ABRASCA: Brazilian Association of Publicly-Held Companies.Founded in September 1971, ABRASCA is non-profit national civil association whose legal classification is different from that of its associates, who are registered as publicly-held companies.

Annual Shareholders’ Meeting: (ASM) – Amandatory shareholders’ meeting called to acknowledge the company’s annual results, as well as examine, discuss and vote on the reports of the board of executive officers and the election of the corporation’s fiscal council members.

APIMEC: Association of Capital Market Analysts and Investment Professionals, a non-profit civil association that unites capital market analysts and related parties, promoting social and cultural activities aimed at the integration, training and specialization of its associates.

BACEN: The Central Bank of Brazil,a federal agency integrated into the National Financial System and linked to Brazil's Ministry of Finance.Like other central banks, the Brazilian Central Bank is one of the country’s main monetary authorities, the most importantof which is the National Monetary Council (CMN).

Benchmark: A term used in the financial market for an index that will serve as a basis for comparing investments.The benchmark of a foreign exchange fund, for example, may be the variation in the price of the U.S. dollar.

BM&FBOVESPA: Brazilian Securities, Commodities and Futures Exchange,Brazil’s official stock exchange, resulting from the merger between the São Paulo Stock Exchange (Bovespa) and the Commodities and Futures Exchange (BM&F), it is linked to all the other Brazilian exchanges. Located in São Paulo, it is the world’s second largest exchange in terms of market capitalization.

BNDES: The Brazilian Development Bank, apublic institution whose main activities are studying global economic development problems, examining specific projects to foster the country’s economy, strengthening Brazil’s corporate sector, offsetting regional imbalances, promotingthe integrated development of agricultural, industrial and service activities, and promoting the growth and diversification of exports.

*Board of Directors: a body of elected or appointed members who jointly oversee the activities of a company or organization

Board of Executive Officers: Comprising members elected by the board of directors or, in the absence thereof, by the annual shareholders’ meeting, it is responsible for the company's day-to-day management and representation.

Book Value (BV): Shareholders’ equity divided by the number of shares.

Bovespa: The São Paulo Stock Exchange, anon-profit civil association on whose premises securities are traded.Its main objectives are to maintain an appropriate location or electronic trading system for the purchase and sale of securities, to preserve high ethical trading standards, and to handle the transactions and ensure their rapid and detailed disclosure.

BR GAAP: Accounting standards adopted in Brazil based on Brazilian Corporation Law and the accounting rules issued by IBRACON and CVM and CFC resolutions.

Bylaws: A set of rules and regulations governing the institutional and organic principles of a public or private group or corporation.

CAGR: Compound annual growth rate.

Capital Stock: In financial or accounting terms, the portion of a company’s equity that represents shareholders’ investments in the company in the form of shares (in the case of Alpargatas S.A.), which includes not only the capital heldby them, but also amounts obtained by the company and incorporated into the capital stock whenever authorized by a shareholders’ decision.

Cash flow: Defines a company’s cash inflow and outflow. It also refers a chronological breakdown of future cash inflows and outflows for a given period (days, months, years), which is of fundamental importance for the financial planning of an operational company or for the implementation of a project. In the latter case, cash flow analysis allows one to predict the undertaking’s break-even point.

CBLC: Brazilian Clearing and Depository Corporation,the BM&FBOVESPA department responsible for the custody of shares and other private securities in the Brazilian financial market.

CMN: The National Monetary Council,created by Law 4595, of December 31, 1964. It is the supreme deliberative body of the National Financial System, responsible for issuing the rules and general guidelines governing its proper functioning.

Commodity: A product, generally agricultural or mineral, that is of substantial economic importance internationally due to widespread trading on the import/export market. Examples include crude oil, soybean, meat, cotton, steel and copper, among others.

Common Share: (ON) - Grants its holders voting rights in shareholders’ meetings. Holders of common shares only receive their corresponding share of the company’s dividends after payment to holders of preferred shares.

Conference Call: A telephone conference with analystsand institutional and individual investors to discuss the company’s most recent quarterly earnings results.Conference calls should also include information related to the company’s future prospects.

Corporate Governance: Refers to the practices and relationships between shareholders, the board of directors, the board of executive officers, the independent auditors and the fiscal council, aimed at optimizing the company's performance and facilitating access to capital. It covers issues related to a company’s control and management, as well as the different ways and spheres in which this is exercised and the various interests that are connected to corporate operations.

Corporation (S.A.): A company comprising at least two partners whose respective interests are represented by a proportional number of shares, the responsibility of each partner being limited to the issue price of their subscribed or acquired shares. Corporations may exercise any type of activity legally considered as a commercial, industrial or service activity. Corporations are for-profit entities.

CVM: The Brazilian Securities and Exchange Commission (CVM), an agency linked to the Brazilian Ministry of Finance, created by Law 6385, of December 7, 1976, during the administration of President Ernesto Geisel, and subsequently amended by Law 6422, of June 8, 1977, Law 9457, of May 5, 1997, Law 10303, of October 31, 2001, Executive Order 3995, of October 31, 2001, Law 10411, of February 26, 2002, which, together with Brazilian Corporation Law (Law 6404/76), governs the operation of the securities market and the conduct of its protagonists.The CVM has powers to regulate, monitor and discipline the operations of the variousmarket participants.Its regulatory powers include all matters related to the securities market.

Disclosure: The publication of corporate information, designed to protect investors and help their decision making process.

Dividends: Amounts distributed to shareholders, in cash, proportional to their interest in the company, deriving from the company’s earnings in the current or previous fiscal years.

EBITDA: Earnings before interest,taxes, depreciation and amortization,also known as operating cash flow,it corresponds to the company’s operating result before the financial result and expenses with placement of shares, plus depreciation and amortization, the variation in technical provisions and revenue from overdue client receivables, less employees’ profit sharing.EBITDA is not included in the financial statements in accordance with accounting practices adopted in Brazil and does not represent cash flow for the periods presented.EBITDA is not a standard measure and Alpargatas’ definition may not be comparable to those used by other companies.

e-Commerce: A type of commercewhereby transactions are handled by electronic equipment connected to data transmission networks such as computers and mobile phones.

Eurobonds: Securities issued by the government or Brazilian companies on the international market.

Extraordinary Shareholders’ Meeting: (ESM) – Any company shareholders’ meeting other than the annual shareholders’ meeting. ESMs are not mandatory.

Financial Market: The market through whichresources are transferred between economic agents, including securities with varying terms.

*Fiscal Council: a permanent body that monitors management’s activities.

Free Float: The number of company shares available for trading in the organized markets. i.e.excluding those held by the controlling shareholders.

GDP: Gross Domestic Product, the monetary value of all the wealth produced by a country's economy in a given period (usually one year).

Gross Margin: Gross profit divided by net revenue, one of the best productivity indicators: if we compare two companies with the same activity, the one with the higher gross margin is the more productive (due to process efficiency, gains of scale, cost structure, etc.).

Gross Profit: The difference between net revenue and cost of goods sold (COGS).

Gross Revenue: The total amount received for the sale of products or services without deductions.

High Yield: Refers to a high rate of return and is applied to high-interest loans, usually in the European market.Funds that invest in high-yield securities normally have higher credit risks.

Holding Company: A company that controls other companies (subsidiaries) by holding the majority of their shares.Normally, holding companies do not produce anything, but are designed merely to exercise control over a group of companies.

Home Broker: A relationship channel between investors and brokers for stock market transactions, allowing investors to buy and sell shares on the internet and enabling access to share prices and themonitoringof stock portfolios, among other resources.

IBOVESPA (Bovespa Index): Measures the behavior of the most important stocks traded on the BOVESPA and is therefore the Brazilian capital market’s most important performance indicator.It is compiled based on an imaginary investment, in Reais, ina theoretical number of shares (portfolio) and is designedto serve as an average indicator of market behavior.Consequently, the shares included in the index represent more than 80% of the spot market’s total number of trades and traded volume.Given these shares’ exceptional representativeness, the appreciation or depreciation of the majority is an indication of the performance of the entire market, measured by the Bovespa Index.

IBrX-100: BrazilIndex.The IBrX measures the total return on a theoretical portfolio comprising 100 stocks selected from among the BOVESPA’s most actively traded securities, in terms of number of trades and financial volume.The component stocks are weighted in accordance with the number of shares in their respective free floats.

IBrX–50: Brazil Index 50.The IbrX-50 measures the return on a theoretical portfolio comprising 50 stocks selected from among the BOVESPA’s most actively traded securities, in terms of number of trades and financial volume.The IBrX-50 has the same characteristics as the IBrX, which comprises 100 stocks selected from among BOVESPA’s most actively traded securities.

Independent Board Member: In accordance with the Novo Mercado listing rules, an independent board member (i) has no ties to the Company, other than an equity interest; (ii) is not a controlling shareholder, spouse or relative up to the second degree thereof, and neither has, nor has had, within the last three years, any ties to any company or entity related to the controlling shareholder (excluding persons with ties to public education and/or research institutions); (iii) has not been an employee or officer of the company, the controlling shareholder or a subsidiary of the company in the last three years; (iv) is not a direct or indirect provider or buyer of the company’s services and/or products to an extent that would imply loss of independence; (v) is not an employee or officer of a company or entity that is offering or requesting services and/or products to or from the Company; (vi) is not a spouse or relative up to the second degree of any company officer; and (vii) does not receive any payment from the company other than that of a board member (excluding cash payments in the capacity of a shareholder). Board members elected pursuant to Article 141, paragraphs 4 and 5, or Article 239 of Brazilian Corporation Law, which deal with quorums and procedures for the election of board members by minority shareholders, are also considered to be independent board members.

Inflation: A persistent increase in prices in general, resulting in a continuous reduction in a currency's purchasing power.

Interest on equity: A type of compensation for company shareholders originating from income retained in previous periods.

Liabilities: A company’s entire debt and other obligations.

Liquidity: Measures the speed with which an asset can be converted into cash. Absolute liquidity is only attributed to cash itself, all other securities having lower liquidity, whose precise degree varies in line with the type of investment and the economic scenario.

Logistics: The process of planning, implementing and controllingthe inflow and outflow of materials, as well as warehousing, services and information, in relation to suppliers and clients.

Margin: Anamount fixed by afutures exchange or clearing house for buyers or sellers of forward contracts that serves as collateral for the fulfillment of the future obligation.

Market Capitalization (or Market Cap): The value of a company on the stock exchange, i.e. how much an investor would hypothetically have to pay to buy all the shares of the company at the current market price. To obtain this amount, multiply the price of each type of company share by the respective number of outstanding shares.

Market share: The percentage of the market held by a given company or brand.

Net Income: The positive difference between gross profit less operating and non-operating income, i.e. the final result for a given period after recording all revenues and expenses.

Net Margin: Net income divided by net revenue, an indicator of profitability: if we compare two companies with the same activity, the one with the higher net margin is the more profitable, also including operating, financial and non-operating aspects.

Net Revenue: The amount a company actually receives for the sale of its products or services, i.e. gross revenue less direct taxes such as ICMS, IPI, ISS, PIS and Cofins.

Nominal interest rate: The interest rate including inflation.

Novo Mercado: A specialBOVESPA listing segment containing those companies with the highest standards of corporate governance.

Odd lot: A lot of shares that includes less shares than the standard lot.

Operating Expenses: May be subdivided into administrative expenses (administrative personnel salaries, office rental fees, office electricity and telephone bills, etc.) and selling expenses (marketing, advertising, discounts, commissions, etc.). Thus, operating expenses are all those indirect expenses related to the company’s activities (direct expenses are grouped under cost of goods sold - COGS).

Oscillation: The variation in the price of a determined asset over a given period of time.

Preferred Share: (PN) – Grants its holders priority in the reception of dividends (generally at a higher percentage than common shareholders) and in capital reimbursement in case of the company's dissolution.

Press Release: A document released by media relations areas, in this case the investor relations department, informing, announcing, denying, clarifying or responding to the media regarding a certain fact involving the company, either positively or not.In practice, it is an official and documented public statement by the company.

Primary Market: The market through which new shares or other securities are issued on an exchange.

Promissory Note (PN): A credit security issued by companies for public placement which grants credit rights to its holders.

Real interest rate: The interest rate excluding inflation measured by a particular price index.

Revenue: The financial result from the sale of a company’s products or services.

Secondary Market: The market in which securities acquired in the primary market are traded, favoring their liquidity.

Shareholders’ Equity: The net value of a company’s assets representing the difference between the company’s total assets and its debt with third-parties.

Standard lot: A lot of shares with identical characteristics, the precise number of shares being pre-established by the stock exchanges.

Stock Options: Options granted to company managers and/or employees as a means of compensation, in order to align their goals with those of the company.

Stock Exchange: A non-profit civil association where securities are traded. Its main objectives are to maintain an appropriate location or electronic trading system for the purchase and sale of securities, to preserve high ethical trading standards, and to handle the transactions and ensure their rapid and detailed disclosure.

Stock Market: The market where shares are traded, either through the primary or secondary market.

Sustainability: A corporate operating principle that maintains the necessarycharacteristics for a fair, environmentally balanced and economically prosperous social system for a long and undefined period of time,thus meeting the needs of the present without compromising the ability of future generations to meet their own needs.

Tag along: A right that entitles minority shareholders to the same conditions offered to the controlling shareholders in case of the disposal of a company's control.

US GAAP: United States Generally Accepted Accounting Principles,the accounting principles adopted in the United States of America, and that must be complied with by all foreign companies wishing to trade their shares and/or securities on U.S. stock exchanges.

Volatility: Indicates the average degree of variation in a given share price in a determined period.