Good morning, everyone, and welcome to Coca-Cola FEMSA Third Quarter 2013 Earnings Conference Call. As a reminder, today's conference is being recorded and all participants are in a listen only mode. (Operator Instructions) (Operator Instructions) During this conference call, management may discuss certain forward-looking statements concerning Coca-Cola FEMSA's future performance that 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 can materially impact the company's actual performance. At this time, I would like to turn the conference over to Mr. Hector Trevino, Coca-Cola FEMSA's Chief Financial Officer. Please go ahead, Mr. Trevino. Hector Treviño: Good morning everyone, and thank you for joining us today. As we continue to face a tough consumer environment mainly in Mexico and Brazil, our operators adapt our wide portfolio of beverage to enable our company to capture different consumption occasions and satisfy our consumers’ demand while capitalizing on the reality of our geographically diversified portfolio franchise territories. Together with our refined presently [ph] management capabilities, these portfolio initiatives allow us to achieve organic currency neutral revenue growth of 15% during the quarter. Our reported consolidated total revenues, which close to 38 billion Mexican pesos in the third quarter, including the non-comparable effect of the results from Grupo Yoli, whose operations were integrated into our Mexican franchise in June of this year, and the results from the recently acquired Companhia Fluminense, whose operations were integrated into our Brazilian franchise in September of this year. Our consolidated gross profit margins remained flat as a result of lower sugar prices in most of our franchise territories, and the appreciation of the Mexican peso as applied to US dollar denominated input costs, which were offset…

(Operator Instructions) We will take our first question from Lauren Torres with HSBC. Lauren Torres – HSBC: Hector, if you could talk about the volume weakness that we continue to see in Mexico, I guess it about down 1%. You put through a lot of initiatives to kind of maintain your volumes. But I was just curious in light of what you're seeing at the consumer level, if there is the ability to kind of turn this positive in the near term, or we should continue to expect declines? And then if I could take this a little bit further, in light of the potential tax increase on sugar beverages, you've talked about things that you could do. I don't know if you can or would shed some light on those initiatives now. I mean, is this more price led in order to kind of keep things going to offset the tax increase, or you feel there's other initiatives to keep things going for you looking into next year? Hector Treviño: I think that it’s very important to highlight that in Mexico in this quarter, volume trends were very positive during July, if I remember correctly the number was somewhere around 4% volume growth, although it was 42% between 1.5% to 2% volume growth, which we feel very encouraging for the quarter. But in September with these two hurricanes that hit very strongly in the Acapulco are and obviously affected the central part of the country and in the Gulf areas. Volumes in Mexico for the month of September were very deceptive – were down 11%. That has to do a lot with the disappear – that we will use that word for a few weeks of many of our clients that were flooded, a lot of these mom and…

Our next question comes from Antonio González with Credit Suisse.

This is Hector Armando Perez [ph] on behalf of Antonio. I have only two questions if I may. First one, can you comment on your beer performance in Brazil? Heineken has just reported a high single-digit decline in volumes in the quarter and Carlos Salazar mentioned in the last conference call he joined that you might seek to fine-tune some aspects of their relationship with Heineken in Brazil. So we were wondering if there was any relationship in there, especially with acquisition of Fluminense. And the second question will be -- could you give us more color on your performance on the different channels; how full retailers perform versus mom and pops? That’s it, thanks. Hector Treviño: I think we haven’t done any activities with Heineken. I think that in general if I can comment on Carlos Salazar – I think that what you are referring is, we already represent 40% of the Coca Cola system in Brazil. And all of the Heineken employees go through the Coca Cola system in Brazil. I think it’s given the fact what you were referring is that we have the size to start negotiating better commercial deal with Heineken. We have not done anything in that respect so far. It was just more in anticipation of something that's going to be done in the future if and when it makes sense. In Brazil, I think if you look at the sparkling beverages and the consumer in Brazil -- a very tough environment that in every single consumer companies that I have reviewed is having components in Brazil. All the other bottlers in the Coca Cola system are also suffering. The positive news is that I think we are getting -- the third quarter on a sequential basis shows some better trends in the volume. If I remember correctly, for the first semester in sparkling beverages, we were probably down to 12% to 10% as of last year. And this quarter we are seeing more like a low single digit number is still down. So we are improving – has to do a lot with the – religiously what we have done is again prices, we are having advantage to increase the presentations of 1 to 3 reais consumer representations that are growing very importantly, obviously that those presentations are having some cannibalization effects on our presentations. The two liters returnable presentation is also growing importantly. But for two-liter one-way that goes to a different channel it is suffering. And I think that from the point of view of the consumer, we are still seeing some weaknesses in Brazil. But it looks like the trends at least for our industry are starting to turn around a little bit and improve sequentially.

Regarding Mexico, the performance per channel; have you seen a significant difference in there because we have heard from food retailers and the low-income segment has performed poorly, so we wanted just to check, thanks. Hector Treviño: In Mexico, the trend we are seeing is that the consumers is going more for the day to day purchase of what they need. And they are going a little bit more to the traditional trade. The only problem with that trend is that September we see a lot of – there is more mom and pops because they were closed as I mentioned for a couple of weeks because of these storms. But in general the trend is the consumer going more to the traditional trade, to the mom and pops and less with the modern trade. Our meaning from this is that the consumer is going more on a daily basis to get to these people they knew or the daily need as opposed to going on a weekly basis to the supermarket.

Our next question comes from Lore Serra, Morgan Stanley. Lore Serra – Morgan Stanley: I wanted to ask a question on Brazil. Can you confirm that-- you said that you were increasing the synergies from Fluminense from $14 million to $19 million; I just wanted to make sure I got the number right. And I wanted to get your perspective on how you're thinking about 2014 in Brazil. I mean you started to talk a little about the raw material environment being benign for next year and obviously your work on getting the synergies from the deals. But what's your level of confidence that you can deliver important margin expansion in Brazil next year? Because this year has been a really tough year in Brazil and when you look at the factors that have plagued the year, this year, I guess some of them remain for next year but some of them go away. So how does that balance out and what's your level of optimism about margin recovery next year in Brazil, please? Hector Treviño: Yes, the number that we are confirming is $19 million of synergies, 19 as opposed to the $14 million that we announced, when we did the preliminary due diligence analysis there. It has to do with the workhouses and some of the commercial strategies, and also in the production plants, we were finding some additional synergies. We are having that this $5 million extra is synergies in the Fluminense acquisition. Your question regarding expanding margins in the field, it’s really tough to answer – let me tell you what. Our team is very confident that from raw material point of view and from the production capacity and the future shipment we are achieving, all of that is improving, and that will help us in…

Our next question comes from Fernando Ferreira with Bank of America/Merrill Lynch. Fernando Ferreira – Bank of America/Merrill Lynch: I have two questions. The first one I'd just like to understand is this pick up in your effective tax rate to 34%. You mentioned the inflationary adjustment in Venezuela. I just wanted to understand if we can expect the same level of tax rate going forward or was that a one off and we're expecting to decline to normalized levels in the next quarters? Hector Treviño: This quarter we were affected by this issue with the inflation in Venezuela that, because inflation was getting close to 50%, and that’s more of a permanent thing. But during this quarter we also have the effect that will not – a case that wasn’t in course with respect to some past taxes. From 2010 that we have to pay, including some penalties and that amount is non-tax [indiscernible], so this affected Colombia also – helped move the tax – effective tax rate to 24.7%. What I am expecting and what you should look into the operations is somewhere around 32% to 32.5% is attractive tax save for the full year, is what we should be expected. Fernando Ferreira – Bank of America/Merrill Lynch: And then I had a question on Mexico as well. Have you started hedging your fructose needs for next year and what's the outlook you see for raw materials into 2014? Hector Treviño: We basically have already locked in the fructose for next year. It’s 20% of our need is not a case, it’s basically an agreement with the suppliers where we already agree on a price and the amount that they want to be delivered on a monthly basis. Those agreements call for lower prices than what we have during 2013. And we have done some also taking a portion of what we call dollar denominated raw materials that we have, just a fraction of the number as a percentage. But we have already moved in noting the FX for some of our raw material needs that are dollar denominated. So I feel confident that the raw material environment for us for next year is going to be [indiscernible] but we already have some prices, what we can do, for example, next year we cannot purchase. That’s totally out of it and we will need to negotiate on a quarter-by-quarter basis but what we can – we cannot buy, we already have done that in for Mexico, Colombia, and Brazil.

Our next question comes from Karla Miranda with GBM. Karla Miranda – GBM Grupo Bursátil Mexicano, S.A. de C.V.: Hector, I have two questions. First of all, in Mexico, it seems that while today it was published that the Senate is discussing to maintain the EVA in the border area of Mexico at 11%. And in order to compensate for that loss in taxes, that it would be discussing to increase the proposed tax on beverages to 2 pesos per liter instead of the 1 peso per liter that the lower house approved. Have you measured the impact of this mentioned 2 peso per tax liter? And second of all, I was wondering if you can give us some idea on how the CapEx should behave in Mexico in case that the tax is approved? Hector Treviño: The first part to the question – as we have not mentioned any impact – we have to wait until a final decision is taken in Senate. There are lot of rumors going on and it’s difficult to just – we are planning on none of those rumors. We have not done any exercise yet, or have to adapt our business in case something – this excise tax. With respect to your second question, if we – CapEx for Mexico, for certain it will be reduced substantially. I already mentioned that assuming that tax goes by as was written in the lower house, at 1 peso per liter, we will not be buying any stock next week, next year, that’s a big amount. And we will have around seven production lines that will be – per liter [ph]. So we will not need to do investments for two or three, or four more units of production capacity. And we need to -- also…

Our next question comes from Alan Alanis, JPMorgan. Alan Alanis – JPMorgan: The first question I have, Hector, is regarding the high fructose and sugar. Could you remind us how is your mix right now between fructose and sugar in the context of high fructose or corn prices having come down more than 40% -- 44% down year over year, while sugar is only down high single digits. I mean how much can you shift and you plan to shift towards more high fructose on the light of that situation? That would be my first question and I have a follow up, but it's a different question. Hector Treviño: We are basically at the maximum capacity that we have for high fructose and we are more or less 60% fructose, 40% sugar in our mix as we speak. Prices being very good in fructose [indiscernible]. The issue for us to move, our largest percentage of usage of sugar. But using more fructose I think that we are fixed at the level. We will not be able to grow significantly from those levels. Alan Alanis – JPMorgan: And the second question has to do -- I mean you talked about Fuze and Valle Fresh in Mexico as one of the other emerging categories that continue to perform very well. Could you give us some comments on other categories, specifically the dairy ones, Santa Clara; and your coffee initiatives? How are those doing and then another from a much smaller base, but you're referring to quite positive results I think in dairy in Panama. So I guess we can frame that question as what are the lessons learned in Panama that you are rolling out, that you could be rolling out in Mexico? Hector Treviño: I think that in the case of…

Our next question comes from Luca Cipiccia with Goldman Sachs. Luca Cipiccia – Goldman Sachs: Just a couple of follow-up questions on Brazil. I was wondering as we look in to 2014, related to some of the previous questions, and your capability to return to an upwards move in margins, how should we consider the impact from the World Cup, more in the sense of supposedly the sector is going to benefit most consumer companies but in your case there should be a convergence of investments from Coca-Cola itself. So I was just wondering if we can make a relation with similar situations in the past when the local operators have benefited from additional investments, as this is a global platform for Coca-Cola, one would expect that they would also invest a lot around the event. So I was just wondering if that is going to be a factor and also related, again on Brazil, you have been commenting for some time on the pressure and the operating costs from transfer from labor costs and as you gain more scale as you move forward with acquisitions, what are the initiatives that you could do or you may have already started to put in place to contain some of that inflation, how should we think about that going forward given that has been a factor for some time now? Hector Treviño: Normally when you have a World Cup soccer event that is as important as the World Cup, normally what happens is that the marketing expenditures go up with it because the Coca Cola Company and the bottlers together would normally decide to do a lot of much more activation of our brands around those events. I think that locally in Brazil, for the companies that are in Brazil, you would…

Our final question comes from Luis Miranda with Santander. Luis Miranda – Santander: Just to follow up, Hector, in terms of the competitive environment in Mexico, have you seen any change regarding -- I understood that there were basically the key competitors are focusing on some key accounts and how you mentioned high profile accounts. And has that been the case in the quarter or have you started to see some change that flows to the traditional channel? Hector Treviño: I think that in general I think that the main competitors continue to aggressive in some of these key areas or high profile clients as you call it, like some savings on [indiscernible]. And I think that in general, we see a lot of fluctuations in investment. We have regained some of these points in that, again without paying extra resources but in some cases when we see a client that has been offered what we believe in your rationale proportion, then we just walk away from that and just focus our marketing resources in other areas. But we see our main competitor is quite aggressive on that front and especially in Mexico city. Luis Miranda – Santander: And if I may have a follow up here; you mentioned the steep decline in September for the reasons that we know. But your October, have you seen a material improvement or has seen or the sequential recovery has been very slow, with information that you have so far? Hector Treviño: October has a positive trend, low single digit numbers for Mexico. I would say that in general I am expecting positive results in Mexico and Central America. In the case of South America we are seeing very good positive margin – positive in Argentina and Venezuela. Colombia with very good volume trends, we continue to see some softness in Brazil. In spite of all of the effects also of the market prices and all of that, Brazil so far in October [indiscernible].

It appears we have no further questions in the queue at this time. I would like to turn the conference back to Mr. Treviño for any additional or closing remarks. Hector Treviño: Thank you for your interest in Coca-Cola FEMSA and as always, myself, Jose and his team are available to answer any remaining questions. Thank you so much.

That does conclude today’s conference. Thank you for your participation.