Good morning, and welcome to the Arcos Dorados’ First Quarter 2014 Earnings 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 Daniel Schleiniger, Investor Relations Director. A slide presentation accompanies today’s webcast which is also available in the investor 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. At this time, I would like to turn the call over to Daniel Schleiniger. Please go ahead.

Thank you. Hello, everyone. 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 statements 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 results as compared with GAAP results, which can be found in the press release filed with the SEC on Form 6-K. I would now like to turn the call over to our Chairman, Woods Staton. Woods, please proceed.

Thank you, Dan. Hello everyone and thank you for joining us today. Our first quarter consolidated results indicate a solid start to the year and underscore the continued strong preference that exists for the McDonald’s brand in Latin America and the Caribbean. We achieved double digit organic revenue growth supported by a high single digit increase in comparable sales. This expansion was driven by our Brazil and SLAD divisions where we further increased our leading market share. Importantly, these results were achieved despite economic headwinds in a soft consumption environment in several of our key markets. This is a challenge for anyone operating in Latin America. But we benefit from having one of the most experienced management teams in the region to steer us through the cycle. In fact, today you will hear about some of the measures that we have taken to improve our business both from the short and long-term. As discussed, during last quarter’s earnings call, given increasingly complex operating environment in Venezuela, our 2014 organic guidance excludes that country’s operations. On this basis, our key consolidated operating results experienced double digit growth in the first quarter. Organic revenues expanded 11.6% and our cost containment initiative translated to organic adjusted EBITDA growth of 18.5%. During the quarter, our compelling value platforms, beverage and dessert category as well as execution of strong marketing promotions in the lead up for FIFA World Cup drove revenue growth. And despite a challenging consumer environment across much of the region, overall traffic was relatively stable excluding Venezuela. Turning to unit expansion. Our footprints in Latin America is unmatched and serves as a key differentiator for McDonald’s brand in our region. As has historically been the case, the first quarter of the year is seasonally slow from a restaurant growth perspective with expansion…

Thank you, Woods, and hello everyone. Please turn to Slide 3. During challenging periods for the consumer, we’ll focus on the variables that we can control which include delivering the best value through our unique value platform maintaining customer traffic in our restaurants and providing our customers with an unparalleled experience. If you turn to Slide 4, you can see how this strategy played out in our largest market, Brazil. There, the addition of the Triple Cheeseburger sandwich GPPP value platform and the McFlurry Lingua de Gato for the dessert category combined with implementing of the Monopoly promotion and Champions Glasses campaign, helped to overcome a weak consumption environment. As a result, Brazil’s revenues grew 9.9% on an organic basis, taking to account a 19% year-over-year depreciation of the Brazilian real, revenues were down 7% in the first quarter. Our commercial strategy is designed to simulate traffic resulting in a shift in mix which lowered the average check in the quarter. As a result, comparable sales growth was 3.4% with relatively stable traffic. The net addition of 81 restaurants during the last 12-month period contributed $32.2 million to revenues in constant currency. Following up on Woods’ earlier comment on brand preference in the region, one of Brazil’s most respected business publication, Epoca Negocios, published a circular [ph] within the last couple of weeks where McDonald’s was voted the most admired retail brand in Brazil. As you can see on Slide 5, revenues in the NOLAD division decreased by 5.4% or 1.8% on an organic basis year-over-year. Systemwide comparable sales were 5.1%, Sales growth was impacted by the weak consumer environment in the division and the shift in the important Easter holiday, from the first quarter last year to the second quarter this year, resulting in lower traffic in the first…

Thanks Edwin. All the political and economic challenges will continue to impact cooperation in the near term. The underline driver to our business is strong. And I am confident that our team is the best position in the region to successfully manage to this economic cycle. During the past few years we have taken numerous steps to reduce our volatility and enhance our long-term profitability. The proactive use of current hedges [ph] has successfully buffered operating a goal [ph] the restructuring of debt [ph] has strengthened our balance sheet and the structure of operations while the corporate headquarter will [indiscernible] value and [indiscernible] continued to provide a natural hedge [ph] for currency and inflationary [ph] pressure. The cost savings that we achieved thus far are the initial results with strategic comprehensive review of our organizational structure. In fact, beginning with the reduction has implemented at the end of 2013, we are targeting an annualize reduction in G&A [ph] of over $20 million. I want to close by reiterating my confidence in ARCO grows bright future. More than 4.3 million customers everyday across countries and territories in Latin America and the Caribbean is a strong foundation which we will grow. It’s in [ph] middle class, changing [indiscernible] to demographics, and uncapped demand for apart, for driving, for long term expansion of our draftable [ph] market. As a leader in the QFR [ph] segment we will benefit greatly from these trends over the years to come. We have a strong relationship with our partner McDonalds and they remain very supportive of our operations. Reaffirming my continued belief and that goes that our long term prospects and [indiscernible] the opportunity to purchase an additional $250,000 shares in the company. Thank you for your attention. I would now like to open the call of the questions.

If you’ll ask a question you may press star then 1 on your touch tone phone. If you’re using a speaker phone please pick a handset before pressing the keys. If you withdraw your question please press star then 2. Our first question comes from Sean John Glass [ph] at Morgan Stanley. Sean John Glass [ph] – Morgan Stanley: Thanks very much. Just – first can you just – can you just really [ph] what is the guidance that you are articulating today versus prior, what is change, what is staying the same. I know you made reference to it couple of times in your remarks but didn’t say you have imprinted [ph] so I just want to understand what you’re saying you can still do this year and what is no longer obtainable given the issues we’ve discussed.

Yeah. Hi, John. We passed the – your question over the Edwin. Germán Lemonnier: Hi, John how are you? Sean John Glass [ph] – Morgan Stanley: Good. Germán Lemonnier: Basically, you don’t have any change in the guidance to [indiscernible] very growth [ph] guidance for 2014 and between 13% to 16% adjusted the growth with 15%, 30% always in a [indiscernible] and excluding Venezuela. The definitive task rate that I mentioned in my part is 25% between 39% [ph] of them and we basically don’t have any in this change. I bet you got – of any growth excluding Venezuela is 11.6 we did that with ultimately misleading concern [ph] that’s the [indiscernible] in our income statements. We have an organic that’s tested the grown the quarter of 13.5% this is – this is above our [indiscernible] guidance of 15%, 13%. So we are not changing our guidance at all. Sean John Glass [ph] – Morgan Stanley: Okay. That’s very helpful. And then, can you just talk in Brazil, you talked about beef [ph] inflation being one of the biggest contributors and also some of the mandatory scheduling and some adjustments. So can you talk – I think you said this but I’m – I don’t – I’m afraid they didn’t catch all of it. Have you now hedge some beefs [ph] so that there’s no longer an exposure of quantified it and can you also talk about what you’re doing on those mandatory fixed schedules to alleviate some labor the pressure.

Yeah. Let me pass you to German for the – for the putting on the beef [ph] and our just only increase in pricing and how it can affect the full year. And then, on the scheduling requirements and the new law in Brazil I’ll pass you to Sergio. German. Germán Lemonnier: Okay. Hi, John again. Basically, we mentioned that the [indiscernible] market going back by already – by my rights food and [ph] paper and payroll. I will pick the food and paper part. The food and [ph] paper was increasing driven by increase and beef cause to make – base in our full years in the [indiscernible] our trend from the protection but happened more abruptly than we expected originally. In terms of [indiscernible] is that are [indiscernible] that we searched the imported food and paper part of the [indiscernible]. The beef is [indiscernible] so the shape – 100% shape is they feed [ph] up imported product of our in goods [ph]. But we don’t take any to meet again more beef and the rest of the year. Sergio [ph].

Yeah. Sure. Hi, John. And regarding the fix schedule situation what we let you know that in the last calls we finished [indiscernible] all across the country as the end of last year and the major change is that we now only have the chance to adjust the number of hours on monthly basis when compared to a weekly basis that we have before. Obviously that creates a different situation when the volumes and the sales are not dynamic as they were in the past that crates an additional situation that we need to consider. Now, having said that, we still have obviously a chance to adjust the schedules mostly letting the head – natural health can turn over to multiply the number of – the working hours that we scheduled at different restaurants. Even though this, you know, creates some of additional pressure on our – on our payroll and the PML [ph] we believe that we will be able to compensate in the months to come this situation with the number of hours that we have under the new schedules system.

Yeah. And John, just around of your question for the full year we expect margins will be approximately flat with some, you know, food and paper [ph] where they have caused pressures of beef as I said. But they’re going to be all set in other non-productive cause as well as G&A the [indiscernible] sales. Sean John Glass [ph] – Morgan Stanley: Okay. Thank you very much.

Our next question comes from Amod Gautam at JPMorgan. Amod Gautam – JPMorgan: Hi, good morning. I’m filling in for John. You mentioned traffic in Brazil was stable year-over-year but could you just help us, you know, in the quarter and with the World Cup gearing up here so. I think in the past you mentioned maybe it’s possible that there could some exhilaration in the couple of months leading up to the World Cup. Is that still kind of the impression I hope that you have for the next few months?

Yeah. How are you? The fourth quarter comes continue to be affected by, you know, unstable macroeconomic environment especially in the whole QSR [ph] arena. We’ve been focusing on variables that we can control which includes the [indiscernible] invest value, so, you know, to our value platform and trying to maintain customer traffic as much as we can. With that said, you know, keep in mind that you’re in the first half of 2014 we’re facing tougher comes because of last year the performance. So this year we have 3.4% increases but that comes on top of last year is 9.1% increase for the quarter. So that’s a tough – that’s been tough for us. And we’re running promotional campaign they have a short-term impact from part mix [ph] but, you know, traffic is maintaining itself stable and we’re comfortable with that. Sergio, would you like to have some –

Yeah. Maybe give some color [indiscernible] on the what we need in terms of the calendar for Q1 we had the – of course as you mentioned before, I mean, the very active 4W [ph] platform that is obviously targeting, retained traffic as well we do [ph] in more complicated and less dynamic economy to all which will focus and retain traffic because we believe that is the best way to sustain value for the future. But apart from the [indiscernible] monitor campaign we have a lot of, you know, monopoly campaign that we have anticipate this year compared to the next year just to open enough space to launch the PIFA [ph] campaign that you also mentioned and obviously we had a very, very comprehensive dessert and launching and a new product with a new McFlurry line. So we have a number of initiatives all of them targeting, retaining traffic as we did. Of course, most of these initiatives remarkably the people just vary probability category. They made up to a changing product mix which also made up to a change in [indiscernible] obviously. Because people they have less spend in money so they take the most affordable options in our menu. Amod Gautam – JPMorgan: Okay. and then, just one more – as you think about the increase in complexity of the operating environment in Venezuela is there any possibility that least began considering downsizing the store base to reduce exposure and what kind of flexibility might you in under the MFA [ph] with McDonalds to do something like that equals or even the market.

Yeah. We’ve been to Venezuela just a few weeks ago. I was there just a few weeks ago. And we are – we are trying to get that operation as lean and as possible. And, you know, as we mentioned before we’re also locally – we are forcing the local to all of over ingredients as much as we can so making a lot of progress there. There are laws in Venezuela that do not allow you to fire people. So, you know, you cannot just close the store and you can’t just close it. But the company [indiscernible] will walk away. So that’s one problem. Then there’s also that problem that if you don’t have that real estate under use it might be expropriated and as in the case was we’ve brought other people in other companies. So we have no plans on shutting down restaurants unless obviously as in any other country there – that will stayed [indiscernible] but, you know, luckily that’s not the case in Venezuela. And, you know, quite honestly I think we’re mildly more optimistic sitting here today about Venezuela and maybe, you know, some months ago because of this new SICAD tool and some of the measure that they’re taking which are more, you know, economically coming sensible. And, you know, partners, you know, we get support from [indiscernible] corporation. We’ve got better positions in our peers [ph] in the market. And the most important thing is that we do not – we’re not going to inject any cash in that country and its – and it’s in terminally sustainable that this – German mentioned in his portion.

Before we go on to the next question I would like to ask the party please limit themselves to one question at a time. And our next question Vinicius Saraiva [ph] Bank of America Merrill Lynch. Bob Ford – Bank of America Merrill Lynch: Hi, it’s actually Bob Ford. And other question with respect to the foreign exchange lost that you include in the quarter on inventory. It was a little bit ambiguous to me, because typically when you’re holding to dollars and [indiscernible] inventory there’s often a gain or you preserve value during encourage effects [ph] weakness. But here it changes that it may be tied to make some of price controls. But if you could elaborate on the nature of the effects losses because you break in two buckets [ph] that will be very helpful please.

Hi, Bob. Yeah. Let me get to you German. Germán Lemonnier: Yes. It’s a good –everybody is the same page, basically we have create the system, you know, [indiscernible], SICAD and SICAD II. We choose to get one to translate and because of this we have two kinds of things [ph] but normal impact that is basically the impact that [indiscernible] on monetary partition that this was %19.2 million. The inventory right down that’s probably are referred to even takes points 7.6 million is related basically growth. We have inventory at that belongs franchisees and we cannot increase the price of this inventories because of price control and that’s why we need to write down the total values with the inventory. So you’re it’s because of the – because of the price control and not because of the company [ph].

The next question comes from Josephine Shea for Investment Management. Josephine Shea – Investment Management: hi, good morning. Could you possibly talk about the capital expenditure which was 20 million this quarter and could you remind what the guidance was for the year and will you bring this down if operating cash continues to be negative obviously your debt is going up and your cash going down. So your leverage is increasing could you come on both on capital expenditure and how that works for the cash flow statement going forward in relation to that levels. Thanks.

Yes. Hi. Let me pass you to German so he can answer the question. Germán Lemonnier: Yes. Yes. In our 2014 guidance basically we keep $200 million for capital [ph] purposes [indiscernible] and the part mentioned that we are in track on this guidance of how we’ve opened to remind this. So we don’t expect change in the – in the – in the capital [ph] deployment in the company and we are on track. And base on the debt we always say that we are comfortable we meant that never fall on two times in the DA [ph] – attract the DDA [ph]. And we don’t expect that in [indiscernible] increasing the [indiscernible] today. We are ensuring as much that we are [indiscernible] two times around two. And we did that – we can maintain this ratio [indiscernible] that we need did mitigations and continued our original caps exploring [ph].

Our next question comes from Geronimo de Guzman [ph] at Morgan Stanley. Geronimo de Guzman – Morgan Stanley: Hi, good morning. My question is also in Venezuela we noticed that the local currency was there decelerated quite a bit from too close to a little above 30% versus 50% before. So I just wanted to understand what droves the declaration and that top line growth. And what that means for your growth and your margin going forward. And then, I guess related to that I just wanted to know you mentioned the SICAD II system just wanted to know if you have been able to access this system at all. And if that’s the case whether there’s a chance that you might moved to that system for translation purposes.

Yeah. Hello, Geronimo. I’ll start with the last part first in SICAD II. And we haven’t been able to secure some money from SICAD II but, you know, it’s very complicated. They’re not many, many funds available. We’ve been able to get some funds that we not – but not with the anything that – Germán Lemonnier: Presentable.

Yeah. Presentable, I mean, nothing substantial it’s $300,000. But yet, it’s open for business. I think an important thing that’s happened also in a [indiscernible] is it – it’s taken away this law it makes it illegal for you to buy dollars. And that’s taken pressure off a lot of the black market whatever, you know, blue market or parallel market is there. So the traffic has decreased because of increasing prices. We have to maintain our margins. Don’t forget that we’ve been buying things like French fries and in our part, they’re imported which is – that’s the only thing that’s imported, but also the local products are very expensive. So to maintain margins, we’ve had to increase prices. That’s brought some of our volume down. And then also, recently we’ve had some unrest in the country. And what’s happened is that doesn’t allow customers to get to your store and/or allow your crew to get to the stores. You can’t open. By the way, one of the focuses of the student activity is close to several of our restaurants. So it’s a challenging situation. But we’re very active in the market. We’ve launched Cheddar Bacon Onion. The McFlurry Tres Leches. We had also McFlurry Flaquito Chocolate. So it’s a dynamic situation. But the brand is very strong. And I was just here, as I said, two weeks ago, and it’s very nice to see that the stores, restaurants are doing extremely well. It’s just an absolute – thrilled to see how well the stores are being run and how good the crew is and what a great McDonald’s experience they’ve given all these negatives going on now.

(Operator instructions) We do have a few more questions. Would you like to take them?

Yes, absolutely.

Okay. Our next question comes from Lore Serra at Morgan Stanley. Lore Serra – Morgan Stanley: Yes. Thanks for taking the question. I just wanted to follow up quickly to Han Well’s [ph] question. Germán, can you just explain to us, like just on the SICAD II, at some point, do you think about using SICAD II as an exchange rate for financial reporting purposes? And as you advance discussions with McDonald’s, we saw you had royalty relief that was important for the profitability of the operations this quarter. Is there any kind of sort of now that you’re seeing a little bit more rules of the road in Venezuela, is there any more of a permanent solution that you’re working on with McDonald’s to kind of see through the next year or two? Germán Lemonnier: Hi, Lore, how are you? It’s Germán. Lore Serra – Morgan Stanley: Hi. Germán Lemonnier: Flipping to the royalty, there’s a [indiscernible] that we received [indiscernible] in the first quarter from McDonald’s 4.7 million basically in line with what we mentioned last call, 1.5 million approximately per month. Currently, we are [indiscernible] monthly basis because of the [indiscernible] and we are working in April with [indiscernible] close to 50. So that’s helped a lot in the business in April. And we continue [indiscernible] McDonald’s because with these are our partners and are supporting us in the business. And so we are not expecting any big change in terms of support from McDonald’s. In terms of [indiscernible] where we checked all the companies and obviously, there are a lot of [indiscernible] exchange rate. We are monitoring the situation carefully every month, because obviously there are two markets there [indiscernible] and SICAD II. As mentioned, we can assess [indiscernible] $300,000. We’ve got more access to SICAD I, more than $2 million for [indiscernible] month. So we evaluated it every month. And [indiscernible] and I cannot guarantee to stay in SICAD I, but today SICAD I is the [indiscernible] that we’ll need to use. And we are open to changes if the market change or the other companies who have a big change in this policy [ph]. But today, it’s SICAD I.

Our next question comes from Greg Pasi [ph] at Pala Assets. Greg Pasi [ph] – Pala Assets: Hi, thanks for taking my call. Just a question about the EBITDA margin. You said margins would be flat. Is that what I understood correctly? And just regarding dividends, what would be the payout ratio as to the 2013 and ‘14? Do you have any indication for that? Thanks.

Yes. First part is margins. We said that the margins would be flat or quite negative at the company excluding Venezuela. So that’s correct. And the second part, [indiscernible].

Yes, thank you. As far as dividend, we’re paying dividends that we’ve already declared our dividends for this year. We don’t see any reason to change that. And obviously when we get into our planning cycle for next year, we’ll look at that there’s no change in necessary right now. So anyway, thank you. Thank you all for your attention. And thank you for joining us today. We approach our business with a very strong focus on the long-term opportunities from McDonald’s around Latin America. And as long as we continue to deliver an unsurpassed money experience backed by innovative marketing programs, I’m confident we’ll enhance long-term shareholder value. And I look forward to updating you on our second quarter before [indiscernible]. Thank you all very much, and have a good day.

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.