1. Latin American Business Outlook Part of the Global Business Outlook A joint survey effort between Duke University, Fundação Getúlio Vargas and CFO magazine Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 1

2. Top Concerns for Latin American CFOs Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 2 1.Government policy 2.Economic Uncertainty 3.Corporate tax code 4.Regulatory requirements 5.Attracting and retaining qualified employees 6.Cost of benefits 7.Input or commodity costs 8.Currency risk 9.Inflation 10.Underlying demand for your product/services

3. Expected Increase in Product Prices Notes: Presented data are the mean values for each region or country. Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 3 Product Prices Inflationary expectations continue to increase among Latin American CFOs, who expect the prices of their products to rise by 6.1% over the next 12 months Global TrendsJune 2014 Outlook Inflation expectations increase in Latin America  Latin American price expectations jumped this quarter, relative to last quarter’s survey  CFOs in Africa expect inflation to temper, US CFOs expect stable product prices, Europe/Asia expect near-zero inflation or even deflation. Inflation expectations vary by country  Prices are expected to increase are expected to approach or exceed 5% in Peru and Brazil, even more in Chile  European and Asian companies expect prices of their products to barely change.

4. Expected Increase in Sales Revenue Global TrendsJune 2014 Outlook Revenue Notes: Presented data are the mean value for each region or country. Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 4 Sales growth expectations are up slightly from last quarter, with Latin American CFOs expecting a 9.6% increase in revenues over the next 12 months Latin America expects 9.6% growth in revenues  Expectations down vs. one year ago, when L.A. CFOs expected revenue growth greater than 10%  Latin American revenue growth will trail only Africa as the highest in the world  As we saw on the previous slide, some of this revenue growth is due to high inflation Emerging economies expect fastest growth  Sales growth will vary by country but overall is highest in Latin American and Asian countries  Among responding L.A. countries, revenues in Peru will grow the fastest, followed by Brazil and Chile

5. Global Trends Capital Spending June 2014 Outlook Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 5 Expected Increase in Capital Spending Notes: Presented data are the mean value for each region or country. Latin American capital spending expectations have decreased significantly and are now expected to decrease (-2.8% growth) over the next 12 months. Capital spending growth falls significantly to -2.8%  Latin American spending plans soften significantly to -2.8%, compared to 3-5% growth expected in previous quarters  Capital spending plans have decreased in Africa and have increased in the US and Asia Business spending weak across Latin America  Capital spending in Peru will grow, but will decrease in Brazil and Chile.  Business spending strong in the US and Asia.

6. Global TrendsJune 2014 Outlook Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 6 Expected Increase in Earnings Notes: Presented data are the mean public company value for each region or country, except private companies also included for Chile and Peru in Mar 2014. Earnings Earnings expectations continue to decline in Latin America, with 4.8% growth expected over the next 12 months. Four quarters of weaker Latam earnings forecasts  Latin American earnings growth has fallen by more than half versus double digit growth that was expected one year ago  European earnings growth recovering from recession lows Weaker earnings in surveyed Latam countries  Brazil and Chile expect earnings to grow less than 5%, below inflationary expectations  Earnings in Peru expected to grow by 9%  US earnings growth also weak at 4%

7. Global Trends # FT Employees June 2014 Outlook Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 7 Expected Increase in fulltime Employment Notes: Presented data are the mean value for each region or country #FT=Number of Fulltime Employees Latin American CFOs expect to increase fulltime domestic employment by 2.3% over the next 12 months. Employment growth slows in Latin America  While Latam CFOs expect less employment growth in the next year, workforce increases should still outpace Europe and the U.S.  Europe expects little if any growth; Asia and Africa expect strong employment growth Employment growth continues in Brazil  Among surveyed LA countries, only Brazil expects decent fulltime employment  Chile and Peru expect little change in the number of fulltime domestic employees

8. Historical Responses Wages & Salaries June 2014 Outlook Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 8 Expected Increase in Wages and Salaries Notes: Presented data are the mean value for each region or country #FT=Number of Fulltime Employees Projected wages and salaries are expected to increase by 6.8% in Latin America, similar to Africa and Asia. Rapid wage growth in emerging economies  Latin America, Asia, and Africa all expect wages to rise by more than 6%, generally keeping up with inflation in LA and Africa  The US and Europe expect wages to grow by less than 3% Wages to soar in Brazil  Companies in Brazil expect to increase wages and salaries by 7.4% over the next year.  In Peru and Chile, wage hikes will be less than 5%

9. Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 Business Optimism Index Global Trends Country / Region June 2014 Response 9 Notes: Presented data are the mean value for each region or country, Scale from 0-100 Regional/Country Business Optimism Index Own-Firm Business Optimism Index Own Company Latin America no longer the most optimistic region, falling below the US and Asia

10. Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 Intention to Deploy Cash Reserves 10 Is it likely that your firm will begin to deploy its cash reserves during the next 12 months? Most firms in emerging economies expect to use their cash reserves in the coming year  Due to good long-run investment opportunities, 72% of Latin American firms will deploy cash reserves  Only about half of US and European companies will spend out of cash reserves in the coming year

11. If deploying cash reserves, on what? Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 11 72% of Latin American firms plan to spend their cash reserves in the next 12 months. Among these firms …  More than half will use the cash for business spending and investment, one-fourth to make acquisitions  Nearly 40% will use excess cash to pay down debt.  More than one-fourth need cash to cover operating losses or purchase raw materials

12. If not deploying cash, why not? Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 12 28% of Latin American firms are NOT planning to spend cash reserves. Among these firms …  Nearly 30% say they lack excess cash to spend; another 30% say they have alternative sources of funds  Nearly 30% also indicate that they need to hold their cash reserve in case a liquidity need arises

13. Explicit Target for Cash 13 Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 As your firm decides how much cash to hold, do you have an explicit "target" or "range" for the amount of cash and marketable securities to hold? About half of LA and Asian firms indicate that they maintain a specific target for how much cash to hold  Though not shown on this graph, if cash drifts below the target, they quickly try to increase cash holdings  If cash accumulates above the cash target, most LA firms move only slowly to decrease cash holdings

14. 14 Latin American Business Outlook Duke University / FGV / CFO Magazine Sep 2012 Russian Business Connections in Latin America Has your company reduced your Russian-related activity? Though not shown on this graph, Latin American businesses are the least exposed to Russia in the world  Left: Among surveyed firms, none indicated they have pulled out of Russia, only a few evaluating  Right: Few Latin American firms indicate that severe sanctions on Russia would harm their prospects What would the impact be on your country's economy if severe financial sanctions were imposed (including restrictions in intra- bank transactions through the SWIFT system) on Russia as a result of activity in Ukraine?

15. Labor Unrest 15 Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 Do you expect labor unrest (e.g,. strikes, work stoppages) to affect your country's economy over the next 12 months? Three-fourths of Latin American firms expect labor unrest during the next 12 months  LA concerns about labor unrest are by far the highest in the world; few US firms share this concern  Though not shown on this graph, Brazil (85%) has the highest concern about labor unrest of any surveyed country in the world

16. What is the cause of labor unrest? Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 16 General problems associated with slowing economic growth are the biggest cause of labor unrest in LA  Wage pressures, in part due to high inflation, are the second biggest cause of unrest.  Working conditions are not a major concern in LA. Though not on the graph, poor working conditions lead to labor unrest in China. If you expect labor unrest (e.g,. strikes, work stoppages) to affect your country's economy over the next 12 month, the unrest is driven by?

17. Duke/FGV CFO Survey in Latin America Press Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 17 The Latin American Business Outlook is frequently reported in the press

18. Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 18 Duke/FGV CFO Survey in Latin America Press The Latin American Business Outlook is frequently reported in the press

19. Latin American Business Outlook Part of the Global Business Outlook A joint survey effort between Duke University, Fundação Getúlio Vargas and CFO magazine Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 19

20. Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 Return on Assets (ROA) 20 Strong profit growth expected in parts of Latin America Profit margins are expected to rise in all regions, relative to 2013 profits  Peru and Chile expect strong ROA growth in 2014  CFOs in Brazil expect only modest ROA improvements

21. OLD SLIDES 21 Latin American Business Outlook Duke University / FGV / CFO Magazine Sep 2012

22. Merger and Acquisition Activity Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 22 As a region, Latin American M&A potential activity trails that of the US, Europe & Asia. About 23% of Latam CFOs expect their firms to make an acquisition in the next year World-wide, slightly more than one-fourth of companies expect to acquire assets of another firm  M&A activity is comparatively lower in Latin America, especially in Peru where only 16% of firms expect to acquire. M&A activity will be highest in Europe and lowest in AFrica.  European firms are the most likely to plan an international acquisition. Among surveyed Latam firms, CFOs in Chile are the most likely to make a cross-border acquisition.

23. Where will cross-border acquisitions occur? Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 23 International acquisitions in Latin America will target companies operating in another Latam country, followed by North American targets. Latam acquisitions mostly regional, overlooking Asia:  Latin American CFOS express very little if any interest in acquiring Asian firms, focusing instead on the Americas  The U.S./Canada is the region most likely to plan to acquire a Latin American target.  Most regions focus their international acquisitions on firms in their own continent

24. Effects of Tighter U.S. FED Monetary Policy Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 24 What effect, if any, has the U.S. Federal Reserve Bank's plan to taper its quantitative easing program had on your company's optimism about its business prospects for 2014? Emerging economics are more wary of U.S. monetary tightening than are U.S. companies  Only 1-in-5 U.S. companies expects direct negative effects from the FED tightening monetary policy  More CFOs in emerging regions are wary of FED tightening, probably because higher U.S. interest rates may lead to either higher emerging economy interest rates and/or depreciated emerging country currencies

25. Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 Effects of Uncertain Economic Conditions 25 Does Uncertainty about Economic Conditions Affect Your Business Planning? Growing uncertainty about economic conditions slows hiring and spending plans  Because Latin American CFOs have grown more uncertain about economic prospects, many are adopting a “wait and see” attitude in their own business plans  More than half of Latam companies have reduced hiring and spending plans due to economic uncertainty

26. Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 Effects of Uncertainty About Government Policies 26 Does Uncertainty about Government Economic Policies Affect Your Business Planning? Growing uncertainty about government policies reduces hiring and business spending  Because Latin American CFOs have grown more uncertain about future government policies, many are adopting a “wait and see” attitude in their hiring and capital spending plans  Though not shown in this graph, concerns about government policies are acute in Chile and Brazil

27. Corporate Culture Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 27 In both Latin America and in the U.S., customer-orientation and integrity are two primary aspects of corporate culture More similarities than differences in Corporate Culture  Still, Latin American CFOs put somewhat more emphasis on results (near-term and strategic) and somewhat less emphasis on customer orientation and integrity.

28. Planned Changes to Corporate Culture Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 28 Latin American CFOs plan to put more emphasis on strategic (long-term) results  Nearly 30% of Latam companies indicate that they will increase strategic focus, while nearly 25% say more focus on customer orientation  Though not shown in the graph, most Latam CFOs say that it is very important for their employees to understand the corporate culture. What is the primary focus of changes in corporate culture among Latin American firms?

29. Real Estate Bubbles? Latin American Business Outlook Duke University / FGV / CFO Magazine June 2014 29 Approximately 50% of Latin American CFOs believe there is a real-estate bubble in the region compared to 70% in Asia, and 90% in China Real Estate Bubbles are significant concerns in Latin America and Asia  More than half of CFOs in Brazil and Peru indicate that they believe there is a real estate bubble in their home countries. A bursting bubble like what occurred in the U.S. in 2008-2010 could slow economic growth  An astounding 90% of Chinese CFOs believe China has a real estate bubble, and (though not shown in the graph) 30% think the Chinese bubble will burst in 2014