cbditr3q16_6k.htm - Generated by SEC Publisher for SEC Filing

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

For the month of October, 2016

Brazilian Distribution Company
(Translation of Registrant’s Name Into English)

Av. Brigadeiro Luiz Antonio,
3142 São Paulo, SP 01402-901
Brazil
(Address of Principal Executive Offices)

(Indicate by check mark whether the registrant files or will file annual reports under cover of 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)):

Yes ___ No X

(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)):

Yes ___ No X

(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

(FreeTranslation into English from the Original Previously Issued in Portuguese)

Companhia Brasileira
de Distribuição

Individual and Consolidated
Interim Financial Information for the
Quarter Ended September 30, 2016 and
Report on Review of Interim Financial Information

Deloitte Touche Tohmatsu Auditores Independentes

(Convenience Translation into English from the Original Previously Issued in Portuguese)

REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION

To the Shareholders, Directors and Officers of

Companhia Brasileira de Distribuição

São Paulo - SP

Introduction

We have reviewed the accompanying individual and consolidated interim financial information of Companhia Brasileira de Distribuição (the “Company”), included in the Interim Financial Information Form (ITR), for the quarter ended September 30, 2016, which comprises the balance sheet as of September 30, 2016 and the related statements of profit or loss and of comprehensive income for the three- and nine-month periods then ended, and the statements of changes in equity and of cash flows for the nine-month period then ended, including the explanatory notes.

Management is responsible for the preparation of the individual and consolidated interim financial information in accordance with technical pronouncement CPC 21 (R1) and international standard IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board - IASB, as well as for the presentation of such information in accordance with the standards issued by the Brazilian Securities and Exchange Commission (CVM), applicable to the preparation of Interim Financial Information (ITR). Our responsibility is to express an opinion on this interim financial information based on our review.

Scope of review

We conducted our review in accordance with Brazilian and international standards on review of interim financial information (NBC TR 2410 and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the standards on auditing and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion on the interim financial information

Based on our review, nothing has come to our attention that causes us to believe that the accompanying individual and consolidated interim financial information included in the ITR referred to above is not prepared, in all material respects, in accordance with CPC 21 (R1) and IAS 34 applicable to the preparation of Interim Financial Information (ITR) and presented in accordance with the standards issued by the CVM.

Other matters

Statements of value added

We have also reviewed the individual and consolidated interim statements of value added (“DVA”) for the nine-month period ended September 30, 2016, prepared under Management’s responsibility, the presentation of which is required by the standards issued by the CVM applicable to the preparation of Interim Financial Information (ITR), and is considered as supplemental information under International Financial Reporting Standards - IFRSs, which do not require the presentation of a DVA. These statements were subject to the same review procedures described above and, based on our review, nothing has come to our attention that causes us to believe that they are not prepared, in all material respects, consistently with the interim financial statements taken as a whole.

The accompanying interim financial information has been translated into English for the convenience of readers outside Brazil.

São Paulo, October 27, 2016

DELOITTE TOUCHE TOHMATSU	Eduardo Franco Tenório
Auditores Independentes	Engagement Partner

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – September 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

Company Information
Capital Composition	2
Individual Interim Financial Information
Balance Sheet – Assets	3
Balance Sheet – Liabilities	4
Statement of Profit or Loss	5
Statement of Comprehensive Income	6
Statement of Cash Flows	7
Statement of Changes in Shareholders’ Equity
1/1/2016 to 9/30/2016	8
1/1/2015 to 9/30/2015	9
Statement of Value Added	10
Consolidated Interim Financial Information
Balance Sheet – Assets	11
Balance Sheet – Liabilities	12
Statement of Profit or Loss	13
Statement of Comprehensive Income	14
Statement of Cash Flows	15
Statement of Changes in Shareholders’ Equity
1/1/2016 to 9/30/2016	16
1/1/2015 to 9/30/2015	17
Statement of Value Added	18
Comments on the Company`s Performance	19
Notes to the Interim Financial Information	42
Other information deemed as relevant by the Company	100

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – September 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

Number of Shares (thousand)	Current Quarter 9/30/2016
Share Capital
Common	99,680
Preferred	166,087
Total	265,767
Treasury Shares
Common	-
Preferred	233
Total	233

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – September 30,2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

Companhia Brasileira de Distribuição

Individual Interim Financial Information / Balance Sheet - Assets

R$ (in thousands)
Code	Description	Current Quarter 9.30.2016	Previous Year 12.31.2015
1	Total Assets	21,215,000	21,399,000
1.01	Current Assets	5,726,000	6,176,000
1.01.01	Cash and Cash Equivalents	1,416,000	2,247,000
1.01.03	Accounts Receivable	626,000	520,000
1.01.03.01	Trade Receivables	519,000	387,000
1.01.03.02	Other Receivables	107,000	133,000
1.01.04	Inventories	3,038,000	2,828,000
1.01.06	Recoverable Taxes	493,000	357,000
1.01.07	Prepaid Expenses	113,000	74,000
1.01.08	Other Current Assets	40,000	150,000
1.02	Noncurrent Assets	15,489,000	15,223,000
1.02.01	Long-term Assets	1,664,000	2,205,000
1.02.01.03	Accounts Receivable	70,000	67,000
1.02.01.03.02	Other Receivables	70,000	67,000
1.02.01.06	Deferred Taxes	138,000	50,000
1.02.01.07	Prepaid Expenses	15,000	19,000
1.02.01.08	Receivables from Related Parties	399,000	1,076,000
1.02.01.09	Other Noncurrent Assets	1,042,000	993,000
1.02.01.09.04	Recoverable Taxes	493,000	534,000
1.02.01.09.05	Restricted Deposits for Legal Proceedings	549,000	459,000
1.02.02	Investments	5,292,000	5,173,000
1.02.02.01	Investments in Associates and Subsidiaries	5,267,000	5,149,000
1.02.02.01.02	Investments in Subsidiaries	5,267,000	5,149,000
1.02.02.02	Investment properties	25,000	24,000
1.02.03	Property and Equipment, Net	7,148,000	6,525,000
1.02.04	Intangible Assets	1,385,000	1,320,000

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – September 30,2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

Companhia Brasileira de Distribuição

Individual Interim Financial Information / Balance Sheet - Liabilities

R$ (in thousands)
Code	Description	Current Quarter 9.30.2016	Previous Year 12.31.2015
2	Total Liabilities	21,215,000	21,399,000
2.01	Current Liabilities	7,548,000	6,375,000
2.01.01	Payroll and Related Taxes	494,000	390,000
2.01.02	Trade Payables	3,073,000	4,103,000
2.01.03	Taxes and Contributions Payable	137,000	135,000
2.01.04	Borrowings and Financing	2,984,000	828,000
2.01.05	Other Liabilities	852,000	915,000
2.01.05.01	Payables to Related Parties	491,000	268,000
2.01.05.02	Other	361,000	647,000
2.01.05.02.04	Utilities	10,000	3,000
2.01.05.02.05	Rent Payable	75,000	83,000
2.01.05.02.06	Advertisement Payable	40,000	45,000
2.01.05.02.07	Pass-through to Third Parties	10,000	43,000
2.01.05.02.08	Financing Related to Acquisition of Assets	46,000	100,000
2.01.05.02.09	Deferred Revenue	27,000	28,000
2.01.05.02.11	Other Payables	126,000	318,000
2.01.05.02.12	Loalty Programs	27,000	27,000
2.01.06	Provisions	2,000	4,000
2.01.07	Noncurrent Liabilities Held for Sales	6,000	-
2.02	Noncurrent Liabilities	3,648,000	4,670,000
2.02.01	Borrowings and Financing	1,881,000	3,277,000
2.02.02	Other Liabilities	1,025,000	871,000
2.02.02.02	Other	1,025,000	871,000
2.02.02.02.03	Taxes Payable in Installments	545,000	572,000
2.02.02.02.05	Financing Related to Acquisition of Assets	4,000	4,000
2.02.02.02.07	Other Accounts Payable	31,000	19,000
2.02.02.02.08	Provision for Negative Equity	445,000	276,000
2.02.04	Provision for risks	715,000	490,000
2.02.06	Deferred Revenue	27,000	32,000
2.03	Shareholders’ Equity	10,019,000	10,354,000
2.03.01	Share Capital	6,808,000	6,806,000
2.03.02	Capital Reserves	321,000	302,000
2.03.02.04	Options Granted	314,000	295,000
2.03.02.07	Capital Reserve	7,000	7,000
2.03.04	Earnings Reserve	3,342,000	3,333,000
2.03.04.01	Legal Reserve	426,000	426,000
2.03.04.05	Earnings Retention Reserve	274,000	400,000
2.03.04.10	Expansion Reserve	2,743,000	2,624,000
2.03.04.12	Transactions with non-controlling interests	49,000	33,000
2.03.04.14	Settlement of Equity Instrument	(150,000)	(150,000)
2.03.05	Retained Earnings/ Accumulated Losses	(446,000)	-
2.03.08	Other Comprehensive Income	(6,000)	(87,000)

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – September 30,2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

Companhia Brasileira de Distribuição

Individual Interim Financial Information / Statement of Profit or Loss

R$ (in thousands)
Code	Description	Year To Date Current Period 7/1/2016 to 9/30/2016	Year To Date Current Period 1/01/2016 to 9/30/2016	Year To Date Previous Period 7/01/2015 to 9/30/2015	Year To Date Previous Period 1/01/2015 to 9/30/2015
3.01	Net Sales of Goods and/or Services	6,303,000	18,103,000	5,313,000	16,298,000
3.02	Cost of Goods Sold and/or Services Sold	(4,611,000)	(13,175,000)	(3,882,000)	(11,909,000)
3.03	Gross Profit	1,692,000	4,928,000	1,431,000	4,389,000
3.04	Operating Income/Expenses	(1,624,000)	(4,885,000)	(1,248,000)	(3,567,000)
3.04.01	Selling Expenses	(1,228,000)	(3,579,000)	(943,000)	(2,886,000)
3.04.02	General and Administrative Expenses	(173,000)	(466,000)	(121,000)	(355,000)
3.04.05	Other Operating Expenses	(185,000)	(712,000)	(187,000)	(517,000)
3.04.05.01	Depreciation/Amortization	(144,000)	(406,000)	(121,000)	(357,000)
3.04.05.02	Other Operating Expenses	(41,000)	(306,000)	(66,000)	(160,000)
3.04.06	Share of Profit of Subsidiaries and Associates	(38,000)	(128,000)	3,000	191,000
3.05	Profit before Financial Income (Expenses) and Taxes	68,000	43,000	183,000	822,000
3.06	Financial Income (Expenses)	(208,000)	(585,000)	(195,000)	(547,000)
3.07	Profit (loss) Before Income Tax and Social Contribution	(140,000)	(542,000)	(12,000)	275,000
3.08	Income Tax and Social Contribution	20,000	96,000	2,000	(27,000)
3.08.01	Current	2,000	9,000	3,000	2,000
3.08.02	Deferred	18,000	87,000	(1,000)	(29,000)
3.09	Net Income (loss) from Continued Operations	(120,000)	(446,000)	(10,000)	248,000
3.11	Net Income (loss) for the Period	(120,000)	(446,000)	(10,000)	248,000
3.99	Earnings per Share - (Reais/Share)	-	-	-	-
3.99.01	Basic Earnings per Share	-	-	-	-
3.99.01.01	Common	(0.45186)	(1.67917)	(0.03875)	0.88006
3.99.01.02	Preferred	(0.45186)	(1.67917)	(0.03875)	0.96807
3.99.02	Diluted Earnings per Share	-	-	-	-
3.99.02.01	Common	(0.45186)	(1.67917)	(0.03875)	0.88006
3.99.02.02	Preferred	(0.45186)	(1.67917)	(0.03875)	0.96588

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – September 30,2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

Companhia Brasileira de Distribuição

Individual Interim Financial Information / Statement of Comprehensive Income

R$ (in thousands)
Code	Description	Year To Date Current Period 7/1/2016 to 9/30/2016	Year To Date Current Period 1/01/2016 to 9/30/2016	Year To Date Previous Period 7/01/2015 to 9/30/2015	Year To Date Previous Period 1/01/2015 to 9/30/2015
4.01	Net income (loss) for the Period	(120,000)	(446,000)	(10,000)	248,000
4.02	Other Comprehensive Income	9,000	81,000	(83,000)	(95,000)
4.02.01	Defined benefit contribution plan	-	-	-	(1,000)
4.02.02	Accumulative Translation Adjustment for the Period	9,000	81,000	(82,000)	(93,000)
4.02.03	Adjustments to financial instruments	-	-	(1,000)	(1,000)
4.03	Total Comprehensive Income for the Period	(111,000)	(365,000)	(93,000)	153,000

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – September 30,2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

Companhia Brasileira de Distribuição

Individual Interim Financial Information / Statement of Cash Flows - Indirect Method

R$ (in thousands)
Code	Description	Year To Date Current Period 1/01/2016 to 9/30/2016	Year To Date Previous Period 1/01/2015 to 9/30/2015
6.01	Net Cash Provided by Operating Activities	(813,000)	776,000
6.01.01	Cash Provided by the Operations	940,000	1,077,000
6.01.01.01	Net Income for the Period	(446,000)	248,000
6.01.01.02	Deferred Income and Social Contribution Taxes (note 20)	(87,000)	29,000
6.01.01.03	Gain (Losses) on Disposal of Fixed Assets and Intangibles	45,000	22,000
6.01.01.04	Depreciation/Amortization	437,000	389,000
6.01.01.05	Interest and Inflation Adjustments	520,000	533,000
6.01.01.06	Adjustment to Present Value	-	2,000
6.01.01.07	Share of Profit (Loss) of Subsidiaries and Associates (note 13)	128,000	(191,000)
6.01.01.08	Provision for Risks (note 22)	191,000	(14,000)
6.01.01.10	Share-based Payment	19,000	18,000
6.01.01.13	Provision for Obsolescence/Breakage (note 10)	23,000	(1,000)
6.01.01.14	Other Operating Expenses	119,000	65,000
6.01.01.15	Deferred Revenue (note 24)	(9,000)	(23,000)
6.01.02	Changes in Assets and Liabilities	(1,753,000)	(301,000)
6.01.02.01	Accounts Receivable	20,000	112,000
6.01.02.02	Recoverable Taxes	(42,000)	(156,000)
6.01.02.03	Inventories	275,000	104,000
6.01.02.04	Other Assets	217,000	(76,000)
6.01.02.06	Trade Payables	(1,486,000)	(846,000)
6.01.02.07	Payroll and Related Taxes	69,000	24,000
6.01.02.08	Related Parties	(418,000)	79,000
6.01.02.09	Restricted Deposits for Legal Proceeding	(74,000)	(33,000)
6.01.02.10	Taxes and Social Contributions Payable	(88,000)	(109,000)
6.01.02.11	Legal claims	(21,000)	(22,000)
6.01.02.12	Deferred Revenue	32,000	605,000
6.01.02.13	Other Payables	(239,000)	26,000
6.01.02.14	Received Dividends	2,000	21,000
6.01.02.15	Income Tax and Social contribution	-	(30,000)
6.02	Net Cash Provided by (Used in) Investing Activities	(236,000)	(597,000)
6.02.02	Acquisition of Property and Equipment (note 14)	(343,000)	(536,000)
6.02.03	Increase in Intangible Assets (note 15)	(60,000)	(88,000)
6.02.04	Sales of Property and Equipment (note 14)	12,000	27,000
6.02.05	Net Cash Acquisition of Companies and Corporate Restructuring	155,000	-
6.03	Net Cash Provided by (Used in) Financing Activities	218,000	(1,358,000)
6.03.01	Capital Increase	2,000	14,000
6.03.02	Borrowings	1,398,000	740,000
6.03.03	Payments (note 17)	(1,179,000)	(1,837,000)
6.03.05	Payment of Dividends	(3,000)	(271,000)
6.03.06	Transactions with Non-controlling Interest	-	(4,000)
6.05	Net Increase (Decrease) in Cash and Cash Equivalents	(831,000)	(1,179,000)
6.05.01	Cash and Cash Equivalents at the Beginning of the Period	2,247,000	2,923,000
6.05.02	Cash and Cash Equivalents at the End of the Period	1,416,000	1,744,000

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – September 30,2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

Companhia Brasileira de Distribuição

Individual Interim Financial Information / Statement of Changes in Shareholders' Equity 01/01/2016 to 9/30/2016

R$ (in thousands)
Code	Description	Share Capital	Capital Reserves, Options Granted and Treasury Shares	Earnings Reserve	Retained Earnings /Accumulated Losses	Other comprehensive income	Shareholders' Equity
5.01	Opening Balance	6,806,000	302,000	3,333,000	-	(87,000)	10,354,000
5.03	Adjusted Opening Balance	6,806,000	302,000	3,333,000	-	(87,000)	10,354,000
5.04	Capital Transactions with Shareholders	2,000	19,000	(4,000)	-	-	17,000
5.04.01	Capital Increases	2,000	-	-	-	-	2,000
5.04.03	Options Granted	-	13,000	-	-	-	13,000
5.04.06	Dividends	-	-	(4,000)	-	-	(4,000)
5.04.08	Options Granted recognized in subsidiaries	-	6,000	-	-	-	6,000
5.05	Total Comprehensive Income	-	-	-	(446,000)	81,000	(365,000)
5.05.01	Net Income (loss) for the Period	-	-	-	(446,000)	-	(446,000)
5.05.02	Other Comprehensive Income	-	-	-	-	81,000	81,000
5.05.02.04	Cumulative Translation Adjustment	-	-	-	-	81,000	81,000
5.06	Internal Changes of Shareholders’ Equity	-	-	13,000	-	-	13,000
5.06.04	Put Option CD Colombia	-	-	11,000	-	-	11,000
5.06.05	Transactions with Non-controlling Interests	-	-	2,000	-	-	2,000
5.07	Closing Balance	6,808,000	321,000	3,342,000	(446,000)	(6,000)	10,019,000

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – September 30,2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

Companhia Brasileira de Distribuição

Individual Interim Financial Information / Statement of Changes in Shareholders' Equity 01/01/2015 to 9/30/2015

R$ (in thousands)
Code	Description	Share Capital	Capital Reserves, Options Granted and Treasury Shares	Earnings Reserve	Retained Earnings /Accumulated Losses	Other comprehensive Income	Shareholders' Equity
5.01	Opening Balance	6,792,000	282,000	3,402,000	-	1,000	10,477,000
5.03	Adjusted Opening Balance	6,792,000	282,000	3,402,000	-	1,000	10,477,000
5.04	Capital Transactions with Shareholders	14,000	18,000	-	(77,000)	-	(45,000)
5.04.01	Capital Increases	14,000	-	-	-	-	14,000
5.04.03	Options Granted	-	11,000	-	-	-	11,000
5.04.06	Dividends	-	-	-	(77,000)	-	(77,000)
5.04.08	Options Granted recognized in subsidiaries	-	7,000	-	-	-	7,000
5.05	Total Comprehensive Income	-	-	-	248,000	(95,000)	153,000
5.05.01	Net Income (loss) for the Period	-	-	-	248,000	-	248,000
5.05.02	Other Comprehensive Income	-	-	-	-	(95,000)	(95,000)
5.05.02.01	Adjusts to Financial Instruments	-	-	-	-	(1,000)	(1,000)
5.05.02.04	Cumulative Translation Adjustment	-	-	-	-	(93,000)	(93,000)
5.05.02.06	Defined benefit plan	-	-	-	-	(1,000)	(1,000)
5.06	Internal Changes of Shareholders’ Equity	-	-	(217,000)	-	-	(217,000)
5.06.04	Settlement of Equity Instrument	-	-	(212,000)	-	-	(212,000)
5.06.05	Transactions with Non-controlling Interests	-	-	(5,000)	-	-	(5,000)
5.07	Closing Balance	6,806,000	300,000	3,185,000	171,000	(94,000)	10,368,000

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – September 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

Companhia Brasileira de Distribuição

Individual Interim Financial Information / Statement of Value Added

R$ (in thousands)
Code	Description	Year To Date Current Period 1/01/2016 to 9/30/2016	Year To Date Previous Period 1/01/2015 to 9/30/2015
7.01	Revenues	19,664,000	17,640,000
7.01.01	Sales of Goods, Products and Services	19,647,000	17,640,000
7.01.02	Other Revenues	17,000	-
7.02	Products Acquired from Third Parties	(15,467,000)	(13,693,000)
7.02.01	Costs of Products, Goods and Services Sold	(13,186,000)	(12,101,000)
7.02.02	Materials, Energy, Outsourced Services and Other	(2,281,000)	(1,592,000)
7.03	Gross Value Added	4,197,000	3,947,000
7.04	Retention	(437,000)	(389,000)
7.04.01	Depreciation and Amortization	(437,000)	(389,000)
7.05	Net Value Added Produced	3,760,000	3,558,000
7.06	Value Added Received in Transfer	2,000	379,000
7.06.01	Share of Profit of Subsidiaries and Associates	(128,000)	191,000
7.06.02	Financial Revenue	130,000	188,000
7.07	Total Value Added to Distribute	3,762,000	3,937,000
7.08	Distribution of Value Added	3,762,000	3,937,000
7.08.01	Personnel	2,136,000	1,928,000
7.08.01.01	Direct Compensation	1,392,000	1,294,000
7.08.01.02	Benefits	472,000	426,000
7.08.01.03	Government Severance Indemnity Fund for Employees (FGTS)	129,000	125,000
7.08.01.04	Other	143,000	83,000
7.08.02	Taxes, Fees and Contributions	892,000	653,000
7.08.02.01	Federal	512,000	397,000
7.08.02.02	State	264,000	153,000
7.08.02.03	Municipal	116,000	103,000
7.08.03	Value Distributed to Providers of Capital	1,180,000	1,108,000
7.08.03.01	Interest	709,000	733,000
7.08.03.02	Rentals	471,000	375,000
7.08.04	Value Distributed to Shareholders	(446,000)	248,000
7.08.04.02	Dividends	3,000	77,000
7.08.04.03	Retained Earnings/ Accumulated Losses for the Period	(449,000)	171,000

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – September 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

Companhia Brasileira de Distribuição

Consolidated Interim Financial Information /Balance Sheet - Assets

R$ (in thousands)
Code	Description	Current Quarter 9.30.2016	Previous Year 12.31.2015
1	Total Assets	41,956,000	47,241,000
1.01	Current Assets	19,918,000	24,960,000
1.01.01	Cash and Cash Equivalents	3,385,000	11,015,000
1.01.03	Accounts Receivable	4,149,000	3,585,000
1.01.03.01	Trade Receivables	3,907,000	3,210,000
1.01.03.02	Other Receivables	242,000	375,000
1.01.04	Inventories	7,864,000	8,965,000
1.01.06	Recoverable Taxes	1,563,000	1,080,000
1.01.07	Prepaid Expenses	244,000	157,000
1.01.08	Other Current Assets	2,713,000	158,000
1.01.08.01	Noncurrent Assets Held for Sales	2,562,000	15,000
1.01.08.03	Other	151,000	143,000
1.02	Noncurrent Assets	22,038,000	22,281,000
1.02.01	Long-term Assets	4,908,000	4,954,000
1.02.01.03	Accounts Receivable	776,000	723,000
1.02.01.03.01	Trade Receivables	147,000	98,000
1.02.01.03.02	Other Receivables	629,000	625,000
1.02.01.06	Deferred Taxes	296,000	406,000
1.02.01.07	Prepaid Expenses	47,000	50,000
1.02.01.08	Receivables from Related Parties	345,000	309,000
1.02.01.09	Other Noncurrent Assets	3,444,000	3,466,000
1.02.01.09.04	Recoverable Taxes	2,247,000	2,467,000
1.02.01.09.05	Restricted Deposits for Legal Proceedings	1,197,000	999,000
1.02.02	Investments	488,000	407,000
1.02.02.01	Investments in Associates	463,000	382,000
1.02.02.02	Investments Property	25,000	25,000
1.02.03	Property and Equipment, Net	10,603,000	10,377,000
1.02.04	Intangible Assets	6,039,000	6,543,000

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – September 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

Companhia Brasileira de Distribuição

Consolidated Interim Financial Information / Balance Sheet - Liabilities

R$ (in thousands)
Code	Description	Current Quarter 9.30.2016	Previous Year 12.31.2015
2	Total Liabilities	41,956,000	47,241,000
2.01	Current Liabilities	22,328,000	25,273,000
2.01.01	Payroll and Related Taxes	1,111,000	1,023,000
2.01.02	Trade Payables	8,520,000	15,508,000
2.01.03	Taxes and Contributions Payable	696,000	830,000
2.01.04	Borrowings and Financing	6,993,000	3,814,000
2.01.05	Other Liabilities	1,879,000	4,092,000
2.01.05.01	Payables to Related Parties	171,000	563,000
2.01.05.02	Other	1,708,000	3,529,000
2.01.05.02.01	Dividends and Interest on Capital Payable	3,000	-
2.01.05.02.04	Utilities	15,000	16,000
2.01.05.02.05	Rent Payable	126,000	151,000
2.01.05.02.06	Advertisement Payable	66,000	121,000
2.01.05.02.07	Pass-through to Third Parties	250,000	398,000
2.01.05.02.08	Financing Related to Acquisition of Assets	136,000	114,000
2.01.05.02.09	Deferred revenue	327,000	420,000
2.01.05.02.11	Accounts Payable Related to Acquisition of Companies	7,000	76,000
2.01.05.02.12	Other Payables	410,000	1,148,000
2.01.05.02.13	Loalty Programs	27,000	30,000
2.01.05.02.14	Suppliers - structured program	341,000	1,055,000
2.01.06	Provisions	5,000	6,000
2.01.07	Noncurrent Liabilities Held for Sales	3,124,000	-
2.02	Noncurrent Liabilities	6,992,000	8,616,000
2.02.01	Borrowings and Financing	2,376,000	4,164,000
2.02.02	Other Liabilities	609,000	649,000
2.02.02.02	Other	609,000	649,000
2.02.02.02.03	Taxes Payable in Installments	545,000	572,000
2.02.02.02.04	Payables Related to Acquisition of Companies	-	28,000
2.02.02.02.05	Financing Related to Acquisition of Assets	4,000	4,000
2.02.02.02.06	Pension Plan	-	11,000
2.02.02.02.07	Other Payables	60,000	34,000
2.02.03	Deferred Taxes	1,039,000	1,184,000
2.02.04	Provision for risks	1,831,000	1,396,000
2.02.06	Deferred revenue	1,137,000	1,223,000
2.03	Consolidated Shareholders’ Equity	12,636,000	13,352,000
2.03.01	Share Capital	6,808,000	6,806,000
2.03.02	Capital Reserves	321,000	302,000
2.03.02.04	Options Granted	314,000	295,000
2.03.02.07	Capital Reserve	7,000	7,000
2.03.04	Earnings Reserve	3,342,000	3,333,000
2.03.04.01	Legal Reserve	426,000	426,000
2.03.04.05	Earnings Retention Reserve	274,000	400,000
2.03.04.10	Expansion Reserve	2,743,000	2,624,000
2.03.04.12	Transactions with Non-Controlling interests	49,000	33,000
2.03.04.14	Settlement of Equity Instrument	(150,000)	(150,000)
2.03.05	Retained Earnings/ Accumulated Losses	(446,000)	-
2.03.08	Other Comprehensive Income	(6,000)	(87,000)
2.03.09	Non-controlling Interests	2,617,000	2,998,000

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – September 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

Companhia Brasileira de Distribuição

Consolidated Interim Financial Information / Statement of Profit or Loss

R$ (in thousands)
Code	Description	Year To Date Current Period 7/1/2016 to 9/30/2016	Year To Date Current Period 1/01/2016 to 9/30/2016	Year To Date Previous Period 7/01/2015 to 9/30/2015	Year To Date Previous Period 1/01/2015 to 9/30/2015
3.01	Net Sales from Goods and/or Services	15,094,000	45,980,000	14,457,000	45,170,000
3.02	Cost of Goods Sold and/or Services Sold	(11,306,000)	(34,382,000)	(10,852,000)	(33,788,000)
3.03	Gross Profit	3,788,000	11,598,000	3,605,000	11,382,000
3.04	Operating Income/Expenses	(3,534,000)	(11,146,000)	(3,380,000)	(9,872,000)
3.04.01	Selling Expenses	(2,833,000)	(8,635,000)	(2,594,000)	(7,885,000)
3.04.02	General and Administrative Expenses	(382,000)	(1,230,000)	(379,000)	(1,122,000)
3.04.05	Other Operating Expenses	(339,000)	(1,362,000)	(429,000)	(949,000)
3.04.05.01	Depreciation/Amortization	(222,000)	(683,000)	(225,000)	(662,000)
3.04.05.02	Other Operating Expenses	(117,000)	(679,000)	(204,000)	(287,000)
3.04.06	Share of Profit of Subsidiaries and Associates	20,000	81,000	22,000	84,000
3.05	Profit before Financial Income (Expenses) and Taxes	254,000	452,000	225,000	1,510,000
3.06	Financial Income (Expenses), Net	(477,000)	(1,331,000)	(345,000)	(1,063,000)
3.07	Profit (loss) Before Income Tax and Social Contribution	(223,000)	(879,000)	(120,000)	447,000
3.08	Income tax and Social Contribution	13,000	18,000	65,000	(88,000)
3.08.01	Current	(13,000)	(74,000)	(28,000)	(84,000)
3.08.02	Deferred	26,000	92,000	93,000	(4,000)
3.09	Net Income (loss) from Continuing Operations	(210,000)	(861,000)	(55,000)	359,000
3.10	Net Income (loss) from Descontinued Operations	(99,000)	(187,000)	(74,000)	(250,000)
3.10.01	Net Income (loss) from Descontinued Operations	(99,000)	(187,000)	(74,000)	(250,000)
3.11	Consolidated Net Income (loss)for the Period	(309,000)	(1,048,000)	(129,000)	109,000
3.11.01	Attributable to Owners of the Company	(120,000)	(446,000)	(9,000)	248,000
3.11.02	Attributable to Non-controlling Interests	(189,000)	(602,000)	(120,000)	(139,000)
3.99	Earnings per Share - (Reais/Share)	-	-	-	-
3.99.01	Basic Earnings per Share	-	-	-	-
3.99.01.01	Common	(0.45186)	(1.67917)	(0.03875)	0.88006
3.99.01.02	Preferred	(0.45186)	(1.67917)	(0.03875)	0.96807
3.99.02	Diluted Earnings per Share	-	-	-	-
3.99.02.01	Common	(0.45186)	(1.67917)	(0.03875)	0.88006
3.99.02.02	Preferred	(0.45186)	(1.67917)	(0.03875)	0.96588

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – September 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

Companhia Brasileira de Distribuição


Consolidated Interim Financial Information / Statement of Comprehensive Income

R$ (in thousands)
Code	Description	Year To Date Current Period 7/1/2016 to 9/30/2016	Year To Date Current Period 1/01/2016 to 9/30/2016	Year To Date Previous Period 7/01/2015 to 9/30/2015	Year To Date Previous Period 1/01/2015 to 9/30/2015
4.01	Net Income (loss) for the Period	(309,000)	(1,048,000)	(129,000)	109,000
4.02	Other Comprehensive Income	21,000	281,000	(224,000)	(250,000)
4.02.01	Defined Benefit Plan	-	-	-	(2,000)
4.02.02	Cumulative Translation adjustment	21,000	281,000	(223,000)	(247,000)
4.02.03	Adjustments to financial instruments	-	-	(1,000)	(1,000)
4.03	Total Comprehensive Income for the Period	(288,000)	(767,000)	(353,000)	(141,000)
4.03.01	Attributable to Controlling Interests	(111,000)	(365,000)	(93,000)	153,000
4.03.02	Attributable to Non-Controlling Interests	(177,000)	(402,000)	(260,000)	(294,000)

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – September 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

Companhia Brasileira de Distribuição

Consolidated Interim Financial Information / Statement of Cash Flows - Indirect Method

R$ (in thousands)
Code	Description	Year To Date Current Period 1/01/2016 to 9/30/2016	Year To Date Previous Period 1/01/2015 to 9/30/2015
6.01	Net Cash Provided by Operating Activities	(7,081,000)	(3,279,000)
6.01.01	Cash from Operations	1,531,000	2,208,000
6.01.01.01	Net Income (loss) for the Period	(1,048,000)	109,000
6.01.01.02	Deferred Income Tax and Social Contribution (note 20)	(92,000)	12,000
6.01.01.03	Gain (Losses) on Disposal of Fixed Assets and Intangibles	146,000	65,000
6.01.01.04	Depreciation/Amortization	826,000	818,000
6.01.01.05	Interest and Inflation Adjustments	996,000	832,000
6.01.01.06	Adjustment to Present Value	-	(4,000)
6.01.01.07	Share of Profit (Loss) of Subsidiaries and Associates (note 13)	(81,000)	(84,000)
6.01.01.08	Provision for Risks (note 22)	638,000	151,000
6.01.01.10	Share-based Payment	19,000	22,000
6.01.01.11	Allowance for Doubtful Accounts (note 08)	438,000	429,000
6.01.01.13	Provision for Obsolescence/breakage (note 10)	19,000	(5,000)
6.01.01.14	Other Operating Expenses	-	2,000
6.01.01.15	Deferred revenue (note 24)	(236,000)	(139,000)
6.01.01.18	Gain in disposal of subsidiaries	(94,000)	-
6.01.02	Changes in Assets and Liabilities	(8,612,000)	(5,487,000)
6.01.02.01	Accounts Receivable	(1,638,000)	(835,000)
6.01.02.02	Inventories	90,000	184,000
6.01.02.03	Recoverable Taxes	(319,000)	(537,000)
6.01.02.04	Other Assets	(36,000)	(285,000)
6.01.02.05	Related Parties	3,000	(157,000)
6.01.02.06	Restricted Deposits for Legal Proceeding	(184,000)	(117,000)
6.01.02.07	Trade Payables	(5,055,000)	(3,199,000)
6.01.02.08	Payroll and Related Taxes	152,000	47,000
6.01.02.09	Taxes and Social Contributions Payable	(51,000)	(31,000)
6.01.02.10	Legal Claims	(271,000)	(217,000)
6.01.02.11	Other Payables	(574,000)	(190,000)
6.01.02.12	Deferred revenue	95,000	43,000
6.01.02.13	Income and Social contribution, paid	(110,000)	(193,000)
6.01.02.14	Suppliers - structured program	(714,000)	-
6.02	Net Cash Provided by (Used in) Investing Activities	(942,000)	(1,376,000)
6.02.02	Acquisition of Property and Equipment	(850,000)	(1,170,000)
6.02.03	Increase in Intangible Assets (note 15)	(221,000)	(314,000)
6.02.04	Sales of Property and Equipment (note 14)	38,000	57,000
6.02.06	Net Cash From Sale of Subsidiary	91,000	51,000
6.03	Net Cash Provided by Financing Activities	1,030,000	(1,253,000)
6.03.01	Capital Increase/Decrease	2,000	14,000
6.03.02	Borrowings	5,422,000	4,624,000
6.03.03	Payments (note 17)	(4,987,000)	(6,603,000)
6.03.05	Payments of Dividends	(4,000)	(397,000)
6.03.07	Acquisition of Subsidiary	(80,000)	(74,000)
6.03.08	Transactions with non-controlling interests	-	(4,000)
6.03.09	Borrowings with Related Parties	677,000	1,187,000
6.04	Effects of Exchange Rate Changes on Cash and Cash Equivalents	22,000	173,000
6.05	Increase (Decrease) in Cash and Cash Equivalents	(6,971,000)	(5,735,000)
6.05.01	Cash and Cash Equivalents at the Beginning of the Period	11,015,000	11,149,000
6.05.02	Cash and Cash Equivalents at the End of the Period	4,044,000	5,414,000

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – September 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

Companhia Brasileira de Distribuição

Consolidated Interim Financial Information / Statement of Changes in Shareholders' Equity 01/01/2016 to 9/30/2016

R$ (in thousands)
Code	Description	Share Capital	Capital Reserves, Options Granted and Treasury Shares	Earnings Reserves	Retained Earnings/ Accumulated Losses	Other comprehensive Income	Shareholders' Equity	Non-Controlling Interest	Consolidated Shareholders' Equity
5.01	Opening Balance	6,806,000	302,000	3,333,000	-	(87,000)	10,354,000	2,998,000	13,352,000
5.03	Adjusted Opening Balance	6,806,000	302,000	3,333,000	-	(87,000)	10,354,000	2,998,000	13,352,000
5.04	Capital Transactions with Shareholders	2,000	19,000	(4,000)	-	-	17,000	4,000	21,000
5.04.01	Capital Increases	2,000	-	-	-	-	2,000	-	2,000
5.04.03	Options Granted	-	13,000	-	-	-	13,000	-	13,000
5.04.06	Dividends	-	-	(4,000)	-	-	(4,000)	-	(4,000)
5.04.08	Options Granted Recognized in Subsidiaries	-	6,000	-	-	-	6,000	4,000	10,000
5.05	Total Comprehensive Income	-	-	-	(446,000)	81,000	(365,000)	(402,000)	(767,000)
5.05.01	Net Income (loss) for the Period	-	-	-	(446,000)	-	(446,000)	(602,000)	(1,048,000)
5.05.02	Other Comprehensive Income	-	-	-	-	81,000	81,000	200,000	281,000
5.05.02.04	Cumulative Translation Adjustment	-	-	-	-	81,000	81,000	200,000	281,000
5.06	Internal Changes in Shareholders’ Equity	-	-	13,000	-	-	13,000	17,000	30,000
5.06.04	Transactions With Non-controlling interests	-	-	2,000	-	-	2,000	(1,000)	1,000
5.06.05	Put Option CD Colombia	-	-	11,000	-	-	11,000	18,000	29,000
5.07	Closing Balance	6,808,000	321,000	3,342,000	(446,000)	(6,000)	10,019,000	2,617,000	12,636,000

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – September 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

Companhia Brasileira de Distribuição

Consolidated Interim Financial Information / Statement of Changes in Shareholders' Equity 01/01/2015 to 9/30/2015

R$ (in thousands)
Code	Description	Share Capital	Capital Reserves, Options Granted and Treasury Shares	Earnings Reserves	Retained Earnings/ Accumulated Losses	Other comprehensive Income	Shareholders' Equity	Non-Controlling Interest	Consolidated Shareholders' Equity
5.01	Opening Balance	6,792,000	282,000	3,402,000	-	1,000	10,477,000	3,717,000	14,194,000
5.03	Adjusted Opening Balance	6,792,000	282,000	3,402,000	-	1,000	10,477,000	3,717,000	14,194,000
5.04	Capital Transactions with Shareholders	14,000	18,000	-	(77,000)	-	(45,000)	4,000	(41,000)
5.04.01	Capital Increases	14,000	-	-	-	-	14,000	-	14,000
5.04.03	Options Granted	-	11,000	-	-	-	11,000	-	11,000
5.04.06	Dividends	-	-	-	(77,000)	-	(77,000)	-	(77,000)
5.04.08	Options Granted Recognized in Subsidiaries	-	7,000	-	-	-	7,000	4,000	11,000
5.05	Total Comprehensive Income	-	-	-	248,000	(95,000)	153,000	(294,000)	(141,000)
5.05.01	Net Income (loss) for the Period	-	-	-	248,000	-	248,000	(139,000)	109,000
5.05.02	Other Comprehensive Income	-	-	-	-	(95,000)	(95,000)	(155,000)	(250,000)
5.05.02.01	Adjusts to Financial Instruments	-	-	-	-	(1,000)	(1,000)	-	(1,000)
5.05.02.04	Cumulative Translation Adjustment	-	-	-	-	(93,000)	(93,000)	(154,000)	(247,000)
5.05.02.06	Defined Benefit Plan	-	-	-	-	(1,000)	(1,000)	(1,000)	(2,000)
5.06	Internal Changes in Shareholders’ Equity	-	-	(217,000)	-	-	(217,000)	(2,000)	(219,000)
5.06.04	Settlement of Equity Instrument	-	-	(212,000)	-	-	(212,000)	-	(212,000)
5.06.05	Transactions With Non-controlling interests	-	-	(5,000)	-	-	(5,000)	(2,000)	(7,000)
5.07	Closing Balance	6,806,000	300,000	3,185,000	171,000	(94,000)	10,368,000	3,425,000	13,793,000

Companhia Brasileira de Distribuição

Consolidated Interim Financial Information / Statement of Value Added

R$ (in thousands)
Code	Description	Year To Date Current Period 1/01/2016 to 9/30/2016	Year To Date Previous Period 1/01/2015 to 9/30/2015
7.01	Revenues	50,940,000	49,436,000
7.01.01	Sales of Goods, Products and Services	51,343,000	49,867,000
7.01.02	Other Revenues	48,000	(2,000)
7.01.04	Allowance for/Reversal of Doubtful Accounts	(451,000)	(429,000)
7.02	Products Acquired from Third Parties	(40,762,000)	(38,738,000)
7.02.01	Costs of Products, Goods and Services Sold	(35,004,000)	(34,030,000)
7.02.02	Materials, Energy, Outsourced Services and Other	(5,758,000)	(4,708,000)
7.03	Gross Value Added	10,178,000	10,698,000
7.04	Retention	(767,000)	(760,000)
7.04.01	Depreciation and Amortization	(767,000)	(760,000)
7.05	Net Value Added Produced	9,411,000	9,938,000
7.06	Value Added Received in Transfer	276,000	416,000
7.06.01	Share of Profit of Subsidiaries and Associates	81,000	84,000
7.06.02	Financial Income	382,000	582,000
7.06.03	Others	(187,000)	(250,000)
7.06.03.01	Net Income from Descontinued Operations	(187,000)	(250,000)
7.07	Total Value Added to Distribute	9,687,000	10,354,000
7.08	Distribution of Value Added	9,687,000	10,354,000
7.08.01	Personnel	4,778,000	4,927,000
7.08.01.01	Direct Compensation	3,385,000	3,505,000
7.08.01.02	Benefits	863,000	883,000
7.08.01.03	Government Severance Indemnity Fund for Employees (FGTS)	300,000	365,000
7.08.01.04	Other	230,000	174,000
7.08.01.04.01	Interest	230,000	174,000
7.08.02	Taxes, Fees and Contributions	3,063,000	2,481,000
7.08.02.01	Federal	1,887,000	1,263,000
7.08.02.02	State	975,000	1,023,000
7.08.02.03	Municipal	201,000	195,000
7.08.03	Value Distributed to Providers of Capital	2,894,000	2,837,000
7.08.03.01	Interest	1,705,000	1,645,000
7.08.03.02	Rentals	1,189,000	1,192,000
7.08.04	Value Distributed to Shareholders	(1,048,000)	109,000
7.08.04.02	Dividends	4,000	77,000
7.08.04.03	Retained Earnings/ Accumulated Losses for the Period	(450,000)	171,000
7.08.04.04	Noncontrolling Interest in Retained Earnings	(602,000)	(139,000)

Third-quarter 2016 Results

São Paulo, Brazil, October 27, 2016 - GPA [BM&FBOVESPA: PCAR4 (PN); NYSE: CBD] announces its results for the third quarter of 2016 (3Q16). The comments refer to the consolidated results of the Group or of its business units. All comparisons are with the same period in 2015, except where stated otherwise.

Consolidated net sales reached R$15.1 billion, driven mainly by the following factors:

o Assaí’s total sales growth accelerates to 45.7%, with double-digit SSS growth

o Extra’s sales volume and market share begin to recover, primarily in the Hyper format

o Via Varejo’s sales growth outperforms the market average

o 40 stores opened in the last 12 months

Consolidated adjusted EBITDA of R$619 million, with margin of 4.1%, an improvement compared to 2Q16^(a):

o Multivarejo’s adjusted EBITDA margin expands 140 bps, driven by the 230 bps recovery in EBITDA margin at Extra stores vs. 2Q16^(a)

o Assaí’s existing and new store base posts a solid performance, supporting Adjusted EBITDA growth of 62.2%

o Via Varejo’s adjusted EBITDA margin^(a) expands 140 bps to 3.6%, reflecting its capacity to adapt to market conditions

Solid cash position of R$5.2 billion^(b) in highly liquid resources, besides R$1.3 billion in pre-approved/confirmed credit facilities. Reduction of net debt of brick-and-mortar stores compared to June 2016:

o Improvement in Food segment of R$130 million^(b), even with the organic expansion at Assaí

o Via Varejo continues to strengthen its solid financial position, with improvement of R$180 million^(b)(c)

Multivarejo:

o Effectiveness of new commercial strategy confirmed by a stronger sales trend at Extra (Hyper and Super), with Extra Hiper's SSS growth accelerating 720 bps and its sales volume recovering 1210 bps vs. 1Q16, with market share volume gains in the Hyper format in the last 5 measurements (April to August);

o Adjusted EBITDA of R$313 million with margin of 4.9%, up 140 bps from 2Q16^(a), led by the strong decrease in SG&A. The highlight was the 230 bps EBITDA margin recovery at Extra stores (Hyper and Super)

o Continued profitability at Pão de Açúcar and gradual improvement in the Proximity business

Assaí:

o Strong growth of 45.7% in total sales: double-digit SSS growth, with solid double-digit growth in customer traffic and continued organic expansion

o Focus on expansion: 8 stores under construction, including 2 conversions of Extra Hiper to Assaí

o Adjusted EBITDA Margin of 4.4% (+40 bps vs. 3Q15), despite the opening of 12 stores in the last 12 months

o Net income growth of 75.6% to R$65 million supported by the higher operational leverage

Via Varejo:

o Consistent market share gains combined with growing profitability

o Adjusted EBITDA margin expansion of 30 bps, demonstrating the better trend compared to 2Q16⁽^a)

Cnova Brasil:

o Expansion in marketplace share of GMV to 21.2% (up 930 bps vs. 3Q15), with significant acceleration when compared to previous quarters;

o Focus on increasing traffic, capturing logistics efficiency gains and encouraging active clients to return.

(a) Excluding non-recurring tax credits. (b) Includes credit card receivables available for sale, (c) Excludes CDCI.


	Consolidated ⁽¹⁾			Food Businesses			Via Varejo
(R$ million)⁽²⁾	3Q16	3Q15	Δ	3Q16	3Q15	Δ	3Q16	3Q15	Δ

GrossRevenue	16,816	15,933	5.5%	10,946	9,574	14.3%	4,667	4,615	1.1%
Net Revenue	15,094	14,458	4.4%	10,090	8,852	14.0%	4,060	4,077	-0.4%
Gross Profit	3,789	3,605	5.1%	2,238	2,126	5.2%	1,407	1,343	4.8%
GrossMargin	25.1%	24.9%	20 bps	22.2%	24.0%	-180 bps	34.7%	32.9%	180 bps
Selling, General and Adm. Expenses	(3,216)	(2,973)	8.2%	(1,787)	(1,619)	10.4%	(1,216)	(1,168)	4.2%
% of Net Revenue	21.3%	20.6%	70 bps	17.7%	18.3%	-60 bps	30.0%	28.6%	140 bps
Other Operating Revenue (Expenses)	(116)	(203)	-42.8%	(51)	(81)	-37.6%	(45)	(119)	-62.4%
EBITDA ⁽³⁾	503	483	4.2%	428	455	-6.0%	163	77	112.0%
EBITDA Margin	3.3%	3.3%	0 bps	4.2%	5.1%	-90 bps	4.0%	1.9%	210 bps
Adjusted EBITDA⁽⁴⁾	619	686	-9.7%	478	536	-10.8%	208	196	6.0%
Adjusted EBITDA Margin	4.1%	4.7%	-60 bps	4.7%	6.1%	-140 bps	5.1%	4.8%	30 bps
Net Financial Revenue (Expenses)	(477)	(345)	38.4%	(241)	(205)	17.7%	(160)	(69)	133.3%
% of Net Revenue	3.2%	2.4%	80 bps	2.4%	2.3%	10 bps	3.9%	1.7%	220 bps
Net Income (Loss) - Company - continuing operations	(210)	(56)	274.2%	(14)	44	n.a.	(32)	(12)	160.9%
Net Margin	-1.4%	-0.4%	-100 bps	-0.1%	0.5%	-60 bps	-0.8%	-0.3%	-50 bps
Net Income (Loss) - Controlling Shareholders - continuing operations	(85)	12	n.a.	(12)	51	n.a.	(14)	(5)	160.9%
Net Margin	-0.6%	0.1%	-70 bps	-0.1%	0.6%	-70 bps	-0.3%	-0.1%	-20 bps
Adjusted Net Income (Loss) - Controlling Shareholders - continuing operations ⁽⁵⁾	(27)	108	n.a.	26	113	-77.2%	(1)	29	n.a.
Adjusted Net Margin	-0.2%	0.7%	-90 bps	0.3%	1.3%	-100 bps	0.0%	0.7%	-70 bps

(1) Due to the ongoing ownership restructuring, GPA will no longer control of Cnova NV activities outside Brazil. As a result, in September 2016, the net result after taxes from these activities was reported as a single line of the income statement and the balances of assets and liabilities as held-for-sale assets and discontinued operations. The September 2015 income statement has been adjusted using the same concept, in accordance with IFRS 5/CPC31. (2) Sums and percentages may present discrepancies due to rounding. All margins were calculated as a ratio of net sales; (3) Earnings before interest, tax, depreciation and amortization; (4) EBITDA adjusted by the line “Other Operating Income and Expenses” to eliminate nonrecurring income and expenses. (5) Net Income Adjusted for the total of “Other Operating Income and Expenses,” which eliminates nonrecurring income and expenses, as well as the respective effects from associated income tax.

Sales Performance


		3Q16 x		1H16 x
		3Q15		1H15
(R$ million)	3Q16	Δ	1H16	Δ
Consolidated⁽¹⁾	15,094	4.4%	30,887	0.6%
Food Businesses	10,090	14.0%	19,623	9.8%
Multivarejo ⁽²⁾	6,354	1.1%	13,129	0.1%
Assaí	3,737	45.7%	6,495	36.6%
Non-Food Businesses ⁽³⁾	5,057	-10.1%	11,295	-12.3%
Cnova ⁽⁴⁾	944	-38.3%	2,253	-28.8%
Via Varejo ⁽³⁾	4,113	0.4%	9,042	-6.9%


	3Q16	1H16
Consolidated ⁽¹⁾	1.9%	-1.7%
Multivarejo + Assaí	8.9%	5.3%
Via Varejo ⁽³⁾	1.8%	-5.4%

(1) Excludes revenue from intercompany transactions; (2) Extra and Pão de Açúcar. Includes revenue from the leasing of commercial centers; (3) Includes revenue from intercompany transactions. (4) Due to the ongoing ownership restructuring, as announced on September 12, 2016, GPA will no longer control Cnova NV activities outside Brazil. As a result, at September 30, 2016, these activities are classified as discontinued operations, with a retrospective adjustment of sales through January 1, 2015, as required under IFRS 5/CPC31 – Non-current Assets Held for Sale and Discontinued Operations.

Sales Performance – Consolidated

§ Consolidated net sales grew 4.4% to R$15.1 billion, supported by the recovery in sales at Multivarejo, the acceleration in sales growth at Assaí and the continued recovery at Via Varejo.

§ The Food segment (Multivarejo + Assaí) posted strong growth in total net sales of 14.0%, driven by the acceleration in sales growth at Assaí (+45.7%) and by the gradual recovery in sales at Multivarejo (+1.1%) due to the better performance of Extra. Same-store sales growth in Food categories was 11.4%.

§ Continued sales recovery at Via Varejo, with same-store sales growth of 1.8% and the marketplace share of GMV near the highest level ever, demonstrating the format’s capacity to adapt to current market conditions.

§ Four stores opened in the quarter (3 Assaí and 1 Casas Bahia), bringing total store openings in the last 12 months to 40. At present, 14 stores are under construction: 8 Assaí stores, including 2 conversions from Extra Hiper, 1 Pão de Açúcar and 5 Minuto Pão de Açúcar stores. Higher-return formats remain the priority of both expansions and format conversions.

Food Segment (Multivarejo + Assaí)

§ Net sales in the quarter were R$10.1 billion, advancing 14.0%, the strongest growth pace since 3Q14. Food categories posted total sales growth of 18.6%. This acceleration is explained by the continued strong growth of Assaí and by the sales recovery at Multivarejo, driven by the commercial actions implemented at Extra in 2Q16 . The opening of 36 stores in the last 12 months also helped drive sales growth in the period.

§ Same-store sales growth in the Food segment was 8.9%, the best performance in three years, driven by sales volume growth at Multivarejo and the strong sales performance by Assaí, whose double-digit growth significantly outpaced inflation. Meanwhile, Food categories posted same-store sales growth of 11.4%.

§ The better performance at Multivarejo reflects the initial results of the new commercial strategy implemented at Extra (Extra Super and Extra Hiper) during 2Q16 to reinforce the banner’s low-price reputation through the following actions:

- “1,2,3 Savings Steps”: progressive discounts, starting with 20% on the purchase of the first unit and increasing to 33% on the third unit, to meet all the food, home care and personal care needs;

- "Hyper Fair": competitive everyday prices in the Fresh Produce category; and

- “The Lowest Price”: lowest price on a selection of staples.

§ These three initiatives supported recoveries in sales and volumes in the food category at Extra, which registered an acceleration in same-store sales growth of 500 bps (from around 1% in 1H16 to over 6% in 3Q16). The banner will continue to focus on initiatives to grow its sales volume. The non-food category at Extra showed signs of recovery, though sales performance was still negative, in line with the market, reflecting the adverse macroeconomic scenario.

§ The performance of Pão de Açúcar and Proximity stores (Minuto Pão de Açúcar and Minimercado Extra) was stable in the quarter compared to the first half of the year.

§ Assaí registered net sales growth in the quarter of 45.7% to R$3.7 billion. The result reflects the strong double-digit growth in same-store sales, significantly outpacing inflation, as well as the substantial double-digit increase in customer traffic and organic expansion (12 new stores in the last 12 months). Another highlight is the continued growth in the format’s share of the Food segment, which already accounts for 37% of sales (vs. 29% in 3Q15).

Via Varejo

§ Same-store sales growth of 1.8% and total sales growth of 0.4%, despite the impact from store closures in 2H15 and 1Q16. This growth was driven by the performance of the Technology category, especially mobile phones, televisions and washing machines, and by the continuation of the effective and unique product assortment at stores, which gives sales teams the tools needed to boost conversion rates. Financial services also helped the format maintain its contribution to total sales in the quarter.

§ Via Varejo remains focused on improving its sales performance. This quarter, it found a better balance between sales growth, market share gain and profitability, despite the challenging macroeconomic scenario and the still weak market for electronics and home appliances.

§ According to the Monthly Retail Survey (PMC) published by the IBGE, the furniture and electronics/home appliances market contracted by 6.8% in July compared to the same period in 2015, which, given the positive growth in net sales in 3Q16, suggests that Via Varejo continues to capture structural market share gains in both the specialty and total markets, despite the strategy adopted in 3Q16 to boost margins.

§ Via Varejo will continue to focus on capturing operating efficiency gains at its stores by integrating the brick-and-mortar and e-commerce businesses, capturing the synergies already announced, continually improving the quality of customer service in both channels and monitoring the cost and expense structure to optimize its results and profitability in 2016 and the coming years.

Cnova

Due to the ongoing ownership restructuring, as announced through the material fact notice of September 12, 2016, GPA will no longer control Cnova NV activities outside Brazil. As a result, at September 30, 2016, these activities were classified as discontinued operations, with a retrospective adjustment of sales through January 1, 2015, as required under IFRS 5/CPC31 – Non-current Assets Held for Sale and Discontinued Operations.

§ GMV in 3Q16 amounted to R$1.5 billion, down 24.2% from 3Q15. In addition to the severe impact from Brazil’s current macroeconomic conditions on consumer spending, the contraction is explained by the commercial dynamics adopted by Cnova Brasil in the quarter. Compared to 2Q16, and consistent with Via Varejo’s strategy, Cnova Brasil pursued a better balance between its GMV, market share and profitability in the quarter.

§ The marketplace share of GMV reached 21.2% in 3Q16 (+930 bps vs. 3Q15).

§ Customer traffic was stable compared to the same period last year at 210.8 million visits in 3Q16, 45.7% of which originated from mobile devices, compared to 32.4% in 3Q15.

§ This quarter, Cnova Brasil focused exclusively on improving its customer service. This led to a reduction in cart abandonment rates to near zero and to a 39.6% drop in the customer contact rate (% of customers seeking assistance from the call center).

Operating Performance


Consolidated

(R$ million)	3Q16	3Q15	Δ	9M16	9M15	Δ

Gross Revenue	16,816	15,933	5.5%	51,343	49,867	3.0%
Net Revenue	15,094	14,458	4.4%	45,980	45,170	1.8%
Gross Profit	3,789	3,605	5.1%	11,599	11,382	1.9%
Gross Margin	25.1%	24.9%	20 bps	25.2%	25.2%	0 bps
Selling Expenses	(2,833)	(2,594)	9.2%	(8,635)	(7,885)	9.5%
General and Administrative Expenses	(383)	(379)	1.1%	(1,230)	(1,122)	9.7%
Selling, General and Adm. Expenses	(3,216)	(2,973)	8.2%	(9,866)	(9,007)	9.5%
% of Net Revenue	21.3%	20.6%	70 bps	21.5%	19.9%	160 bps
Equity Income	20	22	-8.2%	81	84	-3.0%
Other Operating Revenue (Expenses)	(116)	(203)	-42.8%	(679)	(286)	137.3%
Depreciation (Logistic)	27	32	-16.8%	84	97	-13.5%
EBITDA	503	483	4.2%	1,220	2,270	-46.3%
EBITDA Margin	3.3%	3.3%	0 bps	2.7%	5.0%	-230 bps
Adjusted EBITDA ⁽¹⁾	619	686	-9.7%	1,898	2,556	-25.7%
Adjusted EBITDA Margin	4.1%	4.7%	-60 bps	4.1%	5.7%	-160 bps

(1) EBITDA adjusted for “Other Operating Income and Expenses,” thus eliminating nonrecurring income and expenses.

Due to the ongoing ownership restructuring, as announced through the material fact notice of September 12, 2016, GPA will no longer control of Cnova NV activities outside Brazil. As a result, in September 2016, the net result after taxes from these activities was reported as a single line of the income statement and the balances of assets and liabilities were reported as held-for-sale assets and discontinued operations. The September 2015 statements of income and cash flow have been adjusted using the same concept, in accordance with IFRS 5/CPC31.

Adjusted EBITDA reached R$619 million with margin of 4.1%, an evolution in compared to 2Q16 excluding tax credits mainly due to:

i) Adjusted EBITDA margin expansion of 140 bps at Multivarejo to 4.9%, led by a 230 bps recovery in EBITDA margin at Extra stores compared to 2Q16. Assaí’s adjusted EBITDA margin expanded 40 bps, due to the solid performance of existing and new stores;

ii) EBITDA margin expansion of 140 bps at Via Varejo to 3.6%, excluding non-recurring tax credits, demonstrating its capacity to adjust to market conditions.

Note that the end of tax relief under the law to benefit technology and IT products (Lei do Bem) generated a significant negative impact on Consolidated EBITDA margin in 3Q16 of 100 bps, which corresponds to approximately R$137 million. In 9M16, this impact corresponded to approximately R$430 million. Note that GPA is one of the segment’s only players to adopt this practice and continues to evaluate its position regarding the law, which should be concluded in 4Q16.

The main factors impacting EBITDA in the quarter were:

§ Gross profit of R$3,789 million, with margin expansion of 20 bps to 25.1%, led by the shift in gross margin mix at each business, as follows:

(i) Assaí: gross margin was practically stable compared to 3Q15 (14.5%), with margin gain of 10 bps;

(ii) Multivarejo: margin contraction of 130 bps, due to the continued price competitiveness initiatives at Extra and to the change in consumer behavior arising from the current economic scenario;

(iii) Via Varejo: margin expansion of 180 bps explained by the better balance among sales growth, market share gains and profitability, despite the challenging scenario and weak market;

§ Selling, general and administrative expenses were R$3,216 million, increasing 8.2% in the quarter, in line with period inflation. The streamlining initiatives at Multivarejo and Via Varejo led expenses to increase significantly slower than inflation, by 4.4% and 4.2%, respectively. Assaí’s expenses increased 40.8%, still lagging sales growth, reflecting the strong organic expansion with 12 store openings in the last 12 months.

In the quarter, Other Operating Income and Expenses came to R$116 million, most of which involved expenses with integration and restructuring (R$ 77 million) and the result from property and equipment (R$20 million).


Multivarejo

(R$ million)	3Q16	3Q15	Δ	9M16	9M15	Δ

Gross Revenue	6,888	6,794	1.4%	21,124	20,991	0.6%
Net Revenue	6,354	6,287	1.1%	19,482	19,400	0.4%
Gross Profit	1,697	1,758	-3.5%	5,314	5,385	-1.3%
Gross Margin	26.7%	28.0%	-130 bps	27.3%	27.8%	-50 bps
Selling Expenses	(1,235)	(1,190)	3.8%	(3,889)	(3,635)	7.0%
General and Administrative Expenses	(175)	(161)	8.5%	(516)	(469)	10.0%
Selling, General and Adm. Expenses	(1,411)	(1,351)	4.4%	(4,405)	(4,105)	7.3%
% of Net Revenue	22.2%	21.5%	70 bps	22.6%	21.2%	140 bps
Equity Income	14	16	-11.3%	58	61	-5.3%
Other Operating Revenue (Expenses)	(42)	(80)	-48.2%	(308)	(184)	67.7%
Depreciation (Logistic)	13	12	7.7%	38	38	-0.4%
EBITDA	272	354	-23.3%	697	1,196	-41.7%
EBITDA Margin	4.3%	5.6%	-130 bps	3.6%	6.2%	-260 bps
Adjusted EBITDA ⁽¹⁾	313	434	-27.9%	1,005	1,380	-27.2%
Adjusted EBITDA Margin	4.9%	6.9%	-200 bps	5.2%	7.1%	-190 bps

(1) EBITDA adjusted for “Other Operating Income and Expenses,” thus eliminating nonrecurring income and expenses

The effectiveness of the new commercial strategy was confirmed by the stronger sales trend at Extra (Hyper and Super), with Extra Hiper's same-store sales growth accelerating 720 bps and its sales volume recovering 1210 bps compared to 1Q16, with market share gains in volume in the Hyper format in the last 5 measurements (April to August).

On a total-store basis, net sales grew 1.1%, reflecting the closure of 41 stores, net of openings, in the last 12 months, which consisted of 25 convenience stores, 5 Extra Super and 3 Extra Hiper (2 stores to be converted into Assaí), in addition to 6 service stations and 2 drugstores.

Adjusted EBITDA came to R$313 million, with margin of 4.9%, expanding 140 bps from 2Q16 (excluding tax credits), due to the strong decrease in SG&A. The highlight was the 230 bps recovery in EBITDA margin at Extra stores (Hyper and Super).

The main factors influencing EBITDA in the period were:

§ Gross profit of R$1,697 million, with margin of 26.7%, remains stable compared to 2Q16 (excluding tax credits). The decrease compared to 3Q15 reflects the price competitiveness initiatives implemented at Extra since 2Q16 and the changes in consumer habits due to the current economic scenario.

§ Selling, general and administrative expenses fell 6.7% compared to 2Q16, to R$ 1,411 million, with the highlight the 7.9% decrease in selling expenses, which was mainly due to:

i) 5.4% reduction in personnel expenses due to the reviews of processes conducted at stores, which led to the streamlining of approximately 7,000 employees (FTE criteria) since the beginning of the year;

ii) Streamlining of marketing efforts, leading to a decrease of 8.8%;

iii) Energy efficiency projects led to a sharp drop in consumption that supported to a 19.1% decrease in electricity expenses.

Compared to 3Q15, SG&A expenses rose 4.4%, or by half the rate of inflation, reflecting the expense-streamlining projects.

Other Operating Income and Expenses came to R$42 million in the quarter and are mainly related to restructuring expenses and the result of property and equipment.


Assaí

(R$ million)	3Q16	3Q15	Δ	9M16	9M15	Δ

Gross Revenue	4,059	2,779	46.0%	11,104	7,922	40.2%
Net Revenue	3,737	2,564	45.7%	10,232	7,321	39.8%
Gross Profit	541	368	46.8%	1,484	1,019	45.6%
Gross Margin	14.5%	14.4%	10 bps	14.5%	13.9%	60 bps
Selling Expenses	(327)	(235)	39.3%	(917)	(686)	33.7%
General and Administrative Expenses	(49)	(32)	51.6%	(137)	(88)	55.6%
Selling, General and Adm. Expenses	(377)	(267)	40.8%	(1,054)	(774)	36.2%
% of Net Revenue	10.1%	10.4%	-30 bps	10.3%	10.6%	-30 bps
Other Operating Revenue (Expenses)	(9)	(1)	598.5%	(49)	2	n.a.
Depreciation (Logistic)	1	1	11.2%	3	3	0.3%
EBITDA	156	101	55.1%	385	251	53.2%
EBITDA Margin	4.2%	3.9%	30 bps	3.8%	3.4%	40 bps
Adjusted EBITDA ⁽¹⁾	165	102	62.2%	434	249	74.1%
Adjusted EBITDA Margin	4.4%	4.0%	40 bps	4.2%	3.4%	80 bps

(1) EBITDA adjusted for “Other Operating Income and Expenses,” thus eliminating nonrecurring income and expenses

For yet another quarter, Assaí posted strong net sales growth, of 45.7%, driven by double-digit same-store sales growth, significantly outpacing inflation, solid double-digit growth in customer traffic and the ongoing organic expansion. The banner already accounts for the largest share of sales in the Food segment, of 37% (vs. 29% in 3Q15), and will continue to focus its efforts on organic expansion, with 8 stores currently under construction, including 2 conversions from Extra Hyper to Assaí stores.

Assaí registered a significant improvement in profitability in the quarter, given the stability in gross margin and dilution of selling, general and administrative expenses by 30 bps supported by sales growth and the more disciplined control of expenses.

Consequently, Adjusted EBITDA was R$165 million, representing robust growth of 62.2% and outpacing sales growth in the period. Meanwhile, Adjusted EBITDA margin expanded 40 bps to 4.4%.

The improvement in profitability was achieved despite the opening of 12 stores in the last 12 months.

As a result of the increased operational leverage, Assaí posted net income of R$65 million, an increase of 75.6% on the prior-year period.


Via Varejo ⁽¹⁾

(R$ million)	3Q16	3Q15	Δ	9M16	9M15	Δ

Gross Revenue	4,667	4,615	1.1%	15,046	15,563	-3.3%
Net Revenue	4,060	4,077	-0.4%	13,070	13,755	-5.0%
Gross Profit	1,407	1,343	4.8%	4,501	4,528	-0.6%
Gross Margin	34.7%	32.9%	180 bps	34.4%	32.9%	150 bps
Selling Expenses	(1,130)	(1,050)	7.6%	(3,409)	(3,238)	5.3%
General and Administrative Expenses	(86)	(117)	-26.4%	(365)	(370)	-1.2%
Selling, General and Adm. Expenses	(1,216)	(1,168)	4.2%	(3,774)	(3,608)	4.6%
% of Net Revenue	30.0%	28.6%	140 bps	28.9%	26.2%	270 bps
Equity Income	6	6	0.0%	23	23	3.1%
Other Operating Revenue (Expenses)	(45)	(119)	-62.4%	(124)	(87)	43.2%
Depreciation (Logistic)	10	15	-29.3%	30	42	-28.4%
EBITDA	163	77	112.0%	656	898	-27.0%
EBITDA Margin	4.0%	1.9%	210 bps	5.0%	6.5%	-150 bps
Adjusted EBITDA ⁽²⁾	208	196	6.0%	780	985	-20.8%
Adjusted EBITDA Margin	5.1%	4.8%	30 bps	6.0%	7.2%	-120 bps

(1) Some figures in this earnings release differ from those presented in the Via Varejo release due to the effects of intercompany transactions; (2) EBITDA adjusted for “Other Operating Income and Expenses,” thus eliminating nonrecurring income and expenses.

In the quarter, Via Varejo registered consistent market share gains accompanied by higher profitability, reflecting the better adjustment to the assortment at stores, the solid performance of the technology and services categories and the better balance between sales and results.

Adjusted EBITDA amounted to R$208 million, with margin of 5.1%, expanding 30 bps from 3Q15. The main factors contributing to this result were:

§ Gross profit of R$1,407 million, growing by 4.8% or R$ 64 million from 3Q15, impacted by:

o positive effect of R$39 million from the recognition of tax credits;

o negative effect of R$ 43 million related to the impact from the end of tax relief on payroll charges;

o on a comparable basis, i.e., adjusted for the aforementioned impacts, gross margin in 3Q16 was stable compared to 3Q15 (33.5%), an improvement from gross margin adjusted for tax credits in 1H16, reflecting the better balancing of sales and profitability, as well as the higher penetration of the technology category.

§ Selling, general and administrative expenses increased 4.2% compared to 3Q15 to R$ 1,216 million:

o on a comparable basis, i.e., adjusted for the impact of R$61 million in 3Q15, and partially offset by the reversal of the provision of R$16 million in 3Q16, expenses were virtually stable as a ratio of net sales, reflecting Via Varejo’s capacity to adapt to current market conditions.

A highlight was the better trend in adjusted EBITDA margin excluding non-recurring tax credits of 140 bps compared to 2Q16, to 3.6%, reflecting the capacity to adapt to market conditions.

Via Varejo will continue to focus on capturing operating efficiency gains at its stores, implementing strategic projects and monitoring its cost and expense structure to continue delivering better results and higher profitability in the coming periods.

Financial Result


Consolidated

(R$ million)	3Q16	3Q15	Δ	9M16	9M15	Δ

Financial Revenue	101	168	-39.6%	382	581	-34.3%
Financial Expenses	(579)	(513)	12.8%	(1,713)	(1,645)	4.2%
Net Financial Revenue (Expenses)	(477)	(345)	38.4%	(1,332)	(1,064)	25.2%
% of Net Revenue	3.2%	2.4%	80 bps	2.9%	2.4%	50 bps

Charges on Net Bank Debt	(196)	(153)	28.6%	(511)	(388)	31.6%
Cost of Discount of Receivables of Payment Book	(91)	(78)	16.6%	(263)	(246)	6.9%
Cost of Sale of Receivables of Credit Card	(139)	(114)	22.0%	(463)	(432)	7.0%
Restatement of Other Assets and Liabilities	(51)	(0)	n.a.	(95)	3	n.a.
Net Financial Revenue (Expenses)	(477)	(345)	38.4%	(1,332)	(1,064)	25.2%

In 3Q16, the net financial result was an expense of R$477 million, increasing 38.4% on the same period last year. For a better understanding of the financial result and to eliminate potential distortions between quarters, the following explanations refer to the main variations in the year to date (9M16).

In 9M16, the net financial result was an expense of R$1,332 million, increasing 25.2%, or faster than the variation in the basic interest rate (average CDI rate in period), which is basically explained by the deterioration in net debt at Cnova and by the effects on the comparison base in the line Restatement of Other Assets and Liabilities. The main variations in the net financial result were:

§ increase of R$123 million, or 31.6%, in charges on net debt, reflecting the lower average cash balance held in the period, which is basically explained by the deterioration in Cnova’s net debt, among other factors;

§ increase of R$48 million, or 6.9%, in the cost of sale of receivables from cards and payment books, or slower than the variation in the CDI rate in the period. The Company held approximately R$1.8 billion in credit card receivables available for sale, consistent with its cash management strategy;

§ increase of R$98 million in the line Restatement of Other Assets and Liabilities, which is mainly related to the positive impacts in 2015 from the inflation adjustment of recoverable taxes and real estate projects (INCC inflation).

In the current scenario marked by expectations of lower interest rates (based on target SELIC rate), the net financial result at the end of the year is expected to correspond to approximately 3% of net revenue. From an annualized perspective, a reduction of 50 bps in the interest rate would generate savings of R$40 to R$60 million in the financial result.

Net Income


	Consolidated			Food Businesses			Via Varejo

(R$ million)	3Q16	3Q15	Δ	3Q16	3Q15	Δ%	3Q16	3Q15	Δ%

EBITDA	503	483	4.2%	428	455	-6.0%	163	77	112.0%
Depreciation (Logistic)	(27)	(32)	-16.8%	(14)	(13)	8.0%	(10)	(15)	-29.3%
Depreciation and Amortization	(222)	(225)	-1.5%	(182)	(172)	5.9%	(42)	(45)	-6.2%
Net Financial Revenue (Expenses)	(477)	(345)	38.4%	(241)	(205)	17.7%	(160)	(69)	133.3%
Income (Loss)before Income Tax	(223)	(119)	86.6%	(9)	65	n.a.	(49)	(51)	-3.6%
Income Tax	13	63	-80.2%	(5)	(21)	-76.3%	17	39	-55.2%
Net Income (Loss)Company - continuing operations	(210)	(56)	274.2%	(14)	44	n.a.	(32)	(12)	160.9%
Net Margin	-1.4%	-0.4%	-100 bps	-0.1%	0.5%	-60 bps	-0.8%	-0.3%	-50 bps
Net Income (Loss) - Controlling Shareholders - continuing operations	(85)	12	n.a.	(12)	51	n.a.	(14)	(5)	160.9%
Net Margin - Controllings Shareholders	-0.6%	0.1%	-70 bps	-0.1%	0.6%	-70 bps	-0.3%	-0.1%	-20 bps

Other Operating Revenue (Expenses)	(116)	(203)	-42.8%	(51)	(81)	-37.6%	(45)	(119)	-62.4%
Income Tax from Other Operating Revenues (Expenses) and Income Tax from Nonrecurring	28	61	-54.0%	13	20	-35.1%	15	40	n.a.
Adjusted Net Income (Loss)Company - continuing operations ⁽¹⁾	(122)	85	n.a.	23	106	-77.8%	(2)	66	n.a.
Adjusted Net Margin - Company	-0.8%	0.6%	-140 bps	0.2%	1.2%	-100 bps	-0.1%	1.6%	-170 bps
Adjusted Net Income (Loss)- Controlling Shareholders - continuing operations ⁽¹⁾	(27)	108	n.a.	26	113	-77.2%	(1)	29	n.a.
Adjusted Net Margin - Controlling Shareholders	-0.2%	0.7%	-90 bps	0.3%	1.3%	-100 bps	0.0%	0.7%	-70 bps

(1) Net Income adjusted for “Other Operating Income and Expenses,” thus eliminating nonrecurring income and expenses, excluding the effects of Income and social contribution taxes.

The consolidated net loss attributable to controlling shareholders of continuing operations was R$85 million in the quarter, which was affected primarily by Cnova Brasil. However, the improvement compared to 2Q16 demonstrates the Company’s gradual recovery despite the adverse economic scenario.

A highlight was the net income growth of 75.6% to R$65 million at Assaí, driven by the banner’s increased operational leverage.

In the Food segment, net income attributable to controlling shareholders and adjusted by other operating income and expenses was R$26 million, while Via Varejo’s result was virtually breakeven.

Indebtedness


Consolidated

(R$ million)	09.30.2016	09.30.2015	09.30.2015
			Comparable

Short Term Debt	(4,532)	(2,093)	(2,093)
Loans and Financing	(4,014)	(817)	(817)
Debentures and Promissory Notes	(518)	(1,276)	(1,276)
Long Term Debt	(2,149)	(4,267)	(4,267)
Loans and Financing	(1,250)	(3,370)	(3,370)
Debentures	(898)	(897)	(897)
Total Gross Debt	(6,680)	(6,360)	(6,360)
Cash and Financial investments	3,385	5,414	4,489
Net Debt	(3,296)	(946)	(1,871)
EBITDA⁽¹⁾	2,032	3,865	3,865
Net Debt / EBITDA⁽¹⁾	-1.62x	-0.24x	-0.48x
Payment Book - Short Term	(2,461)	(2,153)	(2,153)
Payment Book - Long Term	(228)	(122)	(122)
Net Debt with Payment Book	(5,984)	(3,221)	(4,146)
Net Debt with Payment Book / EBITDA⁽¹⁾	-2.95x	-0.83x	-1.07x
On balance Credit Card Receivables	1,824	1,223	1,069
Net Debt with Payment Book and Credit Card Receivables not sold⁽²⁾	(4,160)	(1,998)	(3,077)
Net Debt with Payment Book and Credit Card Receivables not sold⁽²⁾/ EBITDA⁽¹⁾	-2.05x

FORM 6-K

Report of Foreign Private Issuer

Company Information