total ...... $115,742 $99,069 $97,794

See accompanying notes to condensed consolidated interim financial statements.

F-49 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Condensed Consolidated Interim Statements of Income (Unaudited) For the nine and three months ended September 30, 2011 and 2010 (In millions of Mexican pesos, except share information)

Three Months Three Months Ended Ended Nine Months Ended Nine Months Ended September 30, September 30, September 30, 2011 September 30, 2010 2011 2010 Net sales ...... $ 91,871 $ 86,732 $ 32,230 $ 29,571 Cost of sales ...... 44,654 40,677 15,610 13,783 Gross profit ...... 47,217 46,055 16,620 15,788 General expenses: Distribution and selling ...... 33,330 32,145 11,306 10,756 Administrative ...... 5,938 5,191 2,002 1,645 39,268 37,336 13,308 12,401 Income after general expenses ...... 7,949 8,719 3,312 3,387 Other expenses, net ...... 552 564 186 260 Net comprehensive financing cost: Interest expense, net ...... 1,435 1,898 451 732 Exchange (gain) loss, net ..... (606) 92 (562) 83 Monetary position gain ...... 90 42 45 8 739 1,948 (156) 807 Equity in income (loss) of associated companies ...... (6) 51 (17) 26 Income before income taxes ...... 6,652 6,258 3,265 2,346 Income tax expense ...... 2,228 2,130 1,122 807 Consolidated net income for the period ...... $ 4,424 $ 4,128 $ 2,143 $ 1,539 Net income of controlling stockholders ...... $ 4,327 $ 4,022 $ 2,098 $ 1,495 Net income of noncontrolling stockholders . . . $ 97 $ 106 $ 45 $ 44 Basic earnings per common share ...... $ 0.92 $ 0.86 $ 0.45 $ 0.32 Weighted average number of shares outstanding (000’s) ...... 4,703,200 4,703,200 4,703,200 4,703,200

See accompanying notes to condensed consolidated interim financial statements.

F-50 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Condensed Consolidated Interim Statements of Changes in Stockholders’ Equity (Unaudited) For the nine months ended September 30, 2011 and 2010 (In millions of Mexican pesos)

Accumulated Reserve translation Noncontrolling for effects of Valuation Controlling interest in Total Capital repurchase Retained foreign of financial stockholders’ consolidated stockholders’ stock of shares earnings subsidiaries instruments equity subsidiaries equity Balances, January 1, 2010 ...... $8,006 $759 $30,698 $ 675 $ (34) $40,104 $ 853 $40,957 Dividends declared ...... — — (588) — — (588) (126) (714) Balances before comprehensive income . . . 8,006 759 30,110 675 (34) 39,516 727 40,243 Consolidated net income for the nine months ended September 30, 2010 ...... — — 4,022 — — 4,022 106 4,128 Effect of valuation of financial instruments .... — — — — (121) (121) — (121) Translation effects of foreign subsidiaries ..... — — — (876) — (876) (12) (888)

F-51 Comprehensive income ...... — — 4,022 (876) (121) 3,025 94 3,119 Balances, September 30, 2010 ...... 8,006 759 34,132 (201) (155) 42,541 821 43,362 Consolidated net income for the period from October 1, to December 31, 2010 ...... — — 1,373 — — 1,373 43 1,416 Effect of valuation of financial instruments .... — — — — 136 136 — 136 Translation effects of foreign subsidiaries ..... — — — (340) — (340) (37) (377) Comprehensive income ...... — — 1,373 (340) 136 1,169 6 1,175 Balances, December 31, 2010 ...... 8,006 759 35,505 (541) (19) 43,710 827 44,537 Dividends declared ...... — — (646) — — (646) (106) (752) Balances before comprehensive income . . . 8,006 759 34,859 (541) (19) 43,064 721 43,785 Consolidated net income for the nine months ended September 30, 2011 ...... — — 4,327 — — 4,327 97 4,424 Effect of valuation of financial instruments .... — — — — (122) (122) — (122) Translation effects of foreign subsidiaries ..... — — — (271) — (271) 34 (237) Comprehensive income ...... — — 4,327 (271) (122) 3,934 131 4,065 Balances, September 30, 2011 ...... $8,006 $759 $39,186 $(812) $(141) $46,998 $ 852 $47,850

See accompanying notes to condensed consolidated interim financial statements. Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Condensed Consolidated Interim Statements of Cash Flows (Unaudited) For the nine months ended September 30, 2011 and 2010 (In millions of Mexican pesos)

Nine Months Ended Nine Months Ended September 30, 2011 September 30, 2010 Operating activities: Income before income taxes ...... $ 6,652 $ 6,258 Items related to investing activities: Depreciation and amortization ...... 2,628 2,746 Loss on sale of property, plant and equipment ...... 67 53 Equity in (income) loss of associated companies ...... 6 (51) Impairment of long-lived assets ...... — 19 Items related to financing activities: Interest expense ...... 2,778 2,770 Interest income ...... (1,284) (661) Changes in current assets and liabilities: Accounts and notes receivable ...... 491 113 Inventories ...... (361) (36) Prepaid expenses ...... (139) (197) Trade accounts payable ...... 657 (175) Other accounts payable and accrued liabilities ...... 1,731 1,735 Due to related parties ...... (211) 143 Derivative financial instruments ...... 1,378 (16) Other current assets ...... (446) — Notes receivable from independent distributors long-term ...... (112) (154) Employee labor obligations and workers’ compensation ...... 443 74 Income taxes paid ...... (2,495) (3,867) Statutory employee profit sharing ...... (286) (185) Net cash flows from operating activities ...... 11,497 8,569 Investing activities: Acquisition of property, plant and equipment ...... (3,758) (2,390) Proceeds from sale of property, plant and equipment ...... 149 95 Acquisition of trademarks and other assets ...... (372) — Investments in shares of associated companies ...... (213) (4) Acquisition of business net of cash received ...... (1,136) (39) Dividends collected ...... 17 18 Net cash flows used investing activities ...... (5,313) (2,320) Excess cash to apply to financing activities ...... 6,184 6,249 Financing activities: Proceeds from long-term debt ...... 15,657 10,586 Payment of long-term debt ...... (10,580) (14,093) Interest paid ...... (1,448) (1,763) Payments of interest rate swaps ...... (955) (654) Interest collected ...... 988 386 Dividends paid ...... (752) (714) Net cash flows provided by (used in) financing activities ...... 2,910 (6,252) Adjustments to cash flows due to exchange rate fluctuations ...... 60 (46) Adjustments to cash flows due to inflationary effects ...... (1) 2 Adjustments due to variations in exchange rate fluctuations and inflationary effects ...... 59 (44) Net increase (decrease) in cash and cash equivalents ...... 9,153 (47) Cash and cash equivalents at the beginning of the period ...... 3,325 4,981 Cash and cash equivalents at the end of the period ...... $12,478 $ 4,934

See accompanying notes to condensed consolidated interim financial statements.

F-52 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

2. Basis of presentation a. Explanation for translation into English – The accompanying condensed consolidated interim financial statements have been translated from Spanish into English for use outside of Mexico. These condensed consolidated interim financial statements are presented on the basis of Financial Information Standard (“NIF” for its acronym in Spanish) B-9, Interim Financial Information, of Mexican Financial Reporting Standards (“MFRS”). Certain accounting practices applied by the Company that conform with NIF B-9 may not conform with accounting principles generally accepted in the country of use. b. Interim financial statements – The accompanying condensed consolidated interim financial statements as of and for the nine and the three months ended September 30, 2011 and 2010 have not been audited. In the opinion of Company management, all the adjustments (consisting mainly of ordinary, recurring adjustments) necessary for a fair presentation of the accompanying condensed consolidated interim financial statements are included. The results of the periods are not necessarily indicative of the results for the full year. These financial statements should be read in conjunction with the audited consolidated financial statements of the Company and the respective notes as of and for the year ended December 31, 2010. The preparation of condensed consolidated interim financial statements under NIF B-9 require that management make certain estimates and use certain assumptions that affect the amounts reported in the financial statements and their related disclosures; however, actual results may differ from such estimates. The Company’s management, upon applying professional judgment, considers that estimates made and assumptions used were adequate under the circumstances. c. Monetary unit of the financial statements – The financial statements and notes as of and for the nine and the three months ended September 30, 2011 and 2010 include balances and transactions denominated in Mexican pesos of different purchasing power. d. Consolidation of financial statements – At September 30, 2011, December 31, 2010 and September 30, 2010, the consolidated financial statements include those of Grupo Bimbo, S. A. B. de C. V. and its subsidiaries, of which some of the more significant are shown below:

Ownership Subsidiary Percentage Country Principal Business Bimbo, S. A. de C. V. (“Bimbo”) ...... 97 Mexico Bakery Bimbo Bakeries USA, Inc. (“BBU”) ...... 100 U.S.A. Bakery Barcel, S. A. de C. V. (“Barcel”) ...... 97 Mexico Candies and snacks Bimbo do Brasil, Ltda...... 100 Brazil Bakery

All significant intercompany balances and transactions have been eliminated in these consolidated interim financial statements.

F-53 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

During the nine months ended September 30, 2011 and 2010, net sales of Bimbo and Barcel in Mexico represented approximately 48% and 47%, respectively, of consolidated net sales. During the three months ended September 30, 2011 and 2010, the proportion of net sales of Bimbo and Barcel is similar to that of the nine months ended as of such dates. Net sales of BBU during the nine months ended September 30, 2011 and 2010 represented 37% and 40%, respectively, of consolidated net sales. During the three months ended September 30, 2011 and 2010, the proportion of net sales of BBU is similar to that of the nine months ended as of such date. e. Business acquisitions – During the nine months ended September 30, 2011 and 2010, the Company acquired the following businesses:

2011: Fargo On September 19, 2011, the Company completed the acquisition of Compañía de Alimentos Fargo, S.A. (“Fargo”), after receiving the appropriate permits. The acquisition was paid for through the exercise of a purchase option to acquire the 70% stake owned by Madera LLC.

Fargo is the largest producer and distributor of bread and bakery products in Argentina, with annual sales of approximately US$150 million. With five plants and over 1,500 employees, the company sells its products under the brands of FARGO®, LACTAL® and ALL NATURAL®, among others, through wholesale channels and retail and institutional customers.

As of September 30, 2011, the valuation of assets acquired and liabilities assumed is in process and will be finalized over the following 12 months.

2010:

Company Country Acquisition cost Date Various businesses ...... Mexico and China $2,012 Various

Various businesses On December 2, 2010, Grupo Bimbo acquired the main operating assets of the business called “Dulces Vero”. The acquisition of these assets strengthens the position of the Company in the confectionery market in Mexico through its subsidiary Barcel and supports the Company’s strategy to reach all socio-demographic segments. As of September 30, 2011, the valuation of assets acquired and liabilities assumed is in process and will be completed in the fourth quarter of 2011. In 2010, the Company also acquired a business in China which is focused on package bread, pastries, cookies, sweet bread and ready-to-eat food, which expands its product portfolio in that country.

F-54 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

The acquisition agreement includes the use of the license of the brand Sara Lee, free of royalties, for its use in bakery products in America, Asia, Africa and Eastern and Central Europe, as well as a list of regional brands with high recognition in their respective local markets. f. Translation of financial statements of foreign subsidiaries – To consolidate the financial statements of foreign subsidiaries (located principally in the USA and other Latin American countries, which represent 50%, 52% and 52% of consolidated net sales for the nine months ended September 30, 2011 and 2010 and the year ended December 31, 2010, respectively and 61%, 64% and 65% of consolidated total assets as of September 30, 2011, December 21, 2010 and September 30, 2010, respectively), the accounting policies of the foreign entities are converted to MFRS using the currency in which transactions are recorded, except when the foreign entity operates in an inflationary environment, for which the financial information of such entities is converted to MFRS using their restated (inflated) values. The financial statements are subsequently translated to Mexican pesos considering the following methodologies: Foreign operations that operate in a non-inflationary environment whose functional currency is the same as the currency in which transactions are recorded translate their financial statements using the following exchange rates: 1) the closing exchange rate in effect at the balance sheet date for assets and liabilities; 2) historical exchange rates for stockholders’ equity and 3) the rate on the date of accrual of revenues, costs and expenses. Translation effects are recorded in stockholders’ equity. Foreign operations that operate in an inflationary environment whose functional currency is the same as the currency in which transactions are recorded first restate their financial statements in currency of purchasing power as of the date of the balance sheet, using the price index of their country for the functional currency, and subsequently translate those amounts to Mexican pesos using the closing exchange rate in effect at the balance sheet date for all items. Translation effects are recorded in stockholders’ equity.

As of September 30, 2011, December 31, 2010 and September 30, 2010, derivative financial instruments have been entered into as economic hedges for investments in foreign operations. Their fair values at such dates are US$3,019 million, US$1,290 million and US$1,290 million, respectively, and 283 million euros, 232 million euros and 232 million euros, respectively.

The Company’s risk management policy regarding exchange rate risks consists of hedging expected cash flows, principally those associated with future purchases of raw materials. Those future purchases of raw materials meet the requirements to be considered exposures associated with “highly probable” forecasted transactions for purposes of hedge accounting. When the future purchase is made, the Company adjusts the amount of the non-financial item that was hedged.

Additionally, the Company hedges its exposure to foreign currency translation risk for its net investment in foreign operations by designating one or more loans denominated in currencies other than the Company’s functional currency as exchange rate hedges, according to the hedge accounting model for net investments in foreign subsidiaries.

F-55 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated) g. Comprehensive income – Comprehensive income presented in the accompanying statement of changes in stockholders’ equity represents the changes in stockholders’ equity during the period for items that are not distributions or movements of contributed capital and includes consolidated net income for the period plus other items that represent a gain or loss for the same period, which, in conformity with MFRS, are recorded directly in stockholders’ equity without affecting the results of operations. The items of other comprehensive income consist of the unrealized accrued effects of derivative instruments and the translation and restatement effects of foreign subsidiaries in 2011 and 2010. When assets and liabilities included in other comprehensive income are realized, those amounts are reclassified to income, except for the translation effect of the net investments. h. Classification of costs and expenses – Costs and expenses presented in the condensed consolidated interim statements of income were classified according to their function because this is the practice of the sector to which the Company belongs. i. Income after general expenses – Income after general expenses is the result of subtracting cost of sales and general expenses from net sales. While NIF B-3, Statement of Income, does not require inclusion of this line item in the condensed consolidated interim statements of income, it has been included for a better understanding of the Company’s economic and financial performance. j. Reclassifications – Certain amounts in the consolidated financial statements as of December 31, 2010 and for the year then ended and as of September 30, 2010 and for the nine months then ended have been reclassified to conform to the presentation of the condensed consolidated interim financial statements as of and for the nine months ended September 30, 2011.

3. Accounting changes In 2011, the Mexican Board for Research and Development of Financial Information Standards (“CINIF”) issued the following NIFs and Interpretations of Financial Reporting Standards (“INIF”), which were adopted by the company on January 1, 2011. There were no significant effects from the adoption of these new standards. Certain additional disclosures required by the NIFs and INIFs for 2011 are not included in these condensed financial statements as they are not intended to include all disclosures as required for the annual financial statements. NIF B-5, Financial Segment Information – This standard establishes a management approach to identifying and disclosing segment information, as opposed to Bulletin B-5, which considers a management approach but also required segment disclosures to be classified by economic segments, geographical areas or homogeneous groups of customers. This standard also differs from the previous bulletin in that it does not require that business areas be subject to different risks in order to separate them into different segments. This standard also requires the separate disclosure of interest income, interest expense and liabilities, as well as disclosure of entity-wide information, including products, services, geographical areas, and major customers and suppliers. Similar to Bulletin B-5, this standard is only mandatory for public companies or entities in process of becoming public. NIF B-9, Interim Financial Information – Unlike Bulletin B-9, this standard requires the presentation of a condensed statement of changes in stockholders’ equity and statement of cash flows as part of interim financial information. The standard also requires, for comparative purposes, information presented at the close of an interim period be presented together with information of the corresponding period in the previous year. In the case of the balance sheet, presentation of the closing balance sheet of the immediately preceding year is required; in the case of the income statement presentation of the quarter and accumulated interim period, including comparative information with the same periods of the previous year, are required.

F-56 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

NIF C-5, Advance Payments and Other Assets – This standard establishes that a basic feature of advance payments is the fact that they do not transfer the risks and rewards of the ownership of goods and services to the Company. Therefore, advances for the purchase of inventories or property, plant and equipment, among others, must be presented separately from inventory or property, plant and equipment if the risks and rewards of ownership of those goods have not transferred to the Company. The standard requires that advance payments be impaired when they lose their ability to generate future economic benefits. This standard also requires classification of advance payments as current or noncurrent, depending on their nature. Improvements to Mexican Financial Reporting Standards 2011: NIF B-1, Accounting Changes and Error Corrections – If the entity has implemented an accounting change or corrected an error, it should present a statement of financial position at the beginning of the earliest period for which comparative financial information is required, retroactively presenting the accounting change or error correction. NIF B-2, Statement of Cash Flows – Eliminates the requirement to present a total, between investing activities and financing activities, of the excess cash to be applied in or obtained from financing activities. Presentation of this total is now only a recommendation. NIF C-13, Related Parties – Incorporates a close family member within the definition of a related party. Bulletin C-10, Derivative Financial Instruments and Hedging Activities – Forecasted intercompany transactions – A hedging limitation exists with respect to entities belonging to the same group in the consolidated financial statements, based on the fact that the transaction is eliminated through the consolidation process. However, hedge accounting can be applied to the individual financial statements of the entity which hedges the risk. Additionally, the hedge can be recognized in the group’s consolidated financial statements if the transaction is performed between related parties with different functional currencies and if the exchange rate risk affects such consolidated financial statements. Fair value hedge applied to a portion of the portfolio amount – Bulletin C-10 establishes that, in fair value hedges (in which both the derivative and hedged item are valued at fair value), the effect of valuing the primary position attributable to the hedged risk must be adjusted to reflect the fair value as the carrying value of that position. However, when the hedge is partial and only covers a portion of the financial assets or liabilities of a portfolio, the valuation effect of the hedged interest rate risk of this portfolio portion must be presented on a separate line in an account that is supplemental to the primary position to enhance the transparency of partial hedging effects. Warranty accounts – The Improvements require that the presentation of these accounts be separated from that of derivative financial instruments to avoid contaminating the fair value amount included in the balance sheet. Warranty accounts were formerly presented under the heading of derivative financial instruments. Impossibility of establishing a hedge ratio for par of the duration of a hedge instrument – The Improvements establish that a portion of the total hedge instrument amount can be designated within a hedge ratio. However, this improvement also clarifies the fact that a hedge ratio cannot solely be designated for the period in which the instrument intended for use as a hedge is valid.

F-57 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

Improvements which do not generate accounting changes to NIF C-2, Financial Instruments, C-10, and C-12, Financial Instruments of a Debt or Equity Nature, or Both: Bulletin C-2 – Eliminates the net presentation of the effects of derivative instruments and their hedge items. Bulletin C-10 – Clarifies that when only a portion of the position exposed to a risk is hedged, the effects of the unhedged risks of the primary position must be recognized by using the valuation method applied for that primary position.

4. Accounts and notes receivable

September 30, December 31, September 30, 2011 2010 2010 Customers and agencies ...... $ 8,848 $ 7,249 $ 7,254 Allowance for doubtful accounts ...... (328) (310) (292) 8,520 6,939 6,962 Notes receivable ...... 647 601 570 Income, value-added and other recoverable taxes ...... 2,995 4,021 2,637 Sundry debtors ...... 684 338 613 Sanalp 2005, S. L., related party ...... — 1,092 1,106 Madera, LLC., related party ...... — 127 131 Officers and employees ...... 47 — 39 $12,893 $13,118 $12,058

5. Inventories

September 30, December 31, September 30, 2011 2010 2010 Finished products ...... $1,437 $1,095 $1,034 Orders in-process ...... 260 94 129 Raw materials, containers and wrapping . . . 1,720 1,735 1,475 Other ...... 43 47 42 Allowance for slow-moving inventories .... (1) (1) (4) 3,459 2,970 2,676 Raw materials in-transit ...... 185 162 238 $3,644 $3,132 $2,914

F-58 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

7. Property, plant and equipment

September 30, December 31, September 30, 2011 2010 2010 Buildings ...... $11,941 $ 11,221 $ 11,201 Manufacturing equipment ...... 31,859 29,488 28,941 Vehicles ...... 8,928 8,430 8,341 Office furniture and fixtures ...... 623 638 614 Computers ...... 2,252 2,044 1,930 55,603 51,821 51,027 Less- Accumulated depreciation ...... (28,366) (25,298) (24,807) 27,237 26,523 26,220 Land ...... 3,639 3,550 3,544 Construction in-progress and machinery in-transit ...... 3,490 1,955 1,776 $ 34,366 $ 32,028 $ 31,540

8. Intangible assets The following is an analysis of the balance of intangible assets by geographical area:

September 30, December 31, September 30, 2011 2010 2010 Mexico ...... $ 2,029 $ 2,016 $ 1,054 United States of America ...... 17,200 16,392 16,676 OLA...... 1,868 1,007 1,010 $21,097 $19,415 $18,740

F-59 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

The breakdown of intangible assets is as follows:

September 30, December 31, September 30, Average life 2011 2010 2010 Trademarks ...... Undefined $17,193 $15,779 $14,965 Rights of use ...... Undefined 39 36 36 17,232 15,815 15,001 Customer relationships ...... 18years 4,254 3,794 3,862 Licensing agreements and software ...... 8and2years 268 247 250 Non-compete agreements ...... 5years 20 17 18 Other ...... 47 43 44 4,589 4,101 4,174 Accumulated amortization ...... (724) (501) (435) 3,865 3,600 3,739 $21,097 $19,415 $18,740

During 2011 and 2010, the changes in trademarks were as follows:

September 30, December 31, September 30, 2011 2010 2010 Balance as of January 1 ...... $15,779 $15,533 $15,533 Acquisitions ...... 723 1,001 38 Impairment ...... — (19) (19) Adjustments due to variations in exchange rates ...... 691 (736) (587) Balance as of the end of the period ...... $17,193 $15,779 $14,965

9. Goodwill The following is an analysis of the balance of goodwill by geographical area:

September 30, December 31, September 30, 2011 2010 2010 Mexico ...... $ 1,288 $ 1,258 $ 744 United States of America ...... 18,708 17,304 17,493 OLA...... 2,006 1,707 1,712 $22,002 $20,269 $19,949

F-60 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

During 2011 and 2010, the changes in goodwill were as follows:

September 30, December 31, September 30, 2011 2010 2010 Balance as of January 1 ...... $20,269 $20,394 $20,394 Acquisitions ...... 336 902 389 Adjustments due to variations in exchange rates ...... 1,397 (1,027) (834) Balance as of the end of the period ...... $22,002 $20,269 $19,949

10. Long-term debt

September 30, December 31, September 30, 2011 2010 2010 Peso Revolving Credit Facility – On October 24, 2010, the Company entered into a committed revolving credit facility with a Mexican Bank in the amount of $5,200 million, which currently bears interest at the Mexican Interbank Equilibrium rate (“TIIE”) rate plus 2.50 % which margin varies based on the Company’s debt/EBITDA ratio. The Peso Revolving Credit Facility matures on April 27, 2012. As of the date hereon, there were no outstanding principal amounts drawn under this credit facility...... $ — $ — $ — On April 26, 2010, the Company entered into, with six financial institutions, a committed dual currency revolving credit for up to US750 million. During June 2011, the Company entered into an agreement to amend the terms and conditions of this credit facility with a new maturity date on June 29, 2014. As of the date hereon, there were no outstanding principal amounts drawn under this credit facility...... $ — $ — $ — Local bonds – On May 10, 2010, the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores or “CNBV”) approved the extension of the authorized total Revolving Certificates Program from $10,000 million, or its equivalent in Investment Units, to $20,000 million, or its equivalent in Investment Units. In addition to the local bonds issued in 2002, during 2009 the Company issued local bonds to refinance short-term liabilities entered into early in 2009 to acquire Bimbo Foods International (“BFI”). As of September 30, 2011, such bonds are as follows: ..... — — — • Bimbo 09- Issued June 15, 2009, maturing in June 2014, with interest at the 28-day TIIE plus 1.55% ...... 5,000 5,000 5,000

F-61 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

September 30, December 31, September 30, 2011 2010 2010 • Bimbo 09-2- Issued June 15, 2009, maturing in June 2016, with a fixed interest rate of 10.60% ...... 2,000 2,000 2,000 • Bimbo 09U- Issued June 15, 2009, in the amount of 706,302,200 Investment Units (“UDIs”), maturing in June 2016, with a fixed interest rate of 6.05%. The UDI value at September 30, 2011, December 31, 2010 and September 30, 2010 was $4.5896, $4.5263 and $4.4431 Mexican pesos per UDI, respectively...... 3,242 3,197 3,138 • Bimbo 02-2-Issued in May 17, 2002, maturing in May 2012, with a fixed interest rate of 10.15% ...... 750 750 750 International bond – On June 30, 2010, the Company issued a bond under U.S. Securities and Exchange Commission Rule 144 Regulation S for US$800 million maturing on June 30, 2020. Such bond pays a fixed interest rate of 4.875% with semiannual payments. The proceeds from this issuance were used to refinance the Company debt, extending the average term of such debt...... 10,738 9,886 10,001 Bank loan – On January 15, 2009, the Company entered into a long- term bank loan in the amount of the equivalent of US$1,700 million, in which BBVA Bancomer, S. A. Institución de Banca Múltiple, Grupo Financiero BBVA Bancomer, as lead agent, and a syndicate bank comprised of 8 institutions, participate. The loan consists of two tranches, the first maturing in January 2012 (Tranche A) and the second with semiannual maturities from July 2012 to January 2014 (Tranche B). During July 2010, the Company used the proceeds from the issuance of the International Bond, to settle Tranche A in full and during April 2011, used the proceeds from the new syndicated bank loan to settle Tranche B in full. All proceeds obtained from this financing, plus those obtained from the multicurrency bridge loan, were used by Grupo Bimbo to partially pay for the acquisition of BFI...... — 10,736 10,776 New syndicated bank loan – On April 26, 2011, the Company entered into a long-term bank loan in the amount of the equivalent of US$1,300 million, in which Bank of America, NA, as lead administrative agent, and a bank syndicate, comprised of ten institutions as of the date of these financial statements, participate. This bank loan will be amortized on a semiannual basis from October 2014 to April 2016. The Company pays interest at the London Interbank Offered rate (“LIBOR”) rate plus 1.10 %. The proceeds obtained from this financing were used to refinance existing obligations of the Company and to partially pay for the acquisition of Sara Lee (see Note 19 regarding acquisition of Sara Lee)...... 17,448 — —

F-62 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

September 30, December 31, September 30, 2011 2010 2010 Other – Certain subsidiaries have entered into other direct loans maturing from 2011 to 2013, bearing interest at various interest rates...... 1,446 1,641 1,006 40,624 33,210 32,671 Less – Current portion of long-term debt ...... (2,137) (1,624) (990) Long-term debt ...... $38,487 $31,586 $31,681

At September 30, 2011, long-term debt matures as follows:

2014 ...... $ 9,362 2015 ...... 8,769 2016 ...... 9,604 2018 ...... 15 2020 ...... 10,737 $38,487

The committed dual-currency revolving credit facility, local bonds, international bond and new syndicate bank loan are guaranteed by the principal subsidiaries of Grupo Bimbo. The loan agreements establish certain covenants and also require that the Company maintain determined financial ratios based on consolidated financial statements. At September 30, 2011 and 2010, the Company has complied with all the obligations established in the loan agreements. The committed dual-currency revolving credit facility and the new syndicated bank loan establishes the payment of an annual administrative agent fee. The committed dual – currency revolving credit facility and peso revolving credit facility also establish the payment of an annual commitment fee.

11. Derivative financial instruments Derivative financial instruments are comprised as follows:

September 30, December 31, September 30, 2011 2010 2010 Assets: Current - Forwards ...... $ 7 $ 6 $ 3 Swaps ...... — — 13 Future contracts Fair value of wheat and soybean oil...... — 131 86 Fair value of natural gas and diesel ...... — 8 26 Forwards (wheat) ...... 60 — — Total current assets ...... $ 67 $145 $128 Long-term swaps ...... $343 $393 $212

F-63 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

September 30, December 31, September 30, 2011 2010 2010 Liabilities: Current - Swaps ...... $ (21) $ — $ — Forwards (wheat) ...... — — (1) Forwards ...... (2) — — Future contracts ...... — Fair value of wheat and soybean oil ...... (224) — — Fair value of natural gas and diesel ...... (47) — (13) Total short-term liabilities ...... $ (294) $ — $ (14) Swaps ...... $(1,361) $(230) $(306) Forwards (wheat) ...... — (1) — Total long-term liabilities ...... $(1,361) $(231) $(306) Stockholders’ equity: Total value of financial instruments designated as cash flow hedges, net of accrued interest ...... $ (166) $ (11) $(223) Closed contracts for unused futures ...... (47) (8) (2) (213) (19) (225) Deferred income taxes, net ...... 72 — 70 Cumulative other comprehensive income ...... $ (141) $ (19) $(155)

Interest rate hedges (Swaps) – The Company entered into interest rate swaps to modify its debt profile in Mexico. The derivatives were designated as cash flow hedges and since their inception were assumed to have no ineffectiveness.

F-64 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

As of September 30, 2011, the operating characteristics and the fair value of the above hedging instruments were as follows:

Amounts as of September 30, 2011

Date of Notional Interest rate Fair Commencement Maturity amount Paid Collected value Swaps that modify the Bimbo 09U local bond currency and interest rate: June 10, 2009 ...... June 6, 2016 $1,000 10.54% (Mexican pesos) 6.05% (UDI) $116 June 24, 2009 ...... June 6, 2016 $2,000 10.60% (Mexican pesos) 6.05% (UDI) 227 Total long-term assets (swaps) ...... $343 Swaps that fix the rate of the long-term credit line in U.S. dollars: May 29, 2009 ...... January 13, 2012 25(*) 1.66% (LIBOR) 0.23% (LIBOR) $ (1) May 29, 2009 ...... January 13, 2012 100(*) 1.63% (LIBOR) 0.23% (LIBOR) (6) Swaps that convert from Mexican pesos to U.S. dollars and modifies the interest rate of the Bimbo 02-2 and Bimbo 09-2 local bonds: September 15, 2010 . . . May 3, 2012 58.6(*) 5.70% 10.15% (14) (U.S. dollars) (Mexican pesos) Total current liabilities (swaps) ...... $(21)

F-65 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

Amounts as of September 30, 2011 Date of Notional Interest rate Fair Commencement Maturity amount Paid Collected value Swaps that fix the rate of the long-term credit line in U.S. dollars May 27, 2009 ...... January 15, 2014 150(*) 2.33% (LIBOR) 0.23% (LIBOR) $(60) Swaps that convert debt from Mexican pesos to U.S. dollars and modifies the interest rate of the Bimbo 02-2 and Bimbo 09-2 local bonds: September 13, 2010 ..... June 6, 2016 155.3(*) 6.35% 10.60% (U.S. dollars) (Mexican pesos) (34) February 11, 2011 ...... June 9, 2014 166.0(*) 5.06% 8.98% (U.S. dollars) (Mexican pesos) (217) February 17, 2011 ...... June 6, 2016 83.1(*) 6.47% 10.54% (U.S. dollars) (Mexican pesos) (253) February 17, 2011 ...... June 6, 2016 166.3(*) 6.53% 10.6% (U.S. dollars) (Mexican pesos) (125) April 27, 2011 ...... June 9, 2014 86.6(*) 3.73% 7.94% (U.S. dollars) (Mexican pesos) (140) April 25, 2011 ...... June 9, 2014 86.2(*) 3.83% 8.03% (U.S. dollars) (Mexican pesos) (139) April 28, 2011 ...... June 9, 2014 86.7(*) 3.79% 8.00% (U.S. dollars) (Mexican pesos) (146) Swaps that modify the Bimbo 09U local bond currency and interest rate: February 28, 2011 ...... June 9, 2014 $1,000 8.00% (Mexican Pesos) 6.37% (TIIE) (40) February 24, 2011 ...... June 9, 2014 $1,000 7.94% (Mexican Pesos) 6.37% (TIIE) (38) February 23, 2011 ...... June 9, 2014 $1,000 8.03% (Mexican Pesos) 6.37% (TIIE) (40) Swaps that modify local bond rates June 26, 2009 ...... June 9, 2014 $2,000 7.43% 4.82% (TIIE) (129) Total long-term liabilities (swaps) ...... $(1,361)

(*) Amounts in millions of U.S. dollars

F-66 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

As of December 31, 2010, the operating characteristics and the fair value of the above hedging instruments were as follows:

Amounts as of December 31, 2010 Date of Notional Interest rate Fair Commencement Maturity amount Paid Collected value Swaps that convert debt from Mexican pesos to U.S. dollars and modifies the interest rate of the Bimbo 02-2 and Bimbo 09-2 local bonds: September 15, 2010 . . . May 3, 2012 58.6(*) 5.70% 10.15% (U.S. dollars) (Mexican pesos) $ 38 September 13, 2010 . . . June 6, 2016 155.5(*) 6.35% 10.60% (U.S. dollars) (Mexican pesos) 105 Swaps that modify the Bimbo 09U local bond currency and interest rate: June 10, 2009 ...... June 6, 2016 $1,000 10.54% (Mexican pesos) 6.05% (UDI) 85 June 24, 2009 ...... June 6, 2016 $2,000 10.60% (Mexican pesos) 6.05% (UDI) 165 Total long-term assets ...... $393

Amounts as of December 31, 2010 Date of Notional Interest rate Fair Commencement Maturity amount Paid Collected value Swaps that fix the Bimbo 09 local bond rate: June 26, 2009 ...... June 9, 2014 $2,000 7.43% 4.87% (TIIE) $ (87) Swaps that fix the rate of the long-term bank loan in U.S. dollars: May 27, 2009 ...... January 15, 2014 150(*) 2.33% (LIBOR) 0.26% (LIBOR) (59) May 29, 2009 ...... January 13, 2012 25(*) 1.63% (LIBOR) 0.26% (LIBOR) (3) May 29, 2009 ...... January 13, 2012 100(*) 1.66% (LIBOR) 0.26% (LIBOR) (12) Swaps that fix the rate of the long-term bank loan in Mexican pesos: June 5, 2009 ...... January 13, 2012 $1,500 6.51% (TIIE) 4.87% (TIIE) (23) June 5, 2009 ...... January 15, 2014 $1,500 7.01% (TIIE) 4.87% (TIIE) (46) Total long-term liabilities (swaps) . . $(230)

(*) Amounts in millions of U.S. dollars.

During April 2011, the long-term bank loan denominated in Mexican pesos was prepaid, therefore, the swaps related to such debt for $1,500 were cancelled according to such prepayment.

F-67 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

As of September 30, 2010, the characteristics of these hedging instruments and their fair value at the contract date were as follows:

Amounts as of September 30, 2010 Date of Notional Interest rate Fair Commencement Maturity amount Paid Collected value Swaps that convert debt from Mexican pesos to U.S. dollars and modifies the interest rate of the local bonds: September 15, 2010 .... May3,2012 58.6(*) 5.70% 10.15% (U.S. dollars) (Mexican pesos) $13

Amounts as of September 30, 2010 Date of Notional Interest rate Fair Commencement Maturity amount Paid Collected value Swaps that modify local bond rates: June 10, 2009 ...... June 6, 2016 $1,000 10.54% 6.05% (UDI) 61 (Mexican pesos) June 24, 2009 ...... June 6, 2016 $2,000 10.60% 6.05% (UDI) 116 (Mexican pesos) Swaps that convert debt from Mexican pesos to U.S. dollars and modifies the interest rate of the local bonds: September 13, 2010 ...... June 6, 2014 155.5(*) 6.35% 10.60% 35 Total long-term assets (swaps) .... $ 212 Swaps that modify local bond rates: June 26, 2009 ...... June 9, 2014 $2,000 7.43% 4.91% (TIIE) (127) Swaps that fix the rate of the long-term bank loan in U.S. dollars May 27, 2008 ...... January 15, 2014 150(*) 2.33% (LIBOR) 0.25% (LIBOR) (73) May 29, 2009 ...... January 13, 2012 25(*) 1.66% (LIBOR) 0.25% (LIBOR) (3) May 29, 2009 ...... January 13, 2012 100(*) 1.63% (LIBOR) 0.25% (LIBOR) (15) Swaps that fix the rate of the long-term bank loan in Mexican pesos: June 5, 2009 ...... January 13, 2012 $1,500 6.51% (TIIE) 4.93% (TIIE) (29) June 5, 2009 ...... January 15, 2014 $1,500 7.01% (TIIE) 4.93% (TIIE) (59) Total long-term liabilities ...... $(306)

(*) Amounts in millions of U.S. dollars

F-68 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

Cross currency “Forwards” – As of September 30, 2011, the Company had contracted forwards to hedge the cash flows of operating and financial liabilities denominated in foreign currency. These instruments cover a notional amount of 10 million euros that fix the exchange rate for the purchase of foreign currency at an average of $17.5253 Mexican pesos per euro. The fair value of these instruments is $7.

Additionally, at September 30, 2011, the Company has contracted other forwards for a notional amount of US$15 million and with a currency purchase exchange rate of $13.5382 Mexican pesos for one US dollar; the fair value of these instruments is $(2).

As of December 31, 2010, the Company had contracted forwards to hedge the cash flows of operating and financial liabilities denominated in foreign currency. These instruments cover a notional amount of 24 million euros that fix the exchange rate for the purchase of foreign currency at an average of $16.3261 Mexican pesos per euro. The fair value of these instruments is $6.

At September 30, 2010, the Company had contracted forwards to hedge the cash flows of operating and/or financial liabilities denominated in foreign currency. These instruments hedged a notional amount of €25 million with a currency purchase exchange rate of $17.1040 Mexican pesos for one Euro. The fair value of these instruments was $3.

The other comprehensive income at September 30, 2011, December 31, 2010 and September 30, 2010, includes closed contracts that have not been transferred to cost of sales due to the fact that the wheat under these contracts has not been used for flour consumption.

As of September 30, 2011, December 31, 2010 and September 30, 2010, the contracted futures and their main characteristics were:

Amounts as of September 30, 2011 Contracts Fair Date of commencement Position Number Maturity Region value Futures contracts to fix the purchase price of wheat and soybean oil: Between September 2011 and June through September 2011 ...... Long 2,902 September 2012 Mexico $(167) Between September 2011 and March through September 2011 .... Long 1,592 May 2012 USA (47) Between September 2011 and June through July 2011 ...... Long 169 May 2012 OLA (7) Various (Soybean oil) ...... Long 184 Various USA (2) Total current liabilities ...... $(223)

F-69 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

Amounts as of September 30, 2011 Contracts Fair Date of commencement Position Number Maturity Region value Futures contracts to fix the purchase price of natural gas, gasoline and diesel: Various (Natural gas) ...... Long 589 Various Mexico $(18) Various (Natural gas) ...... Long 212 Various USA (11) Various (Diesel) ...... Long 353 Various USA (7) Various (Gasoline) ...... Long 468 Various USA (11) Total current liabilities ...... $(47)

Contracts Fair Date of commencement Position Number Maturity Region value Futures contracts to fix the purchase price of natural gas: Between June 2011 and August through December 2010 .... Long 524 December 2012 Mexico $ 8 Between March and August through October 2010 ...... Long 315 December 2011 USA — Total current assets ...... $ 8

F-70 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

Amounts as of September 30, 2010 Contracts Fair Date of commencement Position Number Maturity Region value Futures contracts to fix the purchase price of wheat and soybean oil: May through September 2010 ...... Long 1,048 December 2010 Mexico $ 79 Between November and USA 2 February through September 2010 . . . Long 49 December 2010 March through June 2010 ...... Long 56 December 2010 OLA 4 Various (Soybean oil) ...... Long 4 Various USA 1 Total current assets ...... $86 Futures contracts to fix the purchase price of natural gas and diesel: Various (Natural gas) ...... Long 2,836 Various Mexico $ 23 Various (Diesel) ...... Long 74 Various USA 3 Total current assets ...... $26 Various (Natural gas) ...... Long 850 Various USA $(13)

Hedges of currency “Forwards” for purchase of wheat – During 2011, the Company entered into exchange rate call options, which were designated as hedges of possible exchange rate fluctuations of the U.S. dollar, the foreign currency in which the majority of purchases of wheat flour are made. At September 30, 2011, the covered purchases are from October to December, 2011.

Amounts as of September 30, 2011 Date of Amount in Contracted Fair Commencement Maturity U.S. dollars exchange rate Amount value February through May, Between October to Between 11.9342 and 2011 ...... December, 2011 51,500,000 12.5240 $623 $60

During 2010, the Company entered into exchange rate call options, which were designated as hedges of possible exchange rate fluctuations of the U.S. dollar, the foreign currency in which the majority of purchases of wheat flour are made. The covered purchases in 2010 are from January to April, 2011.

Amounts as of December 31, 2010 Date of Amounts in Contracted Fair Commencement Maturity U.S. dollars exchange rate Amount value October through Between January to Between 12.3217 and November, 2010 ...... April 2011 60,000,000 12.6117 $745 $(1)

During 2010, the Company entered into derivative instruments, which were designated as hedges of possible exchange rate fluctuations of the U.S. dollar, the foreign currency in which the majority of purchases of wheat flour are made. At September 30, 2010, the covered purchases are for October, 2010.

F-71 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

Amounts as of September 30, 2010 Date of Amount in Contracted Fair Commencement Maturity USD exchange rate Amount value August 2010 ...... October 2010 15,000,000 12.7274 $191 $(1)

Embedded derivative instruments – At September 30, 2011, December 31, 2010 and September 30, 2010, the Company does not have any contracts with embedded derivatives.

12. Long-term employee benefits Long term net projected liabilities of employee and welfare benefits plans, by geographical area, are as follows:

September 30, December 31, September 30, 2011 2010 2010 Net projected liability in Mexico: Retirement ...... $1,346 $1,008 $1,063 Termination ...... 113 113 56 $1,459 $1,121 $1,119

September 30, December 31, September 30, 2011 2010 2010 Net projected liability in USA and OLA: Retirement ...... $2,198 $2,216 $2,220 Termination ...... 307 200 270 Workers’ compensation in USA ...... 1,119 1,084 1,084 $3,624 $3,500 $3,574 Total ...... $5,083 $4,621 $4,693 a. Mexico – The Company has a defined benefit pension and seniority premium plan; it also has termination benefits obligations. The funding policy of the Company is making discretionary contributions. At September 30, 2011 and 2010, the Company has not made contributions to such plans.

Employment termination benefits primarily include the estimate for settlement payments equivalent to 3 months of salary per year of service worked, which are paid to all workers that involuntarily leave.

The related liability and annual benefits costs are calculated by an independent actuary in conformity with the bases defined in the plans, using the projected unit credit method.

F-72 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated) b. USA – The Company has established a defined benefit pension plan that covers eligible employees. The Company’s funding policy is to make discretionary contributions. At September 30, 2011, December 31, 2010 and September 30, 2010, the Company made contributions to such plan of $429, $471 and $400, respectively.

Post retirement welfare benefit plans USA The Company maintains a post retirement welfare benefit plan that covers certain eligible employees’ postretirement medical expenses. As of September 30, 2011, December 31, 2010 and September 30, 2010, these liabilities were $1,424, $1,402 and $1,315, respectively, of which the following amounts are classified as long- term:

2011 2010 2010 Welfare benefit plans ...... $1,119 $1,084 $1,084

OLA – The Company has liabilities for termination benefits in accordance with the local legislation of each country. The related liability and annual cost of the benefits is calculated by an independent actuary using the projected unit credit method. As of September 30, 2011, December 31, 2010 and September 30, 2010, the recorded liabilities are $307, $200 and $270, respectively.

13. Stockholders’ equity a. At September 30, 2011, stockholders’ equity consists of the following:

Restatement / Number of Par translation shares value effect Total Fixed capital Series “A” ...... 4,703,200,000 $ 1,902 $ 6,104 $ 8,006 Reserve for repurchase of shares ...... 600 159 759 Retained earnings ...... 31,311 7,875 39,186 Accumulated translation effect ...... — (812) (812) Financial instruments ...... (141) — (141) Noncontrolling interest in consolidated subsidiaries ...... 718 134 852 Total ...... $34,388 $13,462 $47,850 b. Dividends declared during the nine months ended September 30, 2011 and 2010 were:

Value at Mexican pesos per September 30, Approved at the stockholders’ meeting of: share 2011 April 28, 2011 ...... $0.137 $646 April 15, 2010 ...... $0.125 $588

F-73 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

During 2011 and 2010, the dividends paid to non-controlling shareholders were $106 and $126, respectively. c. Effective April 29, 2011, as a result of a four-to-one stock split, Grupo Bimbo’s shareholders authorized and issued capital stock increased from 1,175,800,000 to 4,703,200,000 common shares. Weighted average number of shares outstanding and basic earnings per common share are presented in the income statements as if the stock split had occurred at the beginning of the first period presented in the statements of income, for comparison purposes. d. The capital stock is fully subscribed and paid-in, and represents fixed capital. Variable capital cannot exceed 10 times the amount of the minimum fixed capital without right of withdrawal and must be represented by Series “B” ordinary, nominative, no- par shares and / or limited voting, nominative, no-par shares of the Series to be named when they are issued. Limited voting shares cannot represent more than 25% of non-voting capital stock. e. Retained earnings include the statutory legal reserve. Mexican General Corporate Law requires that at least 5% of net income of the year be transferred to the legal reserve until the reserve equals 20% of capital stock at par value (historical Mexican pesos). The legal reserve may be capitalized but may not be distributed unless the entity is dissolved. The legal reserve must be replenished if it is reduced for any reason. At September 30, 2011 and 2010, the legal reserve, in historical Mexican pesos, was $500. f. Stockholders’ equity, except restated paid-in capital and tax retained earnings, will be subject to income taxes payable by the Company at the rate in effect upon distribution. Any tax paid on such distribution may be credited against annual and estimated income taxes of the year in which the tax on dividends is paid and the following two fiscal years.

14. Foreign currency balances and transactions a. At September 30, 2011, December 31, 2010 and September 30, 2010, the foreign currency monetary position in millions of U.S. dollars, for the Mexican entities only, is as follows:

September 30, December 31, September 30, 2011 2010 2010 Current assets ...... 793 77 58 Liabilities- Short-term ...... (22) (53) (28) Long-term ...... (2,100) (1,076) (1,076) Total liabilities ...... (2,122) (1,129) (1,104) Liability position, net ...... (1,329) (1,052) (1,046) Mexican pesos equivalent ...... $(17,837) $(13,000) $(13,076) b. The Company has significant operations in the USA and OLA as indicated in Note 18.

F-74 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated) c. The exchange rates in effect at the dates of the balance sheets and of issuance of these condensed consolidated interim financial statements were as follows:

September 30, December 31, December 30, 2011 2010 2010 2011 Mexican pesos per one U.S. dollar . . . 13.4217 12.5011 12.3571 13.9904

15. Tax environment Income taxes in Mexico The Company’s Mexican operations are subject to Income tax (“ISR”) and Business Flat tax (“IETU”).

ISR – The ISR rate is 30% for 2010 through 2012, it will be 29% for 2013 and 28% for 2014. The Mexican entities are subject to ISR on an individual basis.

IETU – Revenues, as well as deductions and certain tax credits, are determined based on cash flows of each fiscal year. Beginning in 2010, the IETU rate was 17.5%. The Asset Tax (“IMPAC”) Law was repealed upon enactment of the IETU Law; however, under certain circumstances, IMPAC paid in the ten years prior to the year in which ISR is paid may be recovered, according to the terms of the law.

Income tax expense is the larger of ISR and IETU.

Based on its financial projections, the Company determined that some of its Mexican subsidiaries will pay ISR in certain fiscal years, while in others, they will pay IETU.

Due to changes in the tax law with respect to tax consolidation, the Company elected to deconsolidate for tax purposes beginning in 2010, recognizing the effects of the deconsolidation in 2009, applying some of the effects against retained earnings in accordance with INIF 18, Recognition of the Effects of the 2010 Tax Reform on Income Taxes.

The tax rates applicable in other countries where the Company mainly operates and the period in which tax losses may be applied, are as follows:

Period of expiration of Statutory income tax rate (%) tax loss 2011 2010 carryforwards Brazil ...... 34.0 34.0 (a) USA...... 35.0 35.0 20 (a) Tax losses may be applied indefinitely, but may only be offset each year up to an amount equivalent to 30% of the net taxable profit for the year.

F-75 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

Operations in Brazil and Venezuela are subject to profit sharing payments according to certain rules based on accounting income. During 2010, there were no profit sharing payments in those countries.

Detail of provisions, effective rate and deferred effects a. Consolidated taxes on income are as follows:

Nine Months Nine Months Three Months Three Months Ended September 30, Ended September 30, Ended September 30, Ended September 30, 2011 2010 2011 2010 ISR: Current ...... $1,727 $1,458 $ 410 $720 Deferred ...... 456 611 688 94 2,183 2,069 1,098 814 IETU: Current ...... 12 28 12 8 Deferred ...... 33 33 12 (15) 45 61 24 (7) $2,228 $2,130 $1,122 $807 b. The main items originating a deferred ISR (asset) liability are:

September 30, 2011 December 31, 2010 September 30, 2010 Advances from customers ...... $ — $ (3) $ (4) Allowance for doubtful accounts ...... (108) (109) (97) Inventories ...... 14 9 36 Property, plant and equipment ...... 3,086 2,358 2,568 Intangible assets ...... 4,461 3,812 3,980 Other reserves ...... (4,264) (3,254) (3,148) Current and deferred PTU ...... (202) (287) (222) Tax loss carryforwards ...... (3,816) (3,502) (3,810) Valuation allowance of tax loss carryforwards ...... 202 173 789 IETU ...... 238 205 223 Changes in exchange rate ...... (115) (260) (375) Other items ...... (120) (59) (144) Total (asset) liability, net ...... $ (624) $ (917) $ (204)

F-76 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

The net deferred income tax asset and liability has not been offset in the accompanying condensed consolidated balance sheet as they result from different taxable entities and tax authorities. Gross amounts are as follows:

September 30, December 31, September 30, 2011 2010 2010 Deferred income tax asset ...... $(2,285) $(1,539) $(1,347) Deferred income tax liability ...... 1,661 622 1,143 Total asset, net ...... $ (624) $ (917) $ (204) c. Certain tax losses will not be recoverable before their expiration date. Consequently, the Company has recognized a valuation allowance for a portion of such losses. d. Tax loss carryforwards for which the deferred income tax asset has been recorded may be recovered subject to certain conditions. Tax losses generated in countries and expiration dates are:

Years Amount 2011 ...... $ 3,543 2012 ...... 21 2013 ...... 99 2014 ...... 192 2015 ...... 3 2016 and thereafter ...... 7,763 11,621 Tax losses included in the valuation allowance ...... 647 Total ...... $10,974

16. Commitments Guarantees and/or guarantors a. Grupo Bimbo, S. A. B. de C. V. and certain subsidiary companies have guaranteed bonded issued letters of credit to guarantee commercial obligations. The value of such letters of credit as of September 30, 2011, December 31, 2010 and September 30, 2010 amounts to US$111.4 million, US$98.2 million and US$98.2 million, respectively. Also, there are certain insurance liabilities related to employees for which a liability amounting to US$105.5 million, US$113 million and US$113 million has been already recorded as of those dates. b. The Company has guaranteed certain contingent obligations of associated companies for the amount of US$1.2 million at September 30, 2011.

F-77 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

Lease commitments The Company has long-term commitments under operating leases, principally for the facilities used to produce, distribute and sell its products. These commitments vary from 3 to 14 years, with a renewal option of between one and five years. Certain leases require the Company to pay all related expenses, such as taxes, maintenance and insurance for the term of the contracts. Rental expense was $1,600 and $1,040 for the nine months ended September 30, 2011 and 2010. The total amount of lease commitments as of September 30, 2011, is as follows:

Year Amount 2011 ...... $ 793 2012 ...... 1,122 2013 ...... 829 2014 ...... 649 2015 ...... 467 2016 and thereafter ...... 1,072 Total ...... $4,932

17. Contingencies Certain contingencies exist, of varying nature, that have arisen in the normal course of business of the Company, for which management has evaluated the likelihood of loss as remote, probable or possible. Based on such evaluation, for those contingencies for which the Company believes it is probable it will be required to use future resources to settle its obligation, the Company has accrued the following amounts:

Type Civil ...... $171 Criminal ...... 22 Labor ...... 100 Tax...... 426 Total ...... $719

Those contingencies for which management does not expect a material adverse effect are not accrued until other information becomes available to support the recognition of a liability.

F-78 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

18. Information by geographical area The following is the principal data by geographical area in which the Company operates:

Nine Months Ended September 30, 2011 Consolidation Mexico USA OLA eliminations Total Net sales ...... $47,111 $34,555 $12,547 $(2,342) $ 91,871 Income after general expenses ...... $ 5,371 $ 2,932 $ (322) $ (32) $ 7,949 Net income of controlling stockholders ...... $ 2,583 $ 2,263 $ (519) $ — $ 4,327 Depreciation and amortization ...... $ 1,196 $ 896 $ 536 $ — $ 2,628 Income after general expenses, plus depreciation and amortization (EBITDA) ...... $ 6,567 $ 3,828 $ 214 $ (32) $ 10,577 Interest income ...... $ 1,117 $ 209 $ 21 $ (4) $ 1,343 Interest expense ...... $ 2,504 $ 48 $ 230 $ (4) $ 2,778 Total assets ...... $45,683 $55,480 $17,557 $(2,795) $115,925 Total liabilities ...... $55,282 $10,488 $ 5,441 $(3,136) $ 68,075

Three Months Ended September 30, 2011 Consolidation Mexico USA OLA eliminations Total Net sales ...... $16,461 $12,045 $ 4,555 $ (831) $32,230 Income after general expenses ...... $ 2,391 $ 1,006 $ (66) $ (19) $ 3,312 Net income of controlling stockholders ...... $ 1,440 $ 715 $ (107) $ 50 $ 2,098 Depreciation and amortization ...... $ 399 $ 310 $ 183 $ — $ 892 Income after general expenses, plus depreciation and amortization (EBITDA) ...... $ 2,790 $ 1,316 $ 117 $ (19) $ 4,204 Interest income ...... $ 420 $ 73 $ 8 $ (3) $ 498 Interest expense ...... $ 847 $ 18 $ 86 $ (2) $ 949

Year Ended December 31, 2010 Consolidation Mexico USA OLA eliminations Total Total assets ...... $36,121 $49,380 $16,045 $(2,477) $99,069 Total liabilities ...... $44,080 $ 8,295 $ 5,679 $(3,522) $54,532

F-79 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

Nine Months Ended September 30, 2010 Consolidation Mexico USA OLA eliminations Total Net sales ...... $42,795 $35,800 $10,208 $(2,071) $86,732 Income after general expenses ...... $ 5,452 $ 3,140 $ 129 $ (2) $ 8,719 Net income of controlling stockholders ...... $ 2,111 $ 2,146 $ (88) $ (147) $ 4,022 Depreciation and amortization ...... $ 1,218 $ 1,042 $ 486 $ — $ 2,746 Income after general expenses, plus depreciation and amortization (EBITDA) ...... $ 6,670 $ 4,182 $ 615 $ (2) $11,465 Interest income ...... $ 559 $ 302 $ 14 $ (1) $ 874 Interest expense ...... $ 2,506 $ 139 $ 129 $ (2) $ 2,772 Total assets ...... $34,184 $50,920 $13,560 $ (870) $97,794 Total liabilities ...... $43,233 $ 9,858 $ 3,265 $(1,924) $54,432

Three Months Ended September 30, 2010 Consolidation Mexico USA OLA eliminations Total Net sales ...... $14,433 $12,163 $ 3,672 $ (697) $29,571 Income after general expenses ...... $ 2,285 $ 1,047 $ 66 $ (11) $ 3,387 Net income of controlling stockholders ...... $ 898 $ 786 $ (38) $ (151) $ 1,495 Depreciation and amortization ...... $ 399 $ 341 $ 165 $ — $ 905 Income after general expenses, plus depreciation and amortization (EBITDA) ...... $ 2,684 $ 1,388 $ 231 $ (11) $ 4,292 Interest income ...... $ 116 $ 177 $ 6 $ (1) $ 298 Interest expense ...... $ 857 $ 130 $ 44 $ (1) $ 1,030

19. Events subsequent to the date of the financial statements Acquisitions Sara Lee On October 21, 2011 the State Department of Justice (“DOJ”) concluded its analysis on Grupo Bimbo´s proposal to acquire the fresh bakery of Sara Lee Corporation.

As part of the regulatory approval conditions, the Company has agreed to divest certain brands, assets and routes, including Sara Lee® and Earthgrains® brands in the state of California and some minor brands in the Harrisburg / Scranton region in Pennsylvania and in metropolitan areas in the Cities of Kansas, Oklahoma and Omaha.

F-80 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

From the total sales of US$2 billion announced in November 2010, the revenue from these divestments amounted approximately to US$155 million.

The final purchase price was negotiated at US$709 million, which reflects both the net assets acquired as well as the divestments agreed upon with the DOJ. The acquisition was consummated on November 6, 2011.

Sara Lee España and Portugal On October 10, 2011, the Company announced an agreement to acquire the fresh bakery business of Sara Lee Corporation in Spain and Portugal for a business value of €115 million. The acquisition was consummated on December 5, 2011.

The operation includes, among others, the Bimbo, Silhouette, Martinez and Eagle brands, which enjoy wide recognition and market leadership in the categories of bread, cakes and snacks; also, it includes seven plants and over 800 distribution routes.

Withdrawals under credit facilities On October 24, 2011, the Company drew US$90 million under the Syndicated revolving credit facility and 65 million euros under the euro-denominated credit facility.

During December 2011, the Company drew a net amount of $2,100 million, under the peso-denominated revolving credit facility.

20. International Financial Reporting Standards Pursuant to the General Provisions Applicable to Securities Issuers and Other Participants in the Securities Market (Disposiciones de Carácter General Aplicables a las Emisoras de Valores y a Otros Participantes del Mercado de Valores) issued in January 2010 by the CNBV, beginning with the year ending December 31, 2012, Mexican companies with securities listed on a Mexican securities exchange, including Grupo Bimbo, are required to prepare and present financial information in accordance with International Reporting Standards (“IFRS”). Management is currently in the process of quantifying the effects of the differences between MFRS and IFRS on its consolidated financial statements. While the Company does not believe such differences will materially affect its consolidated financial position, financial performance or cash flows, as it is still in the conversion process, it cannot assure that, once completed, the consolidated financial information under IFRS will not differ materially from that reported under MFRS. As the Company is still in the conversion process, it is unable to provide a reliable estimate of the effects of adoption on its consolidated financial statements; however, certain additional information regarding adoption of IFRS is provided below • As the consolidated financial statements for the year ending December 31, 2012 will be the first annual financial statements prepared in accordance with IFRS, the Company’s date of transition to IFRS will be January 1, 2011. Accordingly, the consolidated financial information for the year ended December 31, 2011 will be part of the period covered by the first IFRS annual financial statements and as of January 1, 2011, the Company will adopt IFRS 1, First-time Adoption of International Financial Reporting Standards. In accordance with IFRS 1, the Company will apply the mandatory exceptions and certain of the optional exemptions from full retrospective application of IFRS as described below.

F-81 Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Notes to Condensed Consolidated Interim Financial Statements (Unaudited)—(Continued) As of September 30, 2011 and 2010 and December 31, 2010 and for the Nine and Three Months Ended September 30, 2011 and 2010 (In millions of Mexican pesos, unless otherwise stated)

Mandatory Exceptions:

• Estimates – Estimates under IFRS at the transition date will be consistent with estimates made as of such date under MFRS, unless there is evidence that those estimates were made in error.

• Non-Controlling Interests – The Company will prospectively apply the guidance with respect to certain recognition and presentation requirements related to non-controlling interests from its date of transition.

• Hedge Accounting – The Company will claim hedge accounting for its derivative financial instruments from the date of transition only if the hedge relationship meets the entire hedge accounting criteria required under IFRS.

Optional Exemptions:

• Deemed Cost – The Company plans to elect the option to measure certain items of property, plant and equipment at their revalued amount under MFRS as “deemed cost” under IFRS as of its date of transition.

• Employee Benefits – The Company is electing to recognize all cumulative unrecognized actuarial gains and losses as of its date of transition.

• Cumulative Translation Differences – The Company is electing to set the previously accumulated cumulative translation balance recognized within stockholders’ equity to zero at our transition date.

• Business Combinations – The Company is electing to prospectively apply the guidance in IFRS regarding accounting for business combinations, such that it will not restate the accounting for any business combination that occurred before its transition date.

The information presented above has been prepared based on assumptions that the management has made about the standards and interpretations under IFRS that are expected to be effective as of December 31, 2012, as well as the accounting policies management expects to adopt when it prepares its first complete set of IFRS financial statements for the year ending December 31, 2012.

21. Financial statement issuance authorization

The issuance of the condensed consolidated interim financial statements was authorized by Lic. Daniel Servitje Montull, Chief Executive Officer, and the Board of Directors of the Company on December 30, 2011. These condensed consolidated interim financial statements are subject to shareholder’s approval at the General Stockholders’ meeting, who may modify the financial statements, based on provisions set forth by Mexican General Corporate Law.

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F-82 ******

PRINCIPAL EXECUTIVE OFFICE

GRUPO BIMBO, S.A.B. DE C.V. Prolongación Paseo de la Reforma No. 1000 Colonia Peña Blanca Santa Fe, Delegación Álvaro Obregón 01210, México, Distrito Federal

LEGAL ADVISORS

To Grupo Bimbo, S.A.B. de C.V. To the Initial Purchasers as to U.S. law as to U.S. law

Skadden, Arps, Slate, Meagher & Flom LLP Cleary Gottlieb Steen & Hamilton LLP 4 Times Square One Liberty Plaza New York, New York 10036 New York, New York 10006

To Grupo Bimbo, S.A.B. de C.V. To the Initial Purchasers as to Mexican law as to Mexican law

Ritch Mueller, S.C. Bufete Robles Miaja, S.C. Torre del Bosque, Bosque de Alisos 47 A-PB Blvd. M. Avila Camacho No. 24, Piso 20 Colonia Bosques de las Lomas Lomas de Chapultepec México 05120, Distrito Federal 11000 México, Distrito Federal

TRUSTEE, REGISTRAR, PAYING AGENT AND TRANSFER AGENT Wells Fargo Bank, National Association 45 Broadway, 14th Floor New York, New York 10006

IRISH LISTING AGENT

Arthur Cox Listing Services Limited Earlsfort Centre Earlsfort Terrace Dublin 2 Ireland

INDEPENDENT AUDITORS

Galaz, Yamazaki, Ruiz Urquiza, S.C. (Member of Deloitte Touche Tohmatsu Limited) Paseo de la Reforma 489, piso 6 Col. Cuauhtémoc 06500 México, D.F.

U.S.$800,000,000

Grupo Bimbo, S.A.B. de C.V. 4.50% Notes due 2022

OFFERING MEMORANDUM

Joint Bookrunners BBVA Citigroup Santander

Co-Manager Mitsubishi UFJ Securities

January 25, 2012