b2w companhia global do varejo · b2w - companhia global do varejo press release 1q12 9 of 80 b2w...

(A free translation of the original in Portuguese)

B2W - Companhia Global do Varejo Quarterly Information (ITR) at March 31, 2012 and Report on Review of Quarterly Information

B2W - Companhia Global do Varejo

Balance sheet at March 31

In thousands of reais (A free translation of the original in Portuguese)

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ASSETS 03/31/2012 03/31/2011 03/31/2012 03/31/2011

CURRENT

Cash and cash equivalents 12,446 4,270 29,250 15,297

Marketable securities 593,214 880,883 689,287 923,113

Accounts receivables 528,865 586,622 1,117,643 1,133,190

Inventories 460,019 479,160 480,909 510,934

Recoverable taxes 115,561 109,862 121,988 116,654

Prepaid expenses 10,309 15,844 21,740 17,790

Other current assets 84,848 74,128 89,891 84,051

Total current assets 1,805,262 2,150,769 2,550,708 2,801,029

NON CURRENT

Long-term assets:

Marketable securities 19,246 18,544 - -

Deferred income tax and social contribution 229,337 198,780 255,742 226,092

Escrow deposits 28,194 19,775 28,219 19,802

Related parties 49,004 51,536 15,623 19,604

Other non current assets - - 871 871

Investments 60,334 59,209 - -

Fixed assets 208,289 198,587 222,206 213,037

Intangible 819,432 781,902 849,406 809,592

Deferred 23,544 27,641 - -

Total non current assets 1,437,380 1,355,974 1,372,067 1,288,998

TOTAL ASSETS 3,242,642 3,506,743 3,922,775 4,090,027

Parent Company Consolidated


Balance sheet at March 31 In thousands of reais

The accompanying notes are an integral part of these financial statements. 2 of 80

LIABILITIES AND SHAREHOLDERS' EQUITY 03/31/2012 03/31/2011 03/31/2012 03/31/2011

CURRENT

Suppliers 495,450 689,587 511,306 702,339

Loans and financing 431,634 442,703 612,383 636,254

Debentures 14,700 8,303 14,700 8,303

Salaries, provisions and social contributions 15,781 14,289 18,875 16,929

Taxes payable 3,002 4,881 7,362 8,275

Income tax and social contribution - - 138 2,315

Other current liabilities 15,899 20,415 21,827 25,806

Total current liabilities 976,466 1,180,178 1,186,591 1,400,221

NON CURRENT LIABILITIES

Long-term liabilities:

Loans and financing 758,059 785,086 1,234,424 1,163,672

Debentures 305,127 302,663 305,127 302,663

Provisions for contingencies 16,248 15,341 16,248 15,341

Deferred income tax and social contribution 69,464 60,355 69,464 60,355

Other non current liabilities 5,744 5,743 15,176 8,927

Total non current liabilities 1,154,642 1,169,188 1,640,439 1,550,958

SHAREHOLDERS'S EQUITY

Capital 1,182,491 1,182,491 1,182,491 1,182,491

Capital reserve 430 - 430 -

(-) Treasury shares - - - -

Equity adjustment 232 935 232 935

Capital reserves - - - -

(-) Treasury shares - - - -

Accumulated losses (71,619) (26,049) (87,408) (44,578)

Total shareholders's equity 1,111,534 1,157,377 1,095,745 1,138,848

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 3,242,642 3,506,743 3,922,775 4,090,027



Statements of operations for the quarters In thousands of reais, except the (losses)

earnings per thousand shares in reais (A free translation of the original in Portuguese)

The accompanying notes are an integral part of these financial statements.

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03/31/2012 03/31/2011 03/31/2012 03/31/2011

Net revenue 918,441 954,179 1,001,155 1,028,708

Cost of goods and services sold (723,194) (699,300) (762,170) (733,686)

Gross profit 195,247 254,879 238,985 295,022

Operating income (expenses)

Selling expenses (140,007) (150,455) (164,003) (166,627)

General and administrative expenses (32,148) (29,036) (37,027) (31,652)

Management fees (1,522) (1,515) (1,522) (1,620)

Other operating income (expenses) (8,158) (14,593) (8,157) (19,103)

Result before financial result 13,412 59,280 28,276 76,020

Financial revenue 43,548 38,849 58,969 42,067

Financial expenses (127,616) (108,953) (151,998) (120,772)

Financial result (84,068) (70,104) (93,028) (78,705)

Equity accounting 1,125 2,823 - -

Income (loss) before income tax and social contribution (69,531) (8,001) (64,753) (2,685)

Income tax and social contribution

Current - - (1,137) (2,883)

Deferred 23,961 3,691 23,060 3,962

Net income (loss) of the period (45,570) (4,310) (42,830) (1,606)



Statements of comprehensive result for the quarters In thousands of reais, except the (losses)

earnings per thousand shares in reais (A free translation of the original in Portuguese)

The accompanying notes are an integral part of these financial statements. 4 of 80

03/31/2012 03/31/2011 03/31/2012 03/31/2011

Net income (loss) of the period (45,570) (4,310) (42,830) (1,606)

Change in fair value of assets available for sale (1,065) (809) (1,065) (809)

Deffered income tax and social contribution 362 275 362 275

Total comprehensive result (46,273) (4,844) (43,533) (2,140)



Statements of changes in shareholders' equity for the quarters - Parent company



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Statements of changes in shareholders' equity for the quarters - Consolidated



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Statements of value added for the quarters



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03/31/2012 03/31/2011 03/31/2012 03/31/2011

Revenues

Sales of products, goods and services 1,027,166 1,050,938 1,124,336 1,146,464

Other revenues 6 39 1,270 660

Reversal (allowance) for doubtful accounts (3,282) (1,044) (905) (2,729)

1,023,890 1,049,933 1,124,701 1,144,395

Goods acquired from third parties

Costs of products sold (including ICMS, PIS and COFINS) (821,116) (786,421) (869,742) (822,351)

Materials, energy, third party services and others (103,032) (134,135) (129,763) (151,335)

Loss/Recuperation of active values (1,920) (1,920)

(924,148) (922,476) (999,505) (975,606)

Gross value added 99,742 127,457 125,196 168,789

Depreciation and amortization (24,005) (21,464) (23,575) (19,342)

Net value added generated by the Company 75,737 105,993 101,621 149,447

Value added received in transfer

Equity result 1,125 2,823 -

Financial income 43,548 38,849 58,969 42,068

44,673 41,672 58,969 42,068

Total value added to distribute 120,410 147,665 160,590 191,515

Distribution of value added

Employees

Direct compensation 27,721 15,119 32,304 18,305

Benefits 6,148 5,642 6,609 5,929

Guarantee fund for years of service 2,573 1,355 2,930 1,776

Others 1,515 1,620

36,442 23,631 41,843 27,630

Taxes and contributions

Federal (17,425) 285 (14,214) 20,623

State 9,391 8,124 12,916 12,414

Municipal 170 345 791 906

(7,864) 8,754 (507) 33,943

Compensation of third party capital

Interest 127,616 108,953 151,998 117,809

Rentals 9,725 10,618 10,024 10,818

Others 61 19.00 61 2,921.00

137,402 119,590 162,083 131,548

Pay Equity

Dividends - -

Retained earnings / losses of the exercise (45,570) (4,310) (42,830) (1,606)

(45,570) (4,310) (42,830) (1,606)

120,410 147,665 160,590 191,515


B2W - Companhia Global do Varejo Cash flow statements of cash flows for the quarters



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03/31/2012 03/31/2011 03/31/2012 03/31/2011

Cash flows from operating activities

Net Income (Loss) of the period (45,570) (4,310) (42,830) (1,606)

Adjustments to net income (loss):

Depreciation and amortization 24,005 21,464 23,575 19,341

Deferred income tax and social contribution (23,961) (3,691) (21,923) (3,962)

Interest and changes on financing and other debts 18,639 7,357 46,537 10,881

Equity accounting (1,125) (2,823) - -

Others (2,188) 4,139 (5,701) 5,608

Adjusted net income (loss) (30,200) 22,136 (342) 30,262

Decrease (increase) in operational assets:

Accounts receivable 19,988 16,665 48,116 (130,913)

Inventories 19,835 19,709 30,719 33,127

Recoverable taxes (5,699) 99 (5,334) (2,519)

Prepaid expenses (current and non-current) 5,535 (2,554) (3,950) (2,346)

Escrow deposits (8,419) (269) (8,417) (6,638)

Accounts receivable related parties 2,527 3,682 3,976 4,602

Other accounts receivable (current and non-current) (10,714) (22,330) (5,836) (18,107)

23,053 15,001 59,274 (122,795)

Increase (decrease) in operation liabilities:

Suppliers (194,137) (134,475) (191,033) (139,875)

Payroll and related charges 1,492 (227) 1,946 538

Taxes and contributions (current and non current) (1,879) (33) (3,228) (2,329)

Other accoutns payable (current and non current) (4,515) (162) 2,412 (1,858)

(199,039) (134,897) (189,903) (143,524)

Cash Flow from Investment Activities (206,186) (97,761) (130,971) (236,057)

Investment Activities:

Marketable securities 286,264 121,538 233,123 38,202

Fixed assets (13,568) (18,061) (14,889) (20,478)

Intangible (53,572) (60,658) (57,669) (63,526)

Net cash generated (applied) in investment activities 219,124 42,819 160,565 (45,803)

Financing Activities:

Loans and financing (current and non current):

Additions - 250 94,255 293,847

Payments (47,875) (22,447) (85,051) (56,532)

Discount of receivables 43,113 74,153 (24,845) 37,309

Net cash generated (applied) in financing activities (4,762) 51,956 (15,641) 274,624

Increase (decrease) in Cash and Cash Equivalents 8,176 (2,984) 13,953 (7,234)

Opening balance of cash and cash equivalents 4,270 7,288 15,297 15,283

Closing balance of cash and cash equivalents 12,446 4,304 29,250 8,049



Press Release 1Q12

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B2W ANNOUNCES CONSOLIDATED REVENUE OF R$ 1.1 BILLION IN 1Q12

Rio de Janeiro, May 8th, 2012 – B2W - Companhia Global do Varejo (BOVESPA: BTOW3), the leading online retail company in Brazil, formed from the merger between Americanas.com and Submarino, announces today its consolidated results for the 1st quarter of 2012 (1Q12). The accounting information that serves as the basis for the comments that follow are presented according to the international financial reporting standards (IFRS), to the rules issued by the Brazilian Securities Exchange Commission (CVM), and to the Novo Mercado listing rules, and in Reais (R$). The comparisons refer to the 1st quarter of 2011 (1Q11).

B2W’s portfolio is composed by the brands Americanas.com, Submarino, Shoptime, B2W Viagens, Ingresso.com, Submarino Finance,

BLOCKBUSTER® Online, MesaExpress.com.br and SouBarato.com.br, offering over 35 categories of products and services through the

Internet, telesales, catalogs, TV and kiosks.

B2W FINANCIAL AND OPERATIONAL HIGHLIGHTS

Executive Summary 1Q12 – Comparison to 1Q11

1Q12 1Q11 Var. (%) Financial Highlights (R$ million) 1Q12 1Q11 Var. (%)

918.4 954.2 -3.8% Net Revenue 1,001.2 1,028.7 -2.7%

195.2 254.9 -23.4% Gross Profit 239.0 295.0 -19.0%

21.3% 26.7% -5.4 p.p. Gross Margin (%NR) 23.9% 28.7% -4.8 p.p.

45.6 95.3 -52.2% EBITDA 60.0 114.5 -47.6%

5.0% 10.0% -5.0 p.p. EBITDA Margin (%NR) 6.0% 11.1% -5.1 p.p.

(45.6) (4.3) 960.5% Net Result (42.8) (1.6) 2575.0%

-5.0% -0.5% -4.5 p.p. Net Margin (%NR) -4.3% -0.2% -4.1 p.p.


Gross Revenues (R$ million)

1,020 1,120


Share of Submarino Card (%)

30%

37%

1Q11 1Q12

Evolution of SINDEC Complaints

6,526

3,044

1Q11 1Q12

Gross Revenue In 1Q12, the consolidated gross revenue reached R$ 1,119.9 million, whereas the gross revenue in the parent company was R$ 1,020.0 million;

Net Revenue In 1Q12, the consolidated net revenue reached R$ 1,001.2 million, whereas the net revenue in the parent company was R$ 918.4 million;

EBITDA Consolidated EBITDA totaled R$ 60.0 million, which represents 6.0% of the net revenue in 1Q12. In the parent company, the EBITDA was R$ 45.6 million, representing 5.0% of the net revenue in 1Q12;

Submarino Card share reached 37% of the website’s sale The share of the Submarino Card reached 37% of Submarino’s website sales in 1Q12;

Evolution of the SINDEC Complaints Ratings In 1Q12, the number of complaints registered in the National Consumer Defense System (SINDEC), of B2W’s three websites totaled 3,044, which represents a significative reduction of 53% when compared to the same period of the preceding year;

Launch of “Submarino on Demand” (VOD) Submarino launched the "Submarino on Demand" service, that allows the clients to watch movies and TV series uninterrupted over the Internet through streaming technology;

Launch of an Online Help service by Americanas.com. In its striving to improve the consumer experience, B2W has developed an Online Help service, on which a trained and exclusive professional helps the clients get their doubts clarified, increasing the levels of conversion and satisfaction.

53%

+7 p.p.

-53%


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COMENTS ABOUT THE RESULTS

During this quarter, B2W reaffirmed its commitment to deliver a better service to its clients. We focused on a deep review and consequent reorientation of our practices and processes seeking to create a new relationship with the client. A number of internal and public indicators have already begun to show significant improvements in our satisfaction ratings during these three months. This result was a consequence of a large and effective mobilization of the entire organization, with important investments in all operating areas as well as our service centers. A number of initiatives are now underway — notably, the project to set up new distribution centers to bring the Company geographically closer to its clients. Other initiatives should begin to show results over the medium and long-term. However, the advances achieved in this quarter have not yet been translated into higher sales, that were still lower than our expectations. We believe that our strategy, upon the moment it is fully consolidated, will create the competitive advantage the Company seeks, leading to an increase in revenues coupled with operating excellence and satisfied clients. THE MANAGEMENT


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COMPANY STRUCTURE

B2W – Companhia Global do Varejo, formed from the merger between Americanas.com and Submarino in

2006, has a portfolio with the brands Americanas.com, Submarino, Shoptime, B2W Viagens, Ingresso.com,

Submarino Finance, BLOCKBUSTER® Online, MesaExpress.com.br and SouBarato.com.br, that offer more

than 35 categories of products and services through the internet, telesales, catalogs, TV and kiosks distribution

channels.

The following chart presents an integrated vision of B2W:


Press Release 1Q12

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OPERATIONAL PERFORMANCE COMMENTS

EVOLUTION OF COMPLAINTS In 1Q12, the number of complaints registered in the National Consumer Defense System (SINDEC) regarding B2W’s three websites totaled 3,044, which represents a significant reduction of 53% when compared to the same period of the previous year. There was also a significant improvement in the complaint indicators on file with Rio de Janeiro Court System (TJRJ), where the number of complaints in 1Q12 totaled 404 in March 2012, a reduction of 47% compared to the same period of 2011. Regarding the number of complaints registered at the Reclame Aqui website, B2W’s three sites presented a significant improvement in 1Q12 of 39% over the number of complaints registered during the same period of 2011. Another important improvement regarding the complaints rankings at the Reclame Aqui website was that at the in the end of March Americanas.com appeared in the 9th position among the companies with the most complaints over the past 30 days, seven places better than the same period of the previous year. In addition, neither Submarino nor Shoptime appeared on the list. Despite this excellent evolution, it is important to observe that this information only takes into account absolute figures, and when considering the number of complaints as a percentage of sales, the positions of all of our three websites improved considerably. Improvements in internal processes have been implemented and we are certain that even higher levels will be achieved.

6,526

3,044

1Q11 1Q12

14,390

8,777

1Q11 1Q12

NET REVENUE In 1Q12, the consolidated net revenue reached R$ 1,001.2 million, a variation of -2.7% over the R$ 1,028.7 million obtained in 1Q11. The net revenue in the parent company reached R$ 918.4 million in 1Q12, compared to R$ 954.2 million in 1Q11, representing a variation of -3.8%.

1,029 1,001

1Q11 1Q12

954 918

1Q11 1Q12

-3%

-4%


SINDEC Reclame Aqui

-53%

-39%


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GROSS PROFIT In 1Q12, the consolidated gross profit reached R$ 239.0 million, a variation of -19.0% in relation to the R$ 295.0 million registered in 1Q11. In the parent company, the gross profit of 1Q12 was R$ 195.2 million.

295

239

1Q11 1Q12

255

195

1Q11 1Q12

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES In 1Q12, the consolidated selling, general and administrative expenses totaled R$ 179.0 million, representing 17.9% of net revenue. The selling, general and administrative expenses in the parent company totaled R$ 149.6 million in 1Q11.

17.5%

17.9%

1Q11 1Q12

16.7%

16.3%

1Q11 1Q12

EBITDA In 1Q12, the consolidated EBITDA reached R$ 60.0 million, comparing to R$ 114.5 million registered in the same period of the preceding year. In 1Q12, the EBITDA in the parent company reached R$ 45.6 million.

115

60

1Q11 1Q12

95

46

1Q11 1Q12

-23%

-19%



-48%

-52%

+0.4 p.p.

-0.4 p.p.



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NET FINANCIAL RESULT In 1Q12, the net financial expenses were negative in R$ 93.0 million, a variation of 18.2% comparing to the negative financial expense of R$ 78.7 million presented in 1Q11. The growth of 18.2% in the consolidated financial expense in 1Q12 is related to the increase of the financial discounts granted because of the term or the mean of payment chosen. The increase of these line is in line with the market practices observed during the quarter. When we compare the 1Q12 versus 4Q11, we observe a reduction of 13.6% in the financial result.

Consolidated Net Financial Result - R$ Million 1Q12 1Q11 Δ%

Net Financial Result (93.0) (78.7) 18.2%

The Company continues to reaffirm its commitment to a conservative cash investment policy, manifested by the use of hedge instruments in foreign currencies, to offset eventual exchanges fluctuations, whether relative to financial liabilities or total cash position. These instruments offset the foreign exchange risk, transforming the cost of the debt to local currency and interest rates (as a percentage of CDI*). Similarly, it is worth mentioning that the Company’s cash is invested with Brazil’s largest financial institutions. CDI - Certificado de Depósito Interbancário: average rate of borrowing in the interbank market.

NET RESULT AND NET RESULT PER SHARE In 1Q12, the net result reached R$ -42.8 million, compared to the R$ -1.6 million obtained in the same period of the preceding year. The result per share reached R$ -0.2736 in 1Q12, in relation to the R$ -0.0146 obtained in 1Q11.

Reconciliation of the Consolidated Net Result - R$ Million Δ%

EBITDA 60.0 114.5 -47.6%

(+) Depreciation / Amortization (23.6) (19.3) 22.3%

(+) Net Financial Result (93.0) (78.7) 18.2%

(+) Other Operating Income (Expenses)* (8.2) (19.1) -57.1%

(+) Income Tax and Social Contribution 22.0 1.0 2100.0%

(=) Net Result (42.8) (1.6) 2575.0%

Results per Share (R$0.2736) (R$0.0146) 1777.9%

Weighted average of outstanding shares (thousand) 156,536 110,234

* In the old accounting rules, considered as "non operating income".

1Q12 1Q11

PARENT COMPANY INDEBTEDNESS B2W’s cash balance on 03/31/2012, which amounted R$ 624.8 million, continues to be higher than the Company's short-term gross debt, which totaled R$ 446.3 million. On 03/31/2012, the Company’s net debt was R$ 387.6 million, or 1.4x accumulated EBITDA in the last 12 months.


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R$ million

Indebtedness 3/31/2012 3/31/2011

Short Term Debt 446.3 420.9

Long Term Debt 1,063.2 1,487.7

Total Debt (1) 1,509.5 1,908.6

Cash and Equivalents 624.8 659.2

497.1 526.5

Total Cash (2) 1,121.9 1,185.7

Net Cash (Debt) (2) - (1) (387.6) (722.9)

Net Cash (Debt) / EBITDA LTM 1.4 1.5

Average Maturity of Debt 802 948

Parent Company

Credit Card Accounts Receivables Net of Discounts

Accounts receivable consist of credit card receivables, net of the discounted value, which have immediate liquidity and can be considered as cash. The breakdown of B2W’s accounts receivable, from the parent company point of view, is demonstrated in the table below:

Accounts Receivable Conciliation 3/31/2012 3/31/2011

Gross Credit-Cards Receivable 1,441.4 1,568.4

Receivable Discounts (944.3) (1,041.9)

497.1 526.5

Present Value Adjustment (6.3) (16.0)

Allowance for Doubtful Accounts (25.0) (20.9)

Other Accounts Receivable 63.2 69.1

Net Accounts Receivable - Parent Company 529.0 558.7

Credit Card Accounts Receivables Net of

Discounts

Because of the adoption of the new CPCs/IFRS, in particular the CPC 38 and its corresponding IAS 39, the Company began to write off (derecognize) receivables from credit card administrators at the moment they are effectively discounted (as of the explanatory notes of the financial statements). However, to better demonstrate the volume of receivables discounted on the base-dates analyzed, in the table above the Company presents the accounts receivable adjusted by the discounts made until the base-dates under analysis. NO FOREIGN CURRENCY EXPOSURE

On 03/31/2012, B2W’s balance sheet recorded foreign currency denominated debt. Such debt, however, is FULLY PROTECTED against any foreign exchange fluctuations through derivative operations (swap) that replace the foreign exchange risk for the variation in the basic Brazilian interest rate (CDI).


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PARENT COMPANY SALES BY MEANS OF PAYMENT

Sales by means of payment in 1Q12 and in 1Q11 can be seen in the following table:

Means of Payment 1Q12 1Q11 ∆%

Cash 26% 27% -1 p.p

Credit Card 74% 73% +1 p.p

NET WORKING CAPITAL The net working capital of the parent company on March 31, 2012 was 119 days, representing an increase of 4 days when compared to the 115 days presented on March 31, 2011.

115119

03/31/2011 03/31/2012 (Net Working Capital = Days of Inventory + Days of Accounts Receivable – Days of Suppliers)

B2W, confirming its commitment to maximize shareholder value, continues to manage working capital variables. Opportunities of improvement in internal processes and relationship with suppliers continue being implemented and we are certain that better levels can be achieved. EQUITY ACCOUNTING The equity accounting includes, basically, the subsidiaries Ingresso.com, B2W Viagens, Submarino Finance and BLOCKBUSTER® Online. In 1Q12, the equity accounting registered a net gain of R$ 1.1 million. The results of subsidiaries are evolving gradually, which makes us optimistic about their growth prospects.

+4 days


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INVESTMENT AND INNOVATION

We have adopted an investment plan which the main objective is to enable growth and improvements in our operations. In 1Q12, B2W invested a total of R$ 67.1 million, mainly concentrated on operations/logistics and technology fronts. Logistics B2W has been constantly investing to optimize its logistical systems and distribution chain. During the year, new equipment was installed and a number of construction projects at the Company’s Distribution Centers were concluded, expanding the level of automation and thereby reducing the time needed to deliver merchandise and also reducing human error. Likewise, systems were installed to better satisfy new tax and legal requirements. Another important investment front has been the development of a new customer service system, which will allow B2W to operate more efficiently and assertively. In addition, we have established strategic alliances with the leading transporters of the country, ensuring the joint commitment to offer the best level of service to our customers. In November 2011, we began to operate a new distribution center located in Recife, Pernambuco state. On February 10, 2012 we signed the contract to install another in Uberlândia, Minas Gerais, during a ceremony in the presence of Misters the Governor Antonio Anastasia and the Mayor Odelmo Leão. The new Distribution Center will ensure greater agility in delivery of products purchased on the sites of the Company and a better customer service for Minas Gerais state, and for Midwest and North regions. Furthermore, there is the project of opening a Distribution Center in the city of Rio de Janeiro. This initiative is in line with the Company's strategy to always seek the best service to our customers in all regions of the country. Technology Technology investments were aimed at unifying back office systems, sales layers and accessory systems, such as payment and management-information systems. This has enabled the company to benefit from productivity gains and to prepare for supporting the future growth of its operations. Other important advances were the increased browsing speed of our Internet sites, the greater agility in commercial actions and the notable advances in information-management systems. The investments in technological platforms of the operational/logistics, television, customer service and telephone sales areas seek to improve the quality and efficiency of our operations, with the goal of giving our client an even better purchasing experience. Following its path of innovation, B2W has proceeded to invest in new features, designed mainly to improve the purchase experience, increase the conversion rate and strengthen the positioning of its brands. Overall during the year, 80 projects were implemented, ranging from improvements in the technological platform to new features. We highlight the following recently introduced projects: Implementation of “1-Click Buy” tool by Shoptime. After the implementation of the fastest purchase

tool on the Internet by Americanas.com, Submarino and Ingresso.com, now its Shoptime’s turn to offer the comfort and speed of “1-Click Buy” on its website;

Launch of a new search system by Submarino. The Submarino search system was revamped, offering more assertive results and making them focused on the relevance and popularity of each item, and including new services that provide greater ease of use for clients, such as “auto-complete,” search suggestions and automatic filters.

Product Recommendation System. The product recommendation system was remodeled and now

comprises new features that improve the purchase experience and the assertiveness of the offers.


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Customized offers through Submarino e-mails. Submarino now sends out personalized e-mail offers in real time using behavioral information. Besides enhancing the relevance of offers to clients, it improves the conversion ratio and the average ticket.

Launch of “Submarino on Demand” (VOD). Submarino launched the "Submarino on Demand" service,

that allows the clients to watch movies and TV series uninterrupted over the Internet through streaming technology;

Bar code and QR code reader. It is now possible to use iPhone and Android devices through

Americanas.com and Submarino to read the barcodes of products and locate them on the sites, the same occurring for promotional codes and panels using the QR code.

Launch of the Nokia Cellphone Application. To offer more comfort to clients and strengthen its strategy of expanding product offerings to more mobile devices, B2W launched an Americanas.com and Submarino application for Nokia cell phones. Then besides clients who have iPhone or Android devices, now Nokia clients can also have this feature for greater ease of purchases.

Launch of Easter Application. An innovative “hidden friend” platform developed by Americanas.com for

use on social networks to encourage the sale of Easter-time products. This initiative seeks to transform the consumer purchase experience and is a fun way to create a new seasonal electronic commerce event.

Launch of an Online Help service by Americanas.com. In its striving to improve the consumer experience, B2W has developed an Online Help service, on which a trained and exclusive professional helps the clients get their doubts clarified, increasing the levels of conversion and satisfaction.

Launch of a suggestion channel by Shoptime. A channel was developed for the Shoptime website so

that clients can make suggestions regarding new products and improvements, as well as clarify their doubts, among other services. The objective of the channel is to improve our services and enhance clients’ online experience.


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KEY METRICS AND HIGHLIGHTS OF THE SUBSIDIARIES

Always seeking to strengthen its multibusiness, multichannel and multibrand strategy, B2W continues investing in new Internet businesses. At the end 2011, we launched the SouBarato.com.br website, creating an important channel for the sale of factory outlet merchandise. This site has been demonstrating excellent results and showing superior growth opportunities. Moreover, we continue investing in our video rental, consumer financing, entertainment ticket sales and travel businesses, as shown below: Ingresso.com. Following its expansion plan, B2W continues increasing its presence in other countries,

being already present in 284 movie theaters in Mexico, 139 in Chile and 83 in Argentina, through a partnership with Cinemark. The Company continues searching for new countries to replicate its business model.

In Brazil, Ingresso.com maintains a strong level of growth, boosted by the sale of tickets to blockbuster films, to theaters with reserved seating and by the growing market of 3D films, besides increasing presence at big events, as the exclusive sales of the tickets for Brazilian people in the Rock in Rio Lisboa and Rock in Rio Madrid. Ingresso.com is investing in improvements to increase the clients’ comfort and convenience, as the launch of the iPhone applications, the mobile devices with Android operational system and the adoption of the “Caixa Expresso” tool that makes the purchasing process even faster.

B2W Viagens. The travel operations continue presenting high growth rates, influenced by investments in

technology, such as the launch of the mobile platform for tickets and packages’ sales. Moreover, we continue investing in innovation and service quality, always offering the best services through our three brands: Submarino Viagens, Americanas Viagens and Shoptime Viagens. In December, 2011 B2W has officially launched the travel operation in Argentina through the brand Submarino Viajes (www.SubmarinoViajes.com.ar).

Submarino Finance. Purchases made with the Submarino Card have been gradually rising, reaching 37%

of the Submarino’s website total sales during the three first months of 2012. Currently, Submarino Finance has a base of more than 710,000 cards issued.

BLOCKBUSTER® Online. With the largest volume of DVD and Blu-ray Disc titles in Brazil,

BLOCKBUSTER® Online continues to expand its operations, including the startup of services in the Federal District. It also has been consolidating its presence in the states of São Paulo, Rio de Janeiro, Minas Gerais, Paraná, Santa Catarina and Rio Grande do Sul. At the end of the year, Blockbuster started offering another pioneering service to its clients, being the first online rental to rent games.

http://www.submarinoviajes.com.ar/


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CORPORATE GOVERNANCE AND CAPITAL MARKETS

B2W is subject to the BM&FBOVESPA’s Novo Mercado, the highest Corporate Governance level in Brazil, listing rules. These include an ownership structure exclusively comprised of common shares and the election of independent members to the Board of Directors. B2W’s Board of Directors is comprised of seven members, four of whom are appointed by the controlling shareholders and another three independent members.

The requests to be registered as a publicly-traded Company and the listing of its shares under the Novo Mercado were approved by the Brazilian Securities Exchange Commission (CVM) and the BM&FBOVESPA on July, 25 and 26, 2007, respectively.

B2W’s common shares are listed on the BM&FBOVESPA and have been traded under the ticker symbol BTOW3 (common) since August 8, 2007. Below is a short description of the main events occurred in the year: On April 30, 2012 the Company’s General and Extraordinary Shareholders Meetings were held, at which the following resolutions were approved: 1- To take recognizance of the accounts prepared by the managers and related financial statements for the fiscal year ended December 31, 2011. 2- Setting the global compensation to be paid to officers; 3- Inclusion of a statutory provision for adoption on the part of the Company of mechanisms that assure compensation of the officers and members of the Fiscal Council and technical bodies; 4- Detailing of the Company’s corporate purpose; 5- Change in the wording of Art. 5th of the Bylaws to reflect the canceling of shares held in the treasury. Minutes of the last meetings and other financial or corporate information about B2W are available on our website (www.b2winc.com).

http://www.b2winc.com/


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EXHIBIT I – CONSOLIDATED INCOME STATEMENT


Income Statements

(in million of Brazilian reais, except result per share) 1Q12 1Q11 Delta

Gross Sales and Services Revenue 1,119.9 1,138.8 -1.7%

Taxes on sales and services (118.7) (110.1) 7.8%

Net Sales and Services Revenue 1,001.2 1,028.7 -2.7%

Cost of goods and services sold (762.2) (733.7) 3.9%

Gross Profit 239.0 295.0 -19.0%

Gross Margin (% NR) 23.9% 28.7% -4.8 p.p.

Operating Revenue (Expenses) (202.6) (199.8) 1.4%

Selling expenses (164.0) (166.6) -1.6%

General and administrative expenses (15.0) (13.9) 7.9%

Depreciation and amortization (23.6) (19.3) 22.3%

36.4 95.2 -61.8%


Financial Revenues 59.0 42.1 40.1%

Financial Expenses (152.0) (120.8) 25.8%

Other operating income (expenses) (8.2) (19.1) -57.1%

Income tax and social contribution 22.0 1.0 2100.0%

Net Result (42.8) (1.6) 2575.0%

Net Margin (% NR) -4.3% -0.2% -4.1 p.p.

EBITDA 60.0 114.5 -47.6%

EBITDA Margin (% NR) 6.0% 11.1% -5.1 p.p.


(0.2736) (0.0146) 1777.9%

* In the the former accounting rules, considered as "non-operating income".

Net Result per Outstanding Share (R$)

Consolidated

Period ended on March 31

Operating Result before Net Financial Result and

Equity Accounting


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EXHIBIT II – PARENT COMPANY INCOME STATEMENT


Income Statements

(in million of Brazilian reais, except result per share) 1Q12 1Q11 Delta

Gross Sales and Services Revenue 1,020.0 1,044.8 -2.4%

Taxes on sales and services (101.6) (90.6) 12.1%

Net Sales and Services Revenue 918.4 954.2 -3.8%

Cost of goods and services sold (723.2) (699.3) 3.4%

Gross Profit 195.2 254.9 -23.4%

Gross Margin (% NR) 21.3% 26.7% -5.4 p.p.

Operating Revenue (Expenses) (173.6) (181.0) -4.1%

Selling expenses (140.0) (150.5) -7.0%

General and administrative expenses (9.6) (9.1) 5.5%

Depreciation and amortization (24.0) (21.4) 12.1%

21.6 73.9 -70.8%


Financial Revenues 43.6 38.8 12.4%

Financial Expenses (127.7) (108.9) 17.3%

Equity accounting 1.1 2.8 -60.7%

Other operating income (expenses) (8.2) (14.6) -43.8%

Income tax and social contribution 24.0 3.7 548.6%

Net Result (45.6) (4.3) 960.5%

Net Margin (% NR) -5.0% -0.5% -4.5 p.p.

EBITDA 45.6 95.3 -52.2%

EBITDA Margin (% NR) 5.0% 10.0% -5.0 p.p.


(0.2911) (0.0391) 644.5%

* In the the former accounting rules, considered as "non-operating income".

Net Result per Outstanding Share (R$)

Parent Company

Period ended on March 31

Operating Result before Net Financial Result and

Equity Accounting

O S


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EXHIBIT III – BALANCE SHEET

B2W - Companhia Global do VarejoBalance Sheet

(in million of Brazilian reais)

ASSETS

CURRENT ASSETS

Cash and banks 12.4 4.3 29.3 8.0

Marketable securities 593.2 638.1 689.3 748.7

Accounts receivable 528.9 558.7 1,117.6 910.2

Inventories 460.0 509.3 480.9 525.0

Recoverable taxes 115.6 52.6 122.0 57.4

Prepaid expenses and other accounts 95.2 102.7 111.6 106.7

Total Current Assets 1,805.3 1,865.7 2,550.7 2,356.0

NON CURRENT ASSETS

Marketable securities 19.2 16.8 - 3.2

Deferred income tax and social contribution 229.3 115.5 255.7 155.3

Escrow deposits and other receivables 77.3 55.6 44.8 36.3

Investments 60.3 43.6 - -

Plant, property and equipament 208.3 137.8 222.2 148.7

Intangible assets 819.4 614.5 849.4 634.5

Deferred assets 23.5 39.9 - -

Total Non-Current Assets 1,437.3 1,023.7 1,372.1 978.0

TOTAL ASSETS 3,242.6 2,889.4 3,922.8 3,334.0

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Suppliers 495.5 634.0 511.3 654.2

Loans and financing 431.6 240.6 612.4 404.5

Debentures 14.7 180.3 14.7 180.3

Salaries and social contribution 15.8 9.0 18.9 12.1

Taxes payable 3.0 1.9 7.5 6.6

Dividends payable - 5.4 - 5.4

Other accounts payable 15.9 25.2 21.8 35.4

Total Current Liabilities 976.5 1,096.4 1,186.6 1,298.5

NON-CURRENT LIABILITIES

Long-term liabilities:

Loans and financing 758.1 978.7 1,234.4 1,232.7

Debentures 305.1 509.0 305.1 509.0

Taxes payable 69.5 34.0 69.5 49.2

Provision for contingencies and other accounts payable 21.9 20.1 31.5 20.0

Total Non-Current Liabilities 1,154.6 1,541.8 1,640.5 1,810.9

SHAREHOLDERS' EQUITY

Capital 1,182.5 182.5 1,182.5 182.5

Capital reserves 0.4 8.6 0.4 8.6

Equity valuation adjustments 0.2 0.1 0.2 0.1

Income reserves and others (71.6) 60.0 (87.4) 33.4

Total Shareholders' Equity 1,111.5 251.2 1,095.7 224.6

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 3,242.6 2,889.4 3,922.8 3,334.0

03/31/20123/31/2011 3/31/2011

Parent Company

03/31/2012

Consolidated


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EXHIBIT IV – CASH FLOW STATEMENT


Cash Flow Statement

(in million of reais)

Operating Activities 03/31/2012 03/31/2011 Delta 03/31/2012 03/31/2011 Delta

Net Result for the Period (45.6) (4.3) (41.3) (42.8) (1.6) (41.2)

Adjustment to the Net Result:

Depreciation and amortization 24.0 21.5 2.5 23.6 19.3 4.3

Deferred income tax and social contribution (24.0) (3.7) (20.3) (21.9) (4.0) (17.9)

Interest, monetary and currency changes 18.6 7.4 11.2 46.5 10.9 35.6

Equity accounting (1.1) (2.8) 1.7 - - -

Others (2.1) 4.0 (6.1) (5.7) 5.7 (11.4)

Adjusted Net Result (30.2) 22.1 (52.3) (0.3) 30.3 (30.6)

Change in Working Capital:

Accounts receivable 20.0 16.7 3.3 48.1 (130.9) 179.0

Inventories 19.8 19.7 0.1 30.7 33.1 (2.4)

Suppliers (194.1) (134.5) (59.6) (191.0) (139.9) (51.1)

Change in Working Capital: (154.3) (98.1) (56.2) (112.2) (237.7) 125.5

Change in Assets:

Prepaid expenses 5.5 (2.6) 8.1 (4.0) (2.3) (1.7)

Escrow deposits (8.4) (0.3) (8.1) (8.4) (6.6) (1.8)

Recoverable taxes (5.7) 0.1 (5.8) (5.3) (2.5) (2.8)

Other accounts receivable (current and non-current) (8.2) (18.6) 10.4 (1.9) (13.5) 11.6

Change in Assets: (16.8) (21.4) 4.6 (19.6) (24.9) 5.3

Change in Liabilities

Salaries and social charges security 1.5 (0.2) 1.7 1.9 0.5 1.4

Deferred income tax and social contribution (1.9) - (1.9) (3.2) (2.3) (0.9)

Other liabilities (current and non-current) (4.5) (0.2) (4.3) 2.4 (2.0) 4.4

Change in Liabilities: (4.9) (0.4) (4.5) 1.1 (3.8) 4.9

Cash Flow from Operating Activities (206.2) (97.8) (108.4) (131.0) (236.1) 105.1

Investing Activities

Marketable securities 286.3 121.6 164.7 233.2 38.2 195.0

Purchases of property, plant and equipment assets (13.6) (18.1) (14.9) (20.5)

Intangible assets (53.6) (60.7) 7.1 (57.7) (63.5) 5.8

Cash Flow from Investing Activities 219.1 42.8 176.3 160.6 (45.8) 206.4

Financing Activities

Additions - 0.2 (0.2) 94.3 293.8 (199.5)

Payments (47.9) (22.4) (25.5) (85.1) (56.5) (28.6)

Discount of receivables 43.1 74.2 (31.1) (24.8) 37.3 (62.1)

Cash Flow from Financing Activities (4.8) 52.0 (56.8) (15.6) 274.6 (290.2)

Change in cash balance 8.1 (3.0) 11.1 14.0 (7.3) 21.3

Beginning Cash Balance 4.3 7.3 15.3 15.3

Ending Cash Balance 12.4 4.3 29.3 8.0



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INFORMATION ABOUT THE WEBCAST AND THE CONFERENCE CALL

Conference calls with simultaneous translation into English, followed by a bilingual Q&A session will be held as follows:

EBITDA – Earnings before interest, taxes, depreciation and amortization and excluding other operating revenues/expenses – is presented as additional information because we believe it represents an important indicator of our operating performance, as well as being useful for the purpose of comparison of our performance with that of other retail sector companies. However, no number should be considered by itself as a substitute for net income calculated according to Brazilian Corporate Law and the rules of the Brazilian Securities Exchange Commission (CVM) or, furthermore, as a measure of the profitability of the Company. Moreover, our calculations may not be compatible with similar measures adopted by other companies. We make forward-looking statements that are subject to risks and uncertainties. These statements are based on the beliefs and assumptions of our management, and on information currently available to us. Forward-looking statements include statements regarding our intent, belief or current expectations or that of our directors or executive officers. Forward-looking statements also include information concerning our possible or assumed future results of operations, as well as statements preceded by, followed by, or that include the words ''believes,'' ''may,'' ''will,'' ''continues,'' ''expects,'' ''anticipates,'' ''intends,'' ''plans,'' ''estimates'' or similar expressions. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur. Our future results and shareholder values may differ materially from those expressed in or suggested by these forward-looking statements. Many of the factors that will determine these results and values are beyond B2W ability to control or predict. BLOCKBUSTER® Brand logo: BLOCKBUSTER® trademarks are owned by Blockbuster Iinc, and B2W – Companhia Global do Varejo has the sublicense to use these trademarks in the activities of video rental on internet.


Notes to the quarterly information at March 31, 2012 In thousands of reais

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1 Operating context B2W - Companhia Global do Varejo ("B2W" or "Company") is a publicly traded corporation, with head offices at Rua Sacadura Cabral, 102, in the City and State of Rio de Janeiro, incorporated through the merger of Americanas.com S.A. - Comércio Eletrônico (Americanas.com) and Submarino S.A. (merger approved by their shareholders on December 13, 2006), with shares traded on the Brazilian Securities, Commodities and Futures Exchange (BM&FBOVESPA), under the ticker symbol BTOW3. B2W is controlled by Lojas Americanas S.A. ("LASA" and/or "Parent Company"), a publicly held company with shares traded on the São Paulo Stock Exchange under the ticker symbols LAME3 - ON and LAME4 - PN. The Company and its subsidiaries are engaged in retail marketing and as wholesalers of goods and products in general through various sales channels, particularly through the Internet; the rental of movies and related items; the intermediation and distribution of theater and cinema tickets, tickets for transportation and public events, entrance to theme parks and events in general; the import of products for resale; promotional services, marketing development and the offering of credit products; and various other products and services for the general consumer. B2W's portfolio contains the Americanas.com, Shoptime, Submarino, Submarino Finance, B2W Viagens, Ingresso.com, BLOCKBUSTER® Online, MesaExpress.com.br and SouBarato brands, which offer hundreds of thousands of products and services in various categories through distribution via the Internet, catalogs, television sales and kiosks. B2W also offers outsourced e-commerce services for some of the leading consumer goods companies (Business-to-business to consumer - B2B2C). The issuing of this quarterly information was authorized by the management on April 30, 2012.

2 Summary of significant accounting policies The principal accounting policies applied in preparing this quarterly information are set out below. These policies have been applied consistently in the periods presented, unless otherwise specified.

2.1 Basis of preparation The quarterly information was prepared based on historical cost, except for financial assets available for sale that are presented at fair value and of financial liabilities measured to amortized cost. The preparation of quarterly information requires the use of certain critical accounting estimates and also the exercise of judgment by the Company's management in applying accounting policies. Those areas that require higher level of judgment and are more complex, as well as those where assumptions and estimates are significant to the quarterly information are shown in note 3.

(a) Consolidated quarterly information The consolidated quarterly information has been prepared and is presented according to the technical pronouncements made by the Committee on Accounting Pronouncements (CPC), CPC 21 - Intermediary Statement, and according to international accounting rules IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB).



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(b) Quarterly information statements The Company's quarterly information has been prepared and is being prepared according to the technical pronouncement issued by the Committee on Accounting Pronouncements (CPC), CPC 21 - Intermediary Statement, and is disclosed in conjunction with the consolidated quarterly information. In the individual quarterly information, subsidiaries and jointly controlled companies are accounted for using the equity accounting method. In the case of B2W, the accounting practices adopted in Brazil and applied in quarterly information differ from the IFRS applicable to the separate quarterly information, only (i) in the valuation of investments in subsidiaries and jointly controlled by the equity accounting method, which according to the IFRS should be by cost or fair value, and (ii) in the maintenance of existing deferred assets on December 31, 2008, which are being amortized, whereas under IFRS these expenses do not qualify for recognition as an asset.

(c) Changes in accounting policies and disclosures There are no new accounting statements or interpretations of CPCs/IFRS in force from 2012 that could have a significant impact on the Company's quarterly information, except for the choice of adopting the equity accounting method for accounting for investments in jointly controlled companies instead of proportional consolidation. The Company has not opted to change the accounting criteria of investment in jointly controlled subsidiary companies.

2.2 Consolidation The following accounting policies were applied in preparing the consolidated quarterly information:

(i) Subsidiaries Subsidiaries are all entities (including special purpose entities) in which the Group has the power to govern the financial and operating policies, generally accompanied by a participation of more than half of the voting rights (voting capital). The existence and effect of potential voting rights currently exercisable or convertible are considered when assessing whether the Group controls another entity. The subsidiaries are fully consolidated from the date on which control is transferred to the Group. Consolidation is discontinued from the date the Group ceases to have control. The Group uses the acquisition method to account for business consolidations. The consideration transferred for the acquisition of a subsidiary is the fair value of assets transferred, liabilities incurred and equity instruments issued by the Group. The consideration transferred includes the fair value of assets and liabilities arising from a contracted contingent consideration, if applicable. Costs related to acquisition are recorded in income according to the date incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are initially measured at fair values at the acquisition date. The Group recognizes the non-controlling interest in the acquired company, both at their fair value as well as the pro rata share of the uncontrolled share at the fair value of the net assets acquired. The measurement of non-controlling interest is determined for each acquisition made. The unrealized gains from transactions between the Group and its affiliates and subsidiaries together are eliminated according to the proportion of each in the Group. Unrealized losses are also eliminated unless the transaction provides evidence of a loss (impairment) of the transferred asset. The accounting policies of associated companies are modified as necessary to ensure consistency with the policies adopted by the Group.



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Transactions, balances and unrealized gains on transactions between Group companies are eliminated. The unrealized losses are also eliminated unless the transaction provides evidence of a loss (impairment) of the transferred asset. The accounting policies of subsidiaries are modified as necessary to ensure consistency with the policies adopted by the Group.

(ii) Jointly controlled subsidiaries Jointly controlled subsidiaries are those over which the Group has joint control with one or more parties. The Company has no investments in affiliates. Investments in jointly controlled subsidiaries are consolidated proportionally. From 2011, the Company consolidates also the financial information of the Fênix Fundo de Investimento em Direitos Creditórios do Varejo (FIDC), a special purpose corporation created in 2011 to carry out the securitization of the receivables of the Company and its Parent Company, Lojas Americanas S.A. (individually "transferor" or, collectively, "assignor"). In the consolidation process, the Company considers, for the purpose of determining the percentage of consolidation that accrued to each grantor (proportional consolidation), the percent share of the balance of the securitized assets for each base-date by the Transferor in relation to the total balance of assets securitized. On March 31, 2012, approximately 80.40% and 10.60% were consolidated in the Company and the Parent Company, respectively. See additional details in note 7 (a).

(iii) Reconciliation of the Shareholders' Equity and the Results of the period of the Parent Company with the Consolidated Shareholders' equity Result March 31,

2012 December

31, 2011 March 31,

2012 March 31,

2011

Parent company 1,111,534 1,157,377 (45,570 ) (4,310 ) Write-off of deferred assets (23,923 ) (28,075 ) Reversal of deferred amortization 4,152 4,099 Deferred income tax and social contribution 8,134 9,546 (1,412 ) (1,393 ) Consolidated 1,095,745 1,138,848 (42,830 ) (1,606 )

2.3 Presentation of segment information

The Company's activities are concentrated in the marketing of products and delivery of services by various means of non presence marketing, especially the Internet. Despite the diversity of products sold and services provided by the Company (retail and wholesale trade, movie rentals, sale and distribution of theater and cinema tickets, tickets for transportation and public events, entrance to theme parks and events in general, among others), such activities are not controlled and managed by the Management as independent operational segments, as their accompanying results are monitored, tracked and evaluated in an integrated manner. Thus, Management understands that the Company is organized, basically, in a single business unit. The Company also operates in the area of financial products through the jointly controlled subsidiary, Submarino Finance, which, by not achieving the minimum quantitative and qualitative parameters, is not being presented as a separate operating segment.



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2.4 Foreign currency translation

(a) Functional and presentation currency Items included in the quarterly information of each Group company are measured using the currency of the primary economic environment in which the company operates ("functional currency"). The individual and consolidated quarterly information are presented in R$ , which is the Company's functional currency, and also the presentation currency of the Group.

(b) Transactions and balances Transactions in foreign currency, i.e. all those not made in the functional currency, are converted at exchange rates prevailing on the dates of the transactions. Assets and liabilities in foreign currencies are converted into the functional currency using the exchange rate on the balance sheet closing date. Gains and losses, from changes in the exchange rates, on monetary assets and liabilities are recognized in the statements of operations. Non-monetary assets and liabilities acquired or contracted in foreign currency, as applicable, are converted using the exchange rates on the dates of transactions or at fair value, on the dates of review, when it is used.

2.5 Cash and cash equivalents Cash and cash equivalents include cash, bank deposits, other high-liquidity short-term investments, with original maturities of three months or less, and with insignificant risk of changes in value.

2.6 Financial assets

2.6.1 Classification The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables and available for sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

(a) Financial assets at fair value through profit and loss The financial assets at fair value through profit and loss are financial assets held for trading. A financial asset is classified under this category if it was acquired primarily to be sold in the short term. The assets under this category are classified as current assets. Derivatives are also classified as held for trading unless they have been designated as hedging instruments.

(b) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. These are included as current assets, except for those with maturities greater than 12 months after the date of issue of the balance sheet (these are classified as non-current assets). The Group's loans and receivables comprise "Accounts receivable and other receivables" and "Cash and cash equivalents" (notes 2.5 and 2.8).



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(c) Financial assets available for sale Financial assets available for sale are non-derivatives that are designated in this category or not classified in any of the above categories. They are presented as non-current assets unless management intends to sell the investment within 12 months after the date of the balance sheet.

2.6.2 Recognition and measurement

Purchases and sales of financial assets are usually recognized on the trade date. Investments are initially recognized at fair value plus transaction costs for all financial assets not classified under fair value through profit or loss. Financial assets at fair value through profit or loss are initially recognized at fair value and transaction costs are charged to the statement of operations Financial assets are written off when the rights to receive cash flows from investments have expired or have been transferred; in the latter case, provided that the Company has substantially transferred all risks and benefits of ownership. The financial assets available for sale and the financial assets measured at fair value through income are subsequently accounted for at fair value. Loans and receivables are accounted for at amortized cost using the effective interest method. Gains or losses arising from changes in fair value of financial assets measured at fair value through profit or loss are presented in the statement of operations under "Financial income" in the period in which they occur. Changes in fair value of monetary securities denominated in foreign currency and classified as available for sale are divided between translation differences resulting from changes in amortized cost of the security and other changes in the carrying value of the security. The effects of changes in foreign exchange rates on foreign currency securities are recognized as profit or loss. The foreign exchange non-monetary securities are recognized in equity. Changes in fair value of monetary and non-monetary securities classified as available for sale are recognized in equity. When securities classified as available for sale are sold or suffer loss (impairment), the accumulated fair value adjustments recognized in equity are included in the statement of operations as "Financial income and expenses." Interest on securities available for sale, calculated using the effective interest method , is recognized in the statement of operations as part of other revenues. The fair values of publicly quoted investments are based on current purchase prices. If the market for a financial asset (and securities not listed on the Stock Exchange) is not active, the Group establishes fair value using valuation techniques. These techniques include using recent transactions with third parties, references to other instruments that are substantially similar, analysis of discounted cash flows and option pricing models making maximum use of information generated by the market and have the minimum possible information generated by the administration of the entity itself.

2.6.3 Offsetting financial instruments Financial assets and liabilities are offset and the net value is reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle them on a net basis or realize the asset and settle the liability, simultaneously.



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2.6.4 Impairment of financial assets

(a) Assets Carried at amortized cost On the date of closing each balance sheet, the Group assesses whether there is objective evidence that a financial asset or group of financial assets is impaired. An asset or group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events occurring after the initial recognition of the asset (a "loss event") and that loss event (or events) has an impact on the estimated future cash flows of the financial assets or group of financial assets that can be reliably estimated. The criteria the Company uses to determine whether there is objective evidence of an impairment loss include:

(i) significant financial difficulty of the issuer or obligor; (ii) a breach of contract such as default or late payment of interest or principal; (iii) the Group, for economic or legal reasons relating to the financial difficulty of the borrower, extends

to the borrower a concession that a lender would not normally consider; (iv) it becomes likely that the borrower will file for bankruptcy or other financial reorganization; (v) the disappearance of an active market for that financial asset because of financial difficulties; or (vi) observable data indicating that there has been a measurable decrease in the estimated future cash

flows from a portfolio of financial assets since the initial recognition of those assets, although such decrease cannot yet be identified with the individual financial assets in the portfolio, including: adverse changes in the payment status of borrowers in the portfolio; and

national or local economic conditions that correlate with defaults on the assets in the portfolio.

The amount of the impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognized on the consolidated statement of operations. If a loan or investment held to maturity has a variable interest rate, the discount rate to measure an impairment loss is the current effective interest rate provided for in the contract. As a practical matter, the Company may measure impairment based on fair value of an instrument using an observable market price. If, in a subsequent period, the value of the impairment loss decreases and such decrease can be related objectively to an event occurring after the impairment to be recognized (such as an improvement in creditworthiness of the borrower), the reversal of the previously recognized impairment loss is recognized in the statement of operations.



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(b) Assets classified as available for sale In the case of investments in equity securities classified as available for sale, a significant or prolonged decline in fair value below its cost basis is also evidence that the asset is impaired. If any such evidence exists for financial assets available for sale, the cumulative loss - measured as the difference between the acquisition cost and current fair value, less any impairment loss on the financial asset previously recognized in profit or loss - is removed from equity and recognized in the statement of operations. Impairment losses for equity instruments recognized in the consolidated statement of operations are not reversed in the consolidated statement of operations. In the case of debt instruments, if, in a subsequent period, the fair value of this instrument classified as available for sale increases, and the increase can be objectively related to an event occurring after the impairment loss was recognized in income, loss impairment is reversed through the statement of operations.

2.7 Derivative financial instruments - Hedging Derivatives are recognized at fair value on the date of the contract and are subsequently recalculated at their fair value. For details see note 2.16 and 4.1 (a).

2.8 Accounts receivable clients Accounts receivable from credit card administrators are shown at net adjusted present value, calculated on the portion of the sales and the allowance for doubtful accounts. Sales through corporate loyalty programs and trade agreements are recorded under "Other Receivables." Accounts receivable are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method less the allowance for doubtful accounts ("PDD" or "impairment")

2.9 Inventories Inventories are stated at average cost or net realizable value, whichever is less. The average cost of acquisition is adjusted by the effect of the present value of suppliers (forward purchases) and rebates received from suppliers, as applicable. The net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to carry out the sale.

2.10 Intangible assets

(a) Goodwill Goodwill is represented by the positive difference between the amount paid and/or payable for the acquisition of a business and the net fair value of assets acquired and liabilities of the subsidiary. Goodwill on acquisitions of subsidiaries is recorded as "Intangible Assets" in the consolidated quarterly information. In the case of calculating the discount, the amount is recorded as a gain in earnings at the date of acquisition. Goodwill is tested annually for impairment. Goodwill is stated at its cost less accumulated impairment losses. Recognized impairment losses on goodwill are not reversed. Gains and losses from disposal of an entity include the carrying amount of goodwill related to the entity sold.



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Goodwill is allocated to Cash Generating Units (CGUs) for impairment testing purposes. The allocation is made to the Cash Generating Units or groups of Cash Generating Units that should benefit from the business combination that generated the goodwill, and are identified according to the operating segment. The goodwill on acquisition of investments, including acquisition, due to expected future profitability, were amortized through December 31, 2008 using a 5 to 10 year period, according to the proportion of expected future results from the investments. The value of goodwill for future profitability is no longer amortized as of January 1, 2009.

(b) Trademarks and licenses Trademarks and licenses acquired separately are shown initially at historical cost. Trademarks and licenses acquired in a business combination are recognized at fair value at the acquisition date. Subsequently, the trademarks and licenses, evaluated with finite lives are stated at cost less accumulated amortization. Amortization is calculated on the straight-line method to allocate the cost of trademarks and licenses over their estimated working life of 15 to 20 years.

(c) Software/website The expenses related to the development of web sites (the principal sales channel of the Company), such as the development of application and operational technology infrastructure (purchase and internal development of software and application installation in sites), the rights to use software and graphics development are recorded as intangible, as specified in FRS 04 (IAS 38) and are amortized on the straight-line method considering the stipulated period of its use and benefits to be accrued (note 15). The software licenses are capitalized on the basis of costs incurred to acquire the software and websites and make them ready for use. Costs related to software maintenance are expensed as incurred. Development costs that are directly attributable to the design and testing of new software and websites identifiable and unique, controlled by the Group are recognized as intangible assets when the following criteria are met: it is technically feasible to complete the software/website product and make it available for use;

management plans to complete the software/website and use it or sell it;

the software/website can be sold or used;

it can be shown that it is likely that the software/website will generate future economic benefits;

adequate technical, financial and other resources to complete the development and use or sell the

software/website are available; the expenses attributable to the software/website during its development can be measured

reliably. The directly attributable costs that are capitalized as part of the software product/website, include the costs allocated to employees in software/website development and an appropriate share of applicable overheads. Costs also include borrowing costs incurred during the development of software/websites. The amount of charges on borrowings capitalized is obtained by applying the weighted average rate on loans that were in force during the period of the investments to obtain the asset and that does not exceed the amount of borrowing costs incurred during the period.



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Other development expenditures that do not meet these criteria are recognized as an expense as incurred. Development costs previously recognized as an expense are not recognized as assets in a subsequent period.

2.11 Fixed assets Fixed assets are measured at their historical cost less accumulated depreciation. Historical cost includes directly attributable expenditures to acquire these items and financing costs related to the acquisition of qualifying assets. Subsequent costs are included in the assets' carrying amount or recognized, as appropriate, as a separate asset, only when it is probable that future economic benefits associated with these costs will accrue and can be reliably measured. All other repairs and maintenance, are charged to the statement of income during the financial period in which they are incurred. Land is not depreciated. Depreciation of other fixed assets is calculated using the straight-line method, to allocate their costs to their residual values over the estimated useful lives, as shown in note 14. Residual value and useful life calculations of assets are reviewed and adjusted, as appropriate, at the end of each reporting period. The book value of an asset is immediately reduced to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount (note 2.13). Gains and losses on the disposal of assets are calculated as the difference between the total proceeds realized from disposals and their carrying value, and are recognized as "Other net operating income (expenses)" in the statement of operations.

2.12 Deferred assets In connection with Law No. 11941/09 and CPC 43, the Company (Parent Company) opted to maintain, in its overall results, under Deferred Assets, the balances related to pre-operating expenses that showed signs of recoverability, for amortization during the period of anticipated benefits. The effect of maintaining the Deferred Assets balance is totally eliminated in the preparation and presentation of the consolidated financial statements (note 16).

2.13 Impairment of non-financial assets Assets that have an indefinite useful life, such as goodwill, are not subject to amortization and are tested annually to identify any need to reduce recoverable value (impairment). The assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment loss is recognized when an asset's carrying amount exceeds its recoverable amount, which is the greater of fair value of an asset, less costs to sell, and its value in use. For purposes of impairment evaluation, assets are grouped at the lowest levels for which there are separately identifiable cash flows (Cash Generating Units - CGUs). Non-financial assets, except goodwill, which have been adjusted for impairment, are subsequently reviewed for possible reversal of the impairment at each reporting date.



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2.14 Trade accounts payable Trade accounts payable are payable obligations related to goods or services that were purchased from vendors in the ordinary course of business and are classified as current liabilities if the payment is due in a period up to one year. Otherwise, the accounts payable are posted as non-current liabilities. They are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method.

2.15 Present value adjustment The operations of long-term purchases, primarily from suppliers of goods and services, were adjusted to their present value taking into account the maturities of these transactions. The average rate used of 11.32% per annum (p.a.) on March 31, 2012 (11.73% p.a. on December 31, 2011), was based on funding for the respective periods. The constitution of the present value adjustment of purchases is recorded under "Suppliers" and "Inventory" (note 9) and the counterpart entries are shown under the heading "Financial Expenses", by the maturity date, in the case of suppliers, and for the realization of inventories based on the amounts recorded under the heading "Cost of goods sold." The operations of long-term transactions, at the same previously-agreed prices as represented, mainly, through credit card installment sales, were brought to their present value taking into account the payment deadlines of the aforementioned transactions. The same treatment was given to the taxes on those sales, considering the effective rate on them. The average rate used of 10.88% p.a. on March 31, 2012 (12,53% p.a. on December 31, 2011), was based on receivable discounts on their respective base dates. The present value adjustment of installment sales has a counterpart entry under the heading "Accounts receivable from clients" (note 8) and its realization is recorded under "Financial income" by the maturity date.

2.16 Borrowings Borrowings are recognized initially at fair value, net of transaction costs incurred and are, subsequently, stated at amortized cost. Any difference between the values obtained (net of transaction costs) and the liquidation value is recognized in the statement of income during the period during which loans are outstanding, using the effective interest method. Borrowings subject to swap as protection against exchange rate fluctuations are recorded at fair value, as shown in note 4.1 (a). Borrowings are classified as current liabilities, unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

2.17 Provisions Provisions and legal claims (labor, civil and tax claims) are recognized when: (i) the Group has a present legal or constructive obligation as a result of events that have already occurred, (ii) it is probable that an outflow of resources is necessary to settle an obligation, and (iii) the amount can be reliably estimated. When there are a number of similar obligations, the likelihood of settling them is determined by taking into consideration the class of obligations as a whole. A provision is recognized even if the probability of settlement relating to any individual item included in the same class of obligations is small.



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Provisions are measured at the present value of the expenditures expected to be required to settle an obligation using a pre-tax rate, which reflects current market assessments of the time value of money and, if appropriate, the risks specific to the obligation. The increase in a provision due to the passage of time is recognized as a finance cost.

2.18 Current and deferred income tax and social contribution The income tax and social contribution expenses for the period comprise current and deferred taxes. Income taxes are recognized in the statement of operations, except to the extent that they relate to items recognized directly in equity or comprehensive income. In this case, the tax is also recognized in equity or in comprehensive income. The current and deferred income tax and social contribution burden is calculated using the tax laws that have been enacted, or substantially enacted, by the balance sheet date. Management periodically evaluates positions taken in the Group's tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions, where appropriate, on the basis of amounts expected to be paid to the tax authorities. Current income tax and social contribution are shown net, by contributing entity, as liabilities, when there are payable amounts, payable, or as assets, when amounts paid in advance exceed the total amount due on the date of the report. Deferred income tax and social contribution are recognized using the liability method on the temporary differences arising between the tax bases of assets and liabilities, and their carrying amounts in the financial statements. However, the deferred income tax and social contribution are not accounted for if they result from the initial recognition of an asset or liability in a transaction other than a business combination which, at the time of the transaction, does not affect the accounting result or the taxable profit (tax loss). Deferred income tax and social contribution assets are recognized only in proportion to the probability that future taxable profit will be available and against which the temporary differences can be used. Deferred income tax and social contribution assets and liabilities are presented net in the balance sheet when there is a legal right and intention to set off the recognized amounts in the calculation of current taxes that, in general, relate to the same legal entity and the same tax authority. Thus, deferred tax assets and liabilities for different entities are, in general, presented separately, and not net.

2.19 Employee benefits

(a) Share-based compensation The Group operates a share-based compensation plan, paid in shares, according to which the entity receives the services of employees as consideration for equity instruments (options) of the Group. The fair value of employee services, received in exchange for share options, is recognized as an expense. The total amount to be recognized is determined by referencing the fair value of options granted, which is calculated on the grant date of the options program for the purchase of shares based on pricing models usually adopted by the market. These models are calculated using assumptions, such as market value of the share, the option exercise price, Company share price volatility (calculated based on the historical price of its shares), risk-free interest rate, term of the contract ("vesting period") and anticipated dividends distribution. The compensation costs linked to



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these programs are recorded using the straight-line method during the period in which the recipient is engaged in providing services, accounting for forfeitures as they occur. The assumptions and models used to estimate the fair value of share-based payments are disclosed in note 22. On the closing date of the balance sheet, the entity revises its estimates of the number of options, whose rights may be acquired based on the conditions of acquisition of rights that are not in the market. This recognizes the impact of the revision of original estimates, if any, in the income statement, with a corresponding adjustment in equity. The amounts received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and goodwill reserves, if applicable, when the options are exercised. The social contributions payable in connection with the granting of share options are considered part of the grant itself, and the collection will be treated as a cash-settled transaction.

(b) Profit sharing When applicable, the Group recognizes a liability and an expense for profit sharing based on a methodology that takes into consideration the profit attributable to Company shareholders after certain adjustments. The Group recognizes a provision where it is contractually obliged or where there is a past practice that has created a constructive obligation.

(c) Other benefits The Company and its subsidiaries do not provide other post-employment benefits, contract termination benefits or other long-term benefits for Management and its employees (except for the share option purchase plan described in note 22).

2.20 Capital stock Common shares are classified as net equity. The incremental costs directly attributable to the issuance of new shares or options are shown in equity as a deduction from the proceeds, net of taxes. When the Company purchases its own equity share capital (treasury shares), the consideration paid, including any additional, directly attributable costs (net of income taxes) is deducted from equity attributable to shareholders of the Company until the shares are canceled or reissued. When these shares are subsequently reissued, any consideration received, net of any additional, directly attributable transaction costs and the related income tax and social contribution effects, are included in equity attributable to the shareholders of the Company.

2.21 Recognition of revenues Revenue is the fair value of the consideration received or receivable from the trading of products and services in the ordinary course of business of the Company. Revenue is reported net of taxes, returns, rebates and discounts, as well as the elimination of sales between Group Companies. The Group recognizes revenue when the amount of revenue can be reliably measured, and it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the Group's activities, as described below. The Company bases its estimates on historical results, taking into consideration the type of customer, type of transaction and the specifications of each sale.



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(a) Sales of goods and services Revenues from the sales of goods and services, which include freight charged to customers, are recognized upon transfer of property and the risks to third parties for their gross values and deductions for unconditional discounts, returns, adjustments to present value calculated on credit and sales tax. Sales orders approved by credit card issuers, where products have not yet been billed or shipped to customers, and sales of gift certificates that are held by customers and that will be used in future, are recorded as "other obligations" classified as current liabilities.

(b) Financial income Interest earned is accrued on a time-proportion basis using the effective interest method. When impairment is identified in relation to some accounts receivable, the Company reduces the book value to its recoverable amount, which corresponds to estimated future cash flows, discounted at the original instrument's original effective interest rate. Subsequently, over time, interest is incorporated into the accounts receivable in return for financial income. This interest income is calculated by the same effective interest rate used to determine the recoverable amount.

2.22 Distribution of dividends and interest on capital Pursuant to the Company's bylaws and when applicable, the distribution of dividends and interest on capital to shareholders of the Company is recognized as a liability in the Group's financial statements at the end of the year. Any amount above the mandatory minimum is only accrued on the date on which it is approved.

2.23 New standards, amendments to and interpretations of standards that are not yet in force The following new standards, amendments to and interpretations of standards were issued by the International Accounting Standards Board (IASB), but are not effective for the year 2012. The early adoption of these standards, although encouraged by the IASB, was not allowed in Brazil by the Brazilian Accounting Pronouncements Committee (CPC). IFRS 9 - Financial instruments covers the classification, measurement and recognition of

financial assets and liabilities. IFRS9 was issued in November 2009 and October 2010 and substitutes the sections of IAS 39 related to the classification and measurement of financial instruments. IFRS 9 requires the classification of financial assets in two categories: fair value or amortized cost. The determination is made on initial recognition. The classification base depends on the business model of the organization and the contractual characteristics of the cash flow of the financial instruments. With relation to financial liabilities the standard maintains most of the requirements established by IAS 39. The principle change is that of the cases in the option when just value is adopted for financial liabilities, the portion of changes in the fair value due to credit risks of the actual entity is recorded in comprehensive income and not in the statement of operations, except when it results in an accounting separation. The Group is evaluating the total impact of IFRS 9. The standard is applicable as of January 1, 2013.

IFRS 10 - Consolidated financial statements supported in principle on existing principles,

identifying the concepts of control as a predominant factor to determine if an entity should or not be included in the consolidated financial statements of the parent company. The standard provides additional guidance for the determination of control. The Group is evaluating the total impact of IFRS 10. The standard is applicable as of January 1, 2013.



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IFRS 11 - Joint Agreements, issued in May 2011. The standard calls for more realistic reflections of joint agreements by focusing on the rights in the obligations of the agreement instead of its legal form. There are two types of joint agreements: (i) joint operations - that occur when an operator has right to contractual assets, liabilities and expenses; and (ii) shared control - which occurs when an operator has rights over liquid assets of the contract and books the investment through the equity accountingt method. The proportional consolidation method no longer will be permitted for joint control. The standard is applicable as of January 1, 2013.

IFRS 12 "Disclosure of ownership interests in other entities, deals with the requirements for

disclosing all types of participation in other entities, including joint agreements associations, participations with specific purposes and other participations not recorded in the accounting records. The Group is evaluating the total impact of IFRS 12. The standard is applicable as of January 1, 2013.

IFRS 13 "Measurement of fair value issued in May 2011. The objective of IFRS 13 is to improve

the consistency and reduce the complexity of measuring fair value, providing a more precise definition and a sale source for measuring fair value and the requirements for disclosure for the application of IFRS. The requirements, that are very similar between IFRS and US GAAP do not increase use of accounting for fair value, but supply orientation on how to apply it when its use is required or permitted for other IFRS standards or US GAAP. The Group is still evaluating the total impact of IFRS 13. The standard is applicable as of January 1, 2013.

There are no other International Financial Reporting Standards (IFRS) or interpretations from the International Financial Reporting Interpretations Committee (IFRIC), which have not yet entered into force that could have a significant impact on the Group.

3 Critical accounting estimates and judgments Accounting estimates and judgments are continually evaluated, and are based on historical experience and various other factors, including expectations of future events, which are believed to be reasonable under the circumstances.

3.1 Critical accounting estimates and assumptions Based on assumptions, the Group makes estimates concerning the future. By definition, the resulting accounting estimates will seldom be equal to actual results. Estimates and assumptions, which present significant risk, with a probability of causing a material adjustment to the carrying amounts of assets and liabilities for the next fiscal year, are addressed below:

(a) Loss (impairment) of goodwill Pursuant to the accounting policy disclosed in note 2.13, the Group annually tests losses (impairment) of goodwill Recoverable amounts from Cash Generating Units (CGUs) were determined based on value in use calculations, which were, in turn, based on estimates. Losses due to goodwill impairment were not recorded in the financial statements of December 31, 2011 and in the quarterly information of March 31, 2012.



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(b) Recovery of income tax, social contribution and other deferred taxes Significant management judgment is required to determine the value of deferred tax assets that can be recognized, based upon the likely timing and level of future taxable profits, together with future tax planning strategies. According to Management's estimates, the Company will generate sufficient taxable income to offset deferred taxes on tax loss carry-forwards and temporary differences in up to 8 years. In a scenario where there is a 20% deterioration in the taxable profit, this period will be extended to 10 years.

(c) Fair value of derivatives and other financial instruments The fair value of financial instruments traded in active markets (such as securities held for trading and available for sale) is based on market prices, quoted on the balance sheet date.

3.2 Critical judgments in applying the entity's accounting policies

(a) Allowance for doubtful accounts This allowance is based on the analysis of historical losses monitored by Management and at a level considered sufficient to cover probable losses on accounts receivable.

(b) Allowance for inventory losses Allowance for inventory losses is estimated based on historical losses in the physical inventories at distribution centers, as well as selling items below purchase price. This allowance is considered by Management to be sufficient to cover probable losses on the Company's inventories.

(c) Useful life of fixed and intangible assets

Depreciation and amortization of fixed and intangible assets is Management's best estimate on the use of these assets over the course of their operations. Changes in the economic and/or consumer market may require a revision of these useful life estimates.

(d) Loss from reduction in the recoverable value of non-financial assets Impairment tests are performed in consideration of future revenue projections, calculated on the basis of internal and market assumptions, discounted to present value. These projections are calculated by considering the best estimates of Management, which are revised when changes occur in the economic environment or the consumer market.

(e) Provisions for civil, labor and tax risks The Company recorded provisions, which involve considerable judgment by Management, for tax risks, labor and civil, as a result of a past event. An outflow of resources involving economic benefits will likely be necessary to settle the obligation and a reasonable estimate may be made as regards the amount of this obligation. The Company is subject to legal, civil and labor claims involving matters that arise in the normal course of its business activities.



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Assessing probability of loss includes evaluating available evidence, the hierarchy of laws, available jurisprudences, recent court decisions and their relevance in the legal system, as well as the evaluation of external counsel. Allowances are reviewed and adjusted in consideration of changes in circumstances, such as the applicable limitation period, findings from tax inspections or additional exposures identified based on new issues or court decisions. The actual results may differ from these estimates.

4 Management of financial risk

4.1 Financial risk factors In the normal course of business, the Company and its affiliates are exposed to market risks related to the fluctuation of interest rates and exchange variations, as well as credit risk on its installment sales. Under monitoring carried out by its officers and management, and supervised by the Board of Directors, the Company and its affiliates use hedge instruments to minimize exposure to these risks. These administrators determine what strategies are to be adopted and Management contracts appropriate hedge instruments for each circumstance and inherent risk. The Company and its affiliates have no term contracts, options, swap options, zero cost collars, flexible options, derivatives built into other products, operations structured with derivatives and "exotic derivatives." The Company and its affiliates do not operate using derivative financial instruments for speculative purposes, thereby reaffirming its commitment to conservative policies for cash management, in relation to financial liabilities or available resources.

(a) Market risk (i) Exchange rate risk

These risks originate from foreign currency exchange rate variations on the loan portfolio and the accounts payable for the importation of goods for resale. The Company and its subsidiaries make use of derivatives, such as traditional swaps, for the purpose of canceling exchange losses resulting from sharp devaluations of the Real (R$ ) against foreign currency denominated funding. In addition, the Company uses currency forward contracts to protect themselves from currency fluctuations in the US dollar (US$ ) compared to the Real (R$ ) on the import flow. On March 31, 2012, the position of these derivative financial instruments was the following: Traditional Swaps (registered in the loans and financing account):

The counterparts to these traditional swaps are the financial institutions that provide loans in foreign currency (American dollars or Japanese yen). These CDI-referenced swaps aim to cancel exchange risk, transforming the cost of the debt (note 17) for local currency and interest rates, which varies from 119.1% to 134.0% of the CDI. These contracts, on March 31, 2012, amounted to a reference value of R$ 374,884 for the Parent Company (R$ 441,207 in the Consolidated) and on December 31, 2011, R$ 389,610 in the Parent Company (R$ 469,801 in the Consolidated). These operations are matched in terms of amount, terms, and interest rates. The Company always seeks to liquidate such contracts, together with the respective loans that are the subject of the hedge transactions simultaneously. There are no contractual clauses for margin calls in this type of transaction.



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Parent company Consolidated

March 31, 2012

December 31, 2011

March 31, 2012

December 31, 2011

Hedge object (debt) Amortized cost 376,831 420,300 446,011 509,730

Amounts adjusted by the fair value of the covered risks

466,440 470,870 536,477 560,300

89,609 50,570 90,466 50,570

Swaps

Asset position (US dollar + Pre)

Amortized cost (376,831 ) (420,300 ) (446,011 ) (509,731 )

Fair value (466,776 ) (472,860 ) (536,813 ) (562,291 )

(89,945 ) (52,560 ) (90,802 ) (52,560 )

Liability position (% CDI) Amortized cost 413,144 408,437 482,192 494,486

Fair value 413,480 410,427 482,528 496,476

336 1,990 336 1,990

(89,609 ) (50,570 ) (90,466 ) (50,570 )

Considering that the Company's exposure to the risk of wide swings in currency exchange rates is mitigated by traditional swap operations, contracted for exchange protection purposes and, therefore, simultaneously with the respective foreign currency loans, the change in the rate of the US dollar compared to the real due to the current market conditions does not produce any significant impacts on the Company's quarterly information.

(ii) Interest rate risk

The Company and its subsidiaries use resources produced by operational activities to manage its operations, as well as to guarantee investments and growth. To meet the cash requirements for growth, the Company and its subsidiaries obtain loans and financing from Brazil's principal financial institutions, substantially indexed to the variation of the Interbank Deposit Certificate (CDI). Relevant fluctuations in the CDI (see chart of sensitivity below) raise the possibility of inherent risk. Financial investment policies indexed by the CDI partially mitigate this effect.

(b) Credit risk Credit risk is managed at the corporate level. Credit risk stems from cash and cash equivalents, derivative financial instruments, deposits in banks and other financial institutions as well as exposure to client credit. With regard to banks and other financial institutions, the Company only accepts securities from organizations that are independently classified with a minimum "A" rating on the Standard and Poor's scale. In the event clients are classified by an independent agency, those ratings are used. If there is no independent classification, the credit analysis area evaluates the quality of the client's credit, taking into account his/her financial position, past experience and other factors. The individual risk limits are determined based on internal or external classifications according to the limits set by the Board of Directors. The use of credit limits is regularly monitored. Sales to retail clients are settled in cash or through the main credit cards existing in the market.



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The credit risk is minimized by the fact that approximately 74% of the Company's sales and those of its subsidiaries are conducted through credit cards administered by the main credit card operators, which have excellent levels of risk classification, and by our joint subsidiary FAI - Financeira Americanas Itaú S.A. Crédito, Financiamento e Investimento. The Company and its subsidiaries maintain provisions for doubtful credit in an amount that is considered by Management sufficient to cover possible losses on its receivables.

(c) Liquidity risk Management continuously monitors forecasts for the liquidity requirements of the Company in order to ensure that it has sufficient cash to satisfy its operating needs. This forecast takes into consideration plans for financing the Company's debt, compliance with clauses, compliance with internal targets for the asset balance quotient and, if applicable, external or legal regulatory requirements - for example, currency restrictions. The Treasury invests excess cash in interest-bearing bank accounts, term deposits, short-term deposits and securities, choosing instruments with appropriate maturities with sufficient liquidity that offer a sufficient margin as determined by the aforementioned forecasts. The following table analyzes the non-derivative financial liabilities of the Group and the derivative financial liabilities that are settled on a liquid basis by the Group, through common maturity periods that correspond to the period remaining between the date of the calculation of the net equity balance and the contracted date of maturity. Derivative financial liabilities are included in the analysis if their maturities are essential for an understanding of the cash flows. Parent company

Less than one year

Between one and two

years Between two

and five years More than five years

At March 31, 2012 Suppliers 495,450 Loans, financing and debentures 466,040 359,517 1,130,755 At December 31, 2011 Suppliers 689,587 Loans, financing and debentures 469,927 343,222 1,261,701 Parent company

Less than one year

Between one and two

years Between two

and five years More than five years

At March 31, 2012 Suppliers 511,306 Loans, financing and debentures 648,909 373,978 1,130,755 At December 31, 2011 Suppliers 702,339 Loans, financing and debentures 670,116 343,222 1,261,701



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(d) Analysis of additional sensitivity required by CVM Sensitivity analysis of swap transactions Swap transactions recorded by the Company and its affiliates were contracted, simultaneously, for foreign currency loan transactions, contemplating terms, rates, and equivalent values, exchanging the loans' exchange exposure for exposure to the CDI. At March 31, 2012 the Company's gross debt, in U.S. dollars, was R$ 466,440 (Parent Company) and R$ 536,477 (Consolidated). According to data drawn from the Central Bank of Brazil ("Relatório Focus") April 13, 2012 market expectations were indicating an exchange rate for the end of the calendar year 2012 (probable scenario) of 1.8000 R$ /US$ compared to 1.8758 R$ /US$ on December 31, 2011. Scenarios I and II were calculated with a deterioration of 25% and 50% respectively, above probable expectations (Management's opinion), according to figures below: Parent company Operation

Risk

Probable scenario

Scenario I - Deterioration

of 25%

Scenario II - Deterioration

of 50%

US dollars Exchange rate on March 31, 2012 1.8221 1.8221 1.8221 Estimated exchange rate on December 31, 2012

1.8000 2.2500 2.7000

Forreign currency loans (variation US$ ) (18,849 ) 93,049 204,947 Swaps (Long position in foreign currency)

(variation US$ ) 18,849 (93,049 ) (204,947

)

Net effect

Consolidated Operation

Risk

Probable scenario


of 25%


of 50%

US dollars Exchange rate on March 31, 2012 1.8221 1.8221 1.8221 Estimated exchange rate on December 31, 2012

1.8000 2.2500 2.7000

Forreign currency loans (variation US$ ) (21,679 ) 107,021 235,720 Swaps (Long position in foreign currency)

(variation US$ ) 21,679 (107,021 ) (235,720 )

Net effect

CDI Rate sensitivity analysis

The Company and its affiliates maintain the totality of their debt and cash and equivalents indexed to the variation of the CDI (considering the exchange of debts in foreign currency for variation in the CDI with traditional swaps). On March 31, 2012, the Company (Parent Company) had a net debt of R$ 884,613 (R$ 635,059 on December 31, 2011), which represented the loan values, financing and debentures, net cash and negotiable securities (consolidated, net debt was R$ 1,448,097 (R$ 1,172,482 on December 31, 2011)).



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According to data from the Central Bank of Brazil ("Relatório Focus") on April 13, 2012, market expectations were indicating an effective average CDI rate of 8.83% (probable scenario) for calendar year 2012, against the effective rate of 10.87% as applied during calendar year 2011. In addition, Management ran sensitivity tests for adverse scenarios, CDI rate deterioration at 25% or 50% above the probable scenario (management's opinion), as shown below: Parent company Operation

Probable scenario


of 25%


of 50%

CDI effective annual interest rate in 2011 10.87% 10.87% 10.87% Net debt 884,613 884,613 884,613 CDI estimated annual interest rate in 2012 8.83% 11.04% 13.25% Annual effect on net debt: Reduction (18,439 ) Increase 1,514 21,467

Consolidated

Operation

Probable scenario


of 25%


of 50%

CDI effective annual interest rate in 2011 10.87% 10.87% 10.87% Net debt 1,448,097 1,448,097 1,448,097 CDI estimated annual interest rate in 2012 8.83% 11.04% 13.25% Annual effect on net debt: Reduction (29,743 ) Increase 2,442 34,627

4.2 Capital management

The goal of the Company and its subsidiaries with regard to capital management is to ensure the continuity of its operations to offer a return to shareholders and benefits to other stakeholders, as well as maintaining the ideal capital structure to minimize associated costs. The Company monitors the levels of its indebtedness through the Net Debt/EBITDA ratio, which in its understanding represents the most appropriate manner to present the debt metric, because it reflects consolidated net financial obligations requiring immediate cash for payments, considering its operating cash generation.

4.3 Fair value estimate It is assumed that the book value of the balances of client accounts receivable and suppliers accounts payable, minus impairment in the case of Accounts Receivable, are close to their fair value. The fair value of financial liabilities, for disclosure purposes, is estimated using discounted contractual future cash flows at existing market interest rates, which are available to the Group through similar financial instruments.



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The Group applies CPC 40/IFRS 7 to the financial instruments measured in the balance sheet at fair value, which requires disclosure of the fair value measurements by the level in the following hierarchy: Price quotes (unadjusted) in asset markets for identical assets and liabilities (Level 1).

Information, besides the price quotes, included in Level 1 that are adopted by the market for

assets or liabilities, whether directly (that is, as prices) or indirectly (that is, price derivatives) (Level 2).

Insertions for assets or liabilities that are not based on data adopted by the market (that is, non-

observable insertions) (Level 3). The following table presents the Group's assets and liabilities measured by fair value as on March 31, 2012.

Consolidated

Total Level 1 Level 2 Level 3 balance Assets Financial assets at fair value through result Fundo de Investimento em Direitos Creditórios - FIDC 34,965 34,965

Financial assets available for sale Marketable securities 654,322 654,322 Total assets 689,287 689,287

Liabilities Financial liabilities at fair value though result Loans and financing (Foreing currency) 536,477 536,477 Derivatives used for hedge - swap (54,285 ) (54,285 ) Total liabilities 482,192 482,192

The following table presents the Group's assets and liabilities measured by fair value as at December 31, 2011.

Consolidated Total Level 1 Level 2 Level 3 balance Assets Financial assets at fair value through result Fundo de Investimento em Direitos Creditórios - FIDC 17,980 17,980

Financial assets available for sale

Marketable securitiess 905,133 905,133

Total assets 923,113 923,113

Liabilities

Financial liabilities at fair value though result

Loans and financing (Foreing currency) 560,301 560,301

Derivatives used for hedge - swap (65,815 ) (65,815 )

Total liabilities 494,486 494,486



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5 Financial instruments by category Consolidated Loans and

receivables Available

for sale

Total

At March 31, 2012 Assets, according to the balance sheet Financial assets available for sale 689,287 689,287 Clients accounts receivables and other accounts Accounts receivables, excluding anticipated payments 1,207,534 1,207,534 Cash and cash equivalents 29,250 29,250

1,236,784 689,287 1,926,071

Liabilities at fair value

though result

Other financial

liabilities

Total

At March 31, 2012 Liabilities, according to the balance sheet Loans National currency 1,364,615 1,364,615 Foreing currency 536,477 536,477 Derivatives financial instruments - swap (54,285 ) (54,285 ) Suppliers and other liabilities, excluding legal liabilities 548,309 548,309 Debentures 319,827 319,827

482,192 2,232,751 2,714,943

Consolidated

Loans and

receivables Available

for sale Total At December 31, 2011 Assets, according to the balance sheet Financial assets available for sale 923,113 923,113

Clients accounts receivables and other accounts

receivables, excluding anticipated payments 1,217,241 1,217,241

Financial assets at fair value through result 15,297 15,297

Cash and cash equivalents

1,232,538 923,113 2,155,651

Liabilities at fair value

though result

Other financial

liabilities Total At December 31, 2011 Liabilities, according to the balance sheet Loans National currency 1,305,440 1,305,440

Foreing currency 560,301 560,301

Derivatives financial instruments - swap (65,815 ) (65,815 )

Suppliers and other liabilities, excluding legal liabilities 737,072 737,072

Debentures 310,966 310,966

494,486 2,353,478 2,847,964



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Parent company Accounts receivable and cash and cash equivalents are classified as "Loans and receivables"; accounts payable are classified as "Other financial liabilities."

6 Credit qualities of the financial assets The Company's financial assets are comprised mainly of the balance of available cash and cash equivalents, securities and credit card accounts receivable. The Company's cash is invested in the largest financial institutions in Brazil - all top tier institutions - and the Company's receivables and those of its subsidiaries are essentially with the main credit card operators, which have excellent risk classification levels.

7 Securities

Parent company Consolidated March 31,

2012 December

31, 2011 March 31,

2012 December

31, 2011

Available for sale "Fênix Fundo de Investimentos em Direitos Creditórios do Varejo (FIDC)" 19,246 18,544 34,965 17,980 Certificates of bank deposits - CDBs 101,975 198,021 147,403 213,513 Debentures 490,888 681,445 506,568 690,203 Equity Valuation Adjustments 351 1,417 351 1,417 612,460 899,427 689,287 923,113

Non-current (19,246 ) (18,544 ) Current 593,214 880,883 689,287 923,113

(a) Fênix Fundo de Investimento de Direitos Creditórios do Varejo - Fênix FIDC do Varejo

Operations of the Fênix Fundo de Investimento em Direitos Creditórios do Varejo ("Fênix FIDC do Varejo") began in February 2011, its purpose, defined under regulation, is the investment in credit rights, constituted as a closed credit fund, governed by CMN Resolution 2.907/2001, and by CVM Instruction 356/01, by the Regulations and by other applicable legal and regulatory conditions, for the specific purpose of acquiring creditor rights owned by Lojas Americanas and the Company ("Grantors"), originating from credit card operations used for the purchase and sale of products and services between the Grantors and their final customers, whose electronic transactions were captured and processed by their processing systems. The Fênix FIDC do Varejo will exist for an indefinite period of time, where every issue/series of shares has a specific maturity date. The first issue of senior quotas and subordinated mezzanine, quotas ("Quotas"), realized on February 24, 2011, the same date on which the Quotas were purchased by investors ("Subscription Date") have the amortization payment scheduled for the 60th (sixtieth) month as of the Subscription Date. The structure of the net equity of the Fênix FIDC do Varejo on March 31, 2012, represented, in the following balance sheet, by the lines "accounts payable" in the non-current liabilities and shareholders' equity, is subdivided into 1,643 (1,643 on December 31,2011) senior quotas held by third parties, with a value of R$ 497,984 (R$ 515,501 on December 31,2011), representing 90.22% (90.53% on December 31,2011) of the equity of Fênix FIDC do Varejo on that date; 72 (72 on



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December 31, 2011) subordinated mezzanine quotas held by third parties with a value of R$ 21,912 (R$ 23,028 on December 31, 2011), representing 3,97% (4.04% on December 31, 2011) of the net equity of Fênix FIDC do Varejo on that date; and 93.34 (93.34 on December 31, 2011) subordinated junior quotas held by the Grantors, in the amount of R$ 32,077 (R$ 30,906 on December 31, 2011), representing 5.81% (5.43% on December 31,2011) of the net equity of Fênix FIDC do Varejo on that date. The regulations of Fênix FIDC do Varejo define that the ratio between the net equity and the total value of senior quotas cannot be less than 109.86% (one hundred and nine point eighty six percent), and that the ratio between the value of net equity and the sum of the total value of senior quotas and the total value of the subordinated mezzanine quotas may not be less than 105.25% (one hundred and five point twenty-five per cent). The Benchmark for remuneration of Senior quotas is 111% of the DI rate and for the subordinate mezzanine shares 155% of the DI rate. Junior subordinated quotas do not have a target remuneration rate. The grantors were hired by Fênix FIDC do Varejo to act as agents for following-up payment of past due credit rights, reconciliation and collection agents and depository agents. At March 31, 2012, the securitization of credit right operations realized by the Grantors for Fênix FIDC do Varejo amounted to a total of R$ 507,269 (R$ 539,295 at December 31, 2011), of which R$ 53,771 (R$ 159,911 at December 31, 2011) were securitized by Lojas Americanas and R$ 453,499 (R$ 379,384 at December 31, 2011) were securitized by the Company. The Balance Sheet and Financial Statements for the quarter ended on March 31, 2012 of Fênix FIDC do Varejo is presented as follows: March 31, December 31, 2012 2011 Assets Cash and cash equivalents 5,719 4,304 Marketable securities 39,111 25,576 Accounts receivable 507,269 539,295 Other accounts receivable 4 389

Total assets 552,103 569,564

Liabilities Accounts payable (current) 129 128 Accounts payable (non current) 519,897 538,530 Shareholders' equity 32,077 30,906

Total liabilities and shareholders' equity 552,103 569,564

Financial revenues 17,486 5,993 Financial expenses 16,315 (5,993 ) Net income for the exercise 1,171

The FIDC securities portfolio is made up of: National Treasury Bills (LFTN), Bank Deposit Certificates (CDB) and Financial Investment Fund Quotas, which are available at any moment, for acquisition of receivables originating in operations with sellers.



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(b) Other financial assets available for sale The Certificates of Deposit, totally from top-ranked financial institutions, are remunerated at a rate of 100% to 105% of the CDI at March 31, 2012 (100.0% to 105.0% of CDI at December 31, 2011). There is no intention to dispose of such securities in a period superior to 1 year, so they are classified in current assets. Debentures were issued by a top-ranked financial institution, and are recorded at fair value, for which the rate was 100.5% to 102.9% of CDI and consolidated at March 31, 2012 (from 100% to 102.9% of CDI and consolidated at December 31, 2011) and can be traded at any time. There is no intention to dispose of such securities in a period superior to 1 year, so they are classified in current assets. The movement of financial assets available for sale are as follows: Parent

company

Consolidated

At January 1, 2011 776,973 790,707 Additions 653,350 895,702 Disposals (791,691 ) (933,904 ) Gains and losses transferred to the shareholder's equity (530 ) (530 ) At March 31, 2011 638,102 751,975 Additions 2,769,802 3,147,333 Disposals (2,528,027 ) (2,977,201 ) Gains and losses transferred to the shareholder's equity 1,006 1,006 At December 31, 2011 880,883 923,113 Additions 569,499 721,697 Disposals (856,102 ) (954,457 ) Gains and losses transferred to the shareholder's equity (1,066 ) (1,066 ) At March 31, 2012 593,214 689,287

8 Clients accounts receivable Parent company Consolidated March 31,

2012 December

31, 2011 March 31,

2012 December

31, 2011

Credit cards 497,068 560,851 503,538 572,313 Receivables transferred to Fênix Retail Credit Rights Investment 453,499 379,384 Fund (FIDC) 63,180 72,323 222,696 261,131 Other accounts receivable 560,248 633,174 1,179,733 1,212,828 (6,344 ) (16,169 ) (6,345 ) (16,169 ) Present value adjustments (25,039 ) (30,383 ) (55,745 ) (63,469 ) Provision for doubtful accounts 528,865 586,622 1,117,643 1,133,190 497,068 560,851 503,538 572,313

(i) The operations with credit cards can be paid in installments of up to twelve months. The Company's

and its subsidiaries' credit risks are minimized as the portfolio receivables are monitored by the credit card management companies.



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(ii) Other accounts receivable mainly represent sales to companies through corporate transactions, consumer loyalty projects and commercial agreements. The Company carried out the securitization operations of its credit rights represented by Accounts Receivable from credit card companies with the Retail Credit Rights Investment Fund (FIDC), note 7(a). As described in note 2.2, the FIDC is consolidated by the Company. The amounts recorded as receivables approximate their fair values. The aging list by maturity is as follows: Parent company Consolidated

March 31,

2012 December

31, 2011

March 31, 2012

December 31, 2011

Falling due 500,762 555,449 1,078,122 1,093,120 Overdue

< 30 days 5,025 5,574 7,067 7,165 30 to 60 days 3,992 4,428 5,614 5,692 61 to 90 days 4,107 4,555 5,775 5,855 91 to 120 days 4,179 4,635 5,877 5,959 121 to 180 days 10,800 11,981 15,188 15,399

528,865 586,622 1,117,643 1,133,190

The amount of the provision for doubtful accounts considers the average of the effect of losses over the last 12 months, combined with a Management analysis of the probable losses from due and past due loans. Changes in the provisions for doubtful accounts is shown as follows: Parent company Consolidated

Balance at January 1, 2011 30,208 66,135 Reversals (9,341 ) (26,508 ) Balance at March 31, 2011 20,867 39,627 Additions 9,516 23,842 Balance at December 31, 2011 30,383 63,469 Reversals (5,344 ) (7,724 )

Balance at March 31, 2012 25,039 55,745



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9 Inventories Parent company Consolidated

March 31,

2012 December

31, 2011

March 31, 2012

December 31, 2011

Goods for resale 480,901 498,773 501,791 530,546 Supplies and packaging 10,571 11,854 10,571 11,855 Present value adjustment (6,019 ) (5,339 ) (6,019 ) (5,339 ) Provision for losses (25,434 ) (26,128 ) (25,434 ) (26,128 )

460,019 479,160 480,909 510,934

The movement of the provision for losses is shown as follows: Parent company and consolidated Balance at January 1, 2011 (24,577 ) Additions (1,901 ) Balance at March 31, 2011 (26,478 ) Reversals 350 Balance at December 31, 2011 (26,128 ) Reversals 694 Balance at March 31, 2012 (25,434 )

10 Recoverable taxes Parent company Consolidated

March 31,

2012 December

31, 2011

March 31, 2012

December 31, 2011

Income Tax withheld at source 25,601 22,667 26,944 23,938 Social Integration Program (PIS) and Contribution for the financing of social security (COFINS) 73,978 70,881 74,621 71,805 Taxes on Goods and Services (ICMS) 10,059 10,390 10,071 10,402 Deferred income tax and social contribution 4,907 4,907 8,979 9,137 Others 1,016 1,017 1,373 1,372 115,561 109,862 121,988 116,654



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11 Income tax and social contribution

(a) Deferred income tax and social contribution The composition of deferred credits is as follows: Assets Parent company Consolidated

March 31,

2012 December

31, 2011 March 31,

2012 December

31, 2011

Tax losses 126,386 105,065 131,582 107,479 Negative bases for social contribution 45,499 37,823 46,651 38,692 Temporary differences: Contingency 5,524 5,216 5,524 5,216 Unsettled swaps 15,263 13,551 16,571 14,908 Present value adjustments receivables and payables 13,228 13,590 13,228 13,590 Provisions to doubtful accounts 10,831 10,330 20,616 21,579 Provisions for losses on inventories 8,950 8,884 8,950 8,884 Write-off of deferred assets 8,134 9,546 Others 3,656 4,321 4,486 6,198

229,337 198,780 255,742 226,092

Liabilities Parent company Consolidated

March 31,

2012 December

31, 2011 March 31,

2012 December

31, 2011

Amortization of goodwill 21,895 19,408 21,895 19,408 Capitalization of interest 23,100 20,309 23,100 20,309 Revision of the useful life of intangible assets 18,799 15,896 18,799 15,896 Revision of the useful life of fixed assets 5,670 4,742 5,670 4,742

69,464 60,355 69,464 60,355



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(b) Expected realization of deferred taxes Parent company

March 31,

2012 December

31, 2011

Deferred tax assets Deferred tax assets to be recovered within a year 37,940 Deferred tax assets to be recovered after 12 months 229,337 160,840

229,337 198,780

Deferred tax liabilities Deferred tax liabilities to be settled after 12 months 69,464 60,355

69,464 60,355 Deferred tax assets (net) 159,873 138,425

Consolidated

March 31,

2012 December

31, 2011

Deferred tax assets Deferred tax assets to be recovered within a year 26,405 42,957 Deferred tax assets to be recovered after 12 months 229,337 183,135 255,742 226,092 Deferred tax liabilities Deferred tax liabilities to be settled after 12 months 69,464 60,355 69,464 60,355

Deferred tax assets (net) 186,278 165,737

The Company has a history of taxable income and the estimates for recovery of the deferred tax assets are supported by the taxable income projections, taking into consideration a number of financial and business assumptions taken into account in the period ended on March 31, 2012. Consequently, the estimates are subject to not being realized in the future in view of the uncertainties that are inherent in forecasts. Brazilian legislation permits that tax losses and negative social contribution bases may be carried over indefinitely to compensate future taxable profits. However, tax legislation enacted in 1995 limits the use of such tax losses in any given year to 30% of taxable income.



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(c) Deferred Tax Movements The movement of deferred tax assets and liabilities during the year, without taking into account compensation of balances, are as follows: Parent Company Present value Fiscal Provisions adjustments losses Others Total Deferred tax assets At January 1, 2011 43,322 15,535 34,581 10,168 103,606 Charged (credited) to the financial statements 1,896 27,899 (17,042 ) (567 ) 12,186 Other charges (credits) (281 ) (281 )

At March 31, 2011 45,218 43,434 17,539 9,320 115,511 Charged (Credited) to the financial statements (5,385 ) (29,421 ) 125,349 (6,665 ) 83,878 Other chages (credits) (609 ) (609 ) At December 31, 2011 39,833 14,013 142,888 2,046 198,780 Charged (credited) to the financial statements (543 ) (1,147 ) 33,152 1,609 33,071 Other charges (credits) 1,278 362 (4,154 ) (2,514 ) At March 31, 2012 40,568 13,228 171,886 3,655 229,337

Parent Company Goodwill Capitalization amortization of interest Others Total

Deferred tax liabilities At January 1, 2011 9,458 7,354 8,645 25,457 Credited to the financial statements 2,488 2,027 3,980 8,495 At March 31, 2011 11,946 9,381 12,625 33,952 Credited to the financial statements 7,462 10,928 8,013 26,403 At December 31, 2011 19,408 20,309 20,638 60,355 Credited to the financial statements 2,487 2,791 3,831 9,109 At March 31, 2012 21,895 23,100 24,469 69,464



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Consolidated

Provisions

Present value

adjustments

Write-off deferred

assets Fiscal losses Others Total

Deferred tax assets At January 1, 2011 29,887 15,535 20,745 34,159 34,617 134,943 Charged (credited) to the financial statements 21,709 2,004 8,215 9,275 (3,909 ) 37,294 Other charges (credits) (16,936 ) (16,936 )

At March 31, 2011 51,596 17,539 28,960 43,434 13,772 155,301 Charged (credited) to the financial statements (14,242 ) (3,526 ) (19,414 ) 101,993 (10,388 ) 54,423 Other charges (credits) 16,368 16,368 At December 31, 2011 37,354 14,013 9,546 145,427 19,752 226,092 Charged (credited) to the financial statements 14,308 (1,147 ) (1,412 ) 35,688 (15,267 ) 32,170 Other chages (credits) 362 (2,882 ) (2,520 )

At March 31, 2012 51,662 13,228 8,134 178,233 4,485 255,742

Consolidated

Goodwill

amortization

Reversal deferred

amortization Capitalization

of interest Others Total Deferred tax liabilities At January 1, 2011 9,458 5,623 7,354 8,645 31,080 Credited to the financial statements 2,488 9,607 2,027 3,980 18,102

At March 31, 2011 11,946 15,230 9,381 12,625 49,182 Credited to the

financial statements 7,462 (15,230 ) 10,928 8,013 11,173

At December 31, 2011 19,408 20,309 20,638 60,355 Credited to the financial statements 2,487 24,469 2,791 (20,638 ) 9,109 At March 31, 2012 21,895 24,469 23,100 69,464



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(d) Reconciliation between nominal and effective tax rates The reconciliation between the income tax and social contribution, computed by the nominal and effective rates is demonstrated as follows: Parent Company Consolidated

March 31,

2012 March 31,

2011 March 31,

2012 March 31,

2011

Profits/losses before tax and social contribution (69,531 ) (8,001 ) (64,753 ) (2,685 ) Nominal rate 34% 34% 34% 34% 23,641 2,720 22,016 913 Effect of (additions) or exclusions on net income Equity pick up adjustment 383 960 Other deductions (additions) permanent, net (63 ) 11 (93 ) (1,992 ) Income tax and social contribution at effective rates 23,961 3,691 21,923 1,079 Current (1,137 ) (2,883 ) Deferred 23,961 3,691 23,060 3,962 Income tax and social contribution 23,961 3,691 21,923 1,079

12 Investments

Parent Company

March 31,

2012 December 31,

2011

Subsidiaries 49,826 48,816 Jointly controlled Companies 10,508 10,393

60,334 59,209

(a) Subsidiaries

Ingresso.com The subsidiary provides technology and services to purchase tickets via the Internet for concerts, theater shows, soccer, theme parks, events and cinemas. The Company holds a 100% ownership stake in Ingresso.com, which owns a 100% interest in B2W Rental Ltda. B2W Viagens The subsidiary, under its brands Americanas Viagens, Submarino Viagens and Shoptime Viagens, offers hotel reservation services, tour packages, airline tickets, ocean cruises and rental cars.



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Apart from direct participation in B2W Viagens e Turismo Ltda., the Company has a 15.73% indirect interest in this company through 8M Participações Ltda.

(b) Jointly controlled

(i) Submarino Finance Promotora de Crédito Ltda. The Company has a 50% ownership stake in Submarino Finance Promotora de Crédito Ltda., a company whose management is shared with Cetelem Brasil S/A - Crédito Financiamento e Investimento, through which it offers Submarino credit cards and financing for the purchase of products on the Submarino website. Thus, consolidated quarterly information has been prepared considering the balances of this jointly controlled company in proportion to the 50% stake held by the Company. Below the main values, already considering the percentage of participation (direct and indirect) of the financial statements of this company: Balance sheet at March 31, 2012 and December 31, 2011:

Assets March 31,

2012 December

31, 2011 Liabilities March 31,

2012 December

31, 2011

Current Current Cash and cash equivalents 9,988 11,734 Accounts Payable 806 628 Recoverable taxes 192 740 Salaries and social Others 130 108 charges payable 418 385

Taxes and contributions 126 2.775

10,310 12,582 1,350 3,788

Non-current Deferred income tax and Shareholders' Equity social contribution 1,502 1,544 Capital Stock 12,005 12,005 Fixed 12 13 Accumulated Losses (1,497 ) (1,612 )

Intangible 34 42

10,508 10,393

1,548 1,599

Total Assets 11,858 14,181 Total Liabilities 11,858 14,181

Statement of operations for the periods ended March 31, 2012 and 2011:

March 31,

2012 March 31,

2011

Net revenue 658 620 Selling, administrative and general expenses (659) (580) Net financial result 253 91 Other operational expenses (3) Income tax and social contribution (137) (30)

Net income for the period 115 98



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(c) Change in parent company's investments

Ingresso.com S.A.

8M Participaçõe

s Ltda.

Submarino Viagens e Turismo

Ltda.

Submarino Finance

Promotora de Crédito Ltda.

ST - Importações

Ltda. Total

Balance at January 1, 2011 17,040 2,864 10,111 5,299 5,458 40,772 Equity in subsidiaries 213 288 1,545 393 384 2,823 Balance at March 31, 2011 17,253 3,152 11,656 5,692 5,842 43,595 Equity in subsidiaries 2,472 1,032 5,941 4,701 1,468 15,614 Balance at December 31, 2011 19,725 4,184 17,597 10,393 7,310 59,209 Equity in subsidiaries 70 55 303 115 582 1,125 Balance at March 31, 2012 19,795 4,239 17,900 10,508 7,892 60,334

(d) Information about subsidiaries and jointly controlled companies

March 31, 2012

% Share

Capital Shareholders'

equity

Net income

Direct subsidiaries Ingresso.com 100 6,998 19,795 70 8M Participações Ltda. 100 2,661 4,239 55 Submarino Viagens e Turismo Ltda. 84.27 3,922 21,241 359 ST Importações Ltda. 100 4,050 7,892 582 Jointly held company Submarino Finance Promotora de Crédito Ltda. 50 24,010 21,016 230

December 31, 2011

% Share Capital Shareholders'

equity Net income

Direct Subsidiaries Ingresso.com 100 6,998 19,725 2,685 8M Participações Ltda. 100 2,661 4,184 1,320 Submarino Viagens e Turismo Ltda. 84.27 3,922 20,882 8,883 ST Importações Ltda. 100 4,050 7,310 1,852 Jointly held company Submarino Finance Promotora de Crédito Ltda. 50 24,010 20,786 10,188

13 Related party transactions

(a) Commercial cooperation agreement and others During the quarter ended March 31, 2012, sales were made to the Controller LASA in the amount of R$ 3,218 (R$ 123 at March 31, 2011) of merchandise. At March 31, 2011, there was no amount to receive from this operation (R$ 123 at March 31, 2011).



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(b) Controlling shareholder operations Earnings for the periods ended March 31, 2012 and 2011 represent recoveries of the following expenses: (i) rental of the Headquarters of R$ 341 and R$ 323, respectively; (ii) Management fees of R$ 183 and R$ 404 respectively. Furthermore, the Company has R$ 1,238 to receive as reimbursement of various expenses (December 31, 2011 - R$ 838).

(c) Licensing of the use of the Americanas.com Brand and Similar Trademarks The Company signed a licensing agreement with LASA for the use of the trademark, through which it is granted the exclusive license to use the Americanas.com trademark and similar brands for the activities specified in its bylaws. As stated in the contract, the brand licensing will be free as long as LASA holds a significant shareholding position in the Company.

(d) Remuneration of management The transactions, compensation and benefits for the Directors and key executives of the Company and subsidiaries are described in notes 22 and 29 as recommended in Technical Bulletin CPC 05 (IAS 24).

(e) Kiosk Operations The Company has a contract with its Parent Company, LASA, to jointly carry out activities to increase the synergy in their operations with the installation of Americanas.com brand kiosks in the commercial premises of LASA. Under the agreement, the payments for transactions on the Americanas.com site by customers can also be made at any of the counters in the LASA stores. The amounts obtained from these transactions, which are paid at the LASA points of sale, are transferred monthly to the Company, net of costs incurred by the LASA operation of the kiosks. Thus, the total amount receivable from the operation of all the kiosks installed was R$ 16,860 at March 31, 2012 (R$ 20,443 at December 31, 2011), and the amount of LASA operating costs reimbursed by B2W totaled R$ 4,689 and R$ 4,725 in the quarters ended March 31, 2012 and 2011, respectively.

(f) Private issue of debentures At December 7, 2010, at a Board of Directors Meeting it was approved the first private issuance of debentures, non convertible into shares, of subordinated species, sole series. The issuance was not registered with the CVM, because the debentures constituted a private placement without any sales efforts aimed at investors, fully subscribed by BWU Comércio Entretenimento S.A., a wholly owned subsidiary of the parent company Lojas Americanas S.A. The requirements and the characteristics of the issue were reported in note 18.

(g) Open balances The balances with related parties, classified as "Related Parties", in non-current assets, refer to operating current accounts and kiosks among the companies of the Group and do not incur interest.



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Asset balances

March 31,

2012 December 31,

2011

Parent company Lojas Americanas S.A. 15,623 19,604 Direct subsidiaries Ingresso.com S.A. 41 118 Submarino Viagens e Turismo Ltda. 5,132 6,273 B2W Rental 28,161 25,495 Others 47 46 33,381 31,932 49,004 51,536

The consolidated results are presented, basically, for the transfers made to LASA on account of the operations noted above.


Notes to the financial statements at March 31, 2011 In thousands of reais

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14 Fixed assets Parent company

Land

Facilities, furniture

and fixtures

Machines and

equipment

Improvements to third parties

buildings (*) Computer

equipment Construction

in progress Others Total Balances at January 1, 2011 5,754 19,432 93,431 2,475 1,375 4 122,471 Acquisitions 2,676 14,135 3 1,246 18,060 Transfers (124 ) 124 Depreciation (360 ) (2,110 ) (77 ) (182 ) (2,729 )

Balances at March 31, 2011 5,754 21,624 105,580 2,401 2,439 4 137,802 Aquisitions 55,775 10,653 3,140 2,895 341 18 72,823 Write-off (50 ) (688 ) (415 ) (11 ) (93 ) (1 ) (1,258 ) Transfers (921 ) (311 ) 392 790 ) (4 ) 54 Depreciation (4,286 ) (4,587 ) (1,143 ) (692 ) (72 ) (10,780 ) Balances at December 31, 2011 5,704 71,504 110,920 4,779 5,339 337 3 198,587 Acquisitions 786 12,432 27 308 15 13,568 Depreciation (1,490 ) (1,833 ) (280 ) (263 ) (3,866 ) Balances at March 31, 2012 5,704 70,800 121,519 4,526 5,384 352 3 208,289

Balances at March 31, 2012 Total cost 5,704 89,804 145,268 14,061 33,718 352 140 289,047 Acumulated depreciation (19,004 ) (23,748 ) (9,535 ) (28,334 ) (137 ) (80,758 ) Residual value 5,704 70,800 121,520 4,526 5,384 352 3 208,289

Balances at December 31, 2011 Total cost 5,754 90,751 133,437 13,653 32,713 341 87 276,737 Write-off (50 ) (688 ) (415 ) (11 ) (93 ) (1 ) (1,258 ) Transfers (1,045 ) (187 ) 392 790 (4 ) 54 Acumulated depreciation (17,514 ) (21,915 ) (9,255 ) (28,071 ) (137 ) (76,892 ) Residual value 5,704 71,504 110,920 4,779 5,339 337 3 198,587

Annual depreciation rate 6.85% 5.74% 10% 9.36% 10%



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Consolidated

Land

Facilities, furniture

and fixtures Machines and

equipment

Improvements to third parties

buildings (*) Computer

equipment Goods

for lease Construction

in progress Others Total

Balances at January 1, 2011 5,754 20,165 93,601 2,555 2,336 7,533 5 131,949 Acquisitions 2,715 14,139 3 1,567 2,054 20,478 Write-off Transfers (124 ) 124 Depreciation (418 ) (2,116 ) (79 ) (234 ) (911 ) (3,758 )

Balances at March 31, 2011 5,754 22,338 105,748 2,479 3,669 8,676 5 148,669 Aquisitions 55,995 10,624 3,135 3,085 7,820 341 18 81,018 Write-off (50 ) (688 ) (415 ) (11 ) (93 ) (1 ) (1,258 ) Transfers (922 ) (312 ) 393 791 (3 ) 53 Depreciation (4,396 ) (4,599 ) (1,150 ) (1,011 ) (4,164 ) (72 ) (15,392 )

Balances at December 31, 2011 5,704 72,327 111,046 4,846 6,441 12,332 338 3 213,037 Aquisitions 1,935 12,432 27 480 15 14,889 Depreciation (3,224 ) (1,839 ) (284 ) (373 ) (5,720 ) Balances at March 31, 2012 5,704 71,038 121,639 4,589 6,548 12,332 353 3 222,206

Balances at March 31, 2012 Total cost 5,704 92,172 145,510 14,148 36,532 20,400 353 151 314,970 Acumulated depreciation (21,134 ) (23,871 ) (9,559 ) (29,984 ) (8,068 ) (148 ) (92,764 ) Residual value 5,704 71,038 121,639 4,589 6,548 12,332 353 3 222,206

Balances at December 31, 2010 Total cost 5,754 91,971 133,681 13,739 35,354 20,400 341 99 301,339 Write-off (50 ) (688 ) (415 ) (11 ) (93 ) (1 ) (1,258 ) Transfers (1,046 ) (188 ) 393 791 (3 ) 53 Acumulated depreciation (17,910 ) (22,032 ) (9,275 ) (29,611 ) (8,068 ) (148 ) (87,044 ) Residual value 5,704 72,327 111,046 4,846 6,441 12,332 338 3 213,037

Annual depreciation rate 6.85% 5.74% 10% 9.36% 33% 10%

(*) Calculated based on the respective maturities of the rental contract. The average maturity of the rental contracts is 10 years.



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15 Intangible Assets Parent Company

Goodwill on investment

acquisitions

Right to the use of

software

Development of web sites

and systems

License for the use of

BLOCKBUSTER® Online brand Others Total

Balances at January 1, 2011 82,575 14,230 452,932 17,743 953 568,433 Additions 60,633 24 60,657 Amortization (1,823 ) (11,075 ) (1,738 ) (14,636 )

Balances at March 31, 2011 82,575 12,407 502,490 16,029 953 614,454 Additions 1,138 200,245 (24 ) 201,359 Amortization (8,554 ) (25,991 ) 634 (33,911 ) Balances at December 31, 2011 82,575 4,991 676,744 16,639 953 781,902 Additions 143 53,429 53,572 Amortization (1,517 ) (14,249 ) (276 ) (16,042 ) Balances at March 31, 2012 82,575 3,617 715,924 16,363 953 819,432 Balances at March 31, 2012 Total cost 138,048 76,373 833,186 21,060 953 1,069,620 Accumulated amortization (55,473 ) (72,756 ) (117,262 ) (4,697 ) (250,188 )

82,575 3,617 715,924 16,363 953 819,432

Balances at December 31, 2011 Total cost 138,048 76,230 779,757 21,060 953 1,016,048 Accumulated amortization (55,473 ) (71,239 ) (103,013 ) (4,421 ) - (234,146 )

82,575 4,991 676,744 16,639 953 781,902

Amortization's annual rate - % Undefined 12.72 12.17 5.26 Undefined

Consolidated

Goodwill on investment

acquisitions

Right to the use of

software

Development of web sites

and systems

License for the use of

BLOCKBUSTER® Online brand Others Total

Balances at January 1, 2011 84,788 30,178 452,897 17,744 959 586,566 Additions 2,381 61,051 94 63,526 Amortization (2,715 ) (11,130 ) (1,738 ) (15,583 ) Balances at March 31, 2011 84,788 29,844 502,818 16,100 959 634,509 Additions 8,759 204,172 (94 ) 154 212,991 Amortization (9,682 ) (28,859 ) 633 (37,908 ) Balances at December 31, 2011 84,788 28,921 678,131 16,639 1,113 809,592 Additions 3,734 53,935 57,669 Amortization (3,090 ) (14,489 ) (276 ) (17,855 ) Balances at March 31, 2012 84,788 29,565 717,577 16,363 1,113 849,406 Balances at March 31, 2012 Total cost 143,548 110,773 838,034 21,060 1,113 1,114,528 Accumulated amortization (58,760 ) (81,208 ) (120,457 ) (4,697 ) (265,122 )

84,788 29,565 717,577 16,363 1,113 849,406

Balances at December 31, 2011 Total cost 143,548 107,039 784,099 21,060 1,113 1,056,859 Accumulated amortization (58,760 ) (78,118 ) (105,968 ) (4,421 ) (247,267 ) 84,788 28,921 678,131 16,639 1,113 809,592

Amortization's annual rate - % Undefined 12.72 12.17 5.26 Undefined



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At March 31, 2012 and December 31, 2011, the goodwill of the acquisitions in investments were represented as followed: Parent company March 31,

2012 December

31, 2011

Cost Accumulated

Net

Net

amortization

Goodwill on investment acquisitions TV Sky Shop 135,305 (53,866 ) 81,439 81,439 Ingresso.com 2,743 (1,608 ) 1,136 1,136 8M Participações 138,048 (55,474 ) 82,575 82,575

Consolidated March 31,

2012 December

31, 2011

Cost Accumulated

Net

Net

amortization

Goodwill in investment acquisitions TV Sky Shop 135,305 (53,866 ) 81,439 81,439 Ingresso.com 6,164 (3,613 ) 2,551 2,551 8M Participações 2,079 (1,281 ) 798 798 143,548 (58,760 ) 84,788 84,788

(a) Goodwill on acquisition of investments

The goodwill referring to the investment in TV Sky Shop S.A. was constituted at the time of its acquisition from Shoptime S.A. (Shoptime) and TV Sky Shop S.A. (TV Sky) by Americanas.com. On August 31, 2005, Americanas.com acquired the equivalent of 98.85% of the capital of Shoptime, which held 56% of the capital of TV Skyshop, and 44% of the capital of TV Sky. During the first quarter of 2006 Americanas.com acquired the remaining 1.15% of Shoptime, and now holds 100% of this company. On August 1, 2006, Shoptime was incorporated by its holding company TV Sky, and thus the goodwill registered with Americanas.com with reference to an investment in Shoptime was added to the goodwill with reference to the investment in TV Sky, for a total of R$ 135,305. With the merger of Americanas.com and Submarino S.A on December 13, 2006, B2W was incorporated, with all the rights and obligations of Americanas.com and, consequently, the portion of the goodwill related to TV Sky. On March 31, 2007, at the EGM, it was resolved that the Company would be incorporation in TV Sky Shop S.A. The aforementioned goodwill was kept in line with CVM Circular Letter 001/2007. The balances of the goodwill related to the acquisitions of other shareholder interests are supported by Technical Appraisals based on the future profitability of the companies and were amortized through December 31, 2008, using the period of 5 to 10 years, according to the proportion of future income expected from these investments. Beginning on January 1, 2009, the amortization of these balances for goodwill is subject only to the evaluation of impairment.



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The Company annually evaluates impairment, with the latest assessment conducted upon the closing of the year ending at December 31, 2011, with this goodwill calculated from investments and mergers stemming from the expectation of future profitability, based on the projections of future earnings for a period of 10 years, using 10% per year for the nominal growth rate (equivalent to the long-term inflation rate, not taking into account any real growth) and a single discount rate of 12% to discount future estimated cash flows. For the impairment test of the goodwill of TV Sky, the Company used B2W as the cash generating unit. The asset recovery test carried out did not result in the need to recognize any losses.

(b) Web Site Development and Systems/Software Use License

These represent expenses for e-commerce platforms (development of technological infrastructure, content, applications and graphic layout for the sites), the ERP Oracle system and expenses for the implementation of the development of the Company's own systems, and amortized using the straight-line method over the period stipulated for the use of the benefits identified. Following its path of innovation, B2W has proceeded to invest in new features, designed mainly to improve the purchase experience, increase the conversion rate and strengthen the positioning of its brands, as well as implementing new operating functions for the Company. Overall during the first nine months of the year, 80 projects were implemented, ranging from improvements in the technological platform through to new features. Below are highlighted the following recently introduced projects: Implementation of the "1 Click Buy" tool in Shoptime. After implementing the fast purchase

feature on the Internet within Americanas.com, Submarino and Ingresso.com, now it is the turn of the first Home Shopping channel in Brazil to offer the same convenience and speed of the "1 Click Buy" experience in its website.

Submarino Mobile Project > Nokia: Implementation of a version of the Submarino website as an

application for Nokia. Submarino > Open Innovation: Launch of the innovation challenge to Campus Party Brasil 2012's

guests, enabling participants to send projects in the areas of social networks, new services and features, mobile applications and services.

Easter "Hidden Friend" in Facebook: An online "hidden friend" platform in social networks to

encourage the sale of Easter-time products by Americanas.com. Americanas - Help Layer: Layer that appears after 15 seconds of permanence in the informatics

and eletronics department screens.

(c) Borrowing costs capitalized The amount of borrowing costs capitalized during the quarter ended March 31, 2012 and the year ended December 31, 2011 were R$ 10,598 and R$ 38,103, respectively. The rate used for calculating the costs of borrowing costs eligible for capitalization was approximately 119.0% of the CDI on March 31, 2012 (118.3% of CDI on March 31, 2011), corresponding to the effective interest rate on loans taken by the Company.



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16 Deferred Parent company

March 31,

2012 December

31, 2011

Cost

Accumulated

Net

Net amortization Pre-operating expenses 84,700 (61,156 ) 23,544 27,641

The period for amortization of deferred assets is 5 years.

17 Borrowings and financing

(a) Composition Parent company Consolidated

Annual Final

charges maturity March 31,

2012 December 31,

2011 March 31,

2012 December 31,

2011

In local currency

Working capital 115.2% CDI to 135.0% CDI 11.18.2016 445,690 446,908 566,533 551,176

BNDES (i) TJLP + 3.5% p.a. to 5.8% p.a. 01.15.2016 330,859 372,443 333,295 375,679

FIDC Shares (iv) 111.0% to 155.0% CDI 02.24.2016 464,787 378,586

In foreign currency (iii)

Working capital (ii) US$ + 3.93% to 7.89% 04.30.2015 466,440 470,870 536,477 560,300 Swap operations (ii) 113.3% to 134.0% CDI 09.30.2013 (53,296 ) (62,432 ) (54,285 ) (65,815 ) 1,189,693 1,227,789 1,846,807 1,799,926

Non-current (758,059 ) (785,086 ) (1,234,424 ) (1,163,672 )

Current 431,634 442,703 612,383 636,254

(i) BNDES financing related to the FINEM program (investments in information technology,

implementing a distribution center, acquisition of machinery and equipment and investments in social projects), PEC (Working Capital), BNDES Automatic and "Connected Citizens - Computers for Everyone" programs.

(ii) Foreign currency operations are protected against changes in exchange rates by the use of

financial instruments known as swaps (see note 4). (iii) Funding consistent with Resolution 2,770 of the Central Bank of Brazil (BACEN). (iv) Represents the value of the senior and subordinated mezzanine quotas issued by FIDC (note 7

(a, b)).



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Borrowings and long-term financing by maturity: Parent company Consolidated March 31,

2012 December

31, 2011 March 31,

2012 December

31, 2011

2013 232,396 259,369 232,396 259,369 2014 138,019 141,701 149,596 141,701 2015 355,238 351,587 355,238 351,587 2016 32,406 32,429 497,194 411,015 758,059 785,086 1,234,424 1,163,672

(b) Guarantees

Borrowings and financing are guaranteed by letters of credit and promissory notes in the amount of R$ 314,646 and R$ 341,811, respectively. In the Consolidated there are borrowings and financing guaranteed by letters of credit and promissory notes in the amount of R$ 317,073 and R$ 341,811.

(c) Available lines of credit At March 31, 2012, the Company and its subsidiaries maintained lines of credit with a number of institutions in order to use them for moments of necessity to ensure the organic growth of the Company.



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18 Debentures

(a) Composition

Issue date

Maturity

Type of

issue

Bonds

outstanding

Value at the

issue date

Annual financial

charges

December

31, 2011

December

31, 2010

2nd Public issue 07.21.2010 07.21.2014 Public 100 R$ 1,000 IPCA+8.4% 114,464 111,191 1st Private issue 12.22.2010 12.22.2016 Private 200 R$ 1,000 111.5% CDI 206,140 200,640 320,604 311,831 Cost of borrowings* (777 ) (865 ) 319,827 310,966

Non-current (305.127 ) (302,663 ) Current 14.700 8,303



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(b) Movement

2nd Public

issue 1st Private

issue

Total

Balance at January 1, 2011 105,610 200,717 306,327 Financial charges 3,370 5,928 9,298 Balance at March 31, 2011 108,980 206,645 315,625 Amortization of principle (7,749 ) (7,749 ) Amortization of interest (1,054 ) (26,110 ) (27,164 ) Financial charges 11,014 20,105 31,119 Balance at December 31, 2011 111,191 200,640 311,831 Financial charges 3,273 5,500 8,773 Balance at March 31, 2012 114,464 206,140 320,604

(c) Information about the second issue of debentures

At the meeting of the Board of Directors held on July 14, 2010, the second issue and public distribution of debentures in the local capital market was approved, under the regime of commitment underwriting, with limited efforts of placement, according to the Securities Exchange Commission's ("CVM") Instruction 476:

Issue date

Quantity

issued

Quantity placed on the

market

Unit value

Issue value

Annual financial

charges

7/21/2010 100 100 1,000 R$ 100,000 IPCA + 8.4%

The debentures issued have the following characteristics: Convertibility: The debentures are simple, in other words, not convertible into the Company's

shares. Type and Form: The debentures are nominal and registered, without the issuing of notes or

certificates. Time and date of maturity: The debentures have a maturity of four years from the date of issue,

maturing on July 21, 2014. Amortization of nominal unit value: The updated par value (as described below) of the

debentures will be paid in full on the expiration date. Remuneration: The nominal unit value of the debentures may be adjusted by the fluctuation in

the Broad National Consumer Price Index ("IPCA") over the updated nominal value will yield interest equivalent to 8.40% per year.

Frequency of payment of remuneration interest: The amounts related to remuneration are paid

annually on July 21 of each year, with the first payment being due on July 21, 2011 and the last payment being due on July 21, 2014.



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Distribution and placement: The debentures will be subject to public distribution, with limited efforts of placement, with subscription guarantees through the intermediation of financial institutions belonging to the stocks and securities distribution system, with no early reservations nor minimum or maximum lots.

Financial indexes: The financial indices calculated based on the quarterly consolidated financial

statements of the Company, beginning in the third quarter of 2010, must be: Consolidated Net Debt/EBITDA Adjusted less than or equal to 2.90x.

At March 31, 2012 and December 31, 2011, the Company met all of the restrictive clauses

(financial indexes) established upon the public registration of the debentures. Guarantees: The debentures are of the floating guarantee type with a preferred position with

regard to the assets of the Company.

(d) Information about the first private issue of debentures At a meeting of the Board of Directors on December 7, 2010, the Board approved the first private issue of debentures of the Company, that is, non-convertible into shares, subordinated in a single series. The issue was not subject to registration by the Securities Exchange Commission (CVM) since the debentures were a private placement without any effort to sell to investors, complying with the following requirements:

Issue date Quantity

issued Unit value Issue value

Annual financial

charges

12/22/2010 200 1,000 R$ 200,000 111.5% DI

The debentures issued have the following characteristics: Subscriber: The debentures were wholly subscribed by BWU Comércio Entretenimento S.A., a

wholly owned subsidiary of Lojas Americanas S.A. Convertibility: The debentures are simple, in other words, not convertible into the Company's

shares. Type and Form: The debentures are nominal and registered, without any notes or certificates.

Time and date of maturity: The debentures have maturities of six years from the date of issue,

maturing at the end of December, 2016. Amortization of nominal unit value: The updated par value (as described below) of the

debentures shall be paid in full on the maturity date. Remuneration: The debentures yield interest as remuneration corresponding to 111.5% of the

average rate of interest of the Interbank Deposit Rate DI for one-day, "Extra Group" ("DI Rate"), calculated and published by the CETIP, in the daily bulletin, published on its page on the Internet (http://cetip.com.br) as a percentage per year, based on 252 (two hundred and fifty two) working days (the "Maximum Rate"), incident on the nominal unitary value, from the date of issue or the last days of payment of the remuneration, whichever the case, and paid at the end of each period of capitalization ("Remuneration").



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Frequency of payment of interest remuneration: The amounts related to remuneration are paid annually on December 22 of each year, with the first payment being due on December 22, 2011 and the last payment being due on the maturity date.

Financial Indexes: The financial indices calculated based on the quarterly consolidated financial

statements of the Company, beginning in the third quarter of 2010, must be: Consolidated Net Debt/EBITDA Adjusted less than or equal to 2.90x, considering the following definitions:

At March 31, 2012 and 2011, the Company met all of the restrictive clauses (financial indexes)

established upon the public registration of the simple debentures. Distribution and placement: The debentures will be subject to public distribution, with limited

efforts of placement, through the intermediation of financial institutions belonging to the stocks and securities distribution system.

Renegotiation: renegotiation is permitted provided that there is a common agreement between

the Issuer and the Debenture holder.

19 Taxes and contributions (Current) Parent company Consolidated

March 31,

2012 December

31, 2011 March 31,

2012 December

31, 2011

Taxes on goods and services (ICMS) 2,987 4,831 3,939 5,378 Service tax (ISS) 15 50 330 521 Social integration program (PIS)and Contribution for the social security fund (COFINS)

1,689 1,390

Tax on industrialized products (IPI) 864 665 Others 540 321 3,002 4,881 7,362 8,275

20 Provisions for contingencies The Company and its subsidiaries and jointly controlled companies are parties to lawsuits and administrative proceedings before courts and government agencies involving issues of tax, labor, civil and other matters. The Management has a system for monitoring judicial and administrative proceedings conducted by the Company's own Legal Department and outside counsel. Judicial deposits are made when legally required, and totaled R$ 28,194 at March 31, 2012 (R$ 19,775 at December 31, 2011), in the Parent Company, and R$ 28,219 at March 31, 2012 (R$ 19,802 at December 31, 2011), in the consolidated statements. Based on information provided by its external legal advisors, analysis of pending lawsuits, and labor actions (with prior experience as regards claims), management was able to record a provision that it judged sufficient to cover potential losses from the lawsuits in progress. Letters of guarantee are used to secure some lawsuits.



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(a) Provisions Parent company Consolidated March 31,

2012 December

31, 2011 March 31,

2012 December

31, 2011

Tax 2,186 2,186 2,186 2,186 Labor 1,026 1,025 1,026 1,025 Civil 13,036 12,130 13,036 12,130 16,248 15,341 16,248 15,341

Tax Related to the administrative process for tax assessment notices issued for recovery of alleged debt of ICMS (State Value-Added Tax). Labor The Company and its subsidiaries are also parties to lawsuits related to labor claims. None of these refer to significant amounts, and complaints mainly involve claims for overtime among others. Civil The Company is a party, together with its subsidiaries, to lawsuits resulting from the ordinary course of its operations and its subsidiaries, primarily related to consumers, which accounted for, at March 31, 2012, the amount indicated as a contingent liability related to these issues. Changes in provisions for contingencies: Consolidated Tax Labor Civil Total Balance at January 1, 2011 1,917 1,879 9,015 12,811 Additions 600 600 Payments/reversals (8 ) (14 ) (91 ) (113 ) Monetary variation 8 14 91 113 Balance at March 31, 2011 2,517 1,879 9,015 13,411 Additions 200 3,101 3,301 Payments/reversals (533 ) (856 ) (1,389 ) Monetary variation 2 2 14 18 Balance at December 31, 2011 2,186 1,025 12,130 15,341 Additions 900 900 Monetary variation 1 6 7 Balance at March 31, 2012 2,186 1,026 13,036 16,248



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(b) Contingent liabilities not provided At March 31, 2012, the Company had administrative and legal demands of a civil nature in the approximate amount of R$ 32,166 (R$ 37,130 at December 31, 2011), for the Parent Company and Consolidated statements, classified by their legal counsel as "possible losses" and, for this reason no provision has been made for them. In the Parent Company, these demands refer to lawsuits in civil court, special civil court, the Consumer Protection Institute (PROCON) in several States, referring to actions for claims and indemnities, amounting to approximately R$ 12,395 (R$ 12,395 at December 31, 2011). Additionally, there are lawsuits related to tax assessment notices classified as "possible losses" that mainly refer to the recovery of IPRJ and CSLL debts due to alleged improper use of tax loss carry forwards and social contribution, since the limit of 30% for realization of compensation was not observed, in the amount of approximately R$ 4,553.

21 Shareholders' Equity

(a) Paid in Capital

Paid in Capital may be increased by the Board of Directors, without the need for a change in the statutes, up to a limit of 200,000,000 common shares. There is no preemptive right for the subscription of shares. On March 31, 2012, the capital was represented by 156,536,355 common shares, nominal and having no par value (159,816,337 shares at December 31, 2011).

The composition of the shareholders of the Company's capital on March 31, 2012 and December 31, 2011 is as follows:

Number of shares

March 31,

2012 December 31,

2011

Lojas Americanas S.A 92,157,006 92,157,006 Openheimer Devel Markets Fund 11,430,158 15,109,458 Management 216,407 216,407 Other shareholders (free floating) 52,732,784 49,053,484 Treasury shares 3,279,982

156,536,355 159,816,337

(b) Changes in capital

Number of shares, without par value.

Common Nominal

At December 31, 2011 159,816,337 Subscribed and paid-up (3,279,982 ) At March 31, 2012 156,536,355



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At a meeting of the Board of Directors held on July 30, 2010, a capital increase was approved for the Company in the amount of R$ 925, with subsequent issuance of 27,495 common shares, due to the exercising of options awarded through the Company's Share Option Purchase Program (Note 22).

(c) Shares held in treasury On May 8, 2008, pursuant to CVM Instructions 10/80 and 268/97, the Board of Directors of the Company approved a repurchase program for shares of its own issue, using equity reserves, in order to retain them in treasury or cancel them, with the ability to further sell or transfer them, during the subsequent 365 days, up to the limit of 4,971,895 common shares, which corresponds to 10% of the outstanding shares. On December 31, 2011, the Company presented an excess number of shares in treasury compared to the available reserves, and, therefore, pursuant to CVM instructions, in the Board of Directors Meeting realized on March 1, 2012, it was approved the cancellation of the 3,279,982 treasury shares, in the total amount of R$ 218,631, against profit and capital reserves. The cancellation of these shares was registered on December 31, 2011, "ad referendum" in the Board of Directors Meeting. Changes in shares held by treasury:

Quantity of

shares

Balance (thousand

reais)

Acquisition weighted

avarage cost

At December 31, 2011 3,279,982 218,631 66.66 Shares cancelled on March 1, 2012 (3,279,982 ) (218,631 ) Market value on March 31, 2012 per share R$ 8.30

The minimum and maximum share prices were R$ 46.39 and R$ 74.20, respectively.

(d) Capital subscription At a meeting held on June 14, 2011, the Company's Board of Directors ratified the increase in capital, approved by the meeting of the Board of Directors on March 23, 2011, in view of the subscription and full payment of the 46,253,470 common shares of the Company's issue at a price of R$ 21.62 (twenty one reais and sixty two centavos) per share, totaling R$ 1,000,000.

(e) Capital reserve This reserve was created as a result of a 2007 ownership restructuring process, in consideration of merged net book assets.

(f) Legal reserve As required by Article 193 of Brazilian Corporation Law 6.404/76, the legal reserve is constituted by means of an appropriation of 5% of each year's net profits.



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(g) Expansion reserve Reserve for future investments are constituted based on the capital budget to be submitted for approval to the shareholders at the next General Shareholders Meeting to be used for future investment plans of the Company. The remaining profits from the year will be used for purposes approved by the General Shareholders' Meeting, according to the proposals submitted by the Board of Directors.

22 Payment based on shares The Company approved a Share Option Plan ("B2W Plan") at the GSM held on December 13, 2006, pursuant to § 3 of Art. 168 of Law No. 6.404/76, earmarked for its Managers and employees. The GSM held on March 31, 2007 approved the merger of the Company with TV Sky Shop S.A., ratified maintaining the Plan approved in December 2006, as mentioned. The options are limited to 3% of total capital. The Plan is administered by the Board of Directors or by a Committee nominated by the Board and has the following features: the equivalent of 10% of the option must be exercised by the beneficiary on the date of the award;

the remainder of the option is not subject to a grace period, and may be exercised fully or partially

at any moment until the program expires; the issue price or the purchase price shall be the equivalent to the average value of the closing

price of the Company's options over the past 22 trading sessions of the São Paulo Stock Exchange (BOVESPA) prior to the date the option was awarded, with the payment of the issue price or the purchase price of the residual batch plus monetary correction based on the variation of the IGPM and 6% interest per year as of the date of the award;

the exercise price of the options that have not been exercised shall be deducted from the amount

of the dividends and interest on own equity per share paid by the Company on the date of the award;

the shares that have been exercised may be freely sold by their beneficiaries when they have been

fully paid up and have observed the conditions defined in the Plan; the Company has first rights of refusal for the repurchase option of the shares once an

employment relationship no longer exists with the beneficiary. At the General Shareholders' Meeting (GSM) held on August 31, 2011, the Company approved the reform of its Share Option Plan, with the main changes described below: the options may be exercised in the manner that is foreseen in each program, within the deadline

and during the periods that have been established for the Programs and their respective Contracts;

the issue price, the purchase price will be the equivalent to the weighted average of the price of

the Company's shares at the closing of the last 22 trading sessions of the Bolsa de Valores Mercadorias e Futuros (BM&FBOVESPA) prior to the date the option concession was awarded, and can be monetarily restated based on the IPCA (Full National Consumer Price Index) produced by the IBGE, or other index to be indicated by the Board of Directors, plus interest according to a rate as determined by the Board of Directors; and



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the shares that are exercised may be freely transferred by its beneficiaries when they have been totally paid up and the minimum non-trading period observed in establishing each Program for each lot of shares.

Shown below is a statement of the 2009 and 2007 Programs still open as at March 31, 2012 offered to the Company's principal executives: Program 2009 2007 Global volume (ON) 1,189,414 1,099,868 Strike price 33.63 45.46 Strike deadline 6 years 6 years

Subscription date 07/30/2010 12/10/2007 and

09/23/2008 Number of shares offered 1,006,861 906,736 Number of shares not exercised 121,500 207,216 Number of canceled shares 137,500 658,392 Weighted avarage cost of shares not exercised 37.39 65.14

The fair value of the shares awarded by the B2W Plan was estimated based on the Black & Scholes options value model, based on the following assumptions: Program 2009 2007 Risk free rate 10.64% 9.79% "Plan" duration in years 6 6 Expected annualized volatility 40.83% 45.3% Dividend yield 0.23% 1.44% Fair value of the option on the granting date (per share) 28.85 19.43 Market value on the granting date (per share) 33.63 58.37 Expected dropout rate (*) 50.00% 50.00%

(*) The dropout rate corresponds to the percentage of the share options awarded by the Company,

which it expects will not be exercised, because of the non-compliance on the part of the participants in the conditions established by the B2W Plan. This rate was estimated by the Company using historical bases and the monitoring of the compliance of the performance conditions of the participants of the B2W Plan.



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From the date of the approval of the B2W Plan through March 31, 2012, the following options were exercised:

Period of option exercise

Quantity of shares

Total amount in Reais

Weighted avarage cost

Weighted average market value on the

date of exercise of the shares

2007 69,952 3,180 45.46 78.10 2008 141,403 6,799 48.08 56.97 2010 27,495 925 33.63 28.74

The remuneration costs stemming from the B2W Plan for the period ended March 31, 2012 were R$ 430 (R$ 754 on March 31, 2011). The counterpart to the remuneration costs is the posting to capital reserve - reserve of recognized options awarded under net equity, in view of the fact that the options, once exercised, are settled through the issue of new shares or the use of shares that are kept in treasury. The remuneration cost corresponds to the fair value of the B2W Plan, calculated at the date of the award, registered during the period when the services were rendered, which begins at the date of the award and ends at the date on which the beneficiary acquires the right to exercise the option. The remuneration costs of the B2W Plan to be recognized by the Company for the remaining period (the period of services that will occur) based on the assumptions used totaled approximately R$ 3,020 on March 31, 2012 (R$ 2,779 on March 31, 2011). Based on the capital share base on March 31, 2012, and the maximum participation dilution in the percentage that could be submitted to the current shareholders of the Company in the event all of the shares awarded were to be exercised is less than 1%.

23 Revenue of sales and services Parent company Consolidated

March 31,

2012 March 31,

2011 March 31,

2012 March 31,

2011

Gross revenue of sales 1,054,016 1,073,924 1,123,571 1,140,469 Gross revenue of services 30,009 23,755 61,906 51,205 Returns and unconditional discounts (63,990 ) (52,889 ) (65,574 ) (52,889 ) Sales tax (101,594 ) (90,611 ) (118,748 ) (110,077 )

Net revenue 918,441 954,179 1,001,155 1,028,708



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24 Financial result

Parent company Consolidated March 31,

2012 March 31,

2011 March 31,

2012 March 31,

2011

Interest and monetary variation on securities 11,190 7,736 26,336 10,903

Financial discounts obtained 3,378 2,008 3,652 2,059 Accounts receivable's fair value adjustment 28,968 29,003 28,968 29,003

Other financial revenues 12 102 13 102 Total financial revenue 43,548 38,849 58,969 42,067 Interest and monetary variation of borrowings and financing (33,431 ) (40,035 ) (55,223 ) (49,639 ) Expenditure in anticipation of receivables (25,877 ) (22,720 ) (26,564 ) (22,939 ) Monetary variation of tax liability (153 ) (35 ) (157 ) (35 ) Bank charges and taxes on financial transactions (2,753 ) (2,156 ) (3,176 ) (2,325 ) Suppliers present value adjustment (21,685 ) (22,220 ) (21,685 ) (22,220 ) Conditional/granted discounts (39,219 ) (17,557 ) (40,695 ) (19,382 ) Interest on suppliers overdue (4,024 ) (1,501 ) (4,024 ) (1,501 ) Other financial expenses (474 ) (2,729 ) (474 ) (2,731 )

Total financial expenses (127,616 ) (108,953 ) (151,998 ) (120,772 )

Net financial result (84,068 ) (70,104 ) (93,029 ) (78,705 )

25 Expenses by type

The Company chose to present its statement of operations for the periods ended March 31, 2012 and 2011 by function and presents, as follows, the details by type:

Parent company Consolidated

March 31,

2012 March 31,

2011 March 31,

2012 March 31,

2011

Sales Staff (34,876 ) (19,220 ) (39,557 ) (22,285 ) Occupation (7,922 ) (9,069 ) (7,992 ) (9,108 ) Distribution (65,570 ) (68,472 ) (66,579 ) (70,514 ) Others (a) (31,639 ) (53,694 ) (49,875 ) (64,720 ) (140,007 ) (150,455 ) (164,003 ) (166,627 )

General and administrative Staff (6,873 ) (5,488 ) (8,693 ) (6,595 ) Depreciation and amortization (24,005 ) (21,464 ) (23,575 ) (19,341 ) Others (b) (1,270 ) (2,084 ) (4,759 ) (5,716 ) (32,148 ) (29,036 ) (37,027 ) (31,652 )

(a) Mainly refers to on and off-line media and outsourced client services. (b) Mainly refers to attorney's fees, services and court ordered payments.



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26 Earnings (losses) per share

Basic earnings (losses) per share is calculated by dividing net income (loss) by the average weighted number of common shares in circulation during the quarter. The calculation of basic earnings per share is released as follows:

(a) Basic earnings (losses) per share Parent company Consolidated

March 31,

2012 March 31,

2011 March 31,

2012 March 31,

2011

Numerator Net income (loss) for the period (45,570 ) (4,310 ) (42,830 ) (1,606 ) Denominator (in thousands of shares)

Weighted average of the common shares in circulation 156,536

110,234

156,536

110,234

Basic earnings (losses) per share (0.2911 ) (0.0391 ) (0.2736 ) (0.0146 )

The Company had not issued or granted equity instruments that should be considered for calculation of the diluted earnings per share, according to the Technical Pronauncement CPC 41. Additionally, earnings per share considering the impact of convertible debentures issued in 2011 exceeded the basic earnings per share and therefore the effect is anti-dilutive.

27 Insurance coverage The Company and its affiliates have insurance coverage for merchandise in inventory and fixed assets, as well as against robberies and thefts of cash. At March 31, 2012, such coverage was as follows:

Property insured

Covered risks

Coverage amount - In reais

Inventories and fixed assets Fire and other risks 635,207 Loss of profit 214,000 Civil liability Up to 20,000 Theft 1,000



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28 Obligations - Rental contracts The Company has a Private Instrument for Commercial Real Estate Rental Contracts and Other Agreements with Hulusa Comercial e Imóveis Ltda (unaffiliated company). Through this instrument, the Company, in the capacity of tenant, and Hulusa, in the capacity of landlord, executed a study regarding the establishment of a new distribution center (DC) for use by B2W on real estate owned by Hulusa. This new DC has been used by the Company since August 2008. The Company still maintains its Pirambóia and Osasco DCs, whose consolidation into the operations in the Hulusa DC is anticipated. The rent is updated monthly on the basis of the arithmetical average of the following Brazilian indexes: IGP-M (Market General Price Index) and IPC (Consumer Price Index) (on March 31, 2012, the value of the monthly rent was R$ 2,610). The 10-year (120-month) lease term is counted as of the execution date on the above-mentioned lease instrument. To guarantee the new DC, the Company made payments of R$ 10,000 that will be applied against future rent payments, representing 50% of the monthly rent. Under the above- referenced contract, Lojas Americanas S.A. is the Company's co-signer, guarantor, and principal debt payer. For the period, which closed on March 31, 2012, the Company incurred rent expenses for its DCs of R$ 7,922 (R$ 8,955 for the period ended March 31, 2011). The Company analyzed the above-referenced contracts and concluded that they conform to the classification of operational mercantile leasing. Future commitments arising from the lease contracts of these DCs-in-use, for values as of March 31, 2012 are as follows:

2012

2013

2014

2015 2016

onwards

Rentals 24,953 34,518 36,244 38,057 39,959

29 Employee and management remuneration

(a) Management remuneration In accordance with Brazilian Corporation Law and the Company's bylaws, it is the responsibility of the shareholders, at a General Shareholders Meeting, to establish the total amount of the annual remuneration of the Management. The Board of Directors is charged with making the disbursement of this allocation amongst the members of Management. At the General Shareholders' Meeting on April 30, 2011, the monthly global remuneration limit was established for the Company's Management (Board of Directors and Executive Board). For the quarters ended March 31 2012 and 2011, the total remuneration (salaries and profit-sharing) for the Company's board members, directors and principal executives was R$ 2,130 and R$ 2,229 respectively (R$ 2,413 and R$ 2,451 in the consolidated), with compensation falling within the limits approved in corresponding Shareholders' Meetings. The Company and its affiliates do not grant post-employment benefits, employment contract rescission benefits, or other long-term benefits for management and its employees (except for the Stock Option Purchase Plan described in note 22).



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30 Other information Cash and cash equivalents are basically comprised of balances in bank accounts.

Obligations with suppliers stem mainly from purchase of merchandise for reselling from

domestic suppliers, net of present value adjustment. Other net operating expenses mainly are comprised of non-recurring income related to the

solution of delivery problems occurred at the end of 2010. Considering the Company's core business, cost of goods sold consist primarily of cost of inventory

for resale.

* * *

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