Good morning, and welcome, everyone, to FEMSA's Fourth Quarter Earnings Results Conference call. [Operator Instructions] During this conference call, management may discuss certain forward-looking statements concerning FEMSA's future performance and should considered as good faith estimates made by the company. These forward-looking statements reflect management's expectations and are based upon currently available data. Actual results are subject to future events and uncertainties, which can materially impact the company's actual performance. At this time, I will now turn the conference over to Javier Astaburuaga, FEMSA's CFO. Please go ahead, sir. Javier Gerardo Astaburuaga Sanjinés: Thank you. Thank you, and good morning, everyone. Welcome to FEMSA's Fourth Quarter 2012 Results Conference Call. Juan Fonseca and José Castro are with us today, as always. As is usually the case, during this call we will focus on the consolidated figures for FEMSA and on FEMSA Comercio's results since many of you probably have the chance to participate in Coca-Cola FEMSA's conference call yesterday. As you have also likely had the chance to go over our detailed results, we will take this opportunity to focus on the highlights and main trends in our business. As we mentioned in our press release, during the fourth quarter, we saw both of our core operations performed very well, wrapping up a solid 2012. Our Coca-Cola FEMSA experienced some margin pressure earlier in the year. In the second half, we were able to capitalize on stable volumes, solid pricing and improving raw materials on foreign exchange dynamics that finally, led to achieve double-digit operating income growth not only including new territories but organically as well. For its part, FEMSA Comercio delivered on the expectations of surpassing 1,000 net new stores and also posted double-digit operating income growth on the back of balanced same-store sales dynamics and a consistent level…

[Operator Instructions] And we'll take our first question from Bob Ford with Merrill Lynch.

I had a burning desire to ask about the sharp decline in other amortizations as well as the increase in other liabilities. But maybe I should just restrict myself to something that's bigger, and that is when you look at small-box opportunities to grow in Mexico, what attributes are you looking for and where would you place limits on the range of concepts that you guys are currently evaluating? Javier Gerardo Astaburuaga Sanjinés: Sure, Bob. Thanks for focusing on the second question. I'm sure Juan will follow up on a separate phone call on your -- the first question. But on this topic, maybe what I can convey is this, let's say, criteria that we have been using in -- when we are analyzing and exploring opportunities is we're really -- the starting point is really having a good assessment, both in the skill set, both the FEMSA Comercio organization, which is I would say the strengths are pretty much, I would say, based on a company which is managed through processes, procedures, synchronization of the operations is key. But I would say that the founding base of the business is pretty much a very strong culture of collaboration and frank openness in discussing issues and collaborating as well in terms of, again, creating a very, very powerful business. And when you think about small-box format, you can find things which are closer to those kind of -- the capabilities and some models, which are, I would say, a little bit farther away. So for example, even though regulatory environment is quite different on drugstores and even, I would say, the management of warehousing and logistics is also quite different from the managing the kind of warehouses we do to manage the convenience stores, we found that there's a lot…

And just to get a sense of where you see the opportunity with prepared food or fast-food or whatever you want to call it, can you give us a sense of how -- what the dimension of that market is today in Mexico? Javier Gerardo Astaburuaga Sanjinés: Well, if you look at the informal market, it's huge. And if you look at the way the, I would say, maybe the all-in multi-vineyard company in Mexico that operates, which is representing brands from companies basically in the U.S., it's maybe the only example of an organized company, which is trying to tap this opportunity. So the informal market is huge. The existing players are small. So we think the opportunity is there.

And if I understand you correctly, you're looking at something that maybe bridges the price points between those 2 offerings with much better food safety and consistency, is that correct? Javier Gerardo Astaburuaga Sanjinés: Yes, I think if you look at the offerings from, again, this player that I mentioned, you will find very different offerings with, I mean, average ticket, which ranges very wide from maybe 4, 5 to all the way to 15. So we're looking at targets that play more on the what I should call the fast-food offering as opposed to the fast casual dining offering, and we'll take it from there, Bob.

And we'll now take our next question from Alan Alanis with JPMorgan. Alan Alanis - JP Morgan Chase & Co, Research Division: My question has to do with the cash of FEMSA. I want to understand a little bit more your thinking, Javier, regarding dividends and keeping more cash on the balance sheet and so on. If I'm reading the numbers correctly, I mean, you reduced the percentage of net income that you paid this year versus the previous one to around 32% of net income. We know it's a big increase in absolute terms. So my first question is, most of the increase in dividend seems to be coming from OXXO. Should we relate any of this increase in dividend payout from OXXO because of an issue of finding places to deploy capital? That will be the first question for OXXO. And second, if that is the case -- or if that could be the case, you're still remaining, if I'm running the numbers correctly here, with more than $800 million, almost $900 million of net cash at the FEMSA level, excluding Coca-Cola FEMSA, post-paying the dividends. So you're keeping a big amount of cash still. What's your thinking in terms of how that cash should be used and how will it evolve? Those will be the 2 questions, Javier, please. Javier Gerardo Astaburuaga Sanjinés: Thank you, Alan. Good to talk you as well. On the first one, as I mentioned in my opening remarks, we tend to look first on the dividend payment from FEMSA as a combination of basically a pass-through of the dividends we get from Coca-Cola FEMSA Heineken and then a proportion of the, let's say, excess cash generated by FEMSA Comercio. And we'll use -- we use a number of metrics to determine what's…

And we'll now take our next question from Karla Miranda with GBM.

And I had a couple of questions regarding OXXO. I was wondering if you can comment a little bit on the expansion in South America, if you are seeing more opportunities in there and if you have expanded the number of stores in Columbia? And moving back to Mexico in the previous question you answer that you were looking for fast food operators to speed up the process. Would you -- would this mean that you could be increasing the average size of each store in order to include, I don't know, some seating space to eat in the store? Javier Gerardo Astaburuaga Sanjinés: Sure, Karla. On the first one, we actually have 34 stores in Colombia, and we opened roughly 10, 11 this year, and we feel good that this, I would say, a reasonable amount of stores to still be able to keep on twisting the value proposition. What you might expect in 2013 is maybe a similar or lower number of stores even for 2013, in which we have an important list of initiatives in order to test some ideas to keep improving the value proposition. So we are still at a stage that we signed when we entered Colombia 3, 4 years ago and we have said that it would take time for us to develop the value proposition that could work in Colombia. So that's pretty much what we're doing there for the year. And, yes, we are looking at some opportunities in other places in South America. I wouldn't like to single out any specific country but we're not only analyzing again retail landscape as a whole or specific format offerings, but we're also looking at specific opportunities in some places, again, in a cautious and moderate way. And we have said this in…

And we'll take our next question from Lore Serra with Morgan Stanley.

I guess I wanted to ask 2 questions, maybe actually it's 3. The first is just you've set out this medium-term guidance of OXXO growing about 1,100 stores, having sort of 20 to 30 basis points margin a year. As you start the year, you have a couple of things in place like the fast food initiative or the prepared-food initiative. Do you see this as a, I don't know, typical year OXXO? Or is there a reason to think it's going to be above or below sort of those medium-term guidelines you set out? And then on a longer-term basis, I guess, here's where the 2 questions are, I mean, you bought the southeast chain, is the first time you bought something on the retail side. And I'm curious as you've sort of been there now a couple of months, any initial learnings on the pros and cons of kind of that kind of an acquisition? And then sort of related to that, as you invest more in the sort of small-box space, how deep is the bench in OXXO? And how do you make sure that OXXO kind of does their day job while you get these other initiatives built around it? So I guess, that's 3 questions, but I'd really love your insight on those. Javier Gerardo Astaburuaga Sanjinés: Sure, Lore. First on the medium-term guidance, we still feel comfortable for a number of years, at least 3 to 5, of being able to open above 1,000, maybe 1,100 or a little bit more, a little bit less. But we feel comfortable with the machines we have put in place to really open those stores but not open them, but really opening them with high quality in terms of the batting average that we measure, the accuracy…

And we'll take our next question from Armando Perez from Credit Suisse. Antonio Gonzalez - Crédit Suisse AG, Research Division: This is Antonio Gonzalez, and I'm here with Armando as well. I just wanted to ask you if you could revisit a little bit for us the topic of uses of cash ahead of the expiry or the first expiry of the lockup with respect to your stake in Heineken. I know you can't cover some sort of limited disclosure with the market for obvious reasons with respect to the specific April 2013 date, but maybe more broadly speaking one of the options that has been explored in connection with this expiry of the lockup or at any other point in time, is the opportunity to increase your stake in Coke FEMSA. And I wanted to hear what were your latest thoughts about it. We've heard from a bunch of bottlers actually, not exclusively from Coke FEMSA, but given the valuations of publicly-traded Coke Bottlers, they are probably willing to do acquisitions that are a little bit more expensive than they were in the past. And I just wondered what does that mean for FEMSA and FEMSA's intentions to acquire Bottlers, it's own bottler in this case. Is there a threshold above which you wouldn't be willing to go? Are there any kind of parameters or more qualitative thoughts maybe that you can share on that respect? And again, more generally speaking, can we revisit that topic of uses of cash? Javier Gerardo Astaburuaga Sanjinés: Maybe I can start by repeating what I've said, which is we're very happy with the performance of Heineken for the past 3 years as we made the transaction. That includes our Mexican business, which we keep on taking a close look and enjoying what's…

And we'll take our next question from Lauren Torres with HSBC.

My question is broadly a follow-up on the margin expansion question earlier. Coke FEMSA is guiding to basically stable margins this year, a modest improvement at OXXO. Javier, maybe you could talk a little bit more about the initiatives? I was just wondering if it's kind of more of the same. I know you've talked about the prepared foods. But just curious as there are more initiatives then what we've heard about to help drive this improvement, or is it just continued to do that expansion at the convenience store level. I'm just thinking of this relative to how margins maybe could get a bit more pressured on the soft drink on the bottling side, and if we see further opportunities to kind of get that expansion on the OXXO side. Javier Gerardo Astaburuaga Sanjinés: I think Hector was clear yesterday of the challenges we have both macro economically in some countries in South America and some market strategies that we're putting in place to really drive volume as it should in some [indiscernible] Colombia. And I would say that is pretty much explaining some of the challenges we're going to have particularly in Coca-Cola FEMSA in South America next year -- I mean, this year. In OXXO, I feel comfortable about the perspectives for the year. The number of initiatives which are a large number of them, again, being able to deploy them in a very, very fast way all across 10,000 stores is not an easy thing to do. So again margin expansion is more a function on short term of being even more effective and efficient in managing the levers that we have built already into the critical mass of the business, that is the 10,000 stores. So the initiatives that we're working on tend to have a much important role, medium to long term, in driving again the growth of underdeveloped categories. And in the short term, it's all about how you deal with market dynamics. And of course, if there's a benign environment for growth, employment, salary increases, stability in Mexico, even optimism from the consumer point of view, the categories and the places we serve are benefited by that kind of environment. So we feel good about the guidance we've been giving you today and -- but I don't think, again -- hopefully, there are surprises on the upside on both businesses at the end of 2013, but we feel good about the plan. And what we'll do is put up a challenging but achievable plan in front of our board and the overall demand that precisely from us. So I feel that we are on the right track. But in the short term, I think, that both Hector Trevino's comments yesterday and mine are, I would say, a good directionally guidance that you can take from us.

Okay, that's clear. And if you could also just clarify, I'm not sure you were giving somewhat medium-term guidance on same-store sales growth. Obviously, we've seen maybe better growth than you were expecting initially and going forward -- I'm not sure if you mentioned low or mid single-digit growth coming from same-store sales. Is that more at the low or mid-end? I'm just trying to get a sense of how you're gauging the consumer for the next year or 2? Javier Gerardo Astaburuaga Sanjinés: Mid-single digits is the right thing to think about this, considering the levels of inflation in Mexico. And of course, bringing more people into the store and making them buy a little bit more and still being careful about the price positioning that OXXO has built in the most important categories is key for us. So that's pretty much a balancing act going forward. And of course, the higher you raise the bar, the more difficult it's going to be to match it or to surpass it. But I would say medium term, we feel comfortable about mid-single digits, Lauren.

Okay. And then if I could just finally ask, as you bring up the affordability and the pricing at OXXOs, obviously, you're doing well with higher-margin brands. But are there opportunities just on the pricing front or you just want to stay the course on keeping that affordability at OXXOs? Javier Gerardo Astaburuaga Sanjinés: Well, I think the nature of the consumer needs we are satisfying are pretty aligned with the pricing architecture we have built in relation with both modern box and modern trade, and we feel very good about that. We think we are on the right or sweet spot, if you want to call it that way, in terms of maximizing revenues both at the same time maximizing traffic into the store.

And we'll now take our next question from Alex Robarts with Citi.

I want to go back to some of the block and tackle issues here with OXXO over the more shorter term. You've talked in the past about your services, both in banking and in telecommunications and such. Can you give us an update on how that services component of the OXXO business is growing and some of the initiatives there? Secondly, the pace of the new store openings was quite unusual last year, 40% coming in the fourth quarter. And I think earlier last year, you talked a little bit about some communication or coordination issues of why it kind of got back ended. How do you think about the pace of the rollout this year? That would be the second. And then, I guess, also from a geographical standpoint, it seemed to me that there was a lot of kind of more accelerating growth in the central part of the country, partly reflecting kind of lower base and more penetration opportunities. If you could talk a little bit about how you look at this year in terms of the geographical opportunities within the country. So those kind of relate to the block and tackle stuff. And I guess my question on the use of capital or use of cash is that how do you think about, and I know it's very early days, but how will you go about from your perspective of taking out the Coca-Cola stake in the Philippines? I mean, there's been a few comments about that from past calls, but it'd be great if you could maybe share a little bit of the thinking from your side. Javier Gerardo Astaburuaga Sanjinés: First, on the new initiatives related to services, we continue the effort of rolling out particularly with financial institutions. We have already rolled out…

And we'll now take our last question from Alexandre Miguel with Itaú BBA. Alexandre Miguel - Itaú Corretora de Valores S.A., Research Division: My first question is related to the mix, the different mix between traffic growth and average ticket growth that you report in the fourth quarter. So if you can explain a bit more what happened in the fourth quarter versus the other quarters last year, and if you expect that to be a trend now going forward in 2013. And also related to that, as you mentioned that KOF, they told us some challenges they would probably face next year. So if you can share with us in Mexico for OXXO maybe what you see as the most challenges that you might face in 2013 maybe that could prevent you to repeat the strong same-store sales performance you did in 2012. That will be my first question. And my second question will be regarding extension in Lactam [ph]. Anything that you can share in terms of region or segments that looks more compelling for you guys and in terms of growth and also profitability, so we'll have a more idea of maybe flotation next month that you'll be doing there? Javier Gerardo Astaburuaga Sanjinés: Sure, Alexandre. I'll take the first one, and I'll let Juan answer the second one because he's been so quiet for the whole conference call. On the first one, if you look at our trends, and by trend, I mean, at least looking at the whole 2012, the growth in traffic and ticket was, I would say, pretty balanced. The fourth quarter was slightly higher. The equation biased into ticket as opposed to traffic, but we're looking at very, very healthy traffic figures. And we tend to believe, as I've said that, some of these improvements in traffic have a lot to do with sometimes the timing of some of the initiatives being rolled out and sometimes actually what gels with things such as weather and the likes as well. We still believe that going forward, we have a number of opportunities to keep on building the traffic in a significant way. Growing traffic on the low single digits is, I think, a success looking at -- to what's going on in some other retail formats across the board. So going forward, we are still thinking of a very balanced breakdown of same-store sales between traffic and ticket. 2012 ended basically half on half. I wouldn't dare to say or give you a forecast of what it's going to be in 2013. We can go a little bit on the upside of 1 of the 2 variables or in the downside. But all in all, we feel good about this single mid-digit same-store sales number for the full year. So that will be my comment on the first question, Alex.

Alex, this is Juan. I think on your other 2 questions. First in terms of challenges, I mean, obviously, there's always the challenges that have to do with your blocking and tackling, right, and your daily activities. You always have competitors that are trying to kind of encroach in your market, and you have to be very nimble and very good about how you manage your pricing and your categories. But I guess, we can also think about some of the external factor that might represent challenges. We have to be prepared. And as you know, maybe we have even discussed in the past, this whole expectation of reforms taking place in Mexico, what's going to happen on the fiscal reform in terms of VAT application, does that change, does that increase to food and medicines, what would this mean not just for OXXO. And as I said before, OXXO -- about 2/3 of what OXXO sells already are subject to VAT. So it would really be about 1/3 of our products that would be now subject to VAT, assuming that were to happen. But perhaps more importantly, what would this do to the overall disposable income of the consumer and how would we adjust our own strategies to accommodate a consumer that might be, I guess, a little bit tighter on the purse strings. So obviously, there is plenty of historical information of OXXO are navigating through recessionary environments, periods where people are more on a savings mode. Obviously, we're fortunate not to play in a very discretionary consumption space so people do tend to defer or not make purchases of larger ticket items, not necessarily the type of things that you buy at OXXO. So we feel pretty good about our ability to navigate those waters. But in terms of challenges, if you're going to push us to talk about some of those, those are some that come to mind. Finally, in terms of your question on segments kind of in terms of the retail expansion outside of Mexico, I think, you should think of the same comments that we've made in terms of small boxes that would leverage the skill such as drugstores or such as quick service restaurants. I think those, too, apply not just to Mexico but beyond Mexico. I guess you could sort of think it in terms of a bit of a matrix, always the end mode is always something we said before at some point in the analysis, we look at drugstores in Brazil. Obviously, that's an industry that's already in a bit of a consolidation mode, and some of the big transactions have perhaps already happened. So I don't necessarily think we would go to Brazil with drugstores. But more kind of broadly speaking, you should not discount the possibility that we would look at either drugstores or restaurants in other markets. So that would be, I think, my answer.

Ladies and gentlemen, that is all the time that we have for questions today. I will now turn the conference back to Mr. Astaburuaga for posing additional remarks. Javier Gerardo Astaburuaga Sanjinés: No more additional remarks, just saying goodbye and thank you, everyone. Bye now.

And ladies and gentlemen, if you wish to replay the webcast for this call, you may do so at FEMSA's Investor Relations website. This concludes our conference for today. Thank you for your participation, and have a nice day. All parties may now disconnect.