SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

For the month of December, 2014

Commission File Number 33-99720

ARAUCO AND CONSTITUTION PULP INC.

(Translation of registrant’s name into English)

El Golf 150

Fourteenth Floor

Santiago, Chile

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F  x            Form 40-F  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ¨

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  ¨            No   x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-            

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Celulosa Arauco y Constitución, S.A.
	(Registrant)
Date: March 23, 2015	By:	/s/ Matías Domeyko Cassel
	Name:	Matías Domeyko Cassel
	Title:	Chief Executive Officer

ARAUCO AND CONSTITUTION PULP INC

TABLE OF CONTENTS

Item			Page
	1.	Ratio Analysis of the Consolidated Financial Statement		1
	2.	Unaudited Consolidated Financial Statement		7
	3.	Unaudited Consolidated Financial Income Statement		9
	4.	Unaudited Consolidated Statement of Changes in Net Equity		12
	5.	Unaudited Consolidated Statement of Cash Flow		13
	6.	Unaudited Notes to the Consolidated Financial Statement		14
	7.	Annex: Press Release

CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Ratio Analysis of the Consolidated Financial Statement

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

1. ANALYSIS OF FINANCIAL POSITION

a) Statement of Financial Position

The principal components of assets and liabilities are at year end, as follows:

Assets	12-31-2014 ThU.S.$		12-31-2013 ThU.S.$
Current assets		3,140,715		2,808,321
Non-current assets		11,606,739		11,685,074
Total assets		14,747,454		14,493,395

Liabilities	12-31-2014 ThU.S.$		12-31-2013 ThU.S.$
Current liabilities		1,547,086		1,682,016
Non-current liabilities		6,385,632		5,766,839
Non-parent participation		47,606		52,242
Net equity attributable to parent company		6,767,130		6,992,298
Total net equity and liabilities		14,747,454		14,493,395

As of December 31, 2014, total assets increased US$254 million compared to December 31, 2013, equivalent to 1.75% of variation. This deviation is mainly attributable to an increase in the balance of cash and cash equivalents, trade receivables and accounts receivable from related parties.

Moreover, current liabilities increased US$484 million mainly attributable to an increase in financial liabilities and deferred tax liabilities.

The main financial and operating indicators contributing to the balance are as follows:

Liquidity ratios	12-31-2014		12-31-2013
Current Liquidity (current assets / current liabilities)		2.03		1.67
Acid ratio ((current assets-inventories, biological assets) / current liabilities)		1.25		0.98

Debt indicators	12-31-2014		12-31-2013
Debt to equity ratio (total liabilities / equity)		1.16		1.06
Short-term debt to total debt (current liabilities / total liabilities)		0.19		0.23
Long-term debt to total debt (non-current liabilities / total liabilities)		0.81		0.77

	12-31-2014		12-31-2013
Financial expenses coverage ratio (earnings before taxes + interest expense / interest expense)		3.41		3.36

1

CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Ratio Analysis of the Consolidated Financial Statement

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Activity ratio	12-31-2014		12-31-2013
Inventory turnover-time (cost of sales / inventories + current biological assets)		3.10		3.17
Inventory turnover-time (excluding biological assets) (Cost of sales /inventory)		4.07		4.13
Inventory permanence-days ((inventories + biological assets) /cost of sales)		116.19		113.47
Inventory permanence-days (excluding biological assets) (inventory / cost of sales)		88.38		87.18

As of December 31, 2014, the short-term debt represented 20% of total liabilities (23% as of December 31, 2013).

The ratio of financial expenses covered represents an increase of 3.36 to 3.41. This increase is mainly attributable to a higher proportional result before tax for the 2014 period, compared to the same period of 2013.

b) Statements of income

Profit before Income Tax

Profit before Income Tax registered a profit of US$593 million compared to a profit of US$549 million in the same period of the previous year, equivalent to a positive variation of US$44 million. The effect is explained by the factors described in the following table:

Item	Million U.S.$
Gross margin		86
Distribution and Administrative Expenses		(25	)
Other income/ expenses by function		(17	)
Net change in income before income tax		44

Gross Margin represents a profit of U.S.$1,675 million, U.S.$86 million higher compared to the previous period (U.S.$1,588 million as of December 31, 2013) mainly caused by an increase in sales prices and in sales volumes pulp.

The main indicators related to result accounts and the details of revenues and operation costs are as follows:

Revenues	12-31-2014 ThU.S$		31-12-2013 ThU.S$
Pulp		2,334,338		2,180,756
Sawn timber		962,158		829,924
Panels		1,850,861		1,940,860
Forestry		148,473		160,490
Other		32,835		33,470
Total revenues		5,328,665		5,145,500

2

CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Ratio Analysis of the Consolidated Financial Statement

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Sales costs	12-31-2014 ThU.S$		12-31-2013 ThU.S$
Wood		808,991		869,036
Forestry work		655,257		631,749
Depreciation and amortization		323,306		271,708
Other costs		1,866,592		1,784,717
Total sales costs		3,654,146		3,557,210

Profitability index	12-31-2014		12-31-2013
Profitability on equity		6.30		5.98
Profitability on assets		2.99		2.91
Return on operating assets		4.25		3.90

Profitability ratios	12-31-2014			31-12-2013
Income per share (U.S.$) (1)		3.82			3.41
Income after tax (ThU.S.$) (2)		436,890			418,577
Gross margin (ThU.S.$)		1,674,519			1,588,290
Financial costs (ThU.S.$)		(246,473	)		(232,843	)

(1) Earnings per share refer to the profit to net equity to parent company.

(2) Includes interest.

EBITDA	12-31-2014 MU.S.$			12-31-2013 MU.S.$
Gain (loss)		436.9			418.6
Finance cost		246.5			232.8
Financial Income		(30.8	)		(19.1	)
Expenses for income tax		115.9			130.4
EBIT		808.5			762.7
Depreciation and amortization, others*		384.9			317.6
EBITDA		1,193.5			1,080.4
Cost at fair value of the harvest		353.3			320.9
Gain from changes in fair value of biological assets		(284.5	)		(269.7	)
Exchange difference		10.0			11.8
Adjusted EBITDA		1,272.2			1,143.4

* 2014: Forest loss provision MU.S.$33.3;2013: Forest roads amortization MU.S.$19.0

2. MAIN SOURCES OF FINANCING

Arauco’s financing needs are mainly covered through the capital markets, with bond issuances and credits with banks and financial institutions serving as the main sources of financing. For short-term borrowing, Arauco is regulated by its liquidity policy which indicates the amounts and institutions from which it can borrow according to several conditions defined in the policy. In the case of long-term debt, corporate bond issuances in the local market and also in international markets are used as sources of new resources. Another source of long-term financing to credit corresponds mainly with banks and financial institutions around the world.

3. DIFFERENCE BETWEEN ECONOMIC VALUES AND BOOK ASSETS

Assets and liabilities are presented in the Financial Statements according to International Financial Reporting Standards and instructions issued by the Chilean Securities Commission.

3

CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Ratio Analysis of the Consolidated Financial Statement

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

We believe that there are no substantial differences between the economic value of our assets and the value reflected in these Financial Statements.

4. MARKET SITUATION

Pulp Division

Market trends seen during the third quarter began to change during the fourth quarter, with less demand for long fiber and a more balanced market in short fiber –despite the extra supply that came with the start up the Montes del Plata mill in Uruguay. This situation is in line with changes in inventory levels worldwide. In long fiber, there was a four day increase over the previous quarter and a four day increase compared to one year ago, standing at 31 days. In short fiber, inventory levels stood at 36 days, a drop by two days with respect to the third quarter and two days compared to December 2013. Supply and demand balance in short fiber is explained by mill shutdowns in Europe and North America. The aggregate capacity of these mills was partially offset by that of new mills such as Montes del Plata. Furthermore, the price differential we have seen for several months between long fiber and short fiber has continuously triggered substitution of long fiber with short fiber at levels that will vary depending on the type of paper produced and the technology used. Another factor that may be affecting demand for short fiber is substitution of recycled fiber. In mature markets there is less supply of recycled fiber or substitution has reached maximum levels. In part this happens because certain electronic devices replace the use of printing and writing paper, which are in general the main source of high quality recycled fiber. Recycled paper prices have reached levels that are inconvenient, and are substituted by virgin fibers, especially short fiber, for example in tissue paper.

In Asia, short fiber prices grew by approximately 5% and bleached long fiber prices dropped by 3.5%. This situation stretched the price differential down to nearly US$100 from a peak of US$150-160. In the Asian markets the increased supply of long fiber from Russian producers is what most affected prices. This is the only market where Russian producers are competitive, especially in China where almost all of its long fiber is sold. Ilim is Russia’s most important producer, and is under substantial pressure to sell its production from its new line which has been operational for over a year.

In Europe, we saw the same trend but smoother in both fiber grades. Short fiber prices increased by approximately 2.7% and long fiber prices dropped roughly 2.5%. The main driver of this trend is the shift of short fiber volume to other more profitable markets, in particular, Asia and North America, in the case of Brazilian producers. In long fiber it is the opposite situation: Asian markets are less profitable hence European long fiber producers export less. European paper producers continue with very low margins or no margin at all, which makes it difficult to raise prices.

In the Middle East, short fiber prices increased and the market began to show more activity in order to accumulate inventory at low price levels. This brings a positive effect on prices but does not necessarily add more effective shipping volumes given that producers’ inventory levels seem to be low. The North American market was very active in short fiber imports, especially because of high demand in the tissue paper market. The rest of America was stable, with good demand, but with increasingly more import options from different origins which is reflected by more competitive prices.

4

CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Ratio Analysis of the Consolidated Financial Statement

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

During this quarter production was normal and there were only programmed maintenance stoppages in our Valdivia and Constitucion mills. Our Montes del Plata mill in Uruguay is reaching designed capacity levels with production rates near 90%.

Sawn Timber Division

Markets where Arauco participates with solid Wood products had a positive behavior during year 2014, with a healthy demand that permitted us to improve the sales mix and prices, as compared to year 2013. Asian markets, in particular, Japan, South Korea and China, followed this positive behavior. During the fourth quarter there were some small adjustments given higher inventory levels in New Zealand logs particularly in China, however, demand kept strong.

With respect to the North American market, despite the Housing Starts index (a relevant index in our industry) did not show a significant improvement compared to year 2013, our solid wood moldings business grew both in volume and prices, giving evidence of a stable market environment.

The Middle East was another market that had a positive quarter, maintaining good sales volume levels during the year with small price increases.

Finally, Chile and the rest of Latin America had good demand, which allowed an increase in market share and allowed us to achieve sales mix targets.

Panels Division

During 2014 our plywood business had an increase in sales. Our Nueva Aldea plywood mill increased its production volume, and despite the entrance of new capacity such as Nueva Aldea among other mills, there was a stable price scenario in all of our export markets, particularly in the United States, Mexico and Oceania.

Also, we had good sales levels in particleboard from our Teno mill, which reached its design production capacity. We achieved an increase in sales of value-added products in Chile and in the rest of Latin America. Overall in 2014 we had strong demand for particleboard and melamine products in Arauco North America.

The main reason for the drop in sales of Panels for year 2014 was weak sales of MDF in all markets during the first half of the year. This drop was stronger in the Brazilian market, where we had to decrease production and prices on average were lower. But during the second half of the year the Brazilian market improved. In order to mitigate an oversupply in the North American market, we had to adjust production. Exports from Argentina decreased mainly because of more competition.

5

CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Ratio Analysis of the Consolidated Financial Statement

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

5. ANALYSIS OF CASH FLOW

The main components of net cash flow in each period are as follows:

	12-31-2014 ThU.S.$			12-31-2013 ThU.S.$
Positive (negative) Cash flow
Cash flow from operating activities		985,175			897,720
Cash flow from financing activities:
Loan and bond payments		135,006			(134,765	)
Dividend payments		(141,089	)		(140,054	)
Others		(1,802	)		(2,487	)
Cash flow from investment activities:
Loans to related companies		(158,797	)		—
Incorporation and sale of property, plant and equipment		(396,304	)		(528,749	)
Incorporation and sale of biological assets		(101,881	)		(184,252	)
Dividends received		12,073			18,562
Others		(10,249	)		6,819
Positive Net cash flow (negative)		322,132			202,324

The financing cash flow has a negative balance of U.S.$7,885 million in the current period, with lower variations from the previous period (negative balance U.S. $7,776)

In relation to the flow of investment at the end of the current period, there was a lower negative balance of U.S.$655,158 million (U.S.$687,620 million in 2013), mainly due to lower disbursements from the acquisition of properties, plant, equipment and biological assets in 2014, offset by loans from related companies.

6. MARKET RISK ANALYSIS

In respect of the economic risks resulting from interest rate variations, the Company maintains, as of December 31, 2014, a ratio of fixed rate debt to total consolidated debt of approximately 83.6%, which it believes is consistent with industry standards. The Company does not engage in futures against variations in the selling prices of pulp and forest products because it believes that risks resulting from price variations are limited, in large part because the Company maintains what it believes is one of the lowest cost structures in the industry.

The Company and most of its subsidiaries maintain their accounting records and prepare their financial statements in U.S. dollars. Both the accounts receivable and most financial liabilities are denominated in U.S. dollars or are covered by an exchange rate swap, as well as most of their revenues. As a result, exposure to changes in the exchange rate has decreased significantly.

In the report to the Consolidated Financial Statements December 31, 2014, Note 23, a detailed analysis of the risks associated with the business of Arauco is available.

6

CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

	Note	12-31-2014 ThU.S.$		12-31-2013 ThU.S.$
Assets
Current Assets
Cash and cash equivalents	5		971,152		667,212
Other current financial assets	23		7,633		3,089
Other current non-financial assets	25		177,728		188,964
Trade and other current receivables	23		731,908		711,678
Accounts receivable from related companies	13		4,705		8,243
Current Inventories	4		893,573		900,590
Current biological assets	20		307,551		256,957
Current tax assets			38,477		61,174
Total Current Assets other than assets or disposal groups classified as held for sale			3,132,727		2,797,907
Non-Current Assets or disposal groups classified as held for sale	22		7,988		10,414
Non-Current Assets or disposal groups classified as held for sale or as held for distribution to owners			7,988		10,414
Total Current Assets			3,140,715		2,808,321
Non-Current Assets	23
Other non-current financial assets	25		5,024		48,778
Other non-current non-financial assets	23		101,094		125,052
Trade and other non-current receivables			31,001		40,729
Related party receivables, non-current	13		151,519		0
Investments accounted for using equity method	15-16		326,045		349,412
Intangible assets other than goodwill	19		93,258		99,651
Goodwill	17		82,573		88,141
Property, plant and equipment	7		7,119,583		7,137,467
Non-current biological assets	20		3,538,802		3,635,246
Deferred tax assets			157,840		160,598
Total non-Current Assets			11,606,739		11,685,074
Total Assets			14,747,454		14,493,395

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

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (continued)

	Note	12-31-2014 ThU.S.$			12-31-2013 ThU.S.$
Equity and liabilities
Liabilities
Current Liabilities
Other current financial liabilities	23		742,343			893,605
Trade and other current payables	23		630,406			630,980
Accounts payable to related companies	13		6,036			14,406
Other current provisions	18		2,535			9,696
Current tax liabilities			25,860			4,472
Current provisions for employee benefits	10		3,590			3,814
Other current non-financial liabilities	25		136,316			125,043
Total current liabilities other than assets included in disposal groups classified as held for sale			1,547,086			1,682,016
Total Current Liabilities			1,547,086			1,682,016
Non-Current Liabilities
Other non-current financial liabilities	23		4,453,819			4,156,992
Non-current Payables			0			361
Other non-current provisions	18		64,529			24,167
Deferred tax liabilities	6		1,756,706			1,462,295
Non-current provisions for employee benefits	10		48,582			42,170
Other non-current non-financial liabilities	25		61,996			80,854
Total non - current liabilities			6,385,632			5,766,839
Total liabilities			7,932,718			7,448,855
Equity
Issued capital			353,618			353,618
Retained earnings			6,984,564			7,004,640
Other reserves			(571,052	)		(365,960	)
Equity attributable to parent company			6,767,130			6,992,298
Non-controlling interests			47,606			52,242
Total equity			6,814,736			7,044,540
Total equity and liabilities			14,747,454			14,493,395

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

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

CONSOLIDATED STATEMENTS OF INCOME

	Note	January-December
		2014 ThU.S.$			2013 ThU.S.$
Income Statement
Revenue	9		5,328,665			5,145,500
Cost of sales	3		(3,654,146	)		(3,557,210	)
Gross profit			1,674,519			1,588,290
Other income	3		368,924			385,055
Distribution costs	3		(542,859	)		(523,587	)
Administrative expenses	3		(550,809	)		(544,694	)
Other expense	3		(138,769	)		(136,812	)
Profit (loss) from operating activities			811,006			768,252
Finance income	3		30,772			19,062
Finance costs	3		(246,473	)		(232,843	)
Share of profit (loss) of associates and joint ventures accounted for using equity method	15		7,481			6,260
Exchange rate differences			(9,961	)		(11,797	)
Income before income tax			592,825			548,934
Income Tax	6		(155,935	)		(130,357	)
Net Income			436,890			418,577
Net income attributable to
Net income attributable to parent company			431,958			385,657
Income attributable to non-controlling interests			4,932			32,920
Profit (loss)			436,890			418,577
Basic earnings per share
Earnings per share from continuing operations			0.0038172			0.0034081
Basic earnings per share			0.0038172			0.0034081
Earnings per diluted shares
Earnings per diluted share from continuing operations			0.0038172			0.0034081
Basic earnings per diluted share			0.0038172			0.0034081

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

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

		January-December
	Note	2014 ThU.S.$			2013 ThU.S.$
Profit (loss)			436,890			418,577
Components of other comprehensive income that will not be reclassified to profit or loss before tax:
Other comprehensive income before tax actuarial gains losses on defined Benefit plans	10		(12,829	)		(4,143	)
Share of other comprehensive income of associates and joint ventures accounted for using equity method that will not be reclassified to profit or loss before tax			(4,781	)		2,222
Other Comprehensive Income that will not be reclassified to profit or loss before tax			(17,610	)		(1,921	)
Components of other comprehensive income that will be reclassified to profit or loss before tax:
Exchange differences on translation
Gains (losses) on exchange differences on translation, before tax	11		(163,844	)		(174,985	)
Other Comprehensive Income before tax exchange differences on translation			(163,844	)		(174,985	)
Cash flow hedges
Gains (losses) on cash flow hedges, before tax	23		(55,803	)		22,318
Reclassification adjustments on cash flow hedges before tax	23		13,524			7,591
Other Comprehensive Income before tax Cash flow hedges			(42,279	)		29,909
Other Comprehensive income that will be reclassified to profit or loss before tax			(206,123	)		(145,076	)
Income tax relating to components of other comprehensive Income that will not be reclassified to profit or loss before tax
Income tax relating to defined benefit plans of other comprehensive income			3,404			829
Income tax relating to components of other comprehensive Income that will be reclassified to profit or loss before tax
Income tax relating to cash flow hedges of other comprehensive income	6		10,764			(5,400	)
Income tax relating to components of other comprehensive income that will be reclassified to profit or loss abstract			10,764			(5,400	)
Other comprehensive income			(209,565	)		(151,568	)
Comprehensive income			227,325			267,009

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Comprehensive Income attributable to

Comprehensive income, attributable to owners of parent company	226,866	239,346
Comprehensive income, attributable to non-controlling interests	459	27,663
Total comprehensive income	227,325	267,009

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

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

12-31-2014	Issue Capital ThU.S.$		Reserve of exchange differences on translation ThU.S.$			Reserve of cash flow hedges ThU.S.$			Reserve of actuarial gains or losses on defined benefit plans ThU.S.$			Several Other Reserves ThU.S.$			Other Reserves ThU.S.$			Retained Earnings ThU.S.$			Equity attributable to owners of parent T.hU.S.$			Non- controlling interests ThU.S.$			Total Equity ThU.S.$
Opening balance at 01/01/2014		353,618		(339,105	)		(21,507	)		(6,384	)		1,036			(365,960	)		7,004,640			6,992,298			52,242			7,044,540
Changes in Equity:
Comprehensive income
Net income																			431,958			431,958			4,932			436,890
Other comprehensive income, net of tax				(159,390	)		(31,515	)		(9,406	)		(4,781	)		(205,092	)					(205,092	)		(4,473	)		(209,565	)
Comprehensive income		0		(159,390	)		(31,515	)		(9,406	)		(4,781	)		(205,092	)		431,958			226,866			459			227,325
Dividends																			(159,879	)		(159,879	)		(4,533	)		(164,412	)
Increase (decrease) through for transfers and other changes in equity																			(292,155	)		(292,155	)		(562	)		(292,717	)
Changes in equity		0		(159,390	)		(31,515	)		(9,406	)		(4,781	)		(205,092	)		(20,076	)		(225,168	)		(4,636	)		(229,804	)
Closing balance at 12/31/2014		353,618		(498,495	)		(53,022	)		(15,790	)		(3,745	)		(571,052	)		6,984,564			6,767,130			47,606			6,814,736

12-31-2013	Issue Capital ThU.S.$		Reserve of exchange differences on translation ThU.S.$			Reserve of cash flow hedges ThU.S.$			Reserve of actuarial gains or losses on defined benefit plans ThU.S.$			Several Other Reserves ThU.S.$			Other Reserves ThU.S.$			Retained Earnings ThU.S.$			Equity attributable to owners of parent T.hU.S.$			Non - controlling interests ThU.S.$			Total Equity ThU.S.$
Opening balance at 01/01/2013		353,176		(169,377	)		(46,016	)		(3,070	)		(1,186	)		(219,649	)		6,757,795			6,891,322			74,437			6,965,759
Changes in Equity:
Comprehensive income
Net income																			385,657			385,657			32,920			418,577
Other comprehensive income, net of tax				(169,728	)		24,509			(3,314	)		2,222			(146,311	)					(146,311	)		(5,257	)		(151,568	)
Comprehensive income		0		(169,728	)		24,509			(3,314	)		2,222			(146,311	)		385,657			239,346			27,663			267,009
Issue of equity		442																				442			(442	)		0
Dividends																			(138,812	)		(138,812	)		(29,760	)		(168,572	)
Increase (decrease) for transfer and other changes																						0			(17,392	)		(17,392	)
Increase (decrease) through changes in ownership interest in subsidiaries that do not result in loss of control																						0			(2,264	)		(2,264	)
Changes in equity		442		(169,728	)		24,509			(3,314	)		2,222			(146,311	)		246,845			100,976			(22,195	)		78,781
Closing balance at 12/31/2013		353,618		(339,105	)		(21,507	)		(6,384	)		1,036			(365,960	)		7,004,640			6,992,298			52,242			7,044,540

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

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

CONSOLIDATED STATEMENTS OF CASH FLOWS

	12-31-2014 ThU.S.$			12-31-2013 ThU.S.$
STATEMENTS OF CASH FLOWS
Cash Flows from (used in) Operating Activities
Classes of cash receipts from operating activities
Receipts from sales of goods and rendering of services		5,629,175			5,609,104
Receipts from premiums and claims, annuities and other policy benefits		5,100			29,840
Other cash receipts from operating activities		359,539			408,257
Classes of cash payments
Payments to suppliers for goods and services		(4,190,295	)		(4,117,942	)
Payments to and on behalf of employees		(499,370	)		(573,538	)
Other cash payments from operating activities		(122,027	)		(196,775	)
Interest paid		(204,915	)		(223,571	)
Interest received		46,658			18,451
Income taxes refund (paid)		(37,285	)		(55,272	)
Other (outflows) inflows of cash, net		(1,405	)		(834	)
Net Cash flows from Operating Activities		985,175			897,720
Cash flows (used in) investing activities
Capital contributions to joint ventures		(1,882	)		0
Loans to related parties		(158,797	)		0
Proceeds from sale of property, plant and equipment		63,492			116,639
Purchase of property, plant and equipment		(459,796	)		(645,388	)
Purchase of intangible assets		(10,101	)		(5,889	)
Proceeds from sale of other long-term assets		40,257			28,992
Purchase of biological assets		(142,138	)		(213,244	)
Cash receipts from repayment of advances and loans made to other parties classified as investing activities		0			5,000
Dividends received		12,073			18,562
Other outflows of cash, net		1,734			7,708
Cash flows used in Investing Activities		(655,158	)		(687,620	)
Cash flows from (used in) Financing Activities
Total loans obtained		1,035,601			1,351,682
Loans obtained in long term		829,348			394,464
Proceeds from short-term borrowings		206,253			957,218
Repayments of borrowings		(900,595	)		(1,216,917	)
Dividends paid by subsidiaries or special purpose companies		(141,089	)		(140,054	)
Other inflows of cash, net		(1,802	)		(2,487	)
Cash flows from (used in) Financing Activities		(7,885	)		(7,776	)
Net increase (decrease) in Cash and Cash Equivalents before effect of exchange rate changes		322,132			202,324
Effect of exchange rate changes on cash and cash equivalents		(18,192	)		(23,610	)
Net increase (decrease) of Cash and Cash equivalents		303,940			178,714
Cash and cash equivalents, at the beginning of the period		667,212			488,498
Cash and cash equivalents, at the end of the period		971,152			667,212

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

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31 2014 AND 2013

NOTE 1. PRESENTATION OF FINANCIAL STATEMENTS

Entity Information

Name of Reporting Entity

Celulosa Arauco y Constitución S.A. and subsidiaries, (here after “Arauco” or the “Company”), tax identification number 93,458,000-1, is a closely held corporation, that was registered in the Securities Registry (the “Registry”) of the Superintendency of Securities and Insurance (the “Superintendency”) as No. 042 on June 14, 1982. Forestal Cholguán S.A., subsidiary of Arauco, is also registered in the Registry as No. 030. Additionally, the Company is registered as a non-accelerated filer with the Securities and Exchange Commission of the United States of America.

The Company’s head office address is El Golf Avenue 150, floor 14 th, Las Condes, Santiago, Chile.

Arauco is principally engaged in the production and sale of forestry and timber products. Its main operations are focused on the following business areas: Pulp, Plywood and Fiberboard Panels, Sawn Timber and Forestry.

Arauco is controlled by Empresas Copec S.A., which owns 99.9779% of Arauco, and is registered in the Registry as No. 0028. Each of the above companies is subject to the oversight of the Superintendency.

The ultimate shareholders of Arauco are Mrs. Maria Noseda Zambra de Angelini, Mr. Roberto Angelini Rossi and Mrs. Patricia Angelini Rossi through the entity Inversiones Angelini y Cia. Ltda., which owns 63.4015% of the shares of AntarChile S.A., the controlling shareholder of our parent company Empresas Copec S.A.

Arauco’s Consolidated Financial Statements were prepared on a going concern basis.

Presentation of Financial Statements

The Financial Statements presented by Arauco as of December 31, 2014 are:

• Consolidated Statements of Financial Position as of December 31, 2014 and 2013.

• Consolidated Statements of Income for the periods ended December 31, 2014 and 2013.

• Consolidated Statements of Comprehensive Income for the periods ended December 31, 2014 and 2013.

• Consolidated Statements of Changes in Equity for the periods ended December 31, 2014 and 2013.

• Consolidated Statements of Cash Flows for the periods ended December 31, 2014 and 2013.

• Notes to the consolidated financial statements.

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Date of Approval of Financial Statements

These consolidated financial statements were authorized and approved for issuance by the Board of Directors of the Company (the “Board”) at the Extraordinary Session N° 521 held on March 5, 2015, for the period ended at December 31, 2014.

Initials used in this report:

IFRS - International Financial Reporting Standards

IASB - International Accounting Standards Board

IAS - International Accounting Standards

IFRIC - International Financial Reporting Standards Interpretations Committee

MU.S.$ - Millions of U.S. dollars

ThU.S.$ - Thousands of U.S. dollars

U.F. – Inflation index-linked units of account

EBITDA – Earnings Before Interest, Taxes, Depreciation, and Amortization

ICMS – Tax movement of inventories and services (Brazil)

Functional and Presentation Currency

Arauco and most of its subsidiaries has determined the United States (“U.S.”) Dollar as its functional currency since majority of its revenues from sales of its products are from exports denominated in U.S. Dollars, while its costs of sales are to a large extent related or indexed to the U.S. Dollar.

For the pulp operating segment, most of the sales are exports denominated in U.S. Dollars, and the costs are related mainly to plantation costs which are settled in U.S. Dollars.

For the sawmill, panel and forestry operating segments, although total sales include a mix of domestic and exports sales, the prices for the products are established in U.S. Dollars, as is also the case for the cost structure of the related raw materials.

In relation to cost of sales, although the costs of labor and services are generally billed and paid in local currency, these costs are not as significant as the costs of raw materials, which are driven mainly by global markets and therefore, influenced mostly by the U.S. Dollar.

The presentation currency of the consolidated financial statements is the U.S. Dollar.

Figures on these consolidated financial statements are presented in thousands of U.S. Dollar (ThU.S.$).

In these consolidated financial statements all relevant information required by IFRS has been presented.

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Additional Information Relevant to the Understanding of the Financial Statements

The company Fondo de Inversión Bío Bío and its subsidiary Forestal Río Grande S.A. were consolidated into the financial statements of Arauco up to September 2013, due to the fact that up until that date these entities were in essence controlled by Arauco and they kept exclusive contracts with Arauco for timber supply, forward purchases of land and forest management.

Compliance and adoption of IFRS

The accompanying consolidated financial statements of Arauco present in all material respects its financial position, its results of operations and its cash flows in accordance with IFRS as issued by the IASB, except as instructed in the Official Circular Letter No 856 of the superintendency of securities and insurance which provides in an exceptional form of accounting of changes in assets and liabilities for deferred tax caused by Law No. 20,780, published in the Official Journal on September 29, 2014 (See Note 6).

The Consolidated Financial Statements as of December 31, 2013 have been prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB).

This presentation is required to give a faithful representation of the effects of transactions, as well as other events and conditions, according to the definitions and criteria established within the conceptual framework of IFRS for the recognition of assets, liabilities, income and expenses and considering the regulations of the Superintendency of Securities and Insurance which take precedence over the former.

Summary of significant accounting policies

a) Basis for presentation of financial statements

The consolidated financial statements have been prepared on the historical cost basis, except for biological assets and certain financial instruments which are measured at revalued amounts or fair value at the end of each period as explained in the following significant accounting policies. Generally, historical cost is based on the fair value of the consideration given in exchange for goods and services.

b) Critical accounting estimates and judgments

The preparation of these consolidated financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the carrying amounts reported. These estimates are based on historical experience and various other assumptions that are considered to be reasonable. Actual results may differ from these estimates. Management believes that the accounting policies below are the critical judgments that have the most significant effect on the amounts recognized in the consolidated financial statements.

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

• Property, Plant and Equipment

In an asset acquisition, management values the acquired property, plant and equipment and their useful lives in consultation with third party experts.

The carrying amounts of property, plant and equipment are reviewed whenever events or changes in circumstances indicate that the carrying amount of an asset may be impaired. The recoverable amount of an asset is the higher of fair value less costs to sell and its value in use, with an impairment loss recognized whenever the carrying amount exceeds the recoverable amount. The value in use is calculated using a discounted cash flow model, which is most sensitive to the discount rate as well as the expected future cash inflows.

• Fair Value of Financial Instruments

The fair value of financial instruments that are not traded in an active market is determined by using internal valuation techniques. Arauco uses its judgment to select a variety of methods and makes assumptions that are mainly based on market conditions existing at each reporting date.

Detailed financial information about the fair value of financial instruments and sensitivity analysis are presented in Note 23.

• Biological Assets

The recovery of forest plantations is based on discounted cash flow models which mean that the fair value of biological assets is calculated using cash flows from continuing operations on a discounted basis, based on our sustainable forest management plans and the estimated growth of forests.

These discounted cash flows require estimates in growth, harvest, sales prices and costs. It is therefore important that management make appropriate estimates of future levels and trends for sales and costs, as well as conduct regular surveys of the forests to establish the volumes of wood available for harvesting and their current growth rates. The main considerations used to measure forest plantations are presented in Note 20, including a sensitivity analysis.

• Impairment of goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. Arauco estimates the value either based on appraisals and/or the future cash flows expected to arise from the cash-generating unit and suitable discount rate in order to calculate present value.

• Employee benefits

The cost of defined employee benefits for termination of employment, as well as the present value of the obligation is determined using actuarial valuations. The actuarial valuations involve making assumptions about discount rates, staff turnover, future salary increases and mortality rates.

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

• Litigation and Contingencies

Arauco and its subsidiaries are subject to certain litigation proceedings. Future effects on Arauco’s financial condition resulting from such litigation are estimated by management, in collaboration with its legal advisors. Arauco recognizes provisions on each statement of financial position date and/or upon each substantial modification to an underlying claim of any such litigation. For a description of current litigations see Note 18.

c) Consolidation

The consolidated financial statements include all entities over which Arauco has the power to direct the relevant financial and operating activities, which is presumed to exist when Arauco holds more than one half of the voting rights of an entity so as to obtain benefits from its activities. Subsidiaries (including special purpose entities) are consolidated from the date on which control is obtained and up to the date that control ceases.

Specifically, a company controls an investee if, and only if, they have all of the following:

(a) power over the investee, i.e. the investor has existing rights which give it the ability to direct the relevant activities (the activities that significantly affect the investee’s returns)

(b) exposure, or rights, to variable returns from involvement with the investee; and

(c) the ability to use power over the investee to affect the amount of the investor’s returns.

IFRS sets out requirements on how to apply the control principle:

(a) in circumstances when voting rights or similar rights give an investor power, including situations where the investor holds less than a majority of voting rights and in circumstances involving potential voting rights.

(b) in circumstances when an investee is designed so that voting rights are not the dominant factor in deciding who controls the investee, such as when any voting rights relate to administrative tasks only and the relevant activities are directed by means of contractual arrangements.

(c) in circumstances involving agency relationships.

(d) in circumstances when the investor has control over specified assets of an investee.

IFRS requires an investor to reassess whether it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.

When preparing consolidated financial statements, an entity must use uniform accounting policies for reporting like transactions and other events in similar circumstances. Intragroup balances and transactions must be eliminated. Non-controlling interests in subsidiaries must be presented in the consolidated statement of financial position within equity, separately from the equity attributable to owners of the parent company.

The profit or loss of each component of other comprehensive income is attributed to owners of the parent company and the non-controlling interest, as appropriate. Total comprehensive income is attributed to the owners of the parent company and non-controlling interests even if the results of the non-controlling interest have a deficit balance.

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

If a subsidiary uses accounting policies different than those adopted in the consolidated financial statements for transactions and other events in similar circumstances, appropriate adjustments are made in the financial statements of subsidiaries to prepare consolidated financial statements to ensure compliance with Arauco’s accounting policies.

All intercompany transactions and unrealized gains and losses from subsidiaries have been fully eliminated from consolidated financial statements and non-controlling interests is presented in the consolidated statement of financial position within equity, separately from the equity of the owners of the parent company.

The consolidated financial statements at the end of this period include the assets, liabilities, income and expenses of the subsidiaries shown in Note 13.

Certain consolidated subsidiaries have Brazilian Real and Chilean Pesos as their functional currencies. For consolidation purposes, the financial statements of those subsidiaries have been prepared in accordance with IFRS and translated into the presentation currency as indicated in Note 1 (e) (ii).

A parent company will present non-controlling interests in the consolidated statement of financial position within equity, separately from the equity of the owners of the parent company.

d) Segments

Arauco has defined its operating segments according to its business areas, based on the products and services sold to its customers. This definition is consistent with the management, resource allocation and performance assessment made by key personnel responsible for making relevant decisions related to the Company’s operation. The Chief Operating Decision Maker (CODM) is the Chief Executive Officer who is responsible for making these decisions and it is supported by the Corporate Managing Directors of each segment.

Based on the aforementioned process, the Company has established operating segments according to the following business units:

• Pulp

• Panels

• Sawn Timber

• Forestry

Refer to Note 24 for detailed financial information by operating segment.

e) Functional currency

(i) Functional currency

All items in the financial statements of Arauco and each of its subsidiaries, associates and jointly controlled entities are measured using the currency of the primary economic environment in which each entity operates (the functional currency). The consolidated financial statements are presented in U.S. dollars, which is Arauco’s functional and presentation currency.

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

(ii) Translation to the presentation currency of Arauco

For the purposes of presenting consolidated financial statements, the assets and liabilities of Arauco’s operations in functional currency different from Arauco´s are translated into U.S. dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange rate differences are recognized in other comprehensive income and accumulated in Others reserves within-equity.

(iii) Foreign Currency Transactions

Transactions in currencies other than the functional currency are recognized at the exchange rates prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined.

Profit or loss on transactions in currencies other than the functional currency resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies, are recognized in the statement of income, except those which are recorded in other comprehensive income and accumulated in equity such as cash flows hedging derivatives.

f) Cash and cash equivalents

Cash and cash equivalents include cash-in-hand, deposits held on demand at banks and other short term highly liquid investments with an original maturity of three months or less and which are subject to an insignificant risk of changes in value.

g) Financial Instruments

Financial assets

Financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’ (FVTPL), ‘held-to-maturity’ investments and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Financial assets measured at fair value through profit or loss are financial assets held for trading, or those designated as FVTPL. A financial asset is classified in this category if it is acquired principally for the purpose of selling it in the short term.

Derivatives are also classified as held for trading unless they are designated and effective as hedging instruments. Assets in this category are classified as current assets and the obligation for these instruments is presented under other financial liabilities within the statement of financial position.

Regular purchases and sales of financial assets are recognized on the trade date, which is the date on which Arauco commits itself to purchase or sell the asset.

The financial assets at fair value through profit or loss are initially recognized at fair value and transaction costs are expensed in the statement of income. They are subsequently measured at fair value with any gains or losses from changes in fair value recognized in profit or loss.

A financial asset is classified as held for trading if:

• it has been acquired principally for the purpose of selling it in the near term; or

• on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or

• it is a derivative that is not designated and effective as a hedging instrument

A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial recognition if:

• such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

• the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

• it forms part of a contract containing one or more embedded derivatives, and IAS 39 permits the entire combined contract to be designated as at FVTPL.

Interest Rate and Currency Swaps: Swaps are measured using the discounted cash flow method at a discount rate consistent with the risk of the operation.

Foreign Exchange and Interest Rate Forwards: These instruments are initially recognized at fair value at the date on which the contract is entered into and are subsequently remeasured at fair value at each reporting date. Forwards are recognized as assets when fair value is positive and, as liabilities when fair value is negative.

The fair value of foreign exchange forward contracts is calculated by reference to current forward exchange rates for contracts with similar maturities.

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

The fair value of interest rate forward contracts is calculated by reference to the difference of the existing interest rates between the interest rate contractually agreed and the market interest rate at the end of each reporting period.

Mutual Funds: They are highly liquid instruments that are sold in the short term and are carried at their net asset value at the end of each period.

(ii) Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity dates that the Group has the intent and ability to hold to maturity. They are initially recorded at fair value and after initial recognition, held-to- maturity investments are measured at amortized cost using the effective interest method less any impairment

(iii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are classified as current assets, except for those with maturities more than 12 months after the reporting period, which are classified as non-current assets. Loans and receivables include trade and other receivables.

Loans and receivables are initially recognized at fair value and subsequently are measured at amortized cost using the effective interest rate method, less any impairment.

Repurchase Agreements: These are recognized at their initial investment cost plus accrued interest at the end of each reporting period. These contracts have maturities of less than 30 days.

Financial liabilities

Financial liabilities are classified as either financial liabilities ‘at FVTPL’ or ‘other financial liabilities’ and are initially recorded at fair value.

(i) Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is designated as at FVTPL.

A financial liability is classified as held for trading if:

• it has been incurred principally for the purpose of repurchasing it in the near term; or

• on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or

• it is a derivative that is not designated and effective as a hedging instrument.

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if:

• such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

• the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

• it forms part of a contract containing one or more embedded derivatives, and IAS 39 permits the entire combined contract to be designated as at FVTPL.

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any interest paid on the financial liability and is included in the Finance income or Finance costs line item in the consolidated statements of income.

(ii) Other financial liabilities

Other financial liabilities (including borrowings and trade and other payables) are subsequently measured at amortized cost using the effective interest method.

The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that discounts estimated future cash payments (including all fees and amounts paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Financial obligations are classified as current liabilities, unless Arauco holds an unconditional right to defer their liquidation during at least 12 months after the balance sheet’s date.

The estimation of the reasonable value of the obligations with banks is determined by valuation techniques, using cash flows discounted applying rates in accordance to the risk of bank loans of a similar nature, while bonds are appraised at their market value.

h) Derivative financial instruments

(i) Financial Derivatives - The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks, including foreign exchange forward contracts, interest rate swaps and cross currency swaps. The group’s policy is that all derivative contracts are hedging contracts.

Derivatives are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently re measured at fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss unless the derivative is designated and effective as a hedging instrument under IAS 39, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

(ii) Embedded derivatives - The Company assesses the existence of embedded derivatives in financial instrument contracts. Derivatives embedded in non-derivative host contracts are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contracts and the contracts are not measured at FVTPL. Arauco has determined that no embedded derivatives currently exist.

(iii) Hedge accounting - The Group designates certain hedging instruments as either fair value hedges or cash flow hedges.

At the inception of the hedge relationship, the entity documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, Arauco documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk.

• Fair Value Hedges under IAS 39- Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognized in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The change in the fair value of the hedging instrument and the change in the hedged Item attributable to the hedged risk are recognized in profit or loss in the line item relating to the hedged item.

• Cash flow hedges under IAS 39 - The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income and accumulated under the heading of cash flow hedging reserve. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss, and is included in the Finance costs line item in the consolidated statement of income. Amounts previously recognized in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same line as the recognized hedged item. However, when the hedged forecast transaction results in the recognition of a non-financial asset or a non-financial liability, the gains and losses previously recognized in other comprehensive income and accumulated In equity are transferred from equity and included in the initial measurement of the cost of the non-financial asset or non-financial liability.

Hedge accounting is discontinued when the Group revokes the hedging relationship, when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognized in other comprehensive income and accumulated in equity at that time remains in equity and is recognized when the forecasted transaction is ultimately recognized in profit or loss. When a forecasted transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in profit or loss.

i) Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted average cost method.

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AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

The cost of finished goods and works in process includes the cost of raw materials, direct labor, other direct costs and general overhead expenses, excluding interest expenses.

Initial costs of harvested wood are determined at fair value less cost of sale at the point of harvest.

Biological assets are transferred to inventories when forests are harvested.

Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

When market conditions result in the production costs of a product exceeding its net realizable value, the inventories are written-down to their net realizable value. This write-down also includes obsolescence amounts resulting from slow moving inventories and technical obsolescence.

Spare parts that will be consumed in a period of less than twelve months are presented in inventories and recognized as an expense when they are consumed.

j) Non-current assets held for sale

The Group classifies certain property, plant and equipment, intangible assets, investments in associates and groups subject to expropriation (groups of assets to be sold together with their directly associated liabilities) as non-current assets held for sale which as of the closing date of the statement of financial position are the subject of active sale efforts and for which the completion is estimated to be highly probable.

These assets or groups subject to expropriation are valued at the lower of the carrying amount or the estimated retail value less the costs to carry out the sale, and are no longer amortized from the time they are classified as non-current assets held for sale.

k) Business Combinations

Arauco applies the acquisition method to account for a business combination. This method requires the identification of the acquirer, determination of the acquisition date, recognition and measurement of the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree; and recognition and measurement of goodwill or a gain from a bargain purchase. Identifiable assets acquired and liabilities assumed and any contingent liabilities in a business combination are initially measured at fair value at the acquisition date, except:

• deferred tax assets or liabilities, and assets or liabilities related to employee benefit arrangements are recognized and measured in accordance with IAS 12 Income Taxes and IAS 19 respectively;

• liabilities or equity instruments related to share-based payment arrangements of the acquire or share-based payment arrangements of the Group entered into to replace share-based payment arrangements of the acquire are measured in accordance with IFRS 2 at the acquisition date (see note 3.16.2); and

• assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with such standard.

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If the total of consideration transferred, non-controlling interest recognized and previously held interest measured is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognized directly in the statement of income.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For purposes of impairment testing, goodwill in a business combination is allocated as of the acquisition date to the cash generating unit of the group or groups of cash generating units expected to benefit from the synergies of the combination irrespective of whether other assets or liabilities of the acquire are allocated to those units or groups of units.

Acquisition-related costs are accounted for as expenses when they are incurred, except for costs to issue debt or equity securities which are recognized in accordance with IAS 32 and IAS 39.

A parent will present non-controlling interests in the consolidated statement of financial position within equity, separately from the equity of the owners of the parent company.

Changes in the ownership interest of a parent in its subsidiary that do not result in a loss of control are treated as equity transactions. Any difference between the amount by which non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to owners of the parent company. No adjustment is made to the carrying amount of goodwill, neither gains or losses are recognized in the income statement.

Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation may initially be measured either at fair value or at the present ownership instruments’ proportionate share in the recognized amounts of the acquiree’s identifiable net assets. The choice is made on a transaction-by-transaction basis.

Arauco measures the fair value of the acquired company in the business combination on a step by step basis, recognizing the effects of change in participation of the profit or loss in the statement of income.

If the initial accounting for a business combination is not completed by the end of the reporting period in which the combination occurs, Arauco reports preliminary amounts for the items for which the accounting is incomplete. During the measurement period (no more than one year), these preliminary amounts are retrospectively adjusted, or additional assets or liabilities are recognized to reflect new information about facts and circumstances that existed at the acquisition date, if known, would have affected the amounts recognized at that date.

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Business combinations that are common control transactions are accounted using as a reference the pooling of interest. Under this method, assets and liabilities related to the transaction carries over the previous carrying values. Any difference between assets and liabilities included in the consolidation and the consideration transferred, is accounted in equity.

l) Investments in associates and joint arrangements

Associates are entities over which Arauco exercises significant influence, but not control. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

Joint arrangement is defined as an entity over which there is joint control, which exists only when the decisions about strategic of activities, both financial and operational, require the unanimous consent of the parties sharing control.

Investments in joint arrangements are classified as a joint venture or as a joint operation. A joint operation is a joint arrangement in which the parties that have joint control of the arrangement (i.e. joint operators) have rights to the assets and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement in which the parties that have joint control of the arrangement (i.e., participants in a joint venture) have rights to the net assets of the arrangement.

Investments in associates and joint ventures are accounted for using the equity method and are initially recognized at cost. Their carrying amount is increased or decreased to recognize Arauco’s share of the profit or loss and other comprehensive income (exchange rate differences on translation to the presentation currency) of the associate or joint venture. Dividends received are recognized by deducting the amount received from the carrying amount of the investment. Arauco’s investment in associates includes goodwill.

The investments in joint operations recognize the assets, liabilities and results of operations in relation to Arauco’s ownership percentage.

If the total of consideration transferred, non-controlling interest recognized and previously held interest measured is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognized directly in the income statement.

Investments in associates and joint ventures are presented in the consolidated statement of financial position in the line item “Investments accounted for using equity method”.

If Arauco’s share of losses of an associate or joint venture equals or exceeds its interest in the associate or joint venture, Arauco discontinues recognizing its share of further losses. After Arauco’s carrying value in the investee is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that Arauco has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture. If the associate or joint venture subsequently reports profits, Arauco resumes recognizing its share of those profits only after its share of the profits equals the share of losses not recognized.

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

m) Intangible assets

After initial recognition, intangible assets with finite useful lives are carried at cost less any accumulated amortization and impairment losses.

Amortization of an intangible asset with a finite useful life is allocated over the asset’s useful life. Amortization begins when the asset is available for use, i.e., when it is in the location and condition necessary for it to be capable of operating in the manner intended by management.

(i) Computer Software

Computer software licenses are capitalized in terms of the costs incurred to acquire and make them compatible with existing software. These costs are amortized over the estimated useful lives of the software.

(ii) Water Rights, Easements and Other Rights

This item includes water rights, easements and other acquired rights recognized at historical cost which have indefinite useful lives as there is no foreseeable limit to the period over which these assets are expected to generate future cash flows. These rights are not amortized, but are tested for impairment at least annually, or when there is any indication that the assets might be impaired.

(iii) Customers and trade relations with customers

Correspond to the valuation over the time of the established relationship with customers, from the sale of products and services through its sales team. These relations will materialize in sales orders, which generate revenue and cost of sales. The useful life has been determined to be 15 years.

n) Goodwill

Goodwill generated in the acquisition of an entity is measured as the excess of the sum of the consideration paid, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Goodwill is not amortized but is tested for impairment on annual basis.

The goodwill generated on acquisitions of foreign companies, is controlled in the functional currency of such foreign company.

Goodwill recognized for the acquisition of the subsidiary Arauco do Brasil S.A. whose functional currency is the Brazilian Real, is translated into U.S. Dollars at the closing exchange rate. At the date of these financial statements, the only change in the carrying amount of goodwill in Brazil is related to the net exchange rate differences on translation.

o) Property, Plant and Equipment

Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. The cost includes expenditures that are directly attributable to the acquisition of the assets.

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Subsequent costs, such as improvements and replacement of components, are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to Arauco and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized from property, plant and equipment. All other repairs and maintenance costs are expensed in the period in which they are incurred.

Arauco capitalizes borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets as part of the cost of those assets, until the assets are ready for their intended use (see Note 12).

Depreciation is calculated by components using the straight-line method.

The useful lives of the items of property, plant and equipment is estimated according to the expected use of the assets.

The residual values and useful lives of assets are reviewed and adjusted, if appropriate, annually.

p) Leases

Arauco applies IFRIC 4 to assess whether an arrangement is, or contains, a lease. Leases of assets in which Arauco substantially holds all the risks and rewards of ownership are classified as finance leases. All other leases are classified as operating leases.

Finance leases are initially recognized at the lower of the fair value at the inception of the lease of the leased property and the present value of the minimum lease payments.

When assets are leased under a finance lease, the present value of lease payments are recognized as financial account receivables. Finance income, which is the difference between the gross receivable and the present value of such amount, is recognized as the interest rate of return.

Leases in which substantially all risks and rewards are not transferred to the lessee are classified as operating leases. Payments under operating leases (net of any incentives received from the lessor) are recognized as an expense on a straight-line basis over the lease term.

q) Biological Assets

IAS 41 requires that biological assets, such as standing trees, are measured at fair value in the statement of financial position. Forestry plantations are accounted for at fair value less costs to sell, based on the presumption that fair values of these assets can be measured reliably.

The measurement of forestry plantations is based on discounted cash flow models whereby the fair value of the biological assets is determined using estimated future cash flows from continuing operations calculated using our sustainable forest management plans and including the estimated growth of the forests. This valuation is performed on the basis of each identifiable farm block and for each type of tree.

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

The measurement of new forestry plantations made during the current year, is made at cost, which corresponds to the fair value at that date. After twelve months, the valuation methodology used is that explained in the preceding paragraph.

Biological assets shown as current assets correspond to those forestry plantations that will be harvested in the short term.

Biological growth and changes in fair value of forestry plantations are recognized in the line item Other income in the consolidated statement of income.

The Company holds fire insurance policies for its forestry plantations which, together with company resources and efficient protection measures for these plantation assets allow financial and operational risks to be minimized.

r) Income tax expense and deferred income tax assets and liabilities.

The tax liabilities are recognized in the financial statements based on the determination of taxable income for the year and calculated using the tax rates in force in the countries where Arauco operates.

Deferred income tax is recognized using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the end of the reporting period and that are expected to apply when the related deferred tax asset is realized or the deferred income tax liability is settled.

The goodwill arising on business combinations does not give rise to deferred tax.

Deferred taxes are registered according to rules established in IAS12 “Income Taxes”, except for the application in the Official Circular Letter No. 856 issued on October 17, 2014 by the Superintendency of Securities and Insurance, which established that the differences in liabilities and assets for deferred taxes occurring as a direct effect of the increase in the first category tax introduced by law 20,780, should be accounted for in the respective year against equity. (See Note 2).

The deferred tax assets and tax credits are generally recognized for all deductible temporary differences to the extent that it is probable that future taxable profit will be available against which those deductible temporary differences can be utilized.

s) Provisions

Provisions are recognized when the Company has a present obligation, legal or constructive, as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and a reliable estimate can be made of the amount of the obligation. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period.

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

t) Revenue recognition

Revenues are recognized when Arauco has transferred the risks and rewards of ownership to the buyer and Arauco has no right to dispose of the assets, nor effective control of those good.

(i) Revenue recognition from the Sale of Goods

Revenue from the sale of goods is recognized when Arauco has transferred to the buyer the significant risks and rewards of ownership of the goods, when the amount of revenue can be reliably measured, when Arauco does not retain any managerial involvement over the goods sold and when it is probable that the economic benefits associated with the transaction will flow to Arauco and the costs incurred in respect of the transaction can be measured reliably.

Sales are recognized in terms of the price agreed to in the sales contract, less any volume discounts and estimated product returns at the date of the sale. Volume discounts are evaluated in terms of estimated annual purchases. There is no significant financing component given that receivables from sales are collected within a short period, which is in line with market practices.

(ii) Revenue recognition from Rendering of Services

When the outcome of a transaction involving the rendering of services can be reliably estimated, revenue is recognized by reference to the stage of completion of the transaction at the date of the reporting period, and when it is probable that the economic benefits associated with the transaction will flow to the Arauco.

Arauco mainly provides power supply services which are transacted principally in the spot market of the Sistema Interconectado Central (Central Interconnected System). According to current regulations, the prices on that market called “Marginal Costs” are calculated by the Centro de Despacho Económico de Carga del Sistema Interconectado Central (CDEC – SIC) (Economic Load Dispatch Center of the Central Interconnected System) and are generally recognized in the period in which the services are rendered.

Electrical power is generated as a by-product of the pulp and wood process and is a complementary business to it, which is initially supplied to the group’s subsidiaries and any surplus is sold to the CDEC-SIC.

Arauco provides other non-core services such as port services and pest control whose revenues are derived from fixed price service contracts, generally recognized during the period of the service contract on a straight-line basis over the term of the contract.

Revenues from operating segments mentioned in Note 24 are measured in accordance with the policies indicated in the preceding paragraphs.

Revenues from inter-segment sales (which are made at market prices) are eliminated in the consolidated financial statements.

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

u) Minimum dividend

Article No. 79 of the Chilean Corporations Law states that, unless otherwise unanimously agreed by the shareholders, corporations must distribute annually at least 30% of net income for the current year as cash dividend to shareholders determined in proportion to their shares or in the proportion established in the by-laws for preferred shares, if any, except where necessary to absorb accumulated losses from prior years.

The General Shareholders’ Meeting of Arauco agreed to distribute annual dividends at 40% of net distributable income, including an interim dividend to be distributed at year end. Dividends payable are recognized as a liability in the financial statements in the period when they are declared and approved by the Arauco’s shareholders or when arises the corresponding present obligation based on existing legislation or distribution policies established by the Shareholders’ Meeting.

The interim and final dividends are recorded in equity upon their approval by the Company’s Board of Directors and the shareholders.

Dividends payable are presented in the line item “Other current non financial liabilities” in the consolidated statement of financial position.

Dividends paid are not deductible for income tax purposes.

v) Earning per share

Basic earnings per share are calculated by dividing the net income for the period attributable to the parent company by the weighted average number of ordinary shares outstanding during the period, excluding the average number of shares in the Company held by a subsidiary, if such circumstance exists.

Arauco has not performed any type of transaction with a potential dilutive effect that would cause diluted earnings per share to be different from basic earnings per share.

w) Impairment

Non-financial Assets

The recoverable amount of property, plant and equipment and other assets with finite useful lives are measured whenever there is any indication that the assets have suffered an impairment loss. Among the indications to consider as evidence of impairment are significant declines in the assets’ market value, significant adverse changes in the technological environment, obsolescence or physical damages of assets and changes in the manner in which the asset is used or expected to be used). Arauco evaluates at the end of each reporting period whether there is any evidence of the indications above mentioned.

For this evaluation, assets are grouped at the lowest level of group of assets that generates cash flows independently.

Goodwill and intangible assets with indefinite useful life are tested annually for impairment or whenever circumstances indicate it. The recoverable amount of an intangible asset is the higher of its fair value less costs of disposal and its value in use. An impairment loss is recognized whenever the carrying amount exceeds the recoverable amount.

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognized directly in profit or loss. An impairment loss recognized for goodwill is not reversed in subsequent periods.

Except for goodwill, a previously recognized impairment loss is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized. Impairment losses are reversed so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset in prior years. An impairment loss recognized for goodwill is not reversed in subsequent periods.

For the purposes of assessing impairment losses, assets are grouped at the lowest level for which there is identifiable cash flows separately for each cash-generating unit. Non-financial assets, other than goodwill, which had suffered an impairment loss, are reviewed at the end of each reporting period whether there is any indication that an impairment loss previously recognized may no longer exists or has decreased.

“Cash-generating units” are the smallest identifiable groups of those cash inflows that are largely independent of the cash inflow from other assets or groups of assets.

Goodwill is allocated to cash-generating units for impairment testing purposes. The allocation is made between cash-generating units or groups of cash generating units expected to benefit from the synergies of the combination.

Financial Assets

At the end of each reporting period, an evaluation is performed in order to identify whether there is any objective evidence that a financial asset or a group of financial assets may have been impaired. Financial assets are impaired only when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of a financial asset, the estimated future cash flows of the financial asset have been affected. Impairment losses are recognized in the consolidated statement of income.

The allowance for doubtful accounts is established when there is objective evidence that Arauco will not receive payments under the original sale terms. An allowance is made when the customer is a party to a bankruptcy court agreement or cessation of payments, and is written-off when Arauco has exhausted all levels of recovery of the receivable in a reasonable time.

The allowance for doubtful accounts is measured as the difference between the carrying amount of receivables and the present value of estimated future cash flows. The carrying amount of the receivable is reduced through the use of the allowance. If the impairment loss decreases in later periods, it is reversed either directly or by adjusting the provision for doubtful accounts, with effect in profit or loss.

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

x) Employee Benefits

Arauco has severance payment obligations arising from voluntary termination of employment. These are paid to certain employees that have been employed by the Company for more than five years in accordance with conditions established within collective or individual employment contracts.

This is an estimate of the years of service-based severance payments to be recognized as a future termination payment liability, in accordance with contracts between Arauco and its employees and pursuant to actuarial valuation criteria for this type of liability. These obligations are considered a defined benefit plan.

The main factors considered for calculating the actuarial value of severance payments obligation for years of service are employee turnover, salary increases and life expectancy of the workers included in this benefit.

Actuarial gains and losses are recognized in other comprehensive income in the year they are incurred.

These obligations are treated as post-employment benefits.

y) Employee Vacations

Arauco recognizes the expense for employee vacation according to labor legislation in each country on an accrual basis.

This obligation is presented in the line item “Trade and Other payables” in the consolidated statement of financial position.

z) Recent accounting pronouncements

The following new standards and interpretations have been adopted in these financial statements:

Amendments and improvements	Contents	Mandatory application for annual periods beginning on or after
IAS 32	Financial Instruments Presentation - Clarification of requirements for netting of financial assets and liabilities.	January 1, 2014
IFRS 10, IFRS 12, IAS 27	Investment Entities provides an exemption for the consolidation of subsidiaries under IFRS 10 under the definition of “investment companies”.	January 1, 2014
IAS 36	Impairment of Assets, Modification disclosures requirements	January 1, 2014
IAS 39	Financial Instruments: Recognition and Measurement-Novation of derivatives and continuation hedge accounting	January 1, 2014
IAS 19	Employee Benefits Clarifies the requirements related to the way in which contributions from employees or others which are linked to the service must be attributed to periods of service.	July 31, 2014
Annual improvements 2010-2012-Amendments to IFRS 7	IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS 16, IAS 38, IAS 24	July 31, 2014
Annual Improvement 2011-2013 –Amendments to IFRS 4	IFRS 1, IFRS 3, IFRS 13, IAS 40	July 31, 2014

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

New interpretations	Contents	Mandatory application for annual periods beginning on or after
IFRIC 21	Levies Guides about when to recognize a liability for a government imposed levy whether for those recorded in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets and for those liens whose existence and amount is certain.	January 1, 2014

The application of these standards has not had a significant impact on the amounts reported in these financial statements, however, it may affect the accounting for future transactions or arrangements.

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

At the date of issuance of these consolidated interim financial statements, the following accounting pronouncements have been issued by the IASB:

Standards and interpretations	Contents	Mandatory application for annual periods beginning on or after
IFRS 9	Financial Instruments Amendment to the classification and measurement of financial assets In November 2010 it was also amended to include treatment and classification of liabilities. Early adoption is permitted.	January 1, 2018
IFRS 14	Deferral of Regulatory accounts. Applies to entities adopting IFRS for the first time which are involved in activities with regulated rates.	January 1, 2016
IFRS 15	Income from contracts with customers. provide unique model based on principles that apply in all contracts with customers.	January 1, 2017
Amendments and improvements	Contents	Mandatory application for annual periods beginning on or after
IFRS 11-Amendments	Accounting of acquisitions for shares in joint ventures Require to the acquirer the application of business combinations and related disclosures.	January 1, 2016
IAS 16 and IAS 38 – Amendments	Clarification of acceptable methods of depreciation and amortization. Additional guidance on how to calculate the depreciation and amortization of property, plant and equipment and intangible assets.	January 1, 2016
IAS 16 and IAS 41 – Amendments	Agriculture: Manufacturing plants Amendments provide the concept of manufacturing plants, which are used exclusively to grow products in the scope of IAS 16.	January 1, 2016
IAS 27-Amendments	Equity Method in Separate Financial Statements	January 1, 2016
IFRS 10 and IAS 28- Amendments	Sale or Contribution of Assets between an Investor and its Associate or Joint Venture	January 1, 2016
IAS 1-Amendments	Disclosure initiative	January 1, 2016
IFRS 10, IFRS 12 and IAS 28-Amendments	Investment Entities: Applying the Consolidation Exception	January 1, 2016
Annual Improvements 2012-2014 Cycle	IFRS 5, IFRS 7, IAS 19 and IAS 34	January 1, 2016

Arauco believes that the adoption of these standards, amendments and interpretations will have no significant impact on its consolidated financial statements of the Company in the period of initial application.

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CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

NOTE 2. CHANGES IN POLICIES AND ACCOUNTING ESTIMATES

1) Changes in Accounting Policies

The accounting policies have been developed in accordance with the effective IFRS as of December 31, 2014 and have been consistently applied to all periods presented in these consolidated financial statements.

The Superintendency of Securities and Insurance (SVS), under its authority, issued the Official Circular Letter No. 856 dated October 17, 2014 instructing auditees to register in the respective year against equity, differences in assets and liabilities for deferred taxes occurring as a direct effect of the increase in the first category tax introduced by law 20,780.

This statement differs from that established by the International Financial Reporting Standards (IFRS), which requires that the effect be recorded against income.

This instruction issued by the SVS meant a change in the framework of preparation and presentation of financial information adopted by that date, since the previous frame (IFRS) requires adoption of comprehensive, explicit and unreserved manner.

The effect of this change in accounting bases meant a charge to retained earnings amounting to ThU.S.$292,155, which according to IFRS should be presented under earnings.

For all other matters related to the presentation of its financial statements, the Company uses the International Financial Reporting Standards issued by the International Accounting Standards Board (the “IASB”).

2) Changes in the Estimates and processing of accounting policies

There have been no changes in the treatment of accounting policies for the same period last year.

NOTE 3. DISCLOSURE OF OTHER INFORMATION

a) Disclosure of Information on Issued Capital

At the date of these financial statements the share capital of Arauco is ThU.S.$353,618.

In 2013, as a result of the merger of Celulosa Arauco y Constitución S.A. and Forestal Viñales S.A as part of the reorganization of the forestry companies in Chile, a capital increase of ThU.S.$442 was realized (Note 14).

	12-31-2014	12-31-2013
Description of Ordinary Capital Share Types	100% of Capital corresponds to ordinary shares
Number of Authorized Shares by Type of Capital in Ordinary Shares	113,159,655
Nominal Value of Shares by Type of Capital in Ordinary Shares	ThU.S.$0.0031210 per share
Amount of Capital in Shares by Type of Ordinary Shares that Constitute Capital	ThU.S.$353,618
Number of Shares Issued and Fully Paid by Type of Capital in Ordinary Shares	113,159,655

37

CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

b) Dividends paid

The interim dividend paid each year is equivalent to 20% of the distributable net income calculated as of the end of September of each year and is presented in the consolidated statement of changes in equity.

The final dividend paid each year corresponds to the difference between the 40% of prior year distributable net income and the amount of the interim dividend paid at the end of the immediately preceding fiscal year.

The minimum dividend provision corresponding to the year 2014 in an amount of ThU.S.$159,879 (ThU.S.$138,812 as of December 31, 2013) is presented in the consolidated statement of changes in equity.

In the Cash Flow Statement, in line “Dividends paid” is presented an amount of ThU.S.$141,089 as of December 31, 2014 (ThU.S.$140,054 as of December 31, 2013) which ThU.S.$137,232 (ThU.S.$110,405 as of December 31, 2013) correspond to the payment of dividends of the parent company.

The following are the dividends paid and per share amounts during the period 2014 and the years 2013:

Detail of Dividend Paid, Ordinary Shares
Dividend Paid	Interim Dividend
Type of Shares for which there is a Dividend Paid	Ordinary Shares
Date of Dividend Paid	12-09-2014
Amount of Dividend	ThU.S.$61,808
Number of Shares for which Dividends are Paid	113,159,655
Dividend per Share	U.S.$0.54620
Detail of Dividend Paid, Ordinary Shares
Dividend Paid	Final Dividend
Type of Shares for which there is a Dividend Paid	Ordinary Shares
Date of Dividend Paid	05-09-2014
Amount of Dividend	ThU.S.$75,424
Number of Shares for which Dividends are Paid	113,159,655
Dividend per Share	U.S.$0.66653
Detail of Dividend Paid, Ordinary Shares
Dividend Paid	Interim Dividend
Type of Shares for which there is a Dividend Paid	Ordinary Shares
Date of Dividend Paid	12-10-2013
Amount of Dividend	ThU.S.$63,388
Number of Shares for which Dividends are Paid	113,159,655
Dividend per Share	U.S.$0.56016
Detail of Dividend Paid, Ordinary Shares
Dividend Paid	Final Dividend
Type of Shares for which there is a Dividend Paid	Ordinary Shares
Date of Dividend Paid	05-08-2013
Amount of Dividend	ThU.S.$47,017
Number of Shares for which Dividends are Paid	113,152,446
Dividend per Share	U.S.$0.41552

38

CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

c) Disclosure of Information on Reserves

Other Reserves

Other reserves consist of reserves of exchange differences on translation, reserves of cash flow hedges and other reserves.

Arauco does not have any restrictions associated with these reserves.

Reserves of exchange differences on translation

Reserves of exchange differences on translation correspond to exchange differences relating to the translation of the results and net assets of Arauco’s subsidiaries whose functional currency is other than Arauco’s presentation currency.

Reserves of cash flow hedges

Reserves of cash flow hedges correspond to the portion of mark to market adjustments of outstanding cash flow hedges at the end of each reporting period.

Reserve of Actuarial Profits or Losses in Defined Benefit Plans

This corresponds to changes in the present value of the obligation for defined benefits resulting from experience adjustments (the effect of the differences between the previous actuarial assumptions and the events that occurred within the context of the plan) and the effects of the changes in the actuarial assumptions.

Other reserves

This mainly corresponds to the share of other comprehensive income of investments in associates and joint ventures.

39

CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

d) Disclosures of other information

The table below sets forth other income, other expenses, finance income, finance costs and share of profit (loss) of associates and joint ventures as of December 31, 2014 and 2013:

	January - December
	2014			2013
	ThU.S.$			ThU.S.$
Classes of Other Income
Other Income, Total		368,924			385,055
Gain from changes in fair value of biological assets (See note 20)		284,497			269,671
Net income from insurance compensation		2,264			1,297
Revenue from export promotion		4,032			4,115
Leases received		2,708			2,315
Gain on sales of assets		57,653			46,473
Gain on sales of assets classified as held for sale		244			29,137
Revenue from compensation of judgment		—			8,500
Access easement		5,158			1,771
Other operating results (sale materials and waste, rent of easements, income tax recovery)		12,368			21,776
Classes of Other Expenses by activity
Total of other expenses by activity		(138,769	)		(136,812	)
Depreciation		(2,084	)		(568	)
Expenses judgment		(4,806	)		(17,065	)
Impairment provision properties, plants and equipment and others		(11,803	)		(12,347	)
Plants stoppage operating expenses		(5,102	)		(9,676	)
Expenses projects		(7,447	)		(17,707	)
Expenses start-up		(9,591	)		—
Loss of assets		(126	)		(1,992	)
Loss of forest due to fires		(31,512	)		(8,546	)
Other Taxes		(7,540	)		(4,458	)
Research and development expenses		(3,105	)		(2,641	)
Compensation and eviction		(8,256	)		(1,974	)
Fines, readjustments and interest		(3,749	)		(2,530	)
Other expenses (donations, repayments insurance )		(43,648	)		(57,308	)

40

CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Classes of financing income
Financing income, total	30,772		19,062
Financial income from mutual funds - deposits	13,786		10,539
Financial income resulting from swap - forward	4,673		4,287
Other financial income	12,313		4,236
Classes of financing costs
Financing costs, Total	(246,473	)	(232,843	)
Interest expense, Loans banks	(32,978	)	(29,349	)
Interest expense, Bonds	(186,186	)	(169,806	)
Interest expense, financial instruments	(8,612	)	(6,139	)
Other financial costs	(18,697	)	(27,549	)
Classes of Participation in Income (Loss) of associates and joint ventures accounted for using the Equity Method
Total	7,481		6,260
Investments in associates	6,958		5,657
Joint ventures	523		603

Below is the Balance of Expenses by nature:

	January - December
Cost of sales	2014 ThU.S.$		2013 ThU.S.$
Timber		808,991		869,036
Forestry labor costs		655,257		631,749
Depreciation and amortization		323,306		271,708
Maintenance costs		278,280		209,977
Chemical costs		541,327		485,799
Sawmill Services		129,052		124,501
Others Raw Materials		184,836		203,667
Other indirect costs		126,129		171,704
Energy and fuel		231,120		200,161
Cost of electricity		78,760		89,818
Wage and salaries		297,088		299,090
Total		3,654,146		3,557,210

41

CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

	January - December
Distribution cost	2014 ThU.S.$		2013 ThU.S.$
Selling costs		34,678		33,242
Commissions		16,201		15,781
Insurance		5,330		5,913
Provision for doubtful accounts receivable		2,497		(372	)
Other selling costs		10,650		11,920
Shipping and freight costs		508,181		490,345
Port services		28,906		27,185
Freights		402,386		405,136
Other shipping and freight costs		76,889		58,024
Total		542,859		523,587
	January - December
Administrative expenses	2014 ThU.S.$		2013 ThU.S.$
Wage and salaries		215,662		212,346
Marketing, advertising, promotion and publications expenses		11,343		9,721
Insurance		32,367		39,044
Depreciation and amortization		25,686		24,070
Computer services		25,136		19,760
Lease rentals (offices, warehouses and machinery)		10,209		14,650
Donations, contributions, scholarships		10,407		15,638
Fees (legal and technical advisories)		51,301		45,587
Property taxes, patents and municipality rights		20,790		27,812
Other administration expenses (travel within and outside the country, cleaning services, security, basic services)		147,908		136,066
Total		550,809		544,694

42

CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

	Note	January-December
Expenses for		2014 ThU.S.$		2013 ThU.S.$
Depreciations	7		340,958		288,812
Employee benefits	10		511,824		573,538
Amortization	19		12,475		9,836

e) Auditor Fees and Number of Employees (Not audited)

At the end of this period, the auditor fees and number of employees are follows:

Auditors fees	12-31-2014 ThU.S.$
Audit services		2,805
Other services
Tax services		34
Others		670
TOTAL		3,509
Number of employees	No.
		13,576

NOTE 4. INVENTORIES

Components of Inventory	12-31-2014 ThU.S.$		12-31-2013 ThU.S.$
Raw materials		98,242		93,895
Production supplies		107,067		103,698
Products in progress		66,635		107,180
Finished goods		469,561		453,762
Spare Parts		152,068		142,055
Total Inventories		893,573		900,590

Inventories recognized as cost of sales at December 31, 2014 were ThU.S.$3,645,801 (ThU.S.$3,549,278 at December 31, 2013).

In order to have the inventories recorded at net realizable value at December 31, 2014, there has been a net decrease of inventories associated with a higher provision of obsolescence ThU.S.$2,967 (lower provision ThU.S.$392 at December 31, 2013). At December 31, 2014 the amount of obsolescence provision is ThU.S.$11,668 (ThU.S.$8,702 at December 31, 2013).

At December 31, 2014 there are write-offs inventory ThU.S.$548 (ThU.S.$2,457 at December 31, 2013)

The allowance of obsolescence is calculated based on the conditions of sale of products and age of inventory (inventory turnover).

No inventories have been pledged as security for liabilities at the end of each reporting period.

43

CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Agricultural Products

Agricultural Products are mainly forestry products that are intended for sale in the normal course of our operations and are measured at fair value less costs to sell at the point of harvest at the end of each reporting period Agricultural products are classified as raw materials within the line item inventories.

NOTE 5. CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash on hand, bank checking account balances, time deposits, repurchase agreements and mutual funds. They are short-term highly liquid investments that are readily convertible to known amounts of cash, and are subject to an insignificant risk of changes in value.

The investment objective of time deposits and repurchase agreements is to maximize in the short-term the amounts of cash surpluses. These instruments are permitted under Arauco’s Investment Policy which allows investing in fixed income securities. These instruments have a maturity of less than three months from the date of acquisition.

Arauco invests in local and international mutual funds in order to maximize the returns of cash surpluses denominated in Chilean Pesos or in foreign currencies such as U.S. Dollars or Euros. These instruments are permitted under Arauco’s Investment Policy.

As of the date of these consolidated financial statements, there are no amounts of cash and cash equivalents with restrictions on use.

Components of Cash and Cash Equivalents	12-31-2014 ThU.S.$		12-31-2013 MUS$
Cash on hand		391		330
Bank checking account balances		157,611		155,208
Time deposits		669,545		391,588
Mutual funds		128,985		111,435
Other cash and cash equivalents (*)		14,620		8,651
Total		971,152		667,212

(*) Applies to contracts for the purchase under resale

44

CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

NOTE 6. INCOME TAXES

The tax rates applicable in the countries in which Arauco operates are 21% in Chile, 35% in Argentina, 34% in Brazil, 25% in Uruguay and 34% in the United States (federal tax).

On September 29, 2014, Law No. 20,780 was published in the Official Gazette, introducing various amendments to the current regime of income tax and other taxes. Among the main amendments is the progressive increase of the First Category Income Tax for the 2014, 2015, 2016, 2017, 2018 and following fiscal years, increasing to 21%, 22.5%, 24%, 25.5% and 27% respectively, in the event that the partially integrated system applies. Alternatively, for the 2014, 2015, 2016 and 2017 and following fiscal years, an increase of 21%, 22.5%, 24%, and 25% respectively will apply, in the event that the Company chooses to apply the attributed income system.

On October 17, 2014, the Superintendency of Securities and Insurance issued the Official Circular Letter No. 856, which established that the difference in assets and liabilities for deferred taxes resulting from the increase of the aforementioned tax rate, should be accounted for by charging it against equity. Therefore, as of the close these consolidated financial statements, Arauco has recognized a charge to equity of of ThU.S.$292,155 resulting from a deferred effect of the new tax rate.

Deferred Tax Assets

The following table sets forth the deferred tax assets as of December 31, 2014 and 2013:

Deferred Tax Assets	12-31-2014 ThU.S.$		12-31-2013 ThU.S.$
Deferred Tax Assets relating to Provisions		14,923		12,016
Deferred Tax Assets relating to Accrued Liabilities		8,317		7,367
Deferred Tax Assets relating to Post-Employment benefits		13,859		9,012
Deferred Tax Assets relating to Property, Plant and equipment		10,756		8,842
Deferred Tax Assets relating to Financial Instruments		14,129		343
Deferred Tax Assets relating to Tax Losses Carryforwards		44,832		56,333
Deferred Tax Assets relating to Biological Assets		0		73
Deferred Tax Assets relating to Inventories		3,157		4,910
Deferred Tax Assets relating to Provisions for Income		5,827		3,678
Deferred Tax Assets relating to Allowance for Doubtful Accounts		3,855		3,104
Tax Revaluation of Assets		24,505		19,887
Deferred Tax Assets relating to Other Deductible Temporary Differences		13,680		35,033
Total Deferred Tax Assets		157,840		160,598

45

CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Certain subsidiaries of Arauco, as of the date of these financial statements, show tax losses for which we estimate that, given the projection of future profits, will allow for the recovery of these assets. The total amount of these tax losses is ThU.S.$132,292 (ThU.S.$165,393 at December 31, 2013), which are mainly originated by operational and financial losses.

In addition, as of the closing of these financial statements there are ThU.S.$92,809 (ThU.S.$81,690 at December 31, 2013) of non-recoverable tax losses from companies in Uruguay based on the participation of Arauco, which have not been recognized as deferred tax assets. The payback period exceeds the term of such tax losses.

Deferred Tax Liabilities

The following table sets forth the deferred tax liabilities as of December 31, 2014 and 2013:

Deferred Tax Liabilities	12-31-2014 ThU.S.$		12-31-2013 ThU.S.$
Deferred Tax Liabilities relating to Property, plant and equipment		941,223		781,777
Deferred Tax Liabilities relating to Financial Instruments		4,906		10,060
Deferred Tax Liabilities relating to Biological Assets		681,505		534,161
Deferred Tax Liabilities relating to Inventory		25,688		15,422
Deferred Tax Liabilities due to Prepaid Expenses		40,888		56,558
Deferred Tax Liabilities due to Intangible		32,990		34,188
Deferred Tax Liabilities relating to Other Taxable Temporary Differences		29,506		30,129
Total Deferred Tax Liabilities		1,756,706		1,462,295

The effect of changes in current and deferred tax liabilities related to cash flow hedges corresponds to a credit of ThU.S.$10,764 as of December 31, 2014 (charge of ThU.S.$5,400 as of December 31, 2013), which is presented in Reserves for cash flow hedges in the consolidated statement of changes in equity.

Arauco does not offset deferred tax assets and deferred tax liabilities since there is no legal enforceable right to offset amounts recognized in these items that relate to different tax jurisdictions.

46

CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Reconciliation of the asset and deferred tax liability

Deferred Tax Assets	Opening Balance 01-01-2014 ThU.S.$		Expenses (Income) for deferred tax recognized as a result ThU.S.$			Deferred tax of items directly credited to equity ThU.S.$		Increase (decrease) Net exchange differences ThU.S.$			Closing balance 12-31-2014 ThU.S.$
Deferred Tax Assets relating to provisions		12,016		843			2,367		(303	)		14,923
Deferred Tax Assets relating to accrued liabilities		7,367		19			952		(21	)		8,317
Deferred Tax Assets relating to post-employment benefits		9,012		(1,095	)		6,036		(94	)		13,859
Deferred Tax Assets relating to property, plant and equipment		8,842		1,174			787		(47	)		10,756
Deferred Tax Assets relating to financial instruments		343		355			13,431		—			14,129
Deferred Tax Assets relating to tax losses carryforwards		56,333		(9,427	)		419		(2,493	)		44,832
Deferred Tax Assets relating to biological assets		73		(73	)		—		—			0
Deferred Tax Assets relating to provisions for income		4,910		(1,706	)		82		(129	)		3,157
Deferred Tax Assets relating to provisions for income		3,678		1,624			525		—			5,827
Deferred Tax Assets relating to provision for doubtful accounts		3,104		574			218		(41	)		3,855
Intangible revaluation differences		—		1,080			0		—			1,080
Deferred Tax Assets relating to other deductible temporary differences		54,920		(20,325	)		2,740		(230	)		37,105
Total Deferred Tax Assets		160,598		(26,957	)		27,557		(3,358	)		157,840

47

CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Deferred Tax Liabilities	Opening Balance 01-01-2014 ThU.S.$		Expenses (Income) for deferred tax recognized as a result ThU.S.$			Deferred tax of items directly credited to equity ThU.S.$			Increase (decrease) Net exchange differences ThU.S.$			Closing balance 12-31-2014 ThU.S.$
Deferred Tax Liabilities relating to property, plant and equipment		781,777		7,950			158,106			(6,610	)		941,223
Deferred Tax Liabilities relating to financial instruments		10,060		677			(5,831	)		—			4,906
Deferred Tax Liabilities relating to biological assets		534,161		21,626			134,467			(8,749	)		681,505
Deferred Tax Liabilities relating to inventory		15,422		8,618			1,648			—			25,688
Deferred Tax Liabilities due to prepaid expenses		56,558		(21,363	)		5,693			—			40,888
Deferred Tax Liabilities due to intangible		34,188		(1,533	)		335			—			32,990
Deferred Tax Liabilities relating to other taxable temporary differences		30,129		(2,752	)		3,648			(1,519	)		29,506
Total Deferred Tax Liabilities		1,462,295		13,223			298,066			(16,878	)		1,756,706

48

CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Deferred Tax Assets	Opening Balance 01-01-2013 ThU.S.$		Expenses (Income) for deferred tax recognized as a result ThU.S.$			Deferred tax of items directly credited to equity ThU.S.$		Increase (decrease) Net exchange differences ThU.S.$			Closing balance 12-31-2013 ThU.S.$
Deferred Tax Assets relating to provisions		4,752		7,465			—		(201	)		12,016
Deferred Tax Assets relating to accrued liabilities		7,188		44			—		135			7,367
Deferred Tax Assets relating to post-employment benefits		9,341		(982	)		829		(176	)		9,012
Deferred Tax Assets relating to property, plant and equipment		10,971		(22	)		—		(2,107	)		8,842
Deferred Tax Assets relating to financial instruments		1,900		(1,493	)		—		(64	)		343
Deferred Tax Assets relating to tax losses carryforwards		126,171		(65,777	)		—		(4,061	)		56,333
Deferred Tax Assets relating to biological assets		2,636		(2,563	)		—					73
Deferred Tax Assets relating to provisions for income		9,539		(4,421	)		—		(208	)		4,910
Deferred Tax Assets relating to provisions for income		4,477		(792	)		—		(7	)		3,678
Deferred Tax Assets relating to provision for doubtful accounts		3,602		(481	)		—		(17	)		3,104
Deferred Tax Assets relating to other deductible temporary differences		26,193		28,226			—		501			54,920
Total Deferred Tax Assets		206,770		(40,796	)		829		(6,205	)		160,598

Deferred Tax Liabilities	Opening Balance 01-01-2013 ThU.S.$		Expenses (Income) for deferred tax recognized as a result ThU.S.$			Deferred tax of items directly credited to equity ThU.S.$			Increase (decrease) Net exchange differences ThU.S.$			Closing balance 12-31-2013 ThU.S.$
Deferred Tax Liabilities relating to property, Plant and equipment		769,626		21,530			—			(9,379	)		781,777
Deferred Tax Liabilities relating to financial instruments		14,218		(508	)		(3,801	)		151			10,060
Deferred Tax Liabilities relating to biological assets		531,746		12,552			—			(10,137	)		534,161
Deferred Tax Liabilities relating to inventory		16,517		(1,262	)		—			167			15,422
Deferred Tax Liabilities due to prepaid expenses		55,294		944			—			320			56,558
Deferred Tax Liabilities due to intangible		35,978		(1,789	)		—			(1	)		34,188
Deferred Tax Liabilities relating to other taxable temporary differences		31,673		846			—			(2,390	)		30,129
Total Deferred Tax Liabilities		1,455,052		32,313			(3,801	)		(21,269	)		1,462,295

49

CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Temporary Differences

The following tables summarize the deductible and taxable temporary differences:

	12-31-2014				12-31-2013
Detail of classes of Deferred Tax Temporary Differences	Deductible Difference ThU.S.$		Taxable Difference ThU.S.$		Deductible Difference ThU.S.$		Taxable Difference ThU.S.$
Deferred Tax Assets		113,008				104,265
Deferred Tax Assets - Tax losses		44,832				56,333
Deferred Tax Liabilities				1,756,706				1,462,295
Total		157,840		1,756,706		160,598		1,462,295

	January - December
Detail of Temporary Difference Income and Loss Amounts	2014 ThU.S.$			2013 ThU.S.$
Deferred Tax Assets		(17,530	)		18,136
Deferred Tax Assets - Tax losses		(9,427	)		(53,148	)
Deferred Tax Liabilities		(13,223	)		(38,097	)
Total		(40,180	)		(73,109	)

Income Tax Expense

Income tax expense consists of the following:

	January - December
Income Tax composition	2014 ThU.S.$			2013 ThU.S.$
Current income tax expense		(127,057	)		(89,378	)
Tax benefit arising from unrecognized tax assets previously used to reduce tax expense		—			25,687
Previous period current tax adjustments		2,555			1,826
Other current tax expenses		8,747			4,617
Current Tax Expense, Net		(115,755	)		(57,248	)
Deferred tax income (expense) relating to origination and reversal of temporary differences		(30,753	)		(19,961	)
Tax benefit arising from previously unrecognized tax assets used to reduce deferred expense from taxes		(9,427	)		(53,148	)
Total Deferred Tax Expense, Net		(40,180	)		(73,109	)
Income Tax Expense, Total		(155,935	)		(130,357	)

50

CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

The following table sets for the current income tax expense detailed by foreign and domestic companies at December 31, 2014 and 2013:

	January - December
	2014 ThU.S.$			2013 ThU.S.$
Foreign current income tax expense		(30,458	)		(4,145	)
Domestic current income tax expense		(85,297	)		(53,103	)
Total current income tax expense		(115,755	)		(57,248	)
Foreign deferred tax expense		(25,806	)		(66,558	)
Domestic deferred tax expense		(14,374	)		(6,551	)
Total deferred tax expense		(40,180	)		(73,109	)
Total tax income (expense)		(155,935	)		(130,357	)

Reconciliation of income tax expense from statutory tax rate to the effective tax rate.

The reconciliation of income tax expense is as follows:

	January - December
Reconciliation of Income tax from Statutory Rate to Effective Tax Rate	2014 ThU.S.$			2013 ThU.S.$
Tax Expense at applicable tax rate		(124,493	)		(109,787	)
Tax effect of foreign tax rates		(23,170	)		(24,688	)
Tax effect of revenues exempt from taxation		9,832			(4,589	)
Tax effect of expense not deductible in determining taxable profit (tax loss)		(19,203	)		(9,792	)
Tax rate effect of tax losses		(515	)		(4,330	)
Tax effect of previously unrecognized tax benefit in the income statement		(2,935	)		15,769
Tax effect of a new evaluation of assets for deferred not recognized taxes		12			(3,182	)
Tax rate effect from change in tax rate (opening balances)		(1,839	)		0
Tax rate effect of adjustments for current tax of prior periods		2,555			1,826
Other tax rate effects		3,821			8,416
Total adjustments to tax expense at applicable tax rate		(31,442	)		(20,570	)
Tax expense at effective tax rate		(155,935	)		(130,357	)

51

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Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

NOTE 7. PROPERTY, PLANT AND EQUIPMENT

Property, Plant and Equipment	12-31-2014 ThU.S.$			12-31-2013 ThU.S.$
Construction in progress		265,440			1,542,739
Land		949,531			975,617
Buildings		2,172,177			1,694,924
Plant and equipment		3,565,502			2,774,551
Information technology equipment		28,521			25,575
Fixtures and fittings		11,654			7,627
Motor vehicles		17,346			13,597
Other property, plant and equipment		109,412			102,837
Total Net		7,119,583			7,137,467
Construction in progress		265,440			1,542,739
Land		949,531			975,617
Buildings		3,593,306			3,010,996
Plant and equipment		5,944,394			4,954,621
Information technology equipment		71,838			64,352
Fixtures and fittings		37,382			33,015
Motor vehicles		46,293			40,789
Other property, plant and equipment		128,012			119,601
Total Gross		11,036,196			10,741,730
Accumulated depreciation and impairment
Buildings		(1,421,129	)		(1,316,072	)
Plant and equipment		(2,378,892	)		(2,180,070	)
Information technology equipment		(43,317	)		(38,777	)
Fixtures and fittings		(25,728	)		(25,388	)
Motor vehicles		(28,947	)		(27,192	)
Other property, plant and equipment		(18,600	)		(16,764	)
Total		(3,916,613	)		(3,604,263	)

Description of Property, Plant and Equipment Pledged as Security for Liabilities

To date there are no assets pledged as collateral in these consolidated financial statements.

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Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Commitments for project disbursements or for the acquisition of property, plant and equipment.

	12-31-2014 ThU.S.$		12-31-2013 ThU.S.$
Amount committed for the acquisition of property, plant and equipment		139,927		310,087

	12-31-2014 ThU.S.$		12-31-2013 ThU.S.$
Disbursements for property, plant and equipment under construction		371,286		671,128

53

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Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Movement on Property, Plant and Equipment

The following tables set forth the reconciliation of the carrying amount of property, plant and equipment as of December 31, 2014 and 2013:

Movement of Property, Plant and Equipment	Construction in progress ThU.S.$			Land ThU.S.$			Buildings ThU.S.$			Plant and equipments ThU.S.$			IT Equipment ThU.S.$			Fixtures and fittings ThU.S.$			Motor vehicles ThU.S.$			Other Property, Plant and Equipment ThU.S.$			TOTAL ThU.S.$
Opening Balance 01-01-2014		1,542,739			975,617			1,694,924			2,774,551			25,575			7,627			13,597			102,837			7,137,467
Changes
Additions		371,286			1,215			17,438			54,011			2,605			1,195			4,608			18,828			471,186
Disposals		(2,969	)		(5,596	)		(513	)		(1,715	)		(59	)		(515	)		(458	)		(776	)		(12,601	)
Retirements		(6,278	)		(41	)		(17,369	)		(23,026	)		(12	)		(6	)		(247	)		(5,670	)		(52,649	)
Depreciation		—			—			(102,068	)		(222,232	)		(4,944	)		(2,084	)		(4,241	)		(4,018	)		(339,587	)
Impairment loss recognized in profit or loss		—			—			—			—			—			—			(636	)		—			(636	)
Increase (decrease) through net exchange differences		310			(21,664	)		(30,620	)		(26,928	)		(269	)		(175	)		(123	)		(2,198	)		(81,667	)
Reclassification of assets held for sale		(1,930	)		—			—			—			—			—			—			—			(1,930	)
Increase (decrease) through transfers from construction in progress		(1,637,718	)		—			610,385			1,010,841			5,625			5,612			4,846			409			—
Total changes		(1,277,299	)		(26,086	)		477,253			790,951			2,946			4,027			3,749			6,575			(17,884	)
Closing balance 12-31-2014		265,440			949,531			2,172,177			3,565,502			28,521			11,654			17,346			109,412			7,119,583

54

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Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Movement of Property, Plant and Equipment	Construction in progress ThU.S.$			Land ThU.S.$			Buildings ThU.S.$			Plant and equipments ThU.S.$			IT Equipment ThU.S.$			Fixtures and fittings ThU.S.$			Motor vehicles ThU.S.$			Other Property, Plant and Equipment ThU.S.$			TOTAL ThU.S.$
Opening Balance 01-01-2013		1,291,259			987,242			1,654,955			2,731,233			26,094			13,396			11,094			101,470			6,816,742
Changes
Additions		671,128			13,385			20,359			64,952			1,297			912			2,987			6,160			781,179
Disposals		—			(801	)		(1,747	)		(606	)		(11	)		(3,934	)		(74	)		(344	)		(7,516	)
Retirements		(4,297	)		(317	)		(2,901	)		(15,299	)		(32	)		(179	)		(8	)		(361	)		(23,394	)
Depreciation		—			—			(87,728	)		(220,452	)		(3,528	)		(2,734	)		(3,223	)		(1,187	)		(318,852	)
Impairment loss recognized in profit or loss		—			—			(314	)		(874	)		(2	)		—			—			—			(1,190	)
Increase (decrease) through net exchange differences		(12,053	)		(28,100	)		(19,597	)		(46,907	)		28			288			(259	)		(2,902	)		(109,502	)
Increase (decrease) through transfers from construction in progress		(403,298	)		4,208			131,897			262,505			1,728			(122	)		3,081			1			—
Total changes		251,480			(11,625	)		39,970			43,319			(519	)		(5,769	)		2,504			1,367			320,726
Closing balance 12-31-2013		1,542,739			975,617			1,694,924			2,774,551			25,575			7,627			13,597			102,837			7,137,467

The depreciation expense for the period ending December 31, 2014 and 2013 is as follows:

	January-December
Depreciation for the year	2014 ThU.S.$		2013 ThU.S.$
Cost of sales		316,607		267,793
Administrative expenses		19,910		18,149
Other expenses		4,441		2,870
Total		340,958		288,812

55

CELULOSA ARAUCO Y CONSTITUCION S.A.

AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

The useful lives of property, plant and equipment estimated based on the expected use of the assets are as follows:

		Minimum		Maximum		Average
Buildings	Useful Life in Years		16		89		39
Plant and equipment	Useful Life in Years		8		67		29
Information technology equipment	Useful Life in Years		6		18		5
Fixtures and fittings	Useful Life in Years		6		12		10
Motor vehicles	Useful Life in Years		6		26		13
Other property, plant and equipment	Useful Life in Years		5		27		16

A significant portion of items of property, plant and equipment do not have significant differences between the fair value and the cost of these assets.

See Note 12 for details of capitalized borrowing costs.

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Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

NOTE 8. LEASES

Arauco acting as lessee

	12-31-2014 ThU.S.$		12-31-2013 ThU.S.$
Property, Plant and Equipment under finance leases		94,996		90,467
Plant and equipment		94,996		90,467

Reconciliation of Financial Lease Minimum Payments:

	12-31-2014
Periods	Present Value ThU.S.$
Less than one year		31,706
Between one and five years		65,289
More than five years		—
Total		96,995

	12-31-2013
Periods	Present Value ThU.S.$
Less than one year		26,949
Between one and five years		62,491
More than five years		—
Total		89,440

Lease obligations are presented in the consolidated statement of financial position in line items “Other current financial liabilities” and “Other non-current financial liabilities” depending on their respective maturities as stated above.

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CELULOSA ARAUCO Y CONSTITUCION S.A.

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Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Arauco acting as lessor

Reconciliation of Financial Lease Minimum Payments:

	12-31-2014
Periods	Gross ThU.S.$		Interest ThU.S.$		Present Value ThU.S.$
Less than one year		141		5		136
Between one and five years		20		3		17
More than five years		—		—		—
Total		161		8		153

	12-31-2013
Periods	Gross ThU.S.$		Interest ThU.S.$		Present Value ThU.S.$
Less than one year		980		11		969
Between one and five years		131		1		130
More than five years		—		—		—
Total		1,111		12		1,099

Finance lease receivables are presented in the consolidated statement of financial position in line items “Trade and other current receivable” and “Trade and other non-current receivable” depending on their maturities stated above.

Arauco accounts for its lease contracts as finance leases. These lease contracts are for a term of less than five-years at market interest rates and leased assets are forestry machinery and equipment. They also include an early termination option, under general and special conditions stipulated in each contract.

There are no contingent rents payable or restrictions imposed by any lease arrangements.

NOTE 9. REVENUE

	January - December
Classes of revenue	2014 ThU.S.$		2013 ThU.S.$
Revenue from sales of goods		5,160,960		4,981,423
Revenue from rendering of services		167,705		164,077
Total		5,328,665		5,145,500

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Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

NOTE 10. EMPLOYEE BENEFITS

Classes of Benefits and Expenses by Employee

	January - December
	2014 ThU.S.$		2013 ThU.S.$
Employee expenses		511,824		573,538
Wages and salaries		501,430		563,836
Severance indemnities		10,394		9,702

The main actuarial assumptions used by Arauco in the calculation of the severance indemnities obligation as of December 31, 2014 and 2013 are as follows:

	2014			2013
Discount rate		1.61	%		3.50	%
Inflation		3.00	%		3.00	%
Mortality rate		RV-2009			RV-2009

The following tables set forth the balances and the reconciliation of the present value of severance indemnities obligation as of December 31, 2014 and 2013:

	12-31-2014 ThU.S.$		12-31-2013 ThU.S.$
Current		3,590		3,814
Non-current		48,582		42,170
Total		52,172		45,984

Reconciliation of the present value of severance indemnities obligation	12-31-2014 ThU.S.$			12-31-2013 ThU.S.$
Opening balance		45,984			47,436
Current service cost		1,938			3,241
Interest cost		2,977			1,510
Actuarial gains		12,829			4,143
Benefits paid		(5,388	)		(6,628	)
Increase (decrease) for foreign currency exchange rates changes		(6,168	)		(3,718	)
Closing balance		52,172			45,984

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CELULOSA ARAUCO Y CONSTITUCION S.A.

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Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

NOTE 11. EFFECT OF FOREIGN CURRENCY EXCHANGE RATE VARIATIONS

Local and foreign currency

Assets and liabilities by class of currency as of December 31, 2014 and 2013 are as follows:

	12-31-2014 ThU.S.$		12-31-2013 ThU.S.$
Total Current Assets		3,140,715		2,808,321
Cash and Cash Equivalents		971,152		667,212
U.S. Dollar		877,418		534,575
Euro		8,114		4,681
Brazilian Real		43,604		68,658
Argentine Pesos		15,794		13,942
Other currencies		2,983		3,473
Chilean Pesos		23,239		41,883
Other current financial assets		7,633		3,089
U.S. Dollar		7,632		3,089
Chilean Pesos		1		—
Other current non-financial assets		177,728		188,964
U.S. Dollar		103,689		82,175
Euros		45		126
Brazilian Real		11,489		13,395
Argentine Pesos		13,711		10,079
Other currencies		6,335		7,746
Chilean Pesos		42,459		75,443

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CELULOSA ARAUCO Y CONSTITUCION S.A.

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Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Trade and other current receivables	731,908	711,678
U.S. Dollar	464,219	446,386
Euro	72,353	33,072
Brazilian Real	47,043	55,756
Argentine Pesos	31,354	33,130
Other currencies	19,733	24,513
Chilean Pesos	96,241	117,827
U.F.	965	994
Accounts receivable from related companies	4,705	8,243
U.S. Dollar	—	135
Brazilian Real	1,998	3,654
Chilean Pesos	2,707	4,454
Current Inventories	893,573	900,590
U.S. Dollar	829,830	791,271
Brazilian Real	48,046	87,638
Chilean Pesos	15,697	21,681
Current biological assets	307,551	256,957
U.S. Dollar	307,551	256,957

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CELULOSA ARAUCO Y CONSTITUCION S.A.

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Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Current tax assets	38,477	61,174
U.S. Dollar	2,358	2,861
Euros	81	14
Brazilian Real	2,691	2,475
Argentine Pesos	1,464	5,888
Other currencies	3,653	1,337
Chilean Pesos	28,230	48,599
Non-current assets or disposal groups classified as held for sale or as held for distribution to owners	7,988	10,414
U.S. Dollar	7,988	10,414

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Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

	12-31-2014 ThU.S.$		12-31-2013 ThU.S.$
Total Non Current Assets		11,606,739		11,685,074
Other non-current financial assets		5,024		48,778
U.S. Dollar		4,439		48,011
Argentine Pesos		585		767
Other non-current non-financial assets		101,094		125,052
U.S. Dollar		92,437		113,224
Brazilian Real		5,705		8,707
Argentine Pesos		563		748
Other currencies		885		643
Chilean Pesos		1,504		1,730
Trade and other non-current receivables		31,001		40,729
U.S. Dollar		26,773		35,743
Chilean Pesos		3,591		3,226
U.F.		637		1,760
Related party receivables, non-current		151,519		—
Brazilian Real		151,519		—
Investments accounted for using equity method		326,045		349,412
U.S. Dollar		119,405		126,564
Brazilian Real		206,640		222,848

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Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Intangible assets other than goodwill	93,258	99,651
U.S. Dollar	91,408	95,338
Brazilian Real	1,771	4,241
Chilean Pesos	79	72
Goodwill	82,573	88,141
U.S. Dollar	42,838	43,086
Brazilian Real	39,735	45,055
Property, plant and equipment	7,119,583	7,137,467
U.S. Dollar	6,527,093	6,457,882
Brazilian Real	586,398	670,269
Chilean Pesos	6,092	9,316
Non-current biological assets	3,538,802	3,635,246
U.S. Dollar	3,188,043	3,277,093
Brazilian Real	350,759	358,153
Deferred tax assets	157,840	160,598
U.S. Dollar	128,676	138,486
Brazilian Real	28,345	21,321
Other currencies	67	223
Chilean Pesos	752	568

64

CELULOSA ARAUCO Y CONSTITUCION S.A.

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Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

	12-31-2014						12-31-2013
	Up to 90 days ThU.S.$		From 91 days to 1 year ThU.S.$		Total ThU.S.$		Up to 90 days ThU.S.$		From 91 days to 1 year ThU.S.$		Total ThU.S.$
Total Liabilities, current		1,002,859		544,227		1,547,086		1,105,432		576,584		1,682,016
Other current financial liabilities		203,170		539,173		742,343		399,036		494,569		893,605
U.S. Dollar		173,579		484,254		657,833		260,159		446,893		707,052
Brazilian Real		17,145		27,507		44,652		11,750		9,332		21,082
Argentine Pesos		—		544		544		28,252		504		28,756
Chilean Pesos		288		809		1,097		168		886		1,054
U.F.		12,158		26,059		38,217		98,707		36,954		135,661
Bank Loans		139,916		133,554		273,470		262,010		451,282		713,292
U.S. Dollar		122,771		105,503		228,274		222,008		441,446		663,454
Brazilian Real		17,145		27,507		44,652		11,750		9,332		21,082
Argentine Pesos		—		544		544		28,252		504		28,756
Financial Leases		7,851		23,855		31,706		7,108		19,841		26,949
U.S. Dollar		—		6		6		—		62		62
Chilean Pesos		288		809		1,097		168		886		1,054
U.F.		7,563		23,040		30,603		6,940		18,893		25,833
Other Loans		55,403		381,764		437,167		129,918		23,446		153,364
U.S. Dollar		50,808		378,745		429,553		38,151		5,385		43,536
U.F.		4,595		3,019		7,614		91,767		18,061		109,828
Trade and other current payables		627,972		2,434		630,406		628,662		2,318		630,980
U.S. Dollar		180,164		—		180,164		229,260		—		229,260
Euros		44,887		—		44,887		7,434		—		7,434
Brazilian Real		22,662		2,434		25,096		30,963		—		30,963
Argentine Pesos		34,879		—		34,879		29,102		—		29,102
Other currencies		2,187		—		2,187		3,435		—		3,435
Chilean Pesos		340,858		—		340,858		328,358		12		328,370
U.F.		2,335		—		2,335		110		2,306		2,416
Accounts payable to related companies		6,036		—		6,036		14,406		—		14,406
U.S. Dollar		1,612		—		1,612		2,893		—		2,893
Chilean Pesos		4,424		—		4,424		11,513		—		11,513
Other current provisions		2,535		—		2,535		9,696		—		9,696
U.S. Dollar		2,535		—		2,535		830		—		830
Argentine Pesos		—		—		—		8,866		—		8,866

65

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AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Current tax liabilities	25,860	—	25,860	3,929	543	4,472
U.S. Dollar	782	—	782	424	355	779
Euros	—	—	—	63	—	63
Brazilian Real	1,921	—	1,921	2,581	—	2,581
Argentine Pesos	6,063	—	6,063	42	—	42
Other currencies	—	—	—	231	—	231
Chilean Pesos	17,094	—	17,094	588	188	776
Current provisions for employee benefits	1,211	2,379	3,590	806	3,008	3,814
Chilean Pesos	1,211	2,379	3,590	806	3,008	3,814
Other current non-financial liabilities	136,075	241	136,316	48,897	76,146	125,043
U.S. Dollar	100,904	—	100,904	8,800	74,325	83,125
Brazilian Real	19,041	—	19,041	24,007	—	24,007
Argentine Pesos	6,143	184	6,327	5,507	205	5,712
Other currencies	4,307	—	4,307	4,460	—	4,460
Chilean Pesos	5,575	57	5,632	6,002	2	6,004
U.F.	105	—	105	121	1,614	1,735

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Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

	12-31-2014						12-31-2013
	From 13 months to 5 years ThU.S.$		More than 5 years ThU.S.$		Total ThU.S.$		From 13 months to 5 years ThU.S.$		More than 5 years ThU.S.$		Total ThU.S.$
Total non-current liabilities		3,411,630		2,974,002		6,385,632		3,089,250		2,677,589		5,766,839
Other non-current financial liabilities		1,943,952		2,509,867		4,453,819		1,675,194		2,481,798		4,156,992
U.S. Dollar		1,767,326		1,603,825		3,371,151		1,575,701		1,714,459		3,290,160
Brazilian Real		34,612		18,434		53,046		35,901		22,870		58,771
Argentine Pesos		614		—		614		1,106		—		1,106
Chilean Pesos		2,352		—		2,352		3,300		—		3,300
U.F.		139,048		887,608		1,026,656		59,186		744,469		803,655
Bank Loans		797,628		248,117		1,045,745		822,461		358,301		1,180,762
U.S. Dollar		762,402		229,683		992,085		785,454		335,431		1,120,885
Brazilian Real		34,612		18,434		53,046		35,901		22,870		58,771
Argentine Pesos		614		—		614		1,106		—		1,106
Financial Leases		65,289		—		65,289		62,491		—		62,491
U.S. Dollar		—		—		—		5		—		5
Chilean Pesos		2,352		—		2,352		3,300		—		3,300
U.F.		62,937		—		62,937		59,186		—		59,186
Other Loans		1,081,035		2,261,750		3,342,785		790,242		2,123,497		2,913,739
U.S. Dollar		1,004,924		1,374,142		2,379,066		790,242		1,379,028		2,169,270
U.F.		76,111		887,608		963,719		—		744,469		744,469

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Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Other non-current payables	—	—	—	361	—	361
U.S. Dollar	—	—	—	361	—	361
Other non-current provisions	64,529	—	64,529	24,167	—	24,167
U.S. Dollar	4	—	4	4	—	4
Brazilian Real	31,374	—	31,374	24,163	—	24,163
Argentine Pesos	30,301	—	30,301	—	—	—
Chileans $	2,850	—	2,850	—	—	—
Deferred tax liabilities	1,299,271	457,435	1,756,706	1,272,326	189,969	1,462,295
U.S. Dollar	1,159,362	457,435	1,616,797	1,272,037	170,265	1,442,302
Euros	4,044	—	4,044	—	—	—
Brazilian Real	135,600	—	135,600	—	19,704	19,704
Other currencies	—	—	—	1	—	1
Chilean Pesos	265	—	265	288	—	288
Non-current provisions for employee benefits	41,882	6,700	48,582	36,685	5,485	42,170
Other currencies	172	—	172	177	—	177
Chilean Pesos	41,710	6,700	48,410	36,508	5,485	41,993
Other non-current non-financial liabilities	61,996	—	61,996	80,517	337	80,854
U.S. Dollar	1,043	—	1,043	5	—	5
Brazilian Real	59,497	—	59,497	78,672	—	78,672
Argentine Pesos	1,206	—	1,206	1,561	337	1,898
Chilean Pesos	246	—	246	274	—	274
U.F.	4	—	4	5	—	5

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AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

The table below sets forth the subsidiaries that have determined a functional currency other than the U.S. Dollar as follows:

Subsidiary	Country	Functional Currency
Arauco do Brasil S.A.	Brazil	Brazilian Real
Arauco Forest Brasil S.A.	Brazil	Brazilian Real
Arauco Florestal Arapoti S.A.	Brazil	Brazilian Real
Empreendimentos Florestais Santa Cruz Ltda.	Brazil	Brazilian Real
Mahal Empreendimentos e Participacoes S.A.	Brazil	Brazilian Real
Arauco Distribución S.A.	Chile	Chilean Pesos
Investigaciones Forestales Bioforest S.A.	Chile	Chilean Pesos
Consorcio Protección Fitosanitaria Forestal S.A. (Ex-Controladora de Plagas Forestales S.A.)	Chile	Chilean Pesos
Flakeboard Company Limited	Canada	Canadian Dollar

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Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

The table below shows a detail per company of the effect in the period of the Reserve for Exchange Differences resulting from conversion of currencies:

	12-31-2014 ThU.S.$			12-31-2013 ThU.S.$
Arauco Do Brasil S.A.		(66,222	)		(74,429	)
Arauco Forest Brasil S.A.		(57,515	)		(57,484	)
Arauco Florestal Arapoti S.A.		(17,640	)		(21,086	)
Arauco Distribución S.A.		(3,793	)		(1,869	)
Alto Paraná S.A.		(5,765	)		(7,201	)
Flakeboard Company Limited		(8,049	)		(7,290	)
Others		(406	)		(369	)
Total reserve of exchange differences on translation		(159,390	)		(169,728	)

Effect of foreign exchange rates changes

	January-December
	2014 ThU.S.$			2013 ThU.S.$
Exchange differences recognized in profit or loss, except for those arising on financial instruments measured at fair value through profit or loss		(7,763	)		(10,284	)
Reserve of exchange differences on translation (with Non-controlling interests)		(163,844	)		(174,985	)

NOTE 12. BORROWING COSTS

Arauco estimates the average rate of borrowings to finance its current investment projects. As of December 31, 2014, the balance corresponds principally to the accumulated amount that was capitalized until the end of construction of pulp production plant in Uruguay. The average rate loans to finance these investment projects were calculated to record the capitalization.

	January - December
	2014 ThU.S.$			2013 ThU.S.$
Property, plant and equipment capitalized cost
Property, plant and equipment capitalized interest cost rate		4.70	%		3.93	%
Amount of the capitalized interest cost, property, presented as plant and equipment		19,586			27,487

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Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

NOTE 13. RELATED PARTIES

Related Party Disclosures

Related parties are those entities defined in IAS 24 and under the rules of the Chilean Superintendency of Securities and Insurance and the Chilean Corporations Law.

The receivable and payable amounts among related parties at the end of each period correspond to commercial and financing transactions denominated in Chilean Pesos, U.S. dollars and Brazilian Real, where collection or payment deadlines are shown in the following tables and in general do not bear interest, except for financing transactions.

As of the date of these consolidated financial statements, the main transactions with related parties are related to fuel purchases with Compañía de Petróleos de Chile S.A. and loans to related companies.

There is neither a provision for doubtful accounts nor any guarantees granted or received related to the balances with related parties.

Name of Group’s Main Shareholders

The ultimate shareholders of Arauco are Mrs. Maria Noseda Zambra de Angelini, Mr. Roberto Angelini Rossi and Mrs. Patricia Angelini Rossi through Inversiones Angelini y Cia. Ltda.

Name of the Intermediate Controlling Entity that Prepares Financial Statements for Public Use

Empresas Copec S.A.

Compensation to Key Management Personnel

Compensation to key management personnel, including directors, managers and deputy managers, consist of a fixed monthly salary and an annual bonus subject to the results of the Company and the fulfillment of goals of the business as well as individual performance.

Pricing Strategy Terms and Conditions Corresponding to Transactions with Related Parties

Related party transactions were made on terms of those prevailing under market conditions, with mutual independence of the parties.

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Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

The table below sets forth information about the Relationship between the Parent Company and its Subsidiaries

ID N°	Company Name	Country	Functional Currency	% Ownership interest 12-31-2014						% Ownership interest 12-31-2013
				Direct		Indirect		Total		Direct		Indirect		Total
—	Agenciamiento y Servicios Profesionales S.A.	Mexico	U.S. Dollar		0.0020		99.9970		99.9990		0.0020		99.9970		99.9990
—	Alto Paraná S.A.	Argentina	U.S. Dollar		9.9753		90.0048		99.9801		9.9753		90.0048		99.9801
—	Arauco Australia Pty Ltd.	Australia	U.S. Dollar		—		99.9990		99.9990		—		99.9990		99.9990
96547510-9	Arauco Bioenergía S.A.	Chile	U.S. Dollar		98.0000		1.9999		99.9999		98.0000		1.9999		99.9999
—	Arauco Colombia S.A.	Colombia	U.S. Dollar		1.5000		98.4983		99.9983		1.5000		98.4983		99.9983
96765270-9	Arauco Distribución S.A.	Chile	Chilean Pesos		—		99.9996		99.9996		—		99.9996		99.9996
—	Arauco do Brasil S.A.	Brazil	Brazilian Real		1.3418		98.6572		99.9990		1.4319		98.5671		99.9990
—	Arauco Florestal Arapoti S.A.	Brazil	Brazilian Real		—		79.9992		79.9992		—		79.9992		79.9992
—	Arauco Forest Brasil S.A.	Brazil	Brazilian Real		11.1520		88.8470		99.9990		12.8141		87.1849		99.9990
—	Arauco Forest Products B.V.	Holland	U.S. Dollar		—		99.9990		99.9990		—		99.9990		99.9990
—	Arauco Holanda Cooperatief U.A.	Holland	U.S. Dollar		0.5389		99.4601		99.9990		—		99.9990		99.9990
—	Arauco Panels USA, LLC	USA	U.S. Dollar		—		99.9990		99.9990		—		99.9990		99.9990
—	Arauco Perú S.A.	Peru	U.S. Dollar		0.0013		99.9977		99.9990		0.0013		99.9977		99.9990
—	Arauco Wood Products, Inc.	USA	U.S. Dollar		0.0004		99.9986		99.9990		0.0004		99.9986		99.9990
—	Araucomex S.A. de C.V.	Mexico	U.S. Dollar		0.0005		99.9985		99.9990		0.0005		99.9985		99.9990
96565750-9	Aserraderos Arauco S.A.	Chile	U.S. Dollar		99.0000		0.9995		99.9995		99.0000		0.9995		99.9995
96657900-5	Consorcio Protección Fitosanitaria Forestal S.A. (Ex-Controladora de Plagas Forestales S.A.)	Chile	Chilean Pesos		—		57.7503		57.7503		—		57.9502		57.9502
—	Empreendimentos Florestais Santa Cruz Ltda.	Brazil	Brazilian Real		—		99.9789		99.9789		—		99.9789		99.9789
—	Flakeboard America Limited	USA	U.S. Dollar		—		99.9990		99.9990		—		99.9990		99.9990
—	Flakeboard Company Ltd.	Canada	Canadian Dollar		—		99.9990		99.9990		—		99.9990		99.9990
85805200-9	Forestal Arauco S.A. (Ex-Forestal Celco S.A.)	Chile	U.S. Dollar		99.9484		—		99.9484		99.9484		—		99.9484
93838000-7	Forestal Cholguán S.A.	Chile	U.S. Dollar		—		98.1796		98.1796		—		98.1796		98.1796
—	Forestal Concepción S.A.	Panama	U.S. Dollar		0.0050		99.9940		99.9990		0.0050		99.9940		99.9990
78049140-K	Forestal Los Lagos S.A.	Chile	U.S. Dollar		—		79.9587		79.9587		—		79.9587		79.9587
—	Forestal Nuestra Señora del Carmen S.A.	Argentina	U.S. Dollar		—		99.9805		99.9805		—		99.9805		99.9805
—	Forestal Talavera S.A.	Argentina	U.S. Dollar		—		99.9942		99.9942		—		99.9942		99.9942
—	Greenagro S.A.	Argentina	U.S. Dollar		—		97.9805		97.9805		—		97.9805		97.9805
96563550-5	Inversiones Arauco Internacional Ltda.	Chile	U.S. Dollar		98.0186		1.9804		99.9990		98.0186		1.9804		99.9990
79990550-7	Investigaciones Forestales Bioforest S.A.	Chile	Chilean Pesos		1.0000		98.9489		99.9489		1.0000		98.9489		99.9489
—	Leasing Forestal S.A.	Argentina	U.S. Dollar		—		99.9801		99.9801		—		99.9801		99.9801
—	Mahal Empreendimentos e Participacoes S.A.	Brazil	Brazilian Real		—		99.9934		99.9934		—		99.9934		99.9934
96510970-6	Paneles Arauco S.A.	Chile	U.S. Dollar		99.0000		0.9995		99.9995		99.0000		0.9995		99.9995
—	Savitar S.A.	Argentina	U.S. Dollar		—		99.9841		99.9841		—		99.9841		99.9841
76375371-9	Servicios Aéreos Forestales Ltda.	Chile	U.S. Dollar		0.0100		99.9890		99.9990		—		—		—
96637330-K	Servicios Logísticos Arauco S.A.	Chile	U.S. Dollar		45.0000		54.9997		99.9997		45.0000		54.9997		99.9997

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AND SUBSIDIARIES

Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

The companies in the table below are classified as joint operations in accordance with IFRS 11. The assets, liabilities, income and expenses are recorded in relation to the Company’s ownership percentage in accordance with accounting standards applicable in each case.

ID N°	Company Name	Country	Functional Currency
—	Euforest S.A.	Uruguay	U.S. Dollar
—	Celulosa y Energía Punta Pereira S.A.	Uruguay	U.S. Dollar
—	Zona Franca Punta Pereira S.A.	Uruguay	U.S. Dollar
—	Forestal Cono Sur S.A.	Uruguay	U.S. Dollar
—	Stora Enso Uruguay S.A.	Uruguay	U.S. Dollar
—	El Esparragal Asociación Agraria de R.L.	Uruguay	U.S. Dollar
—	Ongar S.A.	Uruguay	U.S. Dollar
—	Terminal Logística e Industrial M’Bopicua S.A.	Uruguay	U.S. Dollar

There are no significant restrictions on the ability of subsidiaries to transfer funds to Arauco, in the form of cash dividends or repayment of loans and/or advances.

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Unaudited Consolidated Financial Statements

December 31, 2014

Amounts in thousands of U.S. dollars, except as indicated

Employee Benefits for Key Management Personnel

	January - December
	2014		2013
	ThU.S.$		ThU.S.$
Salaries and bonuses		69,256		63,633
Per diem compensation to members of the Board of Directors		1,397		1,607
Termination benefits		4,282		3,491
Total		74,935		68,731

Related Party Receivables, Current

Name of Related Party	Tax ID No.	Nature of Relationship	Country	Currency	Maturity	12-31-2014 ThU.S.$		12-31-2013 ThU.S.$
Forestal Mininco S.A	91.440.000-7	Common director	Chile	Chilean Pesos	30 days		19		—
Eka Chile S.A	99.500.140-3	Joint Venture	Chile	Chilean Pesos	30 days		2,083		3,008
Forestal del Sur S.A	79.825.060-4	Common director	Chile	Chilean Pesos	30 days		584		—
Stora Enso Arapoti Industria del Papel S.A	—	Associates	Brazil	Brazilian Real	30 days		588		629
Empresa Electrica Guacolda S.A.	96.635.700-2	Controlling Parent’s Associate	Chile	Chilean Pesos	—		—		240
Unilin Arauco Pisos Ltda.	—	Joint Venture	Brazil	Brazilian Real	30 days		1,389		3,006
Unilin Flooring Ltda.	—	Common director	EEUU	U.S. Dollar	—		—		135
Colbún S.A.	96.505.760-9	Common director	Chile	Chilean Pesos	30 days		—		1,201
CMPC Maderas S.A.	95.304.000-K	Common director	Chile	Chilean Pesos	30 days		—		5
Vale Do Corisco S.A.	—	Associates	Brazil	Brazilian Real	—		—		16
Novo Oeste Gestao de Ativo Florestais S.A.	—	Associates	Brazil	Brazilian Real	30 days		21		3
CMPC Celulosa S.A.	96.532.330-9	Common director	Chile	Chilean Pesos	30 days		1		—
Corpesca S.A	96.893.820-7	Common director	Chile	Chilean Pesos	30 days		20		—
TOTAL							4,705		8,243

Related Party Receivables, Non-Current

Name of Related Party	Tax ID No.	Nature of Relationship	Country	Currency	Maturity	12-31-2014 ThU.S.$		12-31-2013 ThU.S.$
Novo Oeste Gestao de Ativo Florestais S.A. (*)	—	Joint Venture	Uruguay	Brazilian Real	Dec-16		151,519		—
TOTAL