Welcome to the Anheuser-Busch InBev Third Quarter 2012 Earnings Conference Call and Webcast. Hosting the call today from AB InBev is Mr. Carlos Brito, Chief Executive Officer. To access the slides accompanying today’s call, please visit AB InBev’s website now at www.ab-inbev.com and click on the Investors tab. Today’s webcast will be available for on-demand playback later today. [Operator Instructions] Some of the information provided during the conference call may contain statements of future expectations and other forward-looking statements. These expectations are based on the management’s current views and assumptions and involve known and unknown risks and uncertainties. It is possible that the company’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect the firm’s future results, see Risk Factors in the company’s latest Annual Report on Form 20-F filed with the Securities and Exchange Commission on April 13, 2012. AB InBev assumes no obligation to update or revise any forward-looking information provided during the conference call and shall not be liable for any action taken in reliance upon such information. It is now my pleasure to turn the floor over to Mr. Carlos Brito. Sir, you may begin.

Thank you, Jackie, and good morning, good afternoon, everyone. Today, AB InBev reported its third quarter results. Total revenue for the quarter grew by 9.1%, driven by revenue per hectoliter growth of 10.2%. The main drivers were strong results in the U.S., with revenue per hectoliter growth of 5.7%, including 200 basis points of favorable brand mix and in Brazil, with revenue per hectoliter growth of 18.3%, driven by the carryover price increases from the fourth quarter last year, price increases in the third quarter this year, higher premium brand mix and additional direct distribution. Our focus brands, globally, volumes grew by 1.3% with 3 global brands growing ahead of this rate at 5.8%. EBITDA grew by 10.6% and EBITDA margin grew by 54 basis points to 38.7%. Year-to-date EBITDA grew by 6.9%. Finally, our normalized earnings per share grew by 7.3% in the quarter to $1.17 and by 21.6% year-to-date to $3.43. In summary, a good quarter, with solid top line and EBITDA growth. As I mentioned, volumes of our global brands, Budweiser, Stella Artois and Beck's, grew collectively by 5.8%. Global Budweiser continues to do well, with volumes growing by 6.2% in both the quarter and year-to-date, driven by good performances in the U.K., China, Russia and Brazil. Stella Artois volumes were up 5% with double-digit growth in the U.S. and strong results in Brazil and Argentina. Beck's volumes also grew by 5%, mainly due to good performance in the brand's home market of Germany. Turning to the U.S. in more detail now. The industry has shown encouraging improvement in 2012 following 3 challenging years. This has been driven by good weather in the first quarter and innovations throughout the year. We estimate that industry selling day adjusted sales to retails, STRs, declined by 0.4% in the quarter,…

Thank you, Brito, good morning and good afternoon, everyone. Let me start from the Slide 23 with Canada, where our volumes were down by 0.8% in the quarter, primarily driven by poor weather but up by 0.7% year-to-date. Our market share was stable in the quarter with a good performance by Bud Light, which grew both volume and share. Total market share remains around the 41% level we are to date. Going to Latin America South, on the next slide, total volumes in the zone decreased 2.3% in the quarter, with beer volumes flat and non-beer volumes down 5.9%. Year-to-date, total volumes are ahead by 0.3%, with beer volume growth of 0.7% and non-beer volumes decline of 0.4%. Stella Artois has continued to deliver strong performance in Argentina, achieving market share growth in both the quarter and year-to-date as per our estimates. We have also launched Quilmes Night as a premium line expansion for the Quilmes brand, joining Quilmes 1890, which was launched in the second quarter, and both brands are off to a good start. LAS' EBITDA 21.7% in the quarter, with an EBITDA margin increase of 109 basis points to 43.7% with revenue growth offsetting high cost inflation. Moving on to Slide 25 now. In Western Europe, own beer volumes declined 0.5%, while total volumes fell 0.6%. Including Cidre, own volumes would have increased 0.2%. In Belgium, own beer volumes declined 1%. And in Germany, own beer volumes increased by 1.3%, while our Focus Brands grew 3.7%, with strong performances and market share gains for both Beck's and Hasseröder. In the U.K., own beer volumes in the quarter decreased by 6.3%, excluding Cidre, and by 3.4% when Cidre is included. While we estimate that market share year-to-date was below the previous year, the trend is turning and we…

[Operator Instructions] Our first question is coming from Mark Swartzberg with Stifel, Nicolaus. Mark D. Swartzberg - Stifel, Nicolaus & Co., Inc., Research Division: Brito, on the U.S., really a 2-part question relating to innovation. Firstly, do you think that this year's P&L in terms of spending that's required to achieve the improvements you're getting in terms of innovation, do you think this P&L is representative of the kind of spendings necessary to get these better benefits you are getting now from innovation? And then the second question is, as you think about this exercise in managing gap and the progress you've made as an organization becoming better at innovation, where do you think your strengths now lie versus a few years ago? And what do you think some of the big to-do items are?

Mark, I think to your first point, I mean, I think I should look at the level of spend, not only for one quarter, but for the year-to-date. I mean, if you look at the first quarter, sales and marketing increased by 10%, second quarter, not talking North America, okay. So 10%, 5.8% second quarter, 12.8%. And we continue to say that, as we said for the company, North America is along the same lines in the sense that sales and marketing will be between be mid- to high-single digits for the year, okay? So don't take the third quarter as any indication to take our guidance for the company as also being one valid here for the North America. What happened this year is that we saw some opportunities that we thought would be this small and they became much bigger and we decided to invest behind them. And it proved to be a wise thing to do because they responded and that also impacted, in our view, the industry. So now, very glad to see that the industry in the U.S. after 3 tough years is back to growth and with much better price and profitability, so that's -- and with a much better mix on our side, so that's all good news. In terms of your second point, in terms of innovation, for sure, we're in a much different position this year. I think we have a better governance between what zone does and global does. I think we're also looking at alcohol beverages as opposed to beer only. I think that our company, the idea of focus has to be that, first, we look around and then we focus. If you just focus and focus and focus and don't look around, that could be -- you could be missing some opportunities and we understand that, and Lime-a-Rita is a big testament to that. I mean, when you look at that kind of price premium that Lime-a-Rita commands, about 60% to 70% when you compare similar packages to Bud Light, huge premium, therefore, great margins and taken 40% of the volume from outside of the beer category and mainly from hard liquor and bringing new consumers to the category, which is something that the category needs in the U.S. So I think a very good year for us. Innovation is working. I feel very confident. We feel very confident that our pipeline for the next 50 years is in very good shape and there's lots of exciting things for next year.

Your next question comes from the line of Chris Pitcher with Redburn.

A question, actually, in the U.S. margin, in backing out Canada, it does look like your cost of goods inflation was pretty high in the quarter. I was wondering if there was anything specific within that relating to following on from the innovation perspective? Or whether that mid to high-single digits is something that's perhaps a bit more sustainable?

Well, Chris, I mean, if you look again, not only at the third quarter, but if you look at all the quarters for the NA business, North America business, you'd see that in the first quarter, we were 0.3% year-on-year organic. So pretty much flat in terms of cost of solds -- cost of sales per hectoliter. Then it was worse by 5% and now by 6.6%, but we remain committed as for the company to mid-single digits for the full year. And the thing is that commodities hit us more on the second quarter onwards and also package mix and brand mix has been something that has also hit our cost of sales but of course, they are all accretive. So it's great to revenue, great to margins. And if you remember from the 5.7% net revenue per hectoliter increase this quarter, 200 basis points, I mean, that has been the highest since we've started reporting on the U.S. business, was a North American business that came from brand portfolio enhancements and trade up. So that's all pointing in the right direction.

And if I could add a follow-on to that. I mean, that is being obviously impressive around trademarks you've been filing for Bud, Black Crown, and there's been talk about, I think, taking Goose Island nationally. Could you talk a bit more about those 2? Whether you think -- is Black Crown the solution to Budweiser, and to get a feel for when those might be coming to market and whether the implications of marketing spend ahead of that cycle?

Yes. I think when you look at Bud Light and how successful the line extensions on a brand like Bud Light has been, we believe that it's time now, given some new insights that we acquired from our Bud Light consumer base and the other consumers who would like to attract to the franchise, we see the need, and the opportunity that is saying, to really do some line extensions also on Budweiser to show the craftmanship, the history, the roots of this brand. I mean, it's an amazing brand with lots of craftsmanship, lots of things to be told. And this initiative of getting the 12 brewmasters in the U.S. from all 12 breweries to kind of come together and come with variance and old recipes and stuff from the -- from our archives, that proved to be very interesting. Consumers are excited by it. We have a sampler pack in the market. And what's -- the only thing that is disappointing about Budweiser is that brand health is pointing upwards and now for some quarters, especially with the young consumer, which is the kind of guys you need to continue to bring into the franchise. But the market share has not yet responded and we think this year, in particular, it's because of all the focus we gave to the new innovations that we put in the marketplace that had a great yield in terms of volumes and industry impact but, of course, something had to give, and that something ended up being Budweiser a little bit. So but again, make no mistake, we're committed. The brand is growing internationally at an amazing pace. I mean, just remember that 4 years ago, the brand, even on an international basis, was challenged, and since 2009, never looked back and went from 1% to 3% to 5% and now 6% or 7% growth, especially led by China, U.K., Russia, Brazil. So very exciting, we now get to stabilize Budweiser in the U.S. We're totally committed to it. We're putting big funds behind the brand and now with new insights, we think of those trends will be even better utilized.

Your next question comes from the line of Andrea Pistacchi with Citi.

Focusing on the higher costs in the U.S., which turned -- to some extent in the past couple of quarters have limited your operational leverage there. You've touched on the marketing spend and we've just -- you've just touched on the COGS. The other cost line, the distribution cost, they were up, I think, a bit less than in the previous 2 quarters as you're starting to optimize the production footprint of some of your innovation. Is there room for this trend to continue, for your distribution cost to come down further in the -- or to be up less going forward in the U.S.? And then my second question, please, on Brazil. Now that the price increases have gone through and you have this, a sense of how the consumer is reacting to this. Based on this, could you give us, sort of without giving guidance, sort of an expectation of how you think the market will behave in Q4 and next year given the magnitude of the price increases?

Good points. I mean, I think, Andrea, on logistics for North America, if you look again at the first quarter, it was an increase of 16.2%; second quarter, 12.9%; third quarter, 9.9%, and yes, you can continue that this trend downwards will continue and pretty much be in the range that we set for the company, which is mid to high-single digits, or for logistics, we said high-single digits for -- better saying for the year. So yes, it will continue to go down as we expand production of new news or innovations to more breweries. So again, these innovations -- Platinum, Lime-a-Rita -- were much more successful than we thought. We can say it was poor planning but again, good results that they were much better, but we have to ship products all over the country and that took its toll on our margin here. But that will start coming down, as it is coming down and it will continue to come down, you can count on that. In terms of Brazil price, I mean, as it's -- it was a bit -- we have a lot of noise in the Brazil price for this quarter because, first, we decided to come with a price increase ahead of what we normally do earlier, and that's because of the tax -- the excise tax increase event of October 1. So we decided to anticipate our normal price increase, plus the pass-on or the pass-through for the tax increase, then we did that in September. Then of course, with all the inventory shifts between months, that is normal. Then the government decided to do a partial postponement of the taxes, then we responded positively, saying we're going to give some of that price back, and we gave a full year guidance…

Your next question comes from the line of Lauren Torres with HSBC.

On the U.S., as we're seeing the industry is firming up and consumer trends are a bit better, but you're still losing market share. So I was just curious if you could talk about your decision to sacrifice volume share for value share? What are your thoughts on further pricing in the U.S.? And as we think about next year, are we expecting to see further market share losses as long you get your pricing and margin improvement? Or there is the thought that maybe some of that market share will be regained?

Well, Lauren, thanks for the question. I mean, when we got here 4 years ago, it was strong environment with 2 things. First, the prices of beer compared to other countries and compared to the kind of income that our consumer has in the U.S. was very cheap, coming from a price war in 2005 and '06, so we had -- we were lagging CPI big time. Second, we saw that we like the market share composition. I mean, we like the market share position of AB. We didn't like the market share composition because there was too much of value brands being sold at 30% to Bud and Bud Light. So we didn't like that. We decided to have a revenue management strategy that was to recover the real price of beer and narrow the gap between Bud, Bud Light, and the value brands. So we've been implementing that now for 4 years. The gap of value brands to Bud and Bud Light came from 30% to now 23%. That is causing, of course, that segment to shrink. But that's causing also consumers to trade up, and that's also causing our company and our marketeers and salespeople and commercial people to look up as opposed to look down. In the old days, there was a big temptation to rebalance the share equation with better brand activity, and now that door is pretty much closed and we have to do the Bud Lite Platinum, we'll have to do the Lime-a-Rita, the Shock Top, the Stella Artois to rebalance share. And that's the good news, Lauren, about this year, and that we reversed that 0.5%, 0.6% share loss per year that we had in the last 2 years to a 0.26% year-to-date, but with much better pricing, but with much better mix. And that's the exciting thing. And because we see a good pipeline for next year and good commercial plans for next year, we continue to be committed to stabilize the market share year, but with better pricing, better profitability and with better mix, which we think builds a much better future than what we saw here 4 years ago. So that's the direction we're going and that's the thing we're committed to do.

And I guess as a follow-up, then, on just the competitive environment with costs going up and you're taking this pricing, are you seeing your competitors generally follow? I mean, is it rational? And do you expect it to continue to be so if it's been year-to-date?

Well, too early to talk about this price increase. It's just some weeks ago. And the market takes some 2 to 3 months to really adjust to a new price reality. But if you look at the last 3 years, we have been able to increase our prices as per our strategy.

Your next question comes from the line of Mitch Collett with Goldman Sachs.

Revenue per hectoliter impact quarter-on-quarter of the earlier price increase was about 9%. And I think, in the statement, you say that the price increase was taken towards the back end of Q3, and I guess I thought the price increase was about 10%. So I'm just wondering how it can be a 9% impact for the quarter given that it happened late on? And then secondly, I just wondered what concessions have you had to make in order to have the excise increase come later and be smaller than was originally planned?

Well, no concessions really. What we told the government in a very healthy dialogue is that we will continue to do what we've been doing, as a sector, not only our company, but as a sector in beer and soft drinks as we've done in the past few years. And that as long as the market continues to grow and taxes has something to do as a factor of that. As long as the market continues to grow, we'll continue to invest, create jobs, and invest in the overall business for our company in the countries, so CapEx and job creation and therefore, tax collections. So that's what we told the government that we've been doing for the past 2, 3 years and that we will continue to do. And that's why we asked them not to hit the industry too hard at one time with a huge tax increase because that would have to be passed on to prices and that would break this magic cycle in which consumers are better off, they buy more beer, we invest more, we create jobs, tax collections go up, not necessarily with tax excise rate going up. So that was the -- and if you look back, for 2 years, we've been successful with that. For 2 years, we had no excise increase because the taxes were going up and the government agreed that we were in a positive cycle, investing and creating jobs, selling more, and they were collecting taxes more than the year before, which was what they wanted. So now, of course, a new government, they came with new ideas, but we're able to convince them that the postponement of some of the tax increase was a good idea because it would allow us to continue on this positive cycle that is a win-win-win for everybody: for us, for government, for consumers.

Okay. And on the price increase and how it gets to be close to 10% given it happened late on in the quarter?

You're talking about Brazil?

Yes. The quarter-on-quarter increase in revenue per hectoliter, which was about 9%, I think. Because that would suggest to me that you took the price increase relatively early in the quarter. If you did it right at the end, the revenue per hectoliter would only be a fraction of the price increase you had taken, unless there's something else I've missed.

Well, again, revenue per hectoliter in beer Brazil grew in the quarter by 18.3%, right?

Yes, year-on-year. I think...

The 9% that you're referring to is on a sequential basis. I'm talking year-to-date for the quarter, 18.3%. And that's because of 4 things -- yes, quarter-over-quarter, and that's because of 4 things: the carryover from the fourth quarter last year 2011; the price increases that we did earlier this year in the third quarter; the positive premium brands favorable mix; and the additional direct distribution. So that is what caused this 18.3% but at the same time, we're giving guidance on that for the full year, saying that it should be towards the high-single digit for the full year in terms of net revenue per hectoliter....

Which is consistent with year-to-date, right?

With the -- actually, we're saying here, it's consistent with the year-to-date and that's all.

Just so I can check up and understood. I think, yes, you said quarter-on-quarter in beer Brazil, revenue per hectoliter is up 9.7% and if you've taken roughly a 10% price increase towards the end of the quarter, let's say, for the back third, you'd get about 3% from that. So the other 6%, 7%, is that coming from mix or is there something else in there?

Well, the mix is playing our favor, but there was also some sort of price increase in the third quarter of this year and that is carrying over to the fourth quarter -- sorry, into the third quarter of this year, together with the price increase that was implemented in early September, ahead of the tax increase that was kicking in only in October. So there is one month of, let's say, new prices and old taxes that helped to drive that number as well. But I would suggest, if you'll focus on the guidance for the full year, that's going to make the math much simpler.

Your next question comes from the line of Trevor Stirling with Sanford Bernstein. Trevor Stirling - Sanford C. Bernstein & Co., LLC., Research Division: Gentlemen, the first one is, it was price mix in the U.S. accelerated quite a lot from Q2 to Q3. So I think if I'm right, from 4.4% to 5.7%, and I wonder if you could just give a little bit of color on what actually drove that sequential improvement? And the second one, looking forward 2013, there are lots of moving parts in the price in Brazil. It's backing out roughly, I guess, you're implying, Felipe, that Q4 will have about a 9% net revenue per hectoliter increase. If you look forward 2013 event, what the consumers going to see in terms of taxation, should we be looking at that as, going forward, as your net price increase, and then adding something on top for the taxation when it actually does hit later on in 2013?

Trevor, Brito here. In terms of price mix, I mean, one thing that I -- as I mentioned before, helped the 5.7% this quarter, it's 200 basis points of favorable brand mix, that in the previous quarters were more like between 100 and 150 basis points. So that's a big pickup here and that's because of all the innovations and everything we said early in the call and our high-end brand growth. The other thing that also helped explain this sequential increase from 4.4% to 5.7% is the fact that we're taking more direct distribution. And as you know, from the Brazil case, that has also an impact on the top line growth. So those 2 things, plus the general price increase, those would explain the difference. Trevor Stirling - Sanford C. Bernstein & Co., LLC., Research Division: Great. And Brazil?

I'm sorry, and Brazil? What was the question again? Sorry. Trevor Stirling - Sanford C. Bernstein & Co., LLC., Research Division: Brazil, 2013, Brito, I mean, you're backing up from -- Felipe said you're probably going to end up around 9% net revenue per hectoliter in quarter 4. Is that something we should expect to extend into 2013. So net revenue per hectoliter should be high single digits in 2013, plus something on top with taxation?

Yes, well, we do not have guidance at this stage on net revenues per hectoliters, in Brazil next year, we will continue to balance this year pricing equation, and we did only refer to volumes expectation for next year to pick up as a result of GDP growth and minimum wage increases above inflation. But at this stage, we would refrain from commenting on the pricing strategy as it has sensitivity consequences in the marketplace.

Your next question comes from the line of James Edwardes Jones with RBC.

Could you say and explain a little bit more about the distribution, increase in distribution cost in U.S. so far this year? I'm just thinking through the numbers. If you assume that Bud Lime -- Bud Light Lime-a-Rita is -- and Platinum are somewhere around 3% of your sales in North America, distribution cost around 3% of sales. And I get the point that you're doing more of your end distribution but surely, that should along with an increased gross margin as well. So I'm just struggling to reconcile the moving parts. And secondly, can you say a bit more about the reasons behind Budweiser's decline in the U.S.? What's -- you didn't mention, I think, what's happened to brand health in the press release today. I'd be very interested to know if there's been any developments to the trajectory there. And what's sort of underlying rates of increase or decline, which we should be looking for going forward?

Yes, let me take the distribution expenses question first. Basically, these line extensions and innovations, they have been more successful than we originally thought. And it's starting from a single plant production and getting to national distribution that put a lot of pressure in distribution cost over and above fuel prices and so on and so forth. So as we indicated at the beginning of the year, we were expecting this cost to go down as we expand production into other plants and optimizing the footprint as it has been the case on a -- as you take the organic growth quarter-over-quarter from the first quarter throughout the third quarter. We're going to get easier comps for the fourth quarter as we are lapsing the increase of last year. And for the full year, we have U.S. very much in line with the whole company in which distribution cost per hectoliter is expected to grow at the high single digits, which again implies easier comps for the fourth quarter in the U.S., for example.

I think, for Budweiser, I mean, I mentioned in my speech that brand health for the young, 21 to 27 consumer bracket, continues to go up. I mean, the reappraisal of the brand continues to take place, but the brand continues to decline market share-wise. Last year, we had a better result in terms of managing some of the decline. This year, the results were not as good as last year, better than the past for sure, but not as good as last year. We attribute that to the fact that our commercial guys and our retailers put a lot of focus on our innovations because they saw it was higher margin and turning and selling higher velocity. And Bud Light being, of course, the #1 brand in the country didn't suffer that much, but Budweiser did suffer a little bit because a lot of the features and displays got turned to the innovations and Budweiser lost some of that. And there are high correlations of course between features -- beer being featured and displayed and sales. I'm not saying this explains everything, but some of it is the decline that we've seen for years. We remain committed for many reasons. I mean first, is our #2 brand is among the top 3 brands in the U.S., has a very good margin, lots of roots and heritage, has a big international expansion taking place right now. And today, we understand much more about those 3 things you need to understand about the brand. I mean, what's going well, so we can do more of it. What's not going so well in terms of the market mix that we should fix or stop doing. And some of things that we need to add to the brand mix like music, that used to be part of the brand mix in the past that helped create the Budweiser iconic brand and that we lost that and now it's coming back. And all those things are shaping up. And we all know that for brands, brand health comes before market share, so that's something we are -- we continue to keep an eye on, but not there where we would like it to be. So we're not happy with that, and we'll not rest until we stabilize this brand which is a multiyear commitment. So rest assured, that's a key point for us.

Per say [ph], given that sort of rate of volume decline, is it fair to assume that -- yes, I totally accept that Budweiser still makes a very good margin, but are those margins coming down significantly?

; Well, the margin per hectoliter, no. Total margins, not significantly, but they come down as volumes down. Of course, some of that is being replaced by the high-end brands of ours and that's much higher margin than Budweiser.

Your next question comes from the line of Ian Shackleton with Nomura.

You had several questions around the higher cost to doing business in the U.S. and the message seems to be, it looks a bit better in Q4, but what I was particularly interested was looking out the next few years, and whether you do feel it would moving into a period of more investment, which will be driven by the innovations and the new products you're launching, and, as such, we should accept the EBITDA margin in the U.S. will tend to be more flattish for a few years while that investment period is underway.

No, no, no, Ian. I don't think so. I mean, I think margin expansion is the hallmark of our company, but it doesn't mean that it's every year. Even if you look at Brazil, other places, I mean, if you look at many years, that is the trend, that's what took place, but not necessarily every year. Even in Brazil, in 2010, if I'm not mistaken, margin was flat. And even in Argentina, I think last year, margin was down slightly and now it's back to growth. So I mean, some years we have a star alignment that forces margins down a little bit, like commodities, or like innovations that you want to invest behind. And some of those innovations, they're not there every year, for example, liquid innovation or brand innovation requires more money than a package innovation, okay? So depending on the mix of innovation that you have for that year, you need to invest more or less, depending on the mix. But I think margin expansion remains something that we truly believe in and work hard to get to. But it's not every year, not every quarter, but rest assured that if we're investing more this year on the market, it's because we see huge opportunity that will enable us to have that margin expansion in the future.

And just a quick follow-up on Russia. You're minus 17% in the quarter on volume. You talked about a weak industry. How much of that minus 17% is market and how much is loss share?

Yes, it's both. I mean, we lost some share and industry has been a negative territory. We -- in Russia, there are many sources for industries that's kind of hard to get one number. We think it's somewhere between mid-single digits to -- mid-single digits and the rest of the volume is pretty much market share loss, especially in the value segment and some in the core segment but growing -- we're growing share in the Premium and Super Premium segment, with Budweiser mainly, but also Stella Artois and Hoegaarden. So that's the future. I mean, you have to imagine that with what happened in Russia, in which 40% of the margin pull got -- disappeared with the tax increase and the way pricing was passed or not passed to the market and other restrictions. I mean, 40% in our estimate that the margin pull got decimated and with that, we're doing even more of what we were doing before, and that is going more radical to the mix reappraisal, talking more Premium, Super Premium, as opposed to value or even core minus, and also rightsizing our business. It's a new world in Russia and a world that we have to rightsize the portfolio and the fixed cost structure.

Your next question comes from the line of Melissa Earlam with UBS.

I have 2 questions, please. You've guided that you expect U.S. sales to wholesalers to be positive in Q4. Is this taking into account any possible negative impact from Hurricane Sandy that you see so far. Obviously, very early days to comment, but if you could just give some detail on the potential impact there. And the second question is just going back to the EBITDA margin in North America. Obviously, this has been down year-over-year in 3 of the last 4 quarters. Given everything that you're saying on the cost increases abating somewhat in Q4, could we assume that the EBITDA margin will be up year-on-year in the fourth quarter?

Well, first on the STWs, that's our guidance for next quarter. Of course, we still have very limited information on what the storm did to the system and to the retailers, even more importantly, because they're the ones selling beer at the end. But at this point, that's what we confirm, that STWs will grow in the fourth quarter, and STWs and STRs will closely align by the end of the year for the full year. Your second question on margins, I answered that margin expansion will continue to be a focus for us. We believe that doing more with less and be more efficient is always something that you have room to find more. But that's not every year, not every quarter, not even in Brazil that we've been doing that for 20 years, so don't expect that for the U.S. every quarter, every year, but that's the general direction. And if you look at what happened this year, a lot of the margin contraction in these last 2 quarters, second and third, has been a lot due to distribution expenses being way higher than normal when -- and we explained that because of the innovations, I mean, to crisscross the country with the innovations that were more successful. And also sales and marketing expenses, some of that is phasing, some of that is just because we saw some opportunities to open 2 huge avenues in our business, which we think is Bud Lite Platinum in terms of concept, and Lime-a-Rita again in terms of concept, something that brings 40% of its volume from outside of beer. So we think those are 2 opportunities we couldn't pass and, as a company, whenever we see something good, we're not shy of putting money and resources behind that, so that's what we did. In Brazil, if you remember 2010, as we were expanding the 1-liter bottle, we also did lots of investments more than normal because we saw the opportunity to jump ahead of our competitors and that brought margins to flat that year. And after that was gone, we went back to the path of increasing EBITDA margins. So that's how the company works and how we think about the business.

Yes, Melissa, if I may add to what Brito said, I would like to call you attention to the fact that in the fourth quarter 2011, admin expenses was abnormally low as a result of bonus reversal and so on and so forth, which is going to cause the comparison in the fourth quarter 2012 to be more challenging from all different angles being organic growth, as well as margin expansion equation.

Let me add. General direction is margin expansion. We're doing it the right way, so it's sustainable. It doesn't mean it's going to be every quarter, every year, as you can see now in other countries where we've been doing this for 20 years.

Your final question comes from the line of Pablo Zuanic with Liberum Capital.

Look, Brito, if I may, 3 questions. One, can you go back to the discussion about anchor distributors and alignment? The reason I asked that is that we keep reading about distributors taking on other peoples' craft brands. You had some problems with execution on Budweiser that maybe I would blame on the system not being so aligned. So talk about what's really going on and what leverage do you really have at the end of the day. And if you can comment on metrics, on how the system has consolidated over time using 80-20 rule. That's the first question. And the second question, I'm trying to understand the mathematics or the accretion of direct distribution in the U.S. system. And the reason I asked that, if I thought not just on the organic, increasing direct distribution, but on the reported increase, which is more than 60%, close to 80% of that increase is coming from what you call scope, and I assume a good chunk of that is the fact that you're buying distributors. On my math, that will imply your direct distribution in the U.S. went up from 10% to 15%. But the big picture is that a gross margin of 190 bps, marketing is up only 60 bps, but distribution is up 300 bps and I cannot believe that, that's just Lime-a-Rita. It has to be the fact that you're buying direct distribution, but apparently, it's not being accretive to margins. If you can comment on those 2 things, please.

Pablo, Felipe here. The scope adjustment in our reporting line here is due to the change in the way we charge for the freight, and that is moving from cost of sales into the distribution expenses. Potential acquisition in terms of wholesalers, we do not treat as a scope, the same way we do not treat as a scope in Brazil, but we use that as part of the explanation if the number ends up being relevant. To your first question, and for wholesalers...

Yes, to the first question, I mean, Pablo, I mean, a year ago, in November, to be precise, we told the wholesalers in the convention what we expected going forward. And we introduced this idea of anchor wholesalers, the ones that would grow and the consolidation gain going forward, by the way that we support, as long as it's a natural consolidation. And we said that they had to have a couple of things. First, they had to have the track record to be able to expand. I mean, we needed to see that they were able with the operations they have in hand today to do a good job. Second, you would have to have people to send to this new operation, so people pipeline was something we'd look at. Third, you would have to have the financial means not to be overly stretched in terms of leverage as they acquire new companies. And fourth and more importantly, they would have to be aligned with us. And that's what gets to your question. Alignment is all about -- it's a whole bunch of things, but also about share of mind, heart and guts in terms of our portfolio in our market programs. You have to remember that in our system today, close to 95% of the volume being sold through the system is our brands. Very different from our competitors. And we think that's a very important thing to provide alignment. And the idea of alignment is to get this number to remain at where it is or even higher, which is a more challenging than to do. But what we tell our wholesalers now is that we have a very competitive portfolio, talk about craft, we have crafts. You talk about all the other segments. You talk about…

That was our final question. And now, I'd like to turn floor back over to Carlos Brito for any additional or closing remarks.

Well, thank you very much. We have a solid quarter. I mean, the U.S., industry is positive, price is positive, share, trending to a much better place with the help of the top 2 innovations in the beer industry this year. In Brazil, industry positive, not as positive as we thought, given the price increases, but prices has to be taken because of the excise taxes but to better balance as we said between industry or our volumes and pricing and share. In China, we remain very confident. This quarter was heavily impacted by, in our footprint, by very extreme weather in China, typhoons and things of that sort. But our Focus Brands are growing nicely, double digits, and our mix continues to trend the right way and share continues to grow. So very exciting news. And thank you very much for your time and see you next quarter. All the best. Have a nice day.

Thank you. This does conclude today's teleconference and webcast. Please disconnect your lines at this time, and have a wonderful day.