Marcelo Eduardo Martins - CFO and IRO Marcos Marinho Lutz - President, Director and CEO Guilherme Machado - IR Manager

Salim Morsy - Bloomberg New Energy Finance Juan Tavares - Citigroup Fernando Ferreira - Bank of America-Merrill Lynch

Good morning ladies and gentlemen. At this time, we would like to welcome everyone to Cosan's Fourth Quarter and Fiscal Year of 2013 Results Conference Call. Today with us, we have Mr. Marcos Lutz, Cosan's CEO; Mr. Marcelo Martins, CFO and Investor Relations Officer; and Mr. Guilherme Machado, Investor Relations Manager. We would like to inform you that this event is recorded and all participants will be in a listen-only mode during the Company's presentation. After Cosan's remarks, there will be a question-and-answer session for industry analysts. At that time, further instructions will be given. (Operator Instructions). The audio and slide show of this presentation are available through a live webcast at www.cosan.com.br/ir. The slides can also be downloaded from the webcast platform. Before proceeding, let me mention that forward-looking statements will be made under the Safe Harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumptions of Cosan's management, and on information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of Cosan and could cause results to differ materially from those expressed in such forward-looking statements. Now, I will turn the conference over to Mr. Martins. Mr. Martins, you may now begin your conference.

Thanks. Well first, I wanted to thank you for participating in our annual earnings call, which coincides with the announcement of the performance of the company over the last quarter of our fiscal year. Just wanted to make some remarks before we start the presentation. We have this year, for the first time, a consolidation of Comgás, and we had only five months of Comgás being reflected in the results that we will present now. We have run some pro forma numbers so that you can basically compare the full year of Comgás with the results of last year, and we will also use this as a base for the comparison with the forthcoming years, when we are going to have Comgás fully consolidated in Cosan. We have also provided some guidance for the next 12 months, even though we are expecting to have only a nine month year this year, because we are going to be going back to the fiscal year coinciding with the calendar year. We have, nevertheless, indicated the next 12 months numbers as the guidance for the performance of the business. I wanted to start my presentation with the consolidated figures for Cosan. We had a positive variation of 28% in the net revenues of the company, which was represented by roughly R$6.7 billion of additional revenues coming from R$23.4 billion to R$30 billion in the year of 2013. The EBITDA of the company also moved 48% from R$2.1 billion to R$3.14 billion, represented by an EBITDA margin of 10.5% compared to 9.1% last year. When we normalize the EBITDA, taking into consideration the full year for Comgás, we are going to get to R$3.7 billion of EBITDA in the fiscal year of 2013. In terms of net income of the company, we saw a jump of 51% from R$422 million to R$638 million in the year of 2013. For the year 2013 -- for the year of 2012, we have basically normalized EBITDA, reducing the impact of the Raízen formation in the year of 2012, we had a nonrecurring impact as we formed Raízen last year, and then had therefore an impact for the formation of the company. When we compare those numbers, we see that the actual net income for the year of 2012 for Cosan on a consolidated basis, that was up R$422 million, compared to R$638 million in the year of 2013. When we take into consideration the variances of the -- not only Raízen's formation, but the exchange due to variation, the fair value of the biological assets. When we take into consideration 12 months of Comgás, we are going to get into a normalized net income for the year 2013 of R$932 million compared to R$553 million last year. Even if we disregard the net income coming from Comgás, we are going to get to a net income for the year of 2013, roughly 30% higher than the year of 2012. Now, jumping to the business line, starting with Raízen Combustíveis, we had an improvement of 5% in the volumes, an increase of roughly 1 billion liters for the year of 2013 compared to the previous year. The net revenue of R$43.5 billion compared to R$39.7 billion last year, represented by an increase of 10% and an EBITDA increase of 25.5% coming from R$1.3 billion to R$1.66 billion in 2013. The EBITDA margin also improved from 3.3% to 3.8% in this fiscal year. We had an EBITDA margin in reais per cubic meter of R$80 in the last quarter of the year of 2013, at an average of R$76 for the fiscal year of 2013. Just one clarification I'd like to make here on this specific item. As you know in our previous calls in Portuguese, there were several questions about it. We are considering for the guidance that we are providing to the market, for this fiscal year, an average EBITDA per cubic meter, in line with last year. We don't consider as it's hard to predict any variance along the year as a function of seasonality of the business, which basically means that we are actually considering an EBITDA margin per cubic meter for the first quarter of this new fiscal year, substantially higher than the EBITDA margin for the relative quarter in the year of 2013. So that basically means that, we are projecting a growth of this business of Raízen Combustíveis in terms of volume, and this next year, which will have a negative impact in the margin, as we are talking about new stations with a lower throughput than the existing stations we have in our portfolio today. So we should assume that we will have a reduction in the average EBITDA margin for the new stations we are going to be adding to our portfolio. As we are growing more this year, in terms of new stations than we actually grew last year, we are basically projecting that by keeping the same average EBITDA per cubic meter that we had last year, in compensation from other business segments to basically offset the reduction we are going to have in the incremental volume coming from the acquisition of new stations. So therefore, we don't foresee any substantial difference in terms of the average margin for this year, compared to last year, and this is what we hope you understand, is reflected in the guidance we are providing to the market for the next 12 months. In terms of the biggest impact that we had in the EBITDA of the company during this year, we had a positive impact coming from the rebranding process, an increase in the premium of products penetration through V-Power, a higher gasoline volume compared to the overall mix of the company. This year, we project a slightly higher volume of ethanol than we had last year, which also should have a negative impact on the margin. But we also predict a higher volume, which basically should compensate the lower margin, having indicating a higher EBITDA for this fiscal year. An improvement in B2B customer portfolio was also a positive impact last year, and as a negative impact, we had a reduction in aviation volumes. Not only meaning that we lost market share, but basically implying that the slowdown in the economic growth in Brazil, had a substantial impact on the aviation business, which was noticed by a reduction in the sale of jet fuels. If we assume that this scenario should be maintained in the next fiscal year, in this current fiscal year, it will also be a source of reduction in the average EBITDA per cubic meter of the business, which again, we are expecting to offset with other potential revenues, or additional margin coming from other businesses, which will also compensate a reduced aviation margin for Raízen Combustíveis. Now moving to Raízen Energia, we had in the year of 2013 an increase of 6.2% in the crushed volume, jumping from 53 million to 56.2 million tons. We had an increase of 5% in sugar production from 3.96 to 4.16, and a reduction in ethanol production, from 1.83 to 1.903. We also had an increase in the anhydrous volume, which was one of the targets, along the year was basically seek to produce more anhydrous, because anhydrous has the higher margin than -- the hydrous ethanol, has the higher margin than the anhydrous. Therefore, we ended up accomplishing a better mix in the ethanol production. The TSR also was reduced by 2.4% from 136.5 to 133.5. We had a volume sold of power of basically 3 million megawatts hours, which is an increase of 100% compared to last year. It is a function of an increase in the volumes sold due to capacity added in the year 2013, according to the investments we have made for new -- in new mills; and also an increase in the volumes sold in the spot market, considering that we had better prices for the year for 2013 compared to the year of 2012. In terms of the net revenues, we saw a jump of 70% from R$7.2 billion to R$8.5 billion, a reduction in the EBITDA margin as a function of the revaluation of the biological assets of Cosan Energia at the very last quarter of the year. Nonetheless, we had an increase of 14% in EBITDA with the company from R$2.1 billion to R$2.408 billion. If it was not for the revaluation or the reassessment of the biological assets, we would have an EBITDA margin, very much in line with EBITDA margin of the year of 2012. In terms of our hedging position at the end of the fiscal year 2013, looking forward at the next fiscal year, we had a volume mix of 1.2 million tons of sugar, at an average price of 20.7 cents per ton, at an average exchange rate of 2.1259 and a volume of $535 million. Now moving to Comgás, we had an increase in the volumes sold by the company of 9% from 4.8 million to 5.2 billion cubic meters. We had a gross revenue jump of 28% from R$5.1 billion to R$6.15 billion, an increase in EBITDA of 34% from R$716 million to R$962 million and an EBITDA margin increase from 17.5% to 18.2%. The only comment I would like to make here is, that this EBITDA is in IFRS and it does not take into consideration, the regulatory account balance that in this specific case, ended up having a positive impact, leaving the actual EBITDA of Comgás to over R$1.1 billion for the year of 2012. We also saw a jump of 9% in connected meters according to the plant increase approved by the regulator for this specific year of 2012. Now talking about Rumo; we had an increase of 10% in the volume loaded, and I am talking about the loaded volume only, and not the transported volume. So we reached 8.656 million tons of sugar loaded at the port of Santos. The net revenues represented R$713 million, increasing 25% from the year of 2012. We also had a jump in EBITDA of 39% from R$113 million to R$197 million, represented by an EBITDA margin of 41.6%. Overall, it ended up being a very good year for Rumo. In the middle of last fiscal year, we ended up updating the guidance, reducing the projected EBITDA for Rumo, but at the end of the fiscal year, the volume of sugar loaded and transported, exceeded our initial projections and we ended up delivering a better EBITDA than we had projected in the third quarter of 2013. Radar, which is the most recently company being consolidated under Cosan, we had an EBITDA increase of 28% -- a net revenue increase of 28% and an EBITDA reduction of 34%. The reduction in the EBITDA is non-operating and it's not a function of the performance of the business , but just a function of the revaluation of the land portfolio, as we [add] to market. We had in the previous year in 2012, we did, for the first time, the revaluation of the land portfolio, so the impact was much higher than this year, when the revaluation that resulted in a positive number, but substantially lower than the initial revaluation that took place in 2012. For the other businesses, we had an increase in the net revenue of 34% from R$1.1 billion to R$1.42 billion. We had an EBITDA increase from R$49 million to R$93 million, represented by 90% growth. The adjusted EBITDA of R$92.7 million is a function mainly of the equity pickup that has been performed by the company, and also affecting Raízen's formation back in 2012. The net debt position at the end of the fourth quarter was R$8.5 billion compared to R$8.8 billion in the previous quarter. When we consider the pro forma EBITDA for the last 12 months, considering 100% of Comgás EBITDA, and we have to do that, because we are consolidating 100% of Comgás debt and we get to R$8.5 billion. We are going to get to an EBITDA -- the net debt to EBITDA multiple of 2.3 times, which is substantially lower than the multiple we thought it would be at, when we incurred in the R$3.3 billion debt, before the acquisition of Comgás. So we have been generating cash in the business lines overall to reduce our leverage, and it indicates mainly at Raízen as you probably noticed, and therefore we are approaching the two times leverage that we had more recently predicted as being the target leverage for the company moving forward. I would like now to finish my presentation, talking a little bit about the guidance for this next fiscal year, or the current fiscal year. We will have -- we are projecting a consolidated net revenue for Cosan, between R$35 billion and R$38 billion, and EBITDA between 3.95 and 4.35 and a CapEx between R$3.1 billion and R$3.35 billion, which takes into consideration a growth and CapEx for Raízen Energia as a function of investments that are being made, mainly in sugarcane in this fiscal year. This is the last year of -- when we project the growing CapEx for Raízen, starting next year, which would see this number stabilizing and starting to go down, and it's not necessarily the case for Raízen Combustíveis, as we are projecting a substantial growth in the volume as a function of a better market -- higher market volume, but also a growth in the conversion of stations, mainly from White Pumps. Going back to the issue that I have raised before, that's one of the reasons why we have projected a reduction in the average EBITDA per cubic meter, not because we predict a worse performing business for the next fiscal year, but because we are projecting a growth through the acquisition of White Pumpers. Therefore, we are getting to a projected EBITDA for Raízen Combustíveis between R$1.6 billion and R$1.8 billion for this next fiscal year. For Rumo, we are projecting EBITDA between R$330 million and R$370 million, in line with the projected growth of the business as a function of the investments that we are finalizing in the year of 2013. For Radar, we are projecting EBITDA between R$10 million and R$160 million, and for the other businesses, which are mainly comprised by the lubricants business, onshore and offshore, as we have Comma in the U.K. as part of our portfolio now. We are projecting a 270 million to 310 million liters of lubricants sold during this fiscal year. For Comgás, we project an EBITDA in IFRS between R$1.4 billion and R$1.6 billion. It's a big jump from 2013 or from the fiscal year of 2012 in the case of Comgás, and it again is a function of the impact of the regulatory accounts, which [definitely] from last year should have a positive impact in the EBITDA of the company. With that, I would like to now turn back to you for questions, Marcos and I will be here to answer your queries. Thank you.

Thank you. We will now begin the question-and-answer session for investors and analysts. [Operator Instructions]. And our first question comes from Salim Morsy with Bloomberg. Salim Morsy - Bloomberg New Energy Finance: Hi, good morning. This is Salim Morsy from Bloomberg New Energy Finance. I have a question with regards to your exports to the United States of anhydrous ethanol as well hydrous. Have you been sending any hydrous to the Caribbean for dehydration and can you discuss your volumes, your exports to the U.S. and if you have been seeing premiums from the RINs for your own benefit? Thank you.

There is no actual export to the Caribbean. What happened last year was that, we had a record export year for the company, where we basically exported roughly 50% of the overall exports from Brazil, represented by roughly 900 million liters of ethanol being exported mainly to the U.S. Salim Morsy - Bloomberg New Energy Finance: Okay. Thank you.

Our next question comes from Juan Tavares with Citi. Juan Tavares - Citigroup: Hi, thank you. Good morning everyone. The first question is, if we can get some sort of update on the transaction with ALL on the bid for the stake in ALL, regarding whether there has been any update in terms of the terms, the shareholders agreement, or the potential timing for conclusions. And my second question is regarding your sugarcane crop, I was specifically focused on, given the percentage that you have hedged and also the favorability clearly on pricing for ethanol versus sugar, what's the minimum in your mix that you could allocate towards sugar, [as I can guess] [ph] your initial target of looking for 50% target for the mix?

Well we are projecting a mix of roughly 50% for the production of sugar and ethanol this year, which is pretty much where we would normally consider our minimum to be, between 48% and 50% sugar. This year we are projecting 50% sugar and 50% ethanol. Sorry, what was your other question, if you could just recap it please? Juan Tavares - Citigroup: Sure, on ALL, just if we can get an update in terms of the timing for the transaction or the bid for the stake?

Sure. Well, ALL at this point in time we are discussing the shareholders agreement, and we have made progress in terms of discussing the potential sellers, this is an agreement that has already been reached. We are now discussing the terms of the shareholders' agreement and see where we stand now. It's hard to predict how long it's going to take, because in the first phase, it took us more than we had originally thought it would, took us over a year to get negotiation of the shareholders' agreement. So I don't want to predict the timing for that, but it's probably the last stage of our negotiation. Juan Tavares - Citigroup: Okay. And just a follow-up from the previous call regarding your charges, financial charges, if you have any visibility on the explanation for the increase there year-over-year?

Yeah well, it was mainly the exchange rate variance that has an impact on our results. I just want to take advantage of your question, just to make a clarification, because we are basically reading on the press now, some mixed interpretations of the performance of the company. The main impact on the net income of Cosan on a consolidated basis for this quarter comes from basically an increase in our leverage as a function of the acquisition of Comgás. In this specific quarter, we had a substantial payment we made, referring to fees paid to the banks, commitment fees paid to the banks for the utilization of the R$3.3 billion credit line, which was disbursed for the acquisition of Comgás. So we had a substantial increase in our financial expenses, which was predicted as a function of the acquisition of Comgás, which had a huge impact on this specific quarter. But again, as I explained before, overall during the year, we had an increase in our net income. Even if we disregard the consolidation of Comgás. So we consider this to be a very positive result, a very positive year, but I understand that there is some misunderstanding in terms of the actual impact that we had in this specific quarter of -- on the net income of the company. Juan Tavares - Citigroup: Just to be clear on that, because I am looking here on page 31 of your press release in English. It kind of references that the impact of the Comgás debt is within the gross debt charges line. But I guess my question is more towards the other charges in monetary variable line, which it might wouldn't really be FX translation gains, right, in this line. So if these were those -- and transaction costs for the debt already embedded here or are they embedded in the gross debt charges?

Juan again, you are talking about the R$116 million, right? Juan Tavares - Citigroup: Yes, yes.

Again, it's the (inaudible), because what we did differently from what we had done before, we ended up debiting this amount, the R$116 million in crediting (inaudible). in the same amount. So what we basically saw was a move from authorizing (inaudible). That's basically the impact, it's the monetary, it's the exchange rate variance during the period.

Just adding a little bit more information, this was a reclassification we did in this table, just to reclassify some FX that we had from the accounts receivable we had against Shell -- Raízen had. We were treating these FX on the other charge line, and we realized the correct line would be the FX. So we had an impact of almost R$110 million in this line, other charge, and benefited the FX line. So what we would see in this line, FX line, would be roughly R$20 million, if we had not moved this reclassification. Juan Tavares - Citigroup: Okay. So just to be clear, that is a non-cash impact, it's not a cash impact?

Just a reclassification, accounting reclassification. Juan Tavares - Citigroup: Got it. Okay. Perfect. All right. Thank you very much.

Our next question comes from Isabella Simonato with Merrill Lynch. Fernando Ferreira - Bank of America-Merrill Lynch: Hi it's actually Fernando Ferreira, and I just wanted to have an update on the simplification of the (inaudible) structure, if you can provide it to us?

Fernando, there is no news. I mean, we continue to work, but we don't have any specific news that should be disclosed at this point in time. Fernando Ferreira - Bank of America-Merrill Lynch: But the plan is still to give some indication to the market until the end of this year?

Yes. That's it. Fernando Ferreira - Bank of America-Merrill Lynch: Thank you.

That concludes the question-and-answer session for investors and analysts. I would like to invite Mr. Marcelo Martins to proceed with his closing statements. Please go ahead.

All right. Just wanted to emphasize, that we see this as a very positive result of the businesses. All businesses had a very good performance in the year of 2013 compared to the year of 2012, and we foresee an additional good year for the next year, which will be achieved not only through an improvement in macroeconomic conditions, because it is probably the question that lingers at this point in time, but basically, because we have been focusing tremendously on improving our operational performance, and in that regard, I just wanted to highlight the work that has been done at Raízen Energia. I mean, in the year, that was a very challenging year for the industry overall, for the sugar and ethanol industry overall, Raízen ended up being -- probably the only player, one of the very few players that had a very good performance. It was a record year for Raízen Energia. It was a record year for Cosan on a consolidated basis. We are very pleased with the results of the company. There was no, other than what we discussed here, non-recurring items that should be highlighted to the market now and again -- and we foresee a positive year moving forward for all business lines, including the fuels business, fuel distribution business, and so on. I want to thank your participation and we will talk to you next time. Thank you.

That does conclude the Cosan's audio conference for today. Thank you very much for your participation and have a good day.