Corporates Natural Resources /

Empresas CMPC S.A.

Rating Type Rating Outlook Last Rating Action

Long-Term Local Currency IDR BBB Stable Affirmed 9 August 2018

Long-Term IDR BBB Stable Affirmed 9 August 2018

National Equity Rating Primera Clase Affirmed 9 August 2018 Nivel 1(chl)

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Financial Summary

(USDth) Dec 2016 Dec 2017 Dec 2018F Dec 2019F

Operating EBITDA (Before Income from Associates) 969,603 1,078,287 1,624,111 1,801,489

Operating EBITDAR Margin (%) 19.9 21.0 28.8 29.9

FFO Margin (%) 11.3 14.9 20.5 21.7

FFO Adjusted Leverage (x) 5.9 4.5 3.0 2.6

Total Net Debt with Equity Credit/Operating EBITDA (x) 3.8 3.4 2.2 1.8

F – Forecast. Source: Fitch Ratings.

On Aug. 9, 2018, Fitch Ratings affirmed the Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) for Empresas CMPC S.A. at ‘BBB’ and its Long-Term National Scale Rating at ‘AA–(cl)’. The Rating Outlook on the corporate ratings is Stable.

CMPC’s ratings reflect its strong business positions as the fourth-largest market pulp producer globally and the second- largest tissue producer in Latin America. In addition, CMPC is able to generate strong cash flow during cyclical pricing downturns because its production cost is in the lowest quartile. However, Fitch considers the risks associated with the intrinsic high volatility of the pulp and paper industry in its analysis. The ratings are also supported by CMPC’s significant forestry investments, consistently solid liquidity position and low refinancing risk.

Inversiones CMPC is a wholly owned subsidiary of CMPC. All of Inversiones CMPC’s debt is unconditionally guaranteed by CMPC. Its ratings have been linked to those of CMPC through Fitch’s Parent and Subsidiary Rating Linkage Criteria. Key Rating Drivers Stable Outlook: The Stable Outlook for the corporate ratings incorporates an expectation that CMPC’s net leverage will decline to about 2.2x in 2018 and be around 2.0x in 2019. Fitch expects more robust cash generation for 2018 and 2019 due to higher pulp prices. Pulp prices should remain elevated through 2020 due to strong demand from China and a dearth of new projects, which would benefit the company’s leverage reduction during the next few years.

Solid Pulp Position: CMPC has a strong position in market pulp, as the fourth-largest market pulp producer globally, with an annual production capacity of hardwood and softwood pulp of 4.1 million tons. Pulp and forest division sales generated about 73% of 2017 EBITDA, making the company more exposed to the cyclical nature of the pulp segment. Cash production costs are among the world’s lowest for both hardwood and softwood pulp, ensuring long-term competitiveness. During first-quarter 2018, the company’s cash cost of production was USD206 per ton for hardwood pulp and USD336 per ton for softwood, which placed it firmly in the lowest quartile of the cost curve.

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Corporates Natural Resources / Chile

Excellent Regional Tissue Business: CMPC’s ratings also reflect its strong business positions within Latin America. The company is the second-largest tissue producer in Latin America, with leading positions in Chile, , and Uruguay and has a growing presence in and . CMPC’s strong market position in tissue, which accounted for 19% of its EBITDA during 2017, is the result of the strong brand equity of its products, its low production-cost structure, and strong distribution network. CMPC is also the largest producer of packaging paper, boxboard, corrugated boxes and multiwall bags in Chile. Its paper and paper products divisions accounted for an additional 8% of EBITDA.

Stronger CFFO Expected: Fitch projects that CMPC will generate about USD1.6 billion of EBITDA in 2018, benefiting from higher pulp prices. This figure compares positively with USD1.5 billion for the LTM ended June 30, 2018. The company generated USD814 million of cash flow from operations (CFFO) in the LTM ended June 30, 2018, and incorporates the loss of pulp sales of about 400,000 tons in the second half of 2017, due to the unplanned stoppage of the Guaiba II mill. Investments of USD480 million and dividends of USD67 million resulted in FCF generation of USD268 million, after several years of negative FCF. Fitch expects FCF to remain positive, allowing the company to reduce debt, despite the expected increase in dividend distributions to 40% of net income.

Leverage to Decline: Fitch projects net leverage will decline to about 2.2x in 2018 and to be around 2.0x during 2019. Better pulp prices and annual investments around USD500 million–USD550 million should contribute to deleveraging. Net debt/EBITDA fell to 2.3x at June 30, 2018, as per Fitch’s calculations, from 3.4x in 2017 and 3.8x in 2016.

Significant Forestry Investments: A key credit consideration that continues to support CMPC’s investment-grade credit profile is its ownership of about 1 million hectares of land throughout Chile, Brazil and Argentina, where the company has developed about 687,000 hectares of forestry assets. The plantations are valued at USD3.5 billion. Importantly, the nearly ideal conditions for growing trees in the region makes these plantations extremely efficient by global standards, and gives the company a sustainable advantage in terms of cost of fiber and transportation costs between forest and mills.

Cyclicality of Pulp Prices: The market pulp industry is highly cyclical; prices move sharply in response to changes in demand or supply. Market fundamentals for pulp producers are favorable, as strong demand from China has helped the market absorb new capacity from Asia Pulp and Paper and Fibria Celulose S.A. seamlessly. Prices through 2020 should be healthy due to the lack of new projects, which should help issuers build cash positions for new projects or reduce debt accumulated during recent pulp mill projects. China will continue to play a key role in supporting prices, and demand should be driven by a growing economy and the closing of pulp mills that relied on non-wood fibers. Rating Derivation Relative to Peers

Rating Derivation Versus Peers Peer Comparison CMPC is the second-largest tissue producer in Latin America and is the fourth-largest market pulp producer globally, after Fibria and Suzano Papel e Celulose S.A., which are in the process of merging operations (BBB‒/Stable), International Paper Company (not rated) and Celulosa Arauco y Constitucion S.A. (Arauco; BBB/Negative). CMPC has annual pulp production capacity of 4.1 million in an industry of 62 million tons of market pulp. Similar to Latin American pulp producers Arauco, Fibria and Suzano, CMPC’s pulp production cash costs are among the lowest in the world, ensuring its long-term competitiveness. CMPC and Arauco are rated higher than their Brazilian peers, due to more diversified regional and business profiles with operations in the more stable tissue and boards segments, respectively. Fibria and Suzano combined will have a significant scale of operations, but have industrial facilities only in Brazil. Liquidity is historically strong for pulp producers. The deleveraging process for CMPC, Arauco and Klabin S.A. (BB+/Stable) following the startup of their pulp mills took longer than expected due to soft pulp prices in 2016. Fitch expects a deleveraging trend for CMPC, with stronger cash flow generation supported by better pulp prices and lower investments. Arauco will initiate investments in its MAPA project and leverage is expected to ramp up again during the construction period, with a quick deleveraging after the startup of the mill. Leverage for Suzano and Fibria will increase following the merger and will position the company with higher leverage than CMPC. However, ratings are supported by the expectation that net leverage will decline in the next three years due to strong cash flow generation. CMPC and Arauco’s operating margins are lower than the Brazilian companies, as they operate in lower-margin business segments such as tissue and packaging and boards.

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Corporates Natural Resources / Chile

Parent/Subsidiary Linkage Inversiones CMPC is a wholly owned subsidiary of CMPC and is incorporated in the Cayman Islands as an exempted limited liability company. All of Inversiones CMPC’s debt is unconditionally guaranteed by CMPC. Its ratings have been linked to those of CMPC through Fitch’s Parent and Subsidiary Rating Linkage Criteria.

Country Ceiling No Country Ceiling constraint was in effect for these ratings.

Operating Environment About 53% of CMPC’s sales are to Europe, Asia and the U.S., while 47% is in Latin America, of which about 21% comes from Chile. CMPC’s export-oriented profile mitigates the company’s exposure to demand from Latin America, which makes it vulnerable to macroeconomic conditions in the region. The strong brand equity of CMPC’s tissue products, its low production-cost structure and strong distribution network reduce volatility during market downturns.

Other Factors Not applicable.

Source: Fitch Ratings.

Navigator Peer Comparison

Issuer Business profile Financial profile

Management Sector Company's Operating and Corporate Competitive Sector Market Financial Financial Name IDR/Outlook Environment Governance Intensity Trend Position Diversification Profitability Structure Flexibility Empresas CMPC S.A. BBB/Sta a n bbb+ n bbb+ n bbb n bbb+ n bb+ n bbb n bbb- n bbb+ n Celulosa Arauco y Constitucion S.A. BBB/Neg bbb+ n a- n bbb- n bbb+ n bbb+ n bbb- n a- n bb+ n bbb+ n Suzano Papel e Celulose S.A. BBB-/Sta bbb- n bbb n bbb n bbb n bbb n bb+ n a- n bb+ n bbb n Fibria Celulose S.A. BBB-/Pos bbb n bbb+ n bbb n bbb n bbb+ n bb- n a- n bb+ n bbb+ n Klabin S.A. BB+/Sta bb- n bbb+ n bbb- n bbb- n bbb n bb+ n bbb n bb n bbb- n Eldorado Brasil Celulose S.A. B/RWE bb+ n bb- n bbb n bbb n bb+ n b+ n a- n b- n b+ n Masisa S.A. B+/Neg a- n bbb n bb+ n bbb- n bb+ n bb- n b+ n b n bb- n Source: Fitch Importance Higher Moderate Low er n n n Rating Sensitivities Developments That May, Individually or Collectively, Lead to Positive Rating Action  A rating upgrade for CMPC is not likely in the near future.  Net leverage below 2.0x through the cycle. Developments That May, Individually or Collectively, Lead to Negative Rating Action  Net leverage above 3.0x, considering pulp prices are expected to remain relatively unchanged;  Any change in the company’s strategy to reduce leverage and improve its capital structure;  Deterioration in macroeconomic conditions in the countries in which the company has strong tissue businesses. Liquidity and Debt Structure Strong Liquidity: As of June 30, 2018, CMPC had USD639 million of cash and marketable securities, and total debt was USD4.1 billion. CMPC’s liquidity is enhanced by a USD400 million unused revolving committed credit facility. The company has a manageable debt maturity profile, with USD519 million of debt falling due in the short term, including factoring transactions as per Fitch’s methodology, and USD640 million from July 2019 to June 2020. As of June 30, 2018, total debt was composed of senior notes (72% of total debt), loans from Banco Nacional de Desenvolvimento Economico e Social (BNDES) (10%), working capital lines (11%), and others (7%). In July 2018, CMPC issued local bonds for about USD330 million (in Chilean UF) that will be used for debt amortization.

During 2017, CMPC also agreed to pay about USD150 million as restitution to consumers for amounts unduly paid in the Chilean tissue market, as agreed with Chilean authorities. Fitch considered this amount as restricted cash at YE 2017, and USD158 million was paid by CMPC in June 2018.

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Corporates Natural Resources / Chile

Debt Maturities and Liquidity at YE 2017

Liquidity Summary (USD 000) 12/31/2016 12/31/2017 Total Cash and Cash Equivalents 595,843 832,754 Short-Term Investments 0 0 Less: Not Readily Available Cash and Cash Equivalents 0 150,000 Fitch-Defined Readily Available Cash and Cash Equivalents 595,843 682,754 Availability Under Committed Lines of Credit 400,000 400,000 Total Liquidity 995,843 1,082,754

LTM EBITDA 969,603 1,078,287 LTM FCF (56,175) 230,967 Source: Fitch Ratings, company filings.

Scheduled Debt Maturities (USD 000) 12/31/2017 Current Year 537,128 Plus 1 Year 701,611 Plus 2 Years 146,697 Plus 3 Years 144,165 Plus 4 Years 639,126 Thereafter 2,149,491 Total Debt Maturities 4,318,218 Source: Fitch Ratings, company filings.

Liquidity and Debt Maturity Schedule (As of June 30, 2018) Revolving Commited Credit Facility (USD Mil.) 2,500 2,113 2,000

1,500

1,000 400 519 640 578 500 639 135 135 0 Cash Short-Term Debt 2 Years 3 Years 4 Years 5 Years Beyond 5 Years Source: Company reports, Fitch Ratings.

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Corporates Natural Resources / Chile

Charts

Net Revenues by Segment Net Revenues by Segment (2017) (First-Half 2018) Forest and Forest and Paper Wood Paper Wood 16% Products 15% Products 10% 9%

Pulp Tissue 37% Tissue Pulp 31% 37% 45%

Source: Company data, Fitch Ratings. Source: Company data, Fitch Ratings.

EBITDA by Segment EBITDA by Segment (2017) (First-Half 2018) Paper Paper Tissue 8% Tissue 5% 11% 19%

Pulp/Forest and Pulp/Forest and Wood Products Wood Products 73% 84%

Source: Company data, Fitch Ratings. Source: Company data, Fitch Ratings.

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Corporates Natural Resources / Chile

Key Assumptions Fitch’s Key Assumptions Within Our Rating Case for the Issuer  Third-party pulp sales volume between 3.4 million tons and 3.6 million tons during 2018–2020;  Pulp prices between USD675 and USD750 per ton during 2018–2020;  Annual capex around USD500 million–USD550 million between 2018 and 2020;  Dividends of 40% of net income. Financial Data

(USDth) Historical Forecast

Dec 2015 Dec 2016 Dec 2017 Dec 2018F Dec 2019F Dec 2020F SUMMARY INCOME STATEMENT

Net Revenue 4,841,141 4,865,737 5,143,074 5,648,950 6,023,350 6,199,700

Revenue Growth (%) 0.1 0.5 5.7 9.8 6.6 2.9

Operating EBITDA 1,099,007 969,603 1,078,287 1,624,111 1,801,489 1,891,895 (Before Income from Associates)

Operating EBITDA 22.7 19.9 21.0 28.8 29.9 30.5 Margin (%)

Operating EBITDAR 1,099,007 969,603 1,078,287 1,624,111 1,801,489 1,891,895

Operating EBITDAR 22.7 19.9 21.0 28.8 29.9 30.5 Margin (%)

Operating EBIT 725,322 531,699 628,987 1,171,326 1,346,202 1,433,179

Operating EBIT 15.0 10.9 12.2 20.7 22.4 23.1 Margin (%)

Gross Interest -187,032 -212,825 -219,485 -214,788 -199,355 -187,588 Expense

Pretax Income 413,869 -35,578 119,111 968,539 1,158,846 1,257,591 (Including Associate Income/Loss)

SUMMARY BALANCE SHEET

Readily Available 561,369 595,843 682,754 572,742 700,100 958,372 Cash and Equivalents

Total Debt with Equity 4,194,493 4,315,034 4,318,218 4,094,454 3,891,479 3,744,782 Credit

Total Adjusted Debt 4,194,493 4,315,034 4,318,218 4,094,454 3,891,479 3,744,782 with Equity Credit

Net Debt 3,633,124 3,719,191 3,635,464 3,521,712 3,191,379 2,786,410

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Corporates Natural Resources / Chile

SUMMARY CASH FLOW STATEMENT Operating EBITDA 1,099,007 969,603 1,078,287 1,624,111 1,801,489 1,891,895

Cash Interest Paid -178,752 -190,600 -208,442 -214,788 -199,355 -187,588

Cash Tax -117,121 -174,707 -69,348 -213,079 -254,946 -276,670

Dividends Received 0 0 0 0 0 0 Less Dividends Paid to Minorities (Inflow/(Out)flow)

Other Items Before -79,015 -65,246 -51,210 -50,000 -50,000 -50,000 FFO

Funds Flow from 734,535 551,522 764,875 1,158,245 1,309,187 1,389,637 Operations

Change in Working -57,429 -46,739 -43,376 -185,308 -98,295 -46,299 Capital

Cash Flow from 677,106 504,783 721,499 972,937 1,210,892 1,343,338 Operations (Fitch Defined)

Total Non-Operating/ 0 0 0 Nonrecurring Cash Flow

Capex -805,050 -524,636 -485,756

Capital Intensity 16.6 10.8 9.4 (Capex/Revenue) (%)

Common Dividends -30,014 -36,322 -4,776

FCF -157,958 -56,175 230,967

Net Acquisitions and 5,744 894 1,177 Divestitures

Other Investing and -128,034 56,013 5,136 0 0 0 Financing Cash Flow Items

Net Debt Proceeds -306,422 84,755 -369 -223,764 -202,975 -146,697

Net Equity Proceeds 0 0 0 0 0 0

Total Change in Cash -586,670 85,487 236,911 -110,012 127,357 258,273

ADDITIONAL CASH FLOW MEASURES

FFO Margin (%) 15.2 11.3 14.9 20.5 21.7 22.4

Calculations for Forecast Publication

Capex, Dividends, -829,320 -560,064 -489,355 -859,184 -880,560 -938,368 Acquisitions and Other Items Before FCF

FCF After Acquisitions -152,214 -55,281 232,144 113,752 330,332 404,970 and Divestitures

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FCF Margin (After Net -3.1 -1.1 4.5 2.0 5.5 6.5 Acquisitions) (%)

COVERAGE RATIOS

FFO Interest 5.1 3.8 4.6 6.3 7.5 8.3 Coverage (x)

FFO Fixed Charge 5.1 3.8 4.6 6.3 7.5 8.3 Coverage (x)

Operating EBITDAR/ 6.1 5.1 5.2 7.6 9.0 10.1 Interest Paid + Rents (x)

Operating EBITDA/ 6.1 5.1 5.2 7.6 9.0 10.1 Interest Paid (x)

LEVERAGE RATIOS

Total Adjusted Debt/ 3.8 4.5 4.0 2.5 2.2 2.0 Operating EBITDAR (x)

Total Adjusted Net 3.3 3.8 3.4 2.2 1.8 1.5 Debt/Operating EBITDAR (x)

Total Debt with Equity 3.8 4.5 4.0 2.5 2.2 2.0 Credit/Operating EBITDA (x)

FFO Adjusted 4.6 5.9 4.5 3.0 2.6 2.4 Leverage (x)

FFO Adjusted Net 4.0 5.1 3.8 2.6 2.1 1.8 Leverage (x)

How to Interpret the Forecast Presented The forecast presented is based on the agency’s internally produced, conservative rating case forecast. It does not represent the forecast of the rated issuer. The forecast set out above is only one component used by Fitch to assign a rating or determine a rating outlook, and the information in the forecast reflects material but not exhaustive elements of Fitch’s rating assumptions for the issuer’s financial performance. As such, it cannot be used to establish a rating, and it should not be relied on for that purpose. Fitch’s forecasts are constructed using a proprietary internal forecasting tool, which employs Fitch’s own assumptions on operating and financial performance that may not reflect the assumptions that you would make. Fitch’s own definitions of financial terms such as EBITDA, debt or free cash flow may differ from your own such definitions. Fitch may be granted access, from time to time, to confidential information on certain elements of the issuer’s forward planning. Certain elements of such information may be omitted from this forecast, even where they are included in Fitch’s own internal deliberations, where Fitch, at its sole discretion, considers the data may be potentially sensitive in a commercial, legal or regulatory context. The forecast (as with the entirety of this report) is produced strictly subject to the disclaimers set out at the end of this report. Fitch may update the forecast in future reports but assumes no responsibility to do so.

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Corporates Natural Resources / Chile

Rating Navigator

Empresas CMPC S.A. August 15, 2018 9

Corporates Natural Resources / Chile

Empresas CMPC S.A. August 15, 2018 10

Corporates Natural Resources / Chile

Simplified Group Structure Diagram

Simplified Organizational Structure — Empresas CMPC S.A. (As of June 30, 2018)

Matte Group Chilean and Foreign Investors Chilean Pension Funds

56.00% 34.00% 10.00%

Empresas CMPC S.A. IDR — BBB/Stable

100.00%

Inversiones CMPC IDR — BBB/Stable

100.00% 100.00% 100.00% 100.00% Servicios CMPC Celulosa CMPC Papeles CMPC Tissue Compartidos CMPC

100.00% 100.00% Cartulinas CMPC Papeles Cordillera

Forestal Mininco 100.00% 100.00% 100.00% Chimolsa EDIPAC

CMPC Maderas 50.00% 100.00% Envases Impresos 50.00% Sorepa Roble Alto

100.00%

Chile Forsac Chile

100.00% 99.90% Forsac Argentina Papelera del Plata Argentina

100.00% Bosques del Plata

100.00% 100.00% Peru Forsac Peru Protisa Peru

99.61% Uruguay Ipusa

100.00% Colombia Dypers Andina

100.00% 100.00% Mexico Forsac Mexico Absormex

100.00% Brazil 100.00% Rio Grandense Melhoramentos

100.00% Ecuador Protisa Ecuador

IDR – Issuer Default Rating. Source: Empresas CMPC S.A.

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Corporates Natural Resources / Chile

Peer Financial Summary

Company Date Rating Operating Readily Total Adjusted Cash Flow Total Adjusted EBITDA Available Cash Debt with from Net Debt/ (Before (USDm) Equity Credit Operations Operating Income from (USDm) (USDm) EBITDAR (x) Associates) (USDm) Empresas CMPC S.A. 2017 BBB 1,078 683 4,318 721 3.4

2016 BBB+ 970 596 4,315 505 3.8

2015 BBB+ 1,099 561 4,194 677 3.3

Celulosa Arauco y 2017 BBB 1,302 590 4,337 1,067 2.9 Constitucion S.A.

2016 BBB 1,027 592 4,614 732 3.9

2015 BBB 1,276 500 4,533 860 3.1

Masisa S.A. 2016 B+ 119 64 731 52 5.6

2015 B+ 157 110 817 34 4.5

2014 BB 194 114 768 18 3.4

Fibria Celulose S.A. 2017 BBB– 1,522 2,017 6,819 834 3.3

2016 BBB– 1,070 1,442 5,513 1,118 3.6

2015 BBB– 1,618 655 3,722 1,177 2.2

Suzano Papel e Celulose S.A. 2017 BBB– 1,397 819 3,977 912 2.3

2016 BB+ 1,061 1,134 4,618 895 3.1

2015 BB 1,340 627 4,150 777 3.1

Klabin S.A. 2017 BB+ 842 2,501 6,053 656 4.4

2016 BBB– 642 1,984 5,804 225 5.6

2015 BBB– 578 1,437 4,713 437 6.6

Eldorado Brasil Celulose S.A. 2017 B 540 180 2,444 283 4.3

2016 B+ 365 370 2,794 192 6.2

2015 452 353 2,411 230 5.3

Source: Fitch Ratings.

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Reconciliation of Key Financial Metrics

(USD Thousand, As reported) 31 Dec 2017 Income Statement Summary Operating EBITDA 1,078,287 + Recurring Dividends Paid to Non-controlling Interest 0 + Recurring Dividends Received from Associates 0 + Additional Analyst Adjustment for Recurring I/S Minorities and Associates 0 = Operating EBITDA After Associates and Minorities (k) 1,078,287 + Operating Lease Expense Treated as Capitalised (h) 0 = Operating EBITDAR after Associates and Minorities (j) 1,078,287

Debt & Cash Summary Total Debt w ith Equity Credit (l) 4,318,218 + Lease-Equivalent Debt 0 + Other Off-Balance-Sheet Debt 0 = Total Adjusted Debt w ith Equity Credit (a) 4,318,218 Readily Available Cash [Fitch-Defined] 682,754 + Readily Available Marketable Securities [Fitch-Defined] 0 = Readily Available Cash & Equivalents (o) 682,754 Total Adjusted Net Debt (b) 3,635,464

Cash-Flow Summary Preferred Dividends (Paid) (f) 0 Interest Received 15,588 + Interest (Paid) (d) (208,442) = Net Finance Charge (e) (192,854) Funds From Operations [FFO] ( c) 764,875 + Change in Working Capital [Fitch-Defined] (43,376) = Cash Flow from Operations [CFO] (n) 721,499 Capital Expenditures (m) (485,756) Multiple applied to Capitalised Leases 0.0

Gross Leverage Total Adjusted Debt / Op. EBITDAR* [x] (a/j) 4.0 FFO Adjusted Gross Leverage [x] (a/(c-e+h-f)) 4.5 Total Adjusted Debt/(FFO - Net Finance Charge + Capitalised Leases - Pref. Div. Paid) Total Debt With Equity Credit / Op. EBITDA* [x] (l/k) 4.0

Net Leverage Total Adjusted Net Debt / Op. EBITDAR* [x] (b/j) 3.4 FFO Adjusted Net Leverage [x] (b/(c-e+h-f)) 3.8 Total Adjusted Net Debt/(FFO - Net Finance Charge + Capitalised Leases - Pref. Div. Paid) Total Net Debt / (CFO - Capex) [x] ((l-o)/(n+m)) 15.4

Coverage Op. EBITDAR / (Interest Paid + Lease Expense)* [x] (j/-d+h) 5.2 Op. EBITDA / Interest Paid* [x] (k/(-d)) 5.2 FFO Fixed Charge Cover [x] ((c-e+h-f)/(-d+h-f)) 4.6 (FFO - Net Finance Charge + Capit. Leases - Pref. Div Paid) / (Gross Int. Paid + Capit. Leases - Pref. Div. Paid) FFO Gross Interest Coverage [x] ((c-e-f)/(-d-f)) 4.6 (FFO - Net Finance Charge - Pref. Div Paid) / (Gross Int. Paid - Pref. Div. Paid) * EBITDA/R after Dividends to Associates and M inorities Source: Fitch, based on information from company reports.

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Corporates Natural Resources / Chile

Fitch Adjustment Reconciliation

Reported Sum of Fitch Cash - CORP - Other Adjusted (USD Thousand, As reported) Values Adjustments Adjustment Factoring Adjustment Values 31 Dec 17 Income Statement Summary Revenue 5,143,074 0 5,143,074 Operating EBITDAR 766,623 311,664 311,664 1,078,287 Operating EBITDAR after Associates and Minorities 766,623 311,664 311,664 1,078,287 Operating Lease Expense 0 0 0 Operating EBITDA 766,623 311,664 311,664 1,078,287 Operating EBITDA after Associates and Minorities 766,623 311,664 311,664 1,078,287 Operating EBIT 317,323 311,664 311,664 628,987 Debt & Cash Summary Total Debt With Equity Credit 4,116,218 202,000 202,000 4,318,218 Total Adjusted Debt With Equity Credit 4,116,218 202,000 202,000 4,318,218 Lease-Equivalent Debt 0 0 0 Other Off-Balance Sheet Debt 0 0 0 Readily Available Cash & Equivalents 832,754 (150,000) (150,000) 682,754 Not Readily Available Cash & Equivalents 0 150,000 150,000 150,000 Cash-Flow Summary Preferred Dividends (Paid) 0 0 0 Interest Received 15,588 0 15,588 Interest (Paid) (208,442) 0 (208,442) Funds From Operations [FFO] 764,875 0 764,875 Change in Working Capital [Fitch-Defined] 115,624 (159,000) (159,000) (43,376) Cash Flow from Operations [CFO] 880,499 (159,000) (159,000) 721,499 Non-Operating/Non-Recurring Cash Flow 0 0 0 Capital (Expenditures) (485,756) 0 (485,756) Common Dividends (Paid) (4,776) 0 (4,776) Free Cash Flow [FCF] 389,967 (159,000) (159,000) 230,967 Gross Leverage Total Adjusted Debt / Op. EBITDAR* [x] 5.4 4.0 FFO Adjusted Leverage [x] 4.3 4.5 Total Debt With Equity Credit / Op. EBITDA* [x] 5.4 4.0 Net Leverage Total Adjusted Net Debt / Op. EBITDAR* [x] 4.3 3.4 FFO Adjusted Net Leverage [x] 3.4 3.8 Total Net Debt / (CFO - Capex) [x] 8.3 15.4 Coverage Op. EBITDAR / (Interest Paid + Lease Expense)* [x] 3.7 5.2 Op. EBITDA / Interest Paid* [x] 3.7 5.2 FFO Fixed Charge Coverage [x] 4.6 4.6 FFO Interest Coverage [x] 4.6 4.6 *EBITDA/R after Dividends to Associates and M inorities

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Corporates Natural Resources / Chile

FX Screener About 55% of CMPC’s revenues are denominated in U.S. dollars and 22% in Chilean pesos and Brazilian reals, while 46% of costs are denominated in U.S. dollars and 40% in Chilean pesos and Brazilian reals. The depreciation of local currencies has a positive effect on the company’s margins.

Fitch FX Screener (Empresas CMPC S.A. — BBB/Stable, Dec-17, USDth) Reported currency (ST) Reported currency (LT)

Foreign currency (ST) Foreign currency (LT)

100% 0 119,398 378,109 53,713

80% 2,314,383 2,194,985 477,928 60% 3,402,981 3,402,981 958,889 40%

2,828,691 1,869,802 20% 204,826

483,415 278,589 0% -46,106

-20% Revenue* Costs* EBITDA Total debt* Total cash* Net debt* *Post hedge, absolute figures displayed are Fitch’s analytical estimates, based on publicly available information Source: Fitch

Empresas CMPC S.A. August 15, 2018 15

Corporates Natural Resources / Chile

Full List of Ratings

Rating Outlook Last Rating Action Empresas CMPC S.A.

Long-Term Local Currency IDR BBB Stable Affirmed 9 August 2018

Long-Term IDR BBB Stable Affirmed 9 August 2018

Long-Term National Scale Rating AA–(cl) Stable Affirmed 9 August 2018

National Equity Rating Primera Clase Affirmed 9 August 2018 Nivel 1(chl)

Short-Term National Scale Rating N1+(cl) Affirmed 9 August 2018

Inversiones CMPC

Long-Term Foreign Currency IDR BBB Stable Affirmed 9 August 2018

Long-Term National Scale Rating AA–(cl) Stable Affirmed 9 August 2018

Short-Term National Scale Rating N1+(cl) Affirmed 9 August 2018

Senior Unsecured Long-Term Notes BBB Affirmed 9 August 2018

Senior Unsecured Long-Term Debt Denominated in Chilean AA–(cl) Affirmed 9 August 2018 Pesos

Senior Unsecured Short-Term Debt Denominated in Chilean N1+(cl) Affirmed 9 August 2018 Pesos

CP Denominated in Chilean Pesos AA–(cl) Affirmed 9 August 2018

Related Research & Criteria

Equity Rating Criteria in Chile (August 2018)

National Scale Ratings Criteria (July 2018)

Parent and Subsidiary Rating Linkage (July 2018)

Corporate Rating Criteria (March 2018)

Analysts

Fernanda Rezende +55 21 4503-2619 [email protected]

Rodolfo Schmauk +56 2 2499-3341 [email protected]

Empresas CMPC S.A. August 15, 2018 16

Corporates Natural Resources / Chile

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Empresas CMPC S.A. August 15, 2018 17