Análisis Actinver Sector and Regional Studies

May, 2015

Mexico’s Northwestern region economy

CONFIDENCIAL Y DE USO INTERNO 1 ’s Northwestern region

Main points

General features Page 3 Population Page 4 Working population Page 5 Importance of region economy in the macroeconomic context Page 6 Region’s economy Page 8 Sector participation in national economy Performance of agriculture sector Page 9 Performance of industrial sector Page 11 Performance of services sector Page 12 Foreign Direct Investment Page 13 Region infrastructure Page 14 Maritime ports Page 15 Railways Page 16 Highways and roads Page 17 Competitiveness index Page 18 Industrial Parks Page 19 Company generation Page 21 Commercial banking loans by State Page 23 State participation in NIP, investment projects Page 24

CONFIDENCIAL Y DE USO INTERNO 2 General features Mexico’s Northwestern region

• Region concentrates 12.9% of country’s total population (119.71 million to 2014). • The fourth most important region of GDP value totaling MP 1,679,920 million during 2014, with a 12.8% participation. • Economic growth rhythm is above national GDP with a 3.1% rate between 2003 and 2013. • Sonora and Chihuahua are the highest added value economies of the six entities part of the region, together with BC, BCS, Durango and Sinaloa. • Services sector has the highest weight of the regional economy with a 59.30%, followed by the industrial sector with 34.22% and the agriculture sector with 6.49%. • Main activities of the region are focused on the industrial, mining and tourism activities. Although the agriculture sector represents 26.0% of national total. • The region has 166 industrial parks, outstanding BC with 78 and Chihuahua with 38. • With excellent communication routes. It has 19 international airports, 37 ports, 72 thousand Km of roads and 7,234 Km railways. • With 4.7% of loans stake granted by commercial banks to states. Main cities , Baja California Ciudad Juárez, Chihuahua Culiacán, Sinaloa Mexicali, Baja California Hermosillo, Sonora State Durango, Durango BC BCS Sonora Sinaloa Chihuahua Durango Ensenada, Baja California Mazatlán, Sinaloa Ciudad Obregón, Sonora Los Mochis, Sinaloa Capital La Paz, Baja California Sur Mexicali La Paz Hermosillo Culiacán Chihuahua Durango Nogales, Sonora San Luis Río Colorado, Sonora Navojoa, Sonora Guaymas, Sonora Ciudad Cuauhtémoc, Chihuahua Baja California Ciudad Lerdo, Durango Baja California Sur Delicias, Chihuahua Chihuahua Guasave, Sinaloa Sonora Guamuchil, Sinaloa Sinaloa Durango

CONFIDENCIAL Y DE USO INTERNO 3 Population Mexico’s Northwestern region

• Region has 15.45 million inhabitants, in accordance to INEGI’s 2014 figures, representing 12.9% of country’s total population. • Population CAGR of region was 1.3% from 2010 to 2014, rate higher than national total of 1.2%. • Chihuahua is the state with the highest population of 3.67 million, followed by Baja California with 4.43 million, Sinaloa with 2.89 million, Sonora 2.89 million, Durango 1.75 million and BCS with 0.74 million.

Population, million inhabitants 2010 2011 2012 2013 2014 CAGR Total National 114.26 115.68 117.05 118.40 119.71 1.2% Total region 14.65 14.84 15.05 15.25 15.45 1.3% Baja California 3.22 3.28 3.33 3.38 3.43 1.6% Baja California Sur 0.65 0.67 0.70 0.72 0.74 3.3% Chihuahua 3.53 3.56 3.60 3.64 3.67 1.0% Durango 1.67 1.69 1.71 1.73 1.75 1.1% Sinaloa 2.85 2.88 2.91 2.93 2.96 0.9% Sonora 2.73 2.77 2.81 2.85 2.89 1.5% Participation regional/national 12.8% 12.8% 12.9% 12.9% 12.9%

Source: INEGI

CONFIDENCIAL Y DE USO INTERNO 4 Población ocupada Mexico’s Northwestern region

• Region has 6.52 million working population, representing 13.2% of the country’s total working population (49.55 million to 2014). Chihuahua has 1.49 million, the entity with the highest participation. Followed by Baja California with 1.48 million, and Sonora with 1.31 million.

Working population, million 2010 2011 2012 2013 2014 CAGR Total National 46.89 47.18 49.28 49.55 49.55 1.4% Total region 5.88 5.89 6.28 6.53 6.52 2.6% Baja California 1.33 1.36 1.44 1.49 1.48 2.8% Baja California Sur 0.29 0.30 0.32 0.34 0.34 4.1% Chihuahua 1.34 1.29 1.40 1.48 1.49 2.7% Durango 0.61 0.64 0.64 0.69 0.67 2.4% Sinaloa 1.21 1.19 1.25 1.27 1.21 0.0% Sonora 1.09 1.11 1.23 1.26 1.31 4.8% Participation regional/national 12.5% 12.5% 12.7% 13.2% 13.2%

Source: INEGI

Working population by state, 2014

0.67 1.21 1.31 1.49 Total National 0.34 Baja California 1.48 Baja California Sur Chihuahua Durango Sinaloa Sonora

49.55

CONFIDENCIAL Y DE USO INTERNO 5 Importance of region economy in the Mexico’s Northwestern region macroeconomic context

• Region’s economy represents 12.8% of the country’s total economy, fourth most important region. • GDP added MP 1.69 billion in 2013, against MP 13.12 billion of national total. • The 3 states bordering USA have the highest added value within the region. Sonora has the highest GDP value adding MP 395.4 billion, representing 23.5% of regional total, followed by Baja California with MP 383.5 billion (22.8% regional) and Chihuahua with MP 375 billion (22.3%). Northwestern region participation in national GDP, 2013

% GDP regional Regional/Total Expected GDP growth Center 4,291,532 32.7% 2013 2014 2015 2016 2017 2018 Southeast 2,905,082 22.1% National GDP 1.4% 2.1% 2.7% 3.6% 3.8% 3.9% Northeast 1,801,481 13.7% Northwestern GDP 3.2% 3.5% 3.7% 3.8% 4.0% 4.1% Northwest 1,679,920 12.8% Baja California 0.7% 0.8% 1.0% 1.0% 1.1% 1.1% Center North 1,317,259 10.0% Baja California Sur 2.8% 3.0% 3.1% 3.2% 3.3% 3.5% West 1,283,065 9.8% Chihuahua 5.4% 5.9% 6.1% 6.2% 6.5% 6.8% National GDP 13,121,598 100.0% Durango 2.0% 2.1% 2.2% 2.3% 2.4% 2.5% Millions pesos Sinaloa 1.7% 1.8% 1.9% 1.9% 2.0% 2.1% Sonora 5.3% 5.8% 6.0% 6.1% 6.4% 6.7%

GDP, MP millions, 2008 basis 14,000 13,122 12,000 10,000 8,186 8,000

6,000 4,528 4,000 1,680 2,000 996 408 109 575 0 GDP GDP agricultural GDP industrial GDP services National Regional

CONFIDENCIAL Y DE USO INTERNO 6 Importance of region economy in the Mexico’s Northwestern region macroeconomic context

Main economic activities Baja California Manufacturing Tourism Hospitality Agricultural (agriculture, livestock, fishing)

Services Baja California Sur Trading Construction Manufacturing Tourism Hospitality Agricultural (agriculture, livestock, fishing)

Chihuahua Manufacturing (maquila) Agriculture Mining

Sinaloa Agriculture (Mexico's granary), tourism, and agroindustry. It is the most important agricultural entity of the country due to its GDP added value. And the second larget fishing fleet of the country.

Sonora Agricultural (agriculture, livestock, fishing) Mining Surge of maquila industry and agroindustry Strategic sectors (aerospace, automotive, electric/electronics)

Durango Mining and tourism

CONFIDENCIAL Y DE USO INTERNO 7 Region’s economy Mexico’s Northwestern region

• Economy growth dynamics of the northwestern region is higher than total national economy, recording a 3.1% CAGR between 2004 and 2013 against a 2.6% rate of national GDP. • Sonora has the highest value of the region with MP 395.4 billion with data to 2013, 2008 basis. Followed by Baja California with MP 383.5 billion, Chihuahua with MP 375.1 billion, followed in importance by Sinaloa, Durango and Baja California Sur. • As to performance, BCS’ economy has the highest dynamics recording a 5.1% CAGR between 2004 and 2013, followed by Sonora with 4.2% and Chihuahua with 3.2%.

Sector participation of GDP 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 CAGR National GDP 10,119,898 10,545,910 10,870,105 11,410,947 11,778,877 11,941,199 11,374,629 11,965,979 12,435,058 12,935,715 13,121,598 2.6% Agricultural GDP 360,290 364,847 351,456 373,045 390,308 392,984 377,848 390,856 366,831 397,118 407,528 1.2% Industrial GDP 3,884,165 4,043,151 4,142,410 4,322,843 4,385,686 4,365,207 4,094,017 4,280,609 4,427,598 4,552,813 4,527,815 1.5% Services GDP 5,875,443 6,137,912 6,376,239 6,715,059 7,002,883 7,183,008 6,902,764 7,294,514 7,640,629 7,985,784 8,186,255 3.4%

Regional GDP 1,242,396 1,311,025 1,368,641 1,454,842 1,512,375 1,530,370 1,439,982 1,494,913 1,549,724 1,627,605 1,679,920 3.1% Agricultural GDP 88,380 90,547 92,516 97,799 106,559 104,304 102,655 106,196 91,759 105,276 108,991 2.1% Industrial GDP 431,034 463,979 479,968 516,427 531,467 536,746 494,332 500,311 529,856 554,952 574,820 2.9% Services GDP 722,982 756,499 796,157 840,616 874,349 889,320 842,995 888,406 928,109 967,377 996,109 3.3% Regional participation in total sector GDP Agricultural GDP 24.53% 24.82% 26.32% 26.22% 27.30% 26.54% 27.17% 27.17% 25.01% 26.51% 26.74% Industrial GDP 11.10% 11.48% 11.59% 11.95% 12.12% 12.30% 12.07% 11.69% 11.97% 12.19% 12.70% Services GDP 12.31% 12.33% 12.49% 12.52% 12.49% 12.38% 12.21% 12.18% 12.15% 12.11% 12.17% Participation in regional GDP PIB regional 12.28% 12.43% 12.59% 12.75% 12.84% 12.82% 12.66% 12.49% 12.46% 12.58% 12.80% Agricultural GDP 7.11% 6.91% 6.76% 6.72% 7.05% 6.82% 7.13% 7.10% 5.92% 6.47% 6.49% Industrial GDP 34.69% 35.39% 35.07% 35.50% 35.14% 35.07% 34.33% 33.47% 34.19% 34.10% 34.22% Services GDP 58.19% 57.70% 58.17% 57.78% 57.81% 58.11% 58.54% 59.43% 59.89% 59.44% 59.30%

Million pesos

CONFIDENCIAL Y DE USO INTERNO 8 Performance of agriculture sector Mexico’s Northwestern region

• Agriculture sector activity concentrates 26.7% of sector’s total value nation wide, with data to 2013. Growth dynamics has been higher in the region in regard to national total, recording a 2.1% CAGR against 1.2% of national growth rate, with data between 2003 and 2013. • Sinaloa and Chihuahua record the highest value within the region, adding in sector MP 27,777 million the first and MP 26,058 million the latter. Followed by Sonora, Durango and Baja California. • In spite of its value, the sector has had a low performance between 2003 and 2013 in states such as Sinaloa, Durango, BC and BCS, with rates lower than 1.5%.

GDP, agricultural sector, million pesos, 2008 basis 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 CAGR National GDP 360,290 364,847 351,456 373,045 390,308 392,984 377,848 390,856 366,831 397,118 407,528 1.2% Northwestern GDP 88,380 90,547 92,516 97,799 106,559 104,304 102,655 106,196 91,759 105,276 108,991 2.1% Baja California 9,466 9,598 9,772 9,926 10,338 9,896 10,136 10,923 10,528 11,203 10,930 1.4% Baja California Sur 2,920 2,782 3,142 2,935 2,914 2,913 2,706 3,122 3,102 3,431 3,221 1.0% Chihuahua 15,672 17,176 18,376 19,762 20,908 20,349 21,984 21,823 20,925 22,524 26,058 5.2% Durango 14,081 14,273 12,534 14,241 14,705 13,701 13,356 13,475 12,002 13,493 15,410 0.9% Sinaloa 25,532 29,124 28,437 30,003 34,218 34,210 31,116 32,334 22,368 28,565 27,777 0.8% Sonora 20,709 17,594 20,255 20,932 23,476 23,235 23,357 24,519 22,834 26,060 25,595 2.1% Annual growth rate National GDP 1.3% -3.7% 6.1% 4.6% 0.7% -3.9% 3.4% -6.1% 8.3% 2.6% Northwestern GDP 24.8% 26.3% 26.2% 27.3% 26.5% 27.2% 27.2% 25.0% 26.5% 26.7% Baja California 10.6% 10.8% 11.0% 11.4% 10.9% 11.2% 12.1% 11.6% 12.4% 12.1% Baja California Sur 3.1% 3.5% 3.2% 3.2% 3.2% 3.0% 3.4% 3.4% 3.8% 3.6% Chihuahua 19.0% 20.3% 21.8% 23.1% 22.5% 24.3% 24.1% 23.1% 24.9% 28.8% Durango 15.8% 13.8% 15.7% 16.2% 15.1% 14.8% 14.9% 13.3% 14.9% 17.0% Sinaloa 32.2% 31.4% 33.1% 37.8% 37.8% 34.4% 35.7% 24.7% 31.5% 30.7% Sonora 19.4% 22.4% 23.1% 25.9% 25.7% 25.8% 27.1% 25.2% 28.8% 28.3%

Source: INEGI data

CONFIDENCIAL Y DE USO INTERNO 9 Performance of agriculture sector Mexico’s Northwestern region

Main crops by entity Baja California Place Baja California Sur Place Chihuahua Place Raspberry 1st of 1 Basil 1st of 4 Cotton 1st of 6 Flow ers 1st of 1 Straw berry 2nd of 5 Nuts 1st of 18 Wheat grain 2nd of 23 Dates 3rd of 4 Apples 1st of 22 Red tomato 2nd of 32 Oats forage 1st of 24 Onion 2nd of 25 Onion 1st of 25 Cotton 2nd of 6 Ry grass 2nd of 7 Straw berry 2nd of 9 Alfalfa 2nd of 26 Olives 2nd of 5 Green pepper 2nd of 32 Dates 2nd de 4 Beans 3rd of 32 Cucumber 3rd of 29 Garlic 3rd of 18 Grapes 3rd of 14 Sparragus 3rd of 5

Main crops by entity Durango Place Sonora Place Sinaloa Place Oats forage 2nd of 24 Dates 1st of 4 Eggplant 1st of 9 Corn forage 2nd of 24 Olives 1st of 5 Chickpea 1st of 13 Sorghum forage 2nd of 26 Sparragus 1st of 5 Cucumber 1st of 29 Grapes 1st of 14 Green tomato 1st of 30 Potato 1st of 22 Corn grain 1st of 31 Wheat grain 1st of 23 Red tomato 1st of 32 Watermelon 1st of 27 Chile verde 1st of 32 Squash 1st of 30 Potato 2nd of 22 Chickpea 2nd of 13 Beans 2nd of 32 Nuts 2nd of 18 Mango 3rd of 23 Melon 3rd of 24 Sorghum forage 3rd of 29

Source: INEGI

CONFIDENCIAL Y DE USO INTERNO 10 Performance of industrial sector Mexico’s Northwestern region

• Industrial sector of region participates with a 12.7% of total of national activity and 34.2% of regional GDP. Stake of sector within national total has improved from 11.5% in 2004 to 12.7% in 2.13. • Sonora is the state with the highest weight of activity of the region’s total with 30.2%, followed by Baja California with 23.5%, Chihuahua with 22.4%, Sinaloa and Durango have similar participation with 9.9% and 9.6%, respectively, and BCS with 4.4%. • In regard to CAGR the highest growth between 2004 and 2013 is for BCS with 6.2%, Sonora 5.5%, and Chihuahua with 2.7%. CAGR for the outstanding states is lower than 1.5%. • The region is dominated by agroindustry and mining. Sonora and Durango are the best gold and silver producers of the country.

GDP, industrial sector, millions pesos, 2008 basis 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 CAGR National GDP 3,884,165 4,043,151 4,142,410 4,322,843 4,385,686 4,365,207 4,094,017 4,280,609 4,427,598 4,552,813 4,527,815 1.5% Northwestern GDP 431,034 463,979 479,968 516,427 531,467 536,746 494,332 500,311 529,856 554,952 574,820 2.9% Baja California 117,803 127,143 130,615 141,862 145,205 144,343 127,097 124,661 130,827 137,025 134,931 1.4% Baja California Sur 13,943 17,566 17,671 19,181 20,141 23,789 22,239 20,912 22,923 22,163 25,532 6.2% Chihuahua 98,884 104,297 110,534 119,833 123,230 126,034 111,850 109,113 110,328 120,488 128,646 2.7% Durango 48,714 49,188 48,456 49,731 51,328 50,343 49,214 50,130 55,137 56,079 55,071 1.2% Sinaloa 50,267 55,349 55,133 54,980 58,517 62,144 59,633 60,607 59,757 58,447 57,047 1.3% Sonora 101,423 110,436 117,559 130,840 133,046 130,093 124,299 134,888 150,884 160,750 173,593 5.5% Annual growth rate National GDP 4.1% 2.5% 4.4% 1.5% -0.5% -6.2% 4.6% 3.4% 2.8% -0.5% Northwestern GDP 7.6% 3.4% 7.6% 2.9% 1.0% -7.9% 1.2% 5.9% 4.7% 3.6% Baja California 7.9% 2.7% 8.6% 2.4% -0.6% -11.9% -1.9% 4.9% 4.7% -1.5% Baja California Sur 26.0% 0.6% 8.5% 5.0% 18.1% -6.5% -6.0% 9.6% -3.3% 15.2% Chihuahua 5.5% 6.0% 8.4% 2.8% 2.3% -11.3% -2.4% 1.1% 9.2% 6.8% Durango 1.0% -1.5% 2.6% 3.2% -1.9% -2.2% 1.9% 10.0% 1.7% -1.8% Sinaloa 10.1% -0.4% -0.3% 6.4% 6.2% -4.0% 1.6% -1.4% -2.2% -2.4% Sonora 8.9% 6.4% 11.3% 1.7% -2.2% -4.5% 8.5% 11.9% 6.5% 8.0% Participation in National GDP 11.5% 11.6% 11.9% 12.1% 12.3% 12.1% 11.7% 12.0% 12.2% 12.7%

Source:INEGI data

CONFIDENCIAL Y DE USO INTERNO 11 Performance of services sector Mexico’s Northwestern region

• Region’s services sector participates with 12.2% of total of national activity and 59.2% of regional activity. Sector’s total value added MP 996,109 million in 2013, outstanding Baja California with MP 237,647 million, followed by Chihuahua with MP 220,395, Sonora with MP 196,257 million, Sinaloa with MP 184,102 million, Durango with MP 86,259 million and finally BCS with MP 71,449 million. • As to growth, CAGR of regional activity was 3.3% between 2004 and 2013, hardly below national average of 3.4%. BCS outstands with a 5.0% CAGR, followed by Sonora with 3.5%.

GDP, services sector, million pesos, 2008 basis 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 CAGR National GDP 5,875,443 6,137,912 6,376,239 6,715,059 7,002,883 7,183,008 6,902,764 7,294,514 7,640,629 7,985,784 8,186,255 3.4% Northwestern GDP 722,982 756,499 796,157 840,616 874,349 889,320 842,995 888,406 928,109 967,377 996,109 3.3% Baja California 178,988 187,793 198,403 207,818 215,948 217,279 203,826 212,882 223,816 232,603 237,647 2.9% Baja California Sur 43,954 48,164 53,879 59,107 64,901 64,311 61,513 65,569 68,363 71,887 71,449 5.0% Chihuahua 160,466 168,041 176,295 188,924 195,468 200,334 185,771 195,722 204,064 212,720 220,395 3.2% Durango 65,817 68,996 71,685 74,493 77,115 78,812 75,903 79,951 82,319 84,140 86,259 2.7% Sinaloa 135,008 138,658 144,956 151,202 156,017 161,009 154,621 162,680 169,546 177,472 184,102 3.2% Sonora 138,749 144,847 150,939 159,072 164,900 167,575 161,361 171,602 180,001 188,555 196,257 3.5% Annual growth rate National GDP 4.5% 3.9% 5.3% 4.3% 2.6% -3.9% 5.7% 4.7% 4.5% 2.5% Northwestern GDP 4.6% 5.2% 5.6% 4.0% 1.7% -5.2% 5.4% 4.5% 4.2% 3.0% Baja California 4.9% 5.6% 4.7% 3.9% 0.6% -6.2% 4.4% 5.1% 3.9% 2.2% Baja California Sur 9.6% 11.9% 9.7% 9.8% -0.9% -4.4% 6.6% 4.3% 5.2% -0.6% Chihuahua 4.7% 4.9% 7.2% 3.5% 2.5% -7.3% 5.4% 4.3% 4.2% 3.6% Durango 4.8% 3.9% 3.9% 3.5% 2.2% -3.7% 5.3% 3.0% 2.2% 2.5% Sinaloa 2.7% 4.5% 4.3% 3.2% 3.2% -4.0% 5.2% 4.2% 4.7% 3.7% Sonora 4.4% 4.2% 5.4% 3.7% 1.6% -3.7% 6.3% 4.9% 4.8% 4.1% Participation in National GDP 12.3% 12.5% 12.5% 12.5% 12.4% 12.2% 12.2% 12.1% 12.1% 12.2%

Source: INEGI data

CONFIDENCIAL Y DE USO INTERNO 12 Foreign Direct Investment Mexico’s Northwestern region

• The highest foreign investment concentrates in the manufacturing industry, adding to 2014 the amount of USD 1,766 million, of which USD 1,007 million were received by Chihuahua, USD 685 million Baja California and USD 74 million Sonora. • Investment in mining was USD 926 million, in which Durango received USD 790 million, Chihuahua USD 79 million, Sonora USD 34 million and Sinaloa USD 13 million. • Transport sector received USD 113 million and Sinaloa receiving the highest amount with USD 107 million. In other segments investments added USD 600 million.

Foreign Direct Investment 2014, USD million Transport, Agricultural Manufacturing shipments, Other State FDI % National Total sector Mining Construction industries Trading storage segments National total 22,568 100.0% 84 2,215 873 12,870 1,954 400 4,173 Baja California 813 3.6% 11 - 3 685 6 0 108 Baja California Sur 198 0.9% - - 0 0 0 - 198 Chihuahua 1,152 5.1% 0 89 0 1,007 7 6 43 Durango 772 3.4% -26 790 - 0 9 - 0 Sinaloa 141 0.6% 0 13 0 0 -15 107 36 Sonora 333 1.5% 0 34 3 74 7 - 215

Source: Energy Secretary, February 2015 State participation in regional FDI

9.8% 23.9% 4.1% Baja California Baja California Sur Chihuahua Durango 22.7% 5.8% Sinaloa Sonora

33.8%

CONFIDENCIAL Y DE USO INTERNO 13 Region infrastructure Mexico’s Northwestern region

• The region has 19 airports, all international, and represents 25.0% of national total. It has 37 ports, representing 32.0% of national total, and 27.1% railways (national total 26,727 Km.). • Sonora outstands due to the level of infrastructure within the region. It has the highest number of airports (5) of the 17 of the region, with 2,008 km of railways of national total of 7,234 km. • Followed by the two Baja's with 4 airports each, while BC has 8 maritime ports and BCS 16 ports.

Infrastructure State Airports National International Ports Coastal Railways National total 76 12 64 117 48 26,727 regional total 19 0 19 37 14 7,234 Baja California 4 0 4 8 2 223 Baja California Sur 4 0 4 16 4 0 Chihuahua 2 0 2 0 0 2,655 Durango 1 0 1 0 0 1,153 Sinaloa 3 0 3 6 3 1,195 Sonora 5 0 5 7 5 2,008

Source: Energy Secretary, February 2015

CONFIDENCIAL Y DE USO INTERNO 14 Maritime ports Mexico’s Northwestern region

• The region has nine important maritime ports, against a national total of 117, of which 4 are deep-sea harbors (servicing national and international points) and 5 coastal (servicing national points). • Outstanding are Puerto Ensenada, Puerto Guaymas, Topolobampo and Mazatlán as deep-sea harbors and San José del Cabo, Santa Rosalía, Puerto Peñasco, La Paz and Altata as coastal ports. • The area is highly touristic, highlighting La Paz, Los Cabos, and Mazatlán. • As to the tourist level, the region had a total of 22.7% arrivals of the total cruise arrivals in the country in 2014, adding to 462. As to the number of passengers of 19.3% it added to more than 1075 million. • As to the movement of cargo, the ports of Guerrero Negro in BCS and Isla de Cedros in BC, occupy 15.0% of national total with 24,890 tons recorded in 2014.

Shipments 2014, %

3.7% 4.9% Cruises and passenger per port 2014 Coatzacoalcos, Ver. Guerrero Negro, BCS ArrivalsPassengers 21.6% 6.6% Punta Venado, Q. Roo Cabo San Lucas 121 254,080 Isla de Cedros, BC 10.1% Manzanillo, Col. Ensenada 281 685,496 10.4% Lázaro Cardenas, Mich. Guaymas 2 1,825 Veracruz, Ver. 15.6% Lotero 11 24,833 Altamarira, Tam. 11.6% Other Mazatlán 34 81,659 15.5% Pichilngue 12 27,226 Topolobampo 1 643 Regional total 462 1,075,762 National total 2,034 5,560,437 Nortw estern participation22.7% 19.3%

Source: SCT data

CONFIDENCIAL Y DE USO INTERNO 15 Railways Mexico’s Northwestern region

• The region has 27.1% of national total of railways, representing 7,234 Km of the 26,726 km in the country. • Outstanding is Chihuahua with 2,655 Km, followed by Sonora with 2,008 Km, and Sinaloa with 1,915 Km. • In Chihuahua outstands Ferrocarril Chihuahua del Pacífico that goes from state capital city to Los Mochis in Sinaloa. It is a touristic route and one of the few railways that transports passengers.

CONFIDENCIAL Y DE USO INTERNO 16 Highways and roads Mexico’s Northwestern region

• Region has a 19.3% of total roads in the country, adding 72,857 Km. Roads and Highways Sonora outstands with 25,161 Km, while Sinaloa adds 16,951 Km, % National Chihuahua with 13,272 Km, followed by BC with 11,749 Km and BC with Total roads total % Regional 5,724 Km. It is important to mention the largest portion of this territory is National total 377,660 100.0% desert. Region total 88,416 23.4% 100.0% Baja California 11,749 3.1% 13.3% Baja California Sur 5,724 1.5% 6.5% Chihuahua 13,272 3.5% 15.0% Durango 15,559 4.1% 17.6% Sinaloa 16,951 4.5% 19.2% Sonora 25,161 6.7% 28.5%

CONFIDENCIAL Y DE USO INTERNO 17 Competitiveness index Mexico’s Northwestern region

• With data from the Mexican Competitiveness Institute, BCS occupies the second place of the country within the competitiveness index, followed by Sonora from within the region in 8th position, BC at 12, Sinaloa 14, Chihuahua 19 and Durango all the way to 28.

Position in accordance to state competitivenss index 2014 Law system, Sustainable Competitivenes credible & management of Inclusive, prepared Funciotanl and stable State s o bjective environment and healthy society political system Baja California Sur 2 13 2 5 14 Sonora 8 16 11 9 21 Baja California 12 26 15 10 19 Sinaloa 14 25 9 12 6 Chihuahua 19 30 31 19 11 Durango 28 23 19 21 26

Position in accordance to state competitivenss index 2014 Efficient and effctive Taking advantage Inovation of State governments Labor market Stable economy Initiator sectors international relations economic sectors Baja California Sur 22 1 4 2 2 21 Sonora 8 2 21 6 14 10 Baja California 10 22 17 9 4 12 Sinaloa 14 4 7 5 23 22 Chihuahua 7 25 31 11 1 14 Durango 21 29 24 30 13 18

Source: Índice de Competitividad Estatal 2014, IM CO.

30 28 State competitiveness index 2014 25 19 20 14 15 12

10 8

5 2

0 Baja Sonora Baja Sinaloa Chihuahua Durango California California Sur

CONFIDENCIAL Y DE USO INTERNO 18 Industrial Parks Mexico’s Northwestern region

• Region has 66 industrial parks, outstanding BC with 78, Chihuahua with 38, Sonora 31, Sinaloa 12, Durango 5 and BCS dos.

Industrial Parks Baja California Baja California Sur Sonora Sinaloa Chihuahua Durango Agua Azul Las Californias Centro Industrial La Paz-Sur Ciudad Industrial Nogales Costa Rica American Industries Fideicomiso de la Cd. Industrial de Durango Area industrial Independencia Los Insurgentes Parque Tecnológico BioHelis Ciudad Industrial Nogales 2 DISA Área Industrial Omega PI Gómez Palacio ATISA Los Olivos Dinisa El Burrión Brasa Desarrollos PI Laguna Baja Maq. Insurgentes Los Pinos I y II Lanix Industrial Park El Trebol Complejo Industrial Parral PI Lerdo Bustamente Los Potros Parque Agroindustrial ITSON PI Alfredo I. Bonfil Complejo Indistrial AeropuertoZona de Conectividad Durango California Luna Park PI Bellavista PI Canacintra I CI Chihuahua Centro industrial Arbolada/AFAL Luna Park II PI de Caborca PI Canacintra II CI Cuauhtemoc Centro industrial Barranquita Mexicali I, II, III, IV y V PI de Cananea PI de Los Mochis Gema Industrial Prak I Centro industrial Ferrocarril Misión del Rosarito PI de Ciudad Obregón PI del Evora Gema Industrial Prak II Centro industrial FIM HER Misiones PI de Ciudad de Empalme PI La Primavera Grupo Industrial Camargo Centro industrial Fundadores Morelos PI de Ciudad de Navojoa PI Mazatlán PI Omega Centro industrial La Campiña Nuevo Centro Industrial y Comercial PI de Ciudad de Nogales PI Pesquero del Puerto de TopolobampoParque Fma de Delicias Centro industrial Las Brisas 2a sección Pacífico PI Dynamica PI AeroJuárez Centro industrial Los Pinos Incubador de Empresas PI Dynatech I PI Aeropuerto Centro industrial ONIX EX-XXI PI Dynatech II PI Antonio Bermudez Cerro Colorado Azteca PI Dynatech III PI Cuauhtemoc Cerro de las Abejas Cachanilla PI Dynatech IV PI Delicias Chapultepec El Álamo PI Dynatech V PI El Saucito Cia. Inmobiliaria FIMSA El Rey PI Dynatech South PI Gema II Cd. Industrial Mesa de Otay El Sahuaro PI El CID PI Impulso Colinas El Vigía PI El CID Nogales PI Intermex Constructora VEHCSA El Vigía II PI El Raquet PI Intermex Aeropuerto Cucapah (Centro Industrial Juárez) Grupo AFAI PI El Río PI Intermex Carolinas Desarrollo Industrial El Colorado Insurgentes PI Internacional PI Intermex Norte Desarrollo Industrial La Joya La Mesa II PI Nuevo Nogales PI Intermex Sur El Bajío/Industria Cachanilla Las Brisas PI Pimex PI Juárez El Florido Nelson PI Prime PI Las Alamedas El Lago Palaco PI Pueblo Nuevo PI Las Américas El Rosario Progreso PI Roca Fuerte PI Las Américas de Juárez El Sauzal Tecate PI San Carlos Unidad Oriente PI Los Aztecas Fábricas y Bodegas Tecnológico PI San Carlos Unidad Poniente PI Los Fuentes Frontera Tecnomex PI San Ramon PI NorthGate Garita de Otay Park Pueblo Nuevo PI Panamericano Grupo Afal Presidentes Pi Paquime Grupo Los Olivos Productos Marinos PI Rio Bravo Insurgentes II Progreso II PI Supra Internacional Tijuana Promotora Industrial Mexicali Pi Zaragoza La Gravera Rosarito Prologis Salvacar Industrial Park La Mesa II Tecate Gateway Complejo Industrial Ramon River Lara Industrial Park Valle del Sur II Valle Bonito VCB Industrial Park (Vesta) Valle del Sur Zona Industrial Vista I Zona Industrial Vista II

CONFIDENCIAL Y DE USO INTERNO 19 Company generation Mexico’s Northwestern region

• Of the regions states, Durango is the state with the highest company generation between 2009 and 2014, recording a 615% growth, although this figure is relatively low in comparison with other states. It’s followed by Sinaloa with 52% adding 15,937 companies. Nevertheless, in regard to numbers Chihuahua outstands in the region with 36,590. Sonora has 6,827 companies and a growth of only 0.2%. • BC recorded a fall of company generation with a -11.4% CAGR since 2009. It added 9,976 companies in 2014 in accordance to SIEM records.

Number companies registered in SIEM Var Entity 2009 2010 2011 2012 2013 2014 2014/2009 The region concentrates a total of 90,319 Aguascalientes 7,292 6,220 6,320 5,070 5,290 5,632 -22.8% thousand companies in 2014 recorded in BC 11,263 11,737 11,487 11,420 11,244 9,976 -11.4% BCS 12,681 12,856 11,816 14,003 13,993 12,774 0.7% SIEM, representing a 12.1% of national total. Campeche 6,982 7,102 6,786 7,096 7,553 8,475 21.4% Coahuila 11,622 12,555 12,895 13,816 17,318 18,762 61.4% Colima 741 998 1,538 1,599 1,785 1,795 142.2% Chiapas 3,567 3,632 4,647 4,607 4,590 4,347 21.9% Chihuahua 30,550 28,838 32,354 36,686 39,463 36,590 19.8% DF 110,464 93,162 98,950 94,111 92,055 78,810 -28.7% Durango 1,147 1,172 1,343 1,713 6,586 8,215 616.2% Guanajuato 34,335 41,196 47,489 50,233 46,674 40,851 19.0% Guerrero 1,308 1,956 2,230 2,548 2,295 2,664 103.7% Hidalgo 18,684 21,940 25,943 19,264 16,466 14,094 -24.6% Jalisco 93,274 99,249 99,730 90,974 81,854 60,960 -34.6% México 88,879 94,826 83,764 74,756 71,768 63,130 -29.0% Michoacán 20,248 30,444 41,878 50,577 59,786 60,778 200.2% Morelos 3,982 3,824 2,929 3,358 3,459 3,178 -20.2% Nayarit 13,898 13,621 11,592 11,801 11,285 9,865 -29.0% NL 14,502 15,306 16,191 16,304 16,214 17,820 22.9% Oaxaca 4,733 3,970 4,379 4,272 4,634 4,471 -5.5% 11,390 17,432 22,398 25,631 28,032 22,813 100.3% Querétaro 39,342 48,015 56,256 53,986 51,869 53,562 36.1% Quinatana Roo 31,544 28,576 25,453 22,412 21,794 23,186 -26.5% SLP 13,413 12,946 13,284 13,970 14,471 12,937 -3.5% Sinaloa 10,450 9,853 9,877 11,911 13,320 15,937 52.5% Sonora 6,816 6,067 5,527 6,252 6,699 6,827 0.2% Tabasco 8,651 9,379 9,336 8,709 8,210 7,498 -13.3% Tamaullipas 22,754 20,383 19,396 17,975 21,581 24,712 8.6% Tlaxcala 12,977 12,277 10,743 10,171 9,677 9,250 -28.7% Veracruz 35,096 36,286 37,290 41,755 53,190 57,078 62.6% Yucatán 28,554 30,934 33,842 37,704 33,391 31,358 9.8% Zacatecas 8,515 9,607 10,901 12,194 13,214 14,510 70.4% Total 719,654 746,359 778,564 776,878 789,760 742,855 3.2% Source: Sistema de Inf ormación Empresarial Mexciano (SIEM)

CONFIDENCIAL Y DE USO INTERNO 20 Malls Mexico’s Northwestern region

Malls

Baja California Baja California Sur Chihuahua Mexicali Cabo San Lucas Chihuahua Plaza La Cachanilla (Fashion Mall) Sendero Los Cabos (Town Center): Fashion Mall Chihuahua Plaza Nuevo Mexicali (Community Center) Puerto Paraíso (LifeStyle Center) Plaza Galerías Plaza Galerías del Valle (Community Center) Plaza San Lucas (Town Center) Ciudad Juárez (Town Center) Chedraui San Lucas (Power Center) CC Las Misiones Plaza Carranza (Town Center) La Paz Juárez Plaza Lienzo (Town Center) Plaza Nautica (Servicios Rio Grande Mall Plaza Fiesta (Power Center) The Shoppes At La Paz (LifeStyle Center) Plaza Juárez Mall Plaza Fimbres (Power Center) Plaza La Paz (Centro Comercial Común) Plaza Monumental Tecate Punto La Paz (LifeStyle Center) Galerias Tec Plaza Los Encinos (Power Center) Paseos de La Paz (Power Center): Plaza de Las Americas Rosarito Walmart Cola de Ballena (Power Center): Plaza Las Torres Pabellón Rosarito (Community Center) San José del Cabo Gran Patio Zaragoza Ensenada Plaza La Cascada (Centro Comercial Común Pradera Dorada Westfield MacroPlaza Del Mar (Fashion Mall) Plaza Peninsula (Galería Comercial): Centro Comercial Misión - Ensenada - Community Center Patio CaboLey (Strip Mall): Plaza Marina - Ensenada - Fashion Mall Plaza San José del Cabo (Power Center): Plaza Bahia - Ensenada - Power Center Chedraui San José del Cabo (Power Center): Plaza Transpeninsular - Ensenada - Power Center Súper Plaza (Galería Comercial): Plaza Caracol - Ensenada - Community Center Plaza San José Viejo (Power Center) Plaza Santa Lucía - Ensenada - Power Center Plaza California (Galería Comercial): Plaza Hussong's - Ensenada - Community Center Plaza Mauina - Ensenada - Community Center Tijuana Plaza Rio Tijuana (Fashion Mall) Centro Comercial Otay (Community Center) MacroPlaza Insurgentes (Fashion Mall) Plaza Monarca (Community Center) Plaza Agua Caliente (Fashion Mall) Plaza Carrusel (Community Center) Centro Comercial Minarete (Community Center) Plaza Americana Otay (Community Center) Plaza Pavilion (Power Center) Plaza Loma Bonita (Town Center) Plaza Papalote (Town Center) Plaza La Pajarita (Power Center) Galerias Hipodromo (Fashion Mall)

CONFIDENCIAL Y DE USO INTERNO 21 Malls Mexico’s Northwestern region

Malls

Cohauila Durango Sinaloa Sonora Saltillo Durango Culiacán Ciudad Obregón Galerías Saltillo Plaza FORUM Plaza Tutuli Plaza Sendero Plaza Galas Plaza Cinépolis Plaza Obregón Plaza Real Saltillo Plaza Jardines Plaza de la tecnología Patio Ciudad Obregón Plaza Nogalera Paseo Constitucion Plaza Galerías San Miguel Guaymas Torreón Victoria de Durango Mazatlán Gran Patio Guaymas Galerías Laguna Plaza Comercial Puerta Poniente La Gran Plaza Mazatlán - Mazatlán Hermosillo Plaza Cuatro Caminos Gómez Palacio Galerías Mazatlán - Mazatlán Galerías Mall Sonora Intermall Plaza Cristal Plaza Sendero Mazatlán - Mazatlán Plaza Sendero Plaza Real Torreón Los Mochis Grand Kino Plaza del Angel Paseo Los Mochis Plaza Morelos Plaza Hipermart Plaza Girasol Plaza San Isidro Plaza Dila Plaza El Fresno Pabellón Reforma Plaza Monaco City Center Pitic Plaza La Marina Plaza Quiroga Plaza Fundadores Plaza Hermosillo Plaza Saulo Navojoa Plaza Aurora Patio Navojoa Plaza Florencia Nogales Plaza de la Tecnología Nogales Mall Fashion Outlet San Luis Río Colorado Plaza Herradura -

CONFIDENCIAL Y DE USO INTERNO 22 Commercial banking loans Mexico’s Northwestern region

• Region participates with 4.7% of total commercial bank loans to states, adding MP 155,198 million top 1Q15, outstanding Chihuahua with MP 39,094 million, followed by Sinaloa with MP 37,500, Sonora with MP 35,224, BC with MP 25,414 and at the end BCS with MP 6,519 million. Commercial banking loans 1Q-14 2Q-14 3Q-14 4Q-14 1Q-15 Participation Total 2,924,182 2,992,003 3,050,365 3,222,668 3,278,267 100.0% DF 864,231 886,198 922,459 1,009,307 1,038,967 31.7% NL 186,914 195,854 203,171 214,740 220,784 6.7% México 96,160 99,415 101,572 100,376 97,399 3.0% Jalisco 88,639 89,320 87,056 94,657 91,952 2.8% Coahuila 53,147 53,843 52,999 55,649 58,741 1.8% Veracruz 45,305 46,262 43,948 51,098 46,119 1.4% Chihuahua 39,094 39,783 39,960 46,478 46,877 1.4% Guanajuato 37,679 39,051 40,123 41,839 45,738 1.4% Sinaloa 37,500 41,829 37,831 39,850 42,705 1.3% Sonora 35,224 35,722 34,673 38,047 40,494 1.2% Qroo 33,125 31,827 33,708 36,980 38,756 1.2% Tamaulipas 32,030 32,521 32,270 34,379 34,907 1.1% Puebla 30,819 31,457 33,590 35,674 34,422 1.0% BC 25,414 27,392 26,014 28,492 27,110 0.8% Michoacán 24,226 24,069 24,975 27,150 26,322 0.8% SLP 17,735 19,032 19,965 19,957 18,151 0.6% Querétaro 17,635 18,938 17,333 17,600 18,256 0.6% Yucatán 12,649 12,473 12,137 12,407 14,215 0.4% Zacatecas 12,210 12,622 13,108 16,232 17,086 0.5% Durango 11,448 10,383 10,521 11,672 11,917 0.4% Tabasco 10,124 9,092 9,000 9,184 8,987 0.3% Morelos 9,935 10,287 10,629 10,118 10,593 0.3% Commercial banking loons, million pesos Chiapas 8,821 9,620 9,973 9,702 9,534 0.3% Aguascalientes 8,775 8,950 7,904 8,561 8,907 0.3% National Regional Amount participation participation Nayarit 8,758 8,786 8,513 6,460 6,268 0.2% National total 3,278,266.8 100.0% Campeche 8,473 9,010 7,403 8,499 7,645 0.2% Regional total 155,198.9 4.7% 100.0% Hidalgo 6,918 8,960 8,649 9,039 9,060 0.3% BC 25,414 0.8% 16.4% BCS 6,519 5,753 6,585 8,375 7,343 0.2% BCS 6,519 0.2% 4.2% Colima 4,631 4,635 4,861 4,972 5,520 0.2% Chihuahua 39,094 1.2% 25.2% Guerrero 4,551 4,285 4,290 4,196 3,912 0.1% Durango 11,448 0.3% 7.4% Oaxaca 3,921 3,845 3,370 5,980 6,035 0.2% Sinaloa 37,500 1.1% 24.2% Tlaxcala 3,332 2,830 2,910 2,927 2,775 0.1% Sonora 35,224 1.1% 22.7% Source: Actinver with SCT data

CONFIDENCIAL Y DE USO INTERNO 23 State participation in NIP, investment Mexico’s Northwestern region projects

Most relevant projects by investment amount Investment Million Project Description Segment State Pesos Norte III Combined Cycle Plant capacity 954 MW Energy (CFE) Chihuahua 12,895 Ojinaga-El Encino Pipeline length 254 km Energy (CFE) Chihuahua 5,160 Waha – Central Eléctrica “Norte III” (cerca de Samalayuca) Pipeline length 300 km Energy (CFE) Chihuahua 7,095 Samalayuca – Sásabe Pipeline length 558 km Energy (CFE) Regional 10,836 Red de Transmisión Asociada a la central CC Francisco Villa (Norte V) 3 Electric substations a d2 transmission lines Energy (CFE) Regional 1,937 Transportadora de Gas Natural del Noroeste Natutal gas system for transportation of natural gas called "El Encino-Mazatlán"Energy (CFE) Regional 15,942 CC Norte IV (Lerdo) Combined Cycle Plant capacity 990 MW Energy (CFE) Durango 11,001 El Encino-La Laguna Pipeline length 423 km Energy (CFE) Durango 8,385 La Laguna-Centro Pipeline length 601 km Energy (CFE) Durango 11,610 CC Noroeste (Topolobampo II) Combined Cycle Plant capacity 1034 MW Energy (CFE) Sinaloa 13,655 CC Topolobampo III Combined Cycle Plant capacity 700 MW Energy (CFE) Sinaloa 11,968 CC Mazatlan Combined Cycle Plant capacity 867 MW Energy (CFE) Sinaloa 7,807 Red de Transmisión Asociada a la central CC Mazatlán 3 Electric substations a d2 transmission lines Energy (CFE) Regional 2,405 CC Guaymas II Combined Cycle Plant capacity 735 MW Energy (CFE) Sonora 10,699 CC Guaymas III Combined Cycle Plant capacity 735 MW Energy (CFE) Sonora 9,148 CC Baja California II (SLRC) Combined Cycle Plant capacity 276 MW Energy (CFE) Sonora 5,034 Gasoducto de Aguaprieta Sistema denominado "Gasoducto Sonora" Energy (CFE) Regional 14,385 Compromiso de Gobierno-098 Construction of dam Santa María Hydraulic Sinaloa 7,381 Source: PNI Infrastructure projects NIP 2014-2018 National total 7,750,551 100% 15% 27% Chihuahua Regional total 167,344 2% Durango Chihuahua 25,150 15% Sinaloa Durango 30,996 19% Sonora 19% Sinaloa 40,811 24% Part. Interstate Sonora 24,881 15% 15% Part. Interstate 45,505 27% 24%

CONFIDENCIAL Y DE USO INTERNO 24 Departamentos de Análisis Económico, Cuantitativo y Deuda

Análisis Económico y Cuantitativo

Director Análisis Económico y Ismael Capistrán Bolio (52) 55 1103-6600x6636 [email protected] Cuantitativo

Jaime Ascencio Aguirre Economía y Mercados (52) 55 1103-6600 x1100 [email protected]

Roberto Ramírez Ramírez Análisis Cuantitativo (52) 55 1103-6600x1672 [email protected]

Santiago Hernández Análisis Cuantitativo (52) 55 1103-6600 x4133 [email protected] Morales

Roberto Galván González Análisis Técnico (52) 55 1103 -66000x5039 [email protected]

Análisis de Deuda

Araceli Espinosa Elguea Directora de Análisis de Deuda (52) 55 1103 -66000x6641 [email protected]

Jesús Viveros Hernández Análisis de Deuda (52) 55 1103 -66000x6649 [email protected]

Mauricio Arellano Sampson Análisis de Deuda (52) 55 1103-6600x4132 [email protected]

CONFIDENCIAL Y DE USO INTERNO 25 Departamento de Análisis Fundamental

Análisis Fundamental

Gustavo Terán Durazo, Director Análisis Fundamental (52) 55 1103-6600x1193 [email protected] CFA Analistas Senior

Martín Lara Telecomunicaciones, Medios y Financiero (52) 55 1103-6600x1840 [email protected]

Carlos Hermosillo Bernal Consumo (52) 55 1103-6600x4134 [email protected]

Pablo Duarte de León Fibras y Hoteles (52) 55 1103-6600x4334 [email protected]

Pablo Abraham Peregrina Minería, metales, papel y Conglomerados (52) 55 1103-6600x1395 [email protected]

Ramón Ortiz Reyes Cemento, Construcción y Concesiones (52) 55 1103-6600x1835 [email protected]

Federico Robinson Bours Energía, Petroquímicos e Industriales (52) 55 1103-6600x4127 [email protected] Carrillo Analistas Junior

Juan Ponce Telecomunicaciones, Medios y Financiero (52) 55 1103-6600x1693 [email protected]

Ana Cecilia González Fibras y Hoteles (52) 55 1103-6600x4136 [email protected] Rodríguez

Enrique Octavio Camargo Energía, Petroquímicos e Industriales (52) 55 1103-6600x1836 [email protected] Delgado

José Antonio Cebeira Consumo (52) 55 1103-6600x1394 [email protected] González

CONFIDENCIAL Y DE USO INTERNO 26