Good morning everyone, and welcome to the Arcos Dorados Third Quarter 2017 Earnings Call. A slide presentation will accompany today's webcast, which will be available in the Investors section of the company's Web site, www.arcosdorados.com/ir. And 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. Today's conference call is also being recorded. At this time, I'd like to turn the conference call over to Mr. Daniel Schleiniger, Vice President of Corporate Communications and Investor Relations. Sir, please go ahead.

Thank you. Good morning everyone, and thank you for joining us today. With me on today's call are Sergio Alonso, our Chief Executive Officer; Marcelo Rabach, our Chief Operating Officer; and Mariano Tannenbaum, our Chief Financial Officer. 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 and unaudited financial statements filed today with the SEC on Form 6-K. I would now like to turn the call over to our CEO, Sergio Alonso.

Thank you, Dan. Hello everyone, and thank you for joining us today. This morning we reported another strong quarterly result as the positive momentum we delivered in the first-half of the year continued into the third quarter. But before we take you through the results, I would like to saw a few words about our operations in Mexico, Puerto Rico, and the U.S. Virgin Islands. As you know, each of these markets was impacted by severe natural disasters during the month of September. We do not expect a material impact on our financial performance given that we have sufficient insurance coverage for both the property loss and the interruption to our business that resulted from these disasters. Fortunately, our business in Mexico was not materially impacted by the earthquakes. The vast majority of our restaurants and those of our sub-franchisees were back up and running within a couple of days. In the case of Puerto Rico and the U.S. Virgin Islands the impact of hurricanes Irma and Maria was much more severe. We are now working to assist our employees as they recover from the hurricanes. From a business perspective these markets represent around 1% of our consolidated EBITDA, and we are working with our insurance providers to assess and cover the property damage in Puerto Rico, Saint Thomas, and Saint Croix. We currently have more than 70% of our restaurants back in operation, and expect to have substantially all of our restaurants operating by the end of the year. Employees and sub-franchisees from other Arcos Dorados' markets have provided donations that both Arcos Dorados and McDonalds Corporation have matched [ph] in order to support our colleagues in Mexico, Puerto Rico, Saint Thomas, and Saint Croix. We appreciate these contributions which show us once again why the McDonalds system is…

Thank you, Sergio. Please turn to slide four. We continued to generate positive business momentum by focusing on capturing profit growth with affordable menu offerings both Classics and McDonald's Signature Line. In the quarter, we recorded positive right from volume trends in most of our markets, which combined the average check growth to drive our strong top line results. Reported revenues grew 8.6% with constant currency revenue growth of 17.5%. System-wide comparable sales increased 20.3%. Thanks to average check growth combined with positive traffic in every religion, with a better result. Comparable sales exceeded value inflation, supported by Brazil, NOLAD, and FILAD [ph]. Please turn to slide five, for a more detailed look of our divisional results. In Brazil, reported revenues grew 6%, supported by the 3.7% year-over-year appreciation of the Brazilian Real. Excluding this currency tailwind, constant currency revenues rose 3.3%. Consistent with recent quarter, the company's reported revenues were impacted by the re-franchising of certain company-operated restaurants, as company operated sales are replaced by the rental income, we did from our sub-franchise. From a system-wide basis and constant currency total sales in Brazil grew 8%, while comparable sales gained 6.3% versus the prior year. The comparable sales were sold which was more than doubled the prevailing inflation rate was supported by average check growth and another quarter of positive traffic. Notably, we achieved this result in the context of an improvement but still soft consumer environment Key marketing activities in the quarter included the introduction of core extensions such as the Duplo Quarterão, the Grand Cheddar McMelt, and the McFritas Cheddar Bacon. We also launched the McFlurry and McShake Prestígio in the Dessert category and included Despicable Me 3 and Emoji in the Happy Meal. Turning to slide six, NOLAD's revenues rose 8% year-over-year reflecting constant currency growth…

Thanks Marcelo. Please turn to slide 10, as you can see our adjusted EBITDA grew by 17.5% or $11 million versus the prior year quarter. Our strong comparable sales growth along with operating leverage grow both the operating performance as well as the positive net income result in the quarter. Notably, our cash generation would also have the net cash provided by operating activities reaching $67 million for the three months ended September 30. Consolidated G&A expenses grow 10 basis points as a percentage of revenues. As reported adjusted EBITDA growth was supported by strong constant currency result particularly Brazil and flat partly offset by NOLAD and the Caribbean division. Please turn to slide 11, our adjusted EBITDA margin rose 70 basis points versus last year mostly due to cost leverage in Brazil. We achieved margin expansion primarily by factoring efficiencies in food and paper, which benefited largely from negotiations earlier in the year to consolidate suppliers as well as from the declining beef prices in Brazil. Brazil's adjusted EBITDA margins gained 200 basis points to 13% driven by lower food and paper cost, occupancy and other operating expenses and royalty fees as a percentage of revenues. Royalty fees benefited from growth support which McDonald's Corporation began providing during the quarter. This growth support is expected to be primarily directed towards Brazil and SLAD divisions with a majority of our investments are planned to occur over the next three years. For NOLAD, adjusted EBITDA margin contracted 140 basis points to 9.7%, reflecting higher occupancy and other operating expenses largely due to increases in utility cost as well royalty fees and payroll cost as a percentage of revenue. This was partially offset by franchising inflows. As Marcelo mentioned concern around the speed of Mexico's economy recovery has impacted consumer backdrop in…

Thank you, Mariano. Please turn to the final slide. Over the past several years, we have executed the key components of our turnaround plan by achieving efficiencies in our restaurants up gradations as well as meaningfully reducing our G&A expenses and long term debt levels. These initiatives combined with our successful marketing efforts and improving consumer environment are driving better top line and EBITDA performance. As we have mentioned on previous calls, our growth strategy in the years to come will include expanding and modernizing our restaurant base by adding digital capabilities and enhancing the use of technology. In addition to these critical changes to our restaurant, we are also driving cultural shift across the organization. For example, we are improving operational excellence and customer satisfaction as part of our Service Culture program which helps employees personalize guest experiences. During the quarter, we also maintained a strong commitment to the communities that we serve. Notably in August we held the [indiscernible] in Brazil, which raised a record amount of funds to support the Ronald McDonald Institute in the country. And we also made further progress in our effort to support youth employment initiatives across the region by signing agreements with Ecuador's Labor Ministry. Looking forward, our compelling menu, unmatched customer service, and investment plan that is modernizing our restaurant uniquely position us to benefit from an expected improvement in consumer trend in the region. We will continue to leverage the strong potential of the McDonald's brand in our markets to drive growth and generate shareholder value. And finally, I want to thank all the employees, suppliers, and franchises who provided aide to the search and rescue operations in Mexico, Puerto Rico, and The U.S. Virgin Island. We will continue to support this community as they recover from the natural disasters. So, thank you for your attention today. And I will now like to open the call to questions.

Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Our first question today comes from Robert Schweich from RMB Capital. Please go ahead with your question.

Thank you. This was certainly an excellent report. I would like you to elaborate please on your plans for restaurant expansion. As I looked at the figures in the report, you ended up with 21,060 restaurants, up four from the end of the year, with Brazil having an increase of eight and the other areas having a decline. Could you elaborate on your plans for the fourth quarter of this year and 2018 and 2019?

Yes, sure. Good morning, Bob. This is Sergio. Well, if you recall, we gave -- reintroduced our two-year opening of [indiscernible] McDonald's we mentioned a plan of 180 gross [ph] new restaurants and we said at the time that the number of openings we projected this year 2017 we will be in the range of 45 to 50 units. On top of opening, keep in mind that we also commit a reinvestment of at least $292 million for the period -- I mean 2017 to 2019, which adding out both eventually it will go around $500 million in total. If you look at the total count of evolution in the divisions, so for this year keep in mind that opening and closing some units each parcel of day to day running the company of our size and also keep in mind that most of the opening are typically back ended. So you should expect a relevant increase of number of openings in Q4 before the end of the year to meet with our original guidance in terms of record holdings.

Now what about you mentioned 180 over three years, if I understood correctly, so what does that mean for 2018 and 2019 specific numbers?

Well the remaining 130 openings for both 2018, 2019 should be close to even I would say between 55 and 60 units for next year and there from 65 and 70 units in 2019, Bob.

Are you satisfied with that rate of expansion?

Look, we have to be cautious in terms of what do we expect from the economies looking forward we believe we have relevant investment plan again we plan to deploy over $500 million in these two year cycles, we also mentioned that considering the environment from the economic situation in most of our markets particularly in Brazil and Argentina, we would shift resources from -- investing in the actual restaurant base rather than dedicating the big of the dual piece to restaurant opens. Of course this is the dynamic situation that we monitor day-to-day and should be overall conditions change. We may make some adjustments to our restaurants, keep in mind that as we said several times the opportunity to expand our footprint remains attractive but it's a matter of setting the right phase in terms of what we expect from the economies again mostly in Brazil and Argentina to happen have evolved in the particularly in 2018 and 2019.

[Operator Instructions] And at this time we've reached the end of today's question and answer session. I'd like to turn the conference call back over to Mr. Sergio Alonso for any closing remarks.

Well, thank you. Thank you very much for your attention today. We certainly look forward to speaking with you for next quarter and of course we are very enthusiastic about what we expect for the end of the year. The December is a very important month for us and we're very optimistic and certainly very well prepared to maximize at the potential basis in all the market. As always in the interim, our team remains available to meet with you and answer any questions that you might have. So, thank you again, and enjoy the rest of your day.

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