Good morning everyone and welcome to the Arcos Dorados’ Third Quarter 2013 Earnings Conference Call. With us today are Woods Staton, Chairman and Chief Executive Officer; Sergio Alonso, Chief Operating Officer, the company's Chief Financial Officer, Germán Lemonnier; and Sofia Chellew, Investor Relations Director. A slide presentation accompanies today's webcast, and this is available at the Investors section of the company's website, www.arcosdorados.com. As a reminder, all participants will be in a listen-only mode. There will be an opportunity for you to ask questions at the end of today's presentation. (Operator Instructions) Today's conference call is being recorded and at this time, I would like to turn the conference call over to Ms. Sofia Chellew. Please go ahead.

Thank you. Hello everybody. Before we proceed, I would like to make the following Safe Harbor statement. Today's call will contain forward-looking statements and I refer you to the forward-looking statement section of our earnings release and recent filings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances. In addition to reporting financial results in accordance with Generally Accepted Accounting Principles, we report certain non-GAAP financial results. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to the comparable GAAP results, which can be found in the press release filed with the SEC on Form 6-K. I would like to now turn the call over to our Chairman and CEO, Woods Staton. Woods, please proceed.

Thank you, Sofia. Hello everyone and thank you very much for joining us today. I am very pleased to report double-digit underlying growth in our business in the third quarter, which is a testament to the strength of Arco Dorados’ operations as well as the McDonald’s brand throughout Latin America. Despite continued soft consumption across some of the markets, we achieved comparable sales growth of 12.6%, organic revenue growth of 18.5%, and organic adjusted EBITDA expansion of 25.8% in the quarter. I am particularly pleased with the margin expansion achieved in Brazil despite the weakened environment. Since the start of the year, we are consistently expanding comparable sales and organic adjusted EBITDA on a sequential basis. Part of this improvement reflects more favorable year-over-year comparison, which we noted earlier in the year would benefit second half results. Moreover, the results underscore the continued strong brand preference that exists in our region. In an environment where economic and political uncertainty continue to impact several key markets, our team has drawn on decades of operating experience in Latin America to implement strategies focused on those areas within our control. We have a compelling marketing calendar and in the third quarter, the momentum created by the recent launch of the successful Chicken McBites product offering in many markets enhanced sales. This resulted in broad based comparable sales growth across our four divisions reinforcing our dominant position within the region. Based on internal and available public data, in the third quarter, we once again outperformed our listed peers in terms of comparable sales and outpaced most consumption metrics in key markets. In our largest market Brazil, we maintained our dominant position with the best coverage of any QSR in the country and across the region, we expanded our overall footprint to 1993 restaurants, up 113 year-over-year, contributing additional revenue. Alongside top-line growth, we also achieved strong growth in organic adjusted EBITDA through a strict focus those levers within our control. During the quarter, we were able to lower most cost items as a percentage of sales, thanks our efforts to contain fixed cost and mitigate the impact of currency volatility, particularly in Brazil. Additionally, in October, we concluded a debt restructuring and successfully reduced our overall cost of funding, while extending the average maturity of our debt. Given our strong results, for the first nine months of the year, we are confident that we will reach our revenue guidance and even expect to exceed organic adjusted EBITDA full year guidance. As the market leaders, we are operating from a position of strength and I remain confident that we will continue to profitably expand our business going forward. I will now hand the call over to Sergio Alonso, who will go through Arco Dorados’ third quarter performance in more detail. Sergio?

Thank you, Woods and hello everyone. Turning to Slide 3, our strong marketing calendar and solid execution has enabled us to overcome soft consumption growth across several key markets this year and the third quarter was no exception. The successful Chicken McBites promotion was a key driver of sales in the quarter. And in addition, the family business also stimulated sales. Because of these efforts, and the overall strength of our product portfolio, we were able to increase average check in line with inflation despite strong competition. Turning to Slide 4, Brazil’s revenues were flat in the quarter mainly due to the depreciation of the Brazilian Real. Excluding the currency impact, revenues gained 12.8% year-over-year. System-wide comparable sales were at 5.6% primarily due to average check. As Wood mentioned, we benefited from easier year-over-year comps across the region. However, I would like to point out that we are comparing with September of last year, there was a particularly strong bounce for traffic in Brazil due to the heavily successful Big Mac promotion at that time. Despite this tough comparison, together we continued mix tightness from other consumer industries our third quarter results were strong. This reinforces our strategy of offering great value combined with a strong product portfolio and premium products. Alongside Chicken McBites. Desserts like the Ice Cream Cone and McFlurry Platform also performed very well. The net addition of 71 restaurants during the last 12 month period contributed $31.5 million to revenues in constant currency. Turning to Slide 5, revenues in the Latin America division increased 7.9% or 6.6% on an organic basis, year-over-year. System-wide comparable sales returned to positive growth from the second quarter increasing 1.2% year-over-year despite the soft consumer environment. This reflects the strong performance of the Family business and the Desserts category primarily in…

Thank you, Germán. Our strong third quarter results showcases strength of the McDonald’s brand in Latin America and our ability to execute targeted strategies to overcome challenging environments across our markets. Strong population growth, untapped demand for our products and a burgeoning middle-class are driving the long-term expansion of the QSR segment. As the market leader, we have been at the forefront of this growth. Our current footprint encompasses iconic locations throughout the region which our competitors will find extremely difficult to replicate. While the long-term growth prospects in the region remain unchanged, given current economic, political and political uncertainties, as well as currency volatility in some of our key markets, we are considering modulating the pace of our restaurant openings in the near term while we double our efforts to improve profitability and maintain sound debt levels and ratios. Under such a plan, we would remain committed to opening a balanced portfolio of restaurants, not just points of sales. And growth in our largest market Brazil for the McDonald’s brand has almost three times the market share of its closest listed competitor will continue to be a priority. While the moderation in the pace of openings will impact top-line growth, we are working to improve margins, increased G&A leverage, and provide more predictability to our food and paper costs. As such, we have already hedged part of the imported portion of our dollar costs for 2014. This focus is in line with our guiding strategy, [foreign language] or recipe to win. And I am confident that advances in our profitability initiatives combined with the continued expansion of our footprint in key markets will set the stage for improved results in the coming years. Thank you for your attention. I would now like to open the call up to questions.

(Operator Instructions) And our first question comes from Jeronimo De Guzman from Morgan Stanley. Please go ahead with your question. Jeronimo De Guzman – Morgan Stanley: Hi, good morning. I had two questions, my first question was about your same-store sales growth in Brazil. I wanted to see what you were thinking about the expected pace going forward. Now that you’ve lapsed the price increases in the value platform. I just wanted to see what you can do to maintain ticket growth or potentially get more of your top-line growth from traffic gains.

Yes, good morning, Jeronimo. Look, first of all, don’t forget we are comparing ourselves to last year where we had a very strong Big Mac promotion that ended around the middle of the month and for further color, I’ll pass it to Sergio so he can provide more information.

I think it’s appropriate to mention that the Big Mac was run on part of our McFlurry Platform and it impacted all September and the large part of August last year. So we were competing with the tough base. And on top of that, of course, I mean, the overall economic situation in the country is not as dynamic as we expected. It was projected actually at the end of last year. So and as this year compasses, we stick to our strategy that led us to increased sales, mainly, protect margins. So – and also as Germán said, our revenue guidance remains exactly at the same level. So, that indicates our confidence on the remaining part of the year. Jeronimo De Guzman – Morgan Stanley: Okay, thanks. And then, just the separate question on the expansion, you mentioned a more moderate pace of unit growth. I wanted to see what this means for – what you are thinking about for 2014 and if there is any specific regions or any specific countries, where you are focused on slowing down the expansion?

Yes, we will provide more detailed guidance when we start going through our fourth quarter results in January, but this is a dynamic market, given the current environment, we expect to moderate unit openings in the near term. We are in a planning process right now. We really don’t know where, but as you know, we will always focus on Brazil and we will focus on higher profitability. Jeronimo De Guzman – Morgan Stanley: Okay, thank you.

(Operator Instructions) Our next question comes from John Ivankoe from J.P. Morgan. Please go ahead with your question.

Yes, hi. Great, several if I may. First, that the Brazil labor lawsuit affects the third quarter margins in any way or is that a potentially going forward margin benefit?

Hi, John this is Woods. Yes, let me pass it to Germán so we can… Germán Lemonnier: You want me to explain what?

Is it the PAT, John, you are asking about?

Yes, exactly.

Okay, let me pass it to Sergio.

Sure, John. How are you? PAT at the beginning we said, let me give you some color on what it is exactly. PAT stands for Programa de Alimentação do Trabalhador which is – indicates that in Brazil, the labor law requires companies to provide a meals to its employees. Okay, so, what it is – this subject is whether the meals are not provided to our employees, I can see their part of the salary or not leading to pay all taxes. So, Germán, do you want to? Germán Lemonnier: Yes, Sergio, John, how are you? Relative to the – the rule is relatively new in October but it’s positive for us. So we are analyzing this with our lawyers, because you the Brazilian laws are very complicated, but we – I should also say, there are benefits there for the past, for the provision and going forward, but I don’t feel comfortable right now to give a number. But, year-end, probably we will have a number that will be disclosed to the market.

And could we, slightly separately on Brazil, talk about initiatives such as the CBB program in breakfast, how far along those programs are in the system and the future plans are to roll this out?

Yes, John let me past it to Sergio who will give you an update on CBB.

Yes, on CBB, what we are doing, if you recall, John, we already have the platform implemented in Puerto Rico and Mexico where we’re doing pretty well. In Brazil, the plan is to have by year-end, this year 2013, the biggest markets. So with the equipment, so we will have the chance to market the new products early next year. So we are working at the very high pace to have all the restaurants with equipment installed and by 2014 you will have – being part of our marketing calendar, early 2014 all the CBB platform.

And that will be the first time for national advertising for that?

Yes.

And could you remind me what percentage of your stores have breakfast and whether that’s increasing or is it relatively static at this point?

Well, breakfast in Brazil, remember that, around 40% of our restaurant base in Brazil are placed in shopping malls. So, due to opening hours, we cannot offer breakfast, okay. So I would say that the remaining portion around 60% we offer breakfast. Though it has to be said that we do not have the wide product range that McDonald’s has for instance in the States, or as such we have in Puerto Rico and Mexico is a more leaning approach in terms of product portfolio. So relatively new category for us, so it’s growing and we are happy and of course it will be a medium-term business opportunity.

And our next question comes from Philippe Guson from Mitsubishi Securities.

Yes, good morning, my question I think is largely, or my two questions are largely for Germán. First question, with the – and this relates to your Mexican operations, Germán. With the Congress in Mexico passing a new tax on both fast food and sugar drinks, can you kind of share with us what you think the impact will be on your business and what you can do to remediate perhaps a decline in volumes there? And then my second question is related to your leverage metric, if I make the adjustments for leases in the way that Moody’s does it, you are getting a little bit close to the higher end of the range that I feel comfortable with based on the current trading. What is it, that you could do in terms of bring that leverage down if there were to be deterioration in operating performance or even in the currency translation that would push you above the 4.5 times? Thank you very much.

Yes, let me answer the first part, this is Woods, the new legislation in Mexico regarding soft drinks and snack food does not affect us at all. So we – it just came out last week. We are still trying to figure out some indirect impact, but it’s too soon to tell, but it doesn’t – at least it been here and I will pass it over to Germán for your second part of the question. Germán Lemonnier: Well, okay, we follow closely the net debt to EBITDA ratio because we look at more representatives in our geography. We don’t have any point with leverage ratio including the leases from a covenant point of view with McDonald’s, with any bond holder. The difference between Moody’s and Fitch for example is, Fitch knows that in Latin America the majority of the leases can be finished or terminated without any big penalty, normally between two to three months of payment. So, this ratio, we follow the ratio, but it’s not forcing us to any drastic decision that we can manage that.

(Operator Instructions) And we have a follow-up question from John from Ivankoe from J.P. Morgan Please go ahead with your follow-up.

Yes, thank you. I wondered if there was an appropriate time to begin the talk about how Arcos Dorados may sponsor the World Cup in 2014.

Yes, John, good question. We are lucky as a brand to be related to the World Cup as well as the Olympics all over the world. The World Cup will be held next year in Brazil which is the World Champion. It’s going to be a huge party. It’s going to be very good for our brand. And, it’s going to help build an exciting market calendar. We have a player escort program. We have launched promotions. As you probably remember, McDonald’s is involved with training the Olympics hosts in London. We are doing the same thing with the FIFA Volunteers. So that’s a great thing for us to show ourselves off. And so we are working diligently on capitalizing this great event for Brazil and as we get more news, we will let you know.

Okay, and can you tell us what the hedge rate was for fiscal 2014? I assume that you were referring to Brazil and if I remember correctly, I think it was 210 in fiscal 2013?

Yes, let me pass it to Germán. Germán Lemonnier: Hi, John. Again, at the last year, we tend to be very proactive in terms of hedges. You know we hedge – but in the case of Brazil all the 2013 we are advancing the 2014. We almost have three tenth of – part of the year closed, all the six first months, big part of the third quarter and a small part in the fourth quarter. We are continuing to see windows to try to lock at all the food and paper imported parts in Brazil, but at the same time we are doing hedges in other countries with opportunities like Colombia, Chile and Uruguay. We continue to try to be predictable, not to beat the market.

Okay, and last one for me I promise. You showed a foreign currency, I guess, gain in the quarter, I mean and that had been a loss recently I presume because of Venezuela, could you shed some light on that?

Thank you, I’ll pass it to Germán. Germán Lemonnier: Yes, because, in the quarter, there was a significant Real appreciation in September that offset the impact in the first two months of the quarter. It was a special quarter only because of the appreciation of the Real in September.

(Operator Instructions) Our next question comes from Robert Schweich from Burnham. Please go ahead with your question.

I know that you prefer to give us more definitive information that at the end of the year, but I don’t think it’s correct for you to make a big point Woods at the end of your presentation that you plan to moderate expansion for the year 2014 and not give us some idea of what this implies. Does this imply that the 130 units of this year will go down below 100 or does this imply maybe 120, can you give us some order of magnitude even though you haven’t finalized your plans?

Hi, Bob. We – it’s very tough for me to talk about the future where the dynamic situation in Latin America. As you’ve seen the predictions of gross domestic product growth in all of the countries that we are in, missed their mark this year and I don’t want to get ahead of ourselves. I think, we have to maintain our debt ratios. We are working on profitability and we will grow as fast as we can and as fast as we think is sound, but, Brazil, just – we will keep being as aggressive and as competitive as we can, but we need to be careful. It’s a dynamic market. And, more to come in the next few months, we are still in our planning phase.

(Operator Instructions) And at this time, I am showing no additional questions. I would like to turn the conference call back over to Woods Staton for any closing remarks.

Well, thank you all for joining us today. It was a strong quarter and we are pleased with the results today. Our IR team is available to answer any questions and I look forward to speaking to you again soon. Thank you very much and good bye.

And ladies and gentlemen, that does conclude today’s conference call. We do thank you for attending. You may now disconnect your telephone lines.