Listing Particulars Offering Memorandum U.S.$750,000,000

LISTING PARTICULARS OFFERING MEMORANDUM U.S.$750,000,000

El Puerto de Liverpool, S.A.B. de C.V. 3.875% Senior Notes due 2026 Guaranteed by Distribuidora Liverpool, S.A. de C.V.

We are offering U.S.$750,000,000 aggregate principal amount of our 3.875% senior notes due 2026, or the notes. Interest on the notes will accrue at a rate of 3.875% per year. We will pay interest on the notes semi-annually in arrears on April 6 and October 6 of each year, commencing on April 6, 2017. The notes will mature on October 6, 2026. The notes will be our senior unsecured general obligations and will be guaranteed by our wholly owned subsidiary Distribuidora Liverpool, S.A. de C.V., or the subsidiary guarantor. The notes will rank at least pari passu in right of payment with all of our unsecured and unsubordinated debt, and the subsidiary guarantee will rank at least pari passu in right of payment with all unsecured and unsubordinated debt of the subsidiary guarantor (in each case, subject to certain obligations given preferential treatment pursuant to applicable law). The notes and the subsidiary guarantee will be structurally subordinated to all existing and future indebtedness and trade payables of our non-guarantor subsidiaries in respect of assets of and revenue generated by these subsidiaries. See "Risk Factors— Risk Related to the Notes—The notes are not secured by our assets and the notes and the subsidiary guarantee will be effectively subordinated to our and the subsidiary guarantor's secured debt" and "—The notes and the subsidiary guarantee will be structurally subordinated to the liabilities of our non-guarantor subsidiaries." 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, plus accrued and unpaid interest, if any. See "Description of the Notes—Optional Redemption—Optional Redemption with "Make-Whole" Amount." In addition, we may redeem the notes, in whole but not in part, at 100% of their principal amount plus accrued and unpaid 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—Optional Redemption—Redemption for Taxation Reasons." In addition, if we experience 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 101% 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." This offering memorandum constitutes the listing particulars, or the Listing Particulars, in respect of the admission of the notes to the Official List and to trading on the Global Exchange Market of the Irish Stock Exchange. Application has been made to the Irish Stock Exchange for the approval of this offering memorandum 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. Investing in the notes involves significant risks. See "Risk Factors" beginning on page 21 for a discussion of certain information that you should consider before investing in the notes.

Price: 98.881% plus accrued interest, if any, from October 6, 2016.

THE NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE MEXICAN NATIONAL SECURITIES REGISTRY (REGISTRO NACIONAL DE VALORES, OR THE RNV) MAINTAINED BY THE MEXICAN NATIONAL BANKING AND SECURITIES COMMISSION (COMISIÓN NACIONAL BANCARIA Y DE VALORES, OR CNBV), AND MAY NOT BE OFFERED PUBLICLY IN MEXICO. THE NOTES MAY ONLY BE OFFERED IN MEXICO PURSUANT TO THE EXEMPTIONS TO REGISTRATION PROVIDED IN ARTICLE 8 OF THE MEXICAN SECURITIES MARKET LAW (LEY DEL MERCADO DE VALORES). WE WILL NOTIFY THE CNBV OF THE TERMS AND CONDITIONS OF THIS OFFERING FOR INFORMATIONAL AND STATISTICAL 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 OR THE SUBSIDIARY GUARANTOR'S 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 AND MAY NOT BE PUBLICLY DISTRIBUTED IN MEXICO. 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 EL PUERTO DE LIVERPOOL, S.A.B. DE C.V. AND THE SUBSIDIARY GUARANTOR. 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 an exemption from registration under 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 persons outside the United States in compliance with Regulation S under the Securities Act. See "Transfer Restrictions" 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. We expect that 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 October 6, 2016.

Joint Book-Running Managers Citigroup Credit Suisse J.P. Morgan

The date of this offering memorandum is October 6, 2016.

TABLE OF CONTENTS Page Market and Industry Information ...... iii Trademarks, Service Marks and Trade Names ...... v Enforceability of Civil Liabilities ...... vi Cautionary Statement Regarding Forward-Looking Statements ...... vii Presentation of Financial and Other Information ...... ix Summary...... 1 Risk Factors ...... 21 Use of Proceeds ...... 44 Exchange Rates ...... 45 Capitalization ...... 46 Selected Consolidated Financial and Other Information ...... 47 Management's Discussion and Analysis of Financial Condition and Results of Operations ...... 51 Industry ...... 68 Business ...... 76 Management ...... 104 Shareholders ...... 110 Certain Transactions with Related Parties ...... 111 Description of the Notes ...... 112 Form of Notes, Clearing and Settlement ...... 130 Taxation ...... 134 Plan of Distribution ...... 139 Transfer Restrictions ...... 146 Legal Matters ...... 148 Independent Auditors ...... 149 Available Information ...... 150 Index to Consolidated Financial Statements ...... F-1

All references to "we," "us," "our," "our company" or the "issuer" in this offering memorandum are to El Puerto de Liverpool, S.A.B. de C.V., a publicly traded stock corporation (sociedad anónima bursátil de capital variable) organized under the laws of Mexico and, unless otherwise indicated or the context requires otherwise, its consolidated subsidiaries. All references to "subsidiary guarantor" are to our wholly owned subsidiary Distribuidora Liverpool, S.A. de C.V., a variable stock corporation (sociedad anónima de capital variable) organized under the laws of Mexico. All references to "Mexico" in this offering memorandum are to the United Mexican States. All references to the "United States" or "U.S." in this offering memorandum are to the United States of America.

You should only rely on 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 us. Nothing contained in this offering memorandum is, or shall be, relied upon as a promise or representation by the initial purchasers, whether as to the past or the future.

This offering memorandum does not constitute an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. 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. This offering memorandum may only be used for the purpose for which it has been published. 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. Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC 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 August 19, 2016.

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 purchasers or their respective agents have any responsibility therefor. See "Transfer Restrictions" 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 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 or 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 United States Securities and Exchange Commission, or the SEC, or any state securities commission, 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.

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 not consider any information in this offering memorandum to be legal, business or tax advice. You should consult with your own advisors as to legal, tax, business, financial and related aspects of a purchase of the notes.

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.

The notes will be available initially only in book-entry form. We expect that the notes offered and sold to qualified institutional buyers, or QIBs, in reliance upon Rule 144A under the Securities Act will be represented by beneficial interests in one or more permanent global notes in fully registered form without interest coupons, collectively, the Rule 144A notes. 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 one or more permanent global notes in fully registered form without interest coupons, collectively, the Regulation S notes and, together with the Rule 144A notes, the global notes. The global notes will be deposited with The Depository Trust Company, or DTC. Notes will be issued in minimum denominations of U.S.$200,000 and integral multiples of U.S.$1,000 in excess thereof. See "Description of the Notes" for further discussion of these matters.

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. 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 €5,000.

We accept responsibility for the information contained in these Listing Particulars and confirm that, to the best of our knowledge (having taken all reasonable care to ensure that such is the case), the information contained in these Listing Particulars is in accordance with the facts and does not omit anything likely to affect the import of such information.

Arthur Cox Listing Services Limited is acting solely in its capacity as listing agent for us in relation to the notes and is not itself seeking admission of the notes to the Official List of the Irish Stock Exchange or to trading on the Global Exchange Market of the Irish Stock Exchange.

This offering memorandum 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 offering memorandum or any of its contents.

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, such as Euromonitor, IBISWorld, the Mexican National Association of Self-Service Stores and Department Stores (Asociación Nacional de Tiendas de Autoservicio y Departamentales, A. C., or ANTAD), the Mexican Internet Association (Asociación Mexicana de Internet, or AMIPCI) and Interbrand. 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. The facts and statistics presented have been accurately reproduced from such sources, however, such facts and statistics 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

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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.

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

We own or have rights to the trademarks used in our business, including Liverpool, Fábricas de Francia, Liverpool Duty Free, El Puerto de Liverpool, That's it, JBE, Pique Nique, Petite Studio, Perisur, Galerías Atizapán, Galerías Coapa, Galerías Insurgentes and Galerías Metepec. 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.

ENFORCEABILITY OF CIVIL LIABILITIES

We and the subsidiary guarantor are companies organized and existing under the laws of Mexico. Most of our directors, officers and controlling persons, and most of the directors and officers of the subsidiary guarantor, reside outside of the United States. A significant portion of our assets and the assets of the subsidiary guarantor are located, and a majority of our revenues and the revenues of the subsidiary guarantor 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 on 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, Galicia Abogados, 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 (orden público), 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 or in actions for enforcement of judgments obtained in courts of jurisdictions outside Mexico, of liabilities predicated, in whole or in part, on U.S. federal securities laws or similar laws of any jurisdiction outside Mexico 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 the subsidiary guarantor's 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 the Mexican Central Bank (Banco de México) each business day in Mexico and published the following banking-business day in the Mexican Federal Official Gazette (Diario Oficial de la Federación).

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 or the guarantee of the subsidiary guarantor. See "Description of the Notes."

CAUTIONARY STATEMENT 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, financial condition and results of operations. Although we believe that these estimates and forward- looking statements are based upon reasonable assumptions, these assumptions are subject to several risks and uncertainties and are based on information limited to that information currently available to us.

Our estimates and forward-looking statements, as well as our actual results and financial condition, may be influenced by, among others, the following factors:

 any decrease in the buying power of our customers and any decrease in the level of consumer spending for apparel and other merchandise we sell;

 global macroeconomic conditions and economic, political and social conditions in Mexico;

 changes in consumer preferences;

 our ability to integrate and benefit from our recent or future acquisitions, investments and strategic alliances, including the proposed investment in Ripley Corp S.A., or Ripley, and the apparel retail business of Wal-Mart de México, S.A.B. de C.V., or Wal-Mex, under the brand Suburbia, or Suburbia;

 the costs, difficulties, uncertainties and regulations related to mergers, acquisitions or joint ventures;

 competitive pressures from department and specialty stores, general merchandise stores, manufacturers' outlets, off-price and discount stores, and all other retail channels, including the internet, mail-order catalogs and television;

 the availability of desirable store locations on suitable terms;

 adequate and stable sources of merchandise, including changes in relationships with vendors and other product and service providers;

 reforms of Mexican tax laws, including reforms related to the Mexican value added tax and income tax, which may increase our overall costs and the overall cost of the products we sell;

 any damage to the public's perception of our brands or the brands we sell;

 our ability to implement our business and investment strategy;

 industry trends, including changes in buying, inventory and other business practices;

 disruption of our supply chain, or the failure of our suppliers to perform in a timely manner;

 risks inherent to product liability or intellectual property claims;

 our ability to successfully expand into new markets in Mexico;

 our ability to successfully engage in property development;

 our ability to lease any of our properties;

 credit and other risks of lending, such as increases in the number of defaulting customers;

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 technological innovations;

 increases in our operating costs or our inability to meet efficiency or cost reduction objectives;

 interruptions or failures in our information technology systems;

 loss of key personnel;

 the deterioration of labor relations with our workforce or an increase in labor costs;

 risks related to fluctuations in foreign exchange or interest rates and stock market volatility;

 our ability to service our debt;

 limitations on our access to sources of financing on competitive terms and compliance with covenants by which we are bound;

 compliance with health, environmental, data protection and other laws and regulations;

 regulatory changes and adverse administrative or judicial rulings relating to us;

 trade barriers;

 the imposition of price controls on the products we sell;

 possible disruptions to commercial activities due to natural and human-induced disasters, including terrorist activities and armed conflicts; 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" 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 estimates and 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, financial condition 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 an investment in the notes.

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PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Financial Statements

This offering memorandum includes (i) our audited consolidated financial statements as of December 31, 2015, 2014 and for each of the three years ended December 31, 2015, 2014 and 2013, or the audited consolidated financial statements, and (ii) our unaudited condensed consolidated interim financial statements as of June 30, 2016 and for the three and six months ended June 30, 2016 and 2015, or the unaudited condensed consolidated interim financial statements, all of which are stated in Mexican pesos.

Our audited consolidated financial statements and our unaudited condensed consolidated interim financial statements include consolidated information of our subsidiary guarantor and our non-guarantor subsidiaries.

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), or the General Provisions, issued by CNBV, beginning with the year ended December 31, 2012, Mexican companies with securities listed on a Mexican securities exchange, including our company, have been required to prepare and present financial information in accordance with International Financial Reporting Standards, or IFRS, as adopted by the International Accounting Standards Board. Accordingly, our audited consolidated financial statements and our unaudited condensed consolidated interim financial statements have been prepared in accordance with IFRS, which differ in certain significant respects from the generally accepted accounting principles in the United States, or U.S. GAAP.

Non-IFRS Financial Measures

This offering memorandum contains financial measures that are not in accordance with IFRS, or non-IFRS measures, primarily EBITDA and net debt.

EBITDA

EBITDA represents operating income plus depreciation and amortization. Our management uses this measure as an indicator of our operating results and financial condition. However, you should not consider EBITDA 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 IFRS, since, among others:

 it does not reflect the depreciation and amortization of our operating assets;

 it does not reflect our interest expense;

 it does not reflect our share of profits of associates;

 it does not reflect any income taxes we may be required to pay; and

 it does not reflect our cash expenditures or future requirements for cash expenditures or our working capital needs or charges.

Our management believes that, for comparison purposes with other companies, EBITDA can be useful as an objective and comparable measure of operating profitability, because it excludes those elements of earnings that may not consistently provide information about the current and ongoing operations of our existing businesses. Although our calculation of EBITDA may not be comparable to calculations of similarly titled measures used by other companies, our management believes that disclosure of EBITDA can provide useful information to investors in their evaluation of our operating performance. Last twelve months EBITDA, or LTM EBITDA, for a given interim period was calculated by subtracting the previous year's results for the same interim period, and adding the difference to the results for the fiscal year most recently reported.

Net Debt

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 a non-IFRS measure, and we do not intend net debt to represent debt as defined by IFRS. You should not consider net debt to be an alternative to debt or any other items calculated in accordance with IFRS. Debt levels and, therefore, the impact of interest rates on earnings vary in significance between companies. Thus, for comparison purposes, our management believes that net debt can be useful to investors as an objective and comparable measure of our debt obligations and liquidity, because it recognizes the net cash position of our current operations.

Segment Information

Information per segment is reported on the basis of the information used by our management in making strategic and operating decisions. An operating segment is defined as a component of an entity in which there is separate financial information which is evaluated on a regular basis. Income from our segments primarily results from the sale of products at retail (commercial segment), and from leasing commercial space (real estate segment). We have divided our commercial segment in two different business activities that represent independent sources of revenue: (i) commercial and services and (ii) consumer credit.

IFRS 8 requires disclosure of assets and liabilities pertaining to one segment, if measurement is regularly provided to the decision making body. However, with respect to us, our management only evaluates the performance of each operating segment based on an analysis of income and operating profit, but not of each segment's assets and liabilities. See note 26 to our audited consolidated financial statements for further information in connection with our business segments.

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; and references to "Mexican peso," "peso," "pesos" or "Ps." are to the Mexican peso, the legal currency of Mexico.

Solely for the convenience of the reader, certain amounts presented in pesos in this offering memorandum as of and for the year ended December 31, 2015, and as of and for the six months ended June 30, 2016, have been converted into U.S. dollars at specified exchange rates. Unless otherwise indicated, the exchange rate used in converting pesos into U.S. dollars (i) with respect to financial information other than our consolidated statement of profit and loss, consolidated statement of comprehensive income and cash flow data, presented as of December 31, 2015 was determined by reference to the exchange rate of Ps.17.33 per U.S. dollar, which was the period-end exchange rate published by the Mexican Central Bank in the Federal Official Gazette of Mexico; (ii) with respect to financial information other than our consolidated statement of profit and loss, consolidated statement of comprehensive income and cash flow data, presented as of the six months ended June 30, 2016 was determined by reference to the exchange rate of Ps.18.55 per U.S. dollar, which was the period-end exchange rate published by the Mexican Central Bank in the Federal Official Gazette of Mexico; (iii) with respect to financial information from our consolidated statement of profit and loss, consolidated statement of comprehensive income and cash flow data presented for the year ended December 31, 2015, was determined by reference to the exchange rate of Ps.15.87 per U.S. dollar, which was the average of the daily exchange rates published by the Mexican Central Bank in the Federal Official Gazette of Mexico on each day during such period; (iv) with respect to financial information from our consolidated statement of profit and loss, consolidated statement of comprehensive income and cash flow data presented for the six months ended June 30, 2016 was determined by reference to the exchange rate of Ps.18.07 per U.S. dollar, which was the average of the daily exchange rates published by the Mexican Central Bank in the Federal Official Gazette of Mexico on each day during such period; and (v) with respect to financial information from our consolidated statement of profit and loss, consolidated statement of comprehensive income and cash flow data presented for the twelve months ended June 30, 2016 was determined by reference to the exchange rate of Ps.17.32 per U.S. dollar, which was the average of the daily exchange rates published by the Mexican Central Bank in the Federal Official Gazette of Mexico on each day during such period. You should not construe our conversions as representations that the peso amounts actually represent the U.S. dollar amounts presented, or that they could be

converted into U.S. dollars at the rate or at the dates indicated. See "Exchange Rates." Amounts in U.S. dollars that have been converted from pesos included in this offering memorandum have not been audited.

Solely for the convenience of the reader, certain amounts presented in Chilean pesos in this offering memorandum as of and for the six months ended June 30, 2016, have been converted into U.S. dollars at the rate of 661.49 Chilean pesos per U.S.$1.00, the exchange rate reported on June 30, 2016 by the Central Bank of Chile on its website at www.bcentral.cl.

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 precede them due to such rounding.

SUMMARY

This summary highlights selected information described in greater detail elsewhere in this offering memorandum. It does not contain all of the information that may be important to you. This offering memorandum describes the terms of the offering, as well as information regarding our business and detailed financial information. This information includes risks and uncertainties. Our actual results may differ materially from the results discussed in the estimates and forward-looking statements. You should read the entire offering memorandum carefully, including the risk factors and financial statements.

Overview

We are the largest department store chain in Mexico in terms of number of stores and sales, and one of the leading online apparel retailers in the country in terms of sales, primarily targeting middle and high-income families in Mexico. We offer a wide variety of products, including distinctive fashion apparel, shoes, accessories, jewelry, electronics, sporting goods, household articles, furniture, beauty products and books in engaging shopping destinations and online. With almost 170 years of experience in the Mexican retail industry, we operate department stores nationwide under the "Liverpool," "Fábricas de Francia" and "Liverpool Duty Free" names along with a compelling portfolio of specialized boutiques across the country under the names of sought-after brands. Our "Liverpool" brand is iconic in Mexico and is ranked among the top five Latin American brands in the retail industry and among the top 20 brands in the retail industry worldwide according to Interbrand. We also own or have a significant interest in 25 shopping centers in 16 cities across Mexico, and, according to information from the Mexican Central Bank and our estimates, as of June 30, 2016, we were the leading non-bank credit card issuer in Mexico, with approximately 4.1 million credit card holders.

We have established a leading market position in the department store industry in Mexico through our customer-centric culture, and our focus on our omni-channel and multi-format strategies which are expected to continue driving growth. Our customer-centric culture ensures that each of our actions is aligned to effectively satisfy all of our customers' needs, expectations and preferences at each visit to our stores while surprising and delighting them, to deliver a unique shopping experience in a family friendly environment. Our omni-channel strategy allows our customers to shop seamlessly through our different distribution channels while consistently experiencing our brand. Our multi-format strategy allows us to provide our customers with a wide range of style, quality and value shopping alternatives, and to adjust our stores' size, layouts, promotional efforts and credit offerings to different markets.

Our shares are listed on the Mexican Stock Exchange (Bolsa Mexicana de Valores S.A.B. de C.V.), or the BMV, under the ticker symbol "LIVEPOL." As of June 30, 2016, our market capitalization was approximately Ps.259 billion (U.S.$14 billion).

As a result of the expansion and diversification of our retail business in the last 20 years, we have divided our operations into three different business activities that complement each other and represent independent sources of revenue: commercial and services, consumer credit and real estate.

 Commercial and Services Operations. We operate 114 department stores, 80 of which are under the name "Liverpool," 30 are under the name "Fábricas de Francia" and four are under the name "Liverpool Duty Free." We also operate 115 specialized boutiques, primarily under the names of "Aéropostale," "Banana Republic," "Chico's," "GAP," "Pottery Barn," "Sfera," "West Elm" and "Williams-Sonoma," among others. Our department stores and specialized boutiques represent approximately 1.5 million square meters of retail space in the aggregate. We also operate our www.liverpool.com.mx website, through which we are one of the leading online apparel retailers in Mexico in terms of sales according to ANTAD. Our business model is driven by (i) increasing customer traffic and average ticket sales both in our physical stores and online, which primarily requires us to anticipate our customers' preferences and buying behaviors, (ii) optimizing retail space by adjusting the size and layout of our stores and merchandise mix in each of our locations, (iii) improving the content and functionality of our online platform and (iv) implementing initiatives that transform our stores into destinations for services and

attractions where the shopping experience becomes unique. Our stores are primarily located at urban or suburban sites in almost all of the states of Mexico. Our department stores and website generally serve the same type of customers and provide virtually the same products catalog.

 Consumer Credit Operations. As part of our comprehensive program to support our retail operations, we provide financing to our customers through the "Liverpool Credit Card" and the "Fábricas de Francia Credit Card," which allow them to purchase goods and services exclusively at our department stores. In addition, we offer the "Liverpool Premium Card," which allows cardholders to purchase goods and services at our department stores and specialized boutiques, and at any business affiliated with the VISA payment system worldwide. Our consumer credit operations are not subject to special regulation by the CNBV. As of June 30, 2016, according to information from the Mexican Central Bank and our estimates, we were the leading non-bank credit card issuer in Mexico, with approximately 4.1 million card holders, and we had a loan portfolio of Ps.28,725 million (U.S.$1,549 million). For the year ended December 31, 2015 and for the six months ended June 30, 2016, sales through our credit cards accounted for 45.6% and 46.0%, respectively, of our consolidated sales, and our non-performing loan rates (calculated as overdue loans for more than 90 days divided by the aggregate principal amount of the loan portfolio) for such periods were 3.7% and 4.3%, respectively.

 Real Estate Operations. We are also involved in real estate operations which include developing, leasing and managing shopping centers and retail premises. We own or have a significant interest in 25 shopping centers known as "Galerías" and lease approximately 2,000 of our retail premises to third parties, which had an average occupancy rate of 97.0% for the year ended December 31, 2015. Our shopping centers have a presence in all of Mexico's principal cities in terms of population. In the last ten years, we have more than doubled the gross leasable area of our shopping centers and retail premises from 189,595 square meters in 2005 to approximately 480,000 square meters in 2015. Our real estate operations have become an important source of revenue and a strategic complement to our commercial and services operations by providing high-profile facilities to attract an increasing number of potential customers to our department stores. For the year ended December 31, 2015, our shopping centers had more than 100 million visitors.

For the year ended December 31, 2015, we generated consolidated revenue and EBITDA of Ps.91,293 million (U.S.$5,753 million) and Ps.14,870 million (U.S.$937 million), respectively. For this period, our commercial, consumer credit and real estate operations accounted for 86.8%, 9.9% and 3.3% of our consolidated revenue, respectively. For the six months ended June 30, 2016, we generated consolidated revenue and EBITDA of Ps.43,369 million (U.S.$2,400 million) and Ps.6,143 million (U.S.$340 million), respectively. For this period, our commercial, consumer credit and real estate operations accounted for 86.2%, 10.4% and 3.4% of our consolidated revenue, respectively.

From 2010 to 2015, our consolidated revenue and EBITDA grew at a compounded annual growth rate, or CAGR, of 11.8% and 11.2%, respectively. During the same period we opened 23 new department stores and nine shopping centers which represent 26.6% and 34.3% of our aggregate retail space and gross leasable area, respectively. The graph below shows the growth of our consolidated revenue, EBITDA margin and same store sales for the periods indicated.

The following chart includes certain financial information of us and the subsidiary guarantor for the periods indicated (in each case, without giving effect to intercompany eliminations).

As of and for the six months ended June 30, 2016 As of and for the year ended Unaudited December 31,2015 (in thousands of U.S. (in thousands of (in thousands of U.S. (in thousands of dollars)(1)(2) Ps.) dollars)(3)(4) Ps.) Liverpool total assets ...... 6,261,553 116,151,807 6,635,956 115,001,121 Subsidiary guarantor ...... 3,384,698 62,786,153 3,908,184 67,728,837 Non-guarantor subsidiaries ...... 2,876,855 53,365,654 2,727,772 47,272,284

Liverpool total revenue ...... 2,400,039 43,368,701 5,752,545 91,292,889 Subsidiary guarantor ...... 2,271,754 41,050,598 5,553,599 88,135,622 Non-guarantor subsidiaries ...... 128,285 2,318,103 198,946 3,157,267

Liverpool EBITDA ...... 336,371 6,078,226 937,013 14,870,389 Subsidiary guarantor ...... 190,475 3,441,883 554,539 8,800,532 Non-guarantor subsidiaries ...... 145,896 2,636,343 382,474 6,069,857

(1) Information as of June 30, 2016, was converted to U.S. dollars for convenience only at the rate of Ps.18.55 per U.S.$1.00, the exchange rate reported on June 30, 2016 by the Mexican Central Bank in the Federal Official Gazette of Mexico. See "Exchange Rates." (2) Information for the six months ended June 30, 2016, was converted to U.S. dollars for convenience only at the rate of Ps.18.07 per U.S.$1.00, which was the average of the daily exchange rates published by the Mexican Central Bank in the Federal Official Gazette of Mexico for the six months ended June 30, 2016. See "Exchange Rates." (3) Information as of December 31, 2015, was converted to U.S. dollars for convenience only at the rate of Ps.17.33 per U.S.$1.00, the exchange rate reported on December 31, 2015 by the Mexican Central Bank in the Federal Official Gazette of Mexico. See "Exchange Rates." (4) Information for the year ended December 31, 2015, was converted to U.S. dollars for convenience only at the rate of Ps.15.87 per U.S.$1.00, which was the average of the daily exchange rates published by the Mexican Central Bank in the Federal Official Gazette of Mexico for the year ended December 31, 2015. See "Exchange Rates."

Our Strengths

We have built a reputation for fashion, quality, creativity and uniqueness as a result of our distinctive customer-centric corporate culture and deep understanding of our industry and customers. We believe the following strengths distinguish us from our competitors and will allow us to successfully execute our strategy for continued growth.

 Customer-Centric Culture. Customers are of paramount importance to us and we strive to provide them with an outstanding experience that transcends ordinary shopping. Our commitment to our customers drives our actions and how we evolve. We believe that our customer-centric and family-oriented culture has allowed us to develop broad consumer recognition in Mexico. Our slogan "Liverpool Es Parte de Mi Vida" (Liverpool Is Part of My Life) confirms our philosophy of being a part of the Mexican lifestyle for almost 170 years. As we look towards the future, we are focused on surprising and delighting our customers at our shopping centers, department stores and online. We believe that our shopping centers and department stores serve as multifunctional destinations that promote social gathering while acting as fashion stages and sources of entertainment to provide a complete shopping experience. Our shopping centers and department stores blend design with culture and strategic branding and have been adapted to suit the needs of our customers by providing a diverse range of experiences, entertainment and services, as well as a broad assortment of merchandise in a comfortable, functional and safe environment. Our shopping experience includes quality events such as our biannual Fashion Fest, a fashion authority festival that brings to our customers state-of-the-art fashion immediately available at our stores and gathers world famous supermodels, brand launches, runways and holiday celebration events such as tree lightings and parades. In 2011, we launched "Experiencia Gourmet," our innovative gourmet food hall, to complement our entertainment and services offering within our department stores. Experiencia Gourmet combines eating venues where customers enjoy gourmet food products from different countries. Experiencia Gourmet is currently available in twelve of our department stores and we plan to continue expanding this concept. We believe that our Experiencia Gourmet format enables our customers to enjoy a sophisticated yet comfortable eating experience at our department stores while promoting social gathering. We believe that the alignment of our organization to deliver our customers an extraordinary shopping experience better positions us for long-term success.

 Leading Department Store Chain in Mexico. We started operations in 1847 and have become the leading department store chain in Mexico in terms of sales and number of stores according to ANTAD, primarily targeting middle and high-income families in Mexico. We have a nationwide footprint, covering virtually all states of Mexico and 59 cities. Our department stores are located at urban and suburban sites, primarily in densely populated areas. We believe that our current geographic diversification and our experience and knowledge of customers' preferences and consumption patterns in the regions where we operate provide us with a significant advantage over our competitors. Our brand "Liverpool" is iconic in Mexico and is ranked among the top five Latin American brands in the retail industry and among the top 20 brands in the retail industry worldwide according to Interbrand. We believe our brands are generally associated with trust, legacy and status, coupled with broad product assortment, personalized and high-quality customer service, convenience, unique store locations and attractive promotions and credit offerings. We offer a broad selection of branded and private-label merchandise appealing to the style and value desired by a wide range of customers. The quality and breadth of our selection allow us to adapt the mix of our merchandise at each store based on fashion trends sought after at such location. In addition, we have established strong and trustworthy relationships with qualified vendors that allow us to access products in a timely and efficient manner and easily adjust our mix of imported products during challenging economic cycles. In addition, our different sales channels allow us to offer our customers a wide range of complementary shopping alternatives supported by our iconic brand, while consistently experiencing our unique customer service.

 Legacy and Strategic Real Estate Portfolio. Real estate is a key element of our business. We have strategically acquired and developed stores and shopping centers in selected prime locations based on growth potential, easy access, established trade area and overall operating synergies to ensure that our stores attract traffic or the desired kind of customer for each location. Our real estate portfolio also includes legacy and landmark properties of distinctive character that provide personality and a source of vibrancy to the neighborhoods in which they are located and represent decades of cultural and social connections with our customers. We believe that the design and architecture of our stores and shopping centers serve to reconnect parts of the city with our stores and enhance the shopping experience while promoting our brand. For example, the recently renovated façade of our Insurgentes store in Mexico City, consisting in a dynamic inhabitable three-layer hexagonal structure seamlessly combines the inside and outside of the store giving the user and passer-by a more interactive experience. We have a nationwide presence, virtually covering every major region of Mexico. Currently we own approximately 86.4% of our retail space. A significant number of our stores are in what we believe are prime locations in major metropolitan areas, making them more valuable than look-alike properties in malls or smaller cities. Key areas of geographic concentration of our department stores include Mexico City and the metropolitan area, with 21 million inhabitants served by 24 of our department stores and ten of our shopping centers, Guadalajara, Jalisco, with 1.5 million inhabitants served by eight of our department stores, and Monterrey, Nuevo León with 1.1 million inhabitants served by five of our department stores and one of our shopping centers. The proposed acquisition of Suburbia is expected to strengthen our presence in Mexico City and the metropolitan area with a store format targeted to a customer base not previously served by our "Liverpool" and "Fábricas de Francia" stores. We believe that such geographic concentration allows for economies of scale and provides us with market leverage while representing significant entry barriers for competitors due to the limited geographical opportunities and high costs associated with the construction of new developments. In addition, our retail premises have had occupancy rates above 95.0%, low turnover rates and low past-due accounts with an attractive mix of more than 1,500 tenants and no single tenant accounting for more than 10.0% of our consolidated revenue. Also, during the last ten years, we have more than doubled the gross leasable area of our shopping centers, which allowed us to host more than 100 million visitors in our stores during 2015.

 Effective Control of Our Credit Offerings and Flexibility to Adapt to Challenging Economic Cycles. Our sound and effective credit portfolio management allows us to rapidly increase and decrease our credit offerings which has a direct impact on the purchase behavior of our customers and in turn, on our results of operations. For example, during challenging economic times with higher unemployment rates, we restrict our credit offerings, as well as credit limits of existing customers, to avoid excessive growth of our loan portfolio and non-performing loans rate. In addition, during periods of contraction in consumption with stable macroeconomic fundamentals, we usually increase our credit offerings to increase our customer base and purchase frequency. In the past, such adjustments have had an immediate favorable impact on our results of operations. We believe that such ability to adjust our loan portfolio during challenging economic cycles places us in an advantageous position with respect to our competitors.

 Integrated Business Model With Strong Synergy Potential. Our consumer credit and real estate operations were introduced initially as part of our comprehensive program to support our commercial and services operations and recently have become independent sources of revenue. Since the introduction of our consumer credit and real estate operations, we have strived to share and leverage key resources and capabilities of our company across all of our operations, which has resulted in significant cost savings and enhanced revenues. Our commercial and services operations remain our core competency that binds together all our operations, while our consumer credit and real estate operations have fueled and are expected to continue fueling our growth. Our consumer credit operations have expanded significantly our customer base, average ticket sales and purchase frequency, while our real estate operations have been focused on providing high-profile facilities to increase customer traffic in, and time enjoyed at, our department stores and shopping centers. This business model has allowed us to capture synergies from a streamlined infrastructure and rationalized operation, while integrating customers, suppliers, processes, products, systems and associates. As a result, we have built a strategic platform of scalable approach that leverages new capabilities and value propositions without disrupting business momentum, shareholder value or financial performance. We believe that our integrated

business model, combined with our solid service infrastructure, supply chain and unique facilities, is a significant competitive advantage.

 Strategic Distribution Network. Our distribution network and other logistics infrastructure are key elements to serve our customers effectively and in a timely manner. We have developed an extensive distribution network. Our network allows us to distribute products from two national distribution centers to four regional distribution centers, 21 local warehouses, 25 storage deposits for remote stores and 114 department stores nationwide, supplemented with a fleet of 250 trucks and trailers, 450 home delivery units, and services from independent operators. Our network also allows us to deliver big-ticket items sold in our department stores and products sold through our website to our customer's homes or to the store of their preference under the "Click & Collect" delivery option. For example, in 2015, we completed over two million deliveries to our customers' homes. We also maintain a highly efficient and sophisticated logistics operation to address distribution requirements, which allowed us to process over 64 million of items in 2015. We frequently invest in strengthening and optimizing our distribution network and fulfillment capacity to respond to the diverse and changing needs of our customers and vendors in a cost-effective manner, which we believe contributes to the development of strong customer loyalty. In 2015, we purchased a site in the State of Mexico which will house a state-of-the-art distribution center to efficiently meet our distribution requirements in the medium term.  High-Quality and Experienced Management Team. Our strong senior management team has proven industry expertise, with over 150 years of service with our company in the aggregate. It has managed our company through Mexico's economic cycles while maintaining high operating income margins and sales growth. Our management team has developed and consolidated our market leadership by focusing on our retail operations while successfully integrating our credit and real estate operations. For example, since their introduction, our credit cards have been the most frequently used payment method for our customers. Our management philosophy emphasizes accountability coupled with efficient control mechanisms, and as a result, we believe we maintain a strong balance sheet and disciplined financial policies. In addition, we benefit from a healthy financial position with low leverage levels and high capitalization which enables us to respond effectively to the constantly changing consumer demands and competitive environment in the Mexican retail market. We believe our team has the depth, leadership, expertise and motivation to execute our growth strategy, as proven by its ability to continuously open new stores. The proposed acquisition of Suburbia offers us an unparalleled opportunity to positively integrate the knowledge, talent and culture of experts in a different segment of the apparel industry which we believe will strengthen our position to become the leading multi-format retailer in Mexico. We believe that creating a culture based on both teamwork and strong economic incentives has produced a loyal management team dedicated to providing us with the elements to better serve our customers while achieving our corporate goals. Our Strategy

We seek to enhance our position as the leading Mexican retailer and leading non-bank credit card issuer, and increase our presence in the real estate market for department stores and shopping centers in Mexico while continuing to provide our customers an experience that transcends ordinary shopping. To achieve these objectives, we plan on executing the following key strategies.

retrieve information about the content accessed by each customer and its transactions history. For example, in 2016 we started using geolocation for targeted mobile marketing, such as presenting ads, relevant content, promotions or coupons for customers within a certain distance of our store. In addition, in 2015, we successfully introduced the "Click & Collect" option for online sales, which represented 25.0% of the total electronic sales for that year and contributed to our customer traffic and average ticket. We believe that a deep understanding of our customers' preferences allows us to continue developing integrated marketing plans with offers that address specific customers determined by purchase patterns, social network affinities, website visits and loyalty programs. We are aware that satisfying customers today transcends place and time, and growth is dependent on continually creating the best shopping experience. In this context, our brick-and-mortar stores have become an extension of the supply chain in which purchases and research can be made indistinctively through any channel. As shopping patterns continue to evolve across different channels, we expect to adjust our operations to the changing preferences of our customers. We believe that our omni-channel strategy will allow us to continue surprising our customers and enhancing customer loyalty while increasing our sales and profitability.

 Continue Expanding Our Omni-Channel and Multi-Format Retail Platform. We believe we have a significant opportunity to increase our market share by investing in our stores portfolio and improving our digital sales platform. Investments in our stores portfolio are focused on acquiring or building new stores and shopping centers in prime locations and store remodeling. Our disciplined approach to acquisitions is centered on expanding our geographic footprint, increasing penetration, diversifying our retail portfolio, achieving economies of scale, realizing important revenue and cost synergies, and enhancing the return on investment of our portfolio. We believe that we are in a favorable position to capitalize on attractive growth opportunities through the constant expansion of our selling area and geographic footprint in emerging regions that we believe offer strong growth potential, while leveraging on our multi-format business model. The major rise of infrastructure and commercial real estate projects has resulted in increased availability of retail space that will allow us to capitalize on the positive trend of retail consumption through the expansion of our commercial and real estate operations. We expect to continue implementing our expansion strategy primarily in cities which we believe are underserved or have no access to important retail chains and targeting different socioeconomic segments by adjusting our stores' sizes and introducing different store formats to capture consumption potential in such cities. In line with this strategy, the acquisition of Suburbia is expected to allow us to strengthen our presence across the country, particularly in Mexico City and the metropolitan area where there is large consumer spending potential. It will also allow us to intensify our expansion through customer value proposition formats in regions where this type of format is not available. In addition, we believe that the internet represents a great opportunity for retail in Mexico, in particular as a result of low internet penetration and availability of electronic payment mechanisms. We plan to capitalize on this trend by investing in merchandise offering, functionality, content and transaction processing of our electronic sales platform, while leveraging on our credit offerings which often represent the first credit option for many of our customers. We also plan to continue taking advantage of growth opportunities outside of Mexico, such as our joint venture with Regal Forest and the proposed investment in Ripley.

 Enhance Consumer Credit Offerings. We intend to continue enhancing our consumer credit offerings through our private label credit cards and seek to consolidate our position as the number one non-bank credit card issuer in Mexico. We believe that our credit offerings increase our customer base for our retail operations, enhance our ability to sell additional products, and build lasting trust and loyalty with our customers. In addition to acting as a catalyst for further growth of our commercial and real estate operations, we expect that our consumer credit offerings will become a more relevant source of independent income through the expansion of our credit card portfolio and enhancement of our offerings of financial products and services. As of June 30, 2016, our consumer credit operations reached more than 4.1 million cardholders for a loan book that totaled Ps.28,725 million (U.S.$1,549 million). Through intense promotional activities of our credit offerings, we expect to take advantage of the anticipated growth in online retail and low banking penetration in Mexico. As more of our customers use our private label credit cards, we expect our same-store sales to increase. In addition, our efficient consumer credit portfolio management, combined with our strict screening, has resulted in historically low non-performing loan rates. For the six months ended June 30, 2016, our non-performing

loans rate was 4.3%. We intend to continue building upon our experience and knowledge of providing consumer financing to further expand and enhance our consumer credit offerings, while deepening the loyalty of our customers already using those cards. The proposed acquisition of Suburbia is expected to allow us to replicate this integrated business model and further expand the customer base for our consumer credit offerings.

 Increase Customer Traffic and Sales. We believe that our stores and shopping centers are key components to increase our revenue per customer and implement our omni-channel strategy. Our stores and shopping centers serve as destinations for services and attractions by offering onsite exclusive experiences while our website offers fashion forward and lifestyle content and exclusive surprises to better engage our customers. Further developing our credit card portfolio by introducing new products and categories and investing in our loyalty campaigns are also key components for this strategy. For example, in 2015, we redesigned the Preferred Customer (Cliente ConSentido) program, a rewards program that surprises our customers with gifts or spontaneous discounts primarily based on the use of our credit cards. While we seek to continue developing our credit card and real estate operations as independent sources of revenue, we expect that such operations will continue to be an important complement to our commercial and services operations by providing high-profile facilities and purchase opportunities to attract an increasing number of potential customers and continue our omni-channel efforts towards enhancing customer loyalty. Our offering of innovative sales programs such as our night sales (Ventas Nocturnas), online "Hot Sales," and our end-of-season clearances are also aimed at increasing volume and purchase frequency and visits to our stores, shopping centers and website. In addition, we believe that our customer-centric focus favors the alignment of our commercial offerings by providing particularized merchandise in the right stores at the right price at the right time. In line with this strategy, in recent years we have optimized the retail space of our department stores by introducing more attractive layouts, tailoring the merchandise catalogue, and targeting the preferences and needs of the customer according to each location and channel, which resulted in an increase in customer traffic and sales in stores. We expect to continue catering our customers in ways that are aimed at efficiently and effectively increasing customer traffic in, and time enjoyed at, our department stores, shopping centers and website.

 Improved and Efficient Operations, Technology and Customer Service. We continuously invest to improve, especially through the use of technology, our supply and distribution chains as well as the management of our customer information to enhance the effectiveness of our omni-channel retailing and marketing efforts. In connection with the improvements to our supply and distribution chain, we strive to optimize our fulfillment methods by reducing the number of shipments and merchandise handling operations. We have introduced radio frequency identification, or RFID, and electronic product code, or EPC, tags in most of our department stores and in our Tultitlan, Estado de México, national distribution center to improve inventory management and fulfillment capabilities. Additionally, in compliance with the requirements of our supply chain, our merchandise handling operation was migrated to a flow and in-line processing system in all our locations. In addition, our rapid growth has required us to continuously optimize our warehousing processes and inventory management through automated warehousing and sorting systems, areas where we believe the use of technology would result in increased efficiencies. In connection with our investments to improve our sales platform and implement our omni-channel strategy, in 2015 we re-launched our online store to improve its functionality, introduced new and more flexible delivery and pick-up options, introduced new payment mechanisms, expanded our online catalog and updated our order management information technology to optimize our fulfillment capacity. As a result of the above initiatives, in 2015 sales in non-traditional channels grew 87.7% compared to the prior year and approximately 65.0% of our merchandise is now available online. In line with our efforts to keep up with cutting edge technology and offer immediate and efficient customer service, we have equipped our associates with touch pads that allow them to assist our customers on the spot, consult our entire product catalog and streamline the checkout process.

 Sales Force Productivity and Customer Service. Our associates are part of our brand-delivery experience and a key element to maintain our brand-customer relationship through high-quality personalized services. In 2015, we adopted the international standard Net Promoter Score, which allows us to objectively measure the quality of our service based on the customer's evaluation of the attention received and focus on key areas of opportunities to improve customer service. We believe that a key element to our continued growth and superior customer service is to promote our associates' personal and professional growth. We believe that a well-trained and informed workforce will reduce labor costs, drive efficiencies and deliver better service to our customers. As a result, we plan to continue improving our sales force productivity through more effective training programs and attractive compensation schemes. We are convinced that training plays a key role in omni-channel success. As a result of this commitment, in 2015, we provided approximately 1.5 million training hours to our associates. Data and technology help us train our associates on omni-channel strategies and customer behavior so we can create a unified approach for the shopping experience we offer. As part of our commitment to the growth of our associates, in 2000 we launched the Liverpool Training Institute (Instituto de Formación Liverpool), the first virtual corporate university in Mexico, to provide our associates and their families with personal development options ranging from senior high-school programs to graduate studies. The Liverpool Education Institute offers a bachelor degree in retail management, master's degrees in leadership and business administration, and other programs associated with our business. During 2015, more than 1,200 associates obtained a degree from the Liverpool Training Institute. Through our Liverpool Training Institute we seek to guarantee the continuity of our principles, identity and business philosophy, while encouraging the growth of our associates. We expect to continue offering career plans that enable us to adapt the development of our associates to our corporate growth needs. We are committed to constantly improving the life quality of our associates. As a result, in 2015 we were ranked first among the best places to work in Mexico by the Great Place to Work Institute, and ranked within the top 15 "Best Companies to Work for in Latin America."

Recent Developments

Exclusivity Agreement with Williams-Sonoma

On September 29, 2014, we entered into (i) an exclusive license and services agreement and (ii) a supply agreement, with affiliates of Williams-Sonoma, Inc. to open and operate specialty retail stores under the brands "Pottery Barn," "Pottery Barn Kids," "PBteen," "West Elm" and "Williams-Sonoma” in Mexico. Such stores offer distinctive and high quality home furnishings and related products, including, furniture, home furnishings, kitchenware, cookware, bedding, linens, rugs, seasonal products, decorative accessories, toys and other similar products and accessories.

Investment in Ripley On July 5, 2016, we entered into a partnership agreement, or the Partnership Agreement, with Inversiones R Matriz Limitada, Inversiones Familiares Sociedad Colectiva Civil, Inversiones R III Limitada, and International Funds Limitada, all entities owned or controlled by the Calderón Volochinsky family, or FCV, and holders of 52.9% of the outstanding fully paid in common shares of Ripley, a Chilean retailer operating department stores, consumer finance solutions and shopping malls in Chile and Peru. Ripley owns 70 department stores, 42 of which are located in Chile and 28 in Peru, and manages shopping malls in Chile and Peru. Ripley also operates a bank under the "Banco Ripley" brand and offers consumer credit through its "Tarjeta Ripley" credit cards. As of December 31, 2015, Ripley had more than 1.2 million credit card holders. Ripley's shares are listed on the Santiago Stock Exchange (Bolsa de Santiago) under the ticker symbol "Ripley." As of June 30, 2016, Ripley's market capitalization was approximately 637 billion Chilean pesos (U.S.$963 million). Based on Ripley's public filings with the Santiago Stock Exchange, for the year ended December 31, 2015, Ripley generated consolidated revenue and EBITDA of 1,542 billion Chilean pesos (U.S.$2 billion) and 100 billion Chilean pesos (U.S.$151 million), respectively. For the six months ended June 30, 2016, Ripley generated

consolidated revenue and EBITDA of 745 billion Chilean pesos (U.S.$1 billion) and 62 billion Chilean pesos (U.S.$94 million), respectively. Under the Partnership Agreement, we agreed, directly or indirectly, to make a cash tender offer for all of the outstanding fully paid in common shares of Ripley at a purchase price of 420 Chilean pesos per share, which represents a 25.5% premium to the price of the share immediately before the announcement of the transaction and 51.0% to the average price of the twelve months prior to such date. The offer is conditioned to the acquisition of shares representing at least 25.5% of Ripley's outstanding common stock at the time of the offer and other customary conditions for this type of transactions. If consummated, the investment in Ripley will be financed with a combination of cash on hand and long-term indebtedness. The Partnership Agreement includes certain provisions that will become effective only if the tender offer is consummated pursuant to the terms of the Partnership Agreement, including the following restrictions on the transfer of shares of Ripley: (i) for a period of two years as of the date of the Partnership Agreement, FCV shall, in the aggregate, hold at least 50.0% of the capital stock of Ripley, (ii) for a period of five years as of the date of the Partnership Agreement, each of FCV and us shall hold at least 25.1% of the capital stock of Ripley, (iii) rights of first offer and (iv) tag along rights. In addition, under the Partnership Agreement we granted FCV a put option to sell to us all of their shares representing the capital stock of Ripley at any time following the fifth anniversary of the Partnership Agreement. The strike price of this option will be the higher of (i) the book value of Ripley (as determined pursuant to article 130 of the regulations to Chilean law No. 18.046), and (ii) the purchase price agreed between us and FCV, with the advice of an independent investment bank, pursuant to a mechanism set forth under the Partnership Agreement, in each case, plus 6.6%. Depending on the number of shares acquired in the tender offer, we will have certain corporate rights in Ripley, including, the right to appoint directors, which affirmative vote will be required to take certain strategic decisions. The investment in Ripley represents an attractive opportunity to diversify our geographic footprint and a unique opportunity to combine the experience and culture of two companies with similar business models operating in regions with different challenges and opportunities. Potential investors in the notes should be aware that the proposed investment in Ripley is still subject to regulatory and antitrust approvals (including the approval of the Chilean Superintendence of Banks and Financial Institutions (Superintendencia de Bancos e Instituciones Financieras) to indirectly acquire more than 10.0% of the shares of Banco Ripley) and may not be consummated but, if consummated, the anticipated benefits of the proposed investment in Ripley may not be realized, as discussed in greater detail under "Risk Factors—Risks Related to our Business and Industry—Commercial and Services Operations—Potential acquisitions and investments are subject to significant risks" and "Our future growth opportunities through mergers, acquisitions or joint ventures may be impacted by antitrust laws and other challenges in integrating significant acquisitions" in this offering memorandum.

Acquisition of Suburbia On August 10, 2016, we reached an agreement with Wal-Mex to acquire its apparel retail business in Mexico under the brand Suburbia, which includes (i) 100.0% of the equity interests in four legal entities, (ii) the intellectual property rights of the "Suburbia" brand and its private labels, (iii) 119 stores, seven of which are located in properties that we will acquire from Wal-Mex, 78 are located in properties leased from third parties and 34 are located in properties leased from Wal-Mex, (iv) Wal-Mex's apparel operating division for stores, purchases, commercial planning, product design, marketing and procurement (CATMex), and (v) a distribution center located in a property leased from a third party. Suburbia is a leading retail chain in Mexico targeting the low and mid-income segments with over 45 years of experience in the Mexican market. Its 119 stores are located in 30 out of 32 states in Mexico, including Mexico City. Suburbia offers a broad selection of quality products for value conscious customers.

A significant portion of Suburbia's commercial offer includes its private labels such as the following:

The agreed aggregate enterprise value of Suburbia is Ps.19,000 million (U.S.$1,051 million), consisting of an all-cash purchase price of approximately Ps.15,700 million (U.S.$869 million) (subject to customary adjustments for this type of transaction) which includes the assumption of indebtedness under capital leases for approximately Ps.1,400 million (U.S.$77 million) and a cash distribution to the current shareholders of Ps.3,300 million (U.S.$183 million) through the payment of a dividend and a capital reduction, to be paid once the proposed acquisition is closed. If consummated, the acquisition of Suburbia will be financed with a combination of cash on hand and long-term indebtedness. In addition, we will enter into a transition services contract with Wal-Mex covering management, financial and accounting services, as well as information technology processes, all of which will ensure the continuity of Suburbia's operations. This agreement will remain effective for 12 months following the closing of this acquisition. We expect to benefit from the experience and talent of Suburbia's associates. As a result of this acquisition we expect to employ more than 64,170 associates, operate 242 department stores and three strategically located distribution centers, and have an aggregate retail space of 2,088 square meters. Based on the information provided by Wal-Mex in our diligence process for the acquisition of Suburbia, as of and for the year ended December 31, 2015, Suburbia had pro forma combined total assets of Ps.7,572 million (U.S.$437 million) and generated pro forma combined revenue of Ps.13,406 million (U.S.$845 million), respectively. Suburbia represents an attractive opportunity to expand our consumer base and enhance our multi-format strategy. With the integration of Suburbia's stores, we expect to significantly strengthen our presence in the central region of Mexico and expand the geographic footprint of Suburbia's store formats in underserved regions with high growth potential. This transaction represents one of the most important acquisitions in our company's history, and one more step in our growth strategy to consolidate our platform and reaffirm our position as the leading omni-channel department store chain in Mexico. Also, this transaction represents a unique opportunity to positively integrate the experience and culture of two companies with long commercial heritage in Mexico. Potential investors in the notes should be aware that the proposed acquisition is still subject to antitrust approval and may not be consummated, but if consummated, the anticipated benefits of the proposed acquisition of Suburbia may not be realized, as discussed in greater detail under "Risk Factors—Risks Related to our Business and Industry—Commercial and Services Operations—Potential acquisitions and investments are subject to significant risks" and "Our future growth opportunities through mergers, acquisitions or joint ventures may be impacted by antitrust laws and other challenges in integrating significant acquisitions" in this offering memorandum.

Corporate Structure

Set forth below is our simplified corporate structure:

EL PUERTO DE LIVERPOOL, S.A.B. DE C.V.

Operadora Liverpool, S.A. de C.V.

Servicios Liverpool, S.A. Operadora de Nuevos Distribuidora Liverpool, S.A. Distribuidora Liverpool, S.A. Impeco, S.A. de C.V. Grandes Almacenes de C.V. Formatos, S.A. de C.V. ddee CC..VV..** Liverpool, S.A. de C.V.

Bodegas Liverpool, S.A. de Operadora Comercial Tiendas Departamentales Operadora Liverpool Constructora e Inmobiliaria C.V. Liverpool, S.A. de C.V. Liverpool, S.A. de C.V. México, S.A. de C.V. Perinorte, S.A. de C.V.

Almacenadora Liverpool, Service Trading, S.A. de Inmobiliaria Floreal, S.A. Pluvioso, S.A. de C.V. S.A. de C.V. C.V. de C.V.

Instituto de Formación Promoción Inmobiliaria Importadora Globastic, Termidor, S.A. de C.V. Liverpool, A.C. Grua, S.A. de C.V. S.A. de C.V.

Galerías Campeche, S.A. Importaciones Factum, de C.V. S.A. de C.V.

Edificio Polanco, S.A. de C.V.

* Subsidiary guarantor.

Company Information

Our headquarters are located at Mario Pani 200, Colonia Santa Fe, Delegación Cuajimalpa, 05384, Mexico City, Mexico, and our telephone number is +52(55) 5268-3000. We were incorporated under the laws of Mexico on February 28, 1912. Our commercial registry number (folio mercantil) with the Public Registry of Commerce of Mexico City (Registro Público de Comercio del Distrito Federal), or the Mexican Registry, is 11934, and our taxpayer identification number is PLI 830517 184.

The subsidiary guarantor was incorporated under the laws of Mexico on December 1, 1993. The subsidiary guarantor's commercial registry number (folio mercantil) with the Mexican Registry is 177327, and its taxpayer identification number is DLI 931201 MI9.

Our website is www.liverpool.com.mx. The information included on our website or which may be accessed through our website is not part of this offering memorandum, is not incorporated by reference herein or otherwise and should not be relied upon in determining whether to make an investment in the notes.

The Offering

Issuer ...... El Puerto de Liverpool, S.A.B. de C.V.

Subsidiary Guarantor ...... Distribuidora Liverpool, S.A. de C.V.

Notes Offered ...... U.S.$750,000,000 aggregate principal amount of 3.875% Senior Notes due 2026.

Offering Price ...... 98.881%, plus accrued interest, if any, from October 6, 2016.

Maturity Date ...... October 6, 2026.

Interest ...... The notes will bear interest from and including October 6, 2016 at the rate of 3.875% per annum, payable semi-annually in arrears.

Interest Payment Dates ...... April 6 and October 6 of each year, commencing on April 6, 2017.

Ranking ...... The notes and the subsidiary guarantee 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 and the subsidiary guarantor's unsecured and unsubordinated indebtedness. The notes and the subsidiary guarantee will not have the benefit of any collateral securing any of our or the subsidiary guarantor's existing and future secured indebtedness, and will be effectively junior to such secured indebtedness to the extent of the value of the assets securing such indebtedness. The notes and the subsidiary guarantee will be structurally subordinated to all existing and future indebtedness and trade payables of our non-guarantor subsidiaries in respect of assets of and revenue generated by these subsidiaries. See "Risk Factors—Risk Related to the Notes—The notes are not secured by our assets and the notes and the subsidiary guarantee will be effectively subordinated to our and the subsidiary guarantor's secured debt" and "—The notes and the subsidiary guarantee will be structurally subordinated to the liabilities of our non-guarantor subsidiaries."

As of June 30, 2016, our total consolidated indebtedness was Ps.14,461 million (U.S.$780 million), all of which constituted unsecured indebtedness. As of such date, our non-guarantor subsidiaries had no indebtedness (other than intercompany indebtedness). After giving pro-forma effect to the offer and sale of the notes and the application of the net proceeds from this offering as described under "Use of Proceeds" we and the subsidiary guarantor would have had Ps.28,373 million (U.S.$1,530 million) of total consolidated indebtedness, all of which would have constituted unsecured indebtedness.

Use of Proceeds ...... We intend to use the net proceeds of this offering for general corporate purposes, including to finance capital expenditures and to finance a portion of the purchase price of our proposed acquisitions. See "Use of Proceeds."

Certain Covenants ...... The indenture governing 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 qualifications and exceptions. See "Description of the Notes."

Change of Control Triggering Event If we experience 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 101% 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 ...... We are required by Mexican law to deduct and pay to the Mexican tax authorities, Mexican withholding taxes from payments of interest (and amounts deemed interest, such as any discount on the principal amount of the notes) made to holders who are not residents of Mexico for tax purposes, at a rate of 4.9% if certain requirements under Mexican law are met. See "Taxation—Certain Mexican Federal Income Tax Considerations." We will pay additional amounts in respect of those payments of interest so that the amounts holders receive after such withholding will equal the amounts that they would have received if no such withholding tax had been applicable, subject to the limitations and exceptions described under "Description of the Notes—Payment of Additional Amounts."

Redemption for Taxation Reasons .. We may redeem 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, if any, to the redemption date and any additional amounts due thereon, 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—Optional Redemption—Redemption for Taxation Reasons."

Optional Redemption ...... We may, 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 on a semi-annual basis at the applicable treasury rate plus 35 basis points, plus accrued and unpaid interest, if any, on the principal amount of the notes being redeemed to the redemption date. See "Description of the Notes—Optional Redemption—Optional Redemption with "Make-Whole Amount."

Transfer Restrictions ...... We have not and will not register the notes under the Securities Act, the Mexican Securities Market Law or the securities laws of any other jurisdiction. 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.

The notes have not been and will not be registered with the RNV maintained by the CNBV and may not be offered publicly in Mexico. The notes may only be offered in Mexico pursuant to the exemptions to registration provided in Article 8 of the Mexican Securities Market Law. See "Transfer Restrictions."

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 (except for the issue date and issue price). Any further issue may be consolidated with, and form a single series with, the notes sold in this offering; provided, however, that any additional notes shall be issued under a separate CUSIP or ISIN number unless the additional notes are issued pursuant to a "qualified reopening" of, or are otherwise treated as part of the same "issue" of debt instruments as, the notes sold in this offering for U.S. federal income tax purposes.

Form and Denomination ...... The notes 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.$200,000 and integral multiples of U.S.$1,000 in excess thereof. See "Description of the Notes" and "Form of Notes, Clearing and Settlement."

Settlement ...... The notes will be delivered in book-entry form through the facilities of The Depository Trust Company 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. See "Form of Notes, Clearing and Settlement."

Governing Law ...... The indenture, the notes and the subsidiary guarantee will be governed by, and construed in accordance with, the laws of the State of New York.

Trustee, Registrar, Paying Agent and Transfer Agent ...... Citibank, N.A.

Listing ...... Application has been made to list the notes on the Global Exchange Market of the Irish Stock Exchange. However, we cannot assure you that the listing application will be approved.

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

Risk Factors ...... Investing in the notes involves significant risks. See "Risk Factors" beginning on page 21 for a discussion of certain risk factors you should carefully consider in evaluating an investment in the notes.

Securities Codes ...... The notes will be assigned the following securities codes:

Rule 144A: CUSIP: 283837 AB8 ISIN: US283837AB81

Regulation S: CUSIP: P3691N BF6 ISIN: USP3691NBF61

Summary Consolidated Financial and Other Information

The following tables present our summary 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 financial statements and our 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 December 31, 2015 and 2014 and for the years ended December 31, 2015, 2014 and 2013 has been derived from our audited consolidated financial statements contained elsewhere in this offering memorandum.

The consolidated financial information as of June 30, 2016 and for the six months ended June 30, 2016 and 2015 has been derived from our unaudited condensed consolidated interim financial statements contained elsewhere in this offering memorandum. The results of operations for the six months ended June 30, 2016 are not necessarily indicative of the results to be expected for the year ending December 31, 2016 or for any other period.

Our audited consolidated financial statements and our unaudited condensed consolidated interim financial statements have been prepared in accordance with IFRS and our audited consolidated financial statements have been audited in accordance with International Auditing Standards. We are not providing any reconciliation to U.S. GAAP 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 IFRS if such information were to be prepared on the basis of U.S. GAAP.

Our consolidated financial statements are stated in Mexican pesos. Certain financial information concerning us as of and for the year ended December 31, 2015 and as of and for the six months ended June 30, 2016 included in this offering memorandum is presented in U.S. dollars for the convenience of the investors. See "Presentation of Financial and Other Information—Currency." For additional information regarding financial information presented in this offering memorandum, see "Presentation of Financial and Other Information."

Six Months Ended June 30, Year Ended December 31, 2016 2015 Unaudited 2015 2014 2013 SUMMARY CONSOLIDATED (in thousands (in thousands STATEMENTS OF of U.S. of U.S. (1)(2) (2) (3)(2) (2) COMPREHENSIVE INCOME dollars) (in thousands of Ps.) dollars) (in thousands of Ps.)

Operating revenue: Net sales of merchandise ...... 2,051,444 37,069,594 32,901,608 4,949,444 78,547,671 69,623,101 63,528,386 Interest income from customers ...... 250,673 4,529,652 4,330,004 568,982 9,029,746 8,439,018 7,745,258 Leasing of investment property ...... 82,009 1,481,908 1,576,593 190,349 3,020,831 2,707,054 2,579,680 Services ...... 15,913 287,547 241,974 43,771 694,641 444,416 547,938

Total revenue ...... 2,400,039 43,368,701 39,050,179 5,752,545 91,292,889 81,213,589 74,401,262

Costs and expenses: Cost of sales ...... 1,421,101 25,679,285 22,771,645 3,412,021 54,148,772 48,193,962 44,134,370 Administrative expenses ...... 708,288 12,798,768 11,799,370 1,543,088 24,488,810 21,906,321 19,430,810

Total costs and expenses ...... 2,129,389 38,478,053 34,571,015 4,955,109 78,637,582 70,100,283 63,565,180

Operating income ...... 270,650 4,890,648 4,479,164 797,436 12,655,307 11,113,306 10,836,082

Finance costs ...... (27,499) (496,903) (480,320) (61,123) (970,015) (1,164,789) (1,088,892) Finance income ...... 7,706 139,243 130,216 16,321 259,016 201,761 181,983 Foreign exchange (loss) gain - net ...... (1,847) (33,378) (43,083) (10,557) (167,534) (84,589) (38,236) Equity in income of associates ...... 21,040 380,196 382,098 44,064 699,290 495,850 510,011

Profit before income tax ...... 270,050 4,879,806 4,468,075 786,141 12,476,064 10,561,539 10,400,948 Income taxes ...... 68,752 1,242,351 1,168,761 205,618 3,263,165 2,797,179 2,698,115

Consolidated net income ...... 201,298 3,637,455 3,299,314 580,523 9,212,899 7,764,360 7,702,833

Components of comprehensive income to be subsequently reclassified to the income statement: Cash flow hedges – net of income tax .. 1,703 30,775 (11,781) (1,228) (19,482) 163,765 66,404 Other comprehensive income items ..... ------(415) (6,580) 20,411 52,157

Components of comprehensive income not to be subsequently reclassified to the income statement: Actuarial loss on post-employment benefit obligations – net of income tax 15,584 281,596 (11,214) 5,883 93,368 (109,447) 66,666

Consolidated comprehensive income ...... 218,585 3,949,826 3,276,319 584,764 9,280,205 7,839,089 7,888,060

Net income attributable to: Controlling interest ...... 201,241 3,636,424 3,296,771 580,386 9,210,729 7,763,480 7,701,930 Non-controlling interests ...... 57 1,031 2,543 137 2,170 880 903

Total ...... 201,298 3,637,455 3,299,314 580,523 9,212,899 7,764,360 7,702,833

Basic and diluted earnings per share ...... U.S.$0.15 Ps.2.71 Ps.2.45 U.S.$0.43 Ps.6.86 Ps.5.78 Ps.5.73

Comprehensive income attributable to: Controlling interest ...... 218,528 3,948,795 3,273,776 584,633 9,278,127 7,838,260 7,887,738 Non-controlling interests ...... 57 1,031 2,543 131 2,078 829 322

Total ...... 218,585 3,949,826 3,276,319 584,764 9,280,205 7,839,089 7,888,060

Basic and diluted earnings per share ...... U.S.$0.16 Ps.2.94 Ps.2.44 U.S.$0.44 Ps.6.91 Ps.5.84 Ps.5.87

Weighted average number of shares outstanding ...... 1,342,196,100 1,342,196,100 1,342,196,100 1,342,196,100 1,342,196,100 1,342,196,100 1,342,196,100

(1) Converted to U.S. dollars for convenience only at the rate of Ps.18.07 per U.S.$1.00, which was the average of the daily exchange rates published by the Mexican Central Bank in the Federal Official Gazette of Mexico for the six months ended June 30, 2016. See "Exchange Rates." (2) Except basic and diluted earnings per share and weighted average number of shares outstanding.

(3) Converted to U.S. dollars for convenience only at the rate of Ps.15.87 per U.S.$1.00, which was the average of the daily exchange rates published by the Mexican Central Bank in the Federal Official Gazette of Mexico for the year ended December 31, 2015. See "Exchange Rates."

As of June 30, As of December 31, 2016 Unaudited 2015 2014 2013 (in thousands (in thousands of U.S. (in thousands of U.S. dollars)(1)(2) of Ps.)(2) dollars)(3)(2) (in thousands of Ps.)(2) SUMMARY CONSOLIDATED STATEMENTS OF FINANCIAL POSITION Assets Current assets: Cash and cash equivalents ...... 300,860 5,580,959 495,281 8,583,219 5,891,468 1,618,060 Loan portfolio - net ...... 1,113,816 20,661,296 1,313,478 22,762,580 21,049,700 21,436,709 Value added tax recoverable - net ...... 114,273 2,119,768 76,124 1,319,231 1,087,202 1,043,057 Other accounts receivable - net ...... 55,880 1,036,575 52,872 916,278 730,511 597,059 Inventories ...... 850,577 15,778,200 799,188 13,849,931 11,754,464 11,421,969 Prepaid expenses ...... 90,031 1,670,071 75,286 1,304,704 960,909 617,387 Income tax recoverable - net ...... ------814,611 Derivative financial instruments ...... ------7,759 Total current assets ...... 2,525,438 46,846,869 2,812,230 48,735,943 41,474,254 37,556,611 Non-current assets: Long-term loan portfolio - net ...... 434,685 8,063,414 460,563 7,981,563 7,645,307 6,744,558 Other accounts receivable - net ...... 12,947 240,174 12,156 210,664 198,409 141,132 Derivative financial instruments ...... 115,464 2,141,862 87,509 1,516,534 800,127 312,114 Investments in associates ...... 325,048 6,029,636 325,072 5,633,502 5,027,798 4,616,854 Investment properties - net ...... 906,842 16,821,925 940,856 16,305,027 15,641,205 14,233,786 Property, furniture and equipment - net ...... 1,776,609 32,956,092 1,842,171 31,924,823 30,390,283 29,054,263 Intangible assets - net ...... 131,525 2,439,780 133,950 2,321,350 2,068,661 1,793,911 Employee benefits - net ...... 8,362 155,111 9,465 164,020 192,213 483,675 Deferred income tax ...... 24,633 456,944 11,985 207,695 89,860 --- Total non-current assets ...... 3,736,115 69,304,938 3,823,726 66,265,178 62,053,863 57,380,293

Total assets ...... 6,261,553 116,151,807 6,635,956 115,001,121 103,528,117 94,936,904

Liabilities and stockholders' equity Current liabilities: Suppliers ...... 749,449 13,902,272 877,712 15,210,743 12,949,987 11,454,374 Creditors ...... 311,909 5,785,906 339,397 5,881,751 5,161,021 5,189,318 Provisions ...... 124,666 2,312,553 153,835 2,665,966 1,905,755 1,282,636 Deferred income ...... 97,388 1,806,543 101,590 1,760,558 1,624,620 1,541,032 Income tax ...... 10,417 193,229 41,811 724,583 1,879,462 --- Bank borrowings ...... ------2,011,128 Senior notes ...... ------4,000,000 Derivative financial instruments ...... ------147,983 Total current liabilities...... 1,293,828 24,000,503 1,514,345 26,243,601 23,520,845 25,626,471 Non-current liabilities: Long - term bank borrowings ...... 49,674 921,456 53,171 921,456 921,456 921,456 Long - term senior notes ...... 729,886 13,539,380 760,220 13,174,610 12,422,420 8,000,000 Derivative financial instruments ...... 4,367 81,012 5,889 102,050 118,350 120,599 Employee benefits - net ...... 31,138 577,608 30,375 526,405 441,616 355,459 Deferred income tax ...... 189,277 3,511,083 183,125 3,173,552 3,437,009 5,085,587 Total non-current liabilities ...... 1,004,342 18,630,539 1,032,780 17,898,073 17,340,851 14,483,101

Total liabilities ...... 2,298,169 42,631,042 2,547,125 44,141,674 40,861,696 40,109,572

Stockholders' equity: Capital stock ...... 181,902 3,374,282 194,708 3,374,282 3,374,282 3,374,282 Retained earnings: Prior years' ...... 3,502,694 64,974,974 3,290,362 57,021,978 50,258,797 42,645,852 For the period ...... 196,034 3,636,424 531,490 9,210,729 7,763,480 7,701,930 Capital reserves ...... 82,415 1,528,798 71,968 1,247,202 1,266,684 1,102,919 Stockholders' equity attributable to parent company ...... 3,963,045 73,514,478 4,088,528 70,854,191 62,663,243 54,824,983 Non-controlling interest ...... 339 6,287 303 5,256 3,178 2,349

Total stockholders' equity ...... 3,963,384 73,520,765 4,088,831 70,859,447 62,666,421 54,827,332

Total liabilities and stockholders' equity ...... 6,261,553 116,151,807 6,635,956 115,001,121 103,528,117 94,936,904

As of June 30, As of December 31, 2016 Unaudited 2015 2014 2013 (in thousands (in thousands of U.S. (in thousands of U.S. dollars)(1)(2) of Ps.)(2) dollars)(3)(2) (in thousands of Ps.)(2)

OTHER FINANCIAL DATA EBITDA(4) ...... 336,371 6,078,226 937,013 14,870,389 13,023,604 12,536,327 Total debt/LTM EBITDA(4) ...... 0.9 0.9 0.9 0.9 1.0 1.2 Net debt(5)/LTM EBITDA(4) ...... 0.6 0.6 0.4 0.4 0.6 1.1 LTM EBITDA(4)/LTM Finance costs ...... 15.6 15.6 15.3 15.3 11.2 11.5

(1) Converted to U.S. dollars for convenience only at the rate of Ps.18.55 per U.S.$1.00, the exchange rate reported on June 30, 2016 by the Mexican Central Bank in the Federal Official Gazette of Mexico. See "Exchange Rates." (2) Except ratios. (3) Converted to U.S. dollars for convenience only at the rate of Ps.17.33 per U.S.$1.00, the exchange rate reported on December 31, 2015 by the Mexican Central Bank in the Federal Official Gazette of Mexico. See "Exchange Rates." (4) We define EBITDA as operating income plus depreciation and amortization. Our management uses this measure as an indicator of our operating results and financial condition. However, you should not consider EBITDA 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 IFRS, since, among others:  it does not reflect the depreciation and amortization of our operating assets;  it does not reflect our interest expense;  it does not reflect our share of profits of associates;  it does not reflect any income taxes we may be required to pay; and  it does not reflect our cash expenditures or future requirements for cash expenditures or our working capital needs or charges. 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 IFRS 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 IFRS results and use our EBITDA measurement only as a supplement. The following is a reconciliation of our EBITDA for the periods presented:

Twelve Months Ended Six Months Ended June 30, June 30, Year Ended December 31, 2016 2015 2016 Unaudited 2015 2014 2013 (in (in (in thousands thousands (in thousands of U.S. of U.S. thousands of U.S. dollars) (in thousands of Ps.) dollars) of Ps.) dollars) (in thousands of Ps.) EBITDA...... 336,371 ...... 6,078,226 5,573,891 887,686 15,374,724 937,013 14,870,389 13,023,604 12,536,327 Deduct: Depreciation and 65,721 1,187,578 1,094,727 133,252 2,307,933 139,577 2,215,082 1,910,298 1,700,245 amortization ...... Operating income ...... 270,650...... 4,890,648 4,479,164 754,434 13,066,791 797,436 12,655,307 11,113,306 10,836,082 (5) 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 a non-IFRS measure, and we do not intend net debt to represent debt as defined by IFRS. You should not consider net debt to be an alternative to debt or any other items calculated in accordance with IFRS. Debt levels and, therefore, the impact of interest rates on earnings vary in significance between companies. Thus, for comparison purposes, our management believes that net debt can be useful to investors as an objective and comparable measure of our debt obligations and liquidity, because it recognizes the net cash position of our current operations. The following is the reconciliation as of the dates indicated: As of June 30, As of December 31, 2016 Unaudited 2015 2014 2013 (in thousands of (in thousands of (in thousands of U.S. dollars) Ps.) U.S. dollars) (in thousands of Ps.) Current portion of long-term debt ...... ------6,011,128 Long-term debt ...... 77...... 9,560 14,460,836 813,391 14,096,066 13,343,876 8,921,456 Deduct: Cash and cash equivalents ...... 300,860 5,580,959 495,281 8,583,219 5,891,468 1,618,060 Net debt ...... 478,700...... 8,879,877 318,110 5,512,847 7,452,408 13,314,524

RISK FACTORS

An investment in the notes involves a high degree of risk. 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 that we do not know about or that we currently think are immaterial or we do not view as risks may also affect us. 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—Commercial and Services Operations

Our sales and operating results depend on consumer spending.

Our sales are significantly affected by the discretionary spending of consumers. Consumer spending may be affected by many factors outside of our control, including general economic conditions, consumer disposable income levels, consumer confidence levels, the availability of goods that match consumer needs and preferences, cost and level of consumer debt, consumer behavior with respect to consumer credit, the costs of basic necessities and other goods, and the effects of the weather or natural disasters. Any decline in the discretionary spending of consumers could negatively affect our business and results of operations.

Our business is intensely competitive and increased or new competition could have a material adverse effect on us.

The retail industry is intensely competitive. Although we are one of Mexico's largest retailers, we have numerous and varied competitors at the Mexican national and local levels, including omni-channel retailers, traditional department stores, vendor owned boutiques, specialty retailers, individual specialty apparel stores, designer boutiques, outlet stores, e-commerce and mail order retailers, and "flash sale" businesses, which sell, among other products, products similar to those that we sell. In addition, we face significant competition from informal retailers in Mexico. We compete for customers on the basis of fashion and trends; the selection, presentation, quality, and pricing of our merchandise; the customer experience, both in-store and online; our marketing initiatives; and the visual appeal and overall ambiance of our stores. We also compete in particular markets with a substantial number of retailers that specialize in one or more types of products that we sell. Competition may intensify as our competitors enter into business combinations or alliances. A number of different competitive factors could have a material adverse effect on our business, results of operations and financial condition, including:

 increased operational efficiencies of competitors;

 competitive pricing strategies, including deep discount pricing by a broad range of retailers during periods of low consumption or economic instability;

 assortment of products offered by our competitors and any expansion of such product offerings;

 entry by new competitors into markets in which we currently operate;

 credit availability for customers; and

 adoption by existing competitors of innovative retail sales methods.

We may not be able to continue to compete successfully with our existing or any new competitors, and prolonged periods of deep discount pricing by our competitors may have a material adverse effect on our business. Our failure to compete effectively could negatively affect our business and results of operations.

Our sales and operating results depend on consumer preferences, demand, and fashion trends.

The fashion and retail industries are subject to sudden shifts in consumer preferences, demand, and fashion trends. Our sales and operating results depend in part on our ability to predict or respond to changes in fashion trends and consumer preferences in a timely manner. We develop new retail concepts and continuously adjust our industry position in certain major and private-label brands and product categories in an effort to satisfy our customers. Early order commitments often are made far in advance of consumer acceptance. If we fail to anticipate preferences accurately and respond to consumer preferences and demand or if we fail to maintain adequate inventories that satisfy our customers' needs and preferences, we could experience lower sales, excess inventories, and lower profit margins. In addition, demand for products can change significantly between the time inventory or components are ordered and the date of sale. The acquisition of certain types of inventory or components may require significant lead-time and prepayment and they may not be returnable. We carry a broad selection and significant inventory levels of certain products, such as consumer electronics, and we may be unable to sell products in sufficient quantities or during the relevant selling seasons. We must also guard against accumulating excess or obsolete inventory as we seek to minimize out-of-stock levels across all product categories and to maintain in-stock levels. Any sustained failure to anticipate, identify and respond to emerging trends in lifestyle and consumer preferences could negatively affect our business and results of operations.

In addition, prediction of consumer preferences requires significant research and development as well as marketing initiatives. If we fail to anticipate 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, materially and adversely affecting us.

Our business depends, in part, on the success of our strategies.

Our success is dependent on our ability to identify, develop and execute our strategies. Our continued growth and success depends, in part, on our ability to successfully open and operate new stores, enhance and remodel existing stores on a timely and profitable basis, and optimize store performance by closing under- performing stores. The success of any future store openings will depend upon numerous factors, many of which are beyond our control, including the following:

 our ability to attract appropriate vendors;  the competition for suitable store sites;  our ability to negotiate favorable lease terms with landlords and renew any such leases;  the availability of associates to staff new stores and our ability to hire, train, motivate, and retain store personnel; and  our ability to attract customers and generate sales sufficient to operate new stores profitably.

In the future, we may enter into additional markets. These markets may have different competitive conditions, consumer trends, and discretionary spending patterns than our existing markets, which may cause new stores in these markets to be less successful than stores in our existing markets.

Our continued growth and success also depends, in part, on our ability to implement our omni-channel strategy. Omni-channel retailing is rapidly evolving, and we must keep pace with changing customer expectations and new developments by our competitors. If we do not acquire, improve, and develop relevant technology in a timely manner and in a manner that appeals to our customers, our ability to compete and our results of operations could be adversely affected. In addition, if there are performance issues with our customer-facing technology systems, we may experience a loss of customer confidence and sales, which could adversely affect our reputation and results of operations.

We continue to implement customer-oriented strategic programs designed to differentiate and strengthen our core merchandise content and service levels and expand and enhance our merchandise offerings. We also seek to improve the effectiveness of our marketing and advertising programs. If we fail to implement successfully some or all of these initiatives, we may be unable to retain or attract customers, which could adversely affect our financial results.

Our omni-channel strategy could have adverse impact on our results of operations if not successfully executed.

We are continuing our investment in our omni-channel strategy, in particular, in recent years we have made significant investments in ecommerce as advancements in technology have impacted shopping behaviors of consumers. Computers, mobile phones, tablets and other devices allow customers to browse and transact anywhere or anytime. Our growth strategies in this area span the improvement of customer-facing technology, timely delivery of products purchased online, enhancement of inventory management systems, greater and more fluid inventory availability between online and retail locations, and greater consistency in marketing and pricing strategies. The business model has a high variable cost structure driven by fulfillment, marketing and technology costs and will continue to require investment in omni-channel operations and supporting technologies. If we do not implement and expand our ecommerce initiatives successfully or if we do not realize our anticipated return on these investments, our profitability and growth could be adversely affected. In addition, if customers shift to ecommerce more quickly than we anticipate, we may need to accelerate our ecommerce initiatives and investments and may experience higher costs adversely impacting our profitability.

Potential acquisitions and investments are subject to significant risks.

On July 5, 2016, we entered into the Partnership Agreement in connection with the potential investment in Ripley. Once the minimum required conditions set forth in the Partnership Agreement have been satisfactorily met, we will carry out a tender offer to acquire up to 100.0% of the outstanding shares of Ripley (subject to the obligation of FCV to hold, in the aggregate, at least 50.0% of the capital stock of Ripley at the time of the tender offer and for the period specified in the Partnership Agreement). On August 10, 2016, we reached an agreement with Wal-Mex, to acquire its apparel retail division in Mexico. We continue to be engaged in various stages of evaluating or pursuing other potential acquisitions and investments, and may in the future acquire or invest in other businesses and seek to integrate them into our own operations. Acquisitions and investments involve known and unknown risks that could adversely affect our future net sales and operating results. For example:

 failing to accurately identify suitable companies or brands to acquire or invest in;

 experiencing difficulties in integrating the management, operations, technologies and manufacturing processes of the acquired companies;

 failing to obtain the necessary regulatory approvals;

 entering new markets with which we are unfamiliar;

 diverting management's attention from other business concerns;

 purchasing a company that has contingent liabilities; and

 incurring in substantial additional indebtedness.

Any future or potential acquisitions and investments may result in substantial costs, disrupt our operations or materially adversely affect our operating results. We may not recover any amounts with respect to losses due to unknown or contingent liabilities or 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, and we may experience other unanticipated adverse effects, all of which may adversely affect us.

Our future growth opportunities through mergers, acquisitions or joint ventures may be impacted by antitrust laws and other challenges in integrating significant acquisitions.

There can be no assurance that a challenge on antitrust grounds, in connection with our existing operations, the proposed acquisition of Suburbia, the proposed investment in Ripley 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 we may be prevented from consummating a specific acquisition.

Our business could suffer if we are unsuccessful in identifying, making, integrating, and maintaining acquisitions and investments.

We may be unable to continue to identify suitable acquisition or investment targets at acceptable prices, which could have a material adverse effect on our business and results of operations. From time to time, we pursue strategic acquisitions of, joint arrangements with, or investments in, other companies or businesses. Any such acquisition, joint arrangement or investment that we make may require us to spend our cash, or incur debt, contingent liabilities (such as indemnifications and the exercise of options granted by us, including the option to purchase all of the shares representing the capital stock of Ripley granted to FCV under the Partnership Agreement for the investment in Ripley), or amortization expenses related to intangible assets, any of which could reduce our profitability and harm our business. Acquisitions, joint arrangements and investments also increase the complexity of our business and place strain on its management, personnel, operations, supply chain, financial resources, and internal financial controls and reporting functions. We may not be able to manage acquisitions, joint arrangements or investments effectively, which could damage our reputation, limit our growth and could have a material adverse effect on our business and results of operations.

In the future, we may enter into additional markets, including internationally. These markets may have different competitive conditions, consumer trends, and discretionary spending patterns than existing markets, which may cause new stores in these markets to be less successful than stores in existing markets. Our ability to successfully grow through 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 businesses and distract management.

Our revenues and cash requirements are affected by the seasonal nature of our business.

Our retail operations are seasonal, with a high proportion of revenues and operating cash flows generated during the fourth fiscal quarter, which includes the fall and holiday selling seasons. In addition, sales volumes in our department stores are higher during the months of May, June, November and December due to Mother's Day, Father's Day, the "Buen Fin" (a weekend in late November of each year during which various commercial businesses, including our company, offer sales and discounts to encourage consumer spending in Mexico) and year- end holidays. As a result, our revenues and cash requirements are affected by the seasonal nature of our business and any economic slowdown, interruption to our business or to the business of our suppliers, or the occurrence of any other circumstance that may impact our business during the last quarter of any calendar year may therefore adversely affect our financial condition and results of operations.

The termination of certain license agreements may affect our business.

We have entered into various license agreements and hold both exclusive and non-exclusive licenses to use certain brands and market certain products, as well as franchise agreements for corner stores inside our department stores. These licenses and agreements represent an important benefit to our business; however, we cannot guarantee that they will continue to do so. The term of our license agreements varies. The term of such agreements ranges from five to ten years and some of them are automatically renewable for one or two additional periods of the same tenor. The termination of such agreements or failure to perform by any of the parties to such agreements and licenses may have an adverse effect on our sales, financial condition and results of operations.

We cannot provide any assurance that any agreement or license will not expire in accordance with its terms or that we will be able to form strategic alliances with current or potential partners and/or obtain other licenses that may enable us to improve the performance of our business.

We depend upon designers, vendors and other sources of merchandise, goods and services. Our business could be affected by disruptions in, or other legal, regulatory, political or economic issues associated with, our supply network.

Our relationships with established and emerging designers have been a significant contributor to our past success, and a substantial portion of our revenues are attributable to our sales of designer merchandise. Many of our key vendors limit the number of retailers they use to sell their merchandise, and competition among retailers to obtain and sell these goods is intense. Although we have supply arrangements with some of our merchandising

sources, there can be no assurance that such sources will continue to meet our quality, style, and volume requirements. Moreover, nearly all of the established designer brands sold by us are also sold by competing retailers, and many of these designer brands also have their own dedicated retail stores and/or their own e-commerce sites. If one or more of these designers were to cease providing us with adequate supplies of merchandise or, conversely, were to increase sales of merchandise through their own stores or to the stores of other competitors, our business could be adversely affected. In addition, any decline in the popularity or quality of any of these designer brands could adversely affect our business.

Our ability to find qualified vendors and access products in a timely and efficient manner is particularly challenging with respect to goods sourced outside Mexico. Our procurement of goods and services from outside Mexico is subject to risks associated with political or financial instability, trade restrictions, tariffs, currency exchange rates, transport capacity and costs and other factors relating to foreign trade, including costs and uncertainties associated with potential sell-through difficulties and reputational damage that may be associated with our inability to determine the products we sell are manufactured in accordance with environmental, health, and safety laws for the benefit of workers. In addition, our procurement of all our goods and services is subject to the effects of price increases which we may or may not be able to pass through to our customers. All of these factors may affect our ability to access suitable merchandise on acceptable terms, are beyond our control and could negatively affect our business and results of operations.

Furthermore, damage to the reputation of any of our private label brands or the brands licensed to us, or to the reputation of any supplier or manufacturer of these brands, could negatively impact consumer opinion of our stores or the related products, which could have a material adverse effect on our businesses and results of operations.

We depend upon the success of our advertising and marketing programs.

Our business depends in part on effective marketing and upon our ability to successfully select compelling merchandise assortments as well as present an appealing shopping environment and experience to customers to increase customer traffic. Our advertising and promotional costs, net of cooperative advertising allowances, amounted to Ps.119.5 million for the year ended December 31, 2015. We have many initiatives in this area, and often change our advertising and marketing programs. There can be no assurance as to our continued ability to effectively execute our advertising and marketing programs, and any failure to do so could negatively affect our business and results of operations.

Parties with whom we do business may be subject to insolvency risks or may otherwise become unable or unwilling to perform their obligations to us.

We are a party to contracts, transactions and business relationships with various third parties, including vendors, suppliers, service providers, lenders and participants in joint ventures, strategic alliances and other joint commercial relationships, pursuant to which such third parties have performance, payment and other obligations to us. In some cases, we depend upon such third parties to provide essential leaseholds, products, services or other benefits, including with respect to store and distribution center locations, merchandise, advertising, software development and support, logistics, other agreements for goods and services in order to operate our business in the ordinary course, extensions of credit, credit card accounts and related receivables, and other vital matters. Current economic, industry and market conditions could result in increased risks to us associated with the potential financial distress or insolvency of such third parties. If any of these third parties were to become subject to bankruptcy, receivership or similar proceedings, our rights and benefits in relation to its contracts, transactions and business relationships with such third parties could be terminated, modified in a manner adverse to us, or otherwise impaired. We cannot make any assurances that we would be able to arrange for alternate or replacement contracts, transactions or business relationships on terms as favorable as our existing contracts, transactions or business relationships, if at all. Any inability on our part to do so could negatively affect our cash flows, financial condition and results of operations.

Our business is capital-intensive and we may not be able to generate sufficient cash flows from operations or obtain the funding required to make capital expenditures and/or implement our investment strategy.

We make and expect to continue to make capital expenditures to finance our acquisition, construction, development and renovation of department stores and shopping centers. For the years ended December 31, 2015,

2014 and 2013, we made capital expenditures of Ps.4,873 million, Ps.4,970 million and Ps.6,544 million, respectively. For the six months ended June 30, 2016 we made capital expenditures of Ps.2,454 million. We plan to continue making capital expenditures to implement our expansion plan, which includes the increase in our gross leasable area through the construction of shopping centers and department stores and major renovation of certain of our department stores.

Failure to implement our expansion plan and the planned renovations might result in a reduction of our capacity to attract customers to our stores or to retain current tenants or attract new tenants to our shopping centers, causing a decline in our results of operation.

We expect to fund our capital expenditures program with a combination of cash flows from operations and additional financing, including a portion from the proceeds of this offering. We cannot assure you that we will generate sufficient cash flow from operations, or that we will have access to external financing sources, to adequately fund such or any future capital expenditures. Our access to external sources of financing will depend on many factors, including factors beyond our control, such as conditions in the global capital markets and how investing in Mexico and emerging markets is generally perceived by investors. If our access to external financing is limited, we may not be able to make committed and/or planned capital expenditures or otherwise execute our investment strategy, which could adversely affect our business, financial condition or results of operation. In addition, the amount, timing and costs of our capital expenditures depend in part on market conditions. We may not be able to accurately predict the timing or amount of capital investments or the costs of the expenditures we will require.

Risks Related to our Business and Industry—Consumer Credit Operations

Our inability to effectively control the level of non-performing loans in the future and an insufficient allowance for loan losses could have a material adverse effect on us.

The Liverpool credit cards have historically been the most frequently used payment method for our customers in our stores. As of December 31, 2015, purchases by our customers using the Liverpool credit cards accounted for 45.6% of our total sales. If we fail to successfully assess the creditworthiness of our customers during our credit approval process, the proportion and number of impaired loans in our total loan portfolio may increase. Furthermore, risks arising from changes in the recoverability of loans and amounts due from our customers are inherent in our businesses, and non-performing loans can have an adverse effect on us. Although historically we have been able to maintain low levels of non-performing loans, we cannot assure you that in the future we will be able to effectively control the proportion and number of impaired loans in our total loan portfolio. In particular, the amount of our reported non-performing loans may increase in the future as a result of growth in our total loan portfolio, the adverse effect of changes in the credit quality of our customers or a general deterioration in Mexican or global economic conditions, the impact of political events, events affecting certain industries or events affecting financial markets and global economies.

Our current allowance for loan losses may not be adequate to cover an increase in the amount of non- performing loans or any future deterioration in the overall credit quality of our total loan portfolio. Our allowance for loan losses is based on our current assessment of and expectations concerning various factors affecting us, including the quality of our loan portfolio. In addition, we have a risk management system for our loan portfolio which allows us to reduce the impact of non-performing loans. However, as the recent global financial crisis has demonstrated, many of the factors affecting our loan portfolio are beyond our control. As a result, there is no precise method for predicting loan and credit losses, and we cannot assure you that our allowance for loan losses will be sufficient in the future to cover actual loan and credit losses. If our assessments and expectations concerning the performance of our loan portfolio differ from actual developments, if the quality of our total loan portfolio deteriorates for any reason or if future actual losses exceed our estimates of incurred losses, we may be required to increase our provisions and allowance for loan losses, which may adversely affect us. If we are unable to control or reduce the level of our non-performing or poor credit quality loans, this could have a material adverse effect on us.

Our exposure to loans to individuals could lead to higher levels of non-performing loans, allowances for loan losses and write-offs.

As of June 30, 2016, all of our loan portfolio consisted of consumer credits to our customers. As part of our business strategy, we are seeking to increase volume in our consumer credit portfolio. Our customers are more likely to be adversely affected by downturns in the Mexican economy than large corporations and high-income individuals who have greater resources. Consequently, in the future we may experience higher levels of non-performing loans, which could result in increases in our provisions for loan losses, which in turn will adversely affect us. For the year ended December 31, 2015, non-performing loans totaled Ps.1,220 million and write-offs against our allowance for loan losses totaled Ps.1,956 million. For the six months ended June 30, 2016, non-performing loans totaled Ps.1,369 million and write-offs against our allowance for loan losses totaled Ps.966. There can be no assurance that the levels of non-performing loans and subsequent write-offs will not be materially higher in the future and that this activity will not have an adverse effect on us.

Our consumer credit loans are unsecured and an inefficient recovery process may adversely affect our business, financial condition and results of operations.

We offer a wide variety of credit plans to our customers, primarily through the issuance of our branded credit cards. The loans we provide to our customers are unsecured. Any payment default by our customers could lead us to pursue judicial collection procedures. Judicial recovery through Mexican courts is a complex, uncertain and time consuming endeavor. We cannot anticipate any outcome resulting from the exercise of our collection rights and remedies or otherwise assure that any payments we may obtain would be sufficient to pay in full the amounts due by our customers. Our inability to successfully recover the principal of an interest on the loans from our customers could materially and adversely affect our business, financial condition and results of operations.

We may fail to detect money laundering or fraudulent activities of our customers, which may adversely impact our reputation, business and financial condition.

We are exposed to the risk of money laundering and fraudulent activities by our customers, particularly with respect to our consumer credit offerings. We have implemented internal control systems that monitor unusual transaction volumes or unusual transaction patterns and screen the personal details of our customers, but these systems may not always succeed in protecting us and our customers from money laundering and fraud. To the extent we are not successful in protecting ourselves or our customers from money laundering or fraud, or if we fail to comply with the applicable regulations, we and our directors could be subject to criminal sanctions or administrative and civil fines and could directly suffer loss, or lose the confidence of our customer base, which could have a material adverse effect on our reputation, business, results of operations and financial condition.

Risks Related to Our Business and Industry—Real Estate Operations

Our expansion depends in part on our ability to successfully acquire or build new stores and shopping centers and remodel and/or expand existing stores and shopping centers.

One of our business expansion strategies focuses on acquiring or building new stores and shopping centers and remodeling and/or expanding existing stores and shopping centers. We evaluate each investment decision to determine if it meets our financial projections and expected returns. Our success in achieving future growth through opening new stores and shopping centers, or expanding existing stores and shopping centers, will depend on our ability to identify, finance, obtain, construct and operate such stores and shopping centers. Acquisitions depend on our ability to identify, negotiate and finance acquisitions on acceptable terms and integrate acquired stores and shopping centers into our operations. Our failure to implement this business expansion strategy could have a material adverse effect on our business and operations.

The performance of our real estate operations is subject to risks associated with the real estate industry generally.

Real estate investments are subject to various risks and fluctuations and cycles in value and demand, many of which are beyond our control. Certain events may decrease our results of operations and the value of our properties. These events include, but are not limited to:

 adverse changes in local, national or international demographic and economic conditions, such as the global economic downturn of 2008;

 vacancies or our inability to rent space on favorable terms;

 adverse changes in the financial condition of tenants and buyers of properties;

 our inability to collect rent from tenants;

 adverse changes in laws, regulations and governmental policies, including, without limitation, tax, zoning, environmental and safety laws, governmental fiscal policies, and changes in enforcement thereof;

 competition from other real estate investors with significant capital, including real estate investment companies, real estate investment trusts and institutional investment funds;

 reductions in the level of demand for retail space, and changes in the relative popularity of properties;

 increases in the supply of commercial space;

 fluctuations in interest rates, which could adversely affect our ability, or the ability of buyers and tenants of properties, to obtain financing on favorable terms, or at all;

 increases in expenses including, but not limited to, insurance costs, labor costs, energy prices, real estate assessments and other taxes and costs of compliance with laws, regulations and governmental policies, and restrictions on our ability to pass increased expenses on to our tenants;

 tenants rotation larger than expectation;

 failure to provide adequate maintenance to the properties;

 increases in the criminal activity in the areas where our properties are located;

 excess in the construction or oversupply in the real estate market;

 failure to attract or maintain anchor stores other than "Liverpool;" and

 competition from other shopping malls, other types of retail premises, or other kinds of shopping experiences such as virtual commerce.

In addition, periods of economic slowdown or recession, such as the recent global economic downturn, rising interest rates or declining demand for real estate, or the public perception that any of these events may occur, could result in a general decline in rents or an increased incidence of defaults under existing leases. If we cannot operate our properties to meet our financial expectations, our business, financial condition and results of operations could be materially and adversely affected.

Changes in the market value of land may adversely affect our business.

We continuously purchase land in order to develop future projects and investment activities; however, the value of such land could drop significantly from the date of purchase to the actual development of the project, as a result of economic or market conditions, reducing the profit margins from our leases or the expected return rate from our store projects, which in turn will adversely affect our results of operations. We believe that there is increasing competition for acquisition of land in suitable locations and, even though our continued growth depends on our ability to continue to acquire land at reasonable prices, we cannot guarantee that we will have continued success in this task. The entry of or an increase in the activities of other Mexican or foreign real estate developers could significantly increase real estate prices, leading to a shortage of suitable property. As a consequence, an increase in the cost of real estate could result in an increase in our cost of sales and a decrease in profits, thus adversely affecting our business and results of operations.

Our current store and shopping center locations may become less desirable.

The success of any store and shopping centers depends substantially upon their location. There can be no assurance that current locations will continue to be desirable or appropriate as demographic patterns change. Social or economic conditions where stores are located could decline in the future, thus resulting in potentially reduced sales and traffic in those locations. If we cannot obtain desirable locations at reasonable prices, our cost structure will increase and our revenues will be adversely affected.

We are dependent on our tenants for a portion of our revenue, and our business would be adversely affected if a significant number of our tenants, or any of our major tenants, were unable to meet their lease obligations.

The performance of our real estate operations depends, in part, on our ability to collect rents, past-due amounts and future rent payments from our tenants and our tenants' ability to make rental payments. Our results of operations would be negatively affected if a significant number of our tenants, or any of our major tenants, were to delay commencement of leases, decline to extend or renew leases upon expiration, fail to make rental payments when due or close their businesses or declare bankruptcy. Any of these actions could result in the termination of the tenants' lease, losses to our investments and the loss of rental income attributable to the terminated lease.

In addition, if a tenant defaults on its lease obligations, we may experience delays in enforcing our rights as landlord and may incur substantial costs, including litigation and related expenses, in protecting our investment and re-leasing our property. As of June 30, 2016, no single tenant accounted for more than 8.3% of the gross leasable area of our portfolio. To the extent that a significant number of our tenants experience a downturn in their businesses, their financial condition could be weakened and could result in their failure to make timely rental payments or their default under their leases, which could harm our performance.

If we are unable to renew our leases or lease our vacant space, or we are unable to lease our properties at or above existing rental rates, our rental revenue may be adversely affected.

Some of our stores are owned and some are leased. Currently we own approximately 62.0% of our retail space and approximately 64.0% of the gross leasable area of the shopping centers in which we have interests. Store leases generally require us to pay a fixed minimum rent and a variable amount based on a percentage of annual sales at that location. Generally, we will not be able to terminate these leases, prior to the expiry of the committed term. If a store is not profitable, and we decide to close it, we may be required, among other things, to pay rent for the reminder of the applicable lease term. In addition, as the leases expire, we may be unable to negotiate renewals, either on commercially acceptable terms or at all, which could cause us to close stores in desirable locations. If an existing owned store is not profitable, and we decide to close such store, we may be required to record an impairment charge and/or exit costs associated with the disposal of the store. In addition, we may not be able to close an unprofitable owned or leased store due to an existing operating covenant which may cause us to operate the location at a loss which could result in an impairment charge. Under the terms of the current agreement with Wal- Mex in respect of our potential acquisition of Suburbia, we will acquire 119 stores, seven of which are located in properties that we will acquire from Wal-Mex, 78 are located in properties leased from third parties and 34 are located in properties leased from Wal-Mex. Although we have agreed to enter into a master lease agreement with Wal-Mex with respect to the stores located at properties owned by Wal-Mex to reduce the foregoing risks, we cannot assure that all such risks will be effectively mitigated. Failure to manage effectively these and other factors may affect our ability to build, purchase and lease new stores, which may have a material adverse effect on our businesses and results of operations.

With respect to our real estate business, if we are unable to renew the leases with our tenants or lease our vacant space, or we are unable to lease our properties at or above existing rental rates, our rental revenue may be adversely affected. Usually, we enter into two-year term leases for our real estate premises. Approximately 97.0% of the properties in our real estate portfolio were occupied as of December 31, 2015, in terms of gross leasable area. As of such date, leases representing approximately 36.9% of the occupied retail premises are scheduled to expire in 2017. We cannot assure you that our leases will be renewed or that our properties will be re-leased at rental rates equal to or above our existing rental rates or that substantial rent abatements, tenant improvements, early termination rights or tenant-favorable renewal options will not be offered to attract new tenants or retain existing tenants. There can be no assurance that we will be able to lease any unoccupied spaces or spaces in different stages of development on favorable terms, or at all. In addition, we intend to continue to acquire additional development properties and

may acquire undeveloped land in the future as part of our growth strategy. To the extent that our properties, or portions of our properties, remain vacant for extended periods of time, or in case that our rents decrease for any reason, we may receive reduced or no revenue from such properties. Moreover, the resale value of a property could be diminished because the market value of a particular property depends principally upon the value of the leases of such property.

Insurance coverage for our assets and operations may not be available at reasonable terms or at all, and we may discontinue insurance coverage if the cost of premiums exceeds, in our judgment, the value of the coverage discounted for the risk of loss.

We maintain the customary insurance policies for companies engaged in similar types of operations, including property, casualty and business interruption insurance. Certain types of losses may be either uninsurable or not economically insurable, such as losses due to riots, terrorism or acts of war. If we were to incur uninsured or uninsurable losses, or losses in excess of our insurance coverage, we could lose both our investment in and anticipated profits and cash flow from a property, and we would be required to pay for such losses. If any such loss is insured, we may be required to pay a significant deductible on any claim for recovery of such a loss prior to our insurer being obligated to reimburse us for the loss, or the amount of the loss may exceed our coverage for the loss. In addition, future lenders may require such insurance, and our failure to obtain such insurance could constitute a default under our loan agreements. In addition, we may reduce or discontinue terrorism, earthquake, flood or other insurance on some or all of our properties in the future if the cost of premiums for any of these policies exceeds, in our judgment, the value of the coverage discounted for the risk of loss. In addition, if any one of our insurance carriers were to become insolvent, we would be forced to replace the existing insurance coverage with another suitable carrier at potentially unfavorable rates, and any outstanding claims would be at risk for collection. If we were to incur uninsured or uninsurable losses, or losses in excess of our current coverage, our business, financial condition, results of operations, cash flow, trading price of the notes and our ability to make distributions to holders of the notes may be materially and adversely affected.

We are subject to risks related to investments in real property.

We are subject to risks that generally relate to investments in real property because of the properties we own and lease. Real property may not generate the expected investment returns due to a variety of reasons, including the amount of income earned, capital appreciation generated and expenses incurred. In addition, regulations and interest rates can make it more expensive and/or time-consuming to develop real property or expand, modify or renovate shopping centers and department stores. Under expropriation and similar laws, governments can take or expropriate real property in exchange for some measure of "reasonable" compensation. Sometimes the compensation paid in an expropriation is less than the owner believes the property is worth. Under the Federal Law of Eminent Domain (Ley Federal de Extinción de Dominio), Mexican federal authorities also have the authority to order the seizure of any property, without compensation and prior to judgment, if such property was used for the commission of drug trafficking crimes. In addition, certain of our shopping centers and department stores are in condominiums and are subject to the rules and regulations of the condominium's association, as well as common area charges. Any of these factors could have a material adverse impact on our results of operations or financial condition.

Real estate investments are not as liquid as other types of investments, and this lack of liquidity may limit our ability to react promptly to changes in economic, market or other conditions. Our ability to dispose of real estate assets on advantageous terms depends on factors beyond our control, including competition from other sellers, demand from potential buyers and the availability of attractive financing for potential buyers. We cannot predict the various market conditions affecting real estate investments that will exist at any particular time in the future. Due to the uncertainty of market conditions that may affect the future disposition of our real estate assets, we cannot assure you that we will be able to sell our real estate assets at a profit in the future.

The assets we acquire may be subject to unknown liabilities that could affect the value and profitability of these properties.

In connection with our acquisitions of real estate properties and buildings, we assume existing liabilities associated with such real estate properties or buildings, some of which may be unknown or unquantifiable at the time of the global offering. Unknown liabilities might include liabilities for cleanup or remediation of undisclosed environmental conditions, claims of tenants, vendors or other persons dealing with the entities prior to the

acquisition by us of such properties, tax liabilities, employment-related issues, and accrued but unpaid liabilities, whether incurred in the ordinary course of business or otherwise. If the magnitude of such unknown liabilities is high, either singly or in the aggregate, such liabilities could adversely affect our business, financial condition, results of operations and cash flow and the trading price of our shares.

We might be unable to evict a tenant in a timely manner at the end of the term of their lease.

In Mexico, in general terms, the applicable regulation regarding leases tends to be favorable to the tenant. It may be the case that, even though the lease agreement has expired, a tenant keeps the possession of the real estate property, and we would have to initiate a legal proceeding before the courts of the state where the property is located in order to evict the tenant. A legal proceeding in Mexico, as well as obtaining a definite judgment for the termination of a lease, the eviction of the tenant and the collection of any due amount may be a long and expensive process. Our incapacity to evict the tenants in a timely manner and substitute them with new tenants may negatively affect our financial condition.

Risks Related to Our Business and Industry—General

Our business is subject to unfavorable economic and political conditions and other developments and risks.

Unfavorable global, domestic or regional economic or political conditions and other developments and risks could negatively affect our business and results of operations. For example, unfavorable changes related to interest rates, rates of economic growth, fiscal and monetary policies of governments, inflation, deflation, consumer credit availability, consumer debt levels, consumer debt payment behaviors, tax rates and policy, unemployment trends, energy prices, and other matters that influence the availability and cost of merchandise, consumer confidence, spending and tourism could negatively affect our business and results of operations. In addition, unstable political conditions, criminal activities, civil unrest, terrorist activities and armed conflicts may disrupt commerce and could negatively affect our business and results of operations.

Our business could be affected by extreme weather conditions, regional or global health pandemics or natural disasters.

Extreme weather conditions in the areas in which our stores are located could negatively affect our business and results of operations. For example, frequent or unusually heavy rainstorms or other extreme weather conditions over a prolonged period could make it difficult for our customers to travel to our stores and thereby reduce our sales and profitability. Our business is also susceptible to unseasonable weather conditions. For example, extended periods of unseasonably warm temperatures during the winter season or cool weather during the summer season could reduce demand for a portion of our inventory and thereby reduce our sales and profitability. In addition, extreme weather conditions could result in disruption or delay of production and delivery of materials and products in our supply chain and cause staffing shortages in our stores.

Our business and results of operations could also be negatively affected if a regional or global health pandemic were to occur, depending upon its location, duration and severity. To halt or delay the spread of disease, local, regional or national governments might limit or ban public gatherings or customers might avoid public places, such as our stores and shopping centers. A regional or global health pandemic might also result in disruption or delay of production and delivery of materials and products in our supply chain and cause staffing shortages in our stores.

In addition, natural disasters such as hurricanes and earthquakes, or a combination of these or other factors, could damage or destroy our facilities or make it difficult for customers to travel to our stores, thereby negatively affecting our business and results of operations.

Currency fluctuations may adversely affect us.

Substantially all of our revenues are, and will continue to be, denominated in pesos. We incur operating expenses and indebtedness denominated in U.S. dollars and euros, particularly with respect to imports of merchandise from Europe and Asia. For the year ended December 31, 2013, purchases of merchandise in a currency other than Mexico peso represented approximately 20% of our total purchases. As of December 31, 2015 and 2014,

we had exposure to exchange rate risks of U.S.$353.4 million and €15.6 million and U.S.$347.8 million and €12.2 million, respectively. This situation exposes us to potential losses and reductions in our margins resulting from currency fluctuations, which may materially and adversely affect us.

A portion of our operating costs, primarily costs resulting from imports, are denominated in U.S. dollars. However, other significant portions of our operating costs, taxes and income are denominated in Mexican pesos. As a result, the appreciation or depreciation of the Mexican peso against the U.S. dollar affects our results of operations and financial condition. Significant fluctuation of the Mexican peso relative to the U.S. dollar has occurred in the past, negatively affecting our results. According to data of the Mexican Central Bank, relative to the U.S. dollar, the Mexican peso depreciated by 0.46% in 2013, appreciated by 13% in 2014 and depreciated by 17% in 2015, all in nominal terms. See "Exchange Rates."

Fluctuations in currency exchange rates may adversely affect our ability to acquire assets denominated in other currencies and may also adversely affect the performance of our investments in such assets. Since assets may be purchased with and income may be payable in pesos, the value of these assets measured in U.S. dollars may be affected favorably or unfavorably by changes in currency rates, costs of conversion and exchange control regulations.

We selectively hedge our exposure to the U.S. dollar with respect to the Mexican peso and other currencies, our U.S. dollar-denominated debt obligations and the purchase of certain U.S. dollar-denominated raw materials. A severe depreciation of the Mexican peso may result in a disruption of the international foreign exchange markets and may limit our ability to transfer or to convert Mexican pesos into U.S. dollars or other currencies for the purpose of making timely payments of interest and principal on our U.S. dollar-denominated indebtedness or obligations in other currencies. While the Mexican government does not currently restrict, and since 1982 has not restricted, the right or ability of Mexican or foreign persons or entities to convert Mexican pesos into U.S. dollars or to transfer other currencies out of Mexico, the Mexican government could institute restrictive exchange rate policies in the future. Currency fluctuations may have an adverse effect on us in future periods.

Failure to maintain our relationships with labor unions may have an adverse effect on us.

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 us.

In addition, we 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 costs, which could have a material adverse effect on us.

Our labor costs include the cost of providing benefits for associates. We sponsor a number of defined benefit plans for our associates in most of the regions where we operate, including active health care, pension, retiree health and welfare, severance and other post-employment benefits. 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 associates, 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 is crucial to our success. Furthermore, our continued success depends upon our ability to attract and retain experienced professionals. Many of our associates are in entry level or part-time positions with historically high rates of turnover. Our ability to meet our labor needs while controlling the costs associated with hiring and training new associates is subject to external factors such as unemployment levels, prevailing wage rates, minimum wage legislation and changing demographics. The loss of the services of our senior management or our inability to

recruit, train or retain a sufficient number of experienced associates could have an adverse effect on us, including our ability to successfully expand our operations. We do not maintain any key person insurance on any of our senior management or associates for these purposes. Our ability to retain senior management as well as experienced associates will in part depend on our having in place appropriate staff remuneration and incentive schemes. The remuneration and incentive schemes we have in place may not be sufficient for retaining the services of our experienced associates.

Compliance with environmental and other governmental laws and regulations could result in added expenditures or liabilities.

Our operations are subject to federal, state and municipal laws, regulations and official standards, relating to the protection of the environment and natural resources.

In Mexico, we are subject to various Mexican federal, state and municipal environmental laws and regulations that govern physical 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 strict regulation in Mexico by, among other agencies, the Environmental and National Resources Ministry (Secretaría de Medio Ambiente y Recursos Naturales), the Labor and Social Security Ministry (Secretaría del Trabajo y Previsión Social), the Federal Environmental Protection Bureau (Procuraduría Federal de Protección al Ambiente) and the National Water Commission (Comisión Nacional del Agua). These agencies may initiate administrative proceedings for violations of environmental and safety ordinances and impose economic penalties on violators.

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 us.

Recently approved amendments to Mexican tax laws may have an adverse effect on our financial condition and results of operations.

On January 1, 2014, fundamental changes to Mexican tax laws that seek to support Mexican federal tax revenue became effective. These amendments maintained the current corporate tax rate, which had previously been scheduled for reduction, imposed withholding tax on dividends paid to Mexican and foreign shareholders, eliminated deductions that were previously allowed for related-party payments to certain foreign entities, limited tax deductions on salaries paid to employees, uniformed the value-added tax rate throughout Mexico, required new monthly tax reports to be provided to governmental tax authorities and required the use of electronic invoices, among others. In particular, for the year ended December 31, 2014, our income tax reflected the negative impact of tax reforms regarding the deductibility of certain fringe benefits, which is now limited to 53.0%, compared to the previous periods in which such benefits were 100.0% deductible. Such reforms have adversely affected consumer disposable income levels and, therefore, consumer spending. Any further decline in consumer spending could negatively affect our business and results of operations. We cannot predict the additional effects that these changes or other changes to tax regulations in Mexico will have on our company.

Financing to meet our future capital needs may not be available or sufficient on terms acceptable to us and/or at all.

Our growth strategy may require financing by public or commercial banks, loans from other public or private financial institutions and offerings of securities in the debt capital markets. We may need additional financing to build new facilities, expand existing ones, undertake mergers and acquisitions or comply with our obligations thereunder, refinance our debt or for other purposes. Some of the financing agreements entered into by us and by our subsidiaries contain financial ratios and other customary covenants for transactions of this type which may limit our ability to incur additional debt.

Global market and economic conditions are unpredictable and may continue to be so in the future. Debt capital markets have in the past been affected by significant losses in the international financial services industry and economic events in certain countries, among other factors. Changes in the credit and capital markets, including

market disruptions, limited liquidity and interest rate fluctuations, may increase the cost of financing or restrict our access to potential sources of future liquidity.

In addition, a decrease in the ratings that rating agencies assign to our short and long-term debt may negatively impact our access to the debt capital markets and increase our cost of borrowing. If our results of operations or operating ratios deteriorate to a point where we are not in compliance with our debt covenants, and we are unable to obtain a waiver, much of our debt would be in default and could become due and payable immediately. Our assets may not be sufficient to repay in full this indebtedness, resulting in a need for an alternate source of funding.

We cannot make any assurances that we would be able to obtain funding on satisfactory terms, if at all. If we are not able to access the debt capital markets or if there are no funds available from public or private banks, or if such funds are provided on less favorable terms, we may not be able to meet our capital needs, or these needs may be limited or hampered, and we may not be able to (i) take advantage of certain business opportunities, (ii) respond to competitive pressures, (iii) fund needed capital expenditures, (iv) fund required margin calls or margin deposits in connection with hedging transactions, or (v) comply with our obligations under the agreements governing our acquisitions and investments, any of which may adversely affect us.

We may incur additional indebtedness in the future that could adversely affect our financial health and our ability to satisfy our total outstanding debt obligations from our cash flow.

After the offering of the notes, we may incur additional indebtedness that may have the following direct or indirect effects:

 limit our ability to satisfy our obligations under the instruments governing our debt, including the notes;

 limit our ability to pay dividends;

 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 with respect 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 depends on our operating performance, which is, in turn, 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 and other instruments governing our debt obligations 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 overcome downturns 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.

A material disruption in our computer systems could adversely affect our business or results of operations.

We rely extensively on our computer systems and infrastructure to process transactions, summarize results and manage our business. Our computer systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, cyber-attack or other security breaches, catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes, acts of war or terrorism, and usage errors by our employees. In addition, a portion of our information technology systems and infrastructure are maintained by third- party service providers, over which we have no control. If our computer systems or the portion of our information technology systems and infrastructure maintained by third-party service providers are damaged or cease to function properly, we may have to make a significant investment to fix or replace them, and we may suffer loss of critical data and interruptions or delays in our operations. Any material interruption in our computer systems could negatively affect our business and results of operations.

A privacy breach or failure to comply with consumer protection laws and regulations could result in negative publicity and adversely affect our business or results of operations.

The protection of customer, employee, and company data is critical to us. The regulatory environment surrounding information security and privacy is increasingly demanding, with the frequent imposition of new and constantly changing requirements across business units. In addition, customers have a high expectation that we will adequately protect their personal information from cyber-attack or other security breaches. A significant breach of confidentiality obligations with respect to customer, employee, or company data could attract a substantial amount of media attention, damage our customer relationships and our reputation, and result in lost sales, fines, or lawsuits.

Any failure to protect confidential data of our customers or our employees or other third parties could materially damage our brand and reputation as well as result in significant expenses and disruptions to our operations, and a loss of customer confidence, any of which could have a material adverse effect on our reputation, business, results of operations and financial condition.

In addition, we are subject to laws and regulations related to consumer protection, particularly with respect to our marketing and promotional programs. We may be subject to penalties from the Mexican Consumer Protection Agency (Procuraduría Federal del Consumidor) if we use marketing materials with inaccurate or misleading information, which, in turn may have an adverse effect in our reputation, business, financial condition and results of operation.

We could be harmed by data loss or other security breaches.

As a result of part of our services being web-based and the fact that we process, store and transmit large amounts of data, including personal information, for our customers, failure to prevent or mitigate data loss or other security breaches, including breaches of our vendors' technology and systems, could expose us or our customers to a risk of loss or misuse of such information, adversely affect our operating results, result in litigation or potential liability for us and otherwise harm our business. We use third party technology and systems for a variety of reasons, including, without limitation, encryption and authentication technology, employee email, content delivery to customers, back office support and other functions. We have experienced security breaches in the past, and, although they did not have a material adverse effect on our operating results, there can be no assurance of a similar result in the future. Although we have implemented systems and processes that are designed to protect customer information and prevent data loss and other security breaches, including systems and processes designed to reduce the impact of a security breach at a third party vendor, such measures cannot provide absolute security. 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 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 for other reasons could impair our ability to conduct our business.

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 us, and additional resources could be required to restore our supply chain.

We are subject to litigation and other legal, administrative and regulatory proceedings.

We are regularly party to litigation and other legal proceedings relating to claims resulting from our operations in the normal course of business. Litigation is subject to inherent uncertainties, and unfavorable rulings may occur. We cannot assure you that the legal, administrative and regulatory proceedings in which we are involved will not materially and adversely affect our ability to conduct our business in the manner that we expect or otherwise adversely affect our results of operations and financial position should an unfavorable ruling occur.

We are subject to the Mexican Federal Anticorruption Law in Public Contracting, the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws.

In July 2016, as part of the constitutional reform which created the National Anticorruption System (Sistema Nacional Anticorrupción, or SNA), the Mexican Congress approved a group of laws that comprises the legal framework that will ensure the implementation of the public strategies and policies against corruption. The purpose of this reform is to achieve full coordination of efforts by the federal, state and municipal governments, and the government of Mexico City, in order to prevent, investigate and punish administrative violations and corrupt practices by public officers, companies and individuals.

For the operation of the SNA, the Mexican Congress approved the General Law on the National Anticorruption System (Ley General del Sistema Nacional Anticorrupción), the Federal Anticorruption Law on Public Contracts (Ley Federal Anticorrupción en Contrataciones Públicas), the General Law on Administrative Accountability (Ley General de Responsabilidades Administrativas) and the Organic Law of the Federal Tribunal of the Administrative Justice (Ley Orgánica del Tribunal Federal de Justicia Administrativa). In addition, it approved the Law on Auditing and Accountability of the Federation (Ley de Fiscalización y Rendición de Cuentas de la Federación), and amendments on internal controls of the federal executive branch to the Organic Law of the Public Administration (Ley Orgánica de la Administración Pública Federal), to the Fiscal Coordination Law (Ley de Coordinación Fiscal) and to the General Law for Governmental Accounting (Ley General de Contabilidad Gubernamental).

There can be no assurance that our internal control policies and procedures will be sufficient to monitor compliance with these laws by our associates, agents and suppliers. Violations of these laws, or allegations of such violations, could disrupt our business and could have a material adverse effect on our reputation, business, financial condition or results of operations.

Risks Related to Mexico

Our business and the results of our operations depend on economic, political and social conditions in Mexico.

We are incorporated in Mexico, most of our assets are located in Mexico and most of our operations take place in Mexico. As a result, we are subject to political, economic, legal, tax and regulatory risks specific to Mexico, including the general economic conditions in Mexico, changes in Mexico's gross domestic product, or GDP, per capita disposable income, unemployment rates, changes in oil prices, changes in remittances from the U.S., the devaluation of the peso as compared to other currencies, including the U.S. dollar, inflation, interest rates, regulation, including antitrust regulation, taxation, expropriation, social instability, increasing crime rates and other political, social and economic developments in Mexico. In addition, the Mexican government recently cut spending in response to a downward trend in international crude oil prices, and may further cut spending in the future. These cuts could adversely affect the Mexican economy and, consequently, our business, financial condition, operating results and prospects.

Sales volumes and frequency of consumption of the products sold by us in Mexico depend on the development of Mexico's GDP, the pace of government spending, the level of disposable income of consumers, and related macroeconomic factors affecting Mexico. Changes in Mexican macroeconomic conditions have a significant influence on the demand for the products we sell. Decreases in the growth rate of the Mexican economy, periods of negative growth, reduced government spending and its effect on disposable income and/or increases in inflation or interest rates may result in lower demand for the products we sell, lower real pricing of our services and products or a shift to lower margin products. As a result, our business, financial position and results of operations may be

affected by the general condition of the Mexican economy, price instability, inflation, interest rates, regulations, taxation, social instability and other political, social and economic developments in Mexico, over which we have no control. The Mexican economy faces a complex external environment in which a weak expansion of industrial activity in the United States, persistently low oil prices and heightened risk aversion and financial market volatility pose challenges to the economic policy and growth outlook. According to the World Bank, economic growth is projected to slow down slightly in 2016 as the monetary and fiscal policy response to adverse external shocks will weigh down on aggregate demand. In August, 2016, Standard & Poor's lowered Mexico's sovereign credit outlook to negative from stable, adding that a downgrade could happen in the next two years if the government's debt or interest burden deteriorated. Newly appointed Finance Minister José Antonio Meade presented the 2017 draft budget to Congress on 8 September, 2016. It has proposed reducing the fiscal deficit from an expected 2.9% of GDP this year to 2.4% of GDP in 2017 and targets a primary surplus of 0.4% of GDP.

Many countries in Latin America, including Mexico, have suffered significant economic, political and social crises in the past, and these events may occur again in the future. Instability in the region has been caused by many different factors, including: (i) significant governmental influence over local economies, (ii) substantial fluctuations in economic growth, (iii) high levels of inflation, (iv) changes in currency values, (v) exchange controls or restrictions on expatriation of earnings, (vi) high domestic interest rates, (vii) wage and price controls, (viii) changes in governmental economic or tax policies and regulations, (ix) imposition of trade barriers, (x) unexpected changes in regulation, and (xi) overall political, social and economic instability.

In the past, Mexico has experienced prolonged periods of poor economic conditions. We cannot assure you that such conditions will not return or that such conditions will not have a material and adverse effect on our business, results of operations or financial condition.

Political events in Mexico could adversely affect our operations.

Mexican political events may significantly affect our operations. On July 1, 2012, Mexico elected a new president from a political party previously in opposition, Enrique Peña Nieto of the Partido Revolucionario Institucional. Mexico's president has submitted proposals to Congress to implement changes to laws and regulations covering different sectors and has implemented significant changes in public policy. Congress has passed some of such proposed bills, including structural reforms related to energy, political elections, labor, telecommunications, financial services and taxes. There is no certainty about the impact of such changes on Mexico's economy or our business. Any such changes may have an adverse effect on us.

On June 7, 2015, Mexico held interim Congressional elections and, in certain states and municipalities, elections for governor and mayor. As a result of this election, the Partido Revolucionario Institucional won approximately one third of the House of Representatives (Cámara de Diputados). Political disagreements between the executive and the legislative branches could result in deadlock and prevent the timely implementation of political and economic reforms.

Mexico's political, economic and social conditions could change as a result of a variety of reasons and we cannot predict the impact that any such change could have on the Mexican economy. Furthermore, we cannot provide any assurances that political, economic or social developments in Mexico, over which we have no control, will not have an adverse effect on our business, financial condition, results of operations and prospects.

Economic, political and social conditions in other countries may adversely affect our business, the market value of our securities and our results of operations.

The Mexican economy and the market value of securities issued by Mexican issuers may be, to varying degrees, affected by economic and market conditions in other countries, including emerging countries, and in the United States. Furthermore, economic conditions in Mexico are highly correlated with economic conditions in the United States as a result of the North American Free Trade Agreement ("NAFTA"), and increased economic activity between the two countries. In November 2016, presidential elections will take place in the United States that will result in a change of the nation's leadership and its outcome is still uncertain. Both candidates, Democratic candidate Hillary Clinton and Republican candidate Donald Trump, have made public their intention to re-negotiate the terms of NAFTA, but the content of any potential revisions has not been specified. Furthermore, candidate Donald Trump has stated that if Canada and Mexico do not agree to re-negotiate the treaty, the United States may

withdraw from NAFTA. In addition, candidate Donald Trump has repeatedly announced during his campaign his plan to build a wall along the U.S.-Mexico border in order to stop immigrants from entering into the United States illegally, which may create frictions among the Mexican government and the U.S. government and reduce economic activity between those countries, thus affecting the Mexican economy. There can be no assurance as to what a new U.S. administration will do, and the impact of these measures or any others adopted by the new U.S. administration cannot be predicted.

Furthermore, on June 23, 2016, the United Kingdom held an in-or-out referendum on the United Kingdom's membership within the European Union, the result of which favored the exit of the United Kingdom from the European Union, or Brexit. A process of negotiation will determine the future terms of the United Kingdom's relationship with the European Union. The potential impact of Brexit on our results of operations is unclear. Depending on the terms of Brexit, economic conditions in the United Kingdom, the European Union and global markets may be adversely affected by reduced growth and volatility. The uncertainty before, during and after the period of negotiation could also have a negative economic impact and increase volatility in the markets, particularly in the Eurozone. Such volatility and negative economic impact could, in turn, adversely affect the value and trading of the notes.

Adverse economic conditions in the United States, the termination or re-negotiation of NAFTA or other related events could have an adverse effect on the Mexican economy. Although economic conditions in other countries, including emerging countries, and in the United States may differ significantly from economic conditions in Mexico, investors' reactions to developments in such other countries may have an adverse effect on the market value of securities of Mexican issuers or of assets located in Mexico. There can be no assurance that future developments in other countries, including emerging countries, and in the United States, over which we have no control, will not have a material adverse effect on our business, results of operations, financial condition or prospects.

Inflation in Mexico, along with government measures to curb inflation, may have an adverse effect on our investments.

Mexico historically has experienced levels of inflation that are higher than the annual inflation rates of its main trading partners. The annual rate of inflation, as measured by changes in the Mexican national consumer price index calculated and published by the Mexican Central Bank was 3.97% for 2013, 4.08% for 2014 and 2.13% for 2015. High inflation rates could adversely affect our business and results of operations by reducing consumer purchasing power, thereby adversely affecting consumer demand for the products we sell, increasing our costs beyond levels that we could pass on to our customers and by decreasing the benefit to us of revenues earned to the extent that inflation exceeds growth in our pricing levels.

Mexico has experienced a period of increasing criminal activity, and such activities could affect our business, results of operations and financial condition.

Recently, Mexico has experienced a period of increasing criminal activity, primarily due to organized crime. These activities, their possible escalation and the violence associated with them may have a negative impact on the business environment in certain locations in which we operate, and therefore on our business, results of operations and financial condition.

High interest rates in Mexico could increase our financing costs.

The year-average interest rates on 28-day Mexican government peso-denominated treasury bills (Certificados de la Tesorería de la Federación), were 3.8%, 3.0% and 3.0% for 2013, 2014 and 2015, respectively. The year-average 28-day Interbank Equilibrium Interest Rate (Tasa de Interés Interbancaria de Equilibrio, or TIIE), was 4.3%, 3.5%, and 3.3% for 2013, 2014 and 2015, respectively. As a result of the depreciation of the Mexican peso during 2015 and the volatile macroeconomic environment given international events, such as the Brexit, the Central Bank of Mexico increased its reference interest rate to 4.25% in June 2016, in an effort to encourage lending and stimulate the economy. In the medium-term, it is possible that the Mexican Central Bank will increase its benchmark interest rate. Accordingly, if we incur peso-denominated debt in the future, it could be at higher interest rates.

The Mexican government has exercised, and continues to exercise, significant influence over the Mexican economy. Changes in Mexican governmental policies could adversely affect our business, results of operations and financial condition.

The Mexican federal government has exercised, and continues to exercise, significant influence over the Mexican economy. Accordingly, the actions and policies of the Mexican federal governmental concerning the economy, state owned enterprises and state controlled, funded or influenced financial institutions could have a significant impact on private sector entities in general and on us in particular, and on market conditions, prices and returns on Mexican securities. See "Business—Governmental and Environmental Regulation." The Mexican government has in the past intervened in the local economy and occasionally made significant changes in policies and regulations, which it could continue to do in the future. Such actions to control inflation and other regulations and policies have involved, among other measures, increases in interest rates, changes in tax policies, price controls, currency devaluations, limits on imports and other actions. Our business, financial condition, results of operations and our ability to comply with our obligations under the notes may be adversely affected by changes in governmental policies or regulations involving or affecting our management, our operations and our tax regime.

In the past, the Mexican economy has experienced balance of payment deficits and shortages in foreign exchange reserves. While the Mexican government does not currently restrict the ability of Mexican or foreign persons or entities to convert pesos to foreign currencies, including U.S. dollars, it has done so in the past and could do so again in the future. We cannot assure you that the Mexican government will not implement a restrictive exchange control policy in the future. Any such restrictive exchange control policy could prevent or restrict our access to U.S. dollars to meet our U.S. dollar denominated obligations and could also have a material adverse effect on our business, financial condition and results of operations. Tax legislation, in particular, in Mexico is constantly subject to change, such as the increases in tax rates resulting from the enactment of the Mexican tax legislation in effect as of January 2014, and the Mexican government may continue to make changes to it or any of its existing political, social, economic or other policies, which changes may have a material adverse effect on our business, results of operations, financial condition or prospects or may adversely affect our ability to comply with the obligations under the notes.

Accounting standards and disclosure requirements in Mexico differ from the United States and may not adequately reflect our business and results of operations.

In addition, accounting standards and disclosure requirements in Mexico differ from those of the United States. In particular, our financial statements are prepared in accordance with IFRS which differs from United States GAAP in a number of respects. Items on the financial statements of an entity prepared in accordance with IFRS may not reflect its financial position or results of operations in the way they would be reflected had such financial statements been prepared in accordance with United States GAAP.

Risks Related to the Notes

There is no existing market for the trading of the notes, and we cannot assure you that you will be able to sell your notes in the future.

The notes will constitute a new issue of securities. Prior to the offering of the notes there has been no public market and the notes may not be widely distributed. Accordingly, an active trading market for the notes may not develop. If a market for the notes offered hereby does develop, the price of such notes may fluctuate and liquidity may be limited. If a market for the notes offered hereby does not develop, purchasers may not be able to resell such notes for an extended period of time, if at all. Although we have applied 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, we cannot provide you with any assurances regarding the future development of a market for the notes, the ability of holders of the notes to sell their notes, or the price at which such holders may be able to sell their notes. If such a market were to develop, the notes could trade at prices that may be higher or lower than the initial offering price depending on many factors, including prevailing interest rates, our results of operations and financial condition, political and economic developments in and affecting Mexico and the markets for similar securities. The initial purchasers 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.

In addition, trading or resale of the notes (or beneficial interests therein) may be negatively affected by other factors described in this offering memorandum, either arising from this transaction or from the market for securities of Mexican issuers generally. As a result, we cannot assure you of the level of liquidity of any trading market for the notes and, as a result, you may be required to bear the financial risk of your investment in the notes indefinitely.

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 or the Mexican Securities Market Law 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 for sales to qualified institutional buyers, as defined under Rule 144A of the Securities Act. For a discussion of certain restrictions on resale and transfer, see "Transfer Restrictions."

We are a holding company. We don't generate revenue ourselves, and depend on dividends and other financial resources from our subsidiaries to fund our operations and pay dividends, should we determine to do so. We are a holding company and conduct all of our operations through our subsidiaries. We have no material assets other than the shares of our subsidiaries. Consequently, our ability to fund our operations, pay our debt and, to the extent that we decide to do so, pay dividends, primarily depends on our subsidiaries' ability to generate revenue and pay dividends and make other distributions to us. Our subsidiaries are separate and distinct legal entities. Any dividend payment, distribution, credit or advance from our subsidiaries is limited by the general provisions of Mexican legislation regarding the distribution of corporate earnings and may be limited pursuant to contractual restrictions. The payment of dividends by our subsidiaries also depends on their earnings and business considerations. In addition, our right to receive any assets from any subsidiary upon its reorganization or liquidation, in our capacity as a shareholder of such subsidiary, will be effectively subordinated to the rights of such subsidiary's creditors, including trade creditors.

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 may be required by the indenture governing the notes to offer to repurchase all outstanding notes at a repurchase price equal to 101% 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 and under the instruments governing our other financings.

Payments of judgments against us on the notes would be in pesos.

In the event that proceedings are brought against us or the subsidiary guarantor in Mexico, either to enforce a judgment or as a result of an original action brought in Mexico, we and the subsidiary guarantor 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 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 the Mexican Central Bank and published every banking-business day in the Mexican 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.

Our company and the subsidiary guarantor are organized under the laws of Mexico. Most of our directors, executive officers and controlling persons, and most of the directors and officers of the subsidiary guarantor, reside outside of the United States. A significant portion of our assets and the assets of the subsidiary guarantor are located, and a majority of our revenues and the revenues of the subsidiary guarantor are derived from sources, outside the United States. Certain of the experts named in this offering memorandum also reside outside the United States. As a result, it may not be possible for you to effect service of process upon such persons or entities outside Mexico, as the case may be. In addition, we have been advised by our Mexican counsel, Galicia Abogados, S.C., that there is doubt as to the enforceability, in original actions in Mexican courts or in actions for enforcement of judgments obtained in courts of jurisdictions outside Mexico, of liabilities predicated solely on U.S. federal securities laws or the securities laws of any jurisdiction outside Mexico 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. No treaty is currently in effect between the United States and Mexico that covers the reciprocal enforcement of foreign judgments. As a result, creditors of indebtedness incurred under instruments governed by Mexican law may be in a better position to enforce their rights against us in connection with judgments obtained from Mexican courts predicated on civil liabilities under Mexican laws.

The notes are not secured by our assets and the notes and the subsidiary guarantee will be effectively subordinated to our and the subsidiary guarantor's secured debt.

The notes will be our senior unsecured debt and the subsidiary guarantee will be the unsecured obligation of the subsidiary guarantor, and will rank equally in right of payment with all of our and the subsidiary guarantor's other existing and future unsubordinated debt, respectively. The notes and the subsidiary guarantee will be effectively junior to any existing secured debt or secured debt we may incur in the future and to the future secured debt of the subsidiary guarantor. As of June 30, 2016, our total consolidated indebtedness was Ps.14,461 million (U.S.$780 million), all of which constituted unsecured indebtedness. Because the notes are our unsecured obligations, if an event of default occurs under any future secured debt, or in the event that we or the subsidiary guarantor becomes subject to a dissolution, bankruptcy (quiebra), liquidation or insolvency proceeding (concurso mercantil), any secured debt holders would be paid before you receive any amounts due under the notes to the extent of the value of the assets securing their debt and creditors of our non-guarantor subsidiaries may also be paid before you receive any amounts due under the notes or the subsidiary guarantee. In that event, you may not be able to recover any principal or interest you are due under the notes or the subsidiary guarantee.

Further, if any assets did remain after payment of these secured creditors, the remaining assets might be insufficient to satisfy the claims of the holders of the notes and holders of other unsecured debt that is deemed of the same class as the notes, and potentially all other general creditors who would participate ratably with holders of the notes. Furthermore, the notes will be subordinated to obligations given preference by mandatory provisions of Mexican law (including certain claims relating to taxes and labor).

The notes and the subsidiary guarantee will be structurally subordinated to the liabilities of our non- guarantor subsidiaries.

The notes will only be guaranteed by the subsidiary guarantor. Therefore, the notes and the subsidiary guarantee will be the unconditional and unsecured obligation of the subsidiary guarantor only and are structurally subordinated to all existing and future liabilities of our other non-guarantor subsidiaries in respect of the assets and revenues of such non-guarantor subsidiaries. As of June 30, 2016, our total consolidated indebtedness was Ps.14,461 million (U.S.$780 million), all of which constituted unsecured indebtedness. As of such date, our non-guarantor subsidiaries had no indebtedness (other than intercompany indebtedness).

The non-guarantor subsidiaries are separate legal entities and have no obligation, contingent or otherwise, to pay any amounts due under any the notes or to make any funds available to us for such purpose. The payment of dividends and other distributions 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.

We and the subsidiary guarantor hold a limited portion of our total consolidated assets and account for a limited portion of our consolidated EBITDA and revenue.

For the year ended December 31, 2015, the subsidiary guarantor's aggregate EBITDA and the aggregate EBITDA of our non-guarantor subsidiaries (in each case, without giving effect to intercompany eliminations) was 59.2% and 40.8% of our consolidated EBITDA, respectively. As of December 31, 2015, the total assets of our subsidiary guarantor were 58.9% of our consolidated total assets, and the aggregate total assets of our non-guarantor subsidiaries were 44.1% of our consolidated total assets. As of December 31, 2015, the total revenue of the subsidiary guarantor and our non-guarantor subsidiaries were 96.5% and 3.5% of our consolidated total revenue, respectively. Further, our consolidated financial information included in this offering memorandum may be of limited use in assessing the financial position of the subsidiary guarantor.

The subsidiary guarantee may not be enforceable against the subsidiary guarantor.

The notes will be fully and unconditionally guaranteed by the subsidiary guarantor; however, it is possible that the subsidiary guarantee 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 guarantee of the notes from being valid, binding and enforceable against the subsidiary guarantor, in the event that the subsidiary guarantor becomes subject to an insolvency proceeding (concurso mercantil) or to bankruptcy (quiebra), the creditors of the subsidiary guarantor may challenge the validity of the subsidiary guarantee on the grounds that the subsidiary guarantor did not receive fair consideration in exchange for such guarantee.

If we or the subsidiary guarantor were to be declared insolvent or bankrupt, holders of notes may find it difficult to collect payment on the notes.

Under the Mexican Business Reorganizations Law (Ley de Concursos Mercantiles), if we are or the subsidiary guarantor is declared bankrupt (en quiebra) or subject to insolvency proceedings (concurso mercantil), our obligations under the notes and the obligations of such subsidiary guarantor under the subsidiary guarantee, respectively, (i) would be converted to pesos and then from pesos into unidades de inversión, or UDIs, 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 insolvency proceeding (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 unsecured creditors are satisfied.

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.

The rating of the notes may be lowered or withdrawn depending on various factors, including the rating agencies' assessments of our financial strength and Mexican sovereign risk.

The rating of the notes addresses the likelihood of payment of principal at their maturity. The rating also addresses the timely payment of interest on each payment date. The rating of the notes is not a recommendation to purchase, hold or sell the notes, and the rating does not comment on market price or suitability for a particular investor. We cannot assure you that the rating of the notes will remain for any given period of time or that the rating will not be lowered or withdrawn. An assigned rating may be raised or lowered depending, among others, on the respective rating agency's assessment of our financial strength, as well as its assessment of Mexican sovereign risk generally.

We and the subsidiary guarantors may incur additional secured indebtedness or indebtedness ranking equally to the notes or the subsidiary guarantees, as applicable.

The indenture governing the notes will permit us and the subsidiary guarantor to issue additional debt that ranks on an equal and ratable basis with the notes or the subsidiary guarantees, as applicable. If we incur or the subsidiary guarantor incurs any additional debt that ranks on an equal and ratable basis with the notes or the

subsidiary guarantee, as applicable, the holders of that debt will be entitled to share ratably with the holders of the notes in any proceeds distributed in connection with an insolvency, liquidation, reorganization, dissolution or other winding-up of us or the subsidiary guarantor, as applicable, subject to satisfaction of certain debt limitations. This may have the effect of reducing the amount of proceeds paid to you. We and the subsidiary guarantor also have the ability to incur certain secured debt without securing the notes or guarantees, as applicable, on an equal and ratable basis, and such debt would be effectively senior to the notes and the subsidiary guarantee, as applicable, to the extent of the assets securing such debt.

Our shareholders will continue to have significant influence over us after this offering, and its interests could conflict with yours.

Our shareholders have and will continue to have the ability to determine the outcome of substantially all matters submitted for a vote, and thus to exercise control over our business policies and affairs, including, among others, determinations with respect to: the composition of our board of directors and, consequently, any determinations of our board with respect to our business direction and policy, including the appointment and removal of our officers; mergers, other business combinations and other transactions, including those that may result in a change of control; whether dividends are paid or other distributions are made and the amount of any such dividends or distributions; sales and dispositions of our assets; agreements with competitors, suppliers and any third parties; and the amount of debt that we incur. As a result, circumstances may occur in which our shareholders' interests could conflict with your interests as note holders.

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.$738 million. We intend to use the net proceeds of this offering for general corporate purposes, including to finance capital expenditures and to finance a portion of the purchase price of our proposed acquisitions.

EXCHANGE RATES

Mexico has had a free market for foreign exchange since the end of 1994 and Mexican Central Bank allows the peso to float freely against the U.S. dollar and other foreign currencies. As a result, policy has evolved toward an inflation targeting regime, and Mexican Central Bank intervenes directly in the foreign exchange market only to reduce excessive short-term volatility. Mexican Central Bank, as an autonomous authority, recognizes price stability as its fundamental goal and implements monetary policy using a target for the overnight interest rate charged in the interbank market. An interest rate regime became effective on January 21, 2008 and substituted the regime based on daily balances known as the "corto." As part of the interest rate target regime, open market operations (liquidity auctions) aim to provide the incentives for commercial banks to keep their accounts at the Mexican Central Bank with a balance of zero at the daily market closing, in an environment where the overnight rate equals the target rate. The Mexican Central Bank provides or withdraws liquidity as needed to meet its target rate through these operations. Positive balances in the accounts kept by commercial banks at the Mexican Central Bank are not paid interest, while overdrafts or negative balances are charged twice the overnight interest rate target. An increase in interest rates can make domestic financial assets more attractive to investors than foreign financial assets, which could trigger an appreciation of the nominal exchange rate and vice versa.

There can be no assurance that the Mexican government will maintain its current policies with respect to the peso or that the peso will not depreciate significantly in the future. The Mexican economy has suffered balance of payment deficits and shortages in foreign exchange reserves in the past. While the Mexican government, for more than 15 years, has not restricted the ability of Mexican and foreign individuals or entities to convert pesos to U.S. dollars, we cannot assure you that the Mexican government will not institute restrictive exchange control policies in the future. To the extent that any such restrictive exchange control policies were to be instituted in the future in the event of shortages of foreign currency, our ability to transfer or convert pesos into U.S. dollars and other currencies to service our foreign currency obligations would be adversely affected, and foreign currency may not be available without substantial additional cost.

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 Mexican Central Bank in the Federal Official Gazette of Mexico. The 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 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 actually represent U.S. dollar amounts or that we earn revenue in U.S. dollars, or that such peso amount 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" and "—Currency fluctuations may adversely affect us." On September 20, 2016, the exchange rate between the peso and U.S. dollar was Ps.19.61 to U.S. $1.00. The exchange rates in this table are provided solely for reference of the investors.

Exchange Rate Low High Period Average Period End Year: 2011 ...... 11.51 14.25 12.46 13.95 2012 ...... 12.63 14.37 13.14 12.96 2013 ...... 11.98 13.43 12.86 13.10 2014 ...... 12.84 14.78 13.29 14.73 2015 ...... 14.55 17.37 15.87 17.33

Month ended: March 31, 2016 ...... 17.85 18.10 17.69 17.25 April 30, 2016 ...... 17.23 17.89 17.49 17.21 May 30, 2016 ...... 17.17 18.54 18.09 18.47 June 30, 2016 ...... 18.41 19.12 18.65 18.55 July 31, 2016 ...... 18.46 18.89 18.58 18.89 August 31, 2016 ...... 17.98 18.91 18.79 18.47 September 20, 2016 ...... 18.35 19.61 18.87 19.61

CAPITALIZATION

The following table sets forth our capitalization and indebtedness as of June 30, 2016 on (i) an actual basis and (ii) as adjusted to give effect to the issuance of the 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 our unaudited condensed consolidated interim financial statements included elsewhere in this offering memorandum.

As of June 30, 2016 Unaudited Actual As adjusted Actual As adjusted (in millions of U.S.$)(1)(2) (in millions of Ps.)(2) Debt: Denominated in U.S. dollars: 3.950% Senior Notes due 2024 ...... 299 299 5,539 5,539 3.875% Senior Notes due 2026(3) ...... --- 750 --- 13,913 Total ...... 299 1,049 5,539 19,452 Denominated in Mexican pesos: 9.36% Notes (certificados bursátiles) due 2018 54 54 1,000 1,000 7.64% Notes (certificados bursátiles) due 2022 102 102 1,900 1,900 4.22% Notes (certificados bursátiles) due 2020(4) ...... 40 40 750 750 8.53% Notes (certificados bursátiles) due 2020 121 121 2,250 2,250 TIIE + 0.35% Notes (certificados bursátiles) due 2017 ...... 113 113 2,100 2,100 CS Credit Facility ...... 50 50 921 921 Total ...... 480 480 8,921 8,921 Total Debt ...... 780 1,530 14,461 28,373

Less current portion of long-term debt...... ------Less debt issuance costs ...... --- 12 --- 223 Long-term debt ...... 780 1,518 14,461 28,150

Total stockholders' equity ...... 3,963 3,963 73,521 73,521 Total capitalization ...... 4,743 5,493 87,982 101,894 Total debt as a percentage of total capitalization ...... 16.4% 27.8% 16.4% 27.8%

(1) 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 conversions of the respective Mexican peso amount using any convenience conversion exchange rate. However, the Mexican peso-denominated debt and total lines in the U.S. dollar columns represent a conversion of the respective amount in Mexican pesos using the convenience conversion exchange rate of Ps.18.55 per U.S.$1.00 used elsewhere in this offering memorandum. (2) Except percentages. (3) Net proceeds from this offering, after deducting certain transaction expenses (including fees and commissions payable to the initial purchasers). (4) Converted to Mexican pesos for convenience only at the rate of Ps.5.41 per 1.00 UDI, the rate reported as of June 30, 2014 by the Mexican Central Bank.

SELECTED 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 financial statements and our 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.

Six Months Ended June 30, Year Ended December 31, 2016 2015 Unaudited 2015 2014 2013 (in thousands (in thousands CONSOLIDATED STATEMENTS OF of U.S. of U.S. (1)(2) (2) (3)(2) (2) COMPREHENSIVE INCOME dollars) (in thousands of Ps.) dollars) (in thousands of Ps.)

Total revenue ...... 2,400,039 43,368,701 39,050,179 5,752,545 91,292,889 81,213,589 74,401,262

Total costs and expenses ...... 2,129,389 38,478,053 34,571,015 4,955,109 78,637,582 70,100,283 63,565,180

Operating income ...... 270,650 4,890,648 4,479,164 797,436 12,655,307 11,113,306 10,836,082

Profit before income tax ...... 270,050 4,879,806 4,468,075 786,141 12,476,064 10,561,539 10,400,948 Income taxes ...... 68,752 1,242,351 1,168,761 205,618 3,263,165 2,797,179 2,698,115

Consolidated net income ...... 201,298 3,637,455 3,299,314 580,523 9,212,899 7,764,360 7,702,833

Components of comprehensive income to be subsequently reclassified to the income statement: Cash flow hedges – net of income tax .... 1,703 30,775 (11,781) (1,228) (19,482) 163,765 66,404 Other comprehensive income items ...... ------(415) (6,580) 20,411 52,157

Components of comprehensive income not to be subsequently reclassified to the income statement: Actuarial loss on post-employment benefit obligations – net of income tax .. 15,584 281,596 (11,214) 5,883 93,368 (109,447) 66,666