Arcos Dorados Reports First Quarter 2014 Financial Results

2014-05-06
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  • Restaurant News Resource Consolidated revenues reached $915.5 million, a 6.3% decline versus the first quarter of 2013. On an organic basis, consolidated revenues grew 12.9% in the quarter.

    Arcos Dorados Holdings, Inc. (NYSE:ARCO) (“Arcos Dorados” or the “Company”), Latin America’s largest restaurant chain and the world’s largest McDonald’s franchisee, today reported unaudited results for the first quarter ended March 31, 2014.

    First Quarter 2014 Highlights

    • Consolidated revenues reached $915.5 million, a 6.3% decline versus the first quarter of 2013. On an organic basis, consolidated revenues grew 12.9% in the quarter.
    • Systemwide comparable sales increased by 8.8% year-over-year.
    • As reported General and Administrative expenses (G&A) declined by around 90 basis points as a percentage of revenues compared with the same period last year.
    • Adjusted EBITDA was $50.3 million, or 26.7% lower versus the prior year quarter. Organic Adjusted EBITDA, which excludes currency translation and special items, was 4.4% lower year-over-year.
    • Excluding the Venezuelan operation, organic revenue and Adjusted EBITDA grew 11.6% and 18.5%, respectively, compared to the first quarter of 2013.
    • The Company reported a net loss of $20.6 million, compared to a loss of $6.6 million in the year-ago period, mainly due to lower operating income versus the prior year.

    “We had a solid start to the year, achieving double-digit organic revenue growth, supported by a high single-digit increase in comparable sales. These results reflect the strength of our compelling value platforms, our beverage and dessert categories as well as the impact of our marketing promotions in the lead up to the FIFA World Cup, which overcame continued economic headwinds and soft consumption in several of our key markets. Excluding the Venezuelan operation, organic Adjusted EBITDA grew in the double-digits and the Adjusted EBITDA margin expanded 50 basis points, demonstrating the continued strength of our business on the ground.”

    “I am particularly pleased with the operational efficiencies that we achieved as part of an ongoing review of our cost structure. During the quarter we delivered G&A leverage of approximately 90 basis points, and efficiency improvements will remain a key area of focus throughout the organization. In fact, beginning with the headcount reductions implemented at the end of 2013, we are targeting an annualized reduction in G&A of approximately $20.0 million,” said Woods Staton, Chairman and Chief Executive Officer of Arcos Dorados.

    First Quarter 2014 Results

     

    Consolidated

         
    Financial Highlights (Million US$)
         

    1Q13

    (a)

     

    Special

    Items

    (b)

     

    Currency

    Translation

    (c)

     

    Organic

    Growth

    (d)

     

    1Q14

    (a+b+c+d)

     

    % As

    Reported

     

    % Organic

    Total Restaurants 1,959         2,069    
    Sales by Company-operated Restaurants 934.1 (179.9) 123.9 878.1 -6.0% 13.3%
    Revenues from franchised restaurants     42.8       (7.4)   2.0   37.4   -12.6%   4.7%
    Total Revenues     976.9       (187.3)   125.9   915.5   -6.3%   12.9%
    Systemwide Comparable Sales                         8.8%    
    Adjusted EBITDA     68.7   4.7   (20.0)   (3.1)   50.3   -26.7%   -4.4%
    Adjusted EBITDA Margin 7.0% 5.5%
    Net loss attributable to AD (6.6) 0.4 (5.3) (9.1) (20.6) 212.5% -100.0%
    No. of shares outstanding ('000)     209,529               209,867        
    EPS ($ per share)     (0.03)               (0.10)        

    (1Q14 = 1Q13 + Special items + Currency translation + Organic growth). Please refer to “Definitions” section for further detail.

    Due to the depreciation of local currencies, mainly in Brazil and Argentina, Arcos Dorados’ first quarter as reported revenues decreased by 6.3% whereas organic revenues grew by 12.9%. Revenues were also negatively impacted by a change in the exchange rate used to remeasure the financial statements of the Company’s Venezuelan operation. For more details, please refer to the Quarter Highlights & Recent Developments section on page 9 of this earnings release.

    Organic revenue growth was driven by an 8.8% expansion in systemwide comparable sales and the contribution of $50.3 million in constant currency from the net addition of 110 restaurants during the last 12-month period.

    Marketing activities in the first quarter included the launch of the Monopoly promotion in Brazil and several promotions related to the FIFA World Cup, such as the Player Escort program, “Champions Glasses” in Brazil and the “Combo de la Copa” in Argentina, among others.

    Reported Adjusted EBITDA for the first quarter was $50.3 million, representing a 26.7% decrease as compared to the same period of 2013 primarily due to the change in the Venezuelan exchange rate. The Company’s operating results in the quarter include a $7.6 million write down of certain inventories due to the impact of the currency exchange rate change on their net recoverable value as well as a $6.0 million loss related to lower margin due to the impact of inventories measured at the historical exchange rate and the current regulatory environment in that country. Adjusted EBITDA was also impacted by generally lower operating results in Venezuela. Adjusting for special items and currency impacts, organic Adjusted EBITDA declined by 4.4%.

    Special items impacting Adjusted EBITDA consisted of:

     
    ($ thousands)     1Q14   1Q13   Variation
    Accrual of PAT provision in Brazil (I)     -   ($1,958)   $1,958
    Royalty waiver for Venezuela $4,713 $1,250 $3,463
    CADs net (loss) gain (II)     ($345)   $343   ($688)
    Total     $4,368   ($365)   $4,733

       I.   Employee meals program in Brazil.

       II.  Compensation expense. Includes the result from the total equity return swap.

     
       

    Consolidated - excluding Venezuela

     
    Financial Highlights (Million US$)
         

    1Q13

    (a)

     

    Special

    Items

    (b)

     

    Currency

    Translation

    (c)

     

    Organic

    Growth

    (d)

     

    1Q14

    (a+b+c+d)

     

    % As

    Reported

     

    % Organic

    Total Restaurants 1,820         1,930    
    Sales by Company-operated Restaurants 852.3 (156.7) 97.6 793.2 -6.9% 11.4%
    Revenues from franchised restaurants     33.2       (6.1)   5.1   32.2   -2.8%   15.4%
    Total Revenues     885.5       (162.7)   102.7   825.4   -6.8%   11.6%
    Systemwide Comparable Sales                         6.0%    
    Adjusted EBITDA     59.3   1.3   (12.4)   11.2   59.4   0.2%   18.5%
    Adjusted EBITDA Margin 6.7% 7.2%
    Net loss attributable to AD 2.8 (5.1) (2.8) 14.4 9.3 238.0% 330.3%
    No. of shares outstanding ('000)     209,529               209,867        
    EPS ($ per share)     0.01               0.04        
     

    Excluding the Venezuelan operation, the Company’s Adjusted EBITDA grew by 0.2%, or by 18.5% on an organic basis. Adjusted EBITDA margin improved 50 basis points to 7.2%, driven by G&A leverage, which was partially offset by higher occupancy and other operating expenses. The Company has targeted improvements in G&A leverage, achieving a 90 basis point decline during the quarter. The three main drivers of this G&A leverage were (i) a lower G&A base following the headcount reduction implemented toward the end of 2013, (ii) reduced variable compensation across all of its divisions and at the corporate level and (iii) the location of the Company’s corporate headquarters in Argentina with costs primarily denominated in local currency.

    Non-operating Results

    Non-operating results for the quarter reflected (i) a $2.0 million increase in net interest expense, mainly attributable to additional year-over-year interest and derivative instruments, and (ii) a $2.5 million decrease in foreign currency exchange losses. FX losses for the quarter were mainly driven by the impact of the change in the Venezuelan exchange rate used for reporting purposes.

    Income tax expense for the quarter totaled $3.7 million, compared to $5.9 million in the year-ago period. On a full year basis, the Company maintains its guidance of an effective tax rate between 35% and 37%, excluding Venezuela.

    The Company reported a basic net loss per share of $0.10 in the first quarter of 2014, compared to a loss of $0.03 in the previous corresponding period.

    Analysis by Division:

    Brazil Division      
    Financial Highlights (Million US$)
         

    1Q13

    (a)

     

    Special

    Items

    (b)

     

    Currency

    Translation

    (c)

     

    Organic

    Growth

    (d)

     

    1Q14

    (a+b+c+d)

     

    % As

    Reported

     

    % Organic

    Total Restaurants 735         816   11.0%  
    Systemwide Comparable Sales 3.4%
    Revenues     460.9       (77.8)   45.4   428.6   -7.0%   9.9%
    Adjusted EBITDA     55.1   2.0   (8.2)   (3.4)   45.5   -17.3%   -5.9%
     

    Brazil revenues declined on an as reported basis due to the 18% year-over-year average depreciation of the Brazilian Real. Excluding currency movements, organic revenues grew by 9.9%. Systemwide comparable sales growth was mainly driven by promotional activities designed to stimulate traffic, which resulted in a shift in mix. The quarter’s result follows a strong 9.1% comparable sales performance in the previous year. Despite a soft consumption environment, traffic remained relatively stable year-over-year. During the quarter, the Company’s marketing activities included the launch of the FIFA World Cup campaign: the “Champions Glasses”. Other marketing initiatives included the Monopoly promotion and the addition of the Triple Cheeseburger sandwich to the GPPP value platform.

    The net addition of 81 restaurants during the last 12-month period, with about half being free-standing units, contributed $32.2 million to revenues on a constant currency basis during the quarter. The openings brought the restaurant count to a total of 816.

    Adjusted EBITDA decreased by 17.3% in the first quarter of 2014. The reported Adjusted EBITDA margin declined by 133 basis points to 10.6%, due mainly to increased F&P and payroll expenses. F&P was impacted primarily by higher beef costs, which rose earlier in the year than projected. The Company expects the continued execution of its plan to offset some of these pressures over the course of 2014. Payroll pressures were derived mostly from the fixed schedule requirements in the Brazilian market. The Company is improving its management of the fixed schedule to mitigate its impact over time.

    Special items impacting Adjusted EBITDA in the quarter included a net gain of $2.0 million against the PAT provision included in the 1Q13 that was fully reversed in 4Q13. Excluding currency movements and the aforementioned special item, first quarter organic Adjusted EBITDA decreased by 5.9%.

     
    NOLAD Division      
    Financial Highlights (Million US$)
         

    1Q13

    (a)

     

    Special

    Items

    (b)

     

    Currency

    Translation

    (c)

     

    Organic

    Growth

    (d)

     

    1Q14

    (a+b+c+d)

     

    % As

    Reported

     

    % Organic

    Total Restaurants 503         509   1.2%  
    Systemwide Comparable Sales -5.1%
    Revenues     98.0       (3.6)   (1.7)   92.7   -5.4%   -1.8%
    Adjusted EBITDA     4.7   -   (0.2)   1.0   5.6   18.9%   22.2%
     

    NOLAD’s revenues decreased by 5.4% or 1.8% on an organic basis, year-over-year. Systemwide comparable sales declined by 5.1%, mainly due to a weak consumer environment in the division and a shift in the Easter holiday, from the first quarter in 2013 to the second quarter in 2014, resulting in reduced traffic in the quarter. Key quarterly marketing activities included the launch of the Angus CBO & the Chicken Premium CBO, and the addition of Coronado Cone and McFlurry Hershey’s to the Dessert category. Additionally, the net addition of 6 restaurants during the last 12-month period contributed $4.0 million to revenues in constant currency.

    Adjusted EBITDA increased by 18.9% year-over-year, or 22.2% on an organic basis. The reported Adjusted EBITDA margin increased by 124 basis points to 6.1% as lower F&P as a percentage of sales more than offset higher Payroll, Occupancy & Other Operating Expenses and G&A.

     
    SLAD Division      
    Financial Highlights (Million US$)
         

    1Q13

    (a)

     

    Special

    Items

    (b)

     

    Currency

    Translation

    (c)

     

    Organic

    Growth

    (d)

     

    1Q14

    (a+b+c+d)

     

    % As

    Reported

      % Organic
    Total Restaurants 366         379   3.6%  
    Systemwide Comparable Sales 23.5%
    Revenues     226.5       (78.8)   58.9   206.6   -8.8%   26.0%
    Adjusted EBITDA     20.4   -   (9.4)   11.3   22.3   9.1%   55.3%
     

    SLAD’s revenues declined by 8.8% primarily related to the depreciation of the Argentine Peso. However, organic revenues increased by 26.0% year-over-year. Systemwide comparable sales increased by 23.5% in the quarter, supported by average check growth and relatively stable traffic. The Company implemented a successful marketing calendar, including the launch of the Bone in Chicken in Peru, while in Argentina it added the FIFA World Cup promotion McCombo de la Copa (Angus Criollo and McWrap Criollo) as well as the McFlurry Toblerone to the Dessert category. The net addition of 13 restaurants during the last 12-month period contributed $9.4 million to revenues in constant currency in the quarter.

    Adjusted EBITDA increased by 9.1% year-over-year, or 55.3% on an organic basis. The Adjusted EBITDA margin expanded 176 basis points to 10.8% and was supported by lower payroll costs, Occupancy and Other Operating Expenses and G&A as a percentage of revenues.

     
    Caribbean Division      
    Financial Highlights (Million US$)
         

    1Q13

    (a)

     

    Special

    Items

    (b)

     

    Currency

    Translation

    (c)

     

    Organic

    Growth

    (d)

     

    1Q14

    (a+b+c+d)

     

    % As

    Reported

     

    % Organic

    Total Restaurants 355         365   2.8%  
    Systemwide Comparable Sales 15.0%
    Revenues     191.5       (27.0)   23.2   187.6   -2.0%   12.1%
    Adjusted EBITDA     12.2   3.5   (6.6)   (13.0)   (4.0)   -132.4%   -118.9%
     

    The Caribbean division’s revenues declined by 2.0%. However, excluding currency movements primarily related to the remeasurement of the Venezuelan operation’s financial results at a new exchange rate, organic revenues increased by 12.1% year-over-year. Systemwide comparable sales increased by 15.0%, driven by growth in average check. Despite ongoing challenging conditions in Venezuela, including price controls, social unrest and changes in the exchange rate regime, brand preference remained strong. The Company maintained its leading market share through the execution of a strong marketing calendar, including the introduction of the QPC Melt & McChicken in Venezuela, which incorporates locally sourced inputs, together with the addition of McFlurry Pralines & Cream to the Dessert category in Puerto Rico. The net addition of 10 restaurants during the last 12-month period contributed $4.7 million to revenues in constant currency.

    Adjusted EBITDA in the division declined to negative $4.0 million, resulting in an Adjusted EBITDA margin of negative 2.1% as G&A leverage was more than offset by increases in all other cost items in the division. Results in the division were affected by (i) the change in the Venezuelan exchange rate, including $7.6 million related to the write down of certain inventories due to the impact of the currency exchange rate change on their net recoverable value and $6.0 million related to lower margin due to the impact of inventories measured at the historical exchange rate and the current regulatory environment in that country and (ii) the new legislation on rents in that country. Special items impacting Adjusted EBITDA included the recognition of a $4.7 million royalty waiver for the Venezuelan operation from McDonald’s Corporation in 1Q14, versus $1.3 million in 1Q13.

     

    Caribbean Division - excluding Venezuela

         
    Financial Highlights (Million US$)
         

    1Q13

    (a)

     

    Special

    Items

    (b)

     

    Currency

    Translation

    (c)

     

    Organic

    Growth

    (d)

     

    1Q14

    (a+b+c+d)

     

    % As

    Reported

      % Organic
    Total Restaurants 216         226   4.6%  
    Systemwide Comparable Sales -5.2%
    Revenues     100.0       (2.5)   0.1   97.6   -2.5%   0.1%
    Adjusted EBITDA     3.2       0.1   (0.5)   2.8   -12.6%   -16.0%

    Revenues in the Caribbean division excluding Venezuela declined primarily due to lower revenue in Colombia, which was driven by a 12% average depreciation of the Colombian Peso. Organic revenues were flat in the quarter. Comparable sales decreased by 5.2%. Although traffic was stable in the quarter, this was offset by a shift in mix, which lowered the average check in the division. Adjusted EBITDA margin declined 34 basis points to 2.9% due to pressure in occupancy expenses, partly offset by leverage in G&A.

     

    New Unit Development

       
       
    Total Restaurants (eop)* Mar. ‘14   Dec. ‘13   Sept. ‘13   June ‘13   Mar. ‘13
    Brazil 816   812   762   746   735
    NOLAD 509 507 503 502 503
    SLAD 379 378 372 369 366
    Caribbean 365   365   356   354   355
    TOTAL 2,069   2,062   1,993   1,971   1,959
    LTM Net Openings 110   114   113   113   116

    *Considers company-operated and franchised restaurants at period-end

     

    The Company completed 125 restaurant openings for the twelve month period ended March 31, 2014, resulting in a total of 2,069 restaurants. Also in the period, the Company added 329 dessert centers and 15 McCafés, bringing the total to 2,310 and 343, respectively.

    Balance Sheet & Cash Flow Highlights

    Cash and cash equivalents were $126.4 million at March 31, 2014. The Company’s total financial debt (including derivative instruments) was $848.4 million. Net debt was $722.0 million and the Net Debt/Adjusted EBITDA ratio was 2.2x at March 31, 2014.

    Net cash used in operating activities was $40.0 million in the first quarter of 2014, while cash provided by financing activities amounted to $39.0 million. During the quarter, capital expenditures totaled $20.7 million.

    Quarter Highlights & Recent Developments

    Venezuelan exchange rate used for financial reporting

    Effective as of February 19, 2014, a new Exchange Regime Act was enacted to introduce flexibility into the exchange control system. According to the new law, three foreign exchange trading systems will exist: (i) a similar mechanism to the one administered by CADIVI, but now administered by CENCOEX; (ii) SICAD; and (iii) SICAD II, where Petróleos de Venezuela (PDVSA), the Central Bank of Venezuela and private entities may participate in the acquisition and sale of foreign currency. Trading on the SICAD II system began on March 24, 2014.

    The Company reassessed the exchange rate used for remeasurement purposes and concluded that the SICAD exchange rate is the rate applicable for remeasurement of its Venezuelan operation beginning as of March 1, 2014. As of March 31, 2014, the SICAD exchange rate was 10.70 VEF per US dollar and the resulting average rate for the quarter was 7.88 VEF per US dollar.

    During the three-month period ended March 31, 2014, the Company recognized a foreign currency exchange loss of $19.7 million as a result of the exchange rate change. The Company’s operating results included a $7.6 million write down related to certain inventories due to the impact of the currency exchange rate change on their net recoverable value and a $6.0 million loss related to lower margin due to the impact of inventories measured at the historical exchange rate and the current regulatory environment in that country. At March 31, 2014, the Company’s local currency denominated net monetary asset position, which would be subject to remeasurement in the event of further changes in the SICAD rate, was $25.8 million (including $22.0 million of cash and cash equivalents). Venezuela’s non-monetary assets were $166.3 million at March 31, 2014, and included approximately $109.6 million of fixed assets that could be subject to impairment if the Company continues to be unable to offset the impacts of continued high inflation or further devaluations. Please refer to the Company’s Form 6-K filed with the SEC today for more information on the Venezuelan operation.

    Purchase of Class A shares by the Chairman and CEO

    During the week of March 17, 2014, Woods Staton, the Company’s Chairman and CEO, bought an additional 250,000 Class A shares, bringing his total holding to 4,032,424 shares. In addition to the Class A shares, Woods Staton holds 80,000,000 Class B shares.

    Appointment of new Caribbean division head

    Luis Raganato was appointed President of the Caribbean Division. Mr. Raganato, who will be based in Bogotá, Colombia, most recently served as Regional Director of the Caribbean Division. He replaces Juan Carlos Paba, who departed the Company to pursue other opportunities after a distinguished career spanning almost 20 years.

    Dividend

    On April 1, 2014, the Company paid the first installment of its 2014 Dividends. The total amount paid was $12.5 million or $0.0596 per share on outstanding Class A and Class B shares.

    Annual General Shareholders Meeting

    The Company held its Annual Shareholders’ Meeting on April 21, 2014. All matters proposed were approved.

    Definitions:

    Systemwide comparable sales growth refers to the change, measured in constant currency, in our Company-operated and franchised restaurant sales in one period from a comparable period for restaurants that have been open for thirteen months or longer. While sales by our franchisees are not recorded as revenues by us, we believe the information is important in understanding our financial performance because these sales are the basis on which we calculate and record franchised revenues, and are indicative of the financial health of our franchisee base.

    Constant currency basis refers to amounts calculated using the same exchange rate over the periods under comparison to remove the effects of currency fluctuations from this trend analysis.

    Organic: To better discern underlying business trends, this release uses non-GAAP financial measures that segregate year-over-year growth into three categories: (i) currency translation, (ii) special items and (iii) organic growth. (i) Currency translation reflects the impact on growth of the appreciation or depreciation of the local currencies in which we conduct our business against the US dollar (the currency in which our financial statements are prepared). (ii) Special items include the impact of events that management does not consider part of the underlying performance of the business. (iii) Organic growth reflects the underlying growth of the business excluding the effect from currency translation and special items.

    About Arcos Dorados

    Arcos Dorados is the world’s largest McDonald’s franchisee in terms of systemwide sales and number of restaurants, operating the largest quick service restaurant (“QSR”) chain in Latin America and the Caribbean. It has the exclusive right to own, operate and grant franchises of McDonald’s restaurants in 20 Latin American and Caribbean countries and territories, including Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curaçao, Ecuador, French Guyana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto Rico, St. Croix, St. Thomas, Trinidad & Tobago, Uruguay and Venezuela. The Company operates or franchises 2,069 McDonald’s-branded restaurants with over 95,000 employees serving approximately 4.3 million customers a day, as of March 2014. Recognized as one of the best companies to work for in Latin America, Arcos Dorados is traded on the New York Stock Exchange (NYSE: ARCO).

    Use of Non-GAAP Financial Measures

    In addition to financial measures prepared in accordance with the general accepted accounting principles (GAAP), within this press release and the accompanying tables, we use a financial measure titled ‘Adjusted EBITDA’. We use Adjusted EBITDA to facilitate operating performance comparisons from period to period. Adjusted EBITDA is defined as our operating income plus depreciation and amortization plus/minus the following losses/gains included within other operating expenses, net and within general and administrative expenses in our statement of income: gains from sale of property and equipment, write-off of property and equipment, contract termination losses, and impairment of long-lived assets and goodwill, and stock-based compensation and bonuses incurred in connection with the Company’s initial public listing.

             
    First Quarter Consolidated Results

    (In thousands of U.S. dollars, except per share data)

     
           
    For Three-Months ended
    March 31,
    2014 2013
    REVENUES
    Sales by Company-operated restaurants 878,058 934,063
    Revenues from franchised restaurants   37,436     42,847  
    Total Revenues   915,494     976,910  
    OPERATING COSTS AND EXPENSES
    Company-operated restaurant expenses:
    Food and paper (315,722 ) (331,247 )
    Payroll and employee benefits (189,569 ) (200,408 )
    Occupancy and other operating expenses (252,119 ) (262,462 )
    Royalty fees (41,386 ) (46,442 )
    Franchised restaurants - occupancy expenses (15,717 ) (15,708 )
    General and administrative expenses (67,176 ) (80,333 )
    Other operating expenses, net   (13,031 )   (3,093 )
    Total operating costs and expenses   (894,720 )   (939,693 )
    Operating income   20,774     37,217  
    Net interest expense (16,957 ) (14,965 )
    Gain from derivative instruments 10 231
    Foreign currency exchange results (20,447 ) (22,912 )
    Other non-operating expenses, net   (318 )   (316 )
    loss before income taxes   (16,938 )   (745 )
    Income tax expense   (3,699 )   (5,852 )
    Net loss   (20,637 )   (6,597 )
    Plus(Less): Net loss (income) attributable to non-controlling interests   7     (5 )
    Net loss attributable to Arcos Dorados Holdings Inc.   (20,630 )   (6,602 )
    Earnings per share information ($ per share):        
    Basic net income per common share $ (0.10 )     $ (0.03 )
    Weighted-average number of common shares outstanding-Basic   209,867,426     209,529,412  
    Adjusted EBITDA Reconciliation
    Operating income 20,774 37,217
    Depreciation and amortization 28,016 29,121
    Operating charges excluded from EBITDA computation   1,533     2,355  
    Adjusted EBITDA   50,323     68,693  
    Adjusted EBITDA Margin as % of total revenues 5.5 % 7.0 %
     
                   
    First Quarter Consolidated Results by Division

    (In thousands of U.S. dollars)

     
     
    1Q
    Three-Months ended % Incr. Constant
    March 31, / Curr.
    2014     2013     (Decr.)     Incr/(Decr) %

    Revenues

    Brazil 428,565 460,922 -7.0% 9.9%
    Caribbean 187,638 191,460 -2.0% 12.1%
    NOLAD 92,679 98,014 -5.4% -1.8%
    SLAD 206,612     226,514     -8.8%     26.0%
    TOTAL 915,494     976,910     -6.3%     12.9%
     
     

    Operating Income

    Brazil 31,192 38,747 -19.5% -5.2%
    Caribbean (11,694) 5,610 -308.4% -182.1%
    NOLAD (1,624) (2,478) -34.5% -28.5%
    SLAD 17,403 14,715 18.3% 71.8%
    Corporate and Other (14,503)     (19,377)     -25.2%     1.6%
    TOTAL 20,774     37,217     -44.2%     -3.4%
     
     

    Adjusted EBITDA

    Brazil 45,546 55,104 -17.3% -2.5%
    Caribbean (3,962) 12,222 -132.4% -70.2%
    NOLAD 5,614 4,721 18.9% 22.2%
    SLAD 22,252 20,405 9.1% 55.3%
    Corporate and Other (19,127)     (23,759)     -19.5%     -1.3%
    TOTAL 50,323     68,693     -26.7%     3.9%
     
     
    Average Exchange Rate per Quarter
                               

    Brazil

    Mexico

    Argentina

    Venezuela

     
    1Q14 2.36 13.23 7.62 7.88
    1Q13       2.00     12.62     5.02     5.87
    Local $ per 1 US$
     

           
    Summarized Consolidated Balance Sheets

    (In thousands of U.S. dollars)

     
           

    March 31, 2014

       

    December 31, 2013

                   
    ASSETS
    Current assets
    Cash and cash equivalents 126,440 175,648
    Accounts and notes receivable, net 91,125 110,696
    Other current assets (1) 340,425 380,107
    Total current assets 557,990 666,451
    -
    Non-current assets
    Property and equipment, net 1,232,815 1,244,311
    Net intangible assets and goodwill 66,412 70,375
    Deferred income taxes 104,083 97,687



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