Good morning, everyone, and welcome to Coca-Cola FEMSA's First Quarter 2013 Earnings Conference Call. As a reminder, this conference is being recorded. [Operator Instructions] During this conference call, management may discuss certain forward-looking statements concerning Coca-Cola FEMSA's future performance and should be 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 may materially impact the company's actual performance. At this time, I would now turn the conference over to Mr. Héctor Treviño, Coca-Cola FEMSA's Chief Financial Officer. Please go ahead, Mr. Treviño. Héctor Treviño Gutiérrez: Good morning, everyone. Thank you for joining us today. First, I'd like to apologize since we had some technical difficulties with the conference system, but we are here to start. Sorry for the delay. In the case of tough weather conditions, fewer selling days across most of our markets and the highest currency volatility we have seen in many quarters resulting from the depreciation of the Venezuelan bolivar from 4.30 to 6.30 and the depreciation of currencies in Argentina by 17% and Brazil by 11% combined with the stronger Mexican peso, appreciating 4%, our operators delivered currency-neutral double-digit top and bottom line growth. During the first quarter of 2013, we continue to integrate the results of Grupo FOQUE in our Mexican operations, and Grupos Tampico and Grupo CIMSA's results are now fully comparable. Their performance, coupled with the synergies that we have achieved from their integration, contribute positively to our Mexico and Central America division and our consolidated results. Our company's results reflected the balanced geographic footprint of our operations across Latin America, our operators' skillful market execution and their ability to identify and capture both pricing and volume opportunities through different…

[Operator Instructions] The first question comes from Lauren Torres.

Actually, I have 2 questions, one on volume and one on margin. Just somewhat curious to hear more about the sparkling beverage category. You reported flat, I guess that's comparable volumes for both regions. And I know you spoke about bad weather and the less selling days, I guess, in the quarter. Just curious to get your impression, other than those items, if that category is showing a slowdown, particularly in Mexico? And then secondly, on the margin side of the business, I think you were guiding for this year to hit basically flat margins for the total company, but seeing some steep weakness in South America, I was just curious if you could talk about the ability to actually deliver that for the full year, and how do you plan to do that? Héctor Treviño Gutiérrez: Let me start first with the volume question. I think that in general, we have seen some weaknesses on the volume maybe as a result of what I mentioned, the weather, but especially the fewer selling days. That has to do with the Easter holiday that last year happened in April and this year, it was during March. And the fact that last year we have -- it was a leap year and we had 1 extra working day. When you start looking at what we use in the industry when you compared the average daily sales, which is a measure that we track internally, the numbers look fine, obviously with the still beverages growing faster and water growing faster than CSDs. But we still see healthy growth in our CSDs volumes. Probably the only exception to this is Brazil, where obviously, we were impacted by the fewer days and the weather also, but we are seeing some trends that will point towards…

Okay. That's really helpful. Just one quick follow-up on Brazil. You mentioned the weaker consumer, but are there newer increased competitive pressures that are weighing on your volume, or that's not -- that wasn't a particularly new impact to the first quarter? Héctor Treviño Gutiérrez: I think that it's worth mentioning and then -- another some of your companies, especially our competitors, have not reported, but there is additional pressure, and let me explain why. There is now, in São Paulo and some of the large cities, a very tough law with respect to drinking and driving that has made an important dent on the consumption of beverages, especially for beers. And obviously, for us, on-premise volumes have also decreased because fewer people are attending bars and that kind of beverage consumption at night because -- it is called the zero tolerance alcohol consumption, and it's really -- what I understand is that even with drinking 1 beer, if you're driving, you're in trouble, as opposed to other countries where there's a probably a more flexible, if I may use that word, level of alcohol in the blood levels. That has put a lot of pressure on the beer companies. Our beer volumes are -- Heineken volumes that we saw were also affected by that. And that has created a little bit more pressure on the CSD front, because the competitors are also looking to recuperate part operate of that, I guess, volume being lost in beer. So we are seeing a little more competitive pressure there, but I don't think that it's something to worry about at this point.

The next question in the queue comes from Antonio Gonzalez. Antonio Gonzalez - Crédit Suisse AG, Research Division: I wanted to ask couple of questions as well. First, are there any preliminary comments that you can make on the talks that appear to be now very frequent in Mexico about the possibility of excise taxes? I guess this is a sensitive subject, so I understand if there's limited information that you can share, but I wanted to ask specifically whether you think the industry's participating as they always have, both Coke and Pepsi bottlers, with authorities or whether you maybe can comment on if you had a sense that the industry's not being so active maybe as we saw in some other reforms that were recently approved, the telecom reform in Mexico, for instance, in which industry participants were very explicitly mentioning that they were not part of the negotiations. So I just wanted to have a sense on whether you can make some comments on that, Hector? And then I'll have a follow-up question, but I'll make it later. Héctor Treviño Gutiérrez: There is an important point here with respect to all these issues about obesity and et cetera. I think that we have been doing very important efforts to better communicate those issues to the consumer, and obviously, to Congress in Mexico, which is the area you're referring specifically. There were a lot of comments during the past -- at the end of last year that's when they passed the new laws for -- new fiscal laws for 2013. And at the end of the day, the decision was that, that there was no on excise tax on soft drinks. So our understanding so far is that next time we'll confront that is next September, when they start…

The next question in the queue comes from Lore Serra.

I wanted to just ask a little bit about Venezuela and then a little bit on Brazil. In Venezuela, could you give us a sense of your ability to get raw materials at the official exchange rate and kind of how you see that playing out over the next 6 to 12 months? Do you see any kind of risk to being able to maintain your margins in that country? And then I guess in Brazil, and maybe this is a question more generalized, but you've taken a lot of pricing in South America, and I guess with some systemic inflationary pressures, you might need some more pricing. And I'm just wondering, it sounds like when you're talking about Brazil, and I'm not sure if it's the consumer or the competitive environment, but you're sort of suggesting that the pricing environment isn't as good as it's been. So I wonder if you could sort of talk to those 2 points, please. Héctor Treviño Gutiérrez: Let me start with Venezuela. First of all, we have in place what is called a certificate of nonlocal production in Venezuela so that we can have access to the official exchange rate, which is now 6.3%. And so far for this quarter, around 98% of our applications for this have been accepted, and the dollars have been supplied at the official -- at the 6.3% exchange rate. So in that front, we feel very confident because we have all of our paperwork in order to get the certificate and to continue going in that direction. I think that -- and that had been the case, basically, in Venezuela for most of the 2 or 3 last years. In general, I don't recall a specific case where we are being denied a specific raw material authorization.…

Ladies and gentlemen, I do apologize for the lost connection. Please stay connected to the call, and the speaker will join shortly. [Technical Difficulty] Héctor Treviño Gutiérrez: Yes, I know that Alan was going to do a -- make a question, but I don't -- I didn't listen anything. I don't know if you're there, Alan, if you... Alan Alanis - JP Morgan Chase & Co, Research Division: Yes, I didn't -- Hector, I couldn't listen, but I was given the next spot. Sorry about that. Let me ask you a question regarding Mexico. I mean, that -- what you've said about Brazil is very useful. But going back to Mexico, a couple of questions there, I mean, you're seeing -- you're sort of like declining carbonated soft drinks in the first quarter, correct, Hector? What do you see as -- and you explains the reason for that. What do you see as outlook for the remaining of the year in the -- and if volumes remain weak, would you be -- what you're thinking regarding taking further pricing over the 3%, 4% that you've taken year-over-year in Mexico. That would be my first question. And my second question has to do with just -- if you could remind us, Hector, how do we reconcile the numbers that The Coca-Cola Company reports? I think they said around 3% volumes up in LatAm and pretty, I guess, much stronger volumes in Mexico and in Brazil than the ones that you and Andina have reported so far. So if you could remind us how to reconcile that, that would be useful, please. Héctor Treviño Gutiérrez: Let me start with Mexico, and I think that in general, I think that the trends that we're seeing in Mexico are very positive. I think that…

The next question in the queue comes from Luca Cipiccia.

I was hoping to add just a follow-up on Brazil on your earlier comment about a shift away from traditional channel and whether this, on your view, is more related to the dynamics that you commented on already, the changing drinking law, increased competition? Or going forward, do you see that more as a bit of a gradual structural shift? And if so, how does that may affect the investment, the strategies that you were trying to implement in Brazil. I understand that this year, you were going to put some effort in strengthening the traditional channel? And in general, if you could comment more on the outlook for Brazil in -- from a channel perspective, that would be great. Héctor Treviño Gutiérrez: Yes, I think that in general, what we are seeing is that the single-serve presentation -- that we are seeing a transfer from single-serve to multi-serve is also, in a way, fostering this change in the channels because a lot of the single-serve consumption is done in the traditional trade, more as an impulse consumption, on-the-go consumption, as we said, with your work industry or buy a single-serve presentation of Coca-Cola to drink on the street. By schedule, I believe that that's a strength. And I think that the pricing equation that we have on 2.5 liters and 3 liter, 1-way packages that serves a lot in supermarkets and those categories are growing is more related to this trend of the supermarkets gaining in importance. As I mentioned, one of the strategies that John Santa María and his team has presented to us is how to reconnect the consumer to the traditional store with single-serve presentation with market price points, and that's some of the efforts that we'll be doing. I think that right now, this strength has to do most with the pricing architecture of single-serve as with multi-serve rather than a trend that we need to -- than a trend that has to do with the channels.

But is it safe to assume that the greater competition or competitive pressure that you felt in this quarter was more on the traditional channel? And the question would be if you think that is sustainable going forward? Do you think you will have to rebalance, it was just a method of your competitor trying to compensate maybe what they were losing with beer, with soft drinks? How do you see that playing out? Héctor Treviño Gutiérrez: Yes, it's difficult to -- I mean, I know that the on-premise consumption in bars and restaurants, we were down the same as our competitors. I think that the competitive pressure is both in traditional trades and supermarkets to recapture part of the profitability that they might have been lost, losing on beer. Similar to Mexico, we have a few basis points with option on shares that is not -- nothing to worry so far. And I think that similar to Mexico, we are gaining in isotonics and juices and losing a little bit of market shares from very high numbers in CSDs. So I think -- I don't think that the pressure on competition is focused on the traditional trade and that while we are moving more towards the other channels. It's just that it is more the relative pricing of our own approach that is, in my opinion, creating some of these transfers between channels. And as I mentioned, the team is going to be working on reversing those trends with single-serves. Héctor Treviño Gutiérrez: Operator, do we have an additional question on the line?

Alex Robarts.

I had 2 questions, on Colombia and then Philippines, please. Just looking at the Colombian business, it's the highest-margin operation in South America, and you've given us some good indications about how that kind of pricing reset initiative has been going on in the country. And just was curious to see about any updates that you could pass to us. I mean, just thinking about also the tax reform that's come into play this year to the extent that, that's had an impact either way on demand for your products. You've told us that 200 basis points might be the magnitude of margin contraction this year. I'm just wondering if, if you're still feeling comfortable with that kind of guidance and if Postobón Group have kind of been responding to some of your per capita initiatives there. The other question really is just on the Philippines. And I appreciate it, the magnitude here of the equity income is small, but just looking at the press release, I mean this PHP 210,000, I mean, which -- it seems to be related to negative equity income from the Philippines. Is that a safe assumption? Is that roughly the extent of your 51% of the net loss? And just kind of on a CapEx issue there, you've kind of been saying that you feel like the operation over there will make itself whole and internal cash flow will fund CapEx. Might that change, and would you have to, at some point during the year, draw down from comp resources to finance any CapEx? Héctor Treviño Gutiérrez: Let me start with Colombia. Colombia, as we mentioned, we are -- we embarked in this plan to try to foster consumption per capita. That basically implied having presentations that are more affordable to the consumer. In…

The next question in the queue comes from Alex Miguel. Alexandre Miguel - Itaú Corretora de Valores S.A., Research Division: Can you hear me now, Hector? Héctor Treviño Gutiérrez: Yes, sorry. Alexandre Miguel - Itaú Corretora de Valores S.A., Research Division: Okay, now my question is related to the margin at trend in South America. Should we expect that continuing year-over-year decline in EBITDA margins in South America, like, in the sense that -- how do you plan to deal with these pressures from freight, labor and marketing going forward? If you plan to be more aggressive in pricing, because what I understood, some of the issues tried to continue in Brazil, maybe somewhat with the price freeze in Argentina, so if we should -- do expect for the whole year like a margin contraction in South America around these levels? And if so, if you plan to compensate maybe that with Mexico? Héctor Treviño Gutiérrez: Alex, I think that in general, as I explained the Colombian -- what we call the Colombian plan that calls for a slightly lower profitability this year because of this idea to foster consumption per capita. And precisely the points that you're mentioning, the Brazilian situation that we explained in previous questions and the fact that we have not been able to increase prices in Argentina at the pace that we were anticipating. We are, we were suffering a little bit on the margin this quarter. My expectation is similar to what we commented in the previous quarter, to expect a flattish-to-negative -- excuse me, flattish towards small compressing in margin for South America, and I am still with that estimate. I don't see a missing field to change our estimates for the year and that -- these are the issues. It's the Colombian…

At this time, we have no further questions. I would now like to turn the call over to Héctor Trevino. Héctor Treviño Gutiérrez: Okay, thank you, all, for your interest in our company. As always, Jose and his team are able to answer remaining questions. I know this has been a complicated quarter to explain, with all the currency volatility that we experienced, and you maybe have a lot of questions on that front, but we would be glad to answer to all of our capacity any questions that you might have. Thank you.

Thank you. Ladies and gentlemen, this concludes your conference call for today. Thank you for joining us. You may now disconnect your lines. Enjoy the rest of your day.