Annual Report Empresas CMPC S.A.

Transcription

1 Annual Report Empresas CMPC S.A.

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3 Empresas CMPC S.A. 001 Empresas CMPC S.A. is a listed stock corporation established in 1920 with Chilean private capitals. Its equity is divided into 200 million shares, held by 7,983 shareholders. Its forest assets extend over an area of 717,000 hectares of mainly radiata pine and eucalyptus forests. During 2005 its sales reached to ThUS$ 2,129, Net income was ThUS$ 239,974.5, equivalent to ThUS$ 1.2 per share. CMPC is an integrated forestry company that conducts five distinct businesses, each of which is organized as a separate company or group of companies and independently managed in accordance with the consolidated corporate strategy. These subsidiaries are: Forestal Mininco S.A.: Forestry and sawmill business. CMPC Celulosa S.A.: Short, long-fiber and fluff pulp business. It operates the following pulp mills: Pacífico (495,000 tons/year), Santa Fe (380,000 tons/year) and Laja (360,000 tons/year). CMPC Papeles S.A.: Folding boxboard, printing and writing papers, corrugating and wrapping materials, newsprint and wood free paper business. Its subsidiaries are: Papeles Cordillera S.A., Cartulinas CMPC S.A., Industrias Forestales S.A., and the distribution company EDIPAC S.A. CMPC Tissue S.A.: Tissue and sanitary products in Chile, Argentina, Uruguay, Peru and Mexico. CMPC Productos de Papel S.A.: Engaged in the packaging business, operating through 4 subsidiaries: Envases Impresos S.A., Envases Roble Alto S.A., PROPA S.A., (with subsidiaries in Chile, Argentina and Peru) and Chimolsa S.A.

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5 Contents Letter from the Chairman 007 Board of Directors, Committee of Directors and Management 010 Historic Background 013 Corporate Responsibility in CMPC 015 Businesses and Subsidiaries Description 019 Businesses Analysis 033 Financial Analysis 045 Ownership Structure 056 General Information 059 Consolidated Financial Statements 071 Overseas Representatives 136 Bankers 138 General Information 139

6 004 Board of Directors Empresas CMPC Arturo Mackenna (Chief Executive Officer), Juan Claro, Bernardo Matte, Gonzalo García (General Secretary), Eliodoro Matte, Jorge Gabriel Larraín, Patricio Grez, Jorge Marín, Martín Costabal.

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9 Letter from the Chairman 007 Dear Shareholders, I am pleased to submit for your consideration our Annual Report and Financial Statements for the recently ended fiscal year. The year 2005 was marked by the celebration of the 85th anniversary of the Company, which gave rise to several activities with the community, workers, customers, suppliers, and authorities. These included the exhibition Lágrimas de Luna Tesoros de la Platería Mapuche (Moon Tears -Treasures of Mapuche Silverware), sponsored by CMPC and opened to the public at the Museo de Bellas Artes and subsequently at the Jorge Alessandri Educational Park in Concepción. We consider these initiatives an event of great significance and a vivid testimony of our respect for the identity and spiritual legacy of the Mapuche culture. At the opening of this exhibition, and in the presence of the President of Chile, I emphasized the fact that CMPC develops its production activities harmonizing several aspects, which are very important for society. Certainly, companies main social responsibility is to keep themselves active and generate wealth by means of satisfying customers demands and fairly competing in markets. When this happens, companies not only generate returns for their shareholders, but also very desirable social consequences, such as employment opportunities and provision of high-value goods and services. However, CMPC intends to go further and get involved with the challenges and goals of its neighbors, by making constant and significant social contributions to communities surrounding its forest properties and mills. Fundación CMPC, which supports 93 schools in 36 districts of the country, benefiting over 380 teachers and 15 thousand children, is one of our most important contributions. Equally relevant for the Company is the care for the environment. For this reason all our investments have duly assumed the corresponding environmental dimension. Technical and information requirements regarding the communities involved have been addressed in an atmosphere of much collaboration, with satisfactory results. During the referred ceremony, the President of Chile congratulated CMPC for its contribution and its capability to understand and accommodate the economic, social, cultural and environmental requirements arising from our activity. Throughout its history, the Company has undertaken pioneering and break-through activities in diverse areas, thus contributing not only to consolidate itself in the economic sphere, but also to gain a privileged position in its social insertion. So has been recognized by journals like La Segunda and El Diario Financiero, which supported by wide-coverage surveys- have honored us as The Most Admired Company in Chile for the year This anniversary finds CMPC very actively progressing. Today we have 20 mills operating in Chile, 6 abroad and nearly 500 thousand planted hectares. As I addressed in my letter last year, the Company is developing very important projects, some of which are already near to completion. During the fiscal year, CMPC implemented an expansion of the Maule Plant adding 80 thousand tons of folding boxboard per year with an investment of 38.5 million dollars. In September a new tissue paper machine started up in the Talagante Plant. Total investment amounted to 31 million dollars, and the machine s capacity is 34 thousand tons of paper per year. The rebuilt sawmill in Mulchén began to operate in October, with a capacity of

10 thousand cubic meters per year with an investment of 26 million dollars. Also, by the end of the year, an agreement was reached to purchase the forests and industrial assets of Forestal Copihue for 110 million dollars, including essentially 16 thousand hectares planted with radiata pine in the 7th Region, a sawmill in Constitución and a remanufacturing plant in Coronel. The main ongoing project is the new pulp production line in the Santa Fe Pulp Mill, with a total investment of 745 million dollars. This project is being executed according to schedule and its start up is programmed for the last quarter of Special and constant care has been given to environmental and safety factors and we have devoted significant energy and resources to ensure compliance with our obligations in these matters. During 2006, important investments will be completed in other areas of the Company, such as the new plywood plant, a new biomass boiler at the Pacífico Pulp Mill, several environmental improvements at the Laja Pulp Mill, an increase in corrugated paper production capacity in Puente Alto, and the construction of secondary treatment plants in Nacimiento, Maule, Valdivia, Puente Alto and Talagante. With the foregoing, we complete the investment plan of 1,500 million dollars initiated in the year 2004, the most ambitious in the Company s history. In 2005 our net income amounted to US$ 240 million, 29% lower than that of the previous year. This decrease was the result of several factors that impacted negatively the costs of different activities. These factors include the appreciation of the local currency against foreign currencies, which increased fixed costs measured in dollars, substantial fuel surges and gas shortages, increases in land and ocean freight rates, higher prices of wood purchased from third parties, increases in maintenance and construction costs of forest roads, and the recognition of extraordinary expenses associated to the large number of projects under execution. Export prices of CMPC, measured in dollars, were on average a little lower than those of Pulp prices started the year with an upward trend. However, from the second quarter prices began to weaken, ending with an annual average US$ 20 per ton below the ones recorded in In contrast, some paper export prices experienced moderate increases during the year. It should be noted that price levels of our main export products are modest compared to those obtained by other commodities such as copper and oil. The positive performance of the Chilean economy, particularly in consumption, fuelled a growth in sales in the domestic market, although in a highly competitive environment. Subsidiaries abroad improved their performance measured in dollars, but the economic situation in Argentina continues making difficult for us to obtain results consistent with the investment made in that country. In order to pursue our investments and refinance some financial debt, CMPC issued a 10 year bond in the local market for UF 7 million (approximately 200 million dollars). Furthermore, the Company subscribed a 7-year syndicated loan for 100 million dollars with a group of 8 banks. Including these operations, the average cost of debt is 4.5% per annum in dollars, one of the lowest one ever achieved by a Chilean private company. As a result of the disbursement in investments, net debt increased from 501 million dollars by the end of 2004 to 968 million dollars by the end of 2005.

11 009 Letter from the Chairman CMPC is a company that is investing, which believes in Chile, in its workers, and in its business. A company that is faithful to its traditions, while innovative and vigorous. CMPC is a company that is investing, which believes in Chile, in its workers and in its business. It is also a company which is faithful to its traditions, while innovative and vigorous, and is admired by many as an example of a company that tries to do things well. The difficulties and challenges we face encourage us to make daily efforts to fulfill our duties and conduct our businesses to achieve the best possible results, in an efficient and prudent manner. We endeavor to continue to make a positive contribution to our country and its people, aspiring always to excellence, taking advantage of the possibilities that emerge in the different lines of business in which we compete, and providing improved opportunities to our workers and their families. On this 85th anniversary, taking pride in our history, CMPC has solid foundations to plan its future. This imposes on us the responsibility of continuing to work to attain our entrepreneurial objectives in a framework of strict ethical rigor, and respect for fundamental rules, principles and values. Eliodoro Matte Chairman Empresas CMPC S.A.

12 010 Board of Directors and Administration BOARD OF DIRECTORS EMPRESAS CMPC S.A. Chairman Eliodoro Matte Civil Industrial Engineer Rut: Committee of Directors Jorge Marín Patricio Grez Martín Costabal Directors Juan Claro Entrepreneur Rut: Martín Costabal Economist Rut: Patricio Grez Civil Engineer Rut: Jorge Gabriel Larraín Economist Rut: Jorge Marín Business Administrator Rut: Bernardo Matte Economist Rut:

13 011 MANAGEMENT OF EMPRESAS CMPC S.A. Chief Executive Officer Arturo Mackenna Civil Industrial Engineer Rut: General Secretary Gonzalo García Lawyer Rut: K Chief Financial Officer Luis Llanos Civil Industrial Engineer Rut: External Auditors PricewaterhouseCoopers Management From left to right: Luis Llanos, Arturo Mackenna and Gonzalo García.

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15 Historic Background 013 Empresas CMPC was established in 1920 under the name Compañía Manufacturera de Papeles y Cartones S.A. through the merger of the paper manufacturing firm Ebbinghaus, Hansel and Company and the Maipú Mill of Comunidad Fábrica de Cartón Maipú. During the early and mid-1900s, when the Chilean economy was characterized by import substitution and high tariffs, CMPC focused on diversifying into paper production to complement its production of boxboard and became, by the 1960s, the leading supplier of converted paper products in Chile. As the paper market grew, CMPC began to produce its own pulp at the Laja mill in The growing forest reserves established by CMPC, as well as the need to obtain economies of scale, soon resulted in the production of more pulp than the Chilean market required and, in the late 1950s, the Company entered the export market for newsprint and pulp. In 1991, CMPC made its first investment in production facilities outside of Chile, acquiring the Argentine disposable diaper producer Química Estrella San Luis S.A. In 1993, CMPC entered into a 50/50 joint venture with Procter & Gamble, in order to develop the disposable diapers and sanitary towels market in Chile, Argentina, Bolivia, Uruguay and Paraguay. This join venture was terminated in In 1994, CMPC continued its international expansion with the acquisition of the tissue producer IPUSA in Uruguay. In 1995 it started operations of its greenfield tissue mill in Argentina in 1995, and in 1996, continued to expand its tissue operation through the acquisition of Papelera del Plata S.A. in Argentina and the organization of a tissue company in Peru. In 1998, CMPC finished its second tissue machine in Argentina and started a production facility in Peru, becoming the largest tissue operator in South America. In the mid 1950s, the Company became a holding, decentralizing its operations in different subsidiaries grouped in 5 large business areas: Forestry, Pulp, Paper, Tissue and Paper Products. During 1998, CMPC completed the process of fully incorporating the Santa Fe and Pacífico mills into its pulp business, after acquiring 100% of both companies. In fact, in two separate operations, the Company purchased from Royal Dutch/Shell and Citibank 80% of ownership interest in the Santa Fe Pulp Mill, and, from Simpson Paper and the IFC 53.5% of ownership interest in the Pacífico Pulp Mill. CMPC had previously purchased from Scott Paper 20% of shares in Santa Fe in In 1998, a new boxboard machine started operating, allowing CMPC to serve new export markets for folding boxboard. In 1999, CMPC entered the Peruvian multiwall sacks market with a new greenfield plant. Finally in 2001, a new liner and medium paper mill started operating to supply the domestic corrugated boxes needs. The Company is currently developing relevant projects in its 5 business areas. Many of them have already been executed and are in operation, such as the expansion of the folding boxboard plant in Maule, the reconstruction of the Mulchén sawmill and the expansion of the tissue paper plant in Talagante, while other projects like Santa Fe 2 are in an advanced state of development.

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17 Corporate Responsibility in CMPC 015 For CMPC, corporate responsibility is a voluntary and proactive commitment to perform its duty within an ethical framework that considers good practices in all its activities in different areas: BUSINESS ACTIVITIES The Company contributes to Chile s development by generating both employment and wealth. In order to achieve this: conducts good management practices; produces and sales high quality products; maintains reliable and efficient relations with its customers and suppliers; competes fairly in the marketplace; produces transparent financial reporting; pays all taxes and complies with the legal frameworks. EMPLOYEES The Company strives to ensure appropriate working conditions, complying with all labor obligations related to remuneration, social security and regulations. Furthermore, it develops policies and benefit programs for employees and their families, with a constant concern for their job security and generating training and career development opportunities. People are a key factor in the success of the Company s affairs. COMMUNITY The Company has designed several programs for educational support and community development that benefit the communities surrounding its properties and mills, in order to contribute to improve their living conditions. As a member of many communities, the Company is always keen to collaborate with them in order to participate, where possible, in their goals and challenges. This year CMPC has reinforced its action program towards social insertion, with special emphasis on the generation of direct, indirect and related local employment, as well as cooperating in the development of small-size companies that may offer job possibilities in the region. Fundación CMPC The Program for Language and Mathematics Learning Support covered 5,924 children. A significant improvement in student performance was achieved with this program, as measured by the SIMCE national test (a test conducted nationally to assess the education quality). Likewise, significant management support was provided to municipal schools involved in the program. Also this year the School Libraries project was implemented, with an average of 1,600 books delivered to each of the following schools: Coigüe in the district of Negrete; El Saber, Toqui Lautaro and Canada; the last three located in the district of Nacimiento. The collection comprises literary genres for all tastes and ages, responding to the different interests of readers. Together with the donation of resources, training was provided to librarians and teachers, an experience that took place at the Reading Center of Lo Barnechea in Santiago.

18 016 Good Neighborhood Plan During 2005, an average of 1,262 neighbors were hired as labor force, of whom 721 were Mapuche. This made possible to incorporate neighbors to the forest culture, and so to receive the benefits of living in the proximity of cultivated forests. A total of 211 courses were given to neighbors covering over 2,700 people. From its beginning, six years ago, 914 courses have been given, with 12 thousand neighbors trained in several areas of rural development support, with special emphasis on improving their household skills. Scholarships to pursue secondary education were granted to 147 children. This support is relevant due to the large existing distances to secondary education establishments in rural areas. Over 120 workshops have been given to neighbors, transferring knowledge applicable to their daily chores. Furthermore, pasture has been rented to 280 people with 3,280 livestock; firewood has been furnished to 1,460 neighbors; small farmers have been trained at El Vergel Agricultural School in Angol; a project related to mountain ñocha (a variety of sedge) was developed for seven Mapuche communities and, like in previous years, free access has been allowed to the Company s farms, to remove non-forest products (including mushrooms, dog-rose flowers, blackberries, yellow flowers, among others). The Jorge Alessandri Educational Park Three important events took place in 2005: Opening of the Artequín Museum in the Park. This museum houses works of art reproductions, offering an educational-interactive proposal through guided workshops, audiovisual and computer means. This innovative model allows visitors to experience art in an amusing and didactic manner. Construction of an access square that is part of the first stage of a new landscape proposal, which will modify the present one, changing some plants but preserving native species.

19 017 Corporate Responsibility in CMPC Presentation of the exhibition Lágrimas de Luna -Tesoros de la Platería Mapuche (Moon Tears -Treasures of the Mapuche Silverware), which was opened to the public from November 8 through December 12. This exhibition gathers the most symbolic pieces of the Mapuche people, each object reflecting their spirituality and culture. During the year 2005, the Park received 132,360 visits. From its opening to date, 860 thousand people have visited the Park, and approximately 500 thousand children have participated in the educational and cultural activities offered. Other CMPC Community-Oriented Actions CMPC has a permanent attitude of collaboration with several social and trade institutions. These include, among others, ICARE, CEP, CORMA, Paz Ciudadana, SOFOFA. The Company actively cooperates in the cultural field in Chile. In this regard, it supports the work developed by the Artequín Museum, the Municipal Theater (Chile s principal opera and classical music house) and literary contests organized by El Mercurio Newspaper s Book Magazine. Through its corporate website CMPC makes an important contribution to the children of Chile and the world by providing a wide range of information relating to forests, pulp and paper. THE ENVIRONMENT Regarding the environment, the Company plans for the long term, guided by the principle of sustainable development. This is an element of its competitive strategy that is essential for the existence and progress of the business. This approach is reflected in the Company s environmental policy, which contains the principles that regulate the personnel s performance.

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21 Businesses and Subsidiaries Description Servicios Compartidos 020 Forestal 022 Celulosa 024 Papeles 026 Tissue 028 Productos de Papel 030

22 020 Servicios Compartidos CMPC S.A. SUBSIDIARY DESCRIPTION During 2005 CMPC started a project aimed at creating a shared service center operated as an independent subsidiary to support all business units of the Company, namely: Forestry, Pulp, Papers, Tissue, and Paper Products. The purpose of Servicios Compartidos CMPC is to provide the services these business divisions may require, with high quality and competitive costs, in areas such as accounting, information technologies, communications, procurement, and payroll. Benefits expected of this subsidiary include, among others: improvement and standardization of administrative, payroll, procurement and IT processes in CMPC, support and strengthen the different business areas with optimal service levels for its customers. Concentration of all these support services in a single organization facilitates the attainment of high professional and technical specialization of personnel, as well as reaching a significant volume of operations to obtain synergies and economies of scale, optimizing costs, quality and efficiency. The basic functions of Servicios Compartidos CMPC are the following: To operate the accounting, tax, procurement, accounts payable and payroll processes. To provide information technology/computer support. To optimize current processes and develop new options. To provide professional consultancy in financial, accounting, tax, and computer-related matters. To maintain and define procedures. To establish agreements related to services and associated costs for each area. The objective of this subsidiary is to provide services to CMPC and its subsidiaries; it is not intended to provide services to third parties. Likewise, the Company s subsidiaries shall not exercise the functions described above directly or contract them from third parties. The implementation of these activities is being made gradually and by stages, including a redesign of processes and support technologies. The main challenge CMPC faces now is to make a transition without generating adverse impacts on the current operation of companies, and to achieve an efficient organization able to provide the best service. For that purposes, CMPC relies on its highly qualified and enthusiastic staff and the support of its executive officers.

23 021 Businesses and Subsidiaries Description Chief Executive Officer: Jorge Araya / Directors: Antonio Albarrán, Sergio Colvin, Andrés Infante, Luis Llanos, Jorge Morel, Hernán Rodríguez.

24 022 Forestal Mininco S.A. Chief Executive Officer: Hernán Rodríguez / Chairman: Eliodoro Matte / Vice-Chairman: Arturo Mackenna / Directors: Ernesto Ayala, Gonzalo García, Jorge Gabriel Larraín, José Ignacio Letamendi, Pedro Schlack.

25 023 Businesses and Subsidiaries Description BUSINESS DESCRIPTION CMPC conducts its forest business in a two-fold manner. Forestal Mininco and Forestal Monteáguila manage the forest assets to support the industrial development of the Company in pulp and solid wood needs. CMPC Maderas operates the area of solid wood products, such as sawn wood, remanufacturing and plywood. The Company owns forest resources for over 420 thousand hectares planted with pine and eucalyptus, located between the 7th and 11th Regions in Chile. In the northeast of Argentina, the subsidiary Bosques del Plata is developing a forest base of 100 thousand hectares, principally of taeda and elliotti pine, with the capacity to support a pulp mill at a competitive scale. CMPC Maderas owns three sawmills in the 8th Region: Bucalemu, Mulchén and Nacimiento, with a production capacity of over 1.1 million m3/year of radiata pine. In addition to its sales in Chile, CMPC exports 77% of its production to more than 20 countries in the five continents. It also owns a remanufacturing plant in Los Angeles that produces 110 thousand m3/year of products made from dry sawn wood (finger joint panels, moldings, and laminated products), which are exported mainly to the United States, Japan and Spain. In January 2006, CMPC Maderas will start to operate the industrial assets acquired from Forestal Copihue, consisting of a sawmill of 120 thousand m3/year; a facility to produce 150 thousand units of poles per year, both located in Constitución; and a remanufacturing plant located in Coronel with an annual production capacity of 90 thousand m3, in addition to 200 thousand doors per year.

26 024 CMPC Celulosa S.A. Chief Executive Officer: Sergio Colvin / Chairman: Eliodoro Matte / Vice-Chairman: Arturo Mackenna / Directors: Jorge Araya, Ernesto Ayala, Jorge Gabriel Larraín, Luis Llanos, Bernardo Matte.

27 025 Businesses and Subsidiaries Description BUSINESS DESCRIPTION CMPC produces over one million tons of kraft pulp per year in its Laja, Pacífico and Santa Fe Pulp Mills. The Company has an integral logistic and marketing network reaching over 200 customers in 30 countries in Europe, Asia, and America. The Laja Pulp Mill produces 345 thousand tons per year of long-fiber kraft pulp, from radiata pine. Most part of this volume is bleached pulp, although unbleached pulp and fluff pulp in rolls are also produced, the latter being used in the manufacture of absorbent products. Laja is an integrated mill, which also produces white printing and writing paper, as well as sack kraft paper. The Pacífico Pulp Mill, located 30 kilometers from the city of Angol, produces 490 thousand tons per year of bleached, long-fiber kraft pulp from radiata pine. The Santa Fe Pulp Mill, in Nacimiento, produces 380 thousand tons per year of bleached, short-fiber kraft pulp, from eucalyptus. This pulp has several characteristics that make it an ideal raw material for the production of high quality fine printing, writing and tissue papers. At this pulp mill, CMPC is developing the largest project in its history, by building a second production line for bleached kraft pulp from eucalyptus, with a design capacity of 780 thousand tons per year. With an investment of US$ 745 million, its start up is scheduled for the last quarter of 2006.

28 026 CMPC Papeles S.A. Chief Executive Officer: Antonio Albarrán / Chairman: Eliodoro Matte / Vice-Chairman: Arturo Mackenna / Directors: Jorge Araya, Andrés Echeverría, Luis Llanos, Bernardo Matte, Juan Claro.

29 027 Businesses and Subsidiaries Description BUSINESS DESCRIPTION This business area has a structure with five subsidiaries, through which it is engaged in the production and marketing of folding boxboards, newsprint, corrugating, printing, writing, and wrapping papers. INFORSA sells newsprint paper produced at its Nacimiento plant (8th Region), with a production capacity of 200 thousand tons per year. The main destination of its exports is Latin America. However, sales are also made to North American, the Caribbean, Asia and Europe. Cartulinas CMPC operates the Maule (7th Region) and the Valdivia (10th Region) mills, with a total production capacity of 330 thousand tons of folding boxboard per year, which are sold in more than 30 countries of Latin America, Europe, Asia and the United States. Papeles Cordillera, located in the district of Puente Alto, in Santiago, operates 5 paper machines, including a modern one that produces mainly corrugating papers from recycled fibers. SOREPA is the company responsible for collecting waste papers and corrugated boxes all over the country, which are recycled and transformed into paper again at CMPC s plants, with a significant environmental benefit. In addition, CMPC Papeles owns EDIPAC, a company that distributes nation wide CMPC s paper grades and some imported grades, as well as paper products.

30 028 CMPC Tissue S.A. Chief Executive Officer: Jorge Morel / Chairman: Eliodoro Matte / Vice-Chairman: Arturo Mackenna / Directors: Gonzalo García, Jorge Hurtado, Bernardo Larraín, Luis Llanos, Bernardo Matte.

31 029 Businesses and Subsidiaries Description BUSINESS DESCRIPTION With its plants in Chile, Argentina, Peru and Uruguay, CMPC Tissue manufactures and markets toilet paper, paper towels, napkins and disposable handkerchiefs under the brands Elite, Confort, Higienol, Nova, Noble and Sussex, among others. Additionally, it produces and sells disposable diapers under the Babysec brand, sanitary towels and adult incontinence diapers under the Ladysoft and Cotidian brands respectively. In Chile, CMPC Tissue has production plants in Puente Alto and Talagante, both with modern technology paper machines and conversion equipment. In Uruguay, its subsidiary IPUSA located in Pando, 30 kilometers from Montevideo, produces tissue products and diapers. The subsidiary PROTISA Peru has a plant in Lima that produces tissue products and diapers. The Company has gained an important presence in the market of disposable diapers -specially in the medium and low segments with its brand Babysec. Finally, the Company recently began the production of sanitary towels (Ladysoft) and adult incontinence diapers (Cotidian). Additionally, it offers a specialized line of sanitary products for consumption in institutions and public places.

32 030 CMPC Productos de Papel S.A. Chief Executive Officer: Andrés Infante / Chairman: Eliodoro Matte / Vice-Chairman: Arturo Mackenna / Directors: Juan Carlos Eyzaguirre, Gonzalo García, Patricio Grez, Eugenio Heiremans, Bernardo Matte.

33 031 Businesses and Subsidiaries Description BUSINESS DESCRIPTION CMPC Productos de Papel operates through the subsidiaries Envases Impresos, Envases Roble Alto, PROPA and Chimolsa in Chile, FABI in Argentina and FORSAC in Peru. The corrugated boxes business is conducted separating the two major segments of the market. Envases Impresos manufactures corrugated boxes for the fruit, and salmon export segment in its two plants located in Buin. Envases Roble Alto produces corrugated boxes for the industrial and wine segment, in its facilities located in Til-Til and Quilicura districts. The multiwall sacks business is operated by PROPA in Chile, FABI in Argentina and FORSAC in Peru, from where the respective local markets -particularly the cement and construction materials industry- are served. These companies also export to several countries in the region. Chimolsa, with an industrial plant located in Puente Alto, manufactures moulded pulp trays for apple and avocado exports, as well as trays and cases for eggs.

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35 Businesses Analysis Forestal 034 Celulosa 035 Papeles 038 Tissue 039 Productos de Papel 040

36 034 FORESTAL MININCO S.A. During 2005, the forest business -like most part of industry- faced the effects of cost increases resulting from exchange rate variations, and oil prices. Nevertheless, its performance was within the historical high range. In relation to investments in fixed assets, the year 2005 was particularly active with a total investment of approximately US$ 270 million. The main investment was the acquisition of the forests and industrial operations of Forestal Copihue, which comprises 16 thousand hectares planted with radiata pine in the 7th Region; a 120 thousand m3/year sawmill; a 150 thousand units per year pole production facility located in Constitución; and a remanufacturing plant located in Coronel with an annual production capacity of 90 thousand m3, in addition to 200 thousand doors per year. Regarding industrial projects, the new sawmill in Mulchén -with an investment of US$ 26 million- started operations with a production capacity of nearly 500 thousand m3/year. Another investment of 11 million dollars was made in this sawmill in order to increase wood drying capacity in 190 thousand m3/year. The same was made in Nacimiento sawmill, by adding to the system a drying capacity of approximately 180 thousand m3/year. The construction of the plywood mill also started with an estimated investment of 57 million dollars. This plant will be located adjacent to the Pacífico Pulp Mill, leading to important synergies between them. On the other hand, divestments were made in non-core assets, including particularly the sale in early 2005 of 4.3 thousand hectares of eucalyptus forests located in Litueche (6th Region). During the year, a total of 20.8 thousand hectares were planted in Chile: 15.8 thousand of pine, and 5 thousand of eucalyptus; and in Argentina 3.3 thousand hectares of pine. Forest management was successfully recertified with ISO 14001, and follow-up audits of the Certfor-PEFC forest sustainability seal and OHSAS labor certification were approved. Likewise, the chain of custody certification of CMPC Maderas products is currently under development. Plantation as of December 31, 2005 Hectares Pine Eucalyptus Other Species To Be Planted Other Uses Forestal Mininco 234,355 62,199 17,432 20, , ,693 Forestal Crecex 65,247 25, ,628 35, ,888 Forestal Monteáguila 5,020 24, ,332 13,893 44,788 Subtotal Chile 304, ,821 17,957 27, , ,368 Forestal Bosques del Plata Total 63,084 2, ,336 27,160 94,283 Total CMPC Forestal 367, ,392 18,090 29, , ,652 There are 3,895 additional hectares of plantations belonging to Sociedad Inversora Forestal that are managed by Forestal Mininco.

37 035 Businesses Analysis Comparative Advantages of Plantations in Chile In Chile there are currently 15.6 million hectares covered with forests, located mainly between the 7th and 12th Regions, representing 20.8% of the national territory; however, there are only 2.1 million hectares of forest plantations providing wood to the industry. The main species planted in Chile are radiata pine, eucalyptus globulus and eucalyptus nitens. Radiata pine is native from South California and was introduced in Chile in the late 19th century. Growth rates for radiata pine in Chile are quite higher than those of most conifers in the Northern Hemisphere. This offers some advantages in cost structure for wood-derived products compared to our main competitors at a global level. In fact, radiata pine may be harvested in Chile generally 20 to 24 years after being planted, in contrast with the 50 to 80 years needed for comparable species in the Northern Hemisphere. For this reason, Chilean pine producers require less time and less land area than North American or European producers, which results in lower maintenance and transportation costs. Eucalyptus is native from Australia. In Chile, it takes a period of around 12 years after planted for the tree to be harvested, which is also quite less than the period needed for comparable short-fiber species existing in the Northern Hemisphere. Therefore, Chilean producers also present advantages in production cost structure versus their main competitors. CMPC CELULOSA S.A. In 2005, the sales volume of CMPC Celulosa reached 1 million 213 thousand tons, which is 19 thousand tons more than in the preceding year. This allowed CMPC to keep its position as a dependable supplier of both long and short-fiber pulp to a portfolio of approximately 200 customers in 30 countries around the world. Total production amounted to 1 million 233 thousand tons compared to 1 million 230 thousand tons in 2004, both figures corrected for the transfer between mills effect. The Laja Pulp Mill produced 361 thousand tons, mainly of long-fiber bleached pulp, in addition to other products such as crude pulp, fluff pulp in rolls (used as raw material to manufacture absorbent products), extensible sack kraft papers, as well as white printing and writing paper. The Pacífico Pulp Mill produced 495 thousand tons of long-fiber pulp from radiata pine, and Santa Fe, 377 thousand tons of short-fiber pulp from eucalyptus. The last two figures constitute a new production record. Santa Fe - Line 2 The Santa Fe Line 2 Project -with a budget of US$ 745 million- is advancing according to schedule; therefore, its start-up date is estimated for the last quarter of 2006.

38 036 The state of advance as of December 31, 2005 was 78%. Engineering and acquisitions have advanced over 95%, while civil works have advanced 80% and the mechanical-electrical assembly over 40%. There are over 5 thousand people working in the project. Approximately 50% of them are from the Bío Bío province. This project, which was submitted to the Environmental Impact Evaluation System (SEIA) in accordance with the provisions of Law 19,300 on Environmental Bases contained in the relevant Regulations, has met all the requirements contemplated in the Environmental Qualification Resolution (RCA). These include compliance with the applicable environmental legislation and implementation of a set of mitigation, compensation, and reparation measures considered in the RCA. Both the environmental authority and public inspection organizations have made many inspection visits, no major problems have occurred to date. Another important project being carried out is PROFAL IV in the Laja Pulp Mill, which involves an investment of US$ 46.7 million. Its purpose is to substantially improve the mill s environmental performance, and it is advancing as anticipated. The following items have been put into service to date: an expansion of the area for controlled disposition of solid residues, a secondary effluent treatment plant, and other improvements in the MP12 machine area and bark press. The mechanical assembly of the new oxygen delignification stage is progressing and its start-up is estimated for May Finally, the installation of a biomass boiler at the Pacífico Pulp Mill, capable of producing up to 150 tons per hour of high-pressure steam using bark and other wood particles, is advancing as scheduled and will be operating by October In order to respond to the increasing importance customers are giving to their pulp suppliers environmental performance, this business area obtained certification for its chain of custody according to CERTFOR-PEFC standards, which guarantees that its raw materials come exclusively from planted forests, from a controlled origin, free of disputes and perfectly traceable from the forest up to the final destination. Barriers to Entry and Determination of Pulp Prices The pulp industry is characterized by significant barriers to the entry, generated by high requirements of initial investment in fixed assets, and the need to have an adequate and efficient raw material supply base. Economies of scale are also a typical element of this industry. To take advantage of these aspects, companies must build high capacity mills, requiring sophisticated technologies for their operation. Moreover, in order to be profitable they need to have access to markets of sizes proportionate to their operation scale. Unlike other industries that also have elevated barriers to entry and strong economies of scale, the world pulp industry is highly fragmented. Market price presents cycles generated by the interaction between the economic activity level and supply variations, whether by

39 037 Businesses Analysis addition of new capacity or by cost structure variations, due to, among other things, of exchange rate fluctuations. Pulp prices fluctuate according to a series of factors beyond our control, including world demand, production and inventory capacity, large companies business strategies and availability of substitutes. As noted in the Figure below, pulp prices show high volatility as a result of cycles in the world economy on the part of demand and of fluctuations of the aggregate cost curve of world industry, on the part of supply. It may be further noted that the radiata pine pulp (BRKP) qualities produced in Chile have been historically traded at a discount to the Northern Bleached Softwood Kraft Pulp (NBSKP), quality that serves as international reference price. Finally, it may be seen that in recent years eucalyptus pulp (BEKP) price has had its own dynamics, reaching even levels above the NBSKP benchmark. Historical Nominal Pulp Prices (CIF North of Europe) Source: Hawkins Wright Contrasting with the performance of other commodities in international markets, pulp prices have shown over the last three years only a slight upward trajectory, fuelled by a recovery in the economy of the United States and the strong growth of China. Due to several factors, the aggregate growth of the world economy in recent years has not been proportional to the demand for paper and, accordingly, the demand for pulp has increased less than one would expect given the acceleration level of the economic activity. Pulp prices, however, have not weakened. The key factor to explain the slight upward trend of prices is the currency appreciation of the main pulp producing countries against the US dollar, which has caused a rise in costs for the global industry expressed in US dollars.

40 038 CMPC PAPELES S.A. Cartulinas CMPC Total sales were similar to those of 2004, despite Maule plant stoppage for six weeks due to the expansion project. At the Maule plant, the project to increase production in 80 thousand tons involving an investment of 37.1 million dollars was materialized. The start-up has been successful, which enables to assure that the projected capacity increase will be achieved. Also, a secondary effluent treatment plant is being built with an investment of 5.9 million dollars, and a new cutter is being installed in the converting room, with an investment of 1.6 million dollars. Both projects are expected to start operations during the first quarter of At the Valdivia plant a new converting room is being installed, with an investment of 2.7 million dollars, and is scheduled to start up in early A paper machine expansion project is also being carried out, with an investment of 7.7 million dollars, which will increase production in 20 thousand tons per year. At the same time, a secondary effluent treatment plant is being built, with an investment of 1.2 million dollars. The start-up of both projects is expected for the third quarter of Papeles Cordillera This business was affected by the cost of using oil due to natural gas restrictions, and to the increases in oil prices. During the year a project was initiated aimed at increasing the production capacity of the corrugated papers machine in order to attain 280 thousand tons per year, with an investment of 35.5 million dollars. This will allow CMPC to cope with the growth of the domestic market of corrugating papers. Furthermore, a secondary effluent treatment plant is being built with a cost of 7.6 million dollars. The start-up of both projects is scheduled for the late first half of INFORSA In this subsidiary, several administrative measures began to be implemented in 2005 in order to obtain ISO and certifications. The main project being developed by INFORSA is mechanical pulp washing, which will improve paper quality and reduce variable cost, with an investment of US$ 8.2 million. Its start-up is expected for the first quarter of Likewise, a secondary effluent treatment plant is being built, with an investment of 5.9 million dollars. EDIPAC Starting from March 2005, EDIPAC has successfully undertaken the total marketing of the cut-size paper produced at the Laja Pulp Mill.

41 039 Businesses Analysis In June 2005, EDIPAC transferred its head office facilities to Quilicura, incorporating the converting room until then operating in Papeles Cordillera. The foregoing has translated into a cut of capacity of approximately 4 thousand tons per month, which will be reflected in a significant upgrading of service provided to customers. EDIPAC s sales increased by 12% compared to last year. SOREPA Purchases of waste paper of this subsidiary increased in 9.6% with respect to the previous year. SOREPA opened a new plant in Puente Alto to supply Papeles Cordillera and Tissue in Puente Alto, which has generated considerable savings in freight and packing costs. CMPC TISSUE S.A. In 2005, Tissue showed a 19% growth in consolidated sales, as a result of the increase in sales volume and prices of its products, reaching an annual turnover of 430 million dollars. In general, the better economic situation of the countries where Tissue operates derived in greater dynamism during the year. The GDP grew in these countries from 5% to 8% with respect to the previous year. Cost increases due to rises in oil prices, and repeated restrictions of natural gas supply in Argentina and Chile affected this business area. These events impacted energy costs in the production processes, freight rates, as well as prices of oil-derived inputs. In Chile, during 2005, paper machine No.2 started-up in Talagante, which has had an excellent performance to date. The investment made was 31 million dollars with a production capacity of 34 thousand tons of paper per year. Furthermore, projects for 10 million dollars were completed, including two new converting lines for toilet paper, an automatic palletization system in Puente Alto, and new machines for disposable handkerchiefs, napkins, and interleaved products. The subsidiary PROTISA Peru maintained high growth rates both in sales, and sales volume of tissue and diapers, resulting in improved results. This sustained growth in Peru over several years now forced CMPC to reactivate the paper machine No.1, which may add a capacity of 10 thousand tons per year. Moreover, a distribution and conversion center was inaugurated, incorporating a new conversion line, as well as converting lines for napkins and interfolded towels. In Uruguay record market shares were attained in tissue products, and a significant market share in diapers has been maintained. In Argentina, CMPC obtained an important increase in sales and earnings. Such achievements were the result of applying a strategy of improved sales prices and development of higher added value categories.

42 040 In the sanitary products business, a new line of premium diapers aimed at the mediumhigh segment was introduced to the market. Furthermore, the production and sale of adult diapers started, and a new image for Ladysoft products was launched. Given the growth of sales in the sanitary market, it was necessary to install a third diaper machine in Argentina and a new line for towels in Chile, which will start operating in the second quarter of In January 2006, CMPC Tissue concluded an agreement to acquire a majority interest in Grupo ABS, a company engaged in the business of diapers and tissue in Mexico. This agreement means an important step in this business, since it gives CMPC the opportunity to start a development in the largest Latin American market of tissue products. CMPC PRODUCTOS DE PAPEL S.A. In 2005, corrugated boxes sales volume was 4% lower than in Two offsetting effects were present: a decrease in sales to the horticultural segment and a market share increase in the industrial segment. The foregoing, along with increased costs and low prices, resulted in a deterioration of the performance of Envases Impresos. Roble Alto, in turn, obtained better results because of an increase in sales volume and prices of its products. In this business, projects for 16 million dollars designed to expand the production capacity have been recently approved. In order to materialize these projects, the relevant permits from the respective authorities are now being processed. Multiwall Sacks In 2005, the total sales of multiwall sacks reached its historical maximum. In Chile, sacks exports continue to be the primary source of growth, attaining 59% of the total multiwall sacks sold by this subsidiary. In the export markets, Mexico is still the major one. In the domestic market, the main segment continues to be cement sacks. Sales in this line were similar to those of 2004, due to the increase in bulk dispatch of cement. On the other hand, sales to other sectors increased by 10%. The sack production level at Chillán plant reached 156 million units, which represents a 9% growth in respect of In October 2005 a state-of-the-art sack production line was installed in this plant, which will provide an additional capacity of 50 million units per year. The investment amounted to 6.2 million dollars. In Argentina, FABI intensified the development of high added value sacks and focused on the sale of products with higher margin, following a strategy of optimizing the profitability

43 041 Businesses Analysis of the installed capacity. The Hinojo plant is working 24 hours a day in continuous rotating shifts, which has facilitated an improvement in operational results. In Peru, FORSAC closed the fiscal year with the highest sales figure ever since it started operations in In Chile, Chimolsa had a difficult year. Sales of trays for apples, its main product, declined 24% as compared to the preceding year, in line with the market reduction. Moreover, it was affected by shortages in natural gas supply, incurring a significant cost increase. In order to reduce this impact a propane/air mixing plant was set up.

44

45 Financial Information Financial Analysis 045 Ownership Structure 056 General Information 059 Consolidated Financial Statements 071

46

47 Financial Analysis Detailed analysis of CMPC s Individual and Consolidated Financial Statements as of December 31, 2005.

48 VALUATION OF ASSETS AND LIABILITIES Assets and liabilities in the Individual and Consolidated Financial Statements are valued in accordance with instructions issued in this regard by the Superintendency of Securities and Insurance, and with generally accepted accounting principles and standards. These principles and standards are described in detail in Note No. 2 to the consolidated financial statements. The following criteria are worthy of note: Time deposits and marketable securities are shown at their investment or acquisition cost, plus adjustments and interests accrued. The book value of these investments does not exceed their respective market values. Trade accounts for sales and notes receivable are shown at their estimated realizable value and include deductions for provisions to cover bad and difficult to collect debts. Inventories of manufactured goods are valued at direct production cost plus the cost of some indirect inputs. This cost is below market value, as the sales price includes a profit margin. Property, buildings, machinery and equipment are valued at inflation-adjusted cost, and have been duly depreciated. Forest plantations are shown at their assessed value. This valuation method aims to reflect in the accounts the higher asset and equity values resulting from the natural growth of plantations. Forest plantations due to be harvested within a year are shown in current assets under Inventories. Investments in related companies represent Empresas CMPC S.A. s and its subsidiaries share of the respective companies equity. The liabilities of Empresas CMPC S.A. and its subsidiaries are shown according to the amounts committed for disbursement, both in the short and long term (Notes Nos. 14, 15, and 16). Assets and liabilities in foreign currencies are shown in Chilean pesos according to the respective exchange rate thereof at the close of the year. Fixed assets in subsidiaries abroad (Argentina, Uruguay and Peru), are valued at historic cost in US dollars on the acquisition date, net of the appropriate depreciation charges. They amount to ThCh$ 146,597,817, (equivalent to 286 million dollars) as of December 31, 2005 and to ThCh$ 154,902,102, (equivalent to 268 million dollars) as of December 31, Said valuation is based on the Rules contained in Technical Bulletin No. 64 issued by the Colegio de Contadores de Chile A.G. (Chilean Accountants Association). The Company s Management has estimated that the book value of its fixed assets does not exceed their replacement or market value in the current circumstances. The above-mentioned standards are intended to present the consolidated financial position of Empresas CMPC S.A. and its subsidiaries in a reasonable manner. Consequently, there should be no significant differences between the financial or market and the book value of the assets as of December 31, 2005.

49 047 Financial Analysis 2.- ANALYSIS OF INCOME SATATEMENT AND OPERATING ACTIVITIES Analysis of Consolidated Income Statement The main components of the Consolidated Income Statement, in valores as of December 31, 2005, are as follows: Operating Results 12/31/ /31/2004 ThCh$ ThUS$ ThCh$ ThUS$ Operating Revenue 1,091,279,723 2,129,326 1,116,365,412 1,933,213 Less: Operating Costs (700,197,067) (1,366,238) (656,638,717) (1,137,103) Operating Margin 391,082, , ,726, ,110 Less: Administration and Sales Expenses (232,320,133) (453,308) (233,799,621) (404,871) Operating Profits 158,762, , ,927, ,239 Plus (Less): Non-Operating Results (15,848,690) (30,924) (17,216,197) (29,813) Results before Income Tax 142,913, , ,710, ,426 Less: Income Tax (18,554,209) (36,203) (33,557,536) (58,112) Minority Interest (2,996,489) (5,847) (3,037,368) (5,260) Amortization of Negative Goodwill of Investments 1,623,772 3,168 2,056,497 3,561 Net income 122,986, , ,172, ,615 The net income for the present fiscal year amounted to Ch$ 122,987 million - US$ million (Ch$ 174,172 million - US$ million the previous year). Net income performance was as follows: Consolidated Operating Results Consolidated operating profits for the year 2005 were Ch$ 158,763 million - US$ million, below the operating profits in the preceding year, which amounted to Ch$ 225,927 million - US$ million. Profits (millions of Chilean pesos) Consolidated sales revenues for this year present similar levels to During the year 2005 there was a decrease in long-fiber pulp price and lower sales of corrugated products. These lower revenues were offset with higher prices of foreign subsidiaries products, greater volumes and better prices in sawn wood and folding boxboard exports, as well as higher volumes in pulp exports. The sustained decrease in the US dollar and euro exchange rate compensates negatively the positive effects of the better export , , , , , ,987

50 048 prices of wood, newsprint paper and folding boxboard, and of higher export volumes of pulp, folding boxboard and sawn wood exports. Taken together, consolidated operating, administrative and sales costs represent 85.5% of sales for the current year, experiencing an increase as compared to the year 2004, where they represented 79.8%. This increase reflects the higher cost of wood, the main raw material, and rises in the price of oil and other inputs. In addition, negative effects resulted from the higher cost of replacing natural gas with oil for power and steam generation. Export freight rates and other services, and sales expenses have also experienced increases. Consolidated Non-Operating Results Empresas CMPC S.A. and its subsidiaries consolidated nonoperating result shows a loss of Ch$ 15,849 million - US$ 30.9 million for Non-operating result for the previous year amounted to Ch$ 17,216 million - US$ 29.8 million. Non-operating results include profits in the sale of forest property (Ch$ 13,442 million - US$ 26.2 million in 2005 and Ch$ 9,122 million - US$ 15.8 million in 2004). These profits compensate for financial expenses, and monetary correction for both years. The foregoing leads to profits after taxes of Ch$ 122,987 million - US$ 240 million for this fiscal year (Ch$ 174,172 million - US$ million the previous year). Consolidated Financial Ratios The main Financial Ratios that relate to the Consolidated Income Statement are as follows: Assets Turnover: Indicates the relationship between consolidated operating revenue and average total assets. This ratio was 0.34 times in 2005 and 0.36 times in Profit on Consolidated Revenue: Represents profit as a proportion of operating revenue. This ratio was 11.3% in 2005 and 15.6% in Annual Return on Equity: Indicates the ratio of profit for the period to average equity. Annual return amounted to 5.3% in 2005 and 7.9% in Earnings per Share: Amounted to Ch$ US$ 1.2 in 2005 and Ch$ US$ 1.5 in Return on Dividends: The ratio of dividends paid during the year to the market share price at the end of the fiscal year amounted to 3.4% in 2005 and 2.0% in Consolidated Financial Expense Coverage: Profit before tax and interest payments divided by financial. expenses. This ratio was 5.6 times in 2005 and 7.8 times in Total Inventory Rotation: Annual sales cost divided by the average stock of goods and raw materials. This ratio was 4.4 times in 2005 and 4.8 times in 2004.

51 049 Financial Analysis Inventory Turnover: Indicates the possible number of days of sales with the inventory on hand, at the end of the period. This ratio was 82.4 days in 2005 and 74.9 days in Consolidated Asset Annual Return: Indicates a return on average total assets. It amounted to 3.8% in 2005 and 5.6% in Consolidated Annual Operational Asset Yield: Indicates the ratio of operating profit to operational assets. Fixed assets, stocks and accounts, and notes receivable are considered operational assets. This indicator was 5.6% in 2005 and 8.4% in Income Statement of Business Centers Subsidiaries engaged in the different business activities had the following results for this fiscal year: Forestal CMPC CMPC CMPC CMPC In millions Mininco S.A. Celulosa S.A. Papeles S.A. Tissue S.A. Productos de of dollar and its and its and its and its Papel S.A. and subsidiaries subsidiaries subsidiaries subsidiaries its subsidiaries Operating Revenue Operating Costs (314.0) (438.7) (473.8) (315.1) (178.0) Operating Results Financial Results (4.1) (29.5) (7.3) (1.7) (8.4) Non-operating Results 13.8 (68.3) (14.3) (20.1) (9.1) E.B.I.T.D.A. (*) Net Income (*) Earnings before interest payments, taxes, depreciation, amortization and other extraordinary and non-operating items Analysis of CMPC s Individual Income Statement Industrial, business and forestry operations are carried out by Empresas CMPC S.A. s subsidiaries. Therefore, an appropriate analysis of financial statements should be made based on the consolidated financial statements of Empresas CMPC S.A. and its subsidiaries. The results for the year show a profit of Ch$ 122,987 million - US$ 240 million (Ch$ 174,172 million - US$ million in 2004), and mainly corresponds to the recognition of related companies profits (Ch$ 119,493 million - US$ million as of December 31, 2005 and Ch$ 168,592 million - US$ 292 million as of December 31, 2004). 3.- ANALYSIS OF THE GENERAL BALANCE SHEET Analysis of Consolidated Assets and Liabilities. Broad figures indicate that the main components of assets, in currency as of December 2005, are as follows:

52 050 12/31/ /31/2004 ThCh$ ThUS$ ThCh$ ThUS$ Current Assets 600,147,561 1,171, ,195,293 1,411,676 Fixed Assets 2,533,946,708 4,944,286 2,311,563,165 4,002,939 Other Assets 96,703, ,690 71,088, ,105 Total Assets 3,230,797,859 6,303,996 3,197,847,384 5,537,720 These assets are financed by: Current Liabilities 187,179, , ,152, ,824 Long-term Liabilities 655,102,747 1,278, ,968, ,992 Minority Interest 63,993, ,866 64,834, ,274 Equity 2,324,521,775 4,535,652 2,277,891,265 3,944,630 Total Liabilities and Equity 3,230,797,859 6,303,996 3,197,847,384 5,537,720 The analysis of the relevant figures Consolidated General Balance Sheet as of December 31, 2005, in respect of 2005, is as follows: Current Assets Current Assets show a net decrease of Ch$ 215,048 million - US$ million, mainly due to a decrease in Time Deposits and Marketable Securities by Ch$ 228,857 million - US$ million, resulting from the use of funds for paying debts and strong investments in fixed assets made in the period, as well as a reduction in Trade Accounts for sales amounting to Ch$ 33,457 million - US$ 65.2 million. The foregoing is partly offset by an increase in Inventories of Ch$ 34,989 million - US$ 68.3 million, Refundable Taxes for Ch$ 10,689 million - US$ 20.9 million, and Sundry Receivables for Ch$ 3,929 million - US$ 7.7 million. Fixed Assets Fixed Assets show a net increase of Ch$ 222,384 million - US$ million. The main movements in fixed assets relate to: Incorporation of new fixed assets for Ch$ 377,657 million - US$ million. Increase due to forestry growth. This revaluation reached Ch$ 57,755 million - US$ million in 2005 (Ch$ 95,587 million - US$ million the previous year). Decrease due to depreciation for the fiscal year by Ch$ 85,417 million - US$ million (Ch$ 85,029 million - US$ million in the previous year).

53 051 Financial Analysis Reduction for sale of forest property, land and buildings, and other equipment, and operating cost of forests by Ch$ 68,142 million - US$ 133 million. Other Assets Non-current Other Assets recorded a net increase of Ch$ 25,615 million - US$ 50 million, which originates mainly from the increase of investments in related companies for Ch$ 11,544 million - US$ 22.5 million, as a result of the capital increase made in Inversiones El Raulí S.A., and the recognition of the relevant result arising out of these investments; from the increase of Long-term Trade Accounts by Ch$ 11,255 million - US$ 22 million and Others by Ch$ 7,938 million - US$ 15.5 million. The foregoing is offset with a (net) decrease due to Amortization of the item Positive and Negative Goodwill of Investments by Ch$ 5,063 million - US$ 9.9 million. Current Liabilities Current Liabilities show a net decrease of Ch$ 123,973 million - US$ million, which is mainly explained by the reduction in Liabilities to the Public by Ch$ 143,701 million - US$ million, resulting from payment of the US$ 250 million Bond issued by the Company in 1998, Unpaid Dividends for Ch$ 24,686 million - US$ 48.2 million and Other Current Liabilities by Ch$ 1,853 million - US$ 3.6 million. These reductions are partly offset by an increase in Short-Term Liabilities to banks and financial institutions by Ch$ 19,150 million - US$ 37.4 million, Long-term Liabilities to banks and financial institutions by Ch$ 21,497 million - US$ 41.9 million, and Accounts Payable by Ch$ 9,614 million - US$ 18.8 million. Long-term Liabilities Long-term Liabilities recorded a net increase of Ch$ 111,134 million - US$ million, mainly explained by: Obtaining of a syndicated loan of US$ 100 million in June Placement of a Bond in Chile for UF 7 million, with a term of ten years. Anticipated payment of Liabilities to banks and financial institutions for US$ 210 million, of which US$ 175 million were Long-term Liabilities. Prepayment and transfer to short term of notes payable for Ch$ 4,774 million - US$ 9.3 million. Increase in Deferred Taxes by Ch$ 4,677 million - US$ 9.1 million and Other Long-term Liabilities by Ch$ 6,539 million - US$ 12.8 million. Equity Equity increased by Ch$ 46,631 million - US$ 91 million, mainly due to profits for the year 2005, in addition to the recognition

54 052 of revaluations of forest plantations, net of dividends distributed, and the decrease of the reserve relating to operations in a part of forests. The principal financial indicators related to the Consolidated General Balance Sheet are as follows: Current Liquidity Ratio: Indicates how many times current assets cover current liabilities. This figure was 3.2 times in 2005 and 2.6 times in Quick (or Acid Test) Ratio: Indicates how many times liquid assets cover current liabilities. This ratio was 1.7 times in 2005 and 1.8 times in Debt to Equity Ratio: Represents debt as a proportion of equity. This ratio was 0.36 times in 2005 and 0.38 in Analysis of CMPC s Individual Assets and Liabilities Broad figures indicate that the main components of assets, in currency as of December 2005, are as follows: 12/31/ /31/2004 ThCh$ ThUS$ ThCh$ ThUS$ Current Assets 17,913,638 34, ,721, ,687 Fixed Assets 13,589,946 26,517 14,114,682 24,443 Other Assets 2,353,269,142 4,591,745 2,244,173,090 3,886,240 Total Assets 2,384,772,726 4,653,215 2,440,009,082 4,225,370 These assets are financed by: Current Liabilities 7,092,788 13, ,870, ,580 Long-term Liabilities 53,158, ,723 1,247,544 2,160 Equity 2,324,521,775 4,535,652 2,277,891,265 3,944,630 Total Liabilities and Equity 2,384,772,726 4,653,215 2,440,009,082 4,225,370 Any financial analysis should be based on the Consolidated Financial Statements. However, for information purposes, below we present an analysis of the Individual Financial Statement of the Parent Company, Empresas CMPC S.A. Attention is drawn to the item Other Assets, which includes investment in subsidiaries and associated companies. The analysis of the relevant figures of the individual General Balance Sheet as of December 31, 2005, in respect of the previous year, is as follows: Current Assets Current Assets fell by Ch$ 163,808 million - US$ million, mainly due to a reduction of Ch$ 163,211 million - US$ million in the balance of Short-Term Notes and Accounts Receivable from related companies. Fixed Assets Fixed Assets fell by Ch$ 525 million - US$ 1.0 million, mainly as a result of depreciation charges for the year totaling Ch$ 525 million - US$ 1.0 million.

55 053 Financial Analysis Other Assets Non-current Other Assets show a net increase of Ch$ 109,096 million - US$ million, generated mainly by the proportional recognition of net profits of subsidiaries and associated companies during the period for Ch$ 119,493 million - US$ million and to the capital increase in Inversiones El Raulí S.A. amounting to Ch$ US$ 10.7 million. All this was setoff by a (net) decrease in the forest reserve in related companies by Ch$ 13,685 million - US$ 26.7 million. Current Liabilities Current Liabilities fell by Ch$ 153,777 million - US$ 300 million, owing to payment of debts to related companies for Ch$ 129,721 million - US$ million, and to a decrease in the balance of Unpaid Dividends by Ch$ 24,689 million - US$ 48.2 million. Long-term Liabilities Long-term Liabilities rose by Ch$ 51,911 million - US$ million, as a result of a decrease in indebtedness to related companies. Equity Equity showed a net increase of Ch$ 46,631 million - US$ 91 million, mainly due to profits for the fiscal year, the recognition of revaluation of forest plantations, net of operations, and after deduction of dividends paid. Financial Indicators The main financial indicators relating to the Consolidated General Balance Sheet must be determined on the basis of the Consolidated Financial Statements. Below is the book value of CMPC shares: Book Value per Share: Ch$ 11, US$ 22.7 in 2005 and Ch$ 11, US$ 19.7 in Other financial indicators based on the Individual Financial Statements: The main financial indicators relating to the Income Statement must be determined on the basis of the Consolidated Financial Statements. However the chief financial indicators relating to the Individual Income Statement are as follows: Annual Return on Equity: Indicates the ratio of profit for the period to average equity. It amounted to 5.3% in 2005 and 7.9% in Annual Return on Assets: Indicates the ratio of profit for the period to average total assets. It amounted to 5.1% in 2005 and 7.4% in Profit per Share: Amounted to Ch$ US$ 1.2 in 2005 and Ch$ US$ 1.5 in Return on Dividends: The ratio of dividends paid during the year to the market price of CMPC share at closing is 3.4% in 2005 and 2.0% in 2004.

56 CASH FLOW ANALYSIS Consolidated Cash Flow Analysis The performance of the main components of the consolidated cash flow, valued as of December 31, 2005 is as follows: Consolidated liquid financial investments and cash amount to Ch$ 102,475 million - US$ 200 million as of December 31, 2005 (Ch$ 330,469 million - US$ million as of December 31, 2004). Consolidated operating activities generated positive operational cash flows of Ch$ 202,981 million - US$ million in the current year (Ch$ 224,698 million - US$ million in the previous year). Negative net consolidated financing flows for this year represent a net use of funds of Ch$ 46,118 million - US$ 90 million, basically arising out of dividend payments (Ch$ 88,320 million - US$ million), as the resources obtained from new financings (Ch$ 199,264 million - US$ million), were significantly offset by payment of credits and expenses relating to the obtaining thereof (Ch$ 157,062 million - US$ million). Positive net consolidated financing flows in 2004 represented a net generation of funds for Ch$ 94,312 million - US$ million, mainly due to a syndicated loan obtained for US$ 475 million, which were offset with dividend payments for Ch$ 58,853 million - US$ million, and payment of financial credits for Ch$ million - US$ 275 million. Consolidated investment activities in 2005 generated negative net flows (use of funds) for Ch$ 365,315 million - US$ million (Ch$ 197,778 million - US$ million in 2004). These flows are mainly due to net investment in fixed assets (purchase/sale) for Ch$ 359,707 million - US$ million (Ch$ 192,635 million - US$ million in 2004) and the subscription and payment of shares in Inversiones El Raulí S.A. (Ch$ 5,506 million - US$ 10.7 million) in the year 2005 and in Bicecorp in the previous year (Ch$ 5,145 million - US$ 8.9 million) Individual Cash Flow Analysis As mentioned above, forestry, trade, industrial and the chief financial operations of the Company are carried out through subsidiaries; therefore, any analysis should be based on the Consolidated Financial Statements. However, the performance of the main components of the Individual Cash Flow for the parent Company is shown below: In operating activities flows for Ch$ 4,138 million - US$ 8.1 million were obtained as of December 31, 2005 (Ch$ 15,458 million - US$ 26.8 million as of December 31, 2004). Net financing flows represent a use of funds for Ch$ 216,990 million - US$ million as of December 31, 2005 (Ch$ 54,870 million - US$ 95 million as of December 31, 2004), resulting mainly from payment of dividends in both fiscal years and from anticipated payment of the debt to Cartulinas CMPC S.A.

57 055 Financial Analysis Investment activities recorded net flows amounting to Ch$ 213,019 million - US$ million as of December 31, 2005 (Ch$ 39,570 million - US$ 68.5 million as of December 31, 2004). These flows principally generate from the collection of funds from subsidiaries, offset by a capital increase made in Inversiones El Raulí S.A. In the previous year, these flows stemmed from loan repayment from related companies. 5.- RISK ANALYSIS AND EXCHANGE RATE EXPOSURE Empresas CMPC S.A. and its subsidiaries export approximately 53% of total sales, principally markets in Europe, Latin America, Asia and the United States. Most part of these sales is made in US dollars. Domestic sales - both in Chile and in our subsidiaries in Argentina, Peru and Uruguay - are made in local currency and indexed to the US dollar. In consequence, Empresas CMPC S.A. and its subsidiaries revenue flow, which is in, or indexed to, US dollars, amounts to over 70% of total sales. As regards disbursements, both raw materials and investments in fixed assets are principally in, or indexed to, US dollars. In very specific cases only are export sales or payment commitments made in foreign currencies other than the US dollar. In order to avoid exchange rate risk in non-us dollar currencies, derivatives are used to fix the exchange rates in question. As of December 31, 2005 our main positions were forward purchases of 34 million euros to hedge machinery imports denominated in that currency. Approximately 50% of the expected flows from sales of folding boxboard in the next years in Europe, in turn, is covered by forward sales contracts. As of the same date, 6.5% of the Company s short-term liquid assets were held in euros, so as to pay eurodenominated imports related to the Santa Fe Pulp Mill expansion project. Derivatives are used to structure these investments. Considering that CMPC s revenue flow structure is highly indexed to the US dollar, liabilities have been incurred in this currency. It has been a Company policy to reduce the accounting mismatch between assets and liabilities expressed in US dollars in order to minimize losses on account of exchange rate fluctuations that affect profit for the year. To this end the currency composition of the financial investment portfolio is carefully managed and Chilean peso-us dollar forwards are occasionally made use of. The greater stability of the Argentinean and Uruguayan pesos, as well as a reduction in working capital over the past few years, have maintained the effects of exchange rate fluctuations under control. The Company actively handles the interest rate structure of its debt through derivatives in order to optimize financial expenses as a function of operating income. A combination of derivatives and interest rate swap contracts allows us to fix the Libor rate and establish the range of interest within which CMPC should make use of floating rates in its liabilities. Considering the Libor rate as of December 31, 2005, consolidated debt of the Company is 86% fixed rate and 14% floating rate. This combination ensures an average debt interest rate for CMPC of 4.5% in US dollars.

58 056 Ownership Structure In Chile % 99.99% INVERSIONES CMPC S.A % CMPC PRODUCTOS DE PAPEL S.A. 0.1% % CMPC TISSUE S.A. 0.1% % CMPC PAPELES S.A. 0.1% % ENVASES ROBLE ALTO S.A. 0.1% % INVERSIONES PROTISA S.A. 0.01% % EDIPAC S.A. 0.1% % ENVASES IMPRESOS S.A. 0.1% % COMERCIAL HIGIENE INTEGRAL S.A. 0.01% % INFORSA % 99.9% PROPA S.A. 0.1% 2 50% SOREPA S.A. 50% CRECEX S.A % % AUSTRAL S.A. 0.1% % PAPELES CORDILLERA S.A. 0.01% % CHIMOLSA 0.1% % CARTULINAS CMPC S.A. 0.1% % 16% 16% 16% Abroard 100% 93.48% 6.44% GESTUM INVERSIONES S.L. (ESPAÑA) 0.08% 4 CMPC ASIA LTD. (JAPÓN) 100% FABI BOLSAS INDUSTRIALES S.A. (ARGENTINA) 100% CMPC EUROPE LTD. 100% 16.49% 100% LA PAPELERA DEL PLATA S.A. (ARGENTINA) 83.50% CMPC INVERSIONES DE ARGENTINA S.A. 100% NASCHEL S.A. (ARGENTINA) 100% TISSUE CAYMAN LTD. PROPA CAYMAN LTD. 99.9% FORSAC PERÚ S.A. (PERÚ) 0.1% COMPAÑÍA PRIMUS DEL URUGUAY S.A. CELULOSAS DEL URUGUAY S.A. 100% 100% IPUSA (URUGUAY) PROTISA (PERÚ) 99.61% 100% 2.94% PAPELERA DEL RIMAC S.A. (PERÚ) 97.06%

59 EMPRESAS CMPC S.A % 0.01% 99.95% CMPC CELULOSA S.A. 0.05% % FORESTAL MININCO S.A. CMPC MADERAS S.A % % FORESTAL Y AGRÍCOLA MONTE ÁGUILA S.A. FORESTAL COIHUECO S.A % % % INMOBILIARIA Y FORESTAL MAITENES S.A % % INMOBILIARIA PINARES S.A % CONTROLADORA DE PLAGAS FORESTALES S.A % INVERSIONES EL RAULÍ S.A % 10.66% BICECORP S.A. 8.61% % PORTUARIA CMPC S.A % % 16% 48% SERVICIOS COMPARTIDOS CMPC S.A. 16% 99.6% PROTISA DO BRASIL LTDA. 0.4% 2 100% INVERSIONES CMPC CAYMAN LTD. 100% CMPC INVESTMENTS LTD. (CHANNEL ISLAND) 99% CMPC USA INC. 1% 100% FORESTAL BOSQUES DEL PLATA S.A. (ARGENTINA) SYMBOLOGY EMPRESAS CMPC S.A. INVERSIONES CMPC S.A. INMOBILIARIA PINARES S.A. CMPC CELULOSA S.A. FORESTAL MININCO S.A. FORESTAL COIHUECO S.A. FORESTAL Y AGRÍCOLA MONTE ÁGUILA S.A. CMPC Productos de Papel S.A. CMPC Tissue S.A. CMPC Papeles S.A. CMPC Celulosa S.A. CMPC Forestal

60

61 General Information

62 060 SHARE CAPITAL The Company s share capital as of December 31, 2005, after annual restatement as provided by the law, amounts to ThCh$ 102,521,936 - ThUS$ 200,043 divided into 200 million shares. Empresas CMPC S.A s net worth as of December 31, 2005 amounts to ThCh$ 2,324,521,775 - ThUS$ 4,535,652. SHARE OWNERSHIP In accordance with General Rule No. 30, issued by the Superintendency of Securities and Insurance, below we list the twelve largest shareholders, indicating the number of shares owned by each as of December 31, Shareholder Number of shares Forestal Cominco S.A. 39,254,440 Forestal Constructora y Comercial del Pacifico Sur S.A. 38,432,339 Forestal O Higgins S.A. 13,976,744 AFP Provida S.A. para Fondos de Pensiones 12,056,412 Forestal Bureo S.A. 8,068,615 AFP Habitat S.A. para Fondos de Pensiones 7,861,851 AFP Cuprum S.A. para Fondos de Pensiones 5,416,436 Inmobiliaria Ñague S.A. 4,145,628 AFP Santa Maria S.A. para Fondos de Pensiones 3,920,524 AFP Bansander S.A. para Fondos de Pensiones 3,868,151 Coindustria Ltda. 3,577,021 Constructora Santa Marta Ltda. 3,309,907 Additionally, the number and ownership in shares in Empresas CMPC S.A., belonging to companies that directly or through some type of relationship between them control 55.44% of equity with voting rights. Shareholder Number of shares Forestal Cominco S.A. 39,254,440 Forestal Constructora y Comercial del Pacifico Sur S.A. 38,432,339 Forestal O Higgins S.A. 13,976,744 Forestal Bureo S.A. 8,068,615 Inmobiliaria Ñague S.A. 4,145,628 Coindustria Ltda. 3,577,021 Forestal y Minera Ebro Ltda. 795,534 Forestal y Minera Volga Ltda. 712,069 Inmobiliaria y Forestal Chigualoco S.A. 523,112 Forestal Peumo S.A. 414,930 Forestal Calle Las Agustinas S.A. 311,792 Forestal Choapa S.A. 188,222 Others 475,080

63 061 General Information All the shareholders listed above belong to a same corporate group, but do not have a formal joint action agreement. Final controllers are the following natural persons: Mr. Eliodoro Matte Larraín, taxpayer identification No. 4,436,502-2, Ms. Patricia Matte Larraín, taxpayer identification No. 4,333,299-6, and Mr. Bernardo Matte Larraín, taxpayer identification No. 6,598, Control of the above-mentioned companies is shared equally by the final controllers. SHARE TRANSACTIONS Transactions of CMPC shares in 2005 by related shareholders are as follows: Number of Shares Unit Price Amount Director Purchase/(Sale) Ch$ US$ ThCh$ ThUS$ Eliodoro Matte Larraín (5,000) 13, , Relative of a Director Eliodoro Matte Capdevila 5,000 13, , Eliodoro Matte Capdevila (5,000) 13, , María del Pilar Matte Capdevila (700) 13, , María Josefina Marín Correa 79 13, , Related to a Director El Mayorazgo S.A. 41,642 13, ,811 1,066.9 Inversiones Amolanas Limitada 22,604 13, , Rentas e Inversiones San Antonio Ltda. 3,615 13, , Inversiones La Pinta Limitada 3,000 13, , Inversiones Cruz Grande S.A , , Managers Luis Llanos Collado 1,500 13, , Gonzalo García Balmaceda 62 12, Relative of a Manager Moira Nicoll Benson , , Brian Wilson Grothe , , Alan Wilson Grothe , , Common Controller Compañía de Seguros de Vida La Construcción S.A. (57,111) 13, ,599 1,548.5

64 062 QUARTERLY STATISTICS OF SHARE TRANSACTIONS Amount Average Price Quarter Units Ch$ US$ Ch$ US$ 1st quarter ,983,658 19,216,931,903 37,496,452 6, nd quarter ,956,835 29,585,049,495 57,726,926 7, rd quarter ,536,218 34,071,376,073 66,480,734 9, th quarter ,678,243 51,803,839, ,080,662 11, st quarter ,955,632 22,964,024,972 44,807,854 11, nd quarter ,399,865 27,581,460,649 53,817,484 11, rd quarter ,198,157 40,246,451,542 78,529,662 12, th quarter ,051,588 39,496,701,281 77,066,734 12, st quarter ,681,911 22,007,785,179 42,942,020 13, nd quarter ,818,749 36,889,578,987 71,979,666 13, ,5 3rd quarter ,355,043 46,163,217,894 90,074,572 13, ,8 4th quarter ,857,764 52,992,411, ,399,827 13, ,8 Note: Statistics include information from the Santiago Stock Exchange, the Electronic Stock Exchange of Chile, and the Brokers Exchange. Conversion into US dollars has been made at the exchange rate effective as of December 31, REMUNERATION AND EXPENSES OF THE BOARD OF DIRECTORS AND COMMITTEE OF DIRECTOS, AND MANAGEMENT REMUNERATION Pursuant to the provisions of Law 18,046, the Annual General Meeting of Shareholders of Empresas CMPC S.A., held on April 29, 2005, established, as in the previous year, that the remuneration of the Board of Directors would be 1% of regular dividends paid during the year 2005, duly restated, shared out in equal parts among Directors, with the Chairman entitled to a double share. As of December 31, 2005 a provision of ThCh$ 875,808 - ThUS$ 1,708.9 was set up for this purpose, corresponding to 1% of dividends distributed during the period. This remuneration shall be paid in the first half of The Board of Directors remuneration paid during the years 2005 and 2004 (at discounted values) amounted to: 12/31/ /31/2004 Director ThCh$ ThUS$ ThCh$ ThUS$ Eliodoro Matte Larrain 137, , Ernesto Ayala Oliva 68, , Patricio Grez Matte 68, , Jorge Marín Correa 68, , Jorge Gabriel Larraín Bunster 68, , Manuel Mardones Restat 68, , Bernardo Matte Larraín 68, , Total 550,976 1, , This remuneration corresponds to 1% of dividends paid during the years 2005 and The amounts were agreed upon and ratified by the respective Annual Meetings of Shareholders of the Company.

65 063 General Information Additionally, Mr. Eliodoro Matte L. received ThCh$ 65,957 - ThUS$ (ThCh$ 65,413 - ThUS$ in 2004), on account of financial advice on business strategies; study of development projects, and comparative analysis of the national and international industry. Remuneration paid by subsidiaries to Directors (at discounted values) who are also Directors of Empresas CMPC S.A amounted to: 12/31/ /31/2004 Director ThCh$ ThUS$ ThCh$ ThUS$ Eliodoro Matte Larrain 75, , Ernesto Ayala Oliva 30, , Patricio Grez Matte 15, , Juan Claro Gonzalez 10, Jorge Gabriel Larraín Bunster 45, , Bernardo Matte Larraín 60, , Total 237, , The above remuneration refers to financial/economic advice in respect of domestic and export market development; business strategies; study of development projects; business development support technologies; comparative analysis of the competitiveness of this and other industries; and analysis of both the national and international business environment. Committee of Directors The Committee of Directors established pursuant to Law 18,046 exercises the powers and duties contemplated under Article 50 Bis of said Law. Fees paid (at discounted values) and relationship with the controlling group are detailed below: 12/31/ /31/2004 Director Relationship ThCh$ ThUS$ ThCh$ ThUS$ Ernesto Ayala Oliva Independent , Patricio Grez Matte Controller 2, , Jorge Marín Correa Independent 2, , Martín Costabal Llona Independent 1, Total 6, , On April 29, 2005, Mr. Ernesto Ayala Oliva ceased to be a member of the Committee of Directors, being replaced by Mr. Martín Costabal Llona. The principal activities conducted by the Committee of Directors during the period include, among others: Monthly analysis of transactions regulated by the provisions of articles 44, 89 and 93 of Law 18,046 on Stock Corporations. The Committee found that these transactions were performed in accordance with equity conditions similar to those prevailing in the market, and that the same were conducted in the Company s ordinary course of business (See the

66 064 detail of transactions in Notes No. 4 of the Individual Financial Statements and No. 6 of the Consolidated Financial Statements of Empresas CMPC and subsidiaries). The financial statements of Empresas CMPC S.A. and its subsidiaries for the period ended on December 31, 2004 were reviewed and examined at the meeting held in the month of March, with no remarks being made. The meeting also analyzed the background information relating to Empresas CMPC S.A. s agreement to a capital increase in the investment company El Raulí S.A., and recommended to the Board of Directors to agree to such increase. Additionally and in the fulfillment of its duties, the Committee examined the remuneration systems for managers and chief executive officers, making no in this respect. The Committee s meeting of the month of April approved the offer made by Empresa INDURA, the successful bidder of a bidding process called by CMPC Celulosa S.A., for the supply of oxygen gas to the Pacifico Pulp Mill. The same meeting approved the sale of the interest of Empresas CMPC S.A. in Sociedad Hidroeléctrica El Melocotón Limitada to Colbún S.A. Likewise, it recommended to the Board of Directors to approve the hiring of financial advisors, proposed by the Finance Management to support CMPC in the placement of a bond for 7 million Unidades de Fomento. The meeting further proposed to the Board of Directors a list of external auditors to be suggested to the Meeting of Shareholders, as well as the appointment of risk classification agencies to the same effects. At a meeting held in the month of July, CMPC Celulosa S.A. was authorized to purchase 100 thousand cubic meters of wood from Forestal Valdivia. At the meeting of December, it was resolved to recommend to the Board of Directors of CMPC the approval of a merger of the companies Bicecorp and Renta Urbana S.A. In respect of the financial operations conducted with subsidiaries of Bicecorp S.A. (Common Controller) and with subsidiaries of Banco Security (Common Director) margins and limits according to types of operation were set forth, which were complied with by the management of Empresas CMPC S.A. and its subsidiaries. These operations were carried out under strict market conditions. The expenses of the Board of Directors for 2005 only include travel expenses and amount to ThCh$ ThUS$ 0.8 (ThCh$ 4,449 - ThUS$ 7.7 in 2004). Total gross remuneration received by the Companies executives amounts to ThCh$ 1,362,608 - ThUS$ 2,658.7 in 2005 (ThCh$ 1,522,579 - ThUS$ 2,636.7 in 2004). The executive staff has an incentive plan consisting of a variable annual bonus, depending on profits and on meeting of the Company s operational budget targets. The amount of this component of remuneration is included in the above figure. During the year 2005 no staff severance indemnities for years of service were paid to managers or chief executive officers.

67 065 General Information FINANCIAL STATEMENTS Empresas CMPC S.A. s Financial Statements for the fiscal year ended on December 31, 2005, which are submitted for consideration of the shareholders, have been prepared in accordance with the Rules issued by the Superintendency of Securities and Insurance. These require the inclusion of the proportion corresponding to Empresas CMPC S.A. of the assets and profit/loss of related companies at close of the current period in the assets and profit/loss statement of Empresas CMPC S.A. These Financial Statements show a net profit of ThCh$ 122, ThUS$ 239,974, which may be entirely distributed as dividends, and includes amortization of negative goodwill of investments in related companies totaling ThCh$ 1,623,772 - ThUS$ 3,168, as detailed in Note No. 13 to the Consolidated Financial Statements. DISTRIBUTION OF PROFITS In accordance with General Rule No. 30, issued by the Superintendency of Securities and Insurance, a statistic of dividends paid per share in the last five years is shown below. Year Ch$ US$ , per share , per share , per share , per share , per share At its meeting held on December 9, 2004, the Board of Directors resolved to distribute provisional dividend No. 232 of Ch$ US$ 0.23 per share, out of the profits of the fiscal year ended on December 31, This dividend was paid in January As resolved by the Annual Meeting of Shareholders of April 29, 2005, the Company distributed in May 2005 final dividend No. 233 of Ch$ US$ 0.25 per share, out of the profits of the year The dividend policy agreed by the above-mentioned Annual Meeting of Shareholders consisted of the payment of two provisional dividends, in September and December or January, and a final dividend that the Meeting of Shareholders resolved to pay in May, such that total dividends paid amount 40% of the profits for the fiscal year. According to said policy, the Board of Directors resolved to distribute provisional dividends No. 234 of Ch$ 90 - US$ 0.18 per share and No. 235 of Ch$ 90 - US$ 0.18 per share, out of the profits of 2005, in the months of September and December 2005, respectively. Note No. 20 of the Consolidated Financial Statements specifies the dividends paid during the period. Pursuant to the legal provisions in force, it is the duty of the Meeting of Shareholders to determine how profits for the period are to be distributed and dividends allocated.

68 066 PERSONNEL As of December 31, 2005 the Company s personnel amounted to 8,842 workers, distributed as follows: Managers and Professionals Companies Chief Executive and Workers Total Officers Technicians Forestal Mininco S.A ,120 CMPC Celulosa S.A ,231 CMPC Papeles S.A ,169 1,788 CMPC Tissue S.A ,085 2,851 CMPC Productos de Papel S.A ,345 1,649 Empresas CMPC S.A Totals 222 2,455 6,165 8,842 INSURANCE Empresas CMPC S.A. and its subsidiaries maintain insurance contracts to cover the main risks their physical industrial and forest properties are exposed to, the revenue flows and financial risks. Note No. 11 of the Consolidated Financial Statements describes such coverage, the property covered and amounts insured, which, in brief, comprise the following: Main Facilities: Physical Damage and Business Interruption Millions of US$ Pulp Mills 1,730 Sawmills 245 Paper Mills 1,033 Tissue Products Mills 728 Converters and Others 357 Forest Plantations 1,657 Total 5,750 RELEVANT FACTS a. On January 4, 2006, the subsidiary CMPC Tissue S.A. entered into a share purchase and sale agreement for the acquisition of 66.7% of ABS Internacional S.A. de C.V., the parent company of Absormex group of Mexico. To be valid, this agreement is subject to the release by the Company s creditor banks of the restrictions imposed on shares and to approval or the operation by the Federal Competition Commission of Mexico. This should take place before the date of conclusion, which is scheduled for the next month of February The total amount of the transaction will be 15 million dollars.

69 067 General Information b. On October 14, 2005, Forestal Mininco S.A., a subsidiary of Empresas CMPC S.A., signed a Memorandum of Agreement for the purchase of the industrial and forest assets belonging to Forestal Copihue S.A. and to Empresa Bosques de Chile S.A. This agreement is subject to the favorable outcome of a review process of the relevant accounting, financial, legal, labor, environmental and corporate background information, which will take from 30 to 60 days following the date hereof. The transaction includes the industrial assets of Forestal Copihue S.A., consisting of a sawmill and a pole impregnating facility located in Constitucion, a remanufacturing plant, as well as a door manufacturing plant located in Coronel. It further includes the purchase of Empresa Bosques de Chile S.A., which owns forest assets consisting of approximately 17,000 hectares planted with radiata pine, located in the 7th Region. The industrial assets of the furniture manufacturing business are not included in the operation, and will remain the property of Forestal Copihue S.A. The total amount of the transaction will be US$ 110 million for the aforesaid industrial and forest assets. c. On June 15, 2005, Empresas CMPC S.A. became guarantor, co-debtor and surety of its subsidiary Inversiones CMPC S.A., in respect of the Bond for 7 million Unidades de Fomento placed in the local market with a term of 10 years, which contemplates a single amortization of principal at maturity. A 3,22% rate was achieved in the placement. This Bond is registered with the Register of Securities of the Superintendency of Securities and Insurance under No. 413 of May 12, More than 20 investors, including pension fund administrators (AFP s), insurance companies and banks, participated in the placement of these Bonds. The placing agents were BICE Corredores de Bolsa S.A. and JP Morgan Chase Bank N.A. The resources obtained from this placement will be allocated to the financing of capital investments. d. Empresas CMPC S.A. became guarantor, co-debtor and surety of its subsidiary Inversiones CMPC S.A., acting though its agency in Cayman Islands, in respect of the bank loan signed by the latter on June 3, 2005 with a group of integrated financial institutions, the administrative agent being JP Morgan Chase Bank N.A. The loan subscribed amounts to 100 million US dollars, and is payable in 5 equal semiannual amortizations of 20 million dollars over 7 years, starting from the fifth year, at interest rate of Libor, plus a spread or margin over Libor of 0.225% annually for the first 2 years of the loan, of 0.25% for years 3 to 5, and of 0.275% annually for years 6 and 7. The purpose of the above-mentioned loan is refinancing liabilities and financing capital investments. e. The Annual Meeting of Shareholders held on April 29, 2005 elected a new Board of Directors of the Company for the 3-year period commencing on April 30. The following persons were elected: Juan Claro González, Martín Costabal Llona, Patricio Grez Matte, Jorge Gabriel Larraín Bunster, Jorge Eduardo Marín Correa, Bernardo Matte Larraín and Eliodoro Matte Larraín.

70 068 f. At a special meeting of the Board of Directors held on April 29, 2005, Mr. Eliodoro Matte Larraín was appointed Chairman of the Board of Directors of the Company. The meeting also appointed the members of the Committee of Directors, which will be composed of the following persons: Martín Costabal Llona (independent), Jorge Eduardo Marín Correa (independent) and Patricio Grez Matte (elected with the votes of the controller). g. The Board of Directors, at its meeting of held on March 29, 2005, convened the General Meeting of Shareholders for April 29, The matters addressed include, among others: approval of the Annual Report and Balance Sheet for the year 2004, determination of the final dividend, and dividend policy for the year 2005, election of the Board of Directors, and approval of auditors and risk classification agencies. h. At the same meeting it was proposed to issue a bond through the subsidiary Inversiones CMPC S.A. amounting to UF 7,000,000, for a term of 10 years and with coupons payable semi-annually.

71 069 General Information ENDORSEMENT OF THE ANNUAL REPORT The Directors and the Chief Executive Officer of Empresas CMPC S.A., identified below, being duly sworn, declare themselves liable in respect of the truth of all the information contained in this Annual Report, and sign hereafter. ELIODORO MATTE LARRAIN Chairman Rut: PATRICIO GREZ MATTE JORGE GABRIEL LARRAIN BUNSTER Director Director Rut: Rut: JORGE EDUARDO MARIN CORREA BERNARDO MATTE LARRAIN Director Director Rut: Rut: MARTIN COSTABAL LLONA JUAN CLARO GONZALEZ Director Director Rut: Rut: ARTURO MACKENNA IÑIGUEZ Chief Executive Officer Rut:

72

73 Consolidated Financial Statements December 31, 2005 (Translation of the original in Spanish) Ch$ - Chilean pesos ThCh$ - Thousands of Chilean pesos US$ - United States dollars ThUS$ - Thousands of United States dollars A$ - Argentinean pesos Ur$ - Uruguayan pesos S$ - New Peruvian soles UF - The Unidad de Fomento is a Chilean inflation index-linked, peso-denominated unit, set daily in advance on the basis of the previous month s inflation rate - Euros Consolidated balance sheet 072 Consolidated statement of income 074 Consolidated statement of cash flows 075 Notes to the consolidated financial statements 077 Report of independent accountants 135

74 072 Consolidated Balance Sheet (Translation of the original in Spanish) At december 31, Assets ThCh$ ThUS$ ThCh$ ThUS$ Current assets Cash and banks 5,756,440 11,232 4,892,588 8,473 Time deposits 44,963,687 87, ,475, ,920 Marketable securities 15,994,302 31, ,293, ,629 Trade accounts receivable (net) 118,421, , ,878, ,008 Notes receivable (net) 36,780,987 71,768 40,948,044 70,910 Sundry debtors 22,835,816 44,558 18,906,322 32,740 Notes and accounts receivables to related companies 387, Inventories (net) 268,628, , ,639, ,593 Recoverable taxes 39,042,538 76,181 28,353,609 49,100 Prepaid expenses 6,215,773 12,128 6,988,321 12,102 Deferred taxes 5,747,922 11,216 3,486,284 6,037 Other current assets 35,760,934 69,777 49,946,862 86,493 Total current assets 600,147,561 1,171, ,195,293 1,411,675 Fixed assets Land and plantations 1,196,755,412 2,335,132 1,199,405,477 2,077,013 Buildings and constructions 461,268, , ,676, ,902 Machinery and equipment 1,592,626,442 3,107,564 1,583,882,282 2,742,813 Other fixed assets 434,627, , ,692, ,930 Increased value from technical appraisal of fixed assets 48,081,974 93,818 49,250,898 85,288 Depreciation (1,199,412,470) (2,340,317) (1,139,344,546) (1,973,006) Total net fixed assets 2,533,946,708 4,944,286 2,311,563,165 4,002,940 Other assets Investment in related companies 39,488,111 77,050 27,943,821 48,390 Investment in other companies 134, , Goodwill (net) 54,506, ,355 61,182, ,950 Negative goodwill (net) (24,323,985) (47,461) (25,936,415) (44,914) Long-term debtors 15,660,920 30,558 4,405,463 7,629 Intangibles (net) 1,800,960 3,514 1,861,499 3,224 Others 9,436,373 18,412 1,497,978 2,594 Total other assets 96,703, ,690 71,088, ,105 Total assets 3,230,797,859 6,303,996 3,197,847,384 5,537,720 The accompanying Notes 1 to 35 are an integral part of these consolidated financial statements.

75 073 At december 31, Liabilities and shareholders equity Current liabilities ThCh$ ThUS$ ThCh$ ThUS$ Liabilities with banks and financial institutions short term 20,720,190 40,430 1,569,910 2,719 Short-term portion of long-term liabilities with banks and financial institutions 24,776,617 48,345 3,279,129 5,678 Bonds issued 1,374,720 2, ,075, ,227 Current portion of other long-term liabilities 3,419,677 6,673 5,722,072 9,909 Dividends payable 1,240,706 2,421 25,926,305 44,897 Accounts payable 107,014, ,809 97,400, ,669 Notes payable 2,987,302 5,829 3,211,026 5,561 Sundry creditors 718,184 1,401 1,405,581 2,434 Notes and accounts payable to related companies 436, , Provisions 15,306,551 29,866 16,880,861 29,233 Withholdings 7,841,756 15,301 7,160,608 12,400 Unearned income 1,114,490 2,175 1,369,040 2,371 Other current liabilities 227, ,080,256 3,602 Total current liabilities 187,179, , ,152, ,824 Long-term liabilities Liabilities with banks and financial institutions 273,335, , ,296, ,000 Bonds issued 279,573, , ,239, ,000 Notes payable 7,423,316 14,485 12,197,170 21,122 Provisions 28,498,296 55,606 29,178,690 50,529 Deferred taxes 59,733, ,552 55,056,207 95,341 Other liabilities 6,538,845 12, Total long-term liabilities 655,102,747 1,278, ,968, ,992 Minority interest 63,993, ,866 64,834, ,274 Shareholders equity Paid-in capital 102,521, , ,521, ,537 Other reserves 802,507,433 1,565, ,192,631 1,413,403 Retained earnings: Reserve for future dividends 15,364,363 29,979 15,364,363 26,607 Accumulated earnings 1,317,447,136 2,570,629 1,213,338,345 2,101,141 Net income for the year 122,986, , ,172, ,615 Interim dividends (36,306,000) (70,841) (43,698,480) (75,673) Total shareholders equity 2,324,521,775 4,535,652 2,277,891,265 3,944,630 Total liabilities and shareholders equity 3,230,797,859 6,303,996 3,197,847,384 5,537,720 The accompanying Notes 1 to 35 are an integral part of these consolidated financial statements.

76 074 Consolidated Statement of Income (Translation of the original in Spanish) For the years ended december 31, ThCh$ ThUS$ ThCh$ ThUS$ Operating results Sales 1,091,279,723 2,129,326 1,116,365,412 1,933,213 Cost of sales (700,197,067) (1,366,238) (656,638,717) (1,137,103) Gross margin 391,082, , ,726, ,110 Administrative and selling expenses (232,320,133) (453,308) (233,799,621) (404,871) Operating income 158,762, , ,927, ,239 Non operating results Financial income 7,757,412 15,136 7,189,529 12,450 Gain on investment in related companies 3,329,416 6,496 2,619,597 4,536 Other non-operating income 17,857,490 34,844 12,914,112 22,364 Loss on investment in related companies (4,256) (8) (8,548) (15) Amortization of goodwill (4,739,189) (9,247) (4,785,302) (8,287) Financial expenses (31,179,725) (60,838) (30,690,487) (53,147) Other non-operating expenses (5,891,640) (11,496) (6,150,862) (10,650) Price-level restatements (5,880,125) (11,473) (2,462,796) (4,265) Foreign exchange gains (losses) 2,901,927 5,662 4,158,560 7,201 Non-operating loss (15,848,690) (30,924) (17,216,197) (29,813) Income before income taxes 142,913, , ,710, ,426 Income taxes (18,554,209) (36,203) (33,557,536) (58,112) Consolidated income 124,359, , ,153, ,314 Minority interest (2,996,489) (5,847) (3,037,368) (5,260) Net income 121,363, , ,115, ,054 Amortization of negative goodwill 1,623,772 3,168 2,056,497 3,561 Net income for the year 122,986, , ,172, ,615 The accompanying Notes 1 to 35 are an integral part of these consolidated financial statements.

77 Consolidated Statement of Cash Flows (Translation of the original in Spanish) 075 Cash flows from operating activities For the years ended december 31, ThCh$ ThUS$ ThCh$ ThUS$ Net income for the year 122,986, , ,172, ,615 Profit on sale of fixed assets (13,784,997) (26,898) (9,121,605) (15,796) Loss in investment sales 343, Add (deduct) charges (credits) not representing movement of funds: Depreciation 85,416, ,666 85,029, ,245 Amortization of intangible assets 8, , Write-offs and provisions 4,218,567 8,231 4,355,615 7,543 Net income on investment in related companies (3,329,416) (6,496) (2,619,597) (4,536) Net loss on investment in related companies 4, , Goodwill amortization 4,739,189 9,247 4,785,302 8,287 Negative goodwill amortization (1,623,772) (3,168) (2,056,497) (3,561) Price-level restatements 5,880,125 11,473 2,462,796 4,265 Foreign exchange differences (2,901,927) (5,662) (4,158,560) (7,201) Other credits not representing cash flows (655,919) (1,280) (1,154,275) (1,999) Other credits not representing movement of funds 11,473,952 22,388 12,999,380 22,511 Changes in assets which affect cash flows: Increase in trade accounts receivable 10,411,612 20,315 (31,747,524) (54,977) Increase in inventories (28,285,911) (55,192) (23,435,464) (40,583) (Increase) decrease in other assets 9,804,894 19,132 3,759,444 6,510 Changes in liabilities which affect cash flows: (Decrease) increase in accounts payable related to operating results (3,096,104) (6,041) (4,884,054) (8,458) Decrease in interest payable 2,307,097 4,502 3,905,611 6,763 Increase in taxes payable (4,744,764) (9,258) 8,394,167 14,536 Increase (decrease) in other accounts payable related to non-operating results 1,903,536 3,714 2,152,252 3,727 (Decrease) increase in Value Added Tax and other similar taxes payable (1,090,659) (2,128) (1,217,083) (2,108) Minority interest 2,996,489 5,847 3,037,368 5,260 Net positive cash flows from operating activities 202,981, , ,697, ,110 The accompanying Notes 1 to 35 are an integral part of these consolidated financial statements.

78 076 Consolidated Statement of Cash Flows (Translation of the original in Spanish) For the years ended december 31, ThCh$ ThUS$ ThCh$ ThUS$ Cash flows from financing activities Loans received 78,464, , ,941, ,189 Liabilities with public 120,799, , Payment of dividends (88,320,068) (172,332) (58,853,399) (101,916) Payment of loans (3,709,417) (7,238) (158,775,381) (274,952) Payment of bond issuance cost (151,175,970) (294,977) - - Payments for the placement of Public Bonds (2,176,743) (4,247) - - Net negative cash flows from financing activities (46,118,116) (89,986) 94,312, ,321 Cash flows from investment activities Proceeds from sale of fixed assets 17,950,420 35,025 38,357,818 66,424 Additions on fixed assets (377,657,051) (736,892) (230,992,654) (400,010) Other investment income 139, , Permanent investments (5,747,945) (11,215) (5,462,805) (9,460) Net negative cash flows from investment activities (365,315,097) (712,811) (197,778,067) (342,493) Net positive (negative) cash flows for the year (208,451,755) (406,735) 121,232, ,938 PRICE-LEVEL RESTATEMENT OF CASH AND CASH EQUIVALENTS (19,541,539) (38,130) (27,095,371) (46,922) NET CHANGE IN CASH AND CASH EQUIVALENT (227,993,294) (444,865) 94,136, ,016 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 330,468, , ,332, ,257 CASH AND CASH EQUIVALENT AT END OF YEAR 102,475, , ,468, ,273 The accompanying Notes 1 to 35 are an integral part of these consolidated financial statements.

79 Notes to the Consolidated Financial Statements At december 31, 2005 and 2004 (Translation of the original in Spanish) 077 NOTE 1 - COMPANY S REGISTRATION Empresas CMPC S.A. is registered as N 0115 in the Official Company Register and is under the supervision of the Chilean Superintendency of Securities and Insurance (the Superintendency ). The subsidiaries Industrias Forestales S.A., and Inversiones CMPC S.A. are registered under N 0066, and N 0672, respectively. During September 2004, the subsidiaries Forestal Mininco S.A. and Forestal Crecex S.A., cancelled their registration in the Securities Registry of the Superintendency of Securities and Insurance, pursuant to exempt resolutions N 437 and N 444, respectively. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a) Accounting period The consolidated financial statements cover the period January 1 to December 31, 2005 and are compared to the same period in b) Basis of preparation The consolidated financial statements have been prepared in accordance with Superintendency of Securities and Insurance regulations, which are consistent with accounting principles generally accepted in Chile issued by the Chilean Institute of Accountants. In the event of discrepancy, the Superintendency of Securities and Insurance regulations shall prevail. c) Basis of presentation For an adequate comparison, the balances in the consolidated financial statements as of December 31, 2004 have been restated out-of-book by the variation in the Consumer Price Index (CPI) for the period December 1, 2004 to December 31, 2005, amounting to 3.6%. In addition, minor reclassifications were made for consistency with the 2005 period. d) Basis of consolidation The consolidated financial statements include the assets, liabilities, income statement accounts and cash flows of the Parent Company Empresas CMPC S.A. and its subsidiaries. Significant amounts and results of transactions between the consolidated companies have been eliminated and the participation of the minority shareholders has been recognized in the financial statements under Minority interest. e) Price-level restatements The consolidated financial statements have been restated in order to reflect the effect of price-level changes on the Chilean peso in each year (Note 22). Restatements have been calculated on the basis of the Consumer Price Index published by the Chilean Institute of Statistics, which shows a variation of 3.6% for the period December 1, 2004 to November 30, 2005 (2.5% for the same period in the preceding year). Income and expense accounts have also been restated to present them in year-end constant pesos. The values in indexed unit have been translated into Chilean pesos at 1 UF: Ch$ 17, at December 31, 2005 (Ch$ 17, to UF 1 at December 31, 2004). f) Currency translation Assets and liabilities in foreign currency have been translated into Chilean pesos at the year-end exchange rate (Ch$ US$ 1 at December 31, 2005 and Ch$ to US$ 1 at December 31, 2004). The adjustment effect of assets and liabilities in foreign currency is shown in the Statement of Income under Foreign exchange differences, net of local inflation effects. To incorporate to the consolidated financial statements the financial statements of the productive foreign subsidiaries its assets and liabilities were translated to US dollars at the exchange rate of A$ 3.00 Argentine pesos to 1 US$ (A$ 2.98/US$ in 2004) Uruguayan pesos at UR$ to 1 US$ (UR$ 26.38/US$ in 2004), and New Peruvian soles at the rate of 3.43 S$ to 1 US$ (S$ 3.28 in 2004).

80 078 g) Time deposits and marketable securities Time deposits in banks and financial institutions are valued at cost plus adjustments and interest accrued at each year end. Fixed-income securities are shown at restated investment cost plus interest accrued at each year end at the real interest rate determined on the purchase date. Mutual fund units and foreign investment founds are presented at the year-end unit value. Promissory notes and other bonds are shown at their restated purchase cost plus interest accrued at year end. The resulting amounts do not exceed their market values, and adjustments have been made when the market value is lower. The Company has invested resources in time deposits and marketable securities in Chilean pesos, which have been complemented with derivatives in dollars and euro, whereby the operation is redenominated to such currencies. h) Inventories Inventories of finished products and work in progress have been valued at the most recent direct production cost, including certain indirect inputs. Forest plantations which are deemed to be exploited within one year are included under inventories. Raw materials, supplies and other operating supplies are valued at restated cost at each year end. The resulting amounts do not exceed their related net realizable and replacement values, respectively. A provision has been set up to cover obsolescence of supplies, raw materials and other inputs based on the turnover and historical movements of these inventories. i) Allowance for unrecoverable accounts The Company and subsidiaries have set up a provision for the likelihood of unrecoverable notes and/or accounts receivable, which is determined on the basis of historical movements in the client portfolio and an analysis of accounts due from clients exceeding the normal period of collection. j) Fixed assets Fixed assets are shown at restated cost (Note 11). In addition, this caption includes the effect of technical reappraisals registered by Empresas CMPC S.A. and subsidiaries in prior years. Forest plantations have been appraised considering the market values in conformity with effective accounting standards and technical principles generally accepted for the appraisal of these assets. The higher value so determined above the restated balance in books, increases the plantation assets and is credited to Forest Reserve, an Equity account included under Other reserves. The corresponding deferred tax is deducted from these amounts. The portion of the Forest Reserve corresponding to the plantations exploited is annually netted of against the Forest Reserve account and credited to income in the corresponding sales year. k) Fixed asset depreciation Fixed assets depreciation is calculated on the restated cost of assets using the straight-line method over the estimated remaining useful lives of the assets. l) Leased assets Fixed assets acquired under leasing contracts are recorded at the current value of the contract and shown under Other fixed assets. These assets are not legally owned by the Company until they use purchase option.

81 079 Notes to the Consolidated Financial Statements m) Intangibles Intangible assets are valued at restated purchase cost and are amortized over the estimated years of investment return. n) Investment in related companies (associates) Investments in related companies are valued using the equity method of accounting. This valuation includes recognizing participation in their results on an accrual basis after eliminating unrealized gains and losses on transactions with related companies. In the cases of buying companies, the differential between the Company s equity value and the purchase price is shown as Goodwill/Negative goodwill under Other assets (Circular N 368 dated December 12, 1983, issued by the Superintendency of Securities and Insurance). Pursuant to the new instructions issued by the Superintendency of Securities and Insurance through Circular N 1,697 dated December 30, 2003, the new investments made as from January 1, 2004, are valued through the equity method, which considers the valuation of the investment upon buying at fair value of the equity of the acquired Company (market value of assets and liabilities). Investments in foreign companies are valued in accordance with Technical Bulletin N 64 of the Chilean Institute of Accountants and Official Circular N 5,294 dated October 20, 1998 issued by Superintendency of Securities and Insurance. In conformity with these regulations, the subsidiaries abroad, CMPC Investments Ltd., Inversiones CMPC Cayman Ltd., Gestum Inversiones S.L., Tissue Cayman Ltd., CMPC Europe Ltd., CMPC Asia Ltd. and Propa Cayman Ltd. are considered an extension of the Parent Company and are therefore controlled in Chilean pesos, restated in line with local inflation (CPI). Investments in subsidiaries in Argentina: CMPC Inversiones de Argentina S.A., La Papelera del Plata S.A., Naschel S.A., Forestal Bosques del Plata S.A. y Fabi S.A., the Subsidiary in Uruguay: Ipusa and the subsidiaries in Perú: Forsac Perú S.A., Protisa Perú S.A. and Papelera del Rimac S.A. are considered productive companies with own activities, therefore are controlled in US dollars. o) Goodwill and negative goodwill The difference generated between the purchase of interest in companies and their net book value, calculated on the respective purchase date is presented in Other Assets (as negative goodwill/goodwill). These differences are amortized over the estimated period of investment return, which is estimated at least in 20 years in the forest industry. p) Financial investments Securities purchased under resale agreements are valued at restated cost plus interest accrued at year end in accordance with their respective agreements clauses. These values are shown under Other current assets. Instruments sold under repurchase agreements are valued at restated purchase cost plus accrued interest at year end and are shown in Other current assets. The related obligation is shown at its original value plus interest and restatements accrued at financial statements under Other current liabilities. The Company has invested resources in resale agreements in Chilean pesos, complemented with derivatives in dollars and euros, where by the operation is redenominated to such currencies. q) Bonds payable This caption includes the obligation from two bond issued by Inversiones CMPC S.A., one placed abroad and the other registered under the Securities Registry of the Superintendency of Securities and Insurance, both are recorded at the restated nominal value and interest accrued at year end. The difference from commissions and other bond placement expenses was charged to income on the respective date, except discount in local placement which will be amortized over the bond period.

82 080 r) Income taxes and deferred taxes The Parent Company and subsidiaries set up income tax provisions, which were charged to income for the year, in conformity with current tax legislation in Chile and/or countries in which the respective income is generated or the tax liability should be payed. In accordance with instructions issued by the Superintendency under Circular N 1466, as stipulated under Technical Bulletins N 60, 68, 69 and 71 issued by the Chilean Institute of Accountants and timing differences arising from all timing differences between tax and financial balances are required to be recorded based on the current tax rate on the estimated date of reverse. s) Staff severance indemnities The provision set up to cover the liability for severance indemnities agreed with the Company s staff is presented at the accrued value at each year end. That portion estimated to be paid within one year is shown in the short term. Vacation staff costs are recorded on an accrued basis. t) Operating income Operating income is originated from sales of products delivered and recorded at the value of billing. Operating income from exports is valued at the billing price. u) Derivative contracts Derivative contracts have been subscribed in order to cover global exchange rate risks of the Company and subsidiaries. Such contracts are valued according to the fair value they present at year end, and the difference against the face value is recorded in the respective income or deferred accounts based on the nature of the contracts, in accordance to Technical Bulletin N 57 issued by the Chilean Institute of Accountants. v) Computer software Computer software used for administrative purposes by the Company and subsidiaries were developed internally in prior years with Company funds, and the related expenses for development are charged to income as incurred in the respective periods. The cost of computer software purchased from third parties is considered as part of the expenses during the course of its implementation. The cost of software associated to machines and other production assets is charged to income on the start-up date. w) Research and development costs The Parent Company and subsidiaries have recorded research and development costs incurred in the production process under expenses during the year. x) Cash flows The Company and subsidiaries have defined short-term investments considered as part of the general administration of cash surpluses as cash and cash equivalents in conformity with Technical Bulletin N 50 issued by the Chilean Institute of Accountants. Cash equivalents include time deposits and marketable securities such as short-term investments under resale and repurchase agreements, Chilean Central Bank Promissory Notes, units in investment Funds, investments in mutual fund units and other investments. Cash flows from operating activities include all business-related cash flows as well as interest paid, financial income, dividends and other distributions received and, in general, all cash flows not defined as from investment or financing activities. The concept of operations used in this statement is more comprehensive than that used in the consolidated statement of income.

83 081 Notes to the Consolidated Financial Statements The following subsidiaries have been included in consolidation: Ownership interest (%) Company Direct Indirect Total Total % % % % Forestal Mininco S.A Inversiones CMPC S.A Forestal Coihueco S.A Inmobiliaria Pinares S.A Forestal y Agrícola Monteaguila S.A CMPC Papeles S.A CMPC Tissue S.A CMPC Productos de Papel S.A CMPC Celulosa S.A Inmobiliaria y Forestal Maitenes S.A Envases Roble Alto S.A Propa S.A Portuaria CMPC S.A Sociedad Recuperadora de Papel S.A Empresa Distribuidora de Papeles y Cartones S.A Envases Impresos S.A Productos Austral S.A Cartulinas CMPC S.A Servicios Compartidos CMPC S.A Inversiones Protisa S.A Papeles Cordillera S.A Comercial Higiene Integral S.A Chilena de Moldeados S.A Servicios Forestales Escuadrón Ltda CMPC Maderas S.A Industrias Forestales S.A Forestal Crecex S.A Inversiones CMPC Cayman Ltd.-Cayman Island CMPC Investments Ltd. - Channel Island Gestum Inversiones S.L. - Spain CMPC Inversiones de Argentina S.A CMPC Asia Ltd. - Japan Forestal Bosques de Plata S.A. - Argentina Naschel S.A. - Argentina Fabi Bolsas Industriales S.A. - Argentina Tissue Cayman Ltd.-Cayman Island Protisa S.A. - Peru Papelera del Rimac S.A. - Peru Compañía Primus del Uruguay S.A Celulosas del Uruguay S.A CMPC Europe Ltd. - United Kingdom Protisa do Brasil Ltda Propa Cayman Ltd.-Cayman Island Forsac Perú S.A La Papelera del Plata S.A. - Argentina Ipusa - Uruguay CMPC USA INC. - United States

84 082 NOTE 3 - ACCOUNTING CHANGES There are no changes in the application of generally accepted accounting principles in Chile in relation to the previous year which could significantly affect the interpretation of these financial statements. NOTE 4 - MARKETABLE SECURITIES Marketable securities correspond to funds (cash surpluses) invested in securities, which are used in normal operations of the Company and subsidiaries according to requirements. The Company expects total instruments to be settled in the short term. The book value of these investments does not exceed their market value, adjustments being recorded in case the former were higher than the latter. At December 31, 2005 and 2004 this caption includes the following instruments: a) Detail of marketable securities Investments in mutual fund units: Financial Institution ThCh$ BCI Administradora General de Fondos S.A. 100,013 38,338 Bancoestado S.A. Administradora General de Fondos 18, ,249 Total 118, ,587 ThUS$ 230 1,417 Investments in foreing funds units: Financial Institution Investment currency ThCh$ BBH & Co Money Market Fund Dollars 759 6,580,213 JP Morgan Money Market Fund Euros 26,226 5,961,995 JP Morgan Money Market Fund Dollars 63,123 34,883 Total 90,108 12,577,091 ThUS$ ,780 Central Bank bonds: (1) Financial Institution ThCh$ Central Bank bonds payable in dollars (BCX) 15,644,769 24,576,244 Central Bank bonds in dollars (BCD) - 6,199,928 Central Bank bonds in Chilean pesos (BCP) - 5,477,505 Total 15,644,769 36,253,677 ThUS$ 30,526 62,781 Foreign Companies bonds Financial Institution ThCh$ Foreign enterprises bonds - 37,399,898 Foreign corporate bonds - 14,493,422 United States of America Treasure bonds - 14,391,444 Federal Government of United States of America bonds - 14,330,068 Total - 80,614,832 ThUS$ - 139,601

85 083 Notes to the Consolidated Financial Statements Others ThCh$ Total others 141,407 29,198 ThUS$ Total Marketable securities at December 31, 2005 ThCh$ 15,994, ,293,385 Total Marketable securities at December 31, 2005 ThUS$ 31, ,629 (1) At December 31, 2005 the difference in marketable securities price amount to ThCh$ 37,928 - ThUS$ 74 (ThCh$ 620,566 - ThUS$ 1,075 in 2004) and the amortized value at year end was ThCh$ 461,376 - ThUS$ 900 (ThCh$ 1,289,669 - ThUS$ 2,233 in 2004). b) Marketable securities recorded under Other current assets As outlined in Note 9, Other current assets include the following marketable securities: ThCh$ Marketable securities under resale agreement re- denominated to dollar 30,786,354 14,756,940 Marketable securities under resale agreement in Chilean Pesos 4,974,580 26,396,346 Marketable securities under resale agreement re- denominated to euro - 6,144,737 Marketable securities under resale agreement in Dollars - 431,962 Marketable securities under repurchase agreement in Dollars - 2,077,382 Total 35,760,934 49,807,367 ThUS$ 69,777 86,252 The detail of marketable securities is as follows: a) Account composition Instruments Book value ThCh$ Mutual fund units 118, ,587 Investment fund units 90,108 12,577,091 Public offering promissory notes 15,644,769 36,253,677 Foreign companies bonds - 80,614,832 Others 141,407 29,198 Total marketable securities 15,994, ,293,385 ThUS$ 31, ,629 b) Fixed-income securities Instruments Date of Par value Book value Market value Provision Purchase Maturity ThCh$ ThCh$ Interest rate ThCh$ ThCh$ Central Bank bonds payable in dollars (BCX) ,629,131 15,644, ,644,769 22,290 Total 15,629,131 15,644, ThUS$ 30,496 30,

86 084 NOTE 5 - SHORT-AND LONG-TERM RECEIVABLES These balances at December 31, 2005 and 2004 are presented net of provisions as follows: ThCh$ % ThCh$ % a) Trade accounts receivable, net: Domestic customers 60,737, ,154, Foreign customers 43,854, ,164, Clients from foreign subsidiaries 13,829, ,559, Total 118,421, ,878, ThUS$ 231, ,008 b) Notes receivable, net: Domestic customers 14,976, ,527, Foreign customers 19,315, ,223, Clients from foreign subsidiaries 2,488, ,196, Total 36,780, ,948, ThUS$ 71,768 70,910 c) Sundry debtors: Advances to suppliers 9,473, ,343, Current accounts with third parties 5,868, ,173, Loans to personnel 3,010, ,847, Insurance claims 2,768, ,950, Debtors on fixed assets sales 951, , Drawbacks 108, , Others 654, , Total 22,835, ,906, ThUS$ 44,558 32,740 The provision net of short-term receivables amounts to ThCh$ 4,958,852 - ThU$ 9,676 in 2005 (ThCh$ 5,305,864 - ThUS$ 9,188 in 2004). d) Long-term debtors Cross Currency Swap (Note 16) 12,039, Recoverable taxes in Argentina and Perú (1) 2,396, ,220, Debtors on fixed assets sales 1,068, ,900, Others 156, , Total 15,660, ,405, ThUS$ 30,558 7,629 (1) Amount included under the caption Other receivables - long term (see next table). Receivable Insurance This kind of insurance cover the risk for unrecoverable accounts, mainly foreing customers.

87 085 Notes to the Consolidated Financial Statements Receivable Insurance: This kind of insurance cover the risk for unrecoverable accounts, mainly foreign customers. Maturities Maturity up to 90 days Maturity 90 days up to one year Subtotal Total short-term (net) Total long-term (net) ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ Trade accounts receivable 113,377, ,376,424 9,514,498 14,501, ,892, ,421, ,878, Allowance for doubtful accounts ,471, Notes receivable 27,509,068 31,645,417 9,746,732 9,302,627 37,255,800 36,780,987 40,948, Allowance for doubtful accounts , Sundry debtors 16,292,147 14,379,351 6,556,258 4,526,971 22,848,405 22,835,816 18,906,322 15,660,920 4,405,463 Allowance for doubtful accounts , Total 15,660,920 4,405,463 ThUS$ 30,558 7,629 NOTE 6 - BALANCES AND TRANSACTIONS WITH RELATED COMPANIES Balances and transactions with related companies are originated by commercial operations related to the Company s business carried at market value. Transactions with companies in which the Company has Directors and/or a controller in common (transaction analysis) correspond to business operations which are also carried at market values. Transactions with Copec S.A. (fuel) based in indexed prices, according ENAP prices. Transactions with Colbún S.A. and Nehuenco S.A. (electric power) are under contracts denominated in US dollars. The remaining transactions are carried in non-indexed Chilean pesos. Buying and selling transactions of timber between the Company s subsidiaries and the companies Bosques Arauco S.A. and Forestal Celco S.A. are, in general, offset buying and selling operations. During 2004 were performed operations of purchase, selling and barter of forest properties with subsidiaries of Celulosa Arauco y Constitución S.A. Financial transactions: Financial transactions with intercompanies for the best presentation are shown at average basis. All of this kind of operations is performed at fair value market price and conditions. The composition of related-company accounts receivable and payable is as follows: a) Notes and accounts receivable Short-term Tax number Company ThCh$ Aserraderos Arauco S.A ,110 b) Notes and accounts payable Totales - 387,110 ThUS$ Short-term Tax number Company ThCh$ Aserraderos Arauco S.A. 435, Controladora de Plagas Forestales S.A Totales ThUS$

88 086 c) Transactions: Effect Effect Company Tax number Relation Description Transaction on results Transaction on results amount (expense) income amount (expense) income ThCh$ ThUS$ ThCh$ ThUS$ ThCh$ ThUS$ ThCh$ ThUS$ Aserraderos Arauco S.A Director in common Collection operations 18,679,818 36, ,812,730 27, Administradora de Common Director Fondos Mutuos Security S.A. in Holding Investment in mutual funds 2,724,602 5,316 12, ,328,368 5,764 15, Alimentos Chacabuco Ltda Director in common Product selling 22, , Banco BICE K Controller in common Operations under repurchase agreement 5,591,158 10,910 (19,725) (38) Controller in common Operations under resale agreements 669,846 1, ,314 1,325 16, Controller in common Forward operations 8,920,909 17,407 96, ,420,556 33,631 (163,272) (283) Controller in common Investment in DPF 2,379,247 4, , ,840,007 3, , Controller in common Dollar selling 90,505, ,596 (9,692) (19) 34,117,275 59,081 50, Banco Security Director in common Time Deposits ,997,181 6,922 50, Director in common Dollar selling 531,834 1, , BICE Corredores de Bolsa S.A Common Director Operations under in Holding resale agreements 15,856,915 30, , ,444,435 5,965 76, Common Director in Holding Dollar selling 1,207,029 2,355 10, ,190,925 69, , BICE Administradora General de Fondos S.A Director in common Investment in mutual funds 7,221,492 14,091 28, ,248, , , Director in common Dollar selling ,671 1,659 (124) - Bosques Arauco S.A Director in common Farm buying - barter ,063,143 5, Director in common Timber buying , Director in common Services selling 38, , , , Director in common Farm selling ,493,601 47,611 7,026,571 12,168 Director in common Farm selling- barter ,178,143 5, Director in common Timber selling , ,196 2 Director in common Services buying 21, (21,452) (42) Celulosa Arauco y Constitución S.A Common Director in Holding Material buying 88, , Cerámicas Cordillera S.A Common Director in Holding Products selling 179, , , , Colbún S.A Director in common in related Electric power buying 7,161,724 13, ,250,237 12, Director in common Sociedad Hidroeléctrica in related El Melocotón Ltda. Sale 52,298,102 (343,162) (669,6) Compañía de Petróleos Common Director de Chile COPEC S.A. in Holding Fuel buying 19,079,604 37, ,427,979 16, Compañía Eléctrica del Río Maipo S.A Director in common Electric power buying 697,065 1, ,520,759 2, CGE Distribución S.A Director in common Electric power buying 1,579,276 3, Director in common Product selling 4, , Compañía Industrial El Volcán S.A Director in common Product selling 1,864,627 3, ,555 1,662 2,416,643 4,185 1,240,683 2,148 Controladora de Plagas Forestales S.A Affiliate Service buying 147, (147,317) (287) 197, (197,925) 343

89 087 Notes to the Consolidated Financial Statements c) Transacciones: Effect Effect Company Tax number Relation Description Transaction on results Transaction on results amount (expense) income amount (expense) income ThCh$ ThUS$ ThCh$ ThUS$ ThCh$ ThUS$ ThCh$ ThUS$ Empresa Eléctrica Nehuenco S.A Director in common in related Electric power buying 6,712,375 13, ,259,540 12, Bicecorp S.A Director in common Capital payments ,462,805 9, Empresas Melon S.A Common Director in Holding Product selling 435, , Empresas Call Center S.A K Common Director in Holding Service buying 6, (6,478) Entel Chile S.A Common Director in Holding Service buying 378, (378,296) (738) Entel PCS Telecomunicaciones S.A Common Director in Holding Service buying 226, (226,377) (442) Entel Telefonía Local S.A Common Director in Holding Service buying 282, (282,031) (550) Forestal Celco S.A Director in common Farm buying - barter ,407,528 2, Director in common Services selling 15, , , , Director in common Services buying 1,541 3 (1,541) (3) 34, (34,090) (59) Director in common Farm selling ,832,880 3, , Director in common Farm selling- barter ,368,272 2, Forestal Cholguan S.A Director in common Farm buying - barter ,059,093 1, Director in common Farm selling - barter ,545 1, Forestal Valdivia S.A Director in common Farm selling ,343,954 12, ,365 1,570 Industria y Comercio S.A Director in common Product and Service buying 66, (66,161) (129) 915,285 1, Director in common Product selling , , Inversiones El Rauli S.A Affiliate Capital payments 5,747,945 11, METROGAS S.A K Common Director in Holding Natural gas buying 3,624,902 7, ,204,758 10, Paneles Arauco S.A Director in common Sub-Product selling 282, , , , Pesquera Frio Sur S.A Director in common Product selling 260, , Pesquera Grimar S.A Director in common Product selling 32, , Portuaria Lirquen S.A K Common Director in Holding Product buying 14, (14,878) (29) Puerto Lirquen S.A Common Director in Holding Service buying 2,370,682 4,626 (2,370,682) (4,626) 2,366,684 4,098 (2,366,684) (4,098) Common Director in Holding Product selling 48, , , , Renta Urbana S.A Director in common Services received 30, (30,426) (59) 35, (35,947) (62) Sociedad Industrial Pizarreño S.A Common Director in Holding Product selling 1,391,839 2, ,631 1,513 1,265,779 2, ,670 1,409 Sociedad Industrial Romeral S.A Common Director in Holding Product selling 1,747,589 3, ,097 1,610 1,538,582 2, ,685 1,338 Sofruco Alimentos S.A Director in common in related Product selling 233, , , ,

90 088 NOTE 7 - INVENTORIES Inventories include the following balances: ThCh$ Finished products 65,012,150 53,552,492 Products in process 8,161,263 6,156,633 Raw materials and others 55,386,346 50,855,703 Supplies 54,077,437 55,814,172 Timber 2,893,350 1,534,416 Forestry plantations 79,881,179 62,458,978 Agricultural and other products 3,216,430 3,266,738 Total 268,628, ,639,132 ThUS$ 524, ,593 The Company estimates that these inventories will be sold and/or consumed in the normal course of operations. The item Forestry plantations includes estimated plantations that will be exploited during the next twelve monthts. A provision has been set up to cover the likelihood of obsolescence of raw materials, supplies and spare parts amounting to ThCh$ 3,310,841 - ThUS$ 6,460 at December 31, 2005 (ThCh$ 4,255,191 - ThUS$ 7,369 at December 31, 2004), which is shown net of the respective Inventory accounts.

91 089 Notes to the Consolidated Financial Statements NOTE 8 - INCOME TAXES AND DEFERRED TAXES a) Income tax provisions At December 31, 2005, the consolidated income tax provision amounts to ThCh$ 14,457,299 - ThUS$ 28,209 (ThCh$ 23,113,209 - ThUS$ 40,025 at December 31, 2004), which is shown within recoverable taxes on current assets, once the prepaid income taxes, credit on training expenses and others credits in total amount of ThCh$ 25,220,732 - ThUS$ 49,211 (ThCh$ 25,206,565 - ThUS$ 43,650 at December 31, 2004, have been deducted. The excedents for prepaid income taxes and others tax credits in favor of Company, and subsidiaries amount to ThCh$ 39,042,538 - ThUS$ 76,181 (ThCh$ 28,353,609 - ThUS$ 49,100 at December 31, 2004, it s showing under recoverable taxes on currents assets. Recoverable taxes under Current assets includes the remainder of Value Added Tax (VAT) fiscal credit in favor of the Company in Chile and Argentina, amounting to ThCh$ 19,804,299 - ThUS$ 38,643 (ThCh$ 12,451,078 - ThUS$ 21,562 at December 31, 2004), as well as the balance of recoverable tax corresponding to profits whit income tax paid and absorbed by tax losses of ThCh$ 4,029,549 - ThUS$ 7,863 (ThCh$ 10,048,091 - ThUS$ 17,400 at December 31, 2004), and other taxes in recover process of ThCh$ 4,445,257 - ThUS$ 8,674 (ThCh$ 3,761,084 - ThUS$ 6,513 at December 31, 2004). Tax losses presented by some of the companies total ThCh$ 50,238,026 - ThUS$ 98,025 at December 31, 2005 (ThCh$ 42,994,845 - ThUS$ 74,454 at December 31, 2004). b) Tax profits The balance of undistributed profits in Empresas CMPC S.A. with Corporate income tax paid and subject to distribution with credit for the shareholders is composed of: ThCh$ ThUS$ ThCh$ ThUS$ Profits with 17% credit 3,483,643 6,797 2,394,906 4,147 Profits with 16,5% credit 108, , Profits with 16% credit 1,131,981 2,209 1,131,981 1,960 Profits with 15% credit 177,993, , ,904, ,614 Profits with 10% credit 4,662,286 9,097 10,339,368 17,905 Profits without credit 29,978,671 58,495 32,439,225 56,175 Total 217,358, , ,318, ,989 In addition, accumulated non-taxable income amounting to ThCh$ 194,069,954 - ThUS$ 378,673 (ThCh$ 194,069,954 - ThUS$ 336,071 in 2004) are distributed upon depletion of the accumulated taxable income mentioned earlier and shareholders are not taxed. c) Deferred taxes Restatement of Forest Plantations and its credit to the Forest Reserve equity account is recorded net of Deferred Tax effect in accordance with the Income tax rate applicable when the respective reserve is done (Note 2j).

92 090 Deferred taxes: Timing differences ThCh$ ThCh$ Assets Liabilities Assets Liabilities Short-term Long-term Short-term Long-term Short-term Long-term Short-term Long-term Bad debt provision 1,139, , ,202, Unearned income 57, , Provision for staff vacations 1,272, ,177, Leased assets , ,357 Fixed asset depreciation ,519, ,638,371 Other events 768, , , , ,955 Obsolescence provision 629, , Provision for labor matters 18, , , Tax loss 2,296,813 6,274, ,494, Others (less) Supplementary accounts net ofaccumulated amortization - 23,093-1,543,061-25,919-1,960,127 Valuation provision , Total 6,183,056 6,566, ,134 66,299,894 3,936,329 8,011, ,955 63,067,601 ThUS$ 12,065 12, ,365 6,816 13, ,214 Income tax: ThCh$ Income tax provision (14,457,299) (23,113,209) Prior-year expense adjustment 135,195 (369,516) Deferred tax assets or liabilities for year (4,593,878) (21,175,574) Tax refund (due to accumulated tax losses) 852,100 4,242,307 Amortization of supplementary accounts from assets and liabilities accumulated at the beginning of the year (347,028) 1,887,487 Effect on deferred tax assets and liabilities by evaluation Provisions 306,713 4,970,969 Other charges (450,012) - Total (18,554,209) (33,557,536) ThUS$ (36,203) (58,112)

93 091 Notes to the Consolidated Financial Statements NOTE 9 - OTHER CURRENT ASSETS This item includes the following investments in marketable securities: a) Marketable securities under resale agreement: Institution ThCh$ In Chilean pesos re-denominated to dollar: Bice Corredores de Bolsa S.A. 12,822,370 - BBVA Corredores de Bolsa S.A. 7,699,444 - Larraín Vial S.A. Corredores de Bolsa 5,132,441 - Bancoestado S.A. Corredores de Bolsa 5,132,099 8,967,755 Banchile Corredores de Bolsa S.A. - 5,789,185 Total 30,786,354 14,756,940 ThUS$ 60,071 25,554 In Chilean pesos re-denominated to euro: Bice Corredores de Bolsa S.A. - 6,144,737 ThUS$ - 10,641 Total re-denominated marketable securities ThCh$ (1) 30,786,354 20,901,677 Total re-denominated marketable securities ThUS$ 60,071 36,195 In US dollars: BBVA Corredores de Bolsa S.A ,962 ThUS$ In Chilean Pesos: Santander S.A. Agente de Valores 4,401,320 - Bancoestado S.A. Corredores de Bolsa S.A. 573,260 14,273,751 Bice Corredores de Bolsa S.A - 9,011,901 Larraín Vial S.A. Corredores de Bolsa - 3,110,694 Total 4,974,580 26,396,346 ThUS$ 9,706 45,711 Total Marketable securities under repurchase agreement ThCh$ 35,760,934 47,729,985 Total Marketable securities under repurchase agreement ThUS$ 69,777 82,654 b) Marketable securities under repurchase agreement: ThCh$ Bancoestado S.A. - 2,077,382 Total Marketable securities under resale agreement ThCh$ - 2,077,382 Total Marketable securities under resale agreement ThUS$ - 3,597

94 092 c) Other ThCh$ Forward Contract Rights - 139,495 ThUS$ Total Other current assets 35,760,934 49,946,862 Total Other current assets US$ 69,777 86,493 (1) Marketable securities re-denominated to other currencies refer to operations with forward contracts (Synthetical). On the one hand, they consider the value of the marketable securities under resale agreements in Chilean pesos, valued as of the closing date, based on the value of principal plus the accrued interest of ThCh$ 30,862,236 - ThUS$ 60,219 (ThCh$ 21,707,056 - ThUS$ 37,590 as of December 31, 2004) of these securities. Furthermore, they consider the spread of the value of the signed forward contracts to re-denominate these operations to dollar or euro for ThCh$ (75,882) - ThUS$ (148) as of December 31, 2005 and ThCh$ (805,379) - ThUS$ (1,395) as of December 31, They are recorded at the fair value of each year end. NOTE 10 - FINANCIAL INVESTMENTS At December 31, 2005 transactions under resale agreements amount to ThCh$ 35,760,934 - ThUS$ 69,777 (ThCh$ 47,729,985 - ThUS$ 82,654 in 2004). Some of these investments were re-denominated to dollar through the subscription of forward contracts. At December 31, 2004 there are sales operations under repurchase agreements in the amount of ThCh$ 2,077,382 - ThUS$ 3,597. Both concepts are shown in Other current assets and the obligation of the securities under repurchase agreement is presented in Other current liabilities, as set forth in Circular N 768 issued by the Chilean Superintendency of Securities and Insurance. Sales under repurchase agreements and purchases under resale agreements: Initial Interest Final Market Code Placement Date of Institution Currency amount rate amount Instrument value date maturity ThCh$ % ThCh$ ThCh$ CRV 20/12/ /01/2006 BBVA Corredores de Bolsa S.A. Ch$ 4,400, ,402,640 Pagaré NR - Pagaré R 4,401,320 CRV 20/12/ /01/2006 BBVA Corredores de Bolsa S.A. US$ 7,740, ,703,004 Pagaré NR - Pagaré R CRV 23/12/ /01/2006 BICE Corredores de Bolsa S.A. US$ 5,145, ,132,582 Pagaré R CRV 21/12/ /01/2006 Bancoestado S.A. Corredores de Bolsa US$ 5,110, ,134,399 Pagaré R CRV 21/12/ /01/2006 Larrain Vial S.A. Corredores de Bolsa US$ 5,110, ,134,842 BCP - Pagaré R CRV 27/12/ /01/2006 BICE Corredores de Bolsa S.A. US$ 7,717, ,698,150 Pagaré NR - Pagaré R - Cero CRV 22/11/ /01/2006 Bancoestado S.A. Corredores de Bolsa Ch$ 570, ,932 Pagaré NR

95 093 Notes to the Consolidated Financial Statements NOTE 11 - FIXED ASSETS The balances of fixed assets are as follows: ThCh$ Land 250,432, ,664,984 Forestry plantations 946,322, ,740,493 Land and plantations 1,196,755,412 1,199,405,477 Buildings 323,944, ,371,955 Constructions and others 137,323, ,304,856 Accumulated depreciation (203,645,728) (158,512,925) Buildings and constructions net 257,622, ,163,886 Machinery 1,573,128,030 1,562,769,522 Vehicles 4,991,747 6,321,036 Spare part and others 14,506,665 14,791,724 Accumulated depreciation (924,140,912) (911,840,324) Machinery and equipments net 668,485, ,041,958 Other fixed assets 37,475,048 42,324,485 Constructions in progress 374,502,613 97,226,386 Furniture and office equipment 22,649,468 26,141,372 Accumulated depreciation (41,374,701) (42,931,904) Other fixed assets net 393,252, ,760,339 Increased value from technical appraisal of: Land 8,264,175 8,689,364 Buildings and constructions 20,862,438 20,867,161 Machinery and equipments 18,955,361 19,694,373 Accumulated depreciation (30,251,129) (26,059,393) Increase in value from technical appraisal 17,830,845 23,191,505 Total net fixed assets 2,533,946,708 2,311,563,165 ThUS$ 4,944,286 4,002,940 Fixed asset depreciation, calculated as outlined in Note 2k), amounts to ThCh$ 85,416,563 - ThUS$ 166,666 in 2005 (ThCh$ 85,029,233 - ThUS$ 147,245 in 2004) and is shown in Operating Costs in the statement of income, amounting to ThCh$ 81,777,049 - ThUS$ 159,565 (ThCh$ 80,545,852 - ThUS$ 139,481 in 2004) and in Administrative expenses, amounting to ThCh$ 3,639,514 - ThUS$ 7,101 (ThCh$ 4,483,381 - ThUS$ 7,764 in 2004). The balance under Other fixed assets includes leased assets in foreign subsidiaries amounting to ThCh$ 36,634,525 - ThUS$ 71,482 in 2005 (ThCh$ 41,278,453 - ThUS$ 71,482 in 2004). The main characteristics of the lease contract on assets in Argentina, which maturity was extended pursuant to a rescheduling agreement dated April 6, 2005 are: Description Initial amount Interest rate Initial date Final maturity date ThUS$ % Paper machinery MUS$ 71, October 1999 April 2009 The Company determines the forest appraisal for its forest using a model that basically properly considers that the estimated volumes of lumber available will be progressively realized once the respective plantations have reached optimal exploitation age and conditions. The model uses different variables, such as the overage exchange rate in the last 36 month of United States dollar.

96 094 Fixed assets abroad: Fixed assets of subsidiaries in Argentina, Uruguay and Perú are valued at the equivalent of their historical value in US dollars of acquisition date, net of depreciation and adjustment for devaluation of assets and others. They amount to ThCh$ 146,597,817, at December 31,2005 (equivalent to ThUS$ 286,045), and to ThCh$ 154,902,102 at December 31, 2004 (equivalent to ThUS$ 268,244). Such valuation is based on accounting standards of Technical Bulletin N 64 issued by the Chilean Institute of Accountants. The amounts presented under this standard could differ in certain cases from the market value or current replacement value of fixed assets, derived from the respective currencies of such countries with regard to the dollar. Notwithstanding the above, the Company s Management estimates that the book value of its fixed assets does not exceed its replacement or market value in the current circumstances and that future income will be enough to cover all the costs and expenses, taken as a whole. Therefore, in its opinion, no adjustments to these values are necessary at this date. The main insurance policies of Empresas CMPC and subsidiaries are: a) All Industrial and equipment damage risks: Assets covered: Physical fixed assets, inventories, and damage due to stoppages Physical fixed assets are mainly comprised of three cellulose plants, two cardboard plants, two paper plants, five tissue products plants, two liner plants, one newspaper plant and several other paper production and conversion plants and other buildings. Risks covered: Any risks of loss and/or damage and/or partial or total destruction of all items insured against fire, explosion, earthquakes, malicious acts, sabotage and other risks, equipment breakdown, and damages resulting from operation stoppages (terrorist acts excluded). All assets are insured at their replacement value or replacement for a new asset (buildings, machinery, equipment and plants). Insured amounts: ThUS$ 3,369,382 on Physical assets and ThUS$ 722,927 on damages from stoppages, annually. b) All Forest Risks Assets covered: Forest plantations of radiata pine, eucalyptus, and other species, including timber inventories. Risks covered: Fire, explosions, and earthquakes; damages caused by wind, snow or ice; malicious acts and other. Insured amount: Plantations amounting to ThUS$ 1,657,897. c) Transport risk Coverage for physical assets such as machinery, equipment, products, raw materials, etc, during transport from and to the warehouses of the Company and subsidiaries. Also, the transfer from Supplier warehouses and to Client warehouses.

97 095 Notes to the Consolidated Financial Statements NOTE 12 - INVESTMENTS IN RELATED COMPANIES Significant information on the subsidiaries: a) Incorporation, purchases, sales, capital increases and dividends of the subsidiaries and associates: Servicios Forestales Escuadrón Ltda. On November 2005, the holding company Forestal Minico S.A. merged the related company Servicios Forestales Escuadrón Ltda. Servicios Compartidos CMPC S.A. On September 1, 2005, Empresas CMPC S.A., acquired a 20% of the shares of Abastecimientos CMPC S.A. to its subsidiaries Forestal Mininco S.A. (4%), CMPC Celulosa S.A. (4%), CMPC Papeles S.A. (4%), CMPC Productos de Papel S.A. (4%) and CMPC Tissue S.A. (4%). Later, according the Official Company Register of September 5, 2005, the Company change the name to Servicios Compartidos CMPC S.A. and increase the main activities. Sociedad Hidroeléctrica El Melocotón Ltda. On June 29, 2005, Empresas CMPC S.A., sold its participation in Sociedad Hidroeléctrica El Melocotón Ltda. to Colbun S.A. No significant effects were generated from this operation. Inversiones El Rauli S.A. On March 8, 2005, Empresas CMPC S.A., subscribed and paid 7,754,498 shares regarding a capital increase for Inversiones El Rauli S.A. Based in this transaction the Company maintain the same participation in this investment. This operation amounted ThCh$ 5,505,694 - ThUS$ 10,743. Inmobiliaria y Forestal Maitenes S.A. On December 6, 2004, the companies Forestal Mininco S.A. and Forestal Coihueco S.A. purchased the total shares of Inmobiliaria y Forestal Maitenes S.A. The equity ownership in such company is 88.9% and 11.1%, respectively. Bicecorp S.A. On August 3, 2004, CMPC underwrote and paid for 1,714,888 shares corresponding to a capital increase of Bicecorp S.A., whereby the percentage of equity ownership was maintained. The cost paid for such shares amounted to ThCh$ 5,144,664 - ThUS$ 9,230 historical value. On August 20, 2004, a number of 24,161 shares not underwritten by the preferred shareholders were underwrote and paid in the amount of ThCh$ 72,483 - ThUS$ 130 historical value, whereby the equity ownership was increased by %. This underwriting and payment of shares was recorded at the Fair Value of the investment, pursuant to the new regulations described in Note 2n).

98 096 Dividend Payment During 2005 and 2004 (at historic values) the following companies paid dividends ThCh$ ThUS$ ThCh$ ThUS$ CMPC Papeles S.A. 21,908,579 42,748 28,115,314 50,440 CMPC Tissue S.A. 7,400,000 14,439 4,200,000 7,535 CMPC Productos de Papel S.A. 5,648,346 11,021 11,400,000 20,452 Bicecorp S.A 632,829 1, , Inversiones El Raulí S.A. 170, , CMPC Celulosa S.A ,316, ,151 Inversiones CMPC S.A ,400,000 29,422 b Foreign subsidiaries Argentina Investment in the Company through subsidiaries in Argentine amount to ThCh$ 136,752,135 - ThUS$ 266,833 in accordance with its equity value at December 31, 2005, and to ThCh$ 144,704,643 - ThUS$ 250,585 at December 31, Sales by the aforementioned companies amount to ThCh$ 74,022,425 - ThUS$ 144,434 in 2005 and ThCh$ 69,071,911 - ThUS$ 119,612 in Uruguay Investment of the Company in Uruguay amount to ThCh$ 5,733,754 - ThUS$ 11,188 at December 31, 2005 and to ThCh$ 5,855,475 - ThUS$ 10,140 at December 31, Sales amount to ThCh$ 14,172,675 - ThUS$ 27,654 in 2005 and to ThCh$ 12,185,118 - ThUS$ 21,101 in Potential income from remittance It is not expected that the main Company will receive income from the productive foreign subsidiaries in the short-term. Potential income from remittance by foreign subsidiaries is as follows: ThCh$ ThUS$ Tissue Cayman Ltd. 10,058,863 19,627 Protisa S.A. - Perú 2,421,265 4,724 Papelera del Rimac S.A. - Perú 1,716,583 3,349 Forsac Perú S.A. 1,197,841 2,337 Industria Papelera Uruguaya S.A. 768,295 1,499 Propa Cayman Ltd. 658,567 1,285 CMPC Europe Ltd. 487, La Papelera del Plata S.A. 622,786 1,215

99 097 Notes to the Consolidated Financial Statements c) Liabilities held and accounted for as hedge instruments Inversiones CMPC S.A. has established hedge instruments for investments in foreign companies, These instruments include long-term liabilities in US dollars, represented by the Bond issued abroad in 1998 for US$ 250 million, as required under the United States Securities Act (Note 16) Rule 144a, and a portion of the long-term syndicate loans from BBVA S.A. for US$ 85 million, for US$ 475 million used as pre-payment for the syndicate loan form Dresdner Bank Luxembourg S.A. As agreed, on date term on June 2005, Inversiones CMPC payed the ThUS$ 250,000 bond is sued in The company uses own resources (ThUS$ 150,000) and ThUS$ 100,000 from a syndicate loan. According to this, since June 2005 the hedge established for investments in foreign companies amount ThUS$ 185,000. d) Equity value demonstration Bicecorp S.A. Book Value 31/12/2004 Adjustment Market Value ThCh$ ThUS$ ThCh$ ThUS$ ThCh$ ThUS$ Equity 241,696, ,614 4,420,864 (*) 7, ,117, ,546 Number of shares held 76,500,948-76,500,948-76,500,948 - Market value by share 3, ,217 6 Ownership in Shareholders Equity fair value ( %) 77, Investment at restated equity value at December 31, , Accrued result as of December 31, 2005: ThCh$ ThUS$ ThCh$ ThUS$ Profit as per balance sheet of issuer 26,956,063 (**) 52,597 Accrued result - - 8, Reserves over issuer 42,871,708 (***) 83,652 VP over reserves , Distributed dividends (7,353,271) (14,348) VP over distributed dividend - - (2,322) (4.5) Investment at equity value as of December 31, , (*) With regard to the adjustment to market value, it has been assigned to the investment Bicecorp S.A. holds in Banco Bice, which will be reversed accordingly, as required by such valuation. That value has been modified in accordance to profit recognitions and additional reserves presented by the company during the possession of those shares. (**) Profit corresponding to period ended - December (***) Changes in reserves corresponding to the period ended - December 2005.

100 098 Investments: Tax number Company Country Control Number of Holding Equity currency shares held % ThCh$ Bicecorp S.A. Chile Pesos 6,559, ,854, ,397, Inversiones El Raulí S.A. Chile Pesos 13,919, ,234,320 15,292, Sociedad Hidroeléctrica El Melocotón Ltda. Chile Pesos ,581, Controladora de Plagas Forestales S.A Chile Pesos 2, , , Bicecorp S.A. Chile Pesos 24, ,854, ,397,777 Total ThUS$ NOTE 13 - GOODWILL AND NEGATIVE GOODWILL Goodwill and negative goodwill are amortized in a period of 20 years considering the useful life of industrial plants and periods of growth and re-plantation involved in these industrial activities. The remaining months are: Negative goodwill CMPC Tissue S.A. 115 Forestal y Agrícola Monte Aguila S.A. 207 Forestal Coihueco S.A. 215 Chilena de Moldeados S.A. 209 Month Goodwill Month CMPC Celulosa S.A. 144 La Papelera del Plata S.A. 124 CMPC Tissue S.A. 144 Propa S.A. 144 Sociedad Anónima Agropecuaria 4M 179 Forestadora Caabi Pora S.A. 155 Baserri S.A. 155 Chilena de Moldeados S.A. 169 Envases Roble Alto S.A. 187

101 099 Notes to the Consolidated Financial Statements Equity of Companies at Income at Share of Book value of Net book value Net income fair value fair value income (loss) investments of investments ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ,956,063 25,392, ,311,350 2,177,274 26,825,734 21,470,382 26,825,734 21,470,382 2,603,783 1,131, ,009, ,778 12,498,049 5,929,226 12,498,049 5,929,226 - (2) (1) - 395, ,360 (14,671) (29,463) (4,256) (8,547) 64,075 68,331 64,075 68,331 26,956,063 25,392, ,456, ,977,792 26,956,063 25,392,399 8,513 3, ,253 80, ,253 80,522 39,488,111 27,943,821 39,488,111 27,943,821 77,050 48,390 77,050 48,390 a) Goodwill Balance at December 31, 2005 Balance at December 31, 2004 ThCh$ ThCh$ Amortized amount Amortized amount during the year Net amount during the year Net amount CMPC Celulosa S.A. 2,313,391 27,775,631 2,312,447 30,076,322 La Papelera del Plata S.A. 1,275,187 11,870,854 1,294,418 14,635,411 CMPC Tissue S.A. 404,059 4,851, ,895 5,253,165 Propa S.A. 265,145 3,183, ,036 3,447,136 Sociedad Anónima Agropecuaria 4m 117,942 1,533, ,999 1,860,492 Chilena de Moldeados S.A. 127,043 1,790, ,039 1,916,426 Envases Roble Alto S.A. 103,890 1,619, ,248 1,722,976 Forestadora Caabi Pora S.A. 85,296 1,272,311 96,126 1,529,701 Baserri S.A. 47, ,149 53, ,713 Total 4,739,189 54,506,973 4,785,302 61,182,342 ThUS$ 9, ,355 8, ,950 b) Negative goodwill Balance at December 31, 2005 Balance at December 31, 2004 ThCh$ ThCh$ Amortized amount Amortized amount during the year Net amount during the year Net amount Forestal y Agrícola Monte Aguila S.A. 786,411 13,567, ,312 14,348,026 Forestal Coihueco S.A. 297,818 5,411, ,527 5,706,636 CMPC Tissue S.A. 517,687 4,963, ,471 5,479,216 Chilena Moldeados S.A. 21, ,855 21, ,537 Bicecorp S.A ,677 - Total 1,623,772 24,323,985 2,056,497 25,936,415 ThUS$ 3,168 47,461 3,561 44,914

102 100 NOTE 14 - SHORT -TERM BANK LIABILITIES Liabilities to banks and financial institutions - short-term Denominated in ThCh$ Tax number Institution Dollars Other foreign currencies Non-indexed Chilean pesos Total Corto plazo (código ) K Banco Bice ,171, ,848 1,171, ,848 Foreign Banco Crédito de Perú - - 2,050, , ,050, ,402 Foreign JP Morgan Chase Bank 195, , , , Banco Credito Inversiones Banco Chile ,444,183-15,444, Banco Santander ,212-91,212 - Foreign Banco Frances - Argentina , ,112 - Foreign Banco ABN - Argentina , ,536 - Foreign Citibank N.A. - Uruguay , ,668 - Other , ,018 - Total 195, ,730 3,817, ,402 16,707, ,778 20,720,190 1,569,910 ThUS$ , ,600 1,524 40,430 2,719 Principal outstanding 116,184-3,612, ,402 16,663, ,778 20,391,281 1,404,180 ThUS$ 227-7, ,513 1,524 39,788 2,432 Average annual interest rate % 4.20% 5.436% Short term portion of long-term liabilities to banks Foreign BBVA 24,532,694 2,023, ,532,694 2,023,318 Foreign J.P. Morgan Chase Bank 153, ,857 - Foreign J.Aron & Co 90,066 1,255, ,066 1,255,811 Total 24,776,617 3,279, ,776,617 3,279,129 ThUS$ 48,345 5, ,345 5,678 Principal outstanding 21,352, ,352,031 - ThUS$ 41, ,662 - Average annual interest rate 2.35% Total in foreign currency (%) 63,2783 Total in local currency (%) 36,7217

103 101 Notes to the Consolidated Financial Statements NOTE 15 - LONG-TERM BANK LIABILITIES Liabilities are as follows: In June 2005, Inversiones CMPC S.A., through its agency in the Cayman Islands, obtained a syndicated loan amounting to US$ 100 million at a Libor rate plus a margin of 0.225%. Such margin increases to 0.25% from the second semester in 2007 and to 0.275% from the second semester in It is amortized in four payments starting in June 2010 until June 2012, and the JP Morgan Chase Bank acts as the Managing Agent. Resources from that credit were used to pay off the debt for the foreign bond issued totalizing US$ 250 million which expired on the same date and it was used a derivative financial instrument for hedging external investments. As per as it continue to classified as hedging instrument (Notes N 12 and 16). In September 2004, subsidiary company Inversiones CMPC S.A., through its Cayman Islands agency, obtained a syndicated loan amounting to US$ 475 million at a Libor rate plus a 0.225% margin. Such margin increases to 0.25% since the third year. It is amortized in payments starting in December 2006 until September Banco Bilbao Vizcaya Argentaria S.A. acts as Managing Agent. These loans involve compliance of certain financial indicators (covenants) for Empresas CMPC S.A., which are easily complied with at each year end, and which refer to maintaining a minimum equity, a maximum leverage and a minimum coverage of financial expenses. Interest rate Swaps In September 2004, Inversiones CMPC rescheduled the contracts entered into in December 2002, swing to the syndicated loan of US$ 125 million to adjust them to the schedule of payment of the first three amortization of the syndicated loan of US$ 475 million, amortization totaling US$ 125 million. Similarly, in September 2004 the derivatives contracts subscribed with a number of banks during August 2004 came into force, to cover the remaining US$ 350 million of the syndicated loan of US$ 475 million. The combination of swap contracts allow to fix the Libor rate, as well as establish ranges for which, Inversiones CMPC S.A. again has a scheme of variable rate for the said syndicated loan. Maturities At December 31, 2005 At December 31, 2004 ThCh$ ThCh$ ThCh$ Tax Over one over two Over three Over five Average annual number Institution Currency year, up to years, up to years, up to years, up to Total interest rate Total two years three years five years ten years long-term % long term Foreign Banco Bilbao Vizcaya Argentaria S.A. US$ 42,710,468 59,791, ,583, ,085, ,296,540 Foreign J.P. Morgan Chase Bank US$ ,500,000 30,750,000 51,250, Total 42,710,468 59,791, ,083,163 30,750, ,335, ,296,540 ThUS$ 83, , ,333 60, , ,000 Total in foreign currency (%) 100,00 Total in local currency (%) -

104 102 NOTE 16 - BONDS PAYABLE - SHORT-AND LONG-TERM Bonds payable: On June 15th, 2005 Inversiones CMPC S.A. issued a serie A Bonds registered under number 413 in the Chilean Superintendency of Securities and Insurance Companies for UF 7 million. This debt includes interest paying half-annually, with a 2.0% annual rate, semester basis. Capital will be paid off in March This bond was submitted to discount with an effective rate of 3.2% in UF. The Company will amortize this discount during the term of the Bond. This discount is presented below the item: Other Non-Current Assets. On June 11, 2003, Inversiones CMPC S.A., through its agency in the Cayman Islands, issued a bond abroad in the amount of US$ 300 million, in accordance with Rule 144a of the United States Securities Act. This obligation involves semiannually interest, at an annual 4.875% interest rate, being the total principal paid in June On June 5, 1998, Inversiones CMPC S.A., through its agency in the Cayman Islands, issued a bond abroad in the amount of US$ 250 million, in accordance with Rule 144a of the United States Securities Act. This obligation involves the payment of semiannual interest, at an annual 7.375% interest rate, being the total principal paid in June 2005, which is shown in the short tem. These obligations involve compliance with certain financial covenants for Empresas CMPC S.A., which are amply complied with at each year end (Notes 15 and 27). Interest rate Swaps: On June 15, 2005, Inversiones CMPC S.A. subscribed a Swap contract to re-denominate 50% of the Bond issued in UF to a liability for US$ 100 million at a Libor variable rate plus spread. Through this contract, the Company recovered 50% of the discount produced in the placement of the Bond. This gain will be amortized during the term of the contract, net of the effects of the original discount. Additionally, the Company subscribed an interest rate Swap contract to fix the Libor rate. Consequently the effective cost of the dollar portion (US$ 100 million) is 5.2%. The Cross Currency Swap effects are shown in Long- term debtors (Note 5). All Swap contracts accrued interest since March 1, Payments dates Par value Series Nominal Restatement Interest Expiration Interest Principal Bond value index rate date ThCh$ ThCh$ placement Long-term bonds - short-term portion Bond N 413 A 7,000,000 UF 3.22% 01/03/2015 Bi-annual At the maturity 1,124,876 - Chile Bond Rule 144 A single 250,000,000 US$ 7.375% 15/06/2005 Bi-annual At the maturity - 144,793,865 Abroad Bond Rule 144 A single 300,000,000 US$ 4.875% 18/06/2013 Bi-annual At the maturity 249, ,515 Abroad Total short-term 1,374, ,075,380 ThUS$ 2, ,227 Long-term bonds Bond Rule 144 A single 300,000,000 US$ 4.875% 18/06/2013 Bi-annual At the maturity 153,750, ,239,920 Abroad Bond N 413 A 7,000,000 UF 3.22% 01/03/2015 Bi-annual At the maturity 125,823,670 - Chile Total long-term 279,573, ,239,920 ThUS$ 545, ,000

105 103 Notes to the Consolidated Financial Statements NOTE 17 - PROVISIONS AND WRITE-OFFS The provisions shown under Current liabilities are as follows: ThCh$ Short-term provisions Vacation provisions 6,892,641 6,736,005 Staff bonuses and other benefits 3,281,411 4,519,634 Provision for investments projects 649,980 2,073,935 Staff severance indemnity short term 2,594,100 1,649,981 Provision for directories remuneration 875, ,385 Provision for labor suits 109, ,312 Other provisions 903,386 1,210,609 Total 15,306,551 16,880,861 ThUS$ 29,866 29,233 Long-term provisions Staff severance indemnity 28,134,993 28,427,895 Other provisions 363, ,795 Total 28,498,296 29,178,690 ThUS$ 55,606 50,529 There were no significant write-offs in 2005 and NOTE 18 - STAFF SEVERANCE INDEMNITIES Movement in and the balance of this provision, calculated as described in Note 2 s), are as follows: ThCh$ Balance from prior year (historic) 29,032,699 28,916,039 Increase for the year 4,031,625 4,190,987 Payments made during the year (2,335,231) (3,029,150) Balance at December 31, ,729,093 30,077,876 ThUS$ 59,959 52,086 Presentation in Balance sheet Short-term provisions 2,594,100 1,649,981 Long-term provisions 28,134,993 28,427,895 Total 30,729,093 30,077,876 ThUS$ 59,959 52,086

106 104 NOTE 19 - MINORITY INTEREST a) The portion of minority interest in equity of subsidiaries owned by third parties is as follows: Subsidiary ThCh$ Industrias Forestales S.A. 63,867,584 64,722,920 Forestal y Agrícola Monte Aguila S.A. 95,637 80,302 Ipusa - Uruguay 22,449 22,926 La Papelera del Plata S.A. 8,241 8,614 Others - 13 Total 63,993,911 64,834,775 ThUS$ 124, ,274 b) Minority interest in the portion of income of subsidiaries owned by third parties is as follows: Subsidiary ThCh$ Industrias Forestales S.A. (2,994,367) (3,026,529) Forestal y Agrícola Monte Aguila S.A. 4,092 (7,018) IPUSA - Uruguay (6,214) (4,250) La Papelera del Plata S.A Total (2,996,489) (3,037,368) ThUS$ (5,847) (5,260) NOTE 20 - SHAREHOLDERS EQUITY Capital Paid-in capital of the Parent Company amounts to ThCh$ 102,521,936 - ThUS$ 200,043, which is divided into 200,000,000 shares. Dividends There is no restriction on distributing retained earnings as dividends. The Board of Directors, in its session dated October 27, 2005, agreed to distribute interim dividend N 235 of Ch$ 90, recording a charge to net income for the year ended December 31, Such dividend was paid starting on December 15, The Board of Directors, in its session dated August 4, 2005, agreed to distribute interim dividend N 234 of Ch$ 90, recording a charge to net income for the year ended December 31, Such dividend was paid starting on September 7, The Shareholders annual meeting held on April 29, 2005 agreed to distribute final dividend N 233 of Ch$ 127 per share, recording a charge to net income for the year ended December 31, Such dividend was paid starting on May 9, 2005 and the balance of the undistributed earnings was transferred to the reserve of retained earnings. Further, such meeting agreed the dividend policy for 2005, consisting of the distribution of two interim dividends, payable in September, December 2005 or January 2006, as well as a final dividend, to be agreed by the next Meeting, payable in May 2006, until completing 40% of the net income for The Board of Directors, in its session held on December 9, 2004 agreed to distribute interim dividend N 232 of Ch$ 120 per share, recording a charge to net income for year 2004, which was paid on January 6, The Board of Directors, in its session held on August 5, 2004 agreed to distribute interim dividend N 231 of Ch$ 90 per share, recording a charge to net income for year 2004, which was paid on September 2, The Shareholders annual meeting held on April 30, 2004 agreed to distribute final dividend N 230 of Ch$ 90 per share, recording a charge to net income for the year ended December 31, Such dividend was paid starting on May 12, 2004 and the balance of the undistributed earnings was transferred to the reserve of retained earnings.

107 105 Notes to the Consolidated Financial Statements Other reserves: The following is a breakdown of this balance: ThCh$ Forestry appraisals and other adjustments to net worth recorded by subsidiaries 764,985, ,670,511 Increased value on appraisal of fixed assets 16,541,620 16,541,620 Reserve for future capital increases 20,980,500 20,980,500 Total 802,507, ,192,631 ThUS$ 1,565,868 1,413,403 The reserve for future capital increases originates from prior-year revaluation and reappraisal of fixed assets, which can only be capitalized in conformity with the Superintendency of Securities and Insurance. The balance of the related-company negative goodwill arises from the book value adjustment of investments as follows: ThCh$ Forestal Mininco S.A. 549,861, ,041,482 Industrias Forestales S.A. 137,480, ,596,724 Forestal y Agrícola Monte Aguila S.A. 7,991,390 8,232,605 Forestal Bosques del Plata S.A. 4,600,403 1,555,311 La Papelera del Plata S.A. 9,988,387 5,225,658 Forestal Coihueco S.A. 3,249, ,079 Other investments 51,813,075 52,458,652 Total 764,985, ,670,511 ThUS$ 1,492,654 1,348,426 Significant changes in the Negative goodwill reserve correspond to the revaluation of forest plantations which reflect natural growth of forests amounting to ThCh$ 56,382,265 - ThUS$ 110,014 in 2005 (ThCh$ 91,807,672 - ThUS$ 158,984 in 2004); reduced in the value of the forest reserve corresponding to the exploited portion amounting to ThCh$ 70,067,463 - ThUS$ 136,717 in 2005 (ThCh$ 58,943,942 - ThUS$ 102,073 in 2004). Details of foreign exchange: Movements in foreign exchange adjustments shown in Other reserves, item Related-company negative goodwill, is as follows: ThCh$ Balance at the prior year 1,604,317 1,604,317 Movement during the year (13,647,546) - Balance at December 31, 2005 (12,043,229) 1,604,317 ThUS$ (23,499) 2,778 The movement during the year is as follows: Increase from CPI and dollar variations applied to foreign investments (LPP and others in Argentina, IPUSA in Uruguay and Protisa in Perú) (21,557,719) (18,130,467) Less: Effect of adjustment between CPI and dollar variations in the liabilities associated to these investments as hedges 7,910,173 18,130,467 Total (13,647,546) - ThUS$ (26,629) -

108 106 Shareholders distribution at December 31, 2005 is as follows: Type of shareholder Total participation Number of % shareholder Holding of 10% or more 38,85 2 Holding of less than 10%, with an investment of UF 200 or more 60,99 3,529 Holding of less than 10% with an investment of under UF 200 0,16 4,452 Total 100,00 7,983 Controlling interest 55,44 23 Changes in shareholders equity: 2005 ThCh$ Paid-up capital Other reserves Reserve for Accumulated Dividends future dividends profits Balances at January 1, ,959, ,830,726 14,830,466 1,171,176,009 (42,180,000) Distribution of previous year income ,940,145 42,180,000 Final dividend payment (25,400,000) - Adjustments to net worth recorded by subsidiaries - (12,225,644) Restatement of invested capital 3,562,538 26,902, ,897 45,730,982 (306,000) Net income for the year Interim dividends (36,000,000) Balances at December 31, ,521, ,507,433 15,364,363 1,317,447,136 (36,306,000) Balances at December 31, 2005 restated for comparison ThUS$ 200,043 1,565,868 29,979 2,570,629 (70,841)

109 107 Notes to the Consolidated Financial Statements Number of shares: Series Number of subscribed shares Number of paid in shares Number of shares with voting rights Single 200,000, ,000, ,000,000 Equity: Series ThCh$ Subscribed capital Paid-in capital Single 102,521, ,521,936 ThUS$ 200, ,043 Net income Paid-up capital Other reserves Reserve for Accumulated Dividends Net income for the year future dividends profits for the year 168,120,145 96,545, ,273,646 14,468,747 1,068,008,455 (31,984,000) 124,603,846 (168,120,145) ,619,846 31,984,000 (124,603,846) 2004 ThCh$ (18,000,000) ,264, ,413,644 17,292, ,719 28,547,708 (180,000) - 122,986, ,120, (42,000,000) - 122,986,907 98,959, ,830,726 14,830,466 1,171,176,009 (42,180,000) 168,120, ,521, ,192,631 15,364,363 1,213,338,345 (43,698,480) 174,172, , ,537 1,413,403 26,607 2,101,141 (75,673) 301,615

110 108 NOTE 21 - OTHER NON-OPERATING INCOME AND EXPENSES The balance of Other non-operating income is as follows: ThCh$ Income on sale of forest property and other fixed assets (net income) 13,441,835 9,121,605 Forestry Insurance claims 2,240, ,972 Fixed asset rental 1,245,947 2,123,998 Others 929,191 1,366,537 Total 17,857,490 12,914,112 ThUS$ 34,844 22,364 Other non-operating expenses This balance includes the following: ThCh$ Commissions, taxes and others expenses 2,538,978 1,892,850 Write-offs, provision and net result on sale of other assets 1,127,126 2,954,436 Project expenses 532,284 - Provision for labor lawsuits 21, ,722 Other 1,672, ,854 Total 5,891,640 6,150,862 ThUS$ 11,496 10,650

111 109 Notes to the Consolidated Financial Statements NOTE 22 - PRICE-LEVEL RESTATEMENT Restatement index ThCh$ Assets (charges) credits Inventories CPI 5,880,096 4,897,170 Fixed assets CPI 78,802,774 54,429,412 Investments in related companies CPI 1,153, ,678 Foreign exchange cash and banks CPI/US$ (80,877) 30,023 Time deposits and marketable securities Indexed unit - 258,624 Goodwill CPI 1,827,238 1,390,226 Negative goodwill CPI (877,307) (678,626) Accounts receivable with third parties CPI/ Indexed unit 320, ,315 Time deposits and marketable securities CPI/US$ 10,550,303 6,529,137 Other non-monetary assets CPI (27,052) 665,232 Cost and expense accounts CPI 25,022,977 18,664,745 Total credits 122,572,037 87,524,936 Liabilities (charges) / credits Equity CPI (76,423,768) (50,179,037) Minority interest CPI (2,111,983) (1,514,096) Liabilities to banks CPI/US$ (11,847,813) (4,459,596) Bonds CPI/US$ (8,665,786) (8,460,832) Current and long-term liabilities CPI (242,468) (54,168) Accounts payable to third parties CPI 475,695 (3,031,230) Other non-monetary liabilities CPI/ Indexed unit 590,406 (368,493) Income accounts CPI (30,226,445) (21,920,280) Total (charges) (128,452,162) (89,987,732) Balance of the price-level restatement account (5,880,125) (2,462,796) ThUS$ (11,473) (4,265)

112 110 NOTE 23 - FOREIGN EXCHANGE GAINS (LOSSES) The foreign exchange gains (losses) adjustment is detailed as follows: Currency ThCh$ Assets (charges) credits Cash and banks US$ (969,715) (624,288) Time deposits and marketable securities US$ (13,185,167) (21,946,550) Time deposits and marketable securities EURO (8,496,321) 1,463,273 Fixed assets US$ (11,144,726) (1,469,124) Inventories US$ (5,837,633) (3,243,453) Accounts receivable with third parties US$ (10,564,795) (11,815,081) Other non-monetary assets EURO (10,458,425) (1,097,906) Other non-monetary assets Other currencies 85,610 - Total (charges) (60,571,172) (38,733,129) Liabilities (charges) credits Short and long term liabilities US$ 326, ,183 Accounts payable with third parties US$ 735,582 1,408,292 Due to banks and financial institutions - short term US$ 34,083,240 25,728,669 Bonds US$ 19,312,780 15,938,672 Other non monetary liabilities US$ 9,446, ,246 Translation adjustment on Asset / Liabilities of subsidiaries abroad US$ (431,290) (746,373) Total credits 63,473,099 42,891,689 Total net loss on foreign exchange 2,901,927 4,158,560 ThUS$ 5,662 7,201

113 111 Notes to the Consolidated Financial Statements NOTE 24 - BOND ISSUED COSTS, On June 15, 2005 Inversiones CMPC S.A. issued a Bond in Chile. The amount of the issuance was UF 7,000,000. In this financial operation, the company incurred expenses, as follows: Stamp Tax 1,965,644 Inscription and issuance expenses 117,464 Legal advisories 21,256 Total 2,104,364 ThUS$ 4,106 Additionally, the placement of the Bond has generated a discount amounting to ThCh$ 5,113,526, - ThUS$ 9,978 which will be deferred in the same term of the Bond (10 years) and is shown in Other Non Current assets, net of the deferred gain which was generated by the Swap contract, subscribed to hedge this operation, amounting to ThCh$ 2,553,915 - ThUS 4,983 at December 31, ThCh$ NOTE 25 - STATEMENT OF CASH FLOWS As part of the strategic investment plan, the Company has approved and started projects amounting to more than 1,289 million dollars which will generate negative cash flows on investment, regarding the payments of the outstanding investments. These flows amount to 449 million dollars and are described as follows: Million US$ Line 2 Project - Santa Fe Plant Plywood board plant 54.3 Biomass Boiler - Pacifico plant 30.4 Capacity expansion MP-20- Cordillera 18.8 Expansion of Remanufacturing plant 12.3 Buin plant capacity expansion 11.4 Mulchén new Boiler 10.1 Profal IV Project- Phase I 7.0 Changes in Paper Machine 2- Protisa Argentina 6.5 Secondary treatment plant - Maule, Valdivia, Maule, Nacimiento, Talagante and Puente Alto plants 4.0 Paper Machine N 2 Tissue, Talagante 3.8 Modernization of pulp circuits and water circuits closures - Puente Alto 2.4 Drying Project, Nacimiento Sawmill 2.2 SAP project- CMPC Celulosa 1.4 Other minor projects 18.2

114 112 NOTE 26 - DERIVATIVE CONTRACTS Position Protected item or transaction Type of Type of Contract amount Maturity Risk purchase Name Amount derivative contract hedged ThCh$ ThUS$ sale ThCh$ ThUS$ FR CCPE 7,756,615 15,135 1st 2006 US$/$ C Financial Investment 7,756,615 15,135 FR CCPE 7,728,382 15,080 1st 2006 US$/$ C Financial Investment 7,728,382 15,080 FR CCPE 5,153,489 10,056 1st 2006 US$/$ C Financial Investment 5,153,489 10,056 FR CCPE 10,240,372 19,981 1st 2006 US$/$ C Financial Investment 10,240,372 19,981 FR CCPE 3,566,500 6,959 1st 2006 US$/$ C Financial Investment 3,566,500 6,959 FR CCPE 4,128,000 8,055 1st 2006 US$/$ C Financial Investment 4,128,000 8,055 FR CCPE 2,596,500 5,066 1st 2006 US$/$ C Financial Investment 2,596,500 5,066 FR CCPE 12,348,000 24,094 1st 2006 US$/$ C Financial Investment 12,348,000 24,094 FR CCPE 451, st 2006 Br.Reales/US$ C Sales to Brazil 451, FR CCPE 453, st 2006 Br.Reales/US$ C Sales to Brazil 453, FR CI 11,079,848 21,619 2nd 2006 EURO/US$ C Fixed assets project 11,079,848 21,619 FR CI 1,263,136 2,465 2nd 2006 EURO/US$ C Fixed assets project 1,263,136 2,465 FR CCPE 6,606,963 12,892 1st 2006 EURO/US$ C Fixed assets project 6,606,963 12,892 FR CCPE 3,097,336 6,044 1st 2006 EURO/US$ C Fixed assets project 3,097,336 6,044 FR CCPE 5,168,000 10,084 1st 2006 US$/$ C Fixed assets project 5,168,000 10,084 FR CCPE 5,169,500 10,087 1st 2006 US$/$ C Fixed assets project 5,169,500 10,087 FR CCPE 5,168,500 10,085 1st 2006 US$/$ C Fixed assets project 5,168,500 10,085 FR CCPE 5,169,000 10,086 1st 2006 US$/$ C Fixed assets project 5,169,000 10,086 FR CCPE 5,169,000 10,086 1st 2006 US$/$ C Fixed assets project 5,169,000 10,086 FR CCPE 5,168,000 10,084 1st 2006 US$/$ C Fixed assets project 5,168,000 10,084 FR CCPE 494, st 2006 Pound/US$ C Sales to Europe 494, FR CCPE 434, st 2006 US$/Br. Reales V Sales to Brazil 434, FR CI 496, st 2006 EURO/US$ C Fixed assets project 496, FR CCTE 1,401,489 2,735 4th 2006 US$/Pound V Sales to Europe 1,401,489 2,735 FR CCTE 1,293,683 2,524 1st 2006 US$/Pound V Sales to Europe 1,293,683 2,524 FR CCTE 1,293,683 2,524 2nd 2006 US$/Pound V Sales to Europe 1,293,683 2,524 FR CCTE 1,401,489 2,735 3rd 2006 US$/Pound V Sales to Europe 1,401,489 2,735 FR CCTE 148, rd 2006 US$/EURO V Sales to Europe 148, FR CCTE 446, th 2006 US$/EURO V Sales to Europe 446, FR CCTE 146, rd 2006 US$/EURO V Sales to Europe 146, FR CCTE 439, th 2006 US$/EURO V Sales to Europe 439, FR CCTE 144, rd 2006 US$/EURO V Sales to Europe 144, FR CCTE 432, th 2006 US$/EURO V Sales to Europe 432, S CCPE 24,812,800 48,415 3rd 2009 Libor C Syndicate Loan ThUS $475,000 24,812,800 48,415 S CCPE 24,812,800 48,415 3rd 2009 Libor C Syndicate Loan ThUS $475,000 24,812,800 48,415 S CCPE 27,914,400 54,467 3rd 2009 Libor C Syndicate Loan ThUS $475,000 27,914,400 54,467 S CCPE 23,262,000 45,389 3rd 2009 Libor C Syndicate Loan ThUS $475,000 23,262,000 45,389 S CCPE 31,016,000 60,519 3rd 2009 Libor C Syndicate Loan ThUS $475,000 31,016,000 60,519 S CCPE 31,016,000 60,519 3rd 2009 Libor C Syndicate Loan ThUS $475,000 31,016,000 60,519

115 113 Notes to the Consolidated Financial Statements Amount off Account item related Effect in income protected item Name Amount Realized Not realized ThCh$ ThUS$ ThCh$ ThUS$ ThCh$ ThUS$ ThCh$ ThUS$ 7,703,004 15,030 Other current assets 53, (53,611) (105) - - 7,698,149 15,021 Other current assets 30, (30,232) (59) - - 5,132,582 10,015 Other current assets 20, (20,907) (41) ,269,241 20,038 Other current assets 28, , ,580,481 6,986 Time Deposit 20, , ,140,811 8,080 Time Deposit 28, (28,670) (56) - - 2,601,901 5,077 Time Deposit 34, (34,135) (67) ,356,232 24,110 Time Deposit 47, (47,762) (93) , Other current liabilities 7, , , Other current liabilities 4, , ,213,923 19,930 Other current liabilities 344, (344,494) (672) - - 1,164,588 2,272 Other current liabilities 39, (39,104) (76) - - 6,081,397 11,866 Other current liabilities 143, (143,223) (279) - - 3,039,242 5,930 Other current liabilities 32, , ,132,441 10,015 Other current liabilities 35, (35,559) (69) - - 5,132,459 10,015 Other current liabilities 37, (37,041) (72) - - 5,132,447 10,015 Other current liabilities 36, (36,053) (70) - - 5,132,453 10,015 Other current liabilities 36, (36,547) (71) - - 5,132,453 10,015 Other current liabilities 36, (36,547) (71) - - 5,132,441 10,015 Other current liabilities 35, (35,559) (69) , Other current liabilities 5, (5,787) (11) - 432, Other current liabilities 3,758 7 (3,758) (7) , Other current liabilities 12, (12,072) (24) - - 1,242,756 2,425 Other current liabilities 86, , ,147,160 2,238 Other current liabilities 86, , ,147,160 2,238 Other current liabilities 84, , ,242,756 2,425 Other current liabilities 89, , , Other current liabilities 12, , , Other current liabilities 35, , , Other current liabilities 11, , , Other current liabilities 33, , , Other current liabilities 13, , , Other current liabilities 37, , ,500,000 40,000 Due to banks and financial institutions 9, (9,531) (19) ,500,000 40,000 Due to banks and financial institutions 8, (8,888) (17) ,062,500 45,000 Due to banks and financial institutions 12, (12,894) (25) ,218,750 37,500 Due to banks and financial institutions 29, , ,625,000 50,000 Due to banks and financial institutions 36, , ,625,000 50,000 Due to banks and 40, ,

116 114 NOTE 26 - DERIVATIVE CONTRACTS Position Protected item or transaction Type of Type of Contract amount Maturity Risk purchase Name Amount derivative contract hedged ThCh$ ThUS$ sale ThCh$ ThUS$ S CCPE 31,016,000 60,519 3rd 2009 Libor C Syndicate Loan ThUS $475,000 31,016,000 60,519 S CCPE 31,016,000 60,519 3rd 2009 Libor C Syndicate Loan ThUS $475,000 31,016,000 60,519 S CCPE 23,262,000 45,389 3rd 2009 Libor C Syndicate Loan ThUS $475,000 23,262,000 45,389 S CCPE 46,524,000 90,779 3rd 2009 Libor C Syndicate Loan ThUS $475,000 46,524,000 90,779 S CCPE 28,677,500 55,956 1st 2015 Interest rate C National Market Bond 28,677,500 55,956 S CCPE 28,677,500 55,956 1st 2015 Interest rate C National Market Bond 28,677,500 55,956 S CCPE 57,355, ,912 1st 2015 Currency C National Market Bond 57,355, ,912 S CCPE 60,651, ,345 1st 2015 Currency C National Market Bond 60,651, ,345 FR CCTE 966,465 1,886 4th 2007 US$/EURO V Sales to Europe 966,465 1,886 FR CCTE 1,449,697 2,829 1st 2008 US$/EURO V Sales to Europe 1,449,697 2,829 FR CCTE 1,449,697 2,829 2nd 2008 US$/EURO V Sales to Europe 1,449,697 2,829 FR CCTE 1,610,775 3,143 3rd 2008 US$/EURO V Sales to Europe 1,610,775 3,143 FR CCTE 1,691,313 3,300 4th 2008 US$/EURO V Sales to Europe 1,691,313 3,300 FR CCTE 1,771,852 3,457 1st 2009 US$/EURO V Sales to Europe 1,771,852 3,457 FR CCTE 1,771,852 3,457 2nd 2009 US$/EURO V Sales to Europe 1,771,852 3,457 FR CCTE 1,852,391 3,614 3rd 2009 US$/EURO V Sales to Europe 1,852,391 3,614 FR CCTE 1,932,929 3,772 4th 2009 US$/EURO V Sales to Europe 1,932,929 3,772 FR CCTE 1,932,929 3,772 1st 2010 US$/EURO V Sales to Europe 1,932,929 3,772 FR CCTE 2,013,468 3,929 2nd 2010 US$/EURO V Sales to Europe 2,013,468 3,929 FR CCTE 2,094,007 4,086 3rd 2010 US$/EURO V Sales to Europe 2,094,007 4,086 FR CCTE 2,174,546 4,243 4th 2010 US$/EURO V Sales to Europe 2,174,546 4,243 FR CCTE 2,094,007 4,086 1st 2011 US$/EURO V Sales to Europe 2,094,007 4,086 FR CCTE 2,094,007 4,086 2nd 2011 US$/EURO V Sales to Europe 2,094,007 4,086 FR CCTE 1,852,390 3,614 3rd 2011 US$/EURO V Sales to Europe 1,852,390 3,614 FR CCTE 1,932,929 3,772 4th 2011 US$/EURO V Sales to Europe 1,932,929 3,772 FR CCTE 2,094,007 4,086 1st 2012 US$/EURO V Sales to Europe 2,094,007 4,086 FR CCTE 2,094,007 4,086 2nd 2012 US$/EURO V Sales to Europe 2,094,007 4,086 FR CCTE 1,401,489 2,735 1st 2007 US$/Pound V Sales to Europe 1,401,489 2,735 FR CCTE 1,617,103 3,155 2nd 2007 US$/Pound V Sales to Europe 1,617,103 3,155 FR CCTE 1,617,103 3,155 3rd 2007 US$/Pound V Sales to Europe 1,617,103 3,155 FR CCTE 1,940,524 3,786 4th 2007 US$/Pound V Sales to Europe 1,940,524 3,786 FR CCTE 1,940,524 3,786 1st 2008 US$/Pound V Sales to Europe 1,940,524 3,786 FR CCTE 1,940,524 3,786 2nd 2008 US$/Pound V Sales to Europe 1,940,524 3,786 FR CCTE 1,940,524 3,786 3rd 2008 US$/Pound V Sales to Europe 1,940,524 3,786 FR CCTE 2,156,138 4,207 4th 2008 US$/Pound V Sales to Europe 2,156,138 4,207 FR CCTE 2,156,138 4,207 1st 2009 US$/Pound V Sales to Europe 2,156,138 4,207 FR CCTE 2,156,138 4,207 2nd 2009 US$/Pound V Sales to Europe 2,156,138 4,207 FR CCTE 2,156,138 4,207 3rd 2009 US$/Pound V Sales to Europe 2,156,138 4,207 FR CCTE 2,263,944 4,417 4th 2009 US$/Pound V Sales to Europe 2,263,944 4,417

117 115 Notes to the Consolidated Financial Statements Amount off Account item related Effect in income protected item Name Amount Realized Not realized ThCh$ ThUS$ ThCh$ ThUS$ ThCh$ ThUS$ ThCh$ ThUS$ 25,625,000 50,000 Due to banks and financial institutions 41, , ,625,000 50,000 Due to banks and financial institutions 34, , ,218,750 37,500 Due to banks and financial institutions 34, , ,437,500 75,000 Due to banks and financial institutions 61, , ,625,000 50,000 Bonds 54, (54,848) (107) ,625,000 50,000 Bonds 42, (42,289) (83) ,250, ,000 Bonds 805,878 1,572 (805,878) (1,572) ,289, ,491 Bonds 565,811 1, ,811 1, ,003 1,672 Other long-term liabilities 92, , ,285,504 2,508 Other long-term liabilities 133, , ,285,504 2,508 Other long-term liabilities 127, , ,428,338 2,787 Other long-term liabilities 136, , ,499,754 2,926 Other long-term liabilities 136, , ,571,171 3,066 Other long-term liabilities 136, , ,571,171 3,066 Other long-term liabilities 130, , ,642,588 3,205 Other long-term liabilities 129, , ,714,005 3,344 Other long-term liabilities 128, , ,714,005 3,344 Other long-term liabilities 122, , ,785,422 3,484 Other long-term liabilities 120, , ,856,839 3,623 Other long-term liabilities 118, , ,928,256 3,762 Other long-term liabilities 116, , ,856,839 3,623 Other long-term liabilities 107, , ,856,839 3,623 Other long-term liabilities 102, , ,642,588 3,205 Other long-term liabilities 86, , ,714,005 3,344 Other long-term liabilities 85, , ,856,839 3,623 Other long-term liabilities 87, , ,856,839 3,623 Other long-term liabilities 81, , ,242,756 2,425 Other long-term liabilities 85, , ,433,949 2,798 Other long-term liabilities 96, , ,433,949 2,798 Other long-term liabilities 93, , ,720,739 3,358 Other long-term liabilities 110, , ,720,739 3,358 Other long-term liabilities 108, , ,720,739 3,358 Other long-term liabilities 105, , ,720,739 3,358 Other long-term liabilities 103, , ,911,933 3,731 Other long-term liabilities 113, , ,911,933 3,731 Other long-term liabilities 111, , ,911,933 3,731 Other long-term liabilities 109, , ,911,933 3,731 Other long-term liabilities 108, , ,007,529 3,917 Other long-term liabilities 112, ,

118 116 NOTE 26 - DERIVATIVE CONTRACTS Position Protected item or transaction Type of Type of Contract amount Maturity Risk purchase Name Amount derivative contract hedged ThCh$ ThUS$ sale ThCh$ ThUS$ FR CCTE 892,834 1,742 1st 2007 US$/EURO V Sales to Europe 892,834 1,742 FR CCTE 892,834 1,742 2nd 2007 US$/EURO V Sales to Europe 892,834 1,742 FR CCTE 1,041,640 2,032 3rd 2007 US$/EURO V Sales to Europe 1,041,640 2,032 FR CCTE 1,116,043 2,178 4th 2007 US$/EURO V Sales to Europe 1,116,043 2,178 FR CCTE 1,041,640 2,032 1st 2008 US$/EURO V Sales to Europe 1,041,640 2,032 FR CCTE 1,190,446 2,323 2nd 2008 US$/EURO V Sales to Europe 1,190,446 2,323 FR CCTE 1,116,043 2,178 3rd 2008 US$/EURO V Sales to Europe 1,116,043 2,178 FR CCTE 1,116,043 2,178 4th 2008 US$/EURO V Sales to Europe 1,116,043 2,178 FR CCTE 1,116,043 2,178 1st 2009 US$/EURO V Sales to Europe 1,116,043 2,178 FR CCTE 1,116,043 2,178 2nd 2009 US$/EURO V Sales to Europe 1,116,043 2,178 FR CCTE 1,041,640 2,032 3rd 2009 US$/EURO V Sales to Europe 1,041,640 2,032 FR CCTE 1,041,640 2,032 4th 2009 US$/EURO V Sales to Europe 1,041,640 2,032 FR CCTE 1,041,640 2,032 1st 2010 US$/EURO V Sales to Europe 1,041,640 2,032 FR CCTE 1,041,640 2,032 2nd 2010 US$/EURO V Sales to Europe 1,041,640 2,032 FR CCTE 967,237 1,887 3rd 2010 US$/EURO V Sales to Europe 967,237 1,887 FR CCTE 967,237 1,887 4th 2010 US$/EURO V Sales to Europe 967,237 1,887 FR CCTE 967,237 1,887 1st 2011 US$/EURO V Sales to Europe 967,237 1,887 FR CCTE 967,237 1,887 2nd 2011 US$/EURO V Sales to Europe 967,237 1,887 FR CCTE 1,041,640 2,032 3rd 2011 US$/EURO V Sales to Europe 1,041,640 2,032 FR CCTE 1,041,640 2,032 4th 2011 US$/EURO V Sales to Europe 1,041,640 2,032 FR CCTE 967,237 1,887 1st 2012 US$/EURO V Sales to Europe 967,237 1,887 FR CCTE 967,237 1,887 2nd 2012 US$/EURO V Sales to Europe 967,237 1,887 FR CCTE 1,636,863 3,194 3rd 2012 US$/EURO V Sales to Europe 1,636,863 3,194 FR CCTE 1,636,863 3,194 4th 2012 US$/EURO V Sales to Europe 1,636,863 3,194 FR CCTE 878,849 1,715 1st 2007 US$/EURO V Sales to Europe 878,849 1,715 FR CCTE 878,849 1,715 2nd 2007 US$/EURO V Sales to Europe 878,849 1,715 FR CCTE 1,025,324 2,001 3rd 2007 US$/EURO V Sales to Europe 1,025,324 2,001 FR CCTE 1,098,561 2,144 4th 2007 US$/EURO V Sales to Europe 1,098,561 2,144 FR CCTE 1,025,324 2,001 1st 2008 US$/EURO V Sales to Europe 1,025,324 2,001 FR CCTE 1,171,798 2,286 2nd 2008 US$/EURO V Sales to Europe 1,171,798 2,286 FR CCTE 1,098,561 2,144 3rd 2008 US$/EURO V Sales to Europe 1,098,561 2,144 FR CCTE 1,098,561 2,144 4th 2008 US$/EURO V Sales to Europe 1,098,561 2,144 FR CCTE 1,098,561 2,144 1st 2009 US$/EURO V Sales to Europe 1,098,561 2,144 FR CCTE 1,098,561 2,144 2nd 2009 US$/EURO V Sales to Europe 1,098,561 2,144 FR CCTE 1,025,324 2,001 3rd 2009 US$/EURO V Sales to Europe 1,025,324 2,001 FR CCTE 1,025,324 2,001 4th 2009 US$/EURO V Sales to Europe 1,025,324 2,001 FR CCTE 1,025,324 2,001 1st 2010 US$/EURO V Sales to Europe 1,025,324 2,001 FR CCTE 1,025,324 2,001 2nd 2010 US$/EURO V Sales to Europe 1,025,324 2,001 FR CCTE 952,086 1,858 3rd 2010 US$/EURO V Sales to Europe 952,086 1,858

119 117 Notes to the Consolidated Financial Statements Amount off Account item related Effect in income protected item Name Amount Realized Not realized ThCh$ ThUS$ ThCh$ ThUS$ ThCh$ ThUS$ ThCh$ ThUS$ 817,950 1,596 Other long-term liabilities 68, , ,950 1,596 Other long-term liabilities 64, , ,275 1,862 Other long-term liabilities 70, , ,022,438 1,995 Other long-term liabilities 71, , ,275 1,862 Other long-term liabilities 62, , ,090,600 2,128 Other long-term liabilities 67, , ,022,438 1,995 Other long-term liabilities 59, , ,022,438 1,995 Other long-term liabilities 55, , ,022,438 1,995 Other long-term liabilities 51, , ,022,438 1,995 Other long-term liabilities 47, , ,275 1,862 Other long-term liabilities 40, , ,275 1,862 Other long-term liabilities 37, , ,275 1,862 Other long-term liabilities 34, , ,275 1,862 Other long-term liabilities 30, , ,113 1,729 Other long-term liabilities 25, , ,113 1,729 Other long-term liabilities 22, , ,113 1,729 Other long-term liabilities 20, , ,113 1,729 Other long-term liabilities 18, , ,275 1,862 Other long-term liabilities 17, , ,275 1,862 Other long-term liabilities 15, , ,113 1,729 Other long-term liabilities 12, , ,113 1,729 Other long-term liabilities 9, , ,499,575 2,926 Other long-term liabilities 12, , ,499,575 2,926 Other long-term liabilities 9, , ,338 1,587 Other long-term liabilities 63, , ,338 1,587 Other long-term liabilities 60, , ,894 1,852 Other long-term liabilities 65, , ,016,672 1,984 Other long-term liabilities 66, , ,894 1,852 Other long-term liabilities 57, , ,084,450 2,116 Other long-term liabilities 62, , ,016,672 1,984 Other long-term liabilities 54, , ,016,672 1,984 Other long-term liabilities 50, , ,016,672 1,984 Other long-term liabilities 46, , ,016,672 1,984 Other long-term liabilities 42, , ,894 1,852 Other long-term liabilities 36, , ,894 1,852 Other long-term liabilities 33, , ,894 1,852 Other long-term liabilities 29, , ,894 1,852 Other long-term liabilities 26, , ,116 1,719 Other long-term liabilities 21, ,705 42

120 118 NOTE 26 - DERIVATIVE CONTRACTS Position Protected item or transaction Type of Type of Contract amount Maturity Risk purchase Name Amount derivative contract hedged ThCh$ ThUS$ sale ThCh$ ThUS$ FR CCTE 952,086 1,858 4th 2010 US$/EURO V Sales to Europe 952,086 1,858 FR CCTE 952,086 1,858 1st 2011 US$/EURO V Sales to Europe 952,086 1,858 FR CCTE 952,086 1,858 2nd 2011 US$/EURO V Sales to Europe 952,086 1,858 FR CCTE 1,025,324 2,001 3rd 2011 US$/EURO V Sales to Europe 1,025,324 2,001 FR CCTE 1,025,324 2,001 4th 2011 US$/EURO V Sales to Europe 1,025,324 2,001 FR CCTE 952,086 1,858 1st 2012 US$/EURO V Sales to Europe 952,086 1,858 FR CCTE 952,086 1,858 2nd 2012 US$/EURO V Sales to Europe 952,086 1,858 FR CCTE 1,611,223 3,144 3rd 2012 US$/EURO V Sales to Europe 1,611,223 3,144 FR CCTE 1,611,223 3,144 4th 2012 US$/EURO V Sales to Europe 1,611,223 3,144 FR CCTE 865,035 1,688 1st 2007 US$/EURO V Sales to Europe 865,035 1,688 FR CCTE 865,035 1,688 2nd 2007 US$/EURO V Sales to Europe 865,035 1,688 FR CCTE 1,009,208 1,969 3rd 2007 US$/EURO V Sales to Europe 1,009,208 1,969 FR CCTE 1,081,294 2,110 4th 2007 US$/EURO V Sales to Europe 1,081,294 2,110 FR CCTE 1,009,208 1,969 1st 2008 US$/EURO V Sales to Europe 1,009,208 1,969 FR CCTE 1,153,381 2,250 2nd 2008 US$/EURO V Sales to Europe 1,153,381 2,250 FR CCTE 1,081,294 2,110 3rd 2008 US$/EURO V Sales to Europe 1,081,294 2,110 FR CCTE 1,081,294 2,110 4th 2008 US$/EURO V Sales to Europe 1,081,294 2,110 FR CCTE 1,081,294 2,110 1st 2009 US$/EURO V Sales to Europe 1,081,294 2,110 FR CCTE 1,081,294 2,110 2nd 2009 US$/EURO V Sales to Europe 1,081,294 2,110 FR CCTE 1,009,208 1,969 3rd 2009 US$/EURO V Sales to Europe 1,009,208 1,969 FR CCTE 1,009,208 1,969 4th 2009 US$/EURO V Sales to Europe 1,009,208 1,969 FR CCTE 1,009,208 1,969 1st 2010 US$/EURO V Sales to Europe 1,009,208 1,969 FR CCTE 1,009,208 1,969 2nd 2010 US$/EURO V Sales to Europe 1,009,208 1,969 FR CCTE 937,122 1,829 3rd 2010 US$/EURO V Sales to Europe 937,122 1,829 FR CCTE 937,122 1,829 4th 2010 US$/EURO V Sales to Europe 937,122 1,829 FR CCTE 937,122 1,829 1st 2011 US$/EURO V Sales to Europe 937,122 1,829 FR CCTE 937,122 1,829 2nd 2011 US$/EURO V Sales to Europe 937,122 1,829 FR CCTE 1,009,208 1,969 3rd 2011 US$/EURO V Sales to Europe 1,009,208 1,969 FR CCTE 1,009,208 1,969 4th 2011 US$/EURO V Sales to Europe 1,009,208 1,969 FR CCTE 937,122 1,829 1st 2012 US$/EURO V Sales to Europe 937,122 1,829 FR CCTE 937,122 1,829 2nd 2012 US$/EURO V Sales to Europe 937,122 1,829 FR CCTE 1,585,898 3,094 3rd 2012 US$/EURO V Sales to Europe 1,585,898 3,094 FR CCTE 1,585,898 3,094 4th 2012 US$/EURO V Sales to Europe 1,585,898 3,094

121 119 Notes to the Consolidated Financial Statements Amount off Account item related Effect in income protected item Name Amount Realized Not realized ThCh$ ThUS$ ThCh$ ThUS$ ThCh$ ThUS$ ThCh$ ThUS$ 881,116 1,719 Other long-term liabilities 18, , ,116 1,719 Other long-term liabilities 16, , ,116 1,719 Other long-term liabilities 14, , ,894 1,852 Other long-term liabilities 13, , ,894 1,852 Other long-term liabilities 11, , ,116 1,719 Other long-term liabilities 8, , ,116 1,719 Other long-term liabilities 6, , ,491,119 2,910 Other long-term liabilities 6, , ,491,119 2,910 Other long-term liabilities 3, , ,333 1,603 Other long-term liabilities 71, , ,333 1,603 Other long-term liabilities 67, , ,221 1,870 Other long-term liabilities 74, , ,026,666 2,003 Other long-term liabilities 75, , ,221 1,870 Other long-term liabilities 66, , ,095,110 2,137 Other long-term liabilities 71, , ,026,666 2,003 Other long-term liabilities 63, , ,026,666 2,003 Other long-term liabilities 59, , ,026,666 2,003 Other long-term liabilities 55, , ,026,666 2,003 Other long-term liabilities 51, , ,221 1,870 Other long-term liabilities 44, , ,221 1,870 Other long-term liabilities 40, , ,221 1,870 Other long-term liabilities 37, , ,221 1,870 Other long-term liabilities 34, , ,777 1,736 Other long-term liabilities 28, , ,777 1,736 Other long-term liabilities 25, , ,777 1,736 Other long-term liabilities 23, , ,777 1,736 Other long-term liabilities 21, , ,221 1,870 Other long-term liabilities 20, , ,221 1,870 Other long-term liabilities 18, , ,777 1,736 Other long-term liabilities 14, , ,777 1,736 Other long-term liabilities 12, , ,505,776 2,938 Other long-term liabilities 17, , ,505,776 2,938 Other long-term liabilities 13, ,749 27

122 120 NOTE 27 - CONTINGENCIES AND RESTRICTIONS Direct guarantees: To guarantee Banco Bice full compliance with any and all current and future obligations incurred by Empresas CMPC S.A. and subsidiaries, the Company set up a first mortgage of ThCh$ 4,652,240 - ThUS$ 9,078 on the mezzanine and 2nd, 3rd, 4th and 5th floors of the building located at Agustinas 1343, per public deed dated March 16, 2001, before the Notary Enrique Morgan under digest number Indirect guarantees The loans and bond issuances of the subsidiary Inversiones CMPC S.A., through its Agency in the Cayman Islands, were guaranteed by Empresas CMPC S.A. The UF bond issuance made by the subsidiary Inversiones CMPC S.A. in Chile, was guaranteed by Empresas CMPC S.A. In the case of indirect guarantees, the creditor of the guarantee backed by Empresas CMPC S.A., is the holder of the document, since such documents are transferable. Empresas CMPC S.A. guaranteed the compliance by La Papelera del Plata S.A. (subsidiary in Argentina), of a lease contract on the machinery this company subscribed with Citibank N.A. Restrictions: Empresas CMPC S.A., as a result of certain debt contracts entered into by its subsidiary Inversiones CMPC S.A., and guaranteed by them, has to comply with certain financial indicators ( covenants ). These are to maintain a minimum equity, a maximum indebtness level and a minimum level of financial expenses coverage. At December 31, 2005, such indicators are amply complied with. Lawsuits a) At December 31, 2005, the subsidiaries Forestal Mininco S.A. and Forestal Crecex S.A. have participated in a number of proceedings involving growers and landholders regarding boundaries and other disputes. At December 31, 2005, Forestal Mininco S.A. has a provision of ThCh$ 150,000 - ThUS$ 293. b) In August 2001, the Supreme Court unanimously confirmed the rule that accepted the claim presented by the subsidiary CMPC Celulosa S.A. declaring that the Central Bank had to pay the promissory notes issued by that public body, pursuant to the calculation rules contained in them upon issuance and not under a new calculation formula subsequently established by the debtor. The Central Bank did not accept the rule, invoking a technical impossibility to arrive at the determination of the proper amount. In view of that refusal, CMPC has had to begin new legal procedures in which the Central Bank has continued presenting any kind of dilatory motions. Other lawsuits a) Tax Lawsuit filed against CMPC Celulosa S.A. for a claim over tax settlement made by the S.I.I. on April 30, 2003, and related to the appraisal of the value of shares internally transferred. The company lawyer s have a favorable opinion, therefore, no allowances have been made. b) As of December 31, 2005, the subsidiary Papelera del Plata S.A. in Argentine, has several lawsuits in a number of Argentine labor courts, which involve committed amounts of ThCh$ 798,116 - ThUS$ 1,557. c) At December 31, 2005, the subsidiary Fabi Bolsas Industriales S.A. faces a labor lawsuit. The amount involved is ThCh$ 83,001 - ThUS$ 162 (ThCh$ 74,667 - ThUS$ 129 at December 31, 2004). There is a provision for this concept ascending to ThCh$ 61,337 - ThUS$ 120. This provision considers a contingency of maximum probability, but usually the sentences are less than the claimed amount.

123 121 Notes to the Consolidated Financial Statements d) At December 31, 2005, the subsidiary CMPC Celulosa S.A. follows a labor lawsuit before the Court of Laja. The amount involved is ThCh$ 104,599 - ThUS$ 204 (ThCh$ 108,365 - ThUS$ 188 at December 31, 2004). A provision has been set up for this concept. e) Subsidiaries of the Company have presented an appeal to the Argentine Nation s Court for it to suspend and annul proceedings issued by the Federal Administration of Public Revenue relating to taxes and interests on financial transactions occurring during the years 1995 and 1998 amounting to 3,220,843 Argentine pesos plus fines and interests. According to the Company and its legal advisors, these proceedings should not prosper because all transactions have been legally and administratively done following current legislation, therefore, no provisions have been established. f) At December 31, 2005, the subsidiary Forestal y Agrícola Monte Aguila S.A. faces five labor lawsuits amounting to ThCh$ 3,500,000 - ThUS$ 6,829. During January, 2006, two of the five lawsuits representing fifty percent of the total were finished with a favorable sentence for the Company. The other lawsuits are still in process. There are associated insurance policies for these contingencies. Other contingencies a) Responsibility in return of exports under consignment amounting to ThCh$ 16,081,370 - ThUS$ 31,378 at December 31, 2005 and ThCh$ 33,228,139- ThUS$ 57,541 in This amount represents the marketable price set up at the delivery date. b) As of December 31, 2005, the Company has a liability for the collection upon maturity of the portfolio of assigned loans of ThCh$ 34,072,797 - ThUS$ 66,484. As of December 31, 2004 there was no obligation for this concept. c) Empresas CMPC S.A. guarantees compliance of SWAP contracts entered into by Inversiones CMPC S.A. mainly with J.P. Morgan Chase N.A. and others, related to interest rates on a total notional amount of US$ 705,000,000. Foreign investments The Company s Financial Statements include the effect of the current economic context of Argentine, Uruguay and Peru over the economic and financial position of related companies in such countries, according to the administrations evaluations, as at the date of preparation. The real future results will depend on the evolution of said economies.

124 122 Direct guarantees: Deudor Assets involved Guarantee creditor Entity Relation Type of guarantee Type Book value ThCh$ BICE Bank Empresas CMPC S.A. Informant Mortgage Floor 2,3,4 and 5 4,652,240 Agustinas 13 Nacional Fundo of Technology Forestal Mininco S.A. Subsidiary Guarantee bill Cash 18,707 Development General Treasury of the Republic Inforsa S.A. Indirect subsidiary Promissory notes Machinery - Customs Inforsa S.A. Indirect subsidiary Bill of exchange Machinery 17,166 Foreign supplier Inforsa S.A. Indirect subsidiary Bill of exchange Machinery 2,251,882 General Treasury of the Republic CMPC Celulosa S.A. Indirect subsidiary Bill of exchange Fixed Assets 1,176,088 General Treasury of the Republic CMPC Celulosa S.A. Indirect subsidiary Promissory notes Machinery - General Treasury of the Republic CMPC Celulosa S.A. Indirect subsidiary Promissory notes Machinery - Railroad State Company CMPC Celulosa S.A. Indirect subsidiary Bill of exchange Machinery 5,392 Telecommunications Company of Chile CMPC Tissue S.A Indirect subsidiary Letters Cash 3,595 Natural Gas Protisa Perú S.A. Indirect subsidiary Guarantee letter Cash 71,750 National Customs Superintendency Protisa Perú S.A. Indirect subsidiary Guarantee letter Machinery 109,569 Chilean Security Association CMPC Tissue S.A Indirect subsidiary Letters Cash 4,021 Roberto del Río Hospital CMPC Tissue S.A Indirect subsidiary Letters Cash 5,711 Roberto Arriarán Clinic Hospital CMPC Tissue S.A Indirect subsidiary Letters Cash 8,249 Sotero del Río Hospital CMPC Tissue S.A Indirect subsidiary Letters Cash 4,140 Assalud - National Hospital ED Protisa Perú S.A. Indirect subsidiary Guarantee letter Cash 4,296

125 123 Notes to the Consolidated Financial Statements Balances pending at year end Guarantees released Assets 2007 Assets 2008 Assets ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ Fixed assets ,707 19,380 18,707 Cash , , ,398 17,166 Fixed Assets ,251,882 3,894,808 2,251,882 Fixed Assets ,176,088 1,325,263 1,176,088 Fixed Assets ,574, , ,392 10,047 5,392 Fixed Assets ,595 3, ,395 Cash ,750-71,750 Cash ,569 69, ,569 Fixed Assets , ,021 Cash - - 5,711-5,711 Cash ,249-8,249 Cash ,140-4,140 Cash ,296-4,296 Cash

126 124 Indirect guarantees: Balances pending Assets at year end Guarantees released Guarantee creditor Deudor Type of involved ThCh$ ThCh$ Entity Relation guarantee Type BBVA S.A. Inversiones CMPC S.A. - Subsidiary Guarantor No 243,437, ,296,540 21,352,031 42,710,469 59,791,838 Cayman Island Agency Bonds Inversiones CMPC S.A. - Subsidiary Guarantor No 153,750, ,239, Cayman Island Agency UF Bonds Inversiones CMPC S.A. Subsidiary Joint debtor No 125,823, J.P. Morgan Chase Bank and others Inversiones CMPC S.A. Subsidiary Guarantor No 51,250, Cayman Island Agency Citibank N.A. - Argentina Papelera del Plata S.A. Indirect subsidiary Guarantor No 6,901,336 9,693,588 1,701,699 1,701,699 1,701,699 Voith Paper Maq. y Equipam. Ltda. Industrias Forestales S.A. Indirect subsidiary Guarantor No 3,968,650 6,497,075 1,707,719 1,744, ,576 Valmet Fibertech AB, Kvaerner CMPC Celulosa S.A. Indirect subsidiary Guarantor No - 973, , Pulping AB y otros Bonds Inversiones CMPC S.A. - Subsidiary Guarantor No - 144,366, Cayman Island Agency

127 125 Notes to the Consolidated Financial Statements NOTE 28 - GUARANTEES FROM THIRD PARTIES Guarantees from third parties are as follows: Transaction Amount ThCh$ ThUS$ Issuer Relation Investment Project 5,171,012 10,090 Andritz A.G. Supplier Investment Project 2,963,943 5,783 Kvarner Power Supplier Investment Project 4,192,031 8,180 Metso Paper Pori y Service Supplier Services 5,208,748 10,163 Constructora Tecsa Supplier Services 2,669,662 5,209 Andritz OY Supplier Services 1,144,177 2,233 Metso Paper Pori y Service Supplier Services 1,681,907 3,282 Owner Securing Supplier Investment Project 862,861 1,684 Siemens Demag Supplier Investment Project 431, Demagdelaval Supplier Investment Project 335, Saalasti Oy Supplier Services 436, Invensys Chile S.A. Supplier Services 403, Tecnasic Supplier Services 346, Claro, Vicuña, Valenzuela Supplier Services 304, Fibra S.A. Supplier Services 285, Constructora JCE S.A. Supplier Services 233, Rudel Supplier Services 650,925 1,270 Sundry Supplier Investment Project 255, Proyectos y Montajes Comin S.A. Supplier Investment Project 238, Voith Paper Maquinaria y Equipamientos Ltda. Supplier Investment Project 721,539 1,408 Sundry foreign suppliers Supplier Correct execution 198, Sundry suppliers Supplier Finished product sales 1,127,500 2,200 Papel y Carton Derivados S.A. Customer Finished product sales 626,481 1,222 Guedikian Impresores S.A. Customer Finished product sales 256, Establecimiento Gráfico Impresores S.A Customer Finished product sales 102, Caracas Paper Company Customer Finished product sales 184, Papelera Corrientes S.A.. Customer Finished product sales 153, Productos El Cid S.A. Customer Finished product sales 128, Impresora Hispania Customer Finished product sales 128, Alianza Gráfica S.A. Customer Finished product sales 532,585 1,039 Sundry Customer Timber Sales 351, Proarauco S.A. Customer Transportation 138, Juan Carlos Cabrera R. Outsourcing Timber Sales 150, Forestal Santa Inés Ltda. Customer Road Construction 177, Constructora Tricam Ltda. Outsourcing Road Construction 106, Ingenieria y Construcciones Aninat Ltda. Outsourcing Timber Sales 130, Aserraderos Corsa S.A. Supplier Road Construction 325, Empresa Movimiento de Tierra I.N.B. Ltda. Outsourcing Timber Sales 248, Aserraderos Poco a Poco Ltda. Customer Timber Sales 242, Forestal Transporte y Const. Sta. Elena Customer Forest Protection 237, Helicópteros Agroforestales Ltda. Outsourcing Transportation Service 161, Sundry suppliers Supplier National Purchases 462, Sundry suppliers Supplier Sundry Services 194, Sundry suppliers Supplier

128 126 NOTE 29 - LOCAL AND FOREIGN CURRENCY Current assets: Currency ThCh$ ThUS$ ThCh$ ThUS$ Activos circulantes Cash and banks Non indexed pesos 3,884,276 7,579 1,372,635 2,377 Cash and banks Dollar 1,065,346 2,079 2,259,224 3,912 Cash and banks Euro 462, , Cash and banks Argentinean pesos 5, , Cash and banks Other currencies 339, , Time deposits and marketable securities Non Indexed pesos 8,306,636 16,208 11,131,553 19,276 Time deposits and marketable securities Dollar 46,022,412 89, ,848, ,444 Time deposits and marketable securities Euro 6,352,777 12,396 84,432, ,213 Time deposits and marketable securities Other currencies 276, , Accounts receivable short-term Non indexed pesos 74,612, ,586 80,327, ,104 Accounts receivable short-term Dollar 80,325, , ,622, ,565 Accounts receivable short-term Euro 3,399,307 6,633 5,396,520 9,345 Accounts receivable short-term Argentinean pesos 12,190,493 23,786 9,781,900 16,939 Accounts receivable short-term Other currencies 7,509,097 14,652 5,604,350 9,705 Notes and accounts receivables to related companies Non indexed pesos , Inventories Indexed pesos 149,700, , ,295, ,462 Inventories Dollar 95,782, , ,727, ,429 Inventories Argentinean pesos 13,819,801 26,966 12,559,490 21,749 Inventories Other currencies 9,325,657 18,195 8,057,378 13,953 Taxes recoverable Indexed pesos 38,692,206 75,497 25,792,825 44,666 Taxes recoverable Argentinean pesos 133, ,886 1,352 Taxes recoverable Other currencies 216, ,779,898 3,082 Prepaid expenses Non indexed pesos 2,890,592 5,640 2,762,497 4,785 Prepaid expenses Dollar 2,787,418 5,439 3,406,751 5,899 Prepaid expenses Argentinean pesos 203, , Prepaid expenses Other currencies 334, , Deferred taxes Non indexed pesos 5,014,107 9,785 2,961,534 5,129 Deferred taxes Argentinean pesos 705,421 1, , Deferred taxes Other currencies 28, , Other currents assets Non indexed pesos 4,974,580 9,706 26,396,346 45,710 Other currents assets Dollar 30,786,354 60,071 17,266,285 29,900 Other currents assets Euro - - 6,144,737 10,641 Other currents assets Other currencies ,

129 127 Notes to the Consolidated Financial Statements Currency ThCh$ ThUS$ ThCh$ ThUS$ Fixed assets Fixed assets Indexed pesos 2,213,515,164 4,319,053 2,125,382,599 3,680,530 Fixed assets Dollar 316,921, , ,111, ,266 Fixed assets Euro 3,510,476 6,850 26,068,917 45,144 Others assets Investments in related companies Indexed pesos 39,488,111 77,050 27,943,821 48,390 Investments in other companies Indexed pesos 134, , Goodwill Indexed pesos 54,506, ,355 61,182, ,950 Negative goodwill Indexed pesos (24,323,985) (47,461) (25,936,415) (44,914) Long-term debtors Indexed pesos 13,227,923 25,811 2,083,140 3,607 Long-term debtors Argentinean pesos 1,937,526 3,781 1,957,929 3,391 Long-term debtors Other currencies 495, , Intangibles Indexed pesos 1,800,960 3,514 1,804,356 3,125 Intangibles Other currencies , Others Indexed pesos 2,801,087 5,465 1,030,880 1,785 Others Dollar 440, , Others Other currencies 6,195,004 12, , Total assets Non indexed pesos 99,683, , ,339, ,051 Dollar 574,131,144 1,120, ,593, ,023 Euro 13,724,848 26, ,443, ,036 Argentinean pesos 28,995,574 56,577 26,462,316 45,825 Other currencies 24,720,079 48,231 17,296,437 29,952 Indexed pesos 2,489,543,105 4,857,645 2,331,712,884 4,037,833

130 128 Current liabilities: Up to 2005 Currency Amount Average annual ThCh $ ThUS$ interest rate Liabilities to banks and financial institutions short-term Argentinean pesos 273, Liabilities to banks and financial institutions short-term Non indexed pesos 16,707,218 32, % Liabilities to banks and financial institutions short-term Dollar 195, Liabilities to banks and financial institutions short-term Other currencies 1,283,841 2, % Short-term portion of long term liabilities to banks and financial institutions Dollar 3,424,586 6,682 - Liabilities with public (Bonds) Indexed pesos 1,124,876 2,195 - Liabilities with public (Bonds) Dollar 249, Short-term portion of long term liabilities Dollar 253, Dividends payable Non indexed pesos 1,240,706 2,421 - Account payable Non indexed pesos 67,832, ,356 - Account payable Dollar 22,934,103 44,749 - Account payable Argentinean pesos 8,217,936 16,035 - Account payable Other currencies 2,098,678 4,095 - Notes payable Non indexed pesos Notes payable Dollar 2,733,068 5,333 - Notes payable Euro 147, Notes payable Other currencies 106, Sundry creditors Indexed pesos 168, Sundry creditors Non indexed pesos 496, Sundry creditors Other currencies 53, Notes and accounts payable to related companies Non indexed pesos 1, Notes and accounts payable to related companies Dollar 435, Provisions Non indexed pesos 12,357,414 24,113 - Provisions Argentinean pesos 377, Provisions Other currencies 303, Withholdings Non indexed pesos 6,201,679 12,101 - Withholdings Argentinean pesos 729,071 1,423 - Withholdings Other currencies 911,006 1,778 - Unearned income Non indexed pesos 643,719 1,256 - Unearned income Dollar 64, Other current liabilities Non indexed pesos Other current liabilities Other currencies Total current liabilities Non indexed pesos 105,481, ,818 - Dollar 30,290,424 59,103 - Other currencies 4,756,604 9,281 - Indexed pesos 1,293,549 2,524 - Argentinean pesos 9,597,729 18,727 - Euro 147,

131 129 Notes to the Consolidated Financial Statements 90 days 90 days up to one year Amount Average annual Amount Average annual Amount Average annual ThCh $ ThUS$ interest rate ThCh $ ThUS$ interest rate ThCh $ ThUS$ interest rate ,212,648 2, % ,777 1, , , % 1,048,024 2, % ,279,129 5,678-21,352,031 41, % ,075, , % 1,431,349 2, % 3,165,971 6, % 4,290,723 7, % 25,926,305 44, ,305, ,431-2,801,595 5,467-1,081,396 1,873-21,066,582 36,481-3,129,955 6,107-3,816,373 6,609-8,282,060 14, ,849,178 4, , ,983,906 5, , , ,237,982 2, , , ,915,305 18,903-2,267,967 4,425-4,614,290 7, , ,820 1, ,950,483 10, ,763 1, , ,500 1, , , ,080,256 3, , ,259, ,475-5,475,984 10,685-5,695,686 9,863-29,438,236 50,978-27,647,957 53, ,182, ,266-5,067,545 8,775-1,275,718 2, , ,354,269 16,199-1,212,648 2,

132 130 Long-term liabilities - current period 2005 One up to three years Currency Amount Average annual 2005 interest rate ThCh$ ThUS$ % Liabilities to banks Dollar 102,502, , Liabilities with public (Bonds) Dollar Liabilities with public (Bonds) Indexed pesos Notes payable Dollar 7,409,996 14, Notes payable Indexed pesos 13, Provisions Non indexed pesos 6,119,517 11,941 Provisions Argentinean pesos 363, Deferred taxes Non indexed pesos 16,839,966 32,858 - Deferred taxes Other currencies 801,626 1,564 - Other liabilities Non indexed pesos 4,487,469 8,756 - Other liabilities Dollar 343, Total long-term liabilities Dollar 110,256, ,134 Indexed pesos 13, Non indexed pesos 27,446,952 53,555 Argentinean pesos 363, Other currencies 801,626 1,564 Long-term liabilities - prior period 2004 One up to three years Currency Amount Average annual 2005 interest rate ThCh$ ThUS$ % Liabilities to banks Dollar 72,183, , Liabilities with public (Bonds) Dollar Notes payable Dollar 9,362,903 16, Provisions Non indexed pesos 4,949,944 8,572 - Provisions Argentinean pesos 750,795 1,300 - Deferred taxes Non indexed pesos 13,112,949 22,708 - Deferred taxes Other currencies 462, Total long-term liabilities Dollar 81,546, ,214 Non indexed pesos 18,062,893 31,280 Argentinean pesos 750,795 1,300 Other currencies 462,

133 131 Notes to the Consolidated Financial Statements Three up to five years Five up to ten years More than 10 years Amount Average annual Amount Average annual Amount Average annual 2005 interest rate 2005 interest rate 2005 interest rate ThCh$ ThUS$ % ThCh$ ThUS$ % ThCh$ ThUS$ % 140,083, , ,750,000 60, ,750, , ,823, , ,079,678 7,960-10,199,195 19,901-7,736,603 15, ,403,309 8,592-10,295,704 20,089-27,392,546 53, ,410,763 2, , ,083, , ,500, , ,823, , ,893,750 19,305 20,791,600 40,569 35,129,149 68, Three up to five years Five up to ten years More than 10 years Amount Average annual Amount Average annual Amount Average annual 2005 interest rate 2005 interest rate 2005 interest rate ThCh$ ThUS$ % ThCh$ ThUS$ % ThCh$ ThUS$ % 202,113, , ,239, , ,834,267 4, ,103,899 8,838-5,593,405 9,686-12,780,647 22, ,464,567 9,463-12,843,623 22,241-23,172,771 40, ,947, , ,239, , ,568,466 18,301 18,437,028 31,927 35,953,418 62,

134 132 NOTE 30- PENALTIES No penalties were imposed on the Company and subsidiaries, nor on their Directors or General Managers by the Chilean Superintendency of Securities and Insurance or any other competent administrative authority. Just it is necessary to mention: a) Except the penalty of 15 UF imposed on the General Managers of Forestal Mininco S.A. and Forestal Crecex S.A. pursuant to exempt resolutions N 183 and N 184 issued by the Chilean Superintendency of Securities and Insurance, respectively, dated April 22, 2004, in connection with a delay in the sending of information relating to the shareholders listing. In September 2004 such companies cancelled their listing in the registry of the Superintendency (Note N 1). b) As consequence of an incident in Celulosa Pacífico Plant, located in the IX Region of Chile, the Company had to pay a penalty of 700 UTM (ThCh$ ThUS$ 42) in response to the resolution N dated August 17th, 2005, issued by the Regional office of the Ministry of Health. The company appealed to this penalty. NOTE 31 - SUBSEQUENT EVENTS There have been no subsequent events during the year ended December 31, 2005 and the date on which these financial statements were prepared (January 31, 2006) which could significantly affect their balances or interpretation. NOTE 32- ENVIRONMENTAL ISSUES Empresas CMPC S.A. and subsidiaries have a long-term policy in place consisting in the sustainable development of their forest and industrial activities in harmony with the environment. In this context, investments in fixtures, equipment, and industrial plants include cutting-edge technology, consistent with the latest breakthroughs in this matter. Accordingly, their costs have increased due to these advances. Most of the subsidiaries and factories have already obtained or have filed for certification for the ISO 9002 and international quality standards. In addition, annually vast land surface is recovered and protected from erosion through forestation. Expenses incurred in environmental projects during the year amount to ThCh$ 19,309,886 - ThUS$ 37,678 (ThCh$ 5,445,621 - ThUS$ 9,430 in 2004), among which are expenses involving outflow treatment in industrial processes. NOTE 33 - TIME DEPOSITS At December 31, 2005 and 2004 this caption includes the following financial investments: Institutions ThCh$ Time Deposits in pesos, re-denominated to dollars Banco Santander Chile 22,589,691 20,439,010 Banco BICE - 8,109,115 Banco BBVA - 4,632,493 Deutsche Bank Chile S.A. - 3,765,142 Banco Crédito Inversiones - 2,434,484 SubTotal 22,589,691 39,380,244 ThUS$ 44,077 68,195

135 133 Notes to the Consolidated Financial Statements Institutions ThCh$ Time Deposits in pesos, re-denominated to Euros Banco Santander Chile - 26,758,448 Banco Chile - 25,678,105 Banco Crédito Inversiones - 6,689,765 Banco BBVA - 10,024,017 Corp Banca - 9,070,400 SubTotal - 78,220,735 ThUS$ - 135,455 Time Deposits in dollars J.P. Morgan Chase Bank - New York 5,676,811 1,807,033 Citibank N.A. - New York 1,689, ,183 Banco de Crédito - Perú 196,201 - HSBC Bank (Uruguay) 19,936 22,579 Dresdner Bank A.G. - 8,684,511 Bayerische Landesbank N.Y. - 8,684,337 J.P. Morgan Chase Bank (Perú) - 2,768,476 SubTotal 7,582,663 22,433,119 ThUS$ 14,795 38,848 Time Deposits in Euros. Citibank N.A. - London 6,270, ,275 Mirlan Bank 55,676 69,896 SubTotal 6,326, ,171 ThUS$ 12, Time Deposits in other currencies Banco Santander Chile 6,713,243 - Banco Credito Inversiones 628,631 - Banco Chile 571,606 - Banco Bice 275,138 1,441 Banco Crédito - Perú (other currencies) 172, ,364 San Paolo IMI Bank - Asia (other currencies) 103,362 - Banco BBVA - 4,834,020 Citibank N.A. - London (other currencies) - 241,155 Banco Sudamericano Perú - 68 SubTotal 8,464,782 5,191,048 ThUS$ 16,517 8,989 Total deposits ThCh$ 44,963, ,475,317 Total deposits ThUS$ 87, ,920 Time deposits in Chilean pesos re-denominated to dollar and to euro, subscribed with financial institutions have been valued at the year end, considering the value of principal and accrued interest of such instrument, in the amount of ThCh$ 22,679,424 - ThUS$ 44,253 (ThCh$ 120,419,945 - ThUS$ 208,532 in 2004), net of the difference in the value of the forward contracts entered to re-denominate these transactions to dollar and to euro. They have been recorded at the year-end fair value ThCh$ (89,733) - ThUS$ (175) (ThCh$ (2,818,966) - ThUS$ (4,882) in 2004).

136 134 NOTE 34 - LONG-TERM NOTES PAYABLE Long-term Notes payable denominated in US dollars amount to ThCh$ 7,423,316 - ThUS$ 14,485 at December 31, 2005 (ThCh$ 12,197,170 - ThUS$ 21,122 in 2004), corresponding to loans from suppliers related to project of investments in fixed assets, accruing an annual average interest rate of %. The breakdown of these loans is the following: Supplier ThCh$ Destination Leasing Argentina (1) 5,199,637 7,776,176 Machinery and equipment Voith S.A. 2,135,009 4,110,460 Machinery and equipment General Treasury of the Republic 55, ,541 Custom taxes Others 33,251 25,993 Other fixed assets Total 7,423,316 12,197,170 ThUS$ 14,485 21,122 These loans mature between 2007 and The portion corresponding to current maturities which are shown in Long-term liabilities with current maturities under Current liabilities is as follows: Supplier ThCh$ Destination Leasing Argentina (1) 1,825,133 2,027,948 Machinery and equipment Voith S.A. 1,554,212 1,764,809 Machinery and equipment General Treasury of the Republic 40, ,888 Custom taxes Valmet Fiber Tech A.B ,304 Machinery and equipment Others - 18,123 Other fixed assets Total 3,419,677 5,722,072 ThUS$ 6,673 9,909 NOTE 35 - FOREIGN CURRENCY TRANSLATION The accounting record of Empresas CMPC S.A. and local subsidiaries are in Chilean pesos. Foreign subsidiaries are converted to Chilean pesos as indicated in Note 2 f). The accompanying financial statements have been translated into United States dollars as follows. The balance sheet statement of income, statement of cash flows and amounts in the notes to the financial statements as of December 31, 2005 have been translated into United States dollars at the year end exchanged rate of $ to US$ 1. In the case of the prior year 2004, they were translated at the year end exchange rate of Ch$ to US$ 1, but on a basis of it s historical values in Chilean pesos at December 31, Ricardo Hetz Vorpahl Controller Arturo Mackenna Iñiguez Chief Executive Officer

137 Report of Independent Accountants 135

138 136 Overseas Representatives CMPC FORESTAL Benelux Koninklijke Eduard Van Leer B.V. Jodenbreestraat NS Amsterdam Holland, Belgium, Luxemburg Tel. : (31-20) Fax : (31-20) Tlx. : LEE Mr. Goderd H. Graafland Mr. Martin S. Den Butter CMPC Asia Limited Toto Bldg. 6F-5-1-4, Toranomon - Minato-ku, Tokyo Japan Tel. : (81-3) Fax : (81-3) Mr. Patricio Arenas CMPC USA CMPC USA, Inc Crown Pointe Parkway Suite 1590, Atlanta, GA Tel. : 1 (770) Fax : 1 (770) USA Mr. Pablo Sufán China COPC International Ltd. 22F-1, 447, Sec 3, Win Hsin Road, Taichung, Taiwan, R.O.C Taiwan Tel. : (886-4) Fax : (886-4) Mr. Peter Chang Egypt Sherif Exp & Imp 4, Adib Street Alexandria, Egypt Tel. : (203) Fax : (203) / Mr. Murat Pasic Japan Sakin Corporation Toto Bldg. 6F-5-1-4, Toranomon-Minato-ku, Tokyo Japan Tel. : (81-3) Fax : (81-3) Mr. Kenji Hatogai Sato Middle East United Agencies Suite Nº.801, Khalid Al Attar Tower, Sheik Zayed Road, Post Box 2212 Dubai, U.A.E. Tel. : (971-4) Fax : (971-4) Mr. Vijai Nihalani Spain Eliz Atea 8-2º A Lekeitio Viscaya Spain Tel. : (34-94) Fax : (34-94) Mr. Ramón Zarandona García [email protected] Taiwan COPC International Ltd. 22F-1, 447, Sec 3, Win Hsin Road, Taichung, Taiwan, R.O.C Taiwan Tel. : (886-4) Fax : (886-4) Mr. Peter Chang United Kingdom Price & Pierce Softwoods Limited Cavendish House, 40 Goldsworth Road, Woking Surrey GU21 6JT England Tel. : ( ) Fax : ( ) Mr. Stephen Pitt CMPC CELULOSA S.A. Argentina Productos Forestales S.A. PROFORSA Laprida 3278 piso 2, of: San Isidro, Buenos Aires Tel. : (54-11) Fax : (54-11) Australia Silvania Resources, Inc N. Corporate Lakes Blvd. Suite 307 Weston, Florida U.S.A Tel. : (1-954) Fax : (1-425) Benelux Countries Euro Fibres S.A. 18 Avenue Lavoisier B-1300 Wavre Belgium Tel. : (32-10) Fax : (32-10) Bolivia Hein Ltda. Avda. Arce 2396 La Paz Tel. : (591-2) / Fax : (591-2) Brazil Claudio Maresca, Representante Rua Itapicuru, piso 10 Conj. 1003, Perdizes Sao Paulo - SP Tel. : (55-11) Fax : (55-11) China China International Tourism & Trade Co., Ltd. (CITTC) 2F International Convention Center Nº. 8 Beichendonglu Beijing Tel. : (86-10) Fax : (86-10) CellMark AB, Shanghai Office Room 2007, 205 South Mao Ming Road, Rui Jin Building Shanghai Tel. : (86-21) Fax : (86-21) CMPC Europe Limited 5 Dukes Gate Acton Lane London W4 5DX Tel. : (44-20) Fax : (44-20) Colombia Herzig & Cía. S.A. Carrera 50 N 6-41, Medellín Tel. : (57-4) Fax : (57-4) Eastern Europe W. Heinzel A.G. Wagramer Strasse Viena A-1223 Austria Tel. : (43-1) Fax : (43-1) Ecuador Alter Cia. Ltda. Almagro 1550 y Pradera Edificio P.A. Kingman, piso 4B Quito Tel. : (593-2) Fax : (593-2) France Unifibra S.A. 32, chemin Frank-Thomas CH-1208 Ginebra Switzerland Tel. : (41-22) Fax : (41-22) Germany and Austria GUSCO Handel - G. Schürfeld & Co. Mönckebergstrasse 31 D Hamburg Tel. : (49-40) Fax : (49-40) India Seascope Pulp & Paper Pvt. Ltd. 158/33 Laxmi Industrial Estate New Link Road, Andheri (West) Mumbai Tel. : ( 91-22) [email protected] Indonesia CellMark Interindo Trade Pt. JI. Raya Jatiwaringin Nº 54 Pondok, Gede Jakarta Tel. : (62-21) Fax : (62-21) Italy CMP Cellulosa Marketing SARL 3 Chemin Frank-Thomas 32 CHF-1200 Geneva Switzerland Tel. : (41-22) Fax : (41-22) Japan Hirom Corporation Toto Bldg. 6th. Fl Toranomon Minato-ku Tokyo Tel. : (81-3) Fax : (81-3) Korea HB Corporation 4th Fl. HB Bldg., Sinsa-Dong, Kangnam-Gu Seoul, Tel. : (82-2) Fax : (82-2) Mexico Paxell International S.A. de CV. Fuente de Pirámides No Tecamachalco Mex Mexico Tel. : (52-55) Fax : (52-55) Peru Inunsa S.A. Av. Mariategui # 218 Lima 11 Tel. : (51-1) Fax : (51-1) Portugal Sanches de Gama & Cía. Lda. Rua Tomás Ribeiro, 50, 5th. Floor Lisboa Tel. : (351-21) Fax : (351-21) South Africa Dennis C. Money Esq. c/o Bimac International 58A Curzon Road Bryanston Sandton South Africa Tel. : (27-11) Fax : (27-11) Spain Northern Pulp Cellulose Sales S.A. Almagro Madrid Tel. : (34-91) Fax : (34-91) Switzerland GUSCO Handel - G. Schürfeld & Co. Mönckebergstrasse 31 D Hamburg Tel. : (49-40) Fax : (49-40) Taiwan Beauflex International Corp. 21 FL. No 27-5, Chung Cheng East Rd. Sec. 2 Tanshui 251 Taipei County Tel. : (886-2) Fax : (886-2) Thailand CellMark (Thailand) Co. Ltd. 2024/ Rimtangrodfai Road Prakanong Bangkok Tel. : (66-2) Fax : (66-2) United Kingdom F.G. Evans & Co. (Pulp) Ltd. 15 Manor Courtyard Hughenden Avenue High Wycombe, Bucks HP13 5RE Tel. : ( ) Fax : ( ) Uruguay Arturo Nogueira Representaciones 18 de Julio 1044 piso 2 Esc. 204 Montevideo Tel. : (598-2) Fax : (598-2) USA International Forest Products Corp. One Patriot Place Foxboro, Ma Tel. : (1-508) Fax : (1-508) Venezuela CellMark Pulp & Paper Inc. C/O Rero, C.A., Torre Phelps, Piso 19, Of. A. Plaza Venezuela Caracas, 1010-A Tel. : (58-212) /2476 Fax : (58-212) /6976 CARTULINAS CMPC S.A. Argentina Cartulinas CMPC Argentina Avda. Intendente Rabanal 3120 C1437FQS Capital Federal, Buenos Aires Tel. : (54-11) Fax : (54-11) [email protected] Brazil Knemitz International Ltda. Rua Des. Fco. Meirelles dos Santos, Sao Paulo SP Tel./Fax : [email protected] China China International Tourism & Trade Co. Ltd. (CITTC) 2 F International Convention Center 8 Beichendonglu Ubeijing Beijing Tel. : (8610) Fax : (8610) [email protected] Great China Papers Co., Ltda MassMutual Tower, 38 Gloucester Rd., Wanchai Hong Kong Tel. : (852) Fax : (852) [email protected] Colombia JAG Representaciones. Carrera 127 Nº 9-45, Casa Nº 7 Cali Tel. : (57-2) / Fax : (57-2) Mobile : (57-315) [email protected]

139 137 Costa Rica, El Salvador, Panama, Honduras and Nicaragua Jorosa 250 metros al Norte del Supersaretto Apartamento #4 San José Tel. : (506) Fax : (506) [email protected] Ecuador Alter y Cía. Ltda. Almagro 1550 y Pradera Edif. P.A. Kingman, Piso 4B, Quito Tel. : (593-2) Fax : (593-2) [email protected] J.G.B. Representaciones (PROPAPEL) Córdova 810 y Víctor M. Rendón - Piso 17, of. 02 Guayaquil Tel. : (593-4) Fax : (593-4) [email protected] European Community Gusco Handel G. Schurfeld + Co. Mönckebergstrasse 31 D Hamburg Tel. : (49-40) Fax : (49-40) [email protected] Guatemala CellMark 20 Calle Zona 10 interior c Guatemala Guatemala Tel. : (50-2) Tel./Fax : (50-2) [email protected] Italy Paper One srl Via Borgazzi 183/ Monza (MI) Tel. : (39-039) Fax : (39-039) [email protected] Mexico Federico Escoto Tamuin Nº 4 Col. San Jerónimo, Aculco Deleg. Magdalena Contreras CP 10400, Mexico D.F. Tel. : (52-55) Mobile : (52-55) [email protected] Paraguay Marea SRL Patricio Colman 400 Tourin Park Pablo Rojas - Ciudad del Este Tel./Fax : (595-61) [email protected] Peru Inunsa S.A.C. Av. Maritegui 218 Lima 11 Tel. : (51-1) Fax : (51-1) / [email protected] Southeast Asia ROXCEL Handelsges.m.b.H. Thurngasse 10 A-1090 Viena Austria Tel. : (43-1) Fax : (43-1) [email protected] United Kingdom Profor (UK) Ltd. 44 Dartford Road Sevenoaks TN13 3TQ Kent Tel. : ( ) Fax : ( ) [email protected] Uruguay A. Nogueira Representaciones Av. 18 de Julio 1044, P-2, Of. 204 Montevideo Tel. : (598-2) Fax : (598-2) [email protected] Venezuela CellMark Inc. Av. Principal del Bosque Edificio Suzet Planta Baja Of. 1 y 2 Urbanización El Bosque Caracas Tel. : (58-212) Fax : (58-212) [email protected] CMPC TISSUE S.A. Bolivia Proesa Av. Arce 2847, La Paz Tel. : (591-2) Fax : (591-2) [email protected] Mr. Luis Roberto Urquizo Ecuador Distribuidor Zona La Costa Maxin S.A. Mapasingue este, calle 4ta NS 122 y Vía Daule Post Box Guayaquil Tel. : (593-4) Fax : (593-4) [email protected] Mr. Guillermo Campos Sierra Distribution Agent Intermedia C.A. Inmomedia Vía a Llano s/n (Ciudadela Alegría) Post Box: Tel. : (593-2) Fax : (593-2) [email protected] Mr. Juan Najas Paraguay Trovato CISA Calle Central 1340 Asunción Tel. : (595-21) Fax : (595-21) [email protected] Mr. Marco Trovato Ramírez Díaz de Espada Industrial y Comercial S.A.E.C.A. Raul Díaz de Espada y Curupayty Fernando de la Mora Paraguay Tel. : (595-21) Fax : (595-21) [email protected] Mr. Juan M. Pozzán CMPC PRODUCTOS DE PAPEL S.A. Envases Impresos Chimolsa - PROPA Argentina - Brazil and Uruguay Raúl Scialabba Calle Bulnes to piso Buenos Aires Tel. : (54-11) Cel. : (54-911) [email protected] Peru Imexagro S.A.C. Reinaldo Avendaño / Jorge Avendaño Calle Los Jazmines 125 Urb. Valle Hermoso - Surco Lima Tel. : (51-1) Fax : (51-1) [email protected] FABI Argentina - Chimolsa Uruguay P.R.I. y Asociados Colonia 981 oficina 403 C.P Montevideo Tel. : (5982) Mr. Fernando Incerti [email protected] INDUSTRIAS FORESTALES S.A. INFORSA Argentina PV INTERNATIONAL S.A. Ricardo Güiraldes 916/924, 1 Acassuso (1642) Buenos Aires Argentina Tel. : (54-11) Fax : (54-11) Mr. Gustavo Wahren [email protected] Mr. Pedro Wahren [email protected] Bolivia HEIN Ltda. Avenida Arce 2396, La Paz Tel. : (591-2) / Fax : (591-2) Post Box 1811, La Paz Mr. Carlos Hein [email protected] Brazil Cía. T. Janer Com. E Ind. Av. Henry Ford Sao Paulo SP Tel. : (55-11) Fax : (55-11) Mr. Luiz Carlos Baralle [email protected] China, Hong Kong and Vietnam Eurocell International Ltd Central Plaza, 18 Harbour Road, Hong Kong Tel. : (852) Fax : (852) Mr. Louis Chan [email protected] Colombia Inversanes Limitada Avenida 15 N Torre 1 - Oficina 205 Bogotá, Colombia Tel. : (571) Fax : (571) Mr. Juan Camilo Sandino [email protected] Dominican Republic and Puerto Rico Jorge Santelli Inc. 3 Westfield Lane White Plains, NY USA Tel. : (1-914) Fax : (1-914) [email protected] Ecuador - Guayaquil JGB Representaciones Córdova 810, Esq. Víctor M. Rendón Piso 17, Oficina 2, Guayaquil Tel. : (593-4) Fax : (593-4) Mr. Julio Guzman [email protected] Ecuador - Quito Alter Cia. Limitada Almagro 1550 y Pradera, Edificio P.A. Kingman Piso 4 B Tel. : (593-2) Fax : (593-2) Mr. Esteban Pérez [email protected] India, Thailand and Korea Kavo International Paper Trading Loferer Str Muenchen, Germany Tel. : (49) Fax : (49) Mr. Volker W. Hasemann [email protected] Mexico SOMA Comercializadora, S.A. de C.V. Insurgentes Sur A Col. Nápoles, C.P Mexico D.F. Tel. : (52) Fax : (52) Mr. Fernando Sánchez [email protected] Paraguay PYPA S.R.L. San Rafael 388 c / Avda. España Asunción Tel. : (595-21) Fax : (595-21) Mr. Rodolfo Serrano [email protected] Peru KINTOS S.A. Jirón Juno 102 Urbanización La Campiña Chorrillos Lima 9 Tel. : (51-1) Fax : (51-1) Mr. Alfredo Granda [email protected] United Kingdom International Forest Products (UK) Winchombe House Bartholomew Street Newbury, Berkshire RG 14 5BN Tel. : ( ) Fax : ( ) Mr. Jonathan Heywood [email protected] USA Anticosti, LLC 41 Prospect Street Midland Park, NJ Tel. : (1-201) Fax : (1-201) Mr. Bill Parrilla [email protected] Uruguay Arturo Nogueira Representaciones Avda. 18 de Julio Nº 1044, Of. 204 Montevideo Tel. : (598-2) Fax : (598-2) Ms. Selina Nogueira [email protected] Venezuela Inversiones Catorce SRL Avda. Libertador, Edificio La Línea, Torre A, Piso 1 Caracas 1050 Tel. : (58-212) Fax : (58-212) Mr. Adan Celis Mr. Dagoberto Romer [email protected]

140 138 Bankers In Chile ABN AMRO Banco BICE Banco Crédito e Inversiones Banco de Chile Banco del Desarrollo Banco Santander - Chile Banco Security BancoEstado BankBoston BBVA Citibank Corpbanca Deutsche Bank Chile HSBC Bank USA JP Morgan Chase Bank Scotiabank Sud Americano Abroad ABN AMRO Bank Banca Commerciale Italiana Banca Natzionale del Lavoro Banco Bilbao Vizcaya Argentaria Banco de Crédito del Peru Banco de Galicia y Buenos Aires Banco Santander Central Hispano Bank of America Bank Boston Barclays Bank Bayerische Hypo-Und Vereinsbank Bayerische Landesbank BNP Paribas Brown Brothers Harriman Caja Madrid Calyon Citibank DEG Deutsche Investitions und Entwicklungsgesellschaft Deutsche Bank Dresdner Bank Export Development Canada Goldman Sachs HSBC Bank ING Bank JP Morgan Chase Bank Mizuho Corporate Bank Morgan Stanley Dean Witter N.M. Rothschild & Sons Nordea Bank Rabobank Royal Bank of Canada Sanpaolo IMI Société Générale The Bank of Nova Scotia The Bank of Tokyo-Mitsubishi UBS Warburg Wachovia Bank

141 General Information 139 EMPRESAS CMPC S.A. Chilean Public Liability Company incorporated by public deed on February 5, Authorized by Supreme Decree Nº 589 of March 12, Listed in the Trade Registry for 1920 on page 366 Nº 208. Listed with the Registry of Securities on March 31, 1982 under Nº Offices: General Management Agustinas 1343, P. 10 Tel. : 56 (2) Fax : 56 (2) Post Code Post Box 297, Correo Central Santiago R.U.T Share Registry Agustinas 1343, Entrepiso Tel. : 56 (2) Fax : 56 (2) Post Code: Post Box 297, Correo Central Santiago Inversiones CMPC S.A. Agustinas 1343, P. 9 Tel. : 56 (2) Fax : 56 (2) Post Box 297, Correo Central Santiago SUBSIDIARIES IN CHILE Forestal Mininco S.A. General Management Agustinas 1343, P. 4 Tel. : 56 (2) Fax : 56 (2) Post Box 297, Correo Central Santiago Concepción Office Los Canelos 79, San Pedro de la Paz Tel. : 56 (41) Fax : 56 (41) Post Box 43-C [email protected] Concepción Los Ángeles Office Avenida Alemania 751 Tel. : 56 (43) Fax : 56 (43) Post Box 399 Los Ángeles Carlos Douglas Nursery Fundo Las Tres Marías y María Pilar Tel./Fax : 56 (43) Yumbel CMPC Maderas S.A. General Management Agustinas 1343, P. 4 Tel. : 56 (2) Fax : 56 (2) Post Box 297, Correo Central [email protected] [email protected] Santiago Head Office Avda. Alemania 751 Tel. : 56 (43) Fax : 56 (43) Post Box 30 - D Los Ángeles Remanufacturing Mill Panamericana Sur Km. 494 s/n (1 Km. interior cruce La Mona) Tel. : 56 (43) Fax : 56 (43) Post Box 30 - D Los Ángeles Mulchén Mill Panamericana Sur Km. 540 s/n Tel. : 56 (43) Fax : 56 (43) Post Box 152 Mulchén Bucalemu Mill Panamericana Sur Km. 471 (1,5 Km Camino Laja) Tel. : 56 (43) Fax : 56 (43) Cabrero Nacimiento Mill Recinto Industrial s/n Tel. : 56 (43) Tel./Fax : 56 (43) Fax : 56 (43) Post Box 1799 Nacimiento Inmobiliaria Pinares S.A. Avda. Alemania 751 Tel. : 56 (43) Fax : 56 (43) Post Box 30 - D Los Ángeles Inmobiliaria y Forestal Maitenes S.A. Los Canelos 79 San Pedro de la Paz Tel. : 56 (41) Fax : 56 (41) Post Box 43-C [email protected] Concepción Forestal Coihueco S.A. Los Canelos 79 Tel. : 56 (41) Fax : 56 (41) Post Box 43-C [email protected] Concepción Forestal y Agrícola Monteáguila S.A. General Management Av. Francisco Encina s/n, Paillihue Tel. : 56 (43) Fax : 56 (43) Post Box 32-D [email protected] Los Ángeles Hacienda Rucamanqui Rucamanqui s/n Tel./Fax: 56 (43) (43) Tucapel CMPC Celulosa S.A. General Management Agustinas 1343, P. 3 Tel. : 56 (2) Fax : 56 (2) Post Box 297, Correo Central [email protected] [email protected] Santiago Pacífico Mill Av. Jorge Alessandri 001 Mininco, Comuna Collipulli Tel. : 56 (45) Fax : 56 (45) Post Box 11 - D Angol Laja Mill Balmaceda 30 Tel. : 56 (43) Fax : 56 (43) Post Box 108 Laja Santa Fe Mill Av. Julio Hemmelmann 670 Tel. : 56 (43) Fax : 56 (43) Post Box 1797 Nacimiento CMPC Papeles S.A. Agustinas 1343, P. 5 Tel. : 56 (2) Fax : 56 (2) Post Box 297, Correo Central Post Code [email protected] Santiago Cartulinas CMPC S.A. General Management Agustinas 1343, P. 5 Tel. : 56 (2) Fax : 56 (2) Post Code [email protected] Santiago Valdivia Mill Av. José Manuel Balmaceda 8500 Tel. : 56 (63) Fax : 56 (63) Post Box 5 - D Valdivia Maule Mill Ruta L-25, Yerbas Buenas Tel. : 56 (71) ( 2) Fax : 56 (71) ( 2) Post Box Talca Linares Puente Alto Dispatch Warehouse Eyzaguirre Tel. : 56 (2) Fax : 56 (2) Post Box 23 Puente Alto, Santiago Talcahuano Dispatch Warehouse Juan Antonio Ríos 185 interior Tel. : 56 (41) Talcahuano San Antonio Dispatch Warehouse Hijuela 1-B Ruta 78 Cruce Cartagena Tel. : 56 (35) San Antonio Aníbal Pinto 261 Tel. : 56 (35) Fax : 56 (35) Post Box 178 San Antonio Valparaíso Dispatch Warehouse Tupungato 2821, Parque Industrial Curauma Tel. : 56 (32) Fax : 56 (32) Valparaíso Maipú Dispatch Warehouse Camino a Melipilla 9070 Tel. : 56 (2) Fax : 56 (2) Maipú Papeles Cordillera S.A. Eyzaguirre Tel. : 56 (2) Fax : 56 (2) Post Box 23 Puente Alto, Santiago Industrias Forestales S.A. INFORSA General Management Agustinas 1357, P. 9 Tel. : 56 (2) Fax : 56 (2) Post Box 9201, Correo Central [email protected] Santiago Nacimiento Mill Av. Julio Hemmelmann 330 Tel. : 56 (43) Fax : 56 (43) Post Box 1791 Nacimiento Forestal Crecex S.A. Agustinas 1357, P. 9 Tel. : 56 (2) Fax : 56 (2) Santiago Los Canelos 79 San Pedro de la Paz Tel. : 56 (41) Fax : 56 (41) Concepción Empresa Distribuidora de Papeles y Cartones S.A. EDIPAC Head Office Las Esteras Sur 2501 Tel. : 56 (2) Fax : 56 (2) [email protected] Quilicura, Santiago Sucursales Copiapó 1039 Tel./Fax : 56 (2) Santiago Limache 4627 Tel. : 56 (32) Fax : 56 (32) Viña del Mar Paicaví 3025 Tel./Fax : 56 (41) Concepción Avda. Rudecindo Ortega Tel. : 56 (45) Fax : 56 (45) Temuco Sociedad Recuperadora de Papel S.A. SOREPA General Management Venecia 3200 Tel. : 56 (2) Fax : 56 (2) Post Box 1828 [email protected] San Joaquín, Santiago Pudahuel Mill Camino Renca, Lampa, Parcela 3 Parcelación El Bosque Tel. : 56 (2) Fax : 56 (2) Pudahuel, Santiago CMPC Tissue S.A General Management Agustinas 1343, P. 6 Tel. : 56 (2) Fax : 56 (2) Santiago Tissue Chile Management Puente Alto Mill Eyzaguirre Tel. : 56 (2) Fax : 56 (2) Puente Alto, Santiago

142 140 Talagante Mill Camino a Isla de Maipo 0297 Tel. : 56 (2) Fax : 56 (2) Talagante Inversiones PROTISA S.A. Agustinas 1343 Tel. : 56 (2) Fax : 56 (2) Santiago CMPC Productos de Papel S.A. Agustinas 1343, P. 6 Tel. : 56 (2) Fax : 56 (2) Post Box 297 Santiago Chilena de Moldeados S.A. CHIMOLSA José Luis Coo Tel. : 56 (2) Fax : 56 (2) Post Code Post Box 208, Puente Alto [email protected] Santiago PROPA S.A. Management & Sales Huérfanos 1376, P. 9 Tel. : 56 (2) Fax : 56 (2) Post Box 2413, Correo Central [email protected] Santiago Mill Longitudinal Norte Km.3 s/n Tel. : 56 (42) Fax : 56 (42) Chillán Warehouse Panamericana Norte Km. 4 N 2751 Chillán Productos Austral S.A. Agustinas 1343, P. 6 Tel. : 56 (2) Fax : 56 (2) Santiago Envases Impresos S.A. Management & Mill Camino Alto Jahuel 0360 Tel. : 56 (2) Fax : 56 (2) Buin, Santiago Envases Roble Alto Ltda. Management & Sales Lo Echevers 221 Tel. : 56 (2) Fax : 56 (2) [email protected] Quilicura, Santiago Quilicura Mill Ojos del Salado 0711 Tel. : 56 (2) Fax : 56 (2) Quilicura, Santiago Til Til Mill Camino Cerro Blanco de Polpaico 100 Tel. : 56 (2) Fax : 56 (2) Til Til Servicios Compartidos CMPC S.A. General Management Agustinas 1343, P. 8 Tel. : 56 (2) Fax : 56 (2) Santiago Portuaria CMPC S.A. Alcalde René Mendoza 190, Lirquén Tel. : 56 (41) Fax : 56 (41) Post Box 64 [email protected] Penco RELATED COMPANIES Bicecorp S.A. Teatinos 220, P. 5 Tel. : 56 (2) Fax : 56 (2) Santiago Inversiones El Raulí S.A. Teatinos 280, P. 3 Tel. : 56 (2) Tel./Fax : 56 (2) [email protected] Santiago Controladora de Plagas Forestales S.A. Camino Público Los Ángeles Laja s/n - Sector Curamávida Tel. : 56 (43) Fax : 56 (43) Post Box 1194 [email protected] Los Angeles OVERSEAS SUBSIDIARIES CMPC Investments Ltd. P.O. Box 472, St. Peters House Le Bordage, St. Peter Port Guernsey GY1 6AX, Channel Islands CMPC Europe Limited Representative Claudio Ojeda Strauch 5 Dukes Gate Acton Lane Chiswick London W4 5DX Tel. : 44 (20) Fax : 44 (20) London, England CMPC Asia Limited Representative Patricio Arenas López Toto Building 6th Fl Toranamon Minato - ku, Tokyo Tel. : 81 (3) Fax : 81 (3) [email protected] Japan CMPC Inversiones de Argentina S.A. Suipacha 1111, P.18 Tel. : 54 (11) Fax : 54 (11) Post Code C1008AAW Buenos Aires, Argentina La Papelera del Plata S.A. General Management Av. Intendente Francisco Rabanal 3120 Tel. : 54 (11) Fax : 54 (11) [email protected] Buenos Aires, Argentina Zárate Mill Camino de la Costa Brava Km. 7 Tel. : 54 (03) Fax : 54 (03) Zárate, Buenos Aires Argentina Corepa Mill Paysandú 601 Tel. : 54 (11) Fax : 54 (11) Wilde, Buenos Aires Argentina Córdoba Mill Lizardo Novillo Saravia 400 Barrio Ipona Tel./Fax: 54 (0351) Córdoba, Provincia de Córdoba Argentina Naschel Mill 9 de Julio s/n e Islas Malvinas Tel./Fax: 54 (2656) Naschel, San Luis Argentina Forestal Bosques del Plata S.A. Suipacha 1111, P. 18 Tel. : 54 (11) Fax : 54 (11) Post Code C1008AAW [email protected] Buenos Aires, Argentina Calle 186 Parcela 3 Barrio San Isidro Tel. : 54 (3752) Fax : 54 (3752) int Post Box 34 Post Code 3300 Posadas, Misiones Argentina FABI Bolsas Industriales S.A. Management & Sales Virasoro 2656, Edificio Uruguay III Tel./Fax : 54 (11) Post Code B1643HDB, Beccar Provincia de Buenos Aires [email protected] Buenos Aires, Argentina Hinojo Mill Calle 5 s/n - (7310) Hinojo - Olavarría Tel./Fax: 54 (22) Buenos Aires, Argentina Naschel S.A. General Management Av. Intendente Francisco Rabanal 3120 Tel. : 54 (11) Fax : 54 (11) Buenos Aires, Argentina Naschel Mill Pringles entre Belgrano y 25 de Mayo Tel. : 54 (26) Fax : 54 (26) Naschel, San Luis Argentina Papelera del Rimac S.A. Av. Santa Rosa 550, Santa Anita Tel. : 51 (1) Fax : 51 (1) [email protected] Lima, Peru Productos Tissue del Perú S.A. Av. Santa Rosa 550, Santa Anita Tel. : 51 (1) Fax : 51 (1) [email protected] Lima, Peru Centro de Conversión y Distribución Av. Los Rosales 560 Santa Anita Tel/Fax: 51 (1) Lima, Peru FORSAC Perú S.A. Av. Gerardo Unger 5339, Los Olivos Tel. : 51 (1) Fax : 51 (1) [email protected] Lima, Peru Gestum Inversiones, S.L. Velázquez Madrid Tel. : 34 (91) Fax : 34 (91) Spain Protisa do Brasil Ltda. Rua Albuquerque Lins Andar c.j. 81 y 84 Tel./Fax: 55 (11) Post Code Barrio Santa Cecilia Sao Paulo, Brazil IPUSA S.A. Av. España s/n Ciudad de Pando - Canelones Tel. : 59 (82) Fax : 59 (82) Post Code [email protected] Uruguay Compañía Primus del Uruguay S.A. Av. España s/n Ciudad de Pando - Canelones Tel. : 59 (82) Fax : 59 (82) Post Code Uruguay Celulosas del Uruguay S.A. Av. España s/n Ciudad de Pando - Canelones Tel. : 59 (82) Fax : 59 (82) Post Code Uruguay CMPC USA, INC Crown Pointe Parkway Suite 1590 Atlanta, GA Tel. : 1 (770) Fax : 1 (770) [email protected] USA Inversiones CMPC Cayman Ltd. P.O. BOX 309, Ugland House South Church Street George Town Grand Cayman, Cayman Islands PROPA Cayman Ltd. P.O. Box 309, Ugland House South Church Street George Town Grand Cayman, Cayman Islands Tissue Cayman Ltd. P.O. Box 309, Ugland House South Church Street George Town Grand Cayman, Cayman Islands

143 141