UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
 
For the month of September, 2014
Commission File Number 001-36671

Atento S.A.
(Translation of Registrant's name into English)
 
4 rue Lou Hemmer, L-1748 Luxembourg Findel
Grand Duchy of Luxembourg
(Address of principal executive office)
 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F: x Form 40-F: o
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes: o No: x
 
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes: o No: x
 
Note : Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

 

 	
  
ATENTO S.A.
INDEX
Financial Information
For the Three and Nine Months Ended September 30, 2014

PART I - FINANCIAL INFORMATION	3	
 	 	
SELECTED FINANCIAL DATA	4	
 	 	
SUMMARY CONSOLIDATED HISTORICAL FINANCIAL INFORMATION	4	
 	 	
Interim Condensed Consolidated Statements of Financial Position as of September 30, 2014 and December 31, 2013	6	
 	 	
Interim Condensed Consolidated Income Statements for the Three and Nine Months Ended September 30, 2014 and 2013	7	
 	 	
Interim Condensed Consolidated Statements of Cash Flows for the Three and Nine Months Ended September 30, 2014 and 2013	8	
 	 	
Selected Unaudited Pro Forma Per Share Data	14	
 	 	
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	15	
 	 	
Overview	15	
 	 	
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	33	
 	 	
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014	34	
 	 	
PART II - OTHER INFORMATION	67	
 	 	
LEGAL PROCEEDINGS	67	
 	 	
RISK FACTORS	67	

 	

 	
  
 PART I - FINANCIAL INFORMATION
 
Atento S.A. (“Atento”, the “Company”, “we”, “us”, or “our”) was formed as a direct subsidiary of Atalaya Luxco Topco S.C.A. (“Topco”). In April 2014, Topco also incorporated Atalaya Luxco PIKCo S.C.A. (“PikCo”) and on May 15, 2014 Topco contributed to PikCo: (i) all of its equity interests in its then direct subsidiary, Atalaya Luxco Midco S.à r.l. (“Midco”), the consideration for which was an allocation to PikCo’s account “capital contributions not remunerated by shares” (the “Reserve Account”) equal to €2 million, resulting in Midco becoming a direct subsidiary of PikCo; and (ii) all of its debt interests in Midco (comprising three series of preferred equity certificates (the “Original Luxco PECs”)), the consideration for which was the issuance by PikCo to Topco of preferred equity certificates having an equivalent value. On May 30, 2014, Midco authorized the issuance of, and PikCo subscribed for, a fourth series of preferred equity certificates (together with the Original Luxco PECs, the “Luxco PECs”).
 
In connection with the completion of Atento S.A.’s initial public offering (the “IPO”), Topco transferred its entire interest in the Company (being €31,000 of share capital) to PikCo, the consideration for which was an allocation to PikCo’s Reserve Account equal to €31,000. PikCo then contributed (the “Contribution”) all of the Luxco PECs to Midco, the consideration for which was an allocation to Midco’s Reserve Account equal to the value of the Luxco PECs immediately prior to the Contribution. Upon completion of the Contribution, the Luxco PECs were cancelled by Midco. PikCo then transferred the remainder of its interest in Midco (being €12,500 of share capital) to the Company, in consideration for which the Company issued two new shares of its capital stock to PikCo. The difference between the nominal value of these shares and the value of Midco’s net equity will be allocated to the Company’s share premium account. As a result of such transfer, Midco became a direct subsidiary of Atento S.A.. The Company completed a share split whereby Atento S.A. issued approximately 2,219.212 for each 1 ordinary share outstanding as of September 3, 2014. The foregoing is collectively referred as the “Reorganization Transaction.”
 
Once the Reorganization Transaction was implemented, Midco became a wholly-owned subsidiary of Atento S.A., a newly-formed company incorporated under the laws of Luxembourg, with nominal assets and liabilities for the purpose of facilitating the IPO, and which did not conduct any operations prior to the completion of the IPO. For periods following the Reorganization Transaction and the IPO, our financial statements will represent the consolidated results of operations of Midco. The consolidated financial statements of Midco are substantially the same as the consolidated financial statements of the Atento S.A. after to the IPO. For this reason, for all periods prior to the IPO, Midco consolidated financial statements are presented. Subsequent to the Reorganization Transaction and the IPO the consolidated financial statements of Atento S.A. will be presented on a going forward basis.
 
On October 7, 2014, upon the closing of our initial public offering, Atento S.A. issued 4,819,511 ordinary shares at a price to the public of $15.00 per share. Giving effect to the completion of the IPO, including the 2,219.212-for-1 share split of Atento S.A. and the Reorganization Transaction, Atento S.A. has 73,619,511 ordinary shares outstanding and owns 100% of the issued and outstanding share capital of Midco.

3 	

 	
 
 SELECTED FINANCIAL DATA
 
The following selected financial information should be read in conjunction with the section of this document entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the interim consolidated financial statements presented elsewhere in this Form 6-K.
 
The unaudited Financial Information set forth below is derived from Midco’s financial statements, which, once the Reorganization Transaction (as described in the IPO prospectus) was implemented in October 2014 became a wholly-owned subsidiary of Atento S.A., a newly-formed company incorporated under the laws of Luxembourg with nominal assets and liabilities for the purpose of facilitating the IPO, and which did not conduct any operations prior to the completion of the IPO. Prior to the Reorganization Transaction and the IPO, our financial statements were represented by the consolidated results of operations of Midco. The consolidated financial statements of Midco are substantially the same as the consolidated financial statements of the Atento S.A. after to the IPO. For this reason, for all periods prior to the IPO, Midco consolidated financial statements will be presented. Subsequent to the Reorganization Transaction and the IPO the consolidated financial statements of Atento S.A. will be presented on a going forward basis.
 
 SUMMARY CONSOLIDATED HISTORICAL FINANCIAL INFORMATION
 
The following tables present summary consolidated historical financial information for the periods and as of the dates indicated and should be read in conjunction with the section of this document entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Selected Historical Financial Information” and the financial statements included elsewhere in this document.

 	 	For the three months ended
 September 30,	 	 	Change	 	 	Change
excluding
FX	 	 	For the nine months ended
September 30,	 	 	Change	 	 	Change
excluding FX	 	
($ millions)	 	2013	 	 	2014	 	 	(%)	 	 	(%)	 	 	2013	 	 	2014	 	 	(%)	 	 	(%)	 	
 	 	(unaudited)	 	 	 	 	 	 	 	 	(unaudited)	 	 	 	 	 	 	 	
Revenue	 	 	580.3	 	 	 	589.6	 	 	 	1.6	 	 	 	5.9	 	 	 	1,747.3	 	 	 	1,743.3	 	 	 	(0.2	)	 	 	8.4	 	
EBITDA (1)	 	 	68.4	 	 	 	77.5	 	 	 	13.3	 	 	 	21.9	 	 	 	170.1	 	 	 	171.4	 	 	 	0.8	 	 	 	10.6	 	
Adjusted EBITDA (1)	 	 	85.8	 	 	 	88.2	 	 	 	2.8	 	 	 	10.1	 	 	 	209.6	 	 	 	219.8	 	 	 	4.9	 	 	 	13.9	 	
Adjusted Earnings (2)	 	 	27.5	 	 	 	25.6	 	 	 	(6.9	)	 	 	12.0	 	 	 	41.7	 	 	 	51.0	 	 	 	22.3	 	 	 	35.7	 	
Adjusted Earnings per share (in U.S. dollars) (3)	 	 	0.37	 	 	 	0.35	 	 	 	(6.9	)	 	 	12.0	 	 	 	0.57	 	 	 	0.69	 	 	 	22.3	 	 	 	35.7	 	
Capital Expenditures (4)	 	 	24.0	 	 	 	24.8	 	 	 	3.3	 	 	 	5.2	 	 	 	52.7	 	 	 	65.4	 	 	 	24.1	 	 	 	32.5	 	
Total Debt with third parties	 	 	876.9	 	 	 	703.2	 	 	 	(19.8	)	 	 	N.M.	 	 	 	876.9	 	 	 	703.2	 	 	 	(19.8	)	 	 	N.M.	 	
Cash and cash equivalents and short-term
financial investments	 	 	218.6	 	 	 	243.3	 	 	 	11.3	 	 	 	N.M.	 	 	 	218.6	 	 	 	243.3	 	 	 	11.3	 	 	 	N.M.	 	
Net debt with third parties (5)	 	 	658.3	 	 	 	459.9	 	 	 	(30.1	)	 	 	N.M.	 	 	 	658.3	 	 	 	459.9	 	 	 	(30.1	)	 	 	N.M.	 	

	(1)	In considering the financial performance of the business and as a management tool in business decision making, our management analyzes the financial performance measures of EBITDA and Adjusted EBITDA at a company and operating segment level. EBITDA is defined as profit/(loss) for the period from continuing operations before net finance costs, income taxes and depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted to exclude Acquisition and integration related costs, restructuring costs, sponsor management fees, asset impairments, site relocation costs, financing and IPO fees, and other items which are not related to our core results of operations. EBITDA and Adjusted EBITDA are not measures defined by IFRS. The most directly comparable IFRS measure to EBITDA and Adjusted EBITDA is profit/(loss) for the period from continuing operations.	
 
		We believe EBITDA and Adjusted EBITDA, as defined above, are useful metrics for investors to understand our results of operations and profitability because they permit investors to evaluate our recurring profitability from underlying operating activities. We also use these measures internally to establish forecasts, budgets and operational goals to manage and monitor our business, as well as evaluating our underlying historical performance. We believe EBITDA facilitates operating performance comparisons between periods and among other companies in industries similar to ours because it removes the effect of variation in capital structures, taxation, and non-cash depreciation and amortization charges, which may differ between companies for reasons unrelated to operating performance. We believe Adjusted EBITDA better reflects our underlying operating performance because it excludes the impact of items which are not related to our core results of operations.	

4 	

 	
  
		EBITDA and Adjusted EBITDA measures are frequently used by securities analysts, investors and other interested parties in their evaluation of companies comparable to us, many of which present EBITDA-related performance measures when reporting their results.	
 
		EBITDA and Adjusted EBITDA have limitations as analytical tools. These measures are not presentations made in accordance with IFRS, are not measures of financial condition or liquidity and should not be considered in isolation or as alternatives to profit or loss for the period from continuing operations or other measures determined in accordance with IFRS. EBITDA and adjusted EBITDA are not necessary comparable to similar titled measures used by other companies.	
 
See “Summary Consolidated Historical Financial Information” for a reconciliation of profit/(loss) for the period from continuing operations to EBITDA and Adjusted EBITDA.
 
	(2)	In considering the financial performance, our management analyzes the performance measure of Adjusted Earnings/(Loss). Adjusted Earnings/(Loss) is defined as profit/(loss) for the period from continuing operations adjusted for Acquisition and integration related costs, amortization of Acquisition related intangible assets, restructuring costs, sponsor management fees, assets impairments, site relocation costs, financing fees, PECs interest expense, other and tax effects. Adjusted Earnings/(Loss) is not a measure defined by IFRS. The most directly comparable IFRS measure to Adjusted Earnings/(Loss) is our profit/(loss) for the period from continuing operations.	
 
		We believe Adjusted Earnings/(Loss), as defined above, is useful to investors and is used by our management for measuring profitability because it represents a group measure of performance which excludes the impact of certain non-cash charges and other charges not associated with the underlying operating performance of the business, while including the effect of items that we believe affect shareholder value and in-year return, such as income tax expense and net finance costs.	
 
		Management expects to use Adjusted Earnings/(Loss) to (i) provide senior management a monthly report of our operating results that is prepared on an adjusted earnings basis; (ii) prepare strategic plans and annual budgets on an adjusted earnings basis; and (iii) review senior management’s annual compensation, in part, using adjusted performance measures.	
 
		Adjusted Earnings/(Loss) is defined to exclude items that are not related to our core results of operations. Adjusted Earnings/(Loss) measures are frequently used by securities analysts, investors and other interested parties in their evaluation of companies comparable to us, many of which present an adjusted earnings related performance measure when reporting their results.	
 
		Adjusted Earnings/(Loss) has limitations as an analytical tool. Adjusted Earnings/(Loss) is neither a presentation made in accordance with IFRS nor a measure of financial condition or liquidity, and should not be considered in isolation or as an alternative to profit or loss for the period from continuing operations or other measures determined in accordance with IFRS. Adjusted Earnings/(Loss) is not necessarily comparable to similarly titled measures used by other companies.	
 
See “Summary Consolidated Historical Financial Information” for a reconciliation of our Adjusted Earnings/(Loss) to out profit/(loss) for the period from continuing operations.
 
	(3)	Adjusted Earnings per share calculated assuming Atento S.A. ordinary shares of 73,619,511 giving effect to the completion of the IPO and the Reorganization Transaction.	
 
	(4)	We defined capital expenditure as the sum of the additions to property, plant and equipment and the additions to intangible assets during the period presented.	
 
	(5)	In considering our financial condition, our management analyzes Net debt with third parties, which is defined as Total debt less cash, cash equivalents (net of any outstanding bank overdrafts) and short-term financial investments and non-current payables to Atento Group companies (which represent the PECs). The PECs are classified as our subordinated debt relating to our other present and future obligations, and they were capitalized in connection with the IPO. Net debt with third parties is not a measure defined by IFRS.	
 
Net debt with third parties has limitations as an analytical tool. Net debt with third parties is neither a measure defined by or presented in accordance with IFRS nor a measure of financial performance, and should not be considered in isolation or as an alternative financial measure determined in accordance with IFRS. Net debt with third parties is not necessarily comparable to similarly titled measures used by other companies.
 
See “Selected Historical Financial Information” for a reconciliation of Total debt to Net debt with third parties utilizing IFRS reported balances obtained from the audited financial statements included elsewhere in this document. Total debt is the most directly comparable financial measure under IFRS for the periods presented.

5 	

 	
  
 Interim Condensed Consolidated Statements of Financial Position as of September 30, 2014 and December 31, 2013
 
(THOUSANDS OF U.S. DOLLARS)
 
 	 	December 31, 2013	 	 	September 30, 2014	 	
	 	(Audited)	 	 	(Unaudited)	 	
ASSETS	 	 	 	 	 	 	
NON-CURRENT ASSETS	 	 	1,071,381	 	 	 	955,414	 	
Intangible assets	 	 	392,777	 	 	 	311,926	 	
Goodwill	 	 	197,739	 	 	 	174,407	 	
Property, plant and equipment	 	 	231,603	 	 	 	226,133	 	
Non-current financial assets	 	 	69,323	 	 	 	64,995	 	
Deferred tax assets	 	 	179,939	 	 	 	177,953	 	
CURRENT ASSETS	 	 	770,799	 	 	 	760,189	 	
Trade and other receivables	 	 	553,026	 	 	 	513,728	 	
Other current financial assets	 	 	4,282	 	 	 	55,765	 	
Cash and cash equivalents	 	 	213,491	 	 	 	190,696	 	
TOTAL ASSETS	 	 	1,842,180	 	 	 	1,715,603	 	
 	 	 	 	 	 	 	 	 	
EQUITY AND LIABILITIES	 	 	 	 	 	 	 	 	
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT	 	 	(133,966	)	 	 	(137,192	)	
NON-CURRENT LIABILITIES	 	 	1,591,287	 	 	 	1,462,893	 	
Deferred tax liabilities	 	 	119,282	 	 	 	93,289	 	
Interest bearing-debt	 	 	833,984	 	 	 	690,562	 	
Non-current payables to Group companies	 	 	519,607	 	 	 	578,773	 	
Derivative financial instruments	 	 	15,962	 	 	 	4,043	 	
Non-current provisions	 	 	99,062	 	 	 	93,429	 	
Other non-current non-trade payables	 	 	1,441	 	 	 	1,034	 	
Other non-current payables to public administrations	 	 	1,949	 	 	 	1,763	 	
CURRENT LIABILITIES	 	 	384,859	 	 	 	389,902	 	
Interest bearing-debt	 	 	17,128	 	 	 	12,506	 	
Trade and other payables	 	 	353,213	 	 	 	361,760	 	
Current provisions	 	 	14,518	 	 	 	15,636	 	
TOTAL EQUITY AND LIABILITIES	 	 	1,842,180	 	 	 	1,715,603	 	

6 	

 	
 
 Interim Condensed Consolidated Income Statements for the Three and Nine Months Ended September 30, 2014 and 2013
 
UNAUDITED DATA (THOUSANDS OF U.S. DOLLARS)

 	 	For the three months
ended September 30,	 	 	Change
excluding	 	 	For the nine months
ended September 30,	 	 	Change
excluding	 	
 	 	2013	 	 	2014	 	 	FX (%)	 	 	2013	 	 	2014	 	 	FX (%)	 	
 	 	(unaudited)	 	 	 	 	 	(unaudited)	 	 	 	 	
Revenue	 	 	580,261	 	 	 	589,646	 	 	 	5.9	 	 	 	1,747,332	 	 	 	1,743,264	 	 	 	8.4	 	
Other operating income	 	 	111	 	 	 	904	 	 	 	N.M.	 	 	 	687	 	 	 	1,760	 	 	 	N.M.	 	
Own work capitalized	 	 	533	 	 	 	202	 	 	 	(40.0	)	 	 	533	 	 	 	413	 	 	 	N.M.	 	
Other gains	 	 	-	 	 	 	(403	)	 	 	N.M.	 	 	 	-	 	 	 	34,478	 	 	 	N.M.	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Supplies	 	 	(25,502	)	 	 	(27,106	)	 	 	10.6	 	 	 	(71,563	)	 	 	(79,240	)	 	 	21.1	 	
Employee benefit expense	 	 	(396,725	)	 	 	(403,030	)	 	 	5.9	 	 	 	(1,226,843	)	 	 	(1,246,353	)	 	 	10.3	 	
Depreciation and amortization	 	 	(30,923	)	 	 	(30,017	)	 	 	(1.0	)	 	 	(96,927	)	 	 	(91,640	)	 	 	0.3	 	
Changes in trade provisions	 	 	774	 	 	 	100	 	 	 	(87.5	)	 	 	2,996	 	 	 	(199	)	 	 	N.M.	 	
Other operating expenses	 	 	(91,105	)	 	 	(83,169	)	 	 	(6.9	)	 	 	(283,088	)	 	 	(250,227	)	 	 	(5.0	)	
Impairment charges	 	 	-	 	 	 	387	 	 	 	N.M.	 	 	 	-	 	 	 	(32,479	)	 	 	N.M.	 	
Total operating expenses	 	 	(543,481	)	 	 	(542,835	)	 	 	3.7	 	 	 	(1,675,425	)	 	 	(1,700,138	)	 	 	9.7	 	
Operating profit	 	 	37,424	 	 	 	47,514	 	 	 	40.6	 	 	 	73,127	 	 	 	79,777	 	 	 	24.5	 	
Finance income	 	 	4,074	 	 	 	21,243	 	 	 	N.M.	 	 	 	12,961	 	 	 	28,345	 	 	 	N.M.	 	
Finance costs	 	 	(37,513	)	 	 	(30,311	)	 	 	(18.1	)	 	 	(103,927	)	 	 	(108,138	)	 	 	7.3	 	
Net foreign exchange gain / (loss)	 	 	8,279	 	 	 	(22,014	)	 	 	N.M.	 	 	 	4,915	 	 	 	(18,405	)	 	 	N.M.	 	
Net finance expense	 	 	(25,160	)	 	 	(31,082	)	 	 	21.4	 	 	 	(86,051	)	 	 	(98,198	)	 	 	19.5	 	
Loss before tax	 	 	12,264	 	 	 	16,432	 	 	 	78.9	 	 	 	(12,924	)	 	 	(18,421	)	 	 	8.5		
Income tax benefit	 	 	(7,594	)	 	 	(8,423	)	 	 	32.9	 	 	 	(5,519	)	 	 	2,120	 	 	 	(83.6	)	
Profit/(Loss) for the period	 	 	4,670	 	 	 	8,009	 	 	 	N.M.	 	 	 	(18,443	)	 	 	(16,301	)	 	 	31.0	 	
Basic and diluted result per share (in U.S. dollars)	 	 	0.04	 	 	 	0.06	 	 	 	N.M.	 	 	 	(0.15	)	 	 	(0.13	)	 	 	31.0	 	

7 	

 	
 
Interim Condensed Consolidated Statements of Cash Flows for the Three and Nine Months Ended September 30, 2014 and 2013
UNAUDITED DATA (THOUSANDS OF U.S. DOLLARS)
 
 	 	Three months ended
September 30,	 	 	Nine months ended
September 30,	 	
 	 	2013
(Unaudited)	 	 	2014
(Unaudited)	 	 	2013
(Unaudited)	 	 	2014
(Unaudited)	 	
Operating activities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss before tax	 	 	12,264	 	 	 	16,432	 	 	 	(12,924	)	 	 	(18,421	)	
Adjustments to loss:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Amortization and depreciation	 	 	30,923	 	 	 	30,018	 	 	 	96,927	 	 	 	91,640	 	
Impairment allowances	 	 	(665	)	 	 	(487	)	 	 	(2,886	)	 	 	32,678	 	
Change in provisions	 	 	5,136	 	 	 	10,303	 	 	 	14,986	 	 	 	33,969	 	
Grants released to income	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	
 Losses on disposal of fixed assets	 	 	127	 	 	 	577	 	 	 	1,092	 	 	 	139	 	
 Losses on disposal of financial assets	 	 	314	 	 	 	345	 	 	 	853	 	 	 	1,001	 	
Finance income	 	 	(2,365	)	 	 	(8,445	)	 	 	(7,407	)	 	 	(13,346	)	
Finance expense	 	 	27,076	 	 	 	32,026	 	 	 	87,612	 	 	 	99,404	 	
Net exchange differences	 	 	(8,279	)	 	 	22,015	 	 	 	(4,915	)	 	 	18,405	 	
Change in financial instruments fair value	 	 	8,416	 	 	 	(14,858	)	 	 	9,909	 	 	 	(7,266	)	
Own work capitalized	 	 	-	 	 	 	(202	)	 	 	-	 	 	 	(413	)	
Other (gains)/losses	 	 	-	 	 	 	816	 	 	 	-	 	 	 	(34,478	)	
 	 	 	60,682	 	 	 	72,108	 	 	 	196,171	 	 	 	221,733	 	
Changes in working capital:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Change in trade and other receivable	 	 	(48,546	)	 	 	28,190	 	 	 	(54,500	)	 	 	34,832	 	
Change in trade and other payable	 	 	45,301	 	 	 	(31,854	)	 	 	34,356	 	 	 	(13,586	)	
Other assets (payables)	 	 	(22,193	)	 	 	3,870	 	 	 	(18,758	)	 	 	(11,252	)	
 	 	 	(25,438	)	 	 	206	 	 	 	(38,902	)	 	 	9,994	 	
Other cash flows from operating activities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest paid	 	 	(10,571	)	 	 	(20,055	)	 	 	(47,405	)	 	 	(68,396	)	
Interest received	 	 	7,874	 	 	 	4,104	 	 	 	9,593	 	 	 	13,346	 	
Income tax paid	 	 	(7,403	)	 	 	(6,031	)	 	 	(24,819	)	 	 	(15,998	)	
Other payments	 	 	(3,173	)	 	 	(23,228	)	 	 	(13,290	)	 	 	(32,859	)	
 	 	 	(13,272	)	 	 	(45,210	)	 	 	(75,921	)	 	 	(103,907	)	
Net cash flows from/(used in) operating activities	 	 	34,236	 	 	 	43,536	 	 	 	68,424	 	 	 	109,399	 	
Investing activities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Payments for acquisition of intangible assets	 	 	(2,626	)	 	 	(6,162	)	 	 	(7,613	)	 	 	(13,412	)	
Payments for acquisition of property, plant and equipment	 	 	(5,834	)	 	 	(29,853	)	 	 	(59,445	)	 	 	(67,765	)	
Payments for financial instruments	 	 	-	 	 	 	(6,373	)	 	 	(26,775	)	 	 	(66,562	)	
Disposals of intangible assets	 	 	-	 	 	 	-	 	 	 	-	 	 	 	99	 	
Disposals of property, plant and equipment	 	 	-	 	 	 	-	 	 	 	-	 	 	 	886	 	
Disposal of financial instruments	 	 	19,674	 	 	 	11,644	 	 	 	3,587	 	 	 	14,000	 	
Net cash flows from/(used in) investing activities	 	 	11,215	 	 	 	(30,744	)	 	 	(90,246	)	 	 	(132,754	)	
Financing activities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Proceeds from borrowings from third parties	 	 	3,298	 	 	 	34,103	 	 	 	293,185	 	 	 	70,912	 	
Proceeds from borrowings from group companies	 	 	-	 	 	 	-	 	 	 	(38	)	 	 	88,319	 	
Repayment of borrowings from third parties	 	 	(3,466	)	 	 	(35,038	)	 	 	(252,542	)	 	 	(158,992	)	
Net cash flows from/(used in) financing activities	 	 	(168	)	 	 	(935	)	 	 	40,605	 	 	 	239	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Exchange differences	 	 	(3,834	)	 	 	590	 	 	 	(529	)	 	 	321	 	
Net increase/(decrease) in cash and cash equivalents	 	 	41,449	 	 	 	12,447	 	 	 	18,254	 	 	 	(22,795	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents at beginning of period	 	 	177,116	 	 	 	178,249	 	 	 	200,311	 	 	 	213,491	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents at end of period	 	 	218,565	 	 	 	190,696	 	 	 	218,565	 	 	 	190,696	 	
Cash and cash equivalents and short-term
financial investments at end of the period	 	 	218,565	 	 	 	243,326	 	 	 	218,565	 	 	 	243,326	 	

8 	

 	
 
Reconciliation of EBITDA and Adjusted EBITDA to profit/(loss):
 
 	 	Three months ended
September 30,	 	 	Nine months ended
September 30,	 	
($ in millions)	 	2013	 	 	2014	 	 	2013	 	 	2014	 	
 	 	(unaudited)	 	 	(unaudited)	 	
Profit/(loss) for the period from continuing operations	 	4.7	 	 	8.0	 	 	(18.4	)	 	(16.3	)	
Net finance expense	 	 	25.2	 	 	 	31.1	 	 	 	86.0	 	 	 	98.2	 	
Income tax expense	 	 	7.6	 	 	 	8.4	 	 	 	5.5	 	 	 	(2.1	)	
Depreciation and amortization	 	 	30.9	 	 	 	30.0	 	 	 	96.9	 	 	 	91.6	 	
EBITDA (non-GAAP) (unaudited)	 	 	68.4	 	 	 	77.5	 	 	 	170.1	 	 	 	171.4	 	
Acquisition and integration related costs (a)	 	 	8.3	 	 	 	2.3	 	 	 	21.1	 	 	 	7.7	 	
Restructuring costs (b)	 	 	2.5	 	 	 	2.3	 	 	 	4.0	 	 	 	23.8	 	
Sponsor management fees (c)	 	 	2.4	 	 	 	2.5	 	 	 	5.9	 	 	 	7.3	 	
Site relocation costs (d)	 	 	1.5	 	 	 	0.4	 	 	 	1.8	 	 	 	1.4	 	
Financing and IPO fees (e)	 	 	1.9	 	 	 	3.5	 	 	 	5.1	 	 	 	11.1	 	
Asset impairments and Other (f)	 	 	0.8	 	 	 	(0.3	)	 	 	1.6	 	 	 	(2.9	)	
Adjusted EBITDA (non-GAAP) (unaudited)	 	 	85.8	 	 	 	88.2	 	 	 	209.6	 	 	 	219.8	 	
  
	(a)	Acquisition and integration related costs incurred for the three months ended September 30, 2013 and 2014 primarily include costs associated with the Acquisition. For the three months ended September 30, 2013, of the $8.3 million, $8.0 million are related to professional fees incurred to establish Atento as a standalone company not affiliated to Telefónica. These projects are mainly related to full strategy review including growth implementation plan and operational set-up with a leading consulting firm ($5.8 million), the improvement of financial and cash flow reporting ($0.9 million), improving the efficiency in procurement ($0.9 million) and headhunting fees related primarily to strengthening the senior management team post-Acquisition ($0.4 million). Acquisition and integration related cost incurred for the three months ended September 30, 2014 primarily resulted from consulting fees incurred in connection with the full strategy review including our growth implementation plan an operational set-up with a leading consulting firm. We expect these projects to be completed by the end of 2014.	
 
Acquisition and integration related costs incurred for the nine months ended September 30, 2013 and 2014 primarily include costs associated with the Acquisition. For the nine months ended September 30, 2013, of the $21.1 million, $20.1 million are related to professional fees incurred to establish Atento as a standalone company not affiliated to Telefónica. These projects are mainly related to full strategy review including growth implementation plan and operational set-up with a leading consulting firm ($10.9 million), the improvement of financial and cash flow reporting ($5.9 million), improving the efficiency in procurement ($0.9 million) and headhunting fees related primarily to strengthening the senior management team post-Acquisition ($1.3 million). Acquisition and integration related cost incurred for the nine months ended September 30, 2014 primarily resulted from consulting fees incurred in connection with the full strategy review including our growth implementation plan an operational set-up with a leading consulting firm ($4.0 million), improving the efficiency in procurement ($2.3 million), and IT transformation projects ($0.7 million). We expect these projects to be completed by the end of 2014.
 
	(b)	Restructuring costs primarily include a number of restructuring activities and other personnel cost that were not related to our core results of operations. Restructuring costs incurred for the three months ended September 30, 2013 primarily relate to restructuring costs as a consequence of significant reduction in activity levels as a result of adverse market conditions in Spain ($1.2 million), and related to the relocation of our corporate headquarters ($0.6 million). Restructuring costs incurred for the three months ended September 30, 2014 primarily relate to other costs in connection with Spain headcount reduction plan ($1.0 million), restructuring costs in Argentina ($0.4 million) and the relocation of corporate headquarter ($0.6 million).	
 
For the nine months ended September 30, 2013, we incurred in restructuring costs in Spain of $1.4 million (relating to restructuring expenses incurred as a consequence of significant reduction in activity levels as a result of adverse market conditions in Spain), in Chile of $0.8 million (relating to restructuring expenses incurred in connection with the implementation of a new service delivery model with Telefónica), and $0.8 million related to the relocation of our corporate headquarters. Restructuring costs incurred for the nine months ended September 30, 2014 primarily relate to the headcount reduction plan in Spain which will take into consideration a maximum number of terminations amounting to 9% of the total headcount of Atento Teleservicios España S.A.U. amounting to $13.9 million. In addition, we incurred restructuring costs not related to our core results of operations in Argentina of $3.2 million (related to migration of offshore operations to Peru), and in Chile of $1.4 million (related to restructuring expenses incurred in connection with the implementation of a new service delivery model with Telefónica), and an additional $0.8 million related to the relocation of corporate headquarter.

9 	

 	
  
	(c)	Sponsor management fees represent the annual advisory fee paid to Bain Capital Partners, LLC that are expensed during the period presented. These fees will cease following the offering.	
 
	(d)	Site relocation costs incurred for the three and nine months ended September 30, 2013 and 2014 include costs associated with our current strategic initiative of relocating call centers from tier 1 cities to tier 2 cities in Brazil in order to get efficiencies through rental cost reduction and attrition and absenteeism improvement.	
 
	(e)	Financing and IPO fees for the three and nine months ended September 30, 2013 primarily relate to professional fees incurred in 2013 in connection with the issuance of the Senior Secured Notes and to pay financial advisory fees. Financing fees and IPO fees for the three and nine months ended September 30, 2014 primarily relate to professional fees (advisory, auditing, legal fees, etc.) incurred by us during the IPO process. These fees are expected to cease in the fourth quarter of 2014.	
 
	(f)	Asset impairment and other costs for the three and nine months ended September 30, 2013 relates to charges associated to projects for inventory control in Brazil which are not related to our core results of operations. Asset impairments and other costs incurred for the nine months ended September 30, 2014, mainly relate to the goodwill and other intangible asset impairment relating to our operations in Czech Republic of $3.8 million and Spain of $28.7 million offset by the amendment of the MSA with Telefónica by which the minimum revenue commitment for Spain was reduced against a $34.5 million penalty fee compensated by Telefónica.	

10 	

 	
  
The following table reconciles our Adjusted Earnings/(Loss) to our profit/(loss) for the period from continuing operations:

 	 	For the three months
ended September 30,	 	 	For the nine months
ended September 30,	 	
($ in millions, except percentage changes)	 	2013	 	 	2014	 	 	2013	 	 	2014	 	
Loss attributable to equity holders of the parent	 	 	4.7	 	 	 	8.0	 	 	 	(18.4	)	 	 	(16.3	)	
Acquisition and integration related Costs (a)	 	 	8.3	 	 	 	2.3	 	 	 	21.1	 	 	 	7.7	 	
Amortization of Acquisition related Intangible assets (b)	 	 	9.6	 	 	 	8.9	 	 	 	29.9	 	 	 	28.5	 	
Restructuring Costs (c)	 	 	2.5	 	 	 	2.3	 	 	 	4.0	 	 	 	23.8	 	
Sponsor management fees (d)	 	 	2.4	 	 	 	2.5	 	 	 	5.9	 	 	 	7.3	 	
Site relocation costs (e)	 	 	1.5	 	 	 	0.4	 	 	 	1.8	 	 	 	1.4	 	
Financing and IPO fees (f)	 	 	1.9	 	 	 	3.5	 	 	 	5.1	 	 	 	11.1	 	
PECs interest expense (g)	 	 	6.5	 	 	 	7.2	 	 	 	18.9	 	 	 	25.8	 	
Asset impairments and Other (h)	 	 	0.8	 	 	 	(0.3	)	 	 	1.6	 	 	 	(2.9	)	
Tax effect (i)	 	 	(10.7	)	 	 	(9.2	)	 	 	(28.2	)	 	 	(35.4	)	
Adjusted Earnings /(Loss) (non-GAAP) (unaudited)	 	 	27.5	 	 	 	25.6	 	 	 	41.7	 	 	 	51.0	 	
Adjusted Earnings per share (in U.S. dollars) (unaudited) (*)	 	 	0.37	 	 	 	0.35	 	 	 	0.57	 	 	 	0.69	 	

(*) Adjusted Earnings per share calculated assuming Atento S.A. ordinary shares of 73,619,511 giving effect to the completion of the IPO and the Reorganization Transaction
 
	(a)	Acquisition and integration related costs incurred for the three months ended September 30, 2013 and 2014 primarily include costs associated with the Acquisition. For the three months ended September 30, 2013, of the $8.3 million, $8.0 million are related to professional fees incurred to establish Atento as a standalone company not affiliated to Telefónica. These projects are mainly related to full strategy review including growth implementation plan and operational set-up with a leading consulting firm ($5.8 million), the improvement of financial and cash flow reporting ($0.9 million), improving the efficiency in procurement ($0.9 million) and headhunting fees related primarily to strengthening the senior management team post-Acquisition ($0.4 million). Acquisition and integration related cost incurred for the three months ended September 30, 2014 primarily resulted from consulting fees incurred in connection with the full strategy review including our growth implementation plan an operational set-up with a leading consulting firm. We expect these projects to be completed by the end of 2014.	
 
Acquisition and integration related costs incurred for the nine months ended September 30, 2013 and 2014 primarily include costs associated with the Acquisition. For the nine months ended September 30, 2013, of the $21.1 million, $20.1 million are related to professional fees incurred to establish Atento as a standalone company not affiliated to Telefónica. These projects are mainly related to full strategy review including growth implementation plan and operational set-up with a leading consulting firm ($10.9 million), the improvement of financial and cash flow reporting ($5.9 million), improving the efficiency in procurement ($0.9 million) and headhunting fees related primarily to strengthening the senior management team post-Acquisition ($1.3 million). Acquisition and integration related cost incurred for the nine months ended September 30, 2014 primarily resulted from consulting fees incurred in connection with the full strategy review including our growth implementation plan an operational set-up with a leading consulting firm ($4.0 million), improving the efficiency in procurement ($2.3 million), and IT transformation projects ($0.7 million). We expect these projects to be completed by the end of 2014.
 
	(b)	Amortization of Acquisition related intangible assets represents the amortization expense of intangible assets resulting from the Acquisition and has been adjusted to eliminate the impact of the amortization arising from the Acquisition which is not in the ordinary course of our daily operations and distorts comparison with peers and results for prior periods. Such intangible assets primarily include contractual relationships with customers, for which the useful life has been estimated at primarily nine years.	

	(c)	Restructuring costs primarily include a number of restructuring activities and other personnel cost that were not related to our core results of operations. Restructuring costs incurred for the three months ended September 30, 2013 primarily relate to restructuring costs as a consequence of significant reduction in activity levels as a result of adverse market conditions in Spain ($1.2 million), and related to the relocation of our corporate headquarters ($0.6 million). Restructuring costs incurred for the three months ended September 30, 2014 primarily relate to other costs in connection with Spain headcount reduction plan ($1.0 million), restructuring costs in Argentina ($0.4 million) and the relocation of corporate headquarter ($0.6 million).	

11 	

 	
   
For the nine months ended September 30, 2013, we incurred in restructuring costs in Spain of $1.4 million (relating to restructuring expenses incurred as a consequence of significant reduction in activity levels as a result of adverse market conditions in Spain), in Chile of $0.8 million (relating to restructuring expenses incurred in connection with the implementation of a new service delivery model with Telefónica), and $0.8 million related to the relocation of our corporate headquarters. Restructuring costs incurred for the nine months ended September 30, 2014 primarily relate to the headcount reduction plan in Spain which will take into consideration a maximum number of terminations amounting to 9% of the total headcount of Atento Teleservicios España S.A.U. amounting to $13.9 million. In addition, we incurred restructuring costs not related to our core results of operations in Argentina of $3.2 million (related to migration of offshore operations to Peru), and in Chile of $1.4 million (related to restructuring expenses incurred in connection with the implementation of a new service delivery model with Telefónica), and an additional $0.8 million related to the relocation of corporate headquarter.
 
	(d)	Sponsor management fees represent the annual advisory fee paid to Bain Capital Partners, LLC that are expensed during the periods presented. These fees will cease following the offering.	
 
	(e)	Site relocation costs incurred for the three and nine months ended September 30, 2013 and 2014 include costs associated with our current strategic initiative of relocating call centers from tier 1 cities to tier 2 cities in Brazil in order to get efficiencies through rental cost reduction and attrition and absenteeism improvement.	
 
	(f)	Financing and IPO fees for the three and nine months ended September 30, 2013 primarily relate to professional fees incurred in 2013 in connection with the issuance of the Senior Secured Notes and to pay financial advisory fees. Financing fees and IPO fees for the three and nine months ended September 30, 2014 primarily relate to professional fees (advisory, auditing, legal fees, etc.) incurred by us during the IPO process. These fees are expected to cease in the fourth quarter of 2014.	
 
	(g)	PECs Interest expense represents accrued interest on the preferred equity certificates that were capitalized in connection with the IPO.	
 
	(h)	Asset impairment and other costs for the three and nine months ended September 30, 2013 relates to charges associated to projects for inventory control in Brazil which are not related to our core results of operations. Asset impairments and other costs incurred for the nine months ended September 30, 2014, mainly relate to the goodwill and other intangible asset impairment relating to our operations in Czech Republic of $3.8 million and Spain of $28.7 million offset by the amendment of the MSA with Telefónica by which the minimum revenue commitment for Spain was reduced against a $34.5 million penalty fee compensated by Telefónica.	
 
	(i)	The tax effect represents the tax impact of the total adjustments based on a tax rate of 31.8% for the nine months ended September 30, 2013 and 34.5% for the nine months ended September 30, 2014.	

12 	

 	
 
Financing Arrangements
 
($ in million, except Net Debt / Adj. EBITDA LTM)	 	As of September 30, 2014
(unaudited)	 	
 	 	Actual	 	 	As Adjusted (1)	 	 	Pro Forma	 	
Cash and cash equivalentes	 	 	190.7	 	 	 	190.7	 	 	 	190.7	 	
Short term financial investments	 	 	52.6	 	 	 	52.6	 	 	 	52.6	 	
Debt:	 	 	 	 	 	 	 	 	 	 	 	 	
7.375% Sr. Sec. Notes due 2020	 	 	294.4	 	 	 	294.4	 	 	 	294.4	 	
Brazilian Debentures	 	 	267.7	 	 	 	267.7	 	 	 	267.7	 	
Vendor Loan Note (2)	 	 	29.3	 	 	 	29.3	 	 	 	-	 	
Contingent Value Instrument	 	 	36.1	 	 	 	36.1	 	 	 	36.1	 	
Revolving Credit Facility	 	 	-	 	 	 	-	 	 	 	-	 	
Preferred Equity Certificates	 	 	578.8	 	 	 	-	 	 	 	-	 	
Finance lease payables	 	 	8.7	 	 	 	8.7	 	 	 	8.7	 	
Other borrowings	 	 	67.0	 	 	 	67.0	 	 	 	67.0	 	
Total Debt	 	 	1,282.0	 	 	 	703.2	 	 	 	673.9	 	
Net Debt (3)	 	 	 	 	 	 	459.9	 	 	 	430.6	 	
Adjusted EBITDA LTM (4)	 	 	 	 	 	 	305.4	 	 	 	305.4	 	
Net Debt / Adjusted EBITDA LTM	 	 	 	 	 	 	1.5	x	 	 	1.4	x	
 
(1) Total capitalization as adjusted to give effect to the Reorganization Transaction, in connection with the completion of our IPO.
(2) Reflects the liquidation of Vendor Loan Note.
(3) In considering our financial condition, our management analyzes Net debt with third parties, which is defined as Total debt less cash, cash equivalents, and short-term financial investments. Net debt is not a measure defined by IFRS and it has limitations as an analytical tool. Net debt is neither a measure defined by or presented in accordance with IFRS nor a measure of financial performance, and should not be considered in isolation or as an alternative financial measure determined in accordance with IFRS. Net debt is not necessarily comparable to similarly titled measures used by other companies.
(4) Adjusted EBITDA LTM is defined as EBITDA adjusted to exclude Acquisition and integration related costs, restructuring costs, sponsor management fees, asset impairments, site relocation costs, financing fees, IPO costs and other items, which are not related to our core results of operations for the last twelve months.
 
As of September 30, 2014, we were in compliance with the terms of all our debt covenants.

13 	

 	
 
 Selected Unaudited Pro Forma Per Share Data
 
In October 2014, in connection to completion of Atento S.A. initial public offering (the “IPO”), Topco transferred its entire interest in the Midco (being €31,000 of share capital) to PikCo, the consideration for which was an allocation to PikCo’s Reserve Account equal to €31,000. PikCo then contributed (the “Contribution”) all of the Luxco PECs to Midco, the consideration for which was an allocation to Midco’s Reserve Account equal to the value of the Luxco PECs immediately prior to the Contribution. The Luxco PECs amounted to €460.0 million (US$578.8 million) as of September 30, 2014 (€460.1 million or approx. US$575.9 million as at capitalization date on October 3rd). Upon completion of the Contribution, the Luxco PECs were cancelled by Midco. PikCo then transferred the remainder of its interest in Midco (being €12,500 of share capital) to Atento S.A., in consideration for which Atento S.A. issued two new shares of its capital stock to PikCo. The difference between the nominal value of these shares and the value of Midco’s net equity was allocated to the Atento S.A.’s share premium account. As a result of such transfer, Midco became a direct subsidiary of the Atento S.A. It was also completed a share split whereby the Atento S.A. issued approximately 2,219.212 for each 1 ordinary share outstanding as of September 3, 2014. The foregoing transaction is collectively referred as the “Reorganization Transaction”.
 
On October 7, 2014, upon the closing of our initial public offering, Atento S.A. issued 4,819,511 ordinary shares at a price to the public of $15.00 per share. Giving effect to the completion of the IPO, including the 2,219.212-for-1 share split of Atento S.A. and the Reorganization Transaction, Atento S.A. has 73,619,511 ordinary shares outstanding and owns 100% of the issued and outstanding share capital of Midco.
 
The following table sets forth certain unaudited pro forma earnings per share for each of the periods ended September 30, 2014 and 2013 for Atento S.A.. The pro forma number of shares below is the approximate number of common shares that Atento will have outstanding after the Reorganization Transaction and to the IPO.

 	 	For the nine months ended September 30,	 	
 	 	2013	 	 	2014	 	 	Change
excluding
FX (%)	 	
 	 	(unaudited)	 	
Atento’s Loss attributable to equity holders of the parent (in thousands of U.S. dollars) (1)	 	 	(18,443	)	 	 	(16,301	)	 	 	31.0	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Number of ordinary shares	 	 	73,619,511	 	 	 	73,619,511	 	 	 	-	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Pro forma Basic and diluted result per thousand shares (in. U.S. dollars)	 	 	(0.25	)	 	 	(0.22	)	 	 	31.0	 	
 
	(1)	Represents the unaudited Atento’s Loss attributable to equity holders of the parent considering there is a US$233 thousand of difference compared to Midco’s results, which is the predecessor basis.	
 
Pro forma basic and diluted result per thousand shares improved from a loss of $0.25 for the nine months ended September 30, 2013 to a loss of $0.22 for the nine months ended September 30, 2014. Excluding the impact of foreign exchange, the Pro forma basic and diluted result per thousand shares is represented by a loss of $0.17.

14 	

 	
  
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
 
This Form 6-K providing quarterly information contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995, relating to our operations, expected financial position, results of operation, and other business matters that are based on our current expectations, assumptions, and projections with respect to the future, and are not a guarantee of performance. In this report, when we use words such as “may,” “believe,” “plan,” “will,” “anticipate,” “estimate,” “expect,” “intend,” “project,” “would,” “could,” “target,” or similar expressions, or when we discuss our strategy, plans, goals, initiatives, or objectives, we are making forward-looking statements.
 
We caution you not to rely unduly on any forward-looking statements. Actual results may differ materially from what is expressed in the forward-looking statements, and you should review and consider carefully the risks, uncertainties and other factors that affect our business and may cause such differences.
 
The forward-looking statements are based on information available as of the date that this Form 6-K furnished with the United States Securities and Exchange Commission (“SEC”) and we undertake no obligation to update them. They are based on numerous assumptions and developments that are not within our control. Although we believe these forward-looking statements are reasonable, we cannot assure you they will turn out to be correct.
 
For additional detail see the sections entitled “Risk Factors” and “Forward-looking Statements” in our Registration Statement on Form F-1, as amended, which was declared effective on October 1, 2014 (the “Form F-1”).
 
 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
The following discussion and analysis of our financial condition and the results of operations is based upon and should be read in conjunction with the interim financial information and the related notes included herein. The interim financial information has been prepared in accordance with IAS 34 – Interim Financial Reporting, as issued by the IASB, which may differ in material respects from generally accepted accounting principles in other jurisdictions, including the United States. The following discussion includes forward-looking statements. Our actual results could differ materially from those that are discussed in these forward-looking statements.
 
Factors which could cause or contribute to such difference, include, but are not limited to, those discussed elsewhere in this report, particularly under “Cautionary Note Regarding Forward Looking Statements” and the section entitled “Risk Factors” in the Form F-1.
 
 Overview
 
Atento is the largest provider of customer relationship management and business process outsourcing (“CRM BPO”) services and solutions in Latin America and Spain, and among the top three providers, globally based on revenues. Atento’s tailored CRM BPO solutions are designed to enhance each of its clients’ ability to deliver a high-quality product by creating a best-in-class experience for their customers, enabling our clients to focus on operating their core businesses. Atento utilizes its industry domain and customer care operations expertise, combined with a consultative approach, to offer superior and scalable solutions across the entire customer care value chain, customized for each individual client’s needs and sophistications.
 
Atento offers a comprehensive portfolio of customizable, yet scalable, solutions that comprise front-end and back-end services ranging from sales, applications processing, customer care and credit management. From our suite of products and value-added services, we derive embedded and integrated industry-tailored solutions for a large and diverse group of multi-national companies. Our solutions to our base of over 400 clients are delivered by approximately 153,000 of our highly engaged customer care specialists and facilitated by our best-in-class technology infrastructure and multi-channel delivery platform. We believe we bring a differentiated combination of scale, customer transaction processing capacity and industry expertise to our clients’ customer care operations, which allow us to provide higher-quality customer care services more cost-effectively than our clients could deliver on their own.
 
Our number of workstations increased from 79,197 as of December 31, 2013 to 83,920 workstations as of September 30, 2014. Since we lease all of our call center facilities, which increases our operating expenses and does not result in a depreciation expense, our EBITDA performance has historically differed from competitors who own their buildings and equipment, as related financings have generally resulted in higher depreciation expenses for those competitors and have increased such competitors’ EBITDA.

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We continue to relocate a portion of our delivery centers from tier 1 to tier 2 cities, which tend to be smaller, more affordable locations, as we seek to optimize lease expenses and reduce employee benefit expenses by focusing on reducing turnover and absenteeism. Additionally, the relocation of delivery centers allows us to access and attract new and larger pools of talent in locations where Atento is considered a reference employer. We have completed several successful site transfers in Brazil, Colombia and Argentina. In Brazil, the percentage of total workstations located in tier 2 cities remains constant at 54.1% in 2014 when compared to the same period in 2013. As demand for our services and solutions grows and their complexity continues to increase, we continue to evaluate and adjust our site footprint to create the most competitive combination of quality of service and cost effectiveness.
 
As of September 30, 2014, we had 83,920 workstations globally, with 43,350 in Brazil, 32,644 in the Americas (excluding Brazil) and 7,926 in EMEA. As of September 30, 2014, we had 94 delivery centers globally, 29 in Brazil, 44 in the Americas (excluding Brazil) and 21 in EMEA. The following table sets forth the number of delivery centers and workstations in each of the jurisdictions in which we operated as at September 30, 2013 and September 30, 2014.

 	 	Number of Workstations	 	 	Number of Service
 Delivery Centers (1)	 	
 	 	2013	 	 	2014	 	 	2013	 	 	2014	 	
 	 	(unaudited)	 	
Brazil	 	 	37,754	 	 	 	43,350	 	 	 	23	 	 	 	29	 	
Americas	 	 	32,234	 	 	 	32,644	 	 	 	46	 	 	 	44	 	
Argentina (2)	 	 	3,960	 	 	 	3,831	 	 	 	12	 	 	 	11	 	
Central America (3)	 	 	1,625	 	 	 	2,653	 	 	 	3	 	 	 	3	 	
Chile	 	 	3,749	 	 	 	2,398	 	 	 	3	 	 	 	2	 	
Colombia	 	 	5,647	 	 	 	5,403	 	 	 	7	 	 	 	6	 	
Mexico	 	 	9,014	 	 	 	9,656	 	 	 	16	 	 	 	17	 	
Peru	 	 	7,186	 	 	 	7,569	 	 	 	2	 	 	 	2	 	
United States (4)	 	 	1,053	 	 	 	1,134	 	 	 	3	 	 	 	3	 	
EMEA	 	 	6,311	 	 	 	7,926	 	 	 	18	 	 	 	21	 	
Czech Republic	 	 	4,852	 	 	 	5,414	 	 	 	13	 	 	 	15	 	
Morocco	 	 	867	 	 	 	2,042	 	 	 	2	 	 	 	4	 	
Spain	 	 	592	 	 	 	470	 	 	 	3	 	 	 	2	 	
Total	 	 	76,299	 	 	 	83,920	 	 	 	87	 	 	 	94	 	

	(1)	Includes service delivery centers at facilities operated by us and those owned by our clients where we provide operations personnel and workstations.	

	(2)	Includes Uruguay.	

	(3)	Includes Guatemala and El Salvador.	

	(4)	Includes Puerto Rico.	
 
During the first nine months of 2014, the revenue generated from our fifteen largest client groups (including Telefónica Group) represented 82.2% of our revenue as compared to 84.5% of revenue in the same period in the prior year. Excluding revenue generated from Telefónica Group, our next 15 largest clients groups represented in aggregate 36% of our revenues during the nine months ended September 30, 2014, maintaining constant compared with the same period of the prior year.
 
For the three months ended September 30, 2014, the revenue generated from our fifteen largest client groups (including Telefónica Group) represented 83.1% of our revenue as compared to 83.9% of revenue in the same period in the prior year. Excluding revenue generated from the Telefónica Group, our next 15 largest client groups represented in aggregate 37.2% of our revenue for the three months ended September 30, 2014 as compared to 35.7% of revenue in the same period in the prior year.
 
Our vertical industry expertise in telecommunications, financial services and multi-sector companies allows us to adapt our services and solutions for our clients, further embedding us into their value chain while delivering impactful business results and increasing the portion of our client’s services related to CRM BPO. In the nine months ended September 30, 2014, CRM BPO solutions and individual services comprised approximately 24.3% and 75.7% of our revenues, respectively. For the same period in 2013, CRM BPO solutions and individual services comprised approximately 21.8% and 78.2% of our revenues, respectively. In the three months ended September 30, 2014, CRM BPO solutions and individual services comprised approximately 26.7% and 73.3% of our revenues, respectively. For the same period in 2013, CRM BPO solutions and individual services comprised approximately 22.1% and 77.9% of our revenues, respectively.

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During the nine months of 2014, telecommunications represented 48.4% of our revenue and financial services represented 36.0% of our revenue, compared to 47.2% and 32.6%, respectively, for the same period in 2013. Additionally, during the first nine months of 2014 and 2013 sales by service were represented as follows:

 	 	Nine months ended September, 30	 	
 	 	2013	 	 	2014	 	
 	 	 	 	 	 	 	
Customer Service	 	 	45.7	%	 	 	49.5	%	
Sales	 	 	17.0	%	 	 	17.8	%	
Collection	 	 	10.5	%	 	 	10.8	%	
Back Office	 	 	8.7	%	 	 	8.7	%	
Technical Support	 	 	8.1	%	 	 	10.6	%	
Service Desk	 	 	0.1	%	 	 	0.2	%	
Others	 	 	9.9	%	 	 	2.4	%	
Total	 	 	100.0	%	 	 	100.0	%	

During the three months period ended September 30, 2014, telecommunications represented 46.3% of our revenue and financial services represented 36.0% of our revenue, compared to 47.7% and 33.2%, respectively, for the same period in 2013. Additionally, during the three months ended September 30, 2014 and 2013 sales by service were represented as follows:

 	 	Three months ended September, 30	 	
 	 	2013	 	 	2014	 	
 	 	 	 	 	 	 	
Customer Service	 	 	45.4	%	 	 	49.5	%	
Sales	 	 	17.1	%	 	 	17.9	%	
Collection	 	 	10.5	%	 	 	10.5	%	
Back Office	 	 	8.8	%	 	 	8.9	%	
Technical Support	 	 	8.5	%	 	 	10.9	%	
Service Desk	 	 	0.1	%	 	 	0.2	%	
Others	 	 	9.6	%	 	 	2.1	%	
Total	 	 	100.0	%	 	 	100.0	%	

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($ in millions, except	 	For the three months
ended September 30,	 	 	Change	 	 	Change
excluding	 	 	For the nine months ended
September 30,	 	 	Change	 	 	Change
excluding	 	
percentage changes)	 	2013	 	 	2014	 	 	(%)	 	 	FX (%)	 	 	2013	 	 	2014	 	 	(%)	 	 	FX (%)	 	
 	 	(unaudited)	 	 	 	 	 	 	 	 	(unaudited)	 	 	 	 	 	 	 	
Revenue	 	 	580.3	 	 	 	589.6	 	 	 	1.6	 	 	 	5.9	 	 	 	1,747.3	 	 	 	1,743.3	 	 	 	(0.2	)	 	 	8.4	 	
Other operating income	 	 	0.1	 	 	 	0.9	 	 	 	N.M.	 	 	 	N.M.	 	 	 	0.7	 	 	 	1.8	 	 	 	N.M.	 	 	 	N.M.	 	
Own work capitalized	 	 	0.5	 	 	 	0.2	 	 	 	(60.0	)	 	 	(40.0	)	 	 	0.5	 	 	 	0.4	 	 	 	(20.0	)	 	 	N.M.	 	
Other gains	 	 	-	 	 	 	(0.4	)	 	 	N.M.	 	 	 	N.M.	 	 	 	-	 	 	 	34.5	 	 	 	N.M.	 	 	 	N.M.	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Supplies	 	 	(25.5	)	 	 	(27.1	)	 	 	6.3	 	 	 	10.6	 	 	 	(71.6	)	 	 	(79.2	)	 	 	10.6	 	 	 	21.1	 	
Employee benefit expense	 	 	(396.7	)	 	 	(403.0	)	 	 	1.6	 	 	 	5.9	 	 	 	(1,226.8	)	 	 	(1,246.4	)	 	 	1.6	 	 	 	10.3	 	
Depreciation and amortization	 	 	(30.9	)	 	 	(30.0	)	 	 	(2.9	)	 	 	(1.0	)	 	 	(96.9	)	 	 	(91.6	)	 	 	(5.5	)	 	 	0.3	 	
Changes in trade provisions	 	 	0.8	 	 	 	0.1	 	 	 	(87.5	)	 	 	(87.5	)	 	 	3.0	 	 	 	(0.2	)	 	 	N.M.	 	 	 	N.M.	 	
Other operating expenses	 	 	(91.2	)	 	 	(83.2	)	 	 	(8.8	)	 	 	(6.9	)	 	 	(283.1	)	 	 	(250.3	)	 	 	(11.6	)	 	 	(5.0	)	
Impairment charges	 	 	-	 	 	 	0.4	 	 	 	N.M.	 	 	 	N.M.	 	 	 	-	 	 	 	(32.5	)	 	 	N.M.	 	 	 	N.M.	 	
Total operating expenses	 	 	(543.5	)	 	 	(542.8	)	 	 	(0.1	)	 	 	3.7	 	 	 	(1,675.4	)	 	 	(1,700.2	)	 	 	1.5	 	 	 	9.7	 	
Operating profit	 	 	37.4	 	 	 	47.5	 	 	 	27.0	 	 	 	40.6	 	 	 	73.1	 	 	 	79.8	 	 	 	9.2	 	 	 	24.5	 	
Finance income	 	 	4.1	 	 	 	21.2	 	 	 	N.M.	 	 	 	N.M.	 	 	 	13.0	 	 	 	28.3	 	 	 	N.M.	 	 	 	N.M.	 	
Finance costs	 	 	(37.5	)	 	 	(30.3	)	 	 	(19.2	)	 	 	(18.1	)	 	 	(103.9	)	 	 	(108.1	)	 	 	4.0	 	 	 	7.3	 	
Net foreign exchange gain/(loss)	 	 	8.2	 	 	 	(22.0	)	 	 	N.M.	 	 	 	N.M.	 	 	 	4.9	 	 	 	(18.4	)	 	 	N.M.	 	 	 	N.M.	 	
Net finance expense	 	 	(25.2	)	 	 	(31.1	)	 	 	23.4	 	 	 	21.4	 	 	 	(86.0	)	 	 	(98.2	)	 	 	14.2	 	 	 	19.5	 	
Profit/(loss) before tax	 	 	12.3	 	 	 	16.4	 	 	 	33.3	 	 	 	78.9	 	 	 	(12.9	)	 	 	(18.4	)	 	 	(42.6	)	 	 	8.5		
Income tax benefit/(expense)	 	 	(7.6	)	 	 	(8.4	)	 	 	10.5	 	 	 	32.9	 	 	 	(5.5	)	 	 	2.1	 	 	 	N.M.	 	 	 	(83.6	)	
Profit/(loss) for the period	 	 	4.7	 	 	 	8.0	 	 	 	70.2	 	 	 	N.M.	 	 	 	(18.4	)	 	 	(16.3	)	 	 	11.4		 	 	31.0	 	
Profit/(loss) for the period from continuing operations	 	 	4.7	 	 	 	8.0	 	 	 	70.2	 	 	 	N.M.	 	 	 	(18.4	)	 	 	(16.3	)	 	 	11.4		 	 	31.0	 	
Loss after tax from discontinued operations	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	
Non-controlling interests	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	
Profit/(loss) for the period attributable to equity holders of the parent	 	 	4.7	 	 	 	8.0	 	 	 	70.2	 	 	 	N.M.	 	 	 	(18.4	)	 	 	(16.3	)	 	 	11.4		 	 	31.0	 	
Other financial data:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA (1) (unaudited)	 	 	68.4	 	 	 	77.5	 	 	 	13.3	 	 	 	21.9	 	 	 	170.1	 	 	 	171.4	 	 	 	0.8	 	 	 	10.6	 	
Adjusted EBITDA (1) (unaudited)	 	 	85.8	 	 	 	88.2	 	 	 	2.8	 	 	 	10.1	 	 	 	209.6	 	 	 	219.8	 	 	 	4.9	 	 	 	13.9	 	

	(1)	For a reconciliation to IFRS as issued by the IASB, see Note 6 to the Interim financial statements.	

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($ in millions, except	 	For the three months
 ended September 30,	 	 	Change	 	 	Change
excluding	 	 	For the nine months
ended  September 30,	 	 	Change	 	 	Change
 excluding	 	
percentage changes)	 	2013	 	 	2014	 	 	(%)	 	 	FX (%)	 	 	2013	 	 	2014	 	 	(%)	 	 	FX (%)	 	
 	 	(unaudited)	 	 	 	 	 	 	 	 	(unaudited)	 	 	 	 	 	 	 	
Revenue:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Brazil	 	 	293.0	 	 	 	307.7	 	 	 	5.0	 	 	 	4.5	 	 	 	899.5	 	 	 	906.2	 	 	 	0.7	 	 	 	9.1	 	
Americas	 	 	199.1	 	 	 	204.3	 	 	 	2.6	 	 	 	15.9	 	 	 	574.4	 	 	 	576.7	 	 	 	0.4	 	 	 	14.6	 	
EMEA	 	 	88.5	 	 	 	77.7	 	 	 	(12.2	)	 	 	(11.8	)	 	 	274.1	 	 	 	260.8	 	 	 	(4.9	)	 	 	(7.4	)	
Other and eliminations (1)	 	 	(0.3	)	 	 	(0.1	)	 	 	(66.7	)	 	 	N.M.	 	 	 	(0.7	)	 	 	(0.4	)	 	 	(42.9	)	 	 	(57.1	)	
Total revenue	 	 	580.3	 	 	 	589.6	 	 	 	1.6	 	 	 	5.9	 	 	 	1,747.3	 	 	 	1,743.3	 	 	 	(0.2	)	 	 	8.4	 	
Operating expense:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Brazil	 	 	(265.7	)	 	 	(277.1	)	 	 	4.3	 	 	 	3.4	 	 	 	(836.4	)	 	 	(833.6	)	 	 	(0.3	)	 	 	8.0	 	
Americas	 	 	(176.8	)	 	 	(181.2	)	 	 	2.5	 	 	 	14.8	 	 	 	(528.8	)	 	 	(530.1	)	 	 	0.2	 	 	 	14.8	 	
EMEA	 	 	(87.3	)	 	 	(76.6	)	 	 	(12.3	)	 	 	(11.0	)	 	 	(271.9	)	 	 	(311.2	)	 	 	14.5	 	 	 	11.4	 	
Other and eliminations (1)	 	 	(13.7	)	 	 	(7.9	)	 	 	(42.3	)	 	 	(39.4	)	 	 	(38.3	)	 	 	(25.3	)	 	 	(33.9	)	 	 	(35.5	)	
Total operating expenses	 	 	(543.5	)	 	 	(542.8	)	 	 	(0.1	)	 	 	3.7	 	 	 	(1,675.4	)	 	 	(1,700.2	)	 	 	1.5	 	 	 	9.7	 	
Operating profit/(loss):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Brazil	 	 	27.4	 	 	 	30.7	 	 	 	12.0	 	 	 	14.6	 	 	 	63.4	 	 	 	72.9	 	 	 	15.0	 	 	 	24.6	 	
Americas	 	 	22.8	 	 	 	24.0	 	 	 	5.3	 	 	 	26.3	 	 	 	46.2	 	 	 	47.8	 	 	 	3.5	 	 	 	12.8	 	
EMEA	 	 	1.2	 	 	 	1.2	 	 	 	-	 	 	 	(58.3	)	 	 	2.5	 	 	 	(49.2	)	 	 	N.M.	 	 	 	N.M.	 	
Other and eliminations (1)	 	 	(14.0	)	 	 	(8.4	)	 	 	40.0		 	 	42.1		 	 	(39.0	)	 	 	8.3	 	 	 	N.M.	 	 	 	N.M.	 	
Total operating profit	 	 	37.4	 	 	 	47.5	 	 	 	27.0	 	 	 	40.6	 	 	 	73.1	 	 	 	79.8	 	 	 	9.2	 	 	 	24.5	 	
Net finance expense:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Brazil	 	 	(10.7	)	 	 	(8.6	)	 	 	(19.6	)	 	 	(25.2	)	 	 	(33.9	)	 	 	(36.4	)	 	 	7.4	 	 	 	16.5	 	
Americas	 	 	(0.7	)	 	 	(7.0	)	 	 	N.M.	 	 	 	N.M.	 	 	 	(6.5	)	 	 	(9.4	)	 	 	44.6	 	 	 	90.8	 	
EMEA	 	 	(3.5	)	 	 	(3.3	)	 	 	(5.7	)	 	 	(5.7	)	 	 	(14.7	)	 	 	(10.3	)	 	 	(29.9	)	 	 	(32.0	)	
Other and eliminations (1)	 	 	(10.3	)	 	 	(12.2	)	 	 	18.4	 	 	 	19.4	 	 	 	(30.9	)	 	 	(42.1	)	 	 	36.2	 	 	 	32.4	 	
Total net finance expense	 	 	(25.2	)	 	 	(31.1	)	 	 	23.4	 	 	 	21.4	 	 	 	(86.0	)	 	 	(98.2	)	 	 	14.2	 	 	 	19.5	 	
Income tax benefit:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Brazil	 	 	(5.9	)	 	 	(7.6	)	 	 	28.8	 	 	 	35.6	 	 	 	(10.2	)	 	 	(12.5	)	 	 	22.5	 	 	 	31.4	 	
Americas	 	 	(5.2	)	 	 	(6.6	)	 	 	26.9	 	 	 	55.8	 	 	 	(15.6	)	 	 	(14.4	)	 	 	(7.7	)	 	 	N.M.	 	
EMEA	 	 	(0.9	)	 	 	1.1	 	 	 	N.M.	 	 	 	N.M.	 	 	 	5.8	 	 	 	17.4	 	 	 	N.M.	 	 	 	N.M.	 	
Other and eliminations (1)	 	 	4.4	 	 	 	4.7	 	 	 	6.8	 	 	 	6.8	 	 	 	14.5	 	 	 	11.6	 	 	 	(20.0	)	 	 	(22.8	)	
Total income tax benefit/(expense)	 	 	(7.6	)	 	 	(8.4	)	 	 	10.5	 	 	 	32.9	 	 	 	(5.5	)	 	 	2.1	 	 	 	N.M.	 	 	 	(83.6	)	
Profit/(loss) for the period:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Brazil	 	 	10.8	 	 	 	14.5	 	 	 	34.3	 	 	 	42.6	 	 	 	19.3	 	 	 	24.0	 	 	 	24.4	 	 	 	35.2	 	
Americas	 	 	16.9	 	 	 	10.4	 	 	 	(38.5	)	 	 	(18.9	)	 	 	24.1	 	 	 	24.0	 	 	 	(0.4	)	 	 	N.M.	 	
EMEA	 	 	(3.2	)	 	 	(1.0	)	 	 	68.8	 	 	 	53.1		 	 	(6.4	)	 	 	(42.1	)	 	 	N.M.	 	 	 	N.M.	 	
Other and eliminations (1)	 	 	(19.8	)	 	 	(15.9	)	 	 	19.7	 	 	 	20.7		 	 	(55.4	)	 	 	(22.2	)	 	 	59.9		 	 	60.8	 	
Profit/(loss) for the period	 	 	4.7	 	 	 	8.0	 	 	 	70.2	 	 	 	N.M.	 	 	 	(18.4	)	 	 	(16.3	)	 	 	11.4		 	 	31.0	 	
Other financial data:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA (2) :	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Brazil	 	 	40.6	 	 	 	45.0	 	 	 	10.8	 	 	 	12.6	 	 	 	106.4	 	 	 	115.0	 	 	 	8.1	 	 	 	17.2	 	
Americas	 	 	34.1	 	 	 	34.8	 	 	 	2.1	 	 	 	17.9	 	 	 	81.4	 	 	 	80.3	 	 	 	(1.4	)	 	 	7.0	 	
EMEA	 	 	7.4	 	 	 	5.8	 	 	 	(21.6	)	 	 	(31.1	)	 	 	20.5	 	 	 	(33.0	)	 	 	N.M.	 	 	 	N.M.	 	
Other and eliminations (1)	 	 	(13.7	)	 	 	(8.1	)	 	 	40.9		 	 	44.5		 	 	(38.2	)	 	 	9.1	 	 	 	N.M.	 	 	 	N.M.	 	
Total EBITDA (unaudited)	 	 	68.4	 	 	 	77.5	 	 	 	13.3	 	 	 	21.9	 	 	 	170.1	 	 	 	171.4	 	 	 	0.8	 	 	 	10.6	 	
Adjusted EBITDA (2) :	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Brazil	 	 	43.3	 	 	 	46.8	 	 	 	8.1	 	 	 	9.2	 	 	 	111.2	 	 	 	123.7	 	 	 	11.2	 	 	 	20.6	 	
Americas	 	 	34.8	 	 	 	35.5	 	 	 	2.0	 	 	 	18.1	 	 	 	83.8	 	 	 	85.2	 	 	 	1.7	 	 	 	12.1	 	
EMEA	 	 	9.0	 	 	 	6.5	 	 	 	(27.8	)	 	 	(24.4	)	 	 	22.4	 	 	 	17.4	 	 	 	(22.3	)	 	 	(23.2	)	
Other and eliminations (1)	 	 	(1.3	)	 	 	(0.6	)	 	 	53.8	 	 	 	46.2		 	 	(7.8	)	 	 	(6.5	)	 	 	16.7		 	 	17.9	 	
Total Adjusted EBITDA (unaudited)	 	 	85.8	 	 	 	88.2	 	 	 	2.8	 	 	 	10.1	 	 	 	209.6	 	 	 	219.8	 	 	 	4.9	 	 	 	13.9	 	

	(1)	Includes holding company level revenue and expenses (such as corporate expenses and Acquisition related expenses), as applicable, as well as consolidation adjustments.	
	(2)	For a reconciliation to IFRS as issued by the IASB, see Note 6 to the Interim financial statements. N.M. means not meaningful.	

19 	

 	
 
Three Months Ended September 30, 2014 Compared to Three Months Ended September 30, 2013
 
Revenue
 
Revenue increased by $9.3 million, or 1.6%, from $580.3 million for the three months ended September 30, 2013 to $589.6 million for the three months ended September 30, 2014. Excluding the impact of foreign exchange, revenue increased by 5.9%. Excluding the impact of foreign exchange, revenue from Telefónica increased by 2.7%, driven primarily by solid performance in the Americas and, in particular, in Chile due to the recovery from last year when new business model was implemented, and Peru due to offshore business from Argentina and new local businesses. This positive performance in the Americas largely offset the reduction in EMEA caused by adverse economic conditions in Spain. Excluding the impact of foreign exchange, revenue from non-Telefónica clients increased by 9.1% due to the strong double digit growth in most of the countries except EMEA, growing with current clients and also capturing new clients.
 
The following chart sets forth a breakdown of revenue based on geographical region for the three months ended September 30, 2013 and September 30, 2014 and as a percentage of revenue and the percentage change between those periods with and net of foreign exchange effects.
 
 	 	For the three months ended September 30,	 	
($ in millions, except percentage
changes)	 	2013	 	 	(%)	 	 	2014	 	 	(%)	 	 	Change
(%)	 	 	Change
excluding
FX (%)	 	
 	 	(unaudited)	 	 	 	 	 	(unaudited)	 	 	 	 	 	 	 	 	 	 	
Brazil	 	 	293.0	 	 	 	50.5	 	 	 	307.7	 	 	 	52.2	 	 	 	5.0	 	 	 	4.5	 	
Americas	 	 	199.1	 	 	 	34.3	 	 	 	204.3	 	 	 	34.7	 	 	 	2.6	 	 	 	15.9	 	
EMEA	 	 	88.5	 	 	 	15.3	 	 	 	77.7	 	 	 	13.2	 	 	 	(12.2	)	 	 	(11.8	)	
Other and eliminations (1)	 	 	(0.3	)	 	 	(0.1	)	 	 	(0.1	)	 	 	(0.1	)	 	 	(66.7	)	 	 	N.M.	 	
Total	 	 	580.3	 	 	 	100.0	 	 	 	589.6	 	 	 	100.0	 	 	 	1.6	 	 	 	5.9	 	
 
	(1)	Includes holding company level revenues and consolidation adjustments.	
 
Brazil
 
Revenue in Brazil for the three months ended September 30, 2013 and September 30, 2014 was $293.0 million and $307.7 million, respectively. Revenue increased in Brazil by $14.7 million, or 5.0%. Excluding the foreign exchange impact, revenue increased by 4.5% over this period. Excluding the impact of foreign exchange, revenue from Telefónica decreased by 3.6%, principally due to reduction in volumes. Revenue from non-Telefónica clients, excluding the impact of foreign exchange, increased by 11.0% over this period, principally due to volume growth and the introduction of new services wins in the telecommunications sector with new clients, primarily in the financial services sector and growth with current clients.
 
Americas
 
Revenue in the Americas for the three months ended September 30, 2013 and September 30, 2014 was $199.1 million and $204.3 million, respectively. Revenue increased in the Americas by $5.2 million, or 2.6%. Excluding the impact of foreign exchange, revenue increased by 15.9%. Excluding the impact of foreign exchange, revenue from Telefónica increased by 24.4% over this period, with strong performance across the region and in particular in Chile and Peru thanks to higher volumes in both countries. Excluding the impact of foreign exchange, revenue from non-Telefónica clients increased by 8.1%, with double-digit growth in most of the markets supported by increasing volumes with existing clients and new customers wins.
 
EMEA
 
Revenue in EMEA for the three months ended September 30, 2013 and September 30, 2014 was $88.5 million and $77.7 million, respectively. Revenue decreased in EMEA by $10.8 million, or 12.2%. Excluding the foreign exchange impact, revenue decreased by 11.8%. Excluding the foreign exchange impact, revenue from Telefónica decreased by 18.3% principally due to a decrease in the volume of customer sales in Spain, driven by the adverse Telefónica situation in the Spanish telecommunications market. Revenue from non-Telefónica clients increased by 1.7%, excluding the impact of foreign exchange, principally due to new clients in Spain that compensate the market reduction in Directory services and Public Administration clients.

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Other operating income
 
Other operating income increased by $0.8 million, from $0.1 million for the three months ended September 30, 2013 to $0.9 million for the three months ended September 30, 2014. Excluding the impact of foreign exchange, other operating income increased by $0.8 million principally due to subsidies received in Spain for hiring disabled employees.
 
Other gains
 
In May 2014, the MSA with Telefónica, which required the Telefónica Group to meet pre-agreed minimum annual revenue commitments to us through 2021, was amended to adjust minimum revenue commitments in relation to Spain and Morocco, to reflect the expected lower level of activities in these countries. The provisions of the MSA required Telefónica to compensate us in case of shortfalls in these revenue commitments. Based on the above, Telefónica agreed to compensate us with a penalty fee amounting to €25.4 million.
 
The change from $0.0 million for the three months ended September 30, 2013 to a loss of $0.4 million for the three months ended September 30, 2014 was due to FX effect coming from the income in Atento Luxco 1 explained above.
 
Total operating expenses
 
Total operating expenses decreased by $0.7 million, or 0.1%, from $543.5 million for the three months ended September 30, 2013 to $542.8 million for the three months ended September 30, 2014. Excluding the impact of foreign exchange, operating expenses increased by 3.7%. As a percentage of revenue, operating expenses constituted 93.7% and 92.1% for the three months ended September 30, 2013 and 2014, respectively. This increase at nominal terms is principally due to higher operation volume in Brazil and Americas. Lower operating expenses as a percentage of our revenue are due to efficiencies achieved through the implementation of our margin transformational initiatives in the three months ended September 30, 2014, improving the profitability of the Company.
 
The $0.7 million decrease in operating expenses during the three months ended September 30, 2014 resulted from the following components:
 
Supplies: Supplies increased by $1.6 million, or 6.3%, from $25.5 million for the three months ended September 30, 2013 to $27.1 million for the three months ended September 30, 2014. Excluding the impact of foreign exchange, supplies expense increased by 10.6%. The increase is principally explained by growth in Brazil and Americas, partially offset by a decrease in the EMEA region as a result of lower activity. As a percentage of revenue, supplies constituted 4.4% and 4.6% for the three months ended September 30, 2013 and 2014, respectively.
 
Employee benefits expenses: Employee benefits expenses increased by $6.3 million, or 1.6%, from $396.7 million for the three months ended September 30, 2013 to $403.0 million for the three months ended September 30, 2014. Excluding the impact of foreign exchange, employee benefits expenses increased by 5.9%. This increase in employee benefits expenses was principally in Brazil and Americas, partially offset by EMEA employee benefits expenses decrease, despite restructuring expenses. Adjusting for restructuring expenses of $2.3 million and excluding the impact of foreign exchange, employee benefits expenses would have increased by 5.3%. As a percentage of our revenue, employee benefits expenses maintained stable by 68.4% for the three months ended September 30, 2013 and 2014, respectively. Adjusting for restructuring expenses, employee benefits expenses as a percentage of revenue would have constituted 67.9% and 68.0% for the three months ended September 30, 2013 and 2014, respectively. Adjusting for restructuring expenses and excluding the impact of foreign exchange, employee benefits expense as a percentage of revenue would have constituted 67.9%.
 
Depreciation and amortization: Depreciation and amortization expense decreased by $0.9 million, or 2.9%, from $30.9 million for the three months ended September 30, 2013 to $30.0 million for the three months ended September 30, 2014. Excluding the impact of foreign exchange, depreciation and amortization expense decreased by 1.0%, principally due to the lower carrying amount of customer relationship intangible assets, as a result of the impairment test performed in June 30, 2014.  
 
Changes in trade provisions: Changes in trade provisions decreased by $0.7 million, from $0.8 million for the three months ended September 30, 2013 to $0.1 million for the three months ended September 30, 2014. This decrease was principally due to the collection, in 2013, of some receivables that had been previously impaired. As a percentage of revenue, changes in trade provisions constituted 0.1% and 0.0% for the three months ended September 30, 2013 and 2014.

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Other operating expenses: Other operating expenses decreased by $8.0 million, or 8.8%, from $91.2 million for the three months ended September 30, 2013 to $83.2 million for the three months ended September 30, 2014. Excluding the impact of foreign exchange, other operating expenses decreased by 6.9%, principally due to cost efficiencies and ramp-down of non-core acquisition and integration costs. As a percentage of revenue, other operating expenses constituted 15.7% and 14.1% for the three months ended September 30, 2013 and 2014, respectively.
 
Impairment charges: As of June 30, 2014, we performed an impairment test on the carrying amount of customer relationship intangible assets, goodwill and property, plant and equipment given the amendment to the MSA which impacted the amount of expected revenue and also considering the changes in expected revenue in certain countries. The impairment test was performed using assumptions revised in accordance with the amendments to the MSA and with updated management expectations on cash flow generation from the different countries where we operate. The result of the test performed was an impairment charge.
 
The change from $0.0 million for the three months ended September 30, 2013 to a gain of $0.4 million for the three months ended September 30, 2014 is due to FX differences.
 
Brazil
 
Total operating expenses in Brazil increased by $11.4 million, or 4.3%, from $265.7 million for the three months ended September 30, 2013 to $277.1 million for the three months ended September 30, 2014. Excluding the impact of foreign exchange, operating expenses in Brazil increased by 3.4%, at a slower pace than our revenue growth. Operating expenses as a percentage of revenue decreased from 90.7% to 90.1%. The decrease in operating expenses in Brazil as a percentage of sales was principally due to cost efficiencies from the implementation of our margin transformational programs.
 
Americas
 
Total operating expenses in the Americas increased by $4.4 million, or 2.5%, from $176.8 million for the three months ended September 30, 2013 to $181.2 million for the three months ended September 30, 2014. Excluding the impact of foreign exchange, operating expenses in the Americas increased by 14.8%, at a slower pace than our revenue growth. Operating expenses as a percentage of revenue decreased from 88.8% to 88.7% in the three months ended September 30, 2014.
 
EMEA
 
Total operating expenses in EMEA decreased by $10.7 million, or 12.3%, from $87.3 million for the three months ended September 30, 2013 to $76.6 million for the three months ended September 30, 2014. Excluding the impact of foreign exchange, operating expenses in EMEA decreased by 11.0%. The reduction in operating expenses in EMEA in the three months ended September 30, 2014 is impacted by the benefits of the restructuring plan implemented in Spain.
 
Operating profit
 
Operating profit increased by $10.1 million, or 27.0%, from $37.4 million for the three months ended September 30, 2013 to $47.5 million for the three months ended September 30, 2014. Excluding the impact of foreign exchange, operating profit increased by 40.6%. Operating profit margin increased from 6.4% for the three months ended September 30, 2013 to 8.1% for the three months ended September 30, 2014 driven mainly by the operational improvement achieved in most of our countries as a result of the successful execution of our margin transformational initiatives.
 
Brazil
 
Operating profit in Brazil increased by $3.3 million, or 12.0%, from $27.4 million for the three months ended September 30, 2013 to $30.7 million for the three months ended September 30, 2014. Excluding the impact of foreign exchange, operating profit increased by 14.6% in 2014. Operating profit margin in Brazil increased from 9.4% for the three months ended September 30, 2013 to 10.0% for the three months ended September 30, 2014. The increase in operating profit in Brazil for the period was principally due to cost efficiencies, partially offset by ramp-up costs of new clients.

22 	

 	
 
Americas
 
Operating profit in the Americas increased by $1.2 million, or 5.3%, from $22.8 million for the three months ended September 30, 2013 to $24.0 million for the three months ended September 30, 2014. Excluding the impact of foreign exchange, operating profit in Americas increased by 26.3% in 2014. Operating profit margin in the Americas increased from 11.5% for the three months ended September 30, 2013 to 11.7% for the three months ended September 30, 2014. The increase in operating profit in the Americas was principally due to the better performance in most of the markets where we operate.
 
EMEA
 
Operating profit in EMEA maintained stable when compared the three months ended September 30, 2014 to 2013, in the amount of $1.2 million. However, operating profit margin in EMEA increased from 1.4% for the three months ended September 30, 2013 to 1.5% for the three months ended September 30, 2014, resulting from lower depreciation and restructuring expenses.
 
Finance income
 
Finance income increased by $17.1 million, from $4.1 million for the three months ended September 30, 2013 to $21.2 million for the three months ended September 30, 2014. Excluding the impact of foreign exchange, finance income increased by $17.4 million during the three months ended September 30, 2014. This increase was principally due to higher unrealized gains on cross-currency swaps associated with the 7.375% Senior Secured Notes and higher financial income in Brazil.
 
Finance costs
 
Finance costs decreased by $7.2 million, or 19.2%, from $37.5 million for the three months ended September 30, 2013 to $30.3 million for the three months ended September 30, 2014. Excluding the impact of foreign exchange, finance costs decreased by 18.1% during the three months ended September 30, 2014. This decreased was principally due to lower unrealized losses on cross-currency swaps associated with the 7.375% Senior Secured Notes, partially offset by higher financing costs from BNDES facility and Preferred Equity Certificates.
 
Net foreign exchange gain/(loss)
 
Net foreign exchange gain/(loss) change from a gain of $8.2 million for the three months ended September 30, 2013 to a loss of $22.0 million for the three months ended September 30, 2014. This increase in net foreign exchange losses was principally due to losses resulting from liabilities denominated in foreign currencies which depreciated against the U.S. dollar during the 2014 period.
 
Income tax benefit/(expense)
 
Income tax benefit/(expense) for the three months ended September 30, 2013 and September 30, 2014 was a loss of $7.6 million and $8.4 million, respectively, increasing by $0.8 million or 10.5% during the three months ended September 30, 2014. Excluding the impact of foreign exchange, income tax increased by 32.9%.
 
Profit/(loss) for the period
 
Profit/(loss) for the three months ended September 30, 2013 and September 30, 2014 was a gain of $4.7 million and $8.0 million, respectively. Excluding the impact of foreign exchange, profit margin increased by $7.2 million in the three months ended September 30, 2014 as a result of the factors discussed above.
 
EBITDA and Adjusted EBITDA
 
EBITDA increased by $9.1 million, or 13.3%, from $68.4 million for the three months ended September 30, 2013 to $77.5 million for the three months ended September 30, 2014. Adjusted EBITDA increased by $2.4 million, or 2.8%, from $85.8 million for the three months ended September 30, 2013 to $88.2 million for the three months ended September 30, 2014. The difference between EBITDA and Adjusted EBITDA is due to the exclusion of items that are not related to our core results of operations. Adjusted EBITDA is defined as EBITDA adjusted to exclude Acquisition and integration related costs, restructuring costs, sponsor management fees, asset impairments, site relocation costs, financing and IPO fees and other items which are not related to our core results of operations. See “Selected Historical Financial Information” for a reconciliation of EBITDA and Adjusted EBITDA to profit/(loss).

23 	

 	
 
Excluding the impact of foreign exchange, EBITDA increased by 21.9% and Adjusted EBITDA increased by 10.1% mainly due to revenue growth and solid performance in Brazil and Americas, more than offsetting the volume reduction in EMEA.
 
Brazil
 
EBITDA in Brazil increased by $4.4 million, or 10.8%, from $40.6 million for the three months ended September 30, 2013 to $45.0 million for the three months ended September 30, 2014. Adjusted EBITDA in Brazil increased by $3.5 million, or 8.1%, from $43.3 million for the three months ended September 30, 2013 to $46.8 million for the three months ended September 30, 2014. Excluding the impact of foreign exchange, EBITDA and Adjusted EBITDA increased by 12.6% and 9.2%, respectively. The increase in EBITDA and Adjusted EBITDA is principally due to the strong growth in revenue with existing clients and capture of new clients, as well as the operating efficiencies.
 
Americas
 
EBITDA in the Americas increased by $0.7 million, or 2.1%, from $34.1 million for the three months ended September 30, 2013 to $34.8 million for the three months ended September 30, 2014. Adjusted EBITDA in the Americas increased by $0.7 million, or 2.0%, from $34.8 million for the three months ended September 30, 2013 to $35.5 million for the three months ended September 30, 2014. Excluding the impact of foreign exchange, EBITDA and Adjusted EBITDA increased by 17.9% and 18.1% respectively, due to strong performance across the region and in particular in Chile thanks to the positive impact of the implementation of the new business model with Telefónica during 2013 and in Peru due to increase in offshore business from Argentina.
 
EMEA
 
EBITDA in EMEA decreased by $1.6 million, from $7.4 million for the three months ended September 30, 2013 to $5.8 million for the three months ended September 30, 2014. Adjusted EBITDA in EMEA decreased by $2.5 million, or 27.8%, from $9.0 million for the three months ended September 30, 2013 to $6.5 million for the three months ended September 30, 2014. Excluding the impact of foreign exchange, EBITDA and Adjusted EBITDA decreased by 31.1% and 24.4% respectively. The decrease in Adjusted EBITDA, during the three months ended September 30, 2014 is principally due to a reduction in Telefónica volume in Spain.
 
Nine Months Ended September 30, 2014 Compared to Nine Months Ended September 30, 2013
 
Revenue
 
Revenue decreased by $4.0 million, or 0.2%, from $1,747.3 million for the nine months ended September 30, 2013 to $1,743.3 million for the nine months ended September 30, 2014. Excluding the impact of foreign exchange, revenue increased by 8.4%. Excluding the impact of foreign exchange, revenue from Telefónica increased by 4.4%, driven primarily by solid performance in the Americas and, in particular, in Chile due to the new business model implementation during 2013, in Peru due to increase in offshore business from Argentina and in Argentina due to price increase. This positive performance in the Americas and Brazil largely offset the reduction in EMEA caused by adverse economic conditions in Spain. Excluding the impact of foreign exchange, revenue from non-Telefónica clients increased by 12.2% due to the strong double digit growth in all the regions.
 
The following chart sets forth a breakdown of revenue based on geographical region for the nine months ended September 30, 2013 and September 30, 2014 and as a percentage of revenue and the percentage change between those periods with and net of foreign exchange effects.
 
 	 	For the nine months ended September 30,	 	
($ in millions, except percentage changes)	 	2013	 	 	(%)	 	 	2014	 	 	(%)	 	 	Change
(%)	 	 	Change
excluding
FX (%)	 	
 	 	(unaudited)	 	 	 	 	 	(unaudited)	 	 	 	 	 	 	 	 	 	 	
Brazil	 	 	899.5	 	 	 	51.5	 	 	 	906.2	 	 	 	52.0	 	 	 	0.7	 	 	 	9.1	 	
Americas	 	 	574.4	 	 	 	32.9	 	 	 	576.7	 	 	 	33.1	 	 	 	0.4	 	 	 	14.6	 	
EMEA	 	 	274.1	 	 	 	15.7	 	 	 	260.8	 	 	 	15.0	 	 	 	(4.9	)	 	 	(7.4	)	
Other and eliminations (1)	 	 	(0.7	)	 	 	(0.1	)	 	 	(0.4	)	 	 	(0.1	)	 	 	(42.9	)	 	 	(57.1	)	
Total	 	 	1,747.3	 	 	 	100.0	 	 	 	1,743.3	 	 	 	100.0	 	 	 	(0.2	)	 	 	8.4	 	
 
(1) Includes holding company level revenues and consolidation adjustments.

24 	

 	
 
Brazil
 
Revenue in Brazil for the nine months ended September 30, 2013 and September 30, 2014 was $899.5 million and $906.2 million, respectively. Revenue increased in Brazil by $6.7 million, or 0.7%. Excluding the foreign exchange impact, revenue increased by 9.1% over this period. Excluding the impact of foreign exchange, revenue from Telefónica increased by 4.9%, principally due to the introduction of new services in Brazil. Revenue from non-Telefónica clients, excluding the impact of foreign exchange, increased by 12.5% over this period, principally due to volume growth and the introduction of new services with existing clients, primarily in the financial services sector, in addition to the capture of new clients during the first nine months of 2014.
 
Americas
 
Revenue in the Americas for the nine months ended September 30, 2013 and September 30, 2014 was $574.4 million and $576.7 million, respectively. Revenue increased in the Americas by $2.3 million, or 0.4%. Excluding the impact of foreign exchange, revenue increased by 14.6%. Excluding the impact of foreign exchange, revenue from Telefónica increased by 16.9% over this period, with strong performance across the region and in particular in Chile thanks to the positive impact of the implementation of the new business model with Telefónica during 2013 and in Peru due to increase in offshore business from Argentina. Excluding the impact of foreign exchange, revenue from non-Telefónica clients increased by 12.3%, with growth in most of the markets with existing clients and also through new clients.
 
EMEA
 
Revenue in EMEA for the nine months ended September 30, 2013 and September 30, 2014 was $274.1 million and $260.8 million, respectively. Revenue decreased in EMEA by $13.3 million, or 4.9%. Excluding the foreign exchange impact, revenue decreased by 7.4%. Excluding the foreign exchange impact, revenue from Telefónica decreased by 15.4% principally due to a decrease in the volume of customer sales in Spain, driven by the adverse Telefónica situation in the Spanish telecommunications market. Revenue from non-Telefónica clients increased by 9.6%, excluding the impact of foreign exchange, principally due to new clients in the region.

Other operating income
 
Other operating income increased by $1.1 million, from $0.7 million for the nine months ended September 30, 2013 to $1.8 million for the nine months ended September 30, 2014. Excluding the impact of foreign exchange, other operating income increased by $1.1 million principally due to the subsidies received in Spain for hiring disabled employees.
 
Other gains
 
In May 2014, the MSA with Telefónica, which required the Telefónica Group to meet pre-agreed minimum annual revenue commitments to us through 2021, was amended to adjust minimum revenue commitments in relation to Spain and Morocco, to reflect the expected lower level of activities in these countries. The provisions of the MSA required Telefónica to compensate us in case of shortfalls in these revenue commitments. Based on the above, Telefónica agreed to compensate us with a penalty fee amounting to €25.4 million (equivalent to $34.5 million for the nine months ended September 30, 2014).
 
Total operating expenses
 
Total operating expenses increased by $24.8 million, or 1.5%, from $1,675.4 million for the nine months ended September 30, 2013 to $1,700.2 million for the nine months ended September 30, 2014. Excluding the impact of foreign exchange, operating expenses increased by 9.7%. As a percentage of revenue, operating expenses constituted 95.9% and 97.5% for the nine months ended September 30, 2013 and 2014, respectively. This increase is principally due to the impairment charges recognized and increases in employee benefit expenses due to restructuring costs. Adjusting for both of these items, operating expenses as a percentage of revenues would have constituted 94.3% of revenue.
 
The $24.8 million increase in operating expenses during the nine months ended September 30, 2014 resulted from the following components:

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Supplies: Supplies increased by $7.6 million, or 10.6%, from $71.6 million for the nine months ended September 30, 2013 to $79.2 million for the nine months ended September 30, 2014. Excluding the impact of foreign exchange, supplies expense increased by 21.1%. The increase is principally explained by growth in Brazil and Mexico as well as a reclassification of costs previously booked as Other Operating Costs and now booked as Supplies, which were partially offset by a decrease in the EMEA region as a result of lower activity. As a percentage of revenue, supplies constituted 4.1% and 4.5% for the nine months ended September 30, 2013 and 2014, respectively.
 
Employee benefits expenses: Employee benefits expenses increased by $19.6 million, or 1.6%, from $1,226.8 million for the nine months ended September 30, 2013 to $1,246.4 million for the nine months ended September 30, 2014. Excluding the impact of foreign exchange, employee benefits expenses increased by 10.3%. This increase in employee benefits expenses was principally due to the restructuring expenses in Spain, Argentina and Chile. This increase was partially offset by operational efficiencies generated. Adjusting for restructuring expenses of $23.8 million and excluding the impact of foreign exchange, employee benefits expenses would have increased by 8.4%. As a percentage of our revenue, employee benefits expenses constituted 70.2% and 71.5% for the nine months ended September 30, 2013 and 2014, respectively. Adjusting for restructuring expenses, employee benefits expenses as a percentage of revenue would have constituted 70.0% and 70.1% for the nine months ended September 30, 2013 and 2014, respectively. Adjusting for restructuring expenses and excluding the impact of foreign exchange, employee benefits expense as a percentage of revenue would have constituted 70.2%. The headcount reduction plan in Spain will take into consideration a maximum number of terminations amounting to 9% of the total headcount of Atento Teleservicios España, S.A.U..
 
Depreciation and amortization: Depreciation and amortization expense decreased by $5.3 million, or 5.5%, from $96.9 million for the nine months ended September 30, 2013 to $91.6 million for the nine months ended September 30, 2014. Excluding the impact of foreign exchange, depreciation and amortization expense increased by 0.3%, principally due to the usual investments of the business.
 
Changes in trade provisions: Changes in trade provisions changed by $3.2 million, from a positive change of $3.0 million for the nine months ended September 30, 2013 to a negative change of $0.2 million for the nine months ended September 30, 2014. This decrease was principally due to the collection, in 2013, of some receivables that had been previously impaired. As a percentage of revenue, changes in trade provisions constituted 0.2% and 0.0% for the nine months ended September 30, 2013 and 2014.
 
Other operating expenses: Other operating expenses decreased by $32.8 million, or 11.6%, from $283.1 million for the nine months ended September 30, 2013 to $250.3 million for the nine months ended September 30, 2014. Excluding the impact of foreign exchange, other operating expenses decreased by 5.0%, principally due to cost efficiencies and ramp-down of non-core acquisition and integration costs. As a percentage of revenue, other operating expenses constituted 16.2% and 14.4% for the nine months ended September 30, 2013 and 2014, respectively.
 
Impairment charges: As of June 30, 2014, we performed an impairment test on the carrying amount of customer relationship intangible assets, goodwill and property, plant and equipment given the amendment to the MSA which impacted the amount of expected revenue and also considering the changes in expected revenue in certain countries. The impairment test was performed using assumptions revised in accordance with the amendments to the MSA and with updated management expectations on cash flow generation from the different countries where we operate. The result of the test performed was an impairment charge of $27.6 million of the intangible asset related to the customer relationship with Telefónica in connection with the MSA. Impairment charges of $1.1 million of goodwill in Spain and of $3.8 million of goodwill in the Czech Republic were recognized during the first nine months of 2014 as a result of this impairment test.
 
Brazil
 
Total operating expenses in Brazil decreased by $2.8 million, or 0.3%, from $836.4 million for the nine months ended September 30, 2013 to $833.6 million for the nine months ended September 30, 2014. Excluding the impact of foreign exchange, operating expenses in Brazil increased by 8.0%, which was slightly below revenue growth. Operating expenses as a percentage of revenue decreased from 93.0% to 92.0%. The decrease in operating expenses in Brazil as a percentage of sales was principally due to cost efficiencies in addition to higher costs incurred in 2013 because of the ramp-up of new Telefónica services.
 
Americas
 
Total operating expenses in the Americas increased by $1.3 million, or 0.2%, from $528.8 million for the nine months ended September 30, 2013 to $530.1 million for the nine months ended September 30, 2014. Excluding the impact of foreign exchange, operating expenses in the Americas increased by 14.8%, in line with the increase in revenues. Operating expenses as a percentage of revenue decreased from 92.1% to 91.9% in the nine months ended September 30, 2014.

26 	

 	
 
EMEA
 
Total operating expenses in EMEA increased by $39.3 million, or 14.5%, from $271.9 million for the nine months ended September 30, 2013 to $311.2 million for the nine months ended September 30, 2014. Operating expenses as a percentage of revenue increased from 99.2% to 119.3%. Excluding the impact of foreign exchange, operating expenses in EMEA increased by 11.4%. The change in operating expenses in EMEA in the nine months ended September 30, 2014 was primarily attributable to impairment charges and restructuring costs.
 
Operating profit
 
Operating profit increased by $6.7 million, or 9.2%, from $73.1 million for the nine months ended September 30, 2013 to $79.8 million for the nine months ended September 30, 2014. Excluding the impact of foreign exchange, operating profit increased by 24.5%. Operating profit margin increased from 4.2% for the nine months ended September 30, 2013 to 4.6% for the nine months ended September 30, 2014, despite the negative impact of the recognized impairments in EMEA and restructuring costs. Excluding this impact, operating profit margin would have been 7.8%, driven mainly by the operational improvement in most of the markets as a result of the implementation of strategic initiatives, in addition to the growth in Chile after the implementation of a new business model with Telefónica during 2013 and the costs related to the introduction of new services with Telefónica in Brazil during the first half of 2013.
 
Brazil
 
Operating profit in Brazil increased by $9.5 million, or 15.0%, from $63.4 million for the nine months ended September 30, 2013 to $72.9 million for the nine months ended September 30, 2014. Excluding the impact of foreign exchange, operating profit increased by 24.6% in 2014. Operating profit margin in Brazil increased from 7.0% for the nine months ended September 30, 2013 to 8.0% for the nine months ended September 30, 2014. The increase in operating profit in Brazil for the period was principally due to cost efficiencies (partially offset by higher costs) in 2013 related to the introduction of new services with Telefónica.
 
Americas
 
Operating profit in the Americas increased by $1.6 million, or 3.5%, from $46.2 million for the nine months ended September 30, 2013 to $47.8 million for the nine months ended September 30, 2014. Excluding the impact of foreign exchange, operating profit in Americas increased by 12.8% in 2014. Operating profit margin in the Americas increased from 8.0% for the nine months ended September 30, 2013 to 8.3% for the nine months ended September 30, 2014. The increase in operating profit in the Americas was principally due to the better performance in most of the markets where we operate, including significant improvement in Chile following implementation of the new business model with Telefónica during 2013.
 
EMEA
 
Operating profit in EMEA decreased by $51.7 million, from a profit of $2.5 million for the nine months ended September 30, 2013 to a loss of $49.2 million for the nine months ended September 30, 2014. Excluding the impact of foreign exchange, operating profit in EMEA decreased by $50.6 million in 2014. Operating profit margin in EMEA decreased from 0.9% for the nine months ended September 30, 2013 to a loss of 18.9% for the nine months ended September 30, 2014, principally impacted by the recognized impairment charge ($32.5 million) discussed above and the restructuring costs ($17.9 million). Excluding this impact, operating profit margin would have been a gain of 0.5% during the nine months ended September 30, 2014, resulting from underutilized workforce and infrastructure.
 
Finance income
 
Finance income increased by $15.3 million, from $13.0 million for the nine months ended September 30, 2013 to $28.3 million for the nine months ended September 30, 2014. Excluding the impact of foreign exchange, finance income increased by $16.6 million during the nine months ended September 30, 2014. This increase was principally due to higher unrealized gains on cross-currency swaps associated with the 7.375% Senior Secured Notes and on interest rate swaps associated to Brazilian Debentures and higher finance income in Brazil.

27 	

 	
 
Finance costs
 
Finance costs increased by $4.2 million, or 4.0%, from $103.9 million for the nine months ended September 30, 2013 to $108.1 million for the nine months ended September 30, 2014. Excluding the impact of foreign exchange, finance costs increased by 7.3% during the nine months ended September 30, 2014. This increase was principally due to higher finance costs of $6.9 million incurred in 2014 related to the Preferred Equity Certificates which were capitalized after the IPO, costs from BNDES raised facility in Brazil and a full period of finance costs incurred on the 7.375% Senior Secured Notes. These impacts were partially offset by lower unrealized losses of $7.7 million, mainly related to cross-currency swaps associated with the 7.375% Senior Secured Notes.
 
Net foreign exchange gain/(loss)
 
Net foreign exchange gain/(loss) changed by $23.3 million, from a gain of $4.9 million for the nine months ended September 30, 2013 to a loss of $18.4 million for the nine months ended September 30, 2014. This decreased was principally due to net foreign exchange loss resulting from liabilities denominated in foreign currencies which depreciated against the U.S. dollar during the 2014 period.
 
Income tax benefit/(expense)
 
Income tax benefit/(expense) for the nine months ended September 30, 2013 and September 30, 2014 was a loss $5.5 million and gain of $2.1 million, respectively, increasing by $7.6 million during the nine months ended September 30, 2014. Excluding the impact of foreign exchange, income tax increased by $4.6 million. The aggregated effective tax rate for the nine months ended September 30, 2014 is distorted because of the contribution of losses in the holding companies to our profit before tax and the tax effect of the impairment charges. Adjusting for this effect, the average effective tax rate for the nine months ended September 30, 2014 would have been 34.5%, while the average effective tax rate of the nine months ended September 30, 2013 would have been 31.8%.
 
Profit/(loss) for the period
 
Profit/(loss) for the nine months ended September 30, 2013 and September 30, 2014 was a loss of $18.4 million and $16.3 million, respectively. Excluding the impact of foreign exchange, in the nine months ended September 30, 2014 the Company maintained the same profit margin of (0.7)% as in the nine months ended September 30, 2013 as a result of the factors discussed above.
 
EBITDA and Adjusted EBITDA
 
EBITDA increased by $1.3 million, or 0.8%, from $170.1 million for the nine months ended September 30, 2013 to $171.4 million for the nine months ended September 30, 2014. Adjusted EBITDA increased by $10.2 million, or 4.9%, from $209.6 million for the nine months ended September 30, 2013 to $219.8 million for the nine months ended September 30, 2014. The difference between EBITDA and Adjusted EBITDA is due to the exclusion of items that are not related to our core results of operations. Adjusted EBITDA is defined as EBITDA adjusted to exclude Acquisition and integration related costs, restructuring costs, sponsor management fees, asset impairments, site relocation costs, financing and IPO fees and other items which are not related to our core results of operations. See “Selected Historical Financial Information” for a reconciliation of EBITDA and Adjusted EBITDA to profit/(loss).
 
Excluding the impact of foreign exchange, EBITDA increased by 10.6% and Adjusted EBITDA increased by 13.9% mainly due to revenue growth and solid performance in Brazil and Americas, more than offsetting the volume reduction in EMEA.
 
Brazil
 
EBITDA in Brazil increased by $8.6 million, or 8.1%, from $106.4 million for the nine months ended September 30, 2013 to $115.0 million for the nine months ended September 30, 2014. Adjusted EBITDA in Brazil increased by $12.5 million, or 11.2%, from $111.2 million for the nine months ended September 30, 2013 to $123.7 million for the nine months ended September 30, 2014. Excluding the impact of foreign exchange, EBITDA and Adjusted EBITDA increased by 17.2% and 20.6%, respectively. The increase in EBITDA and Adjusted EBITDA is principally due to the strong growth in revenue with existing clients and capture of new clients, as well as the operating efficiencies that contribute to improve the margin.

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Americas
 
EBITDA in the Americas decreased by $1.1 million, or 1.4%, from $81.4 million for the nine months ended September 30, 2013 to $80.3 million for the nine months ended September 30, 2014. Adjusted EBITDA in the Americas increased by $1.4 million, or 1.7%, from $83.8 million for the nine months ended September 30, 2013 to $85.2 million for the nine months ended September 30, 2014. Excluding the impact of foreign exchange, EBITDA and Adjusted EBITDA increased by 7.0% and increased by 12.1%, respectively, during the nine months ended September 30, 2014. The first nine months of 2014 showed strong performance in Mexico, Peru and Chile. Chile in particular was positively impacted by the finalization of the implementation of a new business model with Telefónica.
 
EMEA
 
EBITDA in EMEA decreased by $53.5 million, from a gain of $20.5 million for the nine months ended September 30, 2013 to a loss of $33.0 million for the nine months ended September 30, 2014. Adjusted EBITDA in EMEA decreased by $5.0 million, or 22.3%, from $22.4 million for the nine months ended September 30, 2013 to $17.4 million for the nine months ended September 30, 2014. Excluding the impact of foreign exchange, Adjusted EBITDA decreased by 23.2%. The decrease in Adjusted EBITDA, during the nine months ended September 30, 2014 is principally due to a reduction in Telefónica volume in Spain.
 
Liquidity and Capital Resources
 
As of September 30, 2014, our outstanding debt amounted to $1,282.0 million, which includes $294.4 million of our 7.375% Senior Secured Notes due 2020, $267.7 million equivalent amount of Brazilian Debentures, $29.3 million of Vendor Loan Note, $36.1 million of CVIs, $8.7 million of finance lease payables, $66.5 million of financing provided by BNDES, $0.5 million of other bank borrowings and $578.8 million of PECs that were capitalized in connection with the IPO.
 
During the nine months ended September 30, 2014 we have drawn $66.5 million equivalent amount under our credit agreement with BNDES. On May 30, 2014, Midco issued PECs for an aggregate amount of €64.1 million (equivalent to $87.3 million) which proceeds were applied to make a partial prepayment of the Vendor Loan Note. In addition, the MSA with Telefónica was amended and Telefónica agreed to compensate us with a penalty fee amounting to €25.4 million (equivalent to $34.5 million for the nine months ended September 30, 2014). We, in turn, used this amount to partially prepay the Vendor Loan Note due to Telefónica. Finally, we prepaid BRL 34.4 million, BRL 45.0 million and BRL 80.0 million, respectively (equivalent to $15.5 million, $20.4 million and $33.1 million, respectively) of the Brazilian Debentures.
 
For the nine months ended September 30, 2014, our cash flow used for debt service totaled $227.4 million, which includes voluntary prepayments of our Brazilian Debentures of BRL 34.4 million (equivalent to $15.5 million) on May 12, 2014, BRL 45.0 million (equivalent to $20.4 million) on June 26, 2014, and BRL 80.0 million (equivalent to $33.1 million) on August 28, 2014, voluntary prepayments of our Vendor Loan Note of €64.1 million (equivalent to $87.3 million) on May 30, 2014, and interest payments of $68.4 million. Also, during the nine months ended September 30, 2014, our net cash flows from operating activities totaled $109.4 million, which includes interest paid of $68.4 million. As such, our net cash flows from operating activities (before giving effect to the payment of interest) amounted to $177.8 million. Cash flow used to service our debt represented 127.9% of our net cash flows from operating activities (before giving effect to the payment of interest). Excluding the voluntary prepayments of our Brazilian Debentures and Vendor Loan Note mentioned above, our cash flow related to interest payment and mandatory debt repayment represented 38.5% of the cash flows from operating activities (before giving effect to the payment of interest).

Cash Flow
 
As of September 30, 2014, we had cash and cash equivalents (net of any outstanding bank overdrafts) and short-term financial investments of approximately $243.3 million. We believe that our current cash flow from operating activities and financing arrangements will provide us with sufficient liquidity to meet our working capital needs.

29 	

 	
 
($ in millions)	 	For the three months
ended September 30,	 	 	For the nine months ended
September 30,	 	
 	 	2013	 	 	2014	 	 	2013	 	 	2014	 	
 	 	(unaudited)	 	 	(unaudited)	 	
Cash provided by operating activities	 	 	34.2	 	 	 	43.5	 	 	 	68.4	 	 	 	109.4	 	
Cash provided by/(used in) investing activities	 	 	11.2	 	 	 	(30.7	)	 	 	(90.2	)	 	 	(132.8	)	
Cash provided by/(used in) financing activities	 	 	(0.2	)	 	 	(0.9	)	 	 	40.6	 	 	 	0.2	 	
Effect of changes in exchanges rates	 	 	(3.8	)	 	 	0.6	 	 	 	(0.5	)	 	 	0.3	 	
Net increase/(decrease) in cash and cash equivalents	 	 	41.4	 	 	 	12.4	 	 	 	18.3	 	 	 	(22.8	)	
 
Cash Provided by Operating Activities
 
Three Months Ended September 30, 2014 Compared to Three Months Ended September 30, 2013
 
Net Cash provided by operating activities was $43.5 million for the three months ended September 30, 2014 compared to $34.2 million for the three months ended September 30, 2013. The increase in net cash provided by operating activities was a result of an improvement in working capital performance in Brazil, Spain and Mexico, partially offset by (i) higher payments due to application of provisions and (ii) higher interest paid as a result of Brazilian Debentures prepayment in August 2014.
 
Nine Months Ended September 30, 2014 Compared to Nine Months Ended September 30, 2013
 
Net Cash provided by operating activities was $109.4 million for the nine months ended September 30, 2014 compared to $68.4 million for the nine months ended September 30, 2013. The increase in net cash provided by operating activities was a result of an overall improvement in working capital performance and lower taxes paid.
 
Cash Provided by/(Used in) Investing Activities
 
Three Months Ended September 30, 2014 Compared to Three Months Ended September 30, 2013
 
Net Cash used in investing activities was $30.7 million for the three months ended September 30, 2014 compared to Net Cash provided by investing activities of $11.2 million for the three months ended September 30, 2013. Net cash used in investing activities for the three months ended September 30, 2014 mainly include payments for capital expenditure of $36.0 million, payments for financial instruments of $6.4 million and proceeds from financial instruments of $11.6 million.
 
Nine Months Ended September 30, 2014 Compared to Nine Months Ended September 30, 2013
 
Net Cash used in investing activities was $132.8 million for the nine months ended September 30, 2014 compared to $90.2 million for the nine months ended September 30, 2013. Net cash used in investing activities for the nine months ended September 30, 2014 mainly include payments for capital expenditure of $81.2 million, payments for financial instruments of $66.6 million, which include $52.6 million of short term financial investments in Brazil, and proceeds from financial instruments of $14.0 million.
 
Cash Provided by/(Used in) Financing Activities
 
Three Months Ended September 30, 2014 Compared to Three Months Ended September 30, 2013
 
Net Cash used in financing activities was $0.9 million for the three months ended September 30, 2014 compared to $0.2 million for the three months ended September 30, 2013. Net Cash used in financing activities for the three months ended September 30, 2014 primarily include the impact of BNDES disbursed, offset by Brazilian Debentures prepayment.
 
Nine Months Ended September 30, 2014 Compared to Nine Months Ended September 30, 2013
 
Net Cash provided by financing activities was $0.2 million for the nine months ended September 30, 2014 compared to $40.6 million for the nine months ended September 30, 2013. The decrease in net cash provided by financing activities was primarily attributable to the net proceeds received from the issuance of 7.375% Senior Secured Note due to 2020 during the nine months ended September 30, 2013.

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Free Cash Flow
 
Our management uses Free cash flow to assess our liquidity and the cash flow generation of our operating subsidiaries. We define Free cash flow as net cash flows from operating activities less capital expenditures (addition to property, plant and equipment, and intangible assets) for the period. We believe that Free cash flow is useful to investors because it adjusts our operating cash flow by the capital that is invested to continue and improve business operations.
 
Free cash flow has limitations as an analytical tool. Free cash flow is not a measure defined by IFRS and should not be considered in isolation from, or as an alternative to, cash flow from operating activities or other measures as determined in accordance with IFRS. Additionally, Free cash flow does not represent the residual cash flow available for discretionary expenditures as it does not incorporate certain cash payments, including payments made on finance lease obligations or cash payments for business acquisitions. Free cash flow is not necessarily comparable to similarly titled measures used by other companies.
 
($ in millions)	 	For the three months
ended September 30,	 	 	For the nine months
ended September 30,	 	
 	 	2013	 	 	2014	 	 	2013	 	 	2014	 	
 	 	(unaudited)	 	 	(unaudited)	 	
Net cash flow from operating activities	 	 	34.2	 	 	 	43.5	 	 	 	68.4	 	 	 	109.4	 	
Capital expenditures (1)	 	 	24.0	 	 	 	24.8	 	 	 	52.7	 	 	 	65.4	 	
Free cash flow (non-GAAP) (unaudited)	 	 	10.2	 	 	 	18.7	 	 	 	15.7	 	 	 	44.0	 	
 
	(1)	We define capital expenditures as the sum of additions to property, plant and equipment and the additions to intangible assets during the period presented.	
 
Three Months Ended September 30, 2014 Compared to Three Months Ended September 30, 2013
 
Free cash flow increased by $8.5 million from $10.2 million for the three months ended September 30, 2013 to $18.7 million for the three months ended September 30, 2014. The improvement in Free cash flow for the three months ended September 30, 2014 was principally due to the increase in net cash flow from operating activities.
 
Free cash flow for the three months ended September 30, 2014 was negatively impacted by cash outflows of $3.9 million related to Acquisition and integration related costs, $11.4 million related to restructuring costs in connection with the headcount reduction plan in Spain, $0.3 million related to site relocation costs and $1.4 million related to financing fees and IPO costs.
 
Free cash flow for the three months ended September 30, 2013 was negatively impacted by cash outflows of $10.3 million related to Acquisition and integration related costs, $0.4 million related to restructuring costs and $0.7 million related to financing fees.
 
Nine Months Ended September 30, 2014 Compared to Nine Months Ended September 30, 2013
 
Free cash flow improved by $28.3 million from positive $15.7 million for the nine months ended September 30, 2013 to positive $44.0 million for the nine months ended September 30, 2014. The improvement in Free cash flow for the nine months ended September 30, 2014 was principally due to the increase in net cash flow from operating activities.
 
Free cash flow for the nine months ended September 30, 2014 was negatively impacted by cash outflows of $6.6 million related to Acquisition and integration related costs, $16.6 million related to restructuring costs, which include $11.5 million related to headcount reduction plan in Spain, $1.1 million related to site relocation costs and $4.8 million related to financing fees and IPO costs.
 
Free cash flow for the nine months ended September 30, 2013 was (i) negatively impacted by cash outflows of $19.4 million related to Acquisition and integration related costs, $0.6 million related to restructuring costs and $3.7 million related to financing fees, and (ii) positively impacted by $1.1 million related to other.

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Finance Leases
 
The Company holds the following assets under finance leases:
 
 	 	As of
December 31,
2013	 	 	As of
September 30,
2014	 	
($ in millions)	 	Net carrying
amount of
asset	 	 	Net carrying
amount of
asset	 	
Finance leases	 	 	 	 	 	 	 	 	
Plant and machinery	 	 	-	 	 	 	-	 	
Furniture, tools and other tangible assets	 	 	9.4	 	 	 	1.7	 	
Software	 	 	-	 	 	 	-	 	
Other intangible assets	 	 	-	 	 	 	-	 	
Total	 	 	9.4	 	 	 	1.7	 	
 
The assets acquired under finance leases are located in Brazil, Uruguay, Colombia and Peru.
 
The present value of future finance lease payments is as follows:
 
 	 	As of
December 31,
2013	 	 	As of
September 30,
2014	 	
($ in millions)	 	Net carrying
amount of
asset	 	 	Net carrying
amount of
asset	 	
 	 	 	 	 	(unaudited)	 	
Up to 1 year	 	 	5.3	 	 	 	1.6	 	
Between 1 and 5 years	 	 	6.5	 	 	 	7.1	 	
Total	 	 	11.9	 	 	 	8.7	 	
 
Capital Expenditures
 
Our business has significant capital expenditure requirements, including construction and initial fit-out of our service delivery centers, improvements and refurbishment of leased facilities for our service delivery centers, acquisition of various items of property, plant and equipment, mainly comprised of furniture, computer equipment and technology equipment, acquisition and upgrades of our software or specific customer’s software.
 
The funding of the majority of our capital expenditures is covered by existing cash and EBITDA generation.
 
The table below sets forth our historic capital expenditures by segment for the three and nine months ended September 30, 2013 and 2014.
 
 	 	For the three months
ended September 30,	 	 	For the nine months
ended September 30,	 	
 	 	2013	 	 	2014	 	 	2013	 	 	2014	 	
($ in millions)	 	(unaudited)	 	 	(unaudited)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Brazil	 	 	17.4	 	 	 	18.4	 	 	 	36.7	 	 	 	46.6	 	
Americas	 	 	4.3	 	 	 	6.0	 	 	 	11.4	 	 	 	15.7	 	
EMEA	 	 	2.1	 	 	 	0.2	 	 	 	4.0	 	 	 	2.7	 	
Other and eliminations	 	 	0.2	 	 	 	0.2	 	 	 	0.6	 	 	 	0.4	 	
Total capital expenditures	 	 	24.0	 	 	 	24.8	 	 	 	52.7	 	 	 	65.4	 	
 
For 2014, we expect to incur in levels of capital expenditures broadly in line with the last two years, for purchases related to the items described above to support the growth of our business and regular maintenance capital expenditures.
 
We expect that our capital expenditures will increase in the future as our business continues to develop and expand.

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 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
There has been no material changes in the Company’s market risk during the nine months period ended September 30, 2014. For additional information, refer to Note 5 to the Condensed Consolidated Financial Statements and to the Annual Consolidated Financial Statements for the year ended December 31, 2013 included in the Form F-1.

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ATALAYA LUXCO MIDCO, S.A.R.L. AND SUBSIDIARIES
(FORMERLY BC LUXCO MIDCO, S.A.R.L. AND
SUBSIDIARIES)

 INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2014

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ATALAYA LUXCO MIDCO, S.A.R.L. AND SUBSIDIARIES
(FORMERLY BC LUXCO MIDCO, S.A.R.L. AND SUBSIDIARIES)
INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
as of December 31, 2013 and September 30, 2014
(In thousands of U.S. dollars)
 
 	 	 	 	December 31,	 	 	September 30,	 	
 	 	 	 	2013	 	 	2014	 	
ASSETS	 	Notes	 	(Audited)	 	 	(Unaudited)	 	
 	 	 	 	 	 	 	 	 	
NON-CURRENT ASSETS	 	 	 	 	1,071,381	 	 	 	955,414	 	
 	 	 	 	 	 	 	 	 	 	 	
Intangible assets	 	Note 7	 	 	392,777	 	 	 	311,926	 	
Goodwill	 	Note 7	 	 	197,739	 	 	 	174,407	 	
Property, plant and equipment	 	Note 7	 	 	231,603	 	 	 	226,133	 	
Non-current financial assets	 	 	 	 	69,323	 	 	 	64,995	 	
Trade and other receivables	 	Note 9	 	 	72	 	 	 	69	 	
Other receivables from public administrations	 	 	 	 	-	 	 	 	3,843	 	
Other non-current financial assets	 	Note 9	 	 	53,812	 	 	 	47,191	 	
Derivative financial instruments	 	Note 9 and 10	 	 	15,439	 	 	 	13,892	 	
Deferred tax assets	 	 	 	 	179,939	 	 	 	177,953	 	
 	 	 	 	 	 	 	 	 	 	 	
CURRENT ASSETS	 	 	 	 	770,799	 	 	 	760,189	 	
 	 	 	 	 	 	 	 	 	 	 	
Trade and other receivables	 	 	 	 	553,026	 	 	 	513,728	 	
Trade and other receivables	 	Note 9	 	 	521,286	 	 	 	486,800	 	
Current income tax receivables	 	 	 	 	12,962	 	 	 	12,250	 	
Other receivables from public administrations	 	 	 	 	18,778	 	 	 	14,678	 	
Other current financial assets	 	 	 	 	4,282	 	 	 	55,765	 	
Other financial assets	 	Note 9	 	 	1,425	 	 	 	53,865	 	
Derivative financial instruments	 	Note 9 and 10	 	 	2,857	 	 	 	1,900	 	
Cash and cash equivalents	 	Note 9	 	 	213,491	 	 	 	190,696	 	
 	 	 	 	 	 	 	 	 	 	 	
TOTAL ASSETS	 	 	 	 	1,842,180	 	 	 	1,715,603	 	
 
The accompanying Notes 1 to 17 are an integral part of the interim condensed consolidated financial statements

35 	

 	
 
ATALAYA LUXCO MIDCO, S.A.R.L. AND SUBSIDIARIES
(FORMERLY BC LUXCO MIDCO, S.A.R.L. AND SUBSIDIARIES)
INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
as of December 31, 2013 and September 30, 2014
(In thousands of U.S. dollars)
 
 	 	 	 	December 31,	 	 	September 30,	 	
 	 	 	 	2013	 	 	2014	 	
EQUITY AND LIABILITIES	 	Notes	 	(Audited)	 	 	(Unaudited)	 	
 	 	 	 	 	 	 	 	 	
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT	 	 	 	 	(133,966	)	 	 	(137,192	)	
 	 	 	 	 	 	 	 	 	 	 	
Share capital	 	Note 8	 	 	2,592	 	 	 	16	 	
Share premium	 	Note 8	 	 	-	 	 	 	2,576	 	
Retained earnings	 	Note 8	 	 	(60,659	)	 	 	(76,960	)	
Translation diferences	 	 	 	 	(77,513	)	 	 	(60,188	)	
Valuation adjustments	 	Note 8	 	 	1,627	 	 	 	(2,623	)	
Other reserves	 	 	 	 	(13	)	 	 	(13	)	
 	 	 	 	 	 	 	 	 	 	 	
NON-CURRENT LIABILITIES	 	 	 	 	1,591,287	 	 	 	1,462,893	 	
 	 	 	 	 	 	 	 	 	 	 	
Deferred tax liabilities	 	 	 	 	119,282	 	 	 	93,289	 	
Interest bearing-debt	 	Note 10	 	 	833,984	 	 	 	690,562	 	
Non-current payables to Group companies	 	Note 10	 	 	519,607	 	 	 	578,773	 	
Derivative financial instruments	 	Note 10	 	 	15,962	 	 	 	4,043	 	
Non-current provisions	 	Note 11	 	 	99,062	 	 	 	93,429	 	
Other non-current non-trade payables	 	Note 10	 	 	1,441	 	 	 	1,034	 	
Other non-current payables to public administrations	 	 	 	 	1,949	 	 	 	1,763	 	
 	 	 	 	 	 	 	 	 	 	 	
CURRENT LIABILITIES	 	 	 	 	384,859	 	 	 	389,902	 	
 	 	 	 	 	 	 	 	 	 	 	
Interest bearing-debt	 	Note 10	 	 	17,128	 	 	 	12,506	 	
Trade and other payables	 	 	 	 	353,213	 	 	 	361,760	 	
Trade payables	 	Note 10	 	 	109,897	 	 	 	116,490	 	
Current income tax payable	 	 	 	 	7,582	 	 	 	7,547	 	
Other current payables to public administrations	 	 	 	 	74,983	 	 	 	68,893	 	
Other non-trade payables	 	Note 10	 	 	160,751	 	 	 	168,830	 	
Current provisions	 	Note 11	 	 	14,518	 	 	 	15,636	 	
 	 	 	 	 	 	 	 	 	 	 	
TOTAL EQUITY AND LIABILITIES	 	 	 	 	1,842,180	 	 	 	1,715,603	 	
 
The accompanying Notes 1 to 17 are an integral part of the interim condensed consolidated financial statements

36 	

 	
 
ATALAYA LUXCO MIDCO, S.A.R.L. AND SUBSIDIARIES
(FORMERLY BC LUXCO MIDCO, S.A.R.L. AND SUBSIDIARIES)
INTERIM CONSOLIDATED INCOME STATEMENTS
For the nine months ended September 30, 2013 and 2014
(In thousands of U.S. dollars)
 
 	 	 	 	Nine months ended September 30,	 	
 	 	Notes	 	2013
(Unaudited)	 	 	2014
(Unaudited)	 	
 	 	 	 	 	 	 	 	 	
Revenue	 	6	 		1,747,332	  	 	 	1,743,264	 	
Other operating income	 	 	 	 	687	 	 	 	1,760	 	
Own work capitalized	 	 	 	 	533	 	 	 	413	 	
Supplies	 	 	 	 	(71,563	)	 	 	(79,240	)	
Employee benefit expense	 	 	 	 	(1,226,843	)	 	 	(1,246,353	)	
Depreciation and amortization	 	7	 	 	(96,927	)	 	 	(91,640	)	
Changes in trade provisions	 	 	 	 	2,996	 	 	 	(199	)	
Other operating expenses	 	 	 	 	(283,088	)	 	 	(250,227	)	
Other gains	 	7	 	 	-	 	 	 	34,478	 	
Impairment charges	 	7	 	 	-	 	 	 	(32,479	)	
 	 	 	 	 	 	 	 	 	 	 	
OPERATING PROFIT	 	 	 	 	73,127	 	 	 	79,777	 	
 	 	 	 	 	 	 	 	 	 	 	
Finance income	 	 	 	 	12,961	 	 	 	28,345	 	
Finance costs	 	 	 	 	(103,927	)	 	 	(108,138	)	
Net foreign exchange gains/(loss)	 	 	 	 	4,915	 	 	 	(18,405	)	
 	 	 	 	 	 	 	 	 	 	 	
NET FINANCE EXPENSE	 	 	 	 	(86,051	)	 	 	(98,198	)	
 	 	 	 	 	 	 	 	 	 	 	
LOSS BEFORE TAX	 	 	 	 	(12,924	)	 	 	(18,421	)	
Income tax benefit/(expense)	 	13	 	 	(5,519	)	 	 	2,120	 	
LOSS ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT	 	 	 	 	(18,443	)	 	 	(16,301	)	
 	 	 	 	 	 	 	 	 	 	 	
Basic and diluted result per share (per U.S. dollars)	 	14	 	 	(0.15	)	 	 	(0.13	)	
 
The accompanying Notes 1 to 17 are an integral part of the interim condensed consolidated financial statements

37 	

 	
 
ATALAYA LUXCO MIDCO, S.A.R.L. AND SUBSIDIARIES
(FORMERLY BC LUXCO MIDCO, S.A.R.L. AND SUBSIDIARIES)
INTERIM CONSOLIDATED STATEMENTS OF
OTHER COMPREHENSIVE INCOME
For the nine months ended September 30, 2013 and 2014
(In thousands of U.S. dollars)
 
 	 	Nine months ended September 30,	 	
 	 	2013
(Unaudited)	 	 	2014
(Unaudited)	 	
Loss for the period	 	 	(18,443	)	 	 	(16,301	)	
Other comprehensive income/(loss)	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Items that will not be reclassified to profit and loss	 	 	-	 	 	 	-	 	
 	 	 	 	 	 	 	 	 	
Items that may subsequently be reclassified to profit and loss	 	 	 	 	 	 	 	 	
Cash flow hedges	 	 	4,853	 	 	 	(5,582	)	
Tax effect	 	 	(4,205	)	 	 	1,332	 	
Translation differences	 	 	(60,777	)	 	 	17,325	 	
 	 	 	 	 	 	 	 	 	
Other comprehensive income/(loss), net of taxes	 	 	(60,129	)	 	 	13,075	 	
Total comprehensive loss	 	 	(78,572	)	 	 	(3,226	)	
 
The accompanying Notes 1 to 17 are an integral part of the interim condensed consolidated financial statements

38 	

 	
 
ATALAYA LUXCO MIDCO, S.A.R.L. AND SUBSIDIARIES
(FORMERLY BC LUXCO MIDCO, S.A.R.L. AND SUBSIDIARIES)
Interim consolidated statements of changes in equity for the nine months ended September 30, 2013 and 2014
(In thousands of U.S. dollars)
 
 	 	Share
capital	 	 	Share
Premium	 	 	Retained
earnings	 	 	  Translation	 	 	Valuation
adjustments	 	 	Other	 	 	 	 	
 	 	(Note 8)	 	 	(Note 8)	 	 	(Note 8)	 	 	  differences	 	 	(Note 8)	 	 	reserves	 	 	Total equity	 	
Balance at January 1, 2013	 	 	2,592	 	 	 	-	 	 	 	(56,620	)	 	 	21,328	 	 	 	-	 	 	 	(13	)	 	 	(32,713	)	
Comprehensive loss for the period	 	  	-	 	 	 	-	 	 	 	(18,443	)	 	 	(60,777	)	 	 	648	 	 	 	-	 	 	 	(78,572	)	
Loss for the period	 	 	-	 	 	 	-	 	 	 	(18,443	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(18,443	)	
Other comprehensive income/(loss)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(60,777	)	 	 	648	 	 	 	-	 	 	 	(60,129	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at September 30, 2013 (*)	 	 	2,592	 	 	 	-	 	 	 	(75,063	)	 	 	(39,449	)	 	 	648	 	 	 	(13	)	 	 	(111,285	)	
 
 	 	Share
capital	 	 	Share
Premium	 	 	Retained
earnings	 	 	Translation	 	 	Valuation
adjustments	 	 	Other	 	 	 	 	
 	 	(Note 8)	 	 	(Note 8)	 	 	(Note 8)	 	 	differences	 	 	(Note 8)	 	 	reserves	 	 	Total equity	 	
Balance at January 1, 2014	 	 	2,592	 	 	 	-	 	 	 	(60,659	)	 	 	(77,513	)	 	 	1,627	 	 	 	(13	)	 	 	(133,966	)	
Comprehensive loss for the period	 	 	-	 	 	 	-	 	 	 	(16,301	)	 	 	17,325	 	 	 	(4,250	)	 	 	-	 	 	 	(3,226	)	
Loss for the period	 	 	-	 	 	 	-	 	 	 	(16,301	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(16,301	)	
Other comprehensive income/(loss)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	17,325	 	 	 	(4,250	)	 	 	-	 	 	 	13,075	 	
Capital reduction	 	 	(2,576	)	 	 	2,576	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at September 30, 2014 (*)	 	 	16	 	 	 	2,576	 	 	 	(76,960	)	 	 	(60,188	)	 	 	(2,623	)	 	 	(13	)	 	 	(137,192	)	
 
The accompanying Notes 1 to 17 are an integral part of the interim condensed consolidated financial statements
(*) UNAUDITED

39 	

 	
 
ATALAYA LUXCO MIDCO, S.A.R.L. AND SUBSIDIARIES
(FORMERLY BC LUXCO MIDCO, S.A.R.L. AND SUBSIDIARIES)
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
for the nine months ended September 30, 2013 and 2014
(In thousands of U.S. dollars)
 
 	 	 	 	Nine months ended September 30,	 	
 	 	Note	 	2013
(Unaudited)	 	 	2014
(Unaudited)	 	
Operating activities	 	 	 	 	 	 	 	 	 	 	
Loss before tax	 	 	 	 	(12,924	)	 	 	(18,421	)	
Adjustments to loss:	 	 	 	 	 	 	 	 	 	 	
Amortization and depreciation	 	 	 	 	96,927	 	 	 	91,640	 	
Impairment allowances	 	 	 	 	(2,886	)	 	 	32,678	 	
Change in provisions	 	 	 	 	14,986	 	 	 	33,969	 	
Grants released to income	 	 	 	 	-	 	 	 	-	 	
(Gains)/losses on disposal of fixed assets	 	 	 	 	1,092	 	 	 	139	 	
(Gains)/losses on disposal of financial assets	 	 	 	 	853	 	 	 	1,001	 	
Finance income	 	 	 	 	(7,407	)	 	 	(13,346	)	
Finance expense	 	 	 	 	87,612	 	 	 	99,404	 	
Net exchange differences	 	 	 	 	(4,915	)	 	 	18,405	 	
Change in financial instruments fair value	 	 	 	 	9,909	 	 	 	(7,266	)	
Own work capitalized	 	 	 	 	-	 	 	 	(413	)	
Other gains	 	 	 	 	-	 	 	 	(34,478	)	
 	 	 	 	 	196,171	 	 	 	221,733	 	
 	 	 	 	 	 	 	 	 	 	 	
Changes in working capital:	 	 	 	 	 	 	 	 	 	 	
Change in trade and other receivable	 	 	 	 	(54,500	)	 	 	34,832	 	
Change in trade and other payable	 	 	 	 	34,356	 	 	 	(13,586	)	
Other assets (payables)	 	 	 	 	(18,758	)	 	 	(11,252	)	
 	 	 	 	 	(38,902	)	 	 	9,994	 	
 	 	 	 	 	 	 	 	 	 	 	
Other cash flows from operating activities	 	 	 	 	 	 	 	 	 	 	
Interest paid	 	 	 	 	(47,405	)	 	 	(68,396	)	
Interest received	 	 	 	 	9,593	 	 	 	13,346	 	
Income tax paid	 	 	 	 	(24,819	)	 	 	(15,998	)	
Other payments	 	 	 	 	(13,290	)	 	 	(32,859	)	
 	 	 	 	 	(75,921	)	 	 	(103,907	)	
Net cash flows from/(used in) operating activities	 	 	 	 	68,424	 	 	 	109,399	 	
Investing activities	 	 	 	 	 	 	 	 	 	 	
Payments for acquisition of intangible assets	 	 	 	 	(7,613	)	 	 	(13,412	)	
Payments for acquisition of property, plant and equipment	 	 	 	 	(59,445	)	 	 	(67,765	)	
Payments for financial instruments	 	 	 	 	(26,775	)	 	 	(66,562	)	
Disposals of intangible assets	 	 	 	 	-	 	 	 	99	 	
Disposals of property, plant and equipment	 	 	 	 	-	 	 	 	886	 	
Disposal of financial instruments	 	 	 	 	3,587	 	 	 	14,000	 	
Net cash flows from/(used in) investing activities	 	 	 	 	(90,246	)	 	 	(132,754	)	
Financing activities	 	 	 	 	 	 	 	 	 	 	
Proceeds from borrowings from third parties	 	 	 	 	293,185	 	 	 	70,912	 	
Proceeds from borrowings from group companies	 	 	 	 	(38	)	 	 	88,319	 	
Repayment of borrowings from third parties	 	 	 	 	(252,542	)	 	 	(158,992	)	
Net cash flows from/(used in) financing activities	 	 	 	 	40,605	 	 	 	239	 	
Exchange diference	 	 	 	 	(529	)	 	 	321	 	
Net increase/(decrease) in cash and cash equivalents	 	 	 	 	18,254	 	 	 	(22,795	)	
Cash and cash equivalents at beginning of period	 	 	 	 	200,311	 	 	 	213,491	 	
Cash and cash equivalents at end of period	 	 	 	 	218,565	 	 	 	190,696	 	
The accompanying Notes 1 to 17 are an integral part of the interim condensed consolidated financial statements

40 	

 	
 
SELECTED EXPLANATORY N OTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014
 
1.           COMPANY ACTIVITY AND CORPORATE INFORMATION
 
Atalaya Luxco Midco – formerly BC Luxco Midco - (hereinafter the “Company” or “Midco”), and its subsidiaries (hereinafter the “Atento Group”) comprise a group of companies that offers contact management services to its clients throughout the entire contract life cycle, through contact centers or multichannel platforms.
 
The Company was incorporated on November 27, 2012 as a limited-liability company. On February 6, 2013 the Company changed its corporate name from BC Luxco Midco to Atalaya Luxco Midco.
 
The Company was incorporated under the laws of the Grand-Duchy of Luxembourg, with registered office in Luxembourg at 4, Rue Lou Hemmer.
 
The Company was incorporated in 2012 by Atalaya Luxco Topco, S.C.A., an entity ultimately owned by funds affiliated with Bain Capital Partners, LLC (hereinafter "Bain Capital"). Bain Capital is a private investment fund that invests in companies with a high growth potential. Notable among its investments in the Customer Relationship Management (hereinafter “CRM”) sector is its holding in Bellsystem 24, a leader in customer service in Japan, and Genpact, the largest business management services company in the world.
 
On December 2012, Bain Capital reached a definitive agreement with Telefónica, S.A. for the transfer of nearly of 100% of the CRM business carried out by Atento Group companies (the "Acquisition"), the parent company of which was Atento Inversiones y Teleservicios, S.A. (hereinafter “AIT”). The Venezuela-based subsidiaries of the group headed by AIT, and AIT, except for some specific assets and liabilities, were not included in the Acquisition. Control was transferred for the purposes of creating the consolidated Atento Group on December 1, 2012. These consolidated financial statements are prepared since December 1, 2012.
 
As of September 30, 2014, the ultimate parent company of the group is Atalaya Luxco Topco, S.C.A. (Luxembourg). The share capital of Midco currently stands at EUR 12,500 (equivalent to 16,201 U.S. dollars).
 
The Company's corporate purpose is to hold business stakes of any kind in companies in Luxembourg and abroad, purchase and sell, subscribe or any other format, and transfer through sale, swap or otherwise of securities of any kind, and administration, management, control and development of the investment portfolio.
 
The Company may also act as the guarantor of loans and securities, as well as assist companies in which it holds direct or indirect interests or that form part of its group. The Company may secure funds, with the exception of public offerings, through any kind of lending, or through the issuance of bonds, securities or debt instruments in general.
 
The Company may also carry on any commercial, industrial, financial or real estate business, or intellectual property related activity that it deems necessary to meet the aforementioned corporate purpose.
 
The corporate purpose of its subsidiaries, with the exception of the intermediate holding companies, is to establish, manage and operate CRM centers through multichannel platforms, provide telemarketing, marketing and "call center" services through service agencies or any other format currently existing or which may be developed in the future by the Atento Group, provide telecommunications, logistics, telecommunications system management, data transmission, processing and Internet services and to promote new technologies in these areas, offer consultancy and advisory services to customers in all areas in connection with telecommunications, processing, integration systems and new technologies, and other services related to the above.

41 	

 	
  
2.           BASIS OF PRESENTATION OF THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
The interim condensed consolidated financial statements for the nine months ended September 30, 2014 (the “interim financial statements”) have been prepared in accordance with International Accounting Standard (IAS) 34 “Interim Financial Reporting”. Therefore, they do not contain all the information and disclosures required in a complete annual consolidated financial statements and, for adequate interpretation, should be read in conjunction with the Atento Group’s consolidated annual financial statements for the year ended December 31, 2013.
 
The figures in these interim condensed consolidated financial statements are expressed in thousands of dollars unless indicated otherwise. U.S. Dollar is the Atento Group’s presentation currency.
 
These interim financial condensed consolidated statements have been prepared on a historical cost basis, except for derivative financial instruments and Contingent Value Instruments (see Note 10), which have been measured at fair value.
 
Going concern
 
As of September 30, 2014, the Atento Group presents negative shareholders’ equity for an amount of 137,192 thousand U.S. dollars (133,966 thousand U.S. dollars as of December 31, 2013), primarily due to the incorporation of the new Atento Group, following the acquisition of the former Atento Group, where equity has been negatively impacted by the costs incurred in connection with the acquisition and by integration related costs associated to the change in ownership. Shareholders’ equity is also negatively impacted by the impact of foreign exchanges and the impact of the Atento Group’s financial structure reflected in the negative net finance result.
 
On October 3, 2014, as part of the Reorganization Transaction as further described in note 17, the Preferred Equity Certificates in the amount of €460,096 thousand (approx. 575,856 thousand U.S. dollars) was capitalized as equity. As a consequence, the negative shareholders’ equity as of September 30, 2014, for an amount of 137,192 thousand U.S. dollars has been corrected with the corresponding prospective reduction in finance expenses.
 
Accordingly, management has prepared these interim condensed consolidated financial statements based on the principle of going concern.
 
	3.	COMPARATIVE INFORMATION	
 
Comparative information in the interim financial statements refer to the nine months periods ended September 30, 2014 and 2013, except for the statement of financial position, which compares information as of September 30, 2014, and December 31, 2013.
 
During the nine months ended September 30, 2014 there have not been any changes in the consolidation scope.
 
	4.	ACCOUNTING POLICIES	
 
	a)	New and amended standards and interpretations	
 
The accounting policies adopted in the preparation of the interim financial statements for the nine months ended September 30, 2014 are consistent with those followed in the preparation of the consolidated annual financial statements for the year ended December 31, 2013, except for the following standards and amendments to existing standards:
 
	·	Amendment to IAS 32 – Offsetting Financial Assets and Financial Liabilities : effective for annual periods beginning on or after January 1, 2014.	
 
	·	Amendment to IFRS 10, IFRS 12 and IAS 27 – Investment Entities : effective for annual periods beginning on or after January 1, 2014.	
 
	·	IFRIC 21 – Levies : effective for annual periods beginning on or after January 1, 2014.	

42 	

 	
 
	·	Amendments to IAS 39 – Novation of Derivatives and Continuation of Hedge Accounting: effective for annual periods beginning on or January 1, 2014.	
 
The adoption of these standards and amendments did not have a significant impact on these interim financial statements.
 
	b)	Standards and interpretations published by the IASB, but not yet applicable in this period	
 
At the date of publication of these interim financial statements, the following standards and amendments had been issued by the IASB, but its application was not mandatory:
 
	·	IFRS 9 – Financial Instruments: effective for annual periods beginning on or after January 1, 2018.	
 
	·	IFRS 14 – Regulatory Deferral Accounts : effective for annual periods beginning on or after January 1, 2016.	
 
	·	Amendment to IAS 19 – Defined Benefit Plans: Employee Contributions: effective for annual periods beginning on or after July 1, 2014.	
 
	·	Annual Improvements to IFRSs 2010-2012 Cycle: effective for annual periods beginning on or after July 1, 2014.	
 
	·	Annual Improvements to IFRSs 2011-2013 Cycle: effective for annual periods beginning on or after July 1, 2014.	
 
	·	IFRS 15 Revenue from Contracts with Customers: effective for annual periods beginning on or after July 1, 2017.	
 
	·	Amendment to IAS 16 and IAS 38: Clarification of Acceptable Methods of Depreciation and Amortization: effective for annual periods beginning on or after January 1, 2016.	
 
The Atento Group is currently assessing the impact of the application of these standards and amendments. Pursuant to the analyses conducted to date, the Atento Group estimates that the application of these amendments will not have a material impact on the Group consolidated financial statements in the period of its initial application.
 
	5.	MANAGEMENT OF FINANCIAL RISK	
 
5.1 Financial risk factors
 
The Atento Group's activities are exposed to the following financial risks: market risk (including currency risk, interest rate risk and country risk), credit risk and liquidity risk. The Atento Group's global risk management policy aims to minimize the potential adverse effects of these risks on the Atento Group's financial returns. The Atento Group also uses derivative financial instruments to hedge certain risk exposures.
 
These interim condensed consolidated financial statements do not include all financial risk management information and disclosures required in the annual financial statements and therefore they should be read in conjunction with the Atento Group’s annual financial statements as of and for the year ended December 31, 2013. During the nine months ended September 30, 2014 there have not been changes in any risk management policies.
 
Country Risk
 
To manage or mitigate country risk, we repatriate the funds generated in Latin America that are not required for the pursuit of new profitable business opportunities in the region and subject to the restrictions of our financing agreements. The capital structure of the Atento Group comprises two separate ring-fenced financings: (i) the Brazilian Debenture and (ii) the 300 million U.S. dollars 7.375% Senior Secured Notes due 2020, together with the €50 million (62.9 million U.S. dollars) Revolving Credit Facility. The Brazilian Debenture is denominated in Brazilian reais and our obligations are paid with cash flows from Atento Brazil revenue in Brazilian reais. This creates a natural hedge for debt commitments eliminating any foreign exchange risk. In addition, in connection with the issuance of the Senior Secured Notes in U.S. dollars we entered into a series of cross currency swaps derivatives agreements, effectively hedging 90% of the related interest payments in Euros, Mexican Pesos, Colombian Pesos and Peruvian Soles, and 75% of the principal exposure in Euros and Mexican Pesos.

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Argentinean subsidiaries are not party to these two separate ring-fenced financings, and we do not rely on cash flows from these operations to serve our debt commitments entered into in connection with the Acquisition.
 
Interest Rate Risk
 
Interest rate risk arises mainly as a result of changes in interest rates which affect: finance costs of debt bearing interest at variable rates (or short-term maturity debt expected to be renewed), as a result of fluctuations in interest rates, and the value of non-current liabilities that bear interest at fixed rates. Our exposure to interest rate risk arises principally from interest on our indebtedness. As of September 30, 2014, we had total consolidated indebtedness of approximately 1,281,841 thousands U.S. dollars, of which approximately 47.8% (excluding CVIs and the PECs) bears interest at variable rates. As of December 31, 2013, we had total consolidated indebtedness of approximately 1,370,719 thousand U.S. dollars, of which approximately 43.2% (excluding CVIs and the PECs) bears interest at variable rates.
 
As of September 30, 2014, the estimated fair value of the interest rate hedging instruments related to the Brazilian Debentures totaled 11,693 thousand U.S. dollars, which was recorded as a financial asset. Based on our total indebtedness of 1,281,841 thousand U.S. dollars as of September 30, 2014 and not taking into account the impact of our interest rate hedging instruments referred to above, a 1% change in interest rates would impact our net interest expense by 2,507 thousand U.S. dollars.
 
As of December 31, 2013, the estimated fair value of the interest rate hedging instruments related to the Brazilian Debentures totaled 15,611 thousand U.S. dollars, which was recorded as a financial asset. Based on our total indebtedness of 1,370,719 thousand U.S. dollars as of December 31, 2013 and not taking into account the impact of our interest rate hedging instruments referred to above, a 1% change in interest rates would impact our net interest expense by 3,786 thousand U.S. dollars.
 
Foreign Currency Risk
 
Our exposure to market risk arises principally from exchange rate risk. While the U.S. dollar is our reporting currency, approximately 98% of our revenue for the nine months period ended September 30, 2014 was generated in local currencies other than the U.S. dollar. In addition to the U.S. dollar, we also generate significant revenues in Brazilian reais, Euros and Mexican pesos. The exchange rates among the U.S. dollar and these local currencies have changed substantially in recent years and may fluctuate substantially in the future. Our exchange rate risk arises from our local currency revenues, receivables and payables. We benefit to a certain degree from the fact that the revenue we collect in each country in which we have operations is generally denominated in the same currency as the majority of the expenses we incur in earning this revenue.
 
In accordance with our risk management policy, whenever we deem it appropriate, we manage foreign currency risk by using derivatives to hedge any debts incurred in currencies other than those of the countries where the companies taking on the debt are domiciled.
 
Upon closing of the Senior Secured Notes issued in U.S. dollars, we entered into cross-currency interest rate swaps pursuant to which we exchanged an amount of U.S. dollars equal to the face amount of the Senior Secured Notes for an amount of Euro, Mexican Pesos, Colombian Pesos and Peruvian Soles. On each interest payment date under the Senior Secured Notes, we receive from the applicable swap counterparty an amount in U.S. dollars equal to a semi-annual amount of interest at a rate per year equal to the interest rate payable on the Senior Secured Notes and calculated based on the amount of U.S. dollars initially exchanged by us under the currency swap and we will pay to the applicable swap counterparty an amount in the applicable other currency equal to a semi-annual amount of interest at a per annum rate equal to the benchmark floating rate for currency swaps for the applicable semi-annual period. Finally, on the maturity date of each currency swap, we will receive from the applicable swap counterparty U.S. dollars in an amount equal to the initial U.S. dollar exchange amount for such currency swap, and will pay to the applicable swap counterparty the applicable other currency in an amount equal to the initial foreign currency exchange amount for such currency swap. As of September 30, 2014, the estimated net fair value of the interest rate hedge instruments related to the cross-currency swaps entered into to hedge the Senior Secured Notes totaled an asset of 56 thousand U.S. dollars (liability 13,277 thousand U.S. dollars, as of December 31, 2013), of which 4,043 thousand U.S. dollars (15,962 thousand U.S. dollars as of December 31, 2013) was recorded as long-term financial debt and 4,099 thousand U.S. dollars (2,685 thousand U.S. dollars as of December 31, 2013) was recorded as long-term financial assets (see Note 10).

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Credit Risk
 
Financial instruments that potentially subject us to credit risk consist principally of accounts receivable, cash and cash equivalents, and long-term financial assets. Our maximum exposure to credit risk on financial assets is the carrying amount of said assets. Our commercial credit risk management approach is based on continuous monitoring of the risk assumed and the financial resources necessary to manage our various units, in order to optimize the risk-reward relationship in the development and implementation of the business plans of our various units in their ordinary management. Accounts receivable are typically unsecured and are derived from revenue earned from clients primarily in Latin America and EMEA. Additionally, we carry out significant transactions with the Telefónica Group. At September 30, 2014, accounts receivable due from the Telefónica Group amounted to 250,519 thousand U.S. dollars (302,234 thousand U.S. dollars as of December 31, 2013).
 
Credit risk arising from cash and cash equivalents is managed by placing cash surpluses in high quality and highly liquid money-market assets. These placements are regulated by a master agreement revised annually on the basis of conditions prevailing in the markets and the countries where we operate. The master agreement establishes: (i) the maximum amounts to be invested per counterparty, based on their ratings (long and short-term debt rating); (ii) the maximum period of the investment; and (iii) the instruments in which the surpluses may be invested.
 
Liquidity Risk
 
We seek to match our debt maturity schedule to our capacity to generate cash flows to meet the payments falling due, factoring in a degree of cushion. In practice, this has meant that our average debt maturity must be longer than the length of time we require to generate cash flows to pay our debt (assuming that internal projections are met).
 
At September 30, 2014, the average term to maturity of our debt with third parties (703,068 thousand U.S. dollars) was 5 years. In addition, we had current assets of 760,189 thousand U.S. dollars at such date, which includes short term financial investments of 52,629 thousand U.S. dollars and cash and cash equivalents of 190,696 thousand U.S. dollars, of which 12,184 thousand U.S. dollars are located in Argentina and subject to restrictions on our ability to transfer them out of the country.
 
At December 31, 2013, the average term to maturity of our debt with third parties (851,112 thousand U.S. dollars) was 6.1 years. In addition, we had current assets of 770,799 thousand U.S. dollars at such date, which included cash and cash equivalents of 213,491 thousand U.S. dollars, of which 13,743 thousand U.S. dollars were located in Argentina and subject to restrictions on our ability to transfer them out of the country.
 
Capital Management
 
Our capital management goal is to determine the financial resources necessary to continue our recurring activities and maintain a capital structure that optimizes own and borrowed funds. Additionally, we set an optimal debt level in order to maintain a flexible and comfortable medium-term borrowing structure in order to carry out our routine activities under normal conditions and to address new opportunities for growth. We strive to maintain debt levels in line with forecasted future cash flows and with quantitative restrictions imposed under financing contracts.
 
In addition to these general guidelines, we take into account other considerations and specifics when determining our financial structure, such as country risk, tax efficiency and volatility in cash flow generation.
 
At the date of these interim financial statements, we are compliant with and other established in our financing contracts. In order to monitor our compliance with our financing contracts, we regularly monitor figures for net financial debt with third parties and EBITDA.
 
5.2 Fair value estimation
 
The table below shows an analysis of the financial instruments measured at fair value, classified according to the valuation method used. The Atento Group has defined the following valuation levels:

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Prices (unadjusted) quoted in active markets for identical assets and liabilities (Level 1).
 
Data other than the Level 1 quoted price that are observable for the asset or liability, either directly (i.e. prices) or indirectly (i.e. price derivatives) (Level 2).
 
Data for the asset or liability that are not based on observable market data (Level 3).
 
The Atento Group's assets and liabilities measured at fair value as of December 31, 2013 and September 30, 2014 are as follows:
 
 	 	Thousands of U.S. dollars	 	
December 31, 2013 (Audited)	 	Level 1	 	 	Level 2	 	 	Level 3	 	 	Total
balance	 	
Assets	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Derivatives	 	 	-	 	 	 	18,296	 	 	 	-	 	 	 	18,296	 	
Total assets	 	 	-	 	 	 	18,296	 	 	 	-	 	 	 	18,296	 	
Liabilities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Derivatives	 	 	-	 	 	 	(15,962	)	 	 	-	 	 	 	(15,962	)	
CVIs	 	 	-	 	 	 	-	 	 	 	(43,367	)	 	 	(43,367	)	
Total liabilities	 	 	-	 	 	 	(15,962	)	 	 	(43,367	)	 	 	(59,329	)	
 
 	 	Thousands of U.S. dollars	 	
September 30, 2014 (Unaudited)	 	Level 1	 	 	Level 2	 	 	Level 3	 	 	Total
balance	 	
Assets	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Derivatives	 	 	-	 	 	 	15,792	 	 	 	-	 	 	 	15,792	 	
Total assets	 	 	-	 	 	 	15,792	 	 	 	-	 	 	 	15,792	 	
Liabilities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Derivatives	 	 	-	 	 	 	(4,043	)	 	 	-	 	 	 	(4,043	)	
CVIs	 	 	-	 	 	 	-	 	 	 	(36,062	)	 	 	(36,062	)	
Total liabilities	 	 	-	 	 	 	(4,043	)	 	 	(36,062	)	 	 	(40,105	)	
 
There were no transfers between the different levels during the period.
 
The following table reflects the movements of the Atento Group’s Contingent Value Instruments (“CVI”) measured at fair value using significant unobservable inputs for the nine months period ended September 30, 2014:
 
 	 	Thousands of U.S. dollars	 	
 	 	 	 	
Fair value as of December 31, 2013 (Audited)	 	 	(43,367	)	
Change in Fair Value	 	 	(4,740	)	
Translation differences	 	 	12,045	 	
Fair value as of September 30, 2014 (Unaudited)	 	 	(36,062	)	
 
	6.	SEGMENT INFORMATION	
 
The following tables present financial information for the Atento Group’s operating segments for the nine months ended September 30, 2013 and 2014 (in thousand U.S. dollars).

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Nine months ended September 30, 2013
(Unaudited)	 	EMEA	 	 	Americas	 	 	Brazil	 	 	Others and
eliminations	 	 	Total Group	 	
Sales to other companies	 	 	88,408	 	 	 	295,245	 	 	 	507,752	 	 	 	-	 	 	 	891,405	 	
Sales to Telefónica Group	 	 	185,464	 	 	 	278,756	 	 	 	391,707	 	 	 	-	 	 	 	855,927	 	
Sales to other group companies	 	 	207	 	 	 	402	 	 	 	-	 	 	 	(609	)	 	 	-	 	
Other operating income and expense	 	 	(253,567	)	 	 	(493,038	)	 	 	(793,091	)	 	 	(37,582	)	 	 	(1,577,278	)	
EBITDA	 	 	20,512	 	 	 	81,365	 	 	 	106,368	 	 	 	(38,191	)	 	 	170,054	 	
Depreciation and amortization	 	 	(18,060	)	 	 	(35,140	)	 	 	(42,987	)	 	 	(740	)	 	 	(96,927	)	
Operating profit	 	 	2,452	 	 	 	46,225	 	 	 	63,381	 	 	 	(38,931	)	 	 	73,127	 	
Financial results	 	 	(14,746	)	 	 	(6,514	)	 	 	(33,884	)	 	 	(30,907	)	 	 	(86,051	)	
Income tax	 	 	5,813	 	 	 	(15,575	)	 	 	(10,251	)	 	 	14,494	 	 	 	(5,519	)	
Profit/(loss) for the period	 	 	(6,481	)	 	 	24,136	 	 	 	19,246	 	 	 	(55,344	)	 	 	(18,443	)	
EBITDA	 	 	20,512	 	 	 	81,365	 	 	 	106,368	 	 	 	(38,191	)	 	 	170,054	 	
Acquisition and integration related costs	 	 	490	 	 	 	615	 	 	 	826	 	 	 	19,142	 	 	 	21,073	 	
Restructuring costs	 	 	1,393	 	 	 	1,808	 	 	 	-	 	 	 	816	 	 	 	4,017	 	
Sponsor management fees	 	 	-	 	 	 	-	 	 	 	-	 	 	 	5,925	 	 	 	5,925	 	
Site relocation costs	 	 	-	 	 	 	-	 	 	 	1,829	 	 	 	-	 	 	 	1,829	 	
Financing fees	 	 	-	 	 	 	-	 	 	 	557	 	 	 	4,559	 	 	 	5,116	 	
Asset impairments and Other	 	 	-	 	 	 	-	 	 	 	1,613	 	 	 	-	 	 	 	1,613	 	
Adjusted EBITDA	 	 	22,395	 	 	 	83,788	 	 	 	111,193	 	 	 	(7,749	)	 	 	209,627	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Capital expenditure	 	 	4,032	 	 	 	11,358	 	 	 	36,715	 	 	 	598	 	 	 	52,703	 	
Fixed assets and intangibles (as of December 31, 2013)	 	 	136,916	 	 	 	303,329	 	 	 	377,933	 	 	 	3,941	 	 	 	822,119	 	
Allocated assets (as of December 31, 2013)	 	 	535,645	 	 	 	694,391	 	 	 	853,018	 	 	 	(240,874	)	 	 	1,842,180	 	
Allocated liabilities (as of December 31, 2013)	 	 	361,576	 	 	 	398,067	 	 	 	661,039	 	 	 	555,464	 	 	 	1,976,146	 	
 
Nine months ended September 30, 2014
(Unaudited)	 	EMEA	 	 	Americas	 	 	Brazil	 	 	Others and
eliminations	 	 	Total Group	 	
Sales to other companies	 	99,298	 	 	303,861	 	 	527,125	 	 	-	 	 	930,284	 	
Sales to Telefónica Group	 	 	161,400	 	 	 	272,484	 	 	 	379,096	 	 	 	-	 	 	 	812,980	 	
Sales to other group companies	 	 	60	 	 	 	335	 	 	 	-	 	 	 	(395	)	 	 	-	 	
Other operating income and expense	 	 	(293,762	)	 	 	(496,392	)	 	 	(791,159	)	 	 	9,466	 	 	 	(1,571,847	)	
EBITDA	 	 	(33,004	)	 	 	80,288	 	 	 	115,062	 	 	 	9,071	 	 	 	171,417	 	
Depreciation and amortization	 	 	(16,185	)	 	 	(32,459	)	 	 	(42,198	)	 	 	(798	)	 	 	(91,640	)	
Operating profit	 	 	(49,189	)	 	 	47,829	 	 	 	72,864	 	 	 	8,273	 	 	 	79,777	 	
Financial results	 	 	(10,265	)	 	 	(9,388	)	 	 	(36,396	)	 	 	(42,149	)	 	 	(98,198	)	
Income tax	 	 	17,374	 	 	 	(14,360	)	 	 	(12,452	)	 	 	11,558	 	 	 	2,120	 	
Profit/(loss) for the period	 	 	(42,080	)	 	 	24,081	 	 	 	24,016	 	 	 	(22,318	)	 	 	(16,301	)	
EBITDA	 	 	(33,004	)	 	 	80,288	 	 	 	115,062	 	 	 	9,071	 	 	 	171,417	 	
Acquisition and integration related costs	 	 	-	 	 	 	39	 	 	 	6,820	 	 	 	821	 	 	 	7,680	 	
Restructuring costs	 	 	17,914	 	 	 	4,788	 	 	 	287	 	 	 	824	 	 	 	23,813	 	
Sponsor management fees	 	 	-	 	 	 	-	 	 	 	-	 	 	 	7,285	 	 	 	7,285	 	
Site relocation costs	 	 	-	 	 	 	-	 	 	 	1,367	 	 	 	-	 	 	 	1,367	 	
Financing and IPO fees	 	 	-	 	 	 	-	 	 	 	795	 	 	 	10,365	 	 	 	11,160	 	
Asset impairments and Other (*)	 	 	32,502	 	 	 	85	 	 	 	(596	)	 	 	(34,882	)	 	 	(2,891	)	
Adjusted EBITDA	 	 	17,412	 	 	 	85,200	 	 	 	123,735	 	 	 	(6,516	)	 	 	219,831	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Capital expenditure	 	 	2,747	 	 	 	15,653	 	 	 	46,632	 	 	 	328	 	 	 	65,360	 	
Fixed assets and intangibles (as of September 30, 2014)	 	 	82,392	 	 	 	262,141	 	 	 	365,219	 	 	 	2,714	 	 	 	712,466	 	
Allocated assets (as of September 30, 2014)	 	 	475,864	 	 	 	659,088	 	 	 	859,999	 	 	 	(279,348	)	 	 	1,715,603	 	
Allocated liabilities (as of September 30, 2014)	 	 	331,451	 	 	 	375,415	 	 	 	656,251	 	 	 	489,678	 	 	 	1,852,795	 	

(*) Other includes the non-cash penalty fee that Telefónica agreed to compensate us after the amendment to the MSA described in Note 7.

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“Other and eliminations” caption includes activities of the Company, the following intermediate holdings in Luxembourg and Spain: Atento Luxco 1, S.A., Atento Spain Holdco S.L.U. and Global Rossolimo S.L.U. and intragroup eliminations between segments.
 
During the nine months ended September 30, 2014 approximately 46.6% of sales arose from services provided to companies belonging to the Telefónica Group (49.0% for the nine months ended September 30, 2013).
 
	7.	INTANGIBLE ASSETS, PROPERTY, PLANT AND EQUIPMENT AND GOODWILL	
 
The movements in “Intangible assets” and “Property, plant and equipment” in the nine months ended September 30, 2014 are as follows:
 
 	 	Thousands of U.S. dollars	 	
 	 	Intangible assets	 	 	Property, plant and
equipment	 	 	Total	 	
Balance at December 31, 2013 (Audited)	 	 	392,777	 	 	 	231,603	 	 	 	624,380	 	
Additions	 	 	13,412	 	 	 	51,948	 	 	 	65,360	 	
Disposals	 	 	(97	)	 	 	(784	)	 	 	(881	)	
Transfers	 	 	167	 	 	 	(167	)	 	 	-	 	
Impairment charges	 	 	(27,643	)	 	 	-	 	 	 	(27,643	)	
Depreciation and amortization	 	 	(47,219	)	 	 	(44,421	)	 	 	(91,640	)	
Translation differences	 	 	(19,471	)	 	 	(12,046	)	 	 	(31,517	)	
Balance at September 30, 2014 (Unaudited)	 	 	311,926	 	 	 	226,133	 	 	 	538,059	 	
 
Additions
 
In the nine months ended September, 2014, investments amounting to 46,632 thousand U.S. dollars were made in Brazil, of which 25,862 thousand U.S. dollars were in capacity growth to be able to attend the current and new clients in that country.
 
In the nine months ended September 30, 2014, investments amounting to 15,653 thousand U.S. dollars were made in Americas mainly in Peru (3,441 thousand U.S. dollars), Mexico (5,968 thousand U.S. dollars) and Central America (4,854 thousand U.S. dollars). The increase in capacity growth in America amounted to 8,144 thousand U.S. dollars, of which in Peru was 920 thousand U.S. dollars and in Mexico was 2,613 thousand U.S. dollars. The investments of 4,575 thousand U.S. dollars in Central America were made for the construction of a new site dedicated to attend nearshore traffic from U.S.A..
 
Finally, in the nine months ended September 30, 2014 there were no significant investments in EMEA.
 
The movement in “Goodwill” in the nine months ended September 30, 2014 is as follows:

 	 	Thousands of U. S. dollars	 	
 	 	12/31/2013
(Audited)	 	 	Impairment	 	 	Translation
differences	 	 	09/30/2014
(Unaudited)	 	
Peru	 	 	34,185	 	 	 	-	 	 	 	(381	)	 	 	33,804	 	
Chile	 	 	21,910	 	 	 	-	 	 	 	(2,807	)	 	 	19,103	 	
Colombia	 	 	9,681	 	 	 	-	 	 	 	(481	)	 	 	9,200	 	
Czech Republic	 	 	3,797	 	 	 	(3,752	)	 	 	(45	)	 	 	-	 	
Mexico	 	 	2,816	 	 	 	-	 	 	 	(73	)	 	 	2,743	 	
Spain	 	 	1,161	 	 	 	(1,149	)	 	 	(12	)	 	 	-	 	
Brazil	 	 	77,920	 	 	 	-	 	 	 	(3,446	)	 	 	74,474	 	
Argentina	 	 	46,269	 	 	 	-	 	 	 	(11,186	)	 	 	35,083	 	
Total	 	 	197,739	 	 	 	(4,901	)	 	 	(18,431	)	 	 	174,407	 	

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Impairment charges
 
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential impairment.
 
Tests conducted in 2013 on Atento companies with goodwill did not uncover any impairment in their value, as the related cash flows exceeded the carrying amount of the cash-generating units.
 
In addition, a sensitivity analysis was performed on changes that could reasonably be expected to occur in the primary valuation inputs, with the recoverable amount remaining above the net carrying amount.
 
In May 2014, the Master Service Agreement (“MSA”) with Telefónica, which required the Telefónica Group companies to meet pre-agreed minimum annual revenue commitments to us through 2021, was amended to adjust such minimum revenue commitments in relation to Spain and Morocco, to reflect the expected lower level of activities in these geographies. The provisions of the MSA required Telefónica to compensate the Company in case of shortfalls in these revenue commitments. As such, Telefónica agreed to compensate the Company with a non-cash penalty fee amounting to €25.4 million (equivalent to $34.5 million for the period ended September 30, 2014). This non-cash compensation was recorded in the consolidated income statement for the period ended September 30, 2014 as other gains. The Company, in turn, used this amount to partially reduce and compensate the Vendor Loan Note with Telefónica (see Note 10).
 
Since the amendment to the MSA affected significantly the amount of expected revenue, this has been considered as a triggering event for the purpose of evaluating the recoverable amount of the intangible assets recorded in relation with such MSA (as described in Note 5 to the Consolidated Financial Statements for the year ended December 31, 2013). Therefore, also considering the changes in expected revenue in other geographies, as of June 30, 2014 (second quarter) management performed an impairment test on the carrying amount of customer relationship intangible assets, goodwill and property, plant and equipment using assumptions revised in accordance with the amendments to the MSA and with updated management expectations on cash flows generation from the different geographies where the company operates. The result of the test performed was an impairment charge of 27,965 thousand U.S. dollars (27,643 thousand U.S. dollars as of September 30, 2014) of the intangible asset related to the customer relationship with Telefónica in connection with the MSA, an impairment charge of 3,752 thousand U.S. dollars of goodwill in Czech Republic and of 1,149 thousand U.S. dollars of goodwill in Spain, which have been recorded in the consolidated income statement as impairment charges.
 
The pre-tax discount rates and the projected growth rates considered for the impairment test as June 30, 2014 were as follows:
 
 	 	Discount rate	 	
 	 	Brazil	 	 	Mexico	 	 	Spain	 	 	Colombia	 	 	Peru	 	 	Chile	 	 	Czech
Republic	 	 	Argentina	 	
June 2014	 	 	16.53	%	 	 	12.21	%	 	 	10.38	%	 	 	12.50	%	 	 	11.37	%	 	 	11.27	%	 	 	9.52	%	 	 	31.77	%	
December 2013	 	 	16.53	%	 	 	12.21	%	 	 	10.38	%	 	 	12.50	%	 	 	11.37	%	 	 	11.27	%	 	 	9.52	%	 	 	31.77	%	
 
 	 	Growth rate	 	
 	 	Brazil	 	 	Mexico	 	 	Spain	 	 	Colombia	 	 	Peru	 	 	Chile	 	 	Czech
Republic	 	 	Argentina	 	
June 2014	 	 	5.50	%	 	 	3.10	%	 	 	1.50	%	 	 	3.00	%	 	 	2.50	%	 	 	3.00	%	 	 	2.03	%	 	 	8.76	%	
December 2013	 	 	5.50	%	 	 	3.10	%	 	 	1.85	%	 	 	3.00	%	 	 	2.50	%	 	 	3.00	%	 	 	2.03	%	 	 	16.83	%	
 
As of September 30, 2014, no trigger event was identified and there are no significant changes to the sensitivity information disclosed in the annual consolidated financial statements for the year ended December 31, 2013.
 
The Atento Group has no assets with an indefinite useful life and therefore carries out no impairment tests of this type.

49 	

 	
 
	8.	EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT	
 
Share capital 
 
At December 31, 2013 share capital amounted to 2,000,000 Euros (equivalent to 2,592,201 U.S. dollars), divided into 2,000,000 shares with a par value of 1 euro each, fully paid in.
 
On April 17, 2014, Atalaya Luxco PIKco, S.C.A. was formed as a direct subsidiary of Atalaya Luxco Topco, S.C.A.. On May 15, 2014 Atalaya Luxco Topco, S.C.A. transferred to Atalaya Luxco PIKco, S.C.A. all of its equity interest in the Company. As a result, Atalaya Luxco PIKco, S.C.A. held the entire share capital of the Company.
 
On September 2, 2014, the nominal value of each share was reduced from 1 euro (EUR 1) to a hundredth of a euro cent (EUR 0.0001), consequently, the number of shares were split from 2,000,000 to 20,000,000,000.
 
At the same date a decrease of the share capital was approved in the amount of EUR 1,987,500 (equivalent to 2,576,000 U.S. dollars) to an amount of EUR 12,500 (equivalent to 16,201 U.S. dollars), through the cancellation of 19,875,000,000 of shares. The amount of EUR 1,987,500 (equivalent to 2,576,000 U.S. dollars) was reclassified from share capital to a capital contribution account (Share Premium).
 
As a result of the split and the cancellation of shares, the Company’s share capital as at September 30, 2014 is EUR 12,500 (equivalent to 16,201 U.S. dollars), represented by 125,000,000 shares (one share for every 16 shares previously outstanding).
 
Legal reserve
 
According to mercantile legislation in Luxembourg, Atalaya Luxco Midco, S.a.r.l. must transfer 5% of profits for the year to a legal reserve until the reserve reaches 10% of share capital. The legal reserve cannot be distributed.
 
As of September 30, 2014 and December 31, 2013, no legal reserve had been established.
 
Retained earnings
 
Movements in retained earnings during the nine months ended September 30, 2014 are as follows:
 
 	 	Thousands of U.S. dollars	 	
 	 	 	 	
As of December 31, 2013 (Audited)	 	 	(60,659	)	
Loss for the period	 	 	(16,301	)	
As of September 30, 2014 (Unaudited)	 	 	(76,960	)	
 
Translation differences
 
Translation differences reflect the differences arising on account of exchange rate fluctuations when converting the net assets of fully consolidated foreign companies from local currency to the Atento Group's presentation currency (U.S. dollars) by the full consolidation method.

50 	

 	
 
Valuation adjustments
 
Movements in valuation adjustments in the nine months ended September 30, 2014 were as follows:
 
 	 	Thousands of U.S. dollars	 	
 	 	 	 	
As of December 31, 2013 (Audited)	 	 	1,627	 	
Cash flow hedges	 	 	(4,250	)	
 	 	 	 	 	
As of September 30, 2014 (Unaudited)	 	 	(2,623	)	
 
	9.	FINANCIAL ASSETS	
 
The breakdown of the Company’s financial assets by category as of December 31, 2013 and September 30, 2014 is as follows:
 
 	 	Thousands of U.S. dollars	 	
December 31, 2013
(Audited)	 	Loans and
receivables	 	 	Derivatives	 	 	Total	 	
 	 	 	 	 	 	 	 	 	 	
Trade and other receivables	 	 	72	 	 	 	-	 	 	 	72	 	
Other financial assets	 	 	53,812	 	 	 	-	 	 	 	53,812	 	
Financial derivative instruments  (Note 10)	 	 	-	 	 	 	15,439	 	 	 	15,439	 	
Non-current financial assets	 	 	53,884	 	 	 	15,439	 	 	 	69,323	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Trade and other receivables (*)	 	 	516,960	 	 	 	-	 	 	 	516,960	 	
Other financial assets	 	 	1,425	 	 	 	-	 	 	 	1,425	 	
Financial derivative instruments  (Note 10)	 	 	-	 	 	 	2,857	 	 	 	2,857	 	
Cash and cash equivalents	 	 	213,491	 	 	 	-	 	 	 	213,491	 	
Current financial assets	 	 	731,876	 	 	 	2,857	 	 	 	734,733	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
TOTAL FINANCIAL ASSETS	 	 	785,760	 	 	 	18,296	 	 	 	804,056	 	

(*) Excluding advance payments and non-financial assets.
 
 	 	Thousands of U.S. dollars	 	
September 30, 2014
(Unaudited)	 	Loans and
receivables	 	 	Derivatives	 	 	Total	 	
 	 	 	 	 	 	 	 	 	 	
Trade and other receivables	 	 	69	 	 	 	-	 	 	 	69	 	
Other financial assets	 	 	47,191	 	 	 	-	 	 	 	47,191	 	
Financial derivative instruments  (Note 10)	 	 	-	 	 	 	13,892	 	 	 	13,892	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Non-current financial assets	 	 	47,260	 	 	 	13,892	 	 	 	61,152	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Trade and other receivables (*)	 	 	478,309	 	 	 	-	 	 	 	478,309	 	
Other financial assets	 	 	53,865	 	 	 	-	 	 	 	53,865	 	
Financial derivative instruments  (Note 10)	 	 	-	 	 	 	1,900	 	 	 	1,900	 	
Cash and cash equivalents	 	 	190,696	 	 	 	-	 	 	 	190,696	 	
Current financial assets	 	 	722,870	 	 	 	1,900	 	 	 	724,770	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
TOTAL FINANCIAL ASSETS	 	 	770,130	 	 	 	15,792	 	 	 	785,922	 	
(*)Excluding advance payments and non-financial assets.
 
Details of other financial assets as of December 31, 2013 and September 30, 2014 are as follows:

51 	

 	
 
 	 	Thousands of U.S. dollars	 	
 	 	12/31/2013	 	 	09/30/2014	 	
 	 	(Audited)	 	 	(Unaudited)	 	
 	 	 	 	 	 	 	
Other non-current receivables	 	 	2,428	 	 	 	-	 	
Non-current guarantees and deposits	 	 	51,384	 	 	 	47,191	 	
Total non-current	 	 	53,812	 	 	 	47,191	 	
 	 	 	 	 	 	 	 	 	
Other current receivables	 	 	-	 	 	 	52,629	 	
Current guarantees and deposits	 	 	1,425	 	 	 	1,236	 	
Total current	 	 	1,425	 	 	 	53,865	 	
 	 	 	 	 	 	 	 	 	
Total	 	 	55,237	 	 	 	101,056	 	
 
“Guarantees and deposits” as of December 31, 2013 and September 30, 2014 primarily comprise deposits posted with the courts in respect of legal disputes with employees of the subsidiary Atento Brasil, S.A. and for litigation underway with the Brazilian Social Security Authority (Instituto Nacional do Seguro Social).
 
“Other current receivables” as of September 30, 2014 are comprised of 52,629 thousand U.S. dollars representing U.S. dollar short-term financial investments held by the subsidiary Atento Brasil, S.A..
 
These short-term financial investments represent export credit notes with a maturity greater than 90 days. Upon maturity the Company will receive Brazilian Reais based on the U.S. dollar – Brazilian Reais foreign exchange rate at maturity date.
 
The breakdown of “Trade and other receivables” as of December 31, 2013 and September 30, 2014 is as follows:
 
 	 	Thousands of U.S. dollars	 	
 	 	12/31/2013	 	 	09/30/2014	 	
 	 	(Audited)	 	 	(Unaudited)	 	
Non-current trade receivables	 	 	72	 	 	 	69	 	
Total non-current	 	 	72	 	 	 	69	 	
Current trade receivables	 	 	492,900	 	 	 	455,765	 	
Other receivables	 	 	12,540	 	 	 	11,664	 	
Prepayments	 	 	4,326	 	 	 	8,491	 	
Personnel	 	 	11,520	 	 	 	10,880	 	
Total current	 	 	521,286	 	 	 	486,800	 	
Total	 	 	521,358	 	 	 	486,869	 	
 
For the purpose of the interim financial statements of cash flows, cash and cash equivalents are comprised of the following:
 
 	 	Thousands of U.S. dollars	 	
  	 	12/31/2013	 	 	09/30/2014	 	
 	 	(Audited)	 	 	(Unaudited)	 	
Cash at banks	 	 	168,287	 	 	 	131,833	 	
Cash equivalents	 	 	45,204	 	 	 	58,863	 	
Total	 	 	213,491	 	 	 	190,696	 	

52 	

 	
 
"Cash equivalents" comprises short-term fixed-income securities in Brazil, which mature in less than 90 days and accrue interest pegged to the CDI.
 
On September 26, 2014 a factoring agreement without recourse was entered into Atento Teleservicios España S.A and Banco Bilbao Vizcaya Argentaria S.A., whose anticipated value was €15.6 million ( equivalent to 19.6 million U.S. dollars as of September 30, 2014). As a consequence of this, the related trade receivables was writing off.
 
	10.	FINANCIAL LIABILITIES	
 
The breakdown of the Company’s financial liabilities by category as of December 31, 2013 and September 30, 2014 is as follows:
 
 	 	Thousands of U.S. dollars	 	
December 31, 2013
(Audited)	 	Liabilities
through profit
and loss	 	 	Derivatives	 	 	Other financial
liabilities at
amortized cost	 	 	Total	 	
Debentures and bonds	 	 	-	 	 	 	-	 	 	 	631,853	 	 	 	631,853	 	
Bank borrowings	 	 	-	 	 	 	-	 	 	 	527	 	 	 	527	 	
Finance lease payables	 	 	-	 	 	 	-	 	 	 	6,536	 	 	 	6,536	 	
CVIs	 	 	43,367	 	 	 	-	 	 	 	-	 	 	 	43,367	 	
Vendor Loan	 	 	-	 	 	 	-	 	 	 	151,701	 	 	 	151,701	 	
Payable to Group companies	 	 	-	 	 	 	-	 	 	 	519,607	 	 	 	519,607	 	
Financial derivative instruments	 	 	-	 	 	 	15,962	 	 	 	-	 	 	 	15,962	 	
Trade and other payables	 	 	-	 	 	 	-	 	 	 	1,033	 	 	 	1,033	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Non-current financial liabilities	 	 	43,367	 	 	 	15,962	 	 	 	1,311,257	 	 	 	1,370,586	 	
Debentures and bonds	 	 	-	 	 	 	-	 	 	 	11,682	 	 	 	11,682	 	
Bank borrowings	 	 	-	 	 	 	-	 	 	 	105	 	 	 	105	 	
Finance lease payables	 	 	-	 	 	 	-	 	 	 	5,341	 	 	 	5,341	 	
Trade and other payables	 	 	-	 	 	 	-	 	 	 	269,789	 	 	 	269,789	 	
Current financial liabilities	 	 	-	 	 	 	-	 	 	 	286,917	 	 	 	286,917	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
TOTAL FINANCIAL LIABILITIES	 	 	43,367	 	 	 	15,962	 	 	 	1,598,174	 	 	 	1,657,503	 	

Excluding deferred income and non-financial liabilities

53 	

 	
 
 	 	Thousands of U.S. dollars	 	
September 30, 2014
(Unaudited)	 	Liabilities
through profit
and loss	 	 	Derivatives	 	 	Other financial
liabilities at
amortized cost	 	 	Total	 	
Debentures and bonds	 	 	-	 	 	 	-	 	 	 	554,813	 	 	 	554,813	 	
Bank borrowings	 	 	-	 	 	 	-	 	 	 	66,270	 	 	 	66,270	 	
Finance lease payables	 	 	-	 	 	 	-	 	 	 	4,598	 	 	 	4,598	 	
CVIs	 	 	36,062	 	 	 	-	 	 	 	-	 	 	 	36,062	 	
Vendor Loan	 	 	-	 	 	 	-	 	 	 	28,819	 	 	 	28,819	 	
Payable to Group companies	 	 	-	 	 	 	-	 	 	 	578,773	 	 	 	578,773	 	
Financial derivative instruments	 	 	-	 	 	 	4,043	 	 	 	-	 	 	 	4,043	 	
Trade and other payables	 	 	-	 	 	 	-	 	 	 	640	 	 	 	640	 	
Non-current financial liabilities	 	 	36,062	 	 	 	4,043	 	 	 	1,233,913	 	 	 	1,274,018	 	
Debentures and bonds	 	 	-	 	 	 	-	 	 	 	7,237	 	 	 	7,237	 	
Bank borrowings	 	 	-	 	 	 	-	 	 	 	697	 	 	 	697	 	
Vendor Loan	 	 	-	 	 	 	-	 	 	 	493	 	 	 	493	 	
Finance lease payables	 	 	-	 	 	 	-	 	 	 	4,079	 	 	 	4,079	 	
Trade and other payables	 	 	-	 	 	 	-	 	 	 	283,344	 	 	 	283,344	 	
Current financial liabilities	 	 	-	 	 	 	-	 	 	 	295,850	 	 	 	295,850	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
TOTAL FINANCIAL LIABILITIES	 	 	36,062	 	 	 	4,043	 	 	 	1,529,763	 	 	 	1,569,868	 	
Excluding deferred income and non-financial liabilities
 
Interest-bearing debt as of December 31, 2013 and September 30, 2014 is as follows:
 
 	 	Thousands of U.S. dollars	 	
 	 	12/31/2013	 	 	09/30/2014	 	
 	 	(Audited)	 	 	(Unaudited)	 	
 	 	 	 	 	 	 	
Senior Secured Notes	 	 	288,339	 	 	 	290,569	 	
Brazilian bonds – Debentures	 	 	343,514	 	 	 	264,244	 	
Bank borrowings	 	 	527	 	 	 	66,270	 	
CVIs	 	 	43,367	 	 	 	36,062	 	
Vendor Loan	 	 	151,701	 	 	 	28,819	 	
Finance lease payables	 	 	6,536	 	 	 	4,598	 	
Sub-total borrowings with third parties	 	 	833,984	 	 	 	690,562	 	
Payable to Group companies	 	 	519,607	 	 	 	578,773	 	
Total non-current	 	 	1,353,591	 	 	 	1,269,335	 	
Senior Secured Notes	 	 	9,342	 	 	 	3,810	 	
Brazilian bonds – Debentures	 	 	2,340	 	 	 	3,426	 	
Bank borrowings	 	 	105	 	 	 	698	 	
Vendor Loan	 	 	-	 	 	 	493	 	
Finance lease payables	 	 	5,341	 	 	 	4,079	 	
Sub-total borrowings with third parties	 	 	17,128	 	 	 	12,506	 	
Total current	 	 	17,128	 	 	 	12,506	 	
TOTAL INTEREST-BEARING DEBT	 	 	1,370,719	 	 	 	1,281,841	 	
 
Issuance of bonds - Senior Secured Notes
 
On January 29, 2013 Atento Luxco 1, S.A. issued bonds with an aggregate principal amount of 300,000,000 U.S. dollars, bearing interest at an annual rate of 7.375%. The bonds mature on January 29, 2020, and the issuer may redeem them early as of January 29, 2016, if certain conditions have been met.
Details of the senior secured notes issuances are as follows:

54 	

 	
 
Issuer	 	Issue date	 	Number of bonds	 	 	Unit nominal
Value	 	 	Annual
interest rate	 	 	 	Maturity	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Atento Luxco 1, S.A.	 	January 29, 2013	 	 	300,000	 	 	1,000 U.S. dollars	 	 	7.375%		 	 	January 29, 2020	 	
 
All interest payments are made on a half-yearly basis.
 
Fair value of debt in relation to the issuance of Senior Secured Notes, calculated on the basis of their quoted price at September 30, 2014, is 301,789 thousand U.S. dollars.
 
The fair value hierarchy of the Senior Secured Notes is level 1 as it based in the market price at the reporting date.
 
Details of the corresponding debt at each reporting date are as follows:

 	 	 	Thousands of U.S. dollars	 	
 	 	 	 	12/31/2013	 	 	 	 	 	 	 	 	09/30/2014	 	
 	 	 	 	(Audited)	 	 	 	 	 	 	 	 	(Unaudited)	 	
Maturity	 	Currency	 	Principal	 	 	Accrued
interest	 	 	Total debt	 	 	Principal	 	 	Accrued
interest	 	 	Total debt	 	
2020	 	 	U.S. Dollar	 	 	288,339	 	 	 	9,342	 	 	 	297,681	 	 	 	290,569	 	 	 	3,810	 	 	 	294,379	 	

Brazilian bonds - Debentures
 
On November 22, 2012 BC Brazilco Participaçoes, S.A. (now merged with Atento Brasil, S.A.) issued preferential bonds in Brazil (the " Debentures "), which were subscribed by institutional investors (the " Debenture holders ") and assumed by Bain for an initial amount of 915 million Brazilian reais (365 million U.S. dollars). This long-term financial commitment matures in 2019 and bears interest pegged to the Brazilian CDI (Interbank Deposit Certificate) rate plus 3.70%. Interest is paid on a half-yearly basis.
 
On March 25, 2013 and June 11, 2013 Atento Brasil, S.A. repaid, in advance of the scheduled date, 71,589 thousand Brazilian reais and 26,442 thousand Brazilian reais respectively (equivalent to 35,545 thousand U.S. dollars and 12,287 thousand U.S. dollars respectively).
 
On May 12, 2014 and June 26, 2014 Atento Brasil, S.A. repaid, in advance of the scheduled date, 34,358 thousand Brazilian reais and 45,000 thousand Brazilian reais respectively (equivalent to 15,502 thousand U.S. dollars and 20,372 thousand U.S. dollars respectively).
 
On August 28, 2014 Atento Brasil, S.A. repaid, in advance of the schedule date, 80,000 thousand Brazilian reais (equivalent to 33,058 thousands U.S. dollars).
 
Under the terms of the financing contract, the Brazilian subsidiary is subject to a financial covenant regarding the maximum debt level at the end of each quarter. To date, the Company has complied with this covenant and does not foresee any future non-compliance.
 
Details of the corresponding debt at each reporting date are as follows:

55 	

 	
 
 	 	 	 	Thousands of U.S. dollars	 	
 	 	 	 	12/31/2013
(Audited)	 	 	09/30/2014
(Unaudited)	 	
Maturity	 	Currency	 	Principal	 	 	Interest
pending
payment	 	 	Total debt	 	 	Principal	 	 	Interest
pending
payment	 	 	Total debt	 	
2019	 	 	Brazilian real	 	 	343,514	 	 	 	2,340	 	 	 	345,854	 	 	 	264,244	 	 	 	3,426	 	 	 	267,670	 	
 
The carrying amount of debentures is similar to the fair value. The fair value is based on cash flows discounted and is within level 2 of the fair value hierarchy.
 
Bank borrowings
 
Bank borrowings are held in the following currencies:
 
 	 	12/31/2013	 	 	09/30/2014	 	
 	 	(Audited)	 	 	(Unaudited)	 	
 	 	Foreign currency
debt	 	 	U.S. dollar debt	 	 	Foreign currency
debt	 	 	U.S. dollar debt	 	
 	 	(thousands)	 	 	(thousands)	 	 	(thousands)	 	 	(thousands)	 	
BRL	 	 	-	 	 	 	-	 	 	 	163,035	 	 	 	66,518	 	
MAD	 	 	5,170	 	 	 	632	 	 	 	3,952	 	 	 	450	 	
Total	 	 	-	 	 	 	632	 	 	 	-	 	 	 	66,968	 	
 
The carrying amount of bank borrowings is similar to the fair value. The fair value is based on cash flows discounted and is within level 2 of the fair value hierarchy.
 
On February 3, 2014, Banco Nacional de Desenvolvimento Economico e Social (BNDES) granted a credit facility to the subsidiary Atento Brasil S.A. for BRL 300 million (equivalent to 124 million U.S. dollars). Once the debtor met certain requirements in the signed contract the loan automatically became available for the debtor. On March 27, 2014 BNDES disbursed BRL 56.6 million (equivalent to USD 23 million as of September 30, 2014) of the total facility. On April 16, 2014 BNDES disbursed BRL 23.7 million (equivalent to USD 10 million as of September 30, 2014) of the total facility. On July 16, 2014 BNDES disbursed BRL 0.6 million (equivalents to USD 0.2 million as of September 30, 2014) of the total facility. On August 13, 2014 BNDES disbursed BRL 80.6 million (equivalent to USD 33 million as of September 30, 2014) of the total facility. As of September 30, 2014, accrued interests amounted to BRL 1.6 million (equivalent to USD 0.7 million).
 
The total amount of the BNDES Credit Facility is divided into 5 tranches in the following amounts and subject to the following interest rates:

 	 	Amount of Each
Tranche	 	Interest Rate	
Tranche A	 	BRL 182,330,000.00	 	Long Term Interest Rate (Taxa de Juros de Longo Prazo—TJLP) plus 2.5% per annum	
Tranche B	 	BRL 45,583,000.00	 	SELIC Rate plus 2.5% per annum	
Tranche C	 	BRL 64,704,000.00	 	4.0% per year	
Tranche D	 	BRL 5,296,000.00	 	6.0% per year	
Tranche E	 	BRL 2,048,000.00	 	Long Term Interest Rate (Taxa de Juros de Longo Prazo—TJLP)	
 
The BNDES Credit Facility is to be repaid in 48 monthly installments. The first payment will be due on March 15, 2016 and the last payment will be due on February 15, 2020.
 
The BNDES Credit Facility contains covenants that restrict Atento Brasil S.A.’s ability to transfer, assign, charge or sell the intellectual property rights related to technology and products developed by Atento Brasil S.A. with the proceeds from the BNDES Credit Facility.

56 	

 	
 
The BNDES Credit Facility contains customary events of default including the following: (i) reduction of the number of the employees of Atento Brasil S.A. without providing program support for outplacement, as training, job seeking assistance and obtaining pre-approval of BNDES, (ii) existence of an unfavorable court decision against the Company for the use of children as workforce, slavery or any environmental crimes and (iii) inclusion in the by-laws of Atento Brasil S.A. of any provision that restricts Atento Brasil S.A.’s ability to paying its obligations under the BNDES Credit Facility.
 
On January 28, 2013 Atento Luxco 1, S.A., Atento Teleservicios España, S.A.U. and Atento Mexicana, S.A. de C.V. contracted a multi-currency revolving facility (“Super Senior Revolving Credit Facilities Agreement” or “SSRCF”) for 50 million euros (equivalent to 62.9 million U.S. dollars as of September 30, 2014).
 
The new revolving facility allows for drawdowns in euros, Mexican pesos and US dollars. The interest rates for euro drawdowns and Mexican peso drawdowns are the Euribor and the TIIE, respectively, and the LIBOR for drawdowns in any other currency, plus a 4.5% spread per year. This spread is subject to a step-down based on the debt ratio calculation.
 
The revolving facility matures on July 28, 2019. As of September 30, 2014 and December 31, 2013 no amounts had been drawdown on the revolving facility.
 
Atento Maroc, S.A. held a loan granted from Banco Sabadell, at November 30, 2012, 10 million dirhams were repaid in advance of the scheduled date. As of September 30, 2014 the loan balance was 3,952 thousand Moroccan dirham (450 thousand U.S. dollars) (5,170 thousand Moroccan dirham and 632 thousand U.S. dollars as of December 31, 2013). The loan matures on June 28, 2016 and bears interest at 6%.
 
Contingent Value Instruments (CVIs)
 
In relation to the acquisition described in Note 1, two of the Company's subholdings, Atalaya Luxco 2, S.a.r.l. (formerly BC Luxco 2, S.a.r.l.) and Atalaya Luxco 3, S.a.r.l. (formerly BC Luxco 3, S.r.a.l.), which held stakes in the Atento Group's Argentinian subsidiaries, issued a contingent value instrument (CVI) with the counterparties Atento Inversiones y Teleservicios, S.A. and Venturini S.A., a Telefónica’s subsidiary.
 
The CVIs do not bear interest and are recognized at fair value. For further information regarding the CVIs, see Note 17 of our consolidated financial statements for the year ended December 31, 2013.
 
Vendor Loan
 
With respect to the acquisition described in Note 1, the Company issued a euro-denominated Vendor Loan Note (Vendor Loan) to a Telefónica branch, amounting to the equivalent of approximately 143 million U.S. dollars. The Vendor Loan matures at December 12, 2022, and accrues an annual 5% of fixed interest, payable annually.
 
As described in Note 7, in May 2014, the Master Service Agreement (“MSA”) with Telefónica was amended and Telefónica agreed to compensate the Company with a non-cash penalty fee amounting to €25.4 million (equivalent to $34.5 million for the period ended September 30, 2014). The Company, in turn, used this amount to partially reduce and compensate the Vendor Loan Note with Telefónica.
 
In addition, in May 30, 2014 Atalaya Luxco Midco issued €64 million of PECs (equivalent to $87 million) which proceeds were applied to make a partial prepayment of the Vendor Loan Note (See Note 15).
 
The carrying amount of the Vendor Loan approximately corresponds to its fair value.
 
The fair value is based on cash flows discounted and is within level 2 of the fair value hierarchy.
 
Derivatives
 
Details of derivative financial instruments as of December 31, 2013 and September 30, 2014 are as follows:

57 	

 	
 
 	 	Thousands of U.S. dollars	 	
 	 	12/31/2013	 	 	09/30/2014	 	
 	 	(Audited)	 	 	(Unaudited)	 	
 	 	Assets	 	 	Liabilities	 	 	Assets	 	 	Liabilities	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest rate swaps - cash flow hedges	 	 	15,611	 	 	 	-	 	 	 	11,693	 	 	 	-	 	
Cross currency swaps - cash flow hedge	 	 	-	 	 	 	(10,985	)	 	 	44	 	 	 	(3,430	)	
Cross currency swaps that do not meet the criteria for hedge accounting	 	 	2,685	 	 	 	(4,977	)	 	 	4,055	 	 	 	(613	)	
Total	 	 	18,296	 	 	 	(15,962	)	 	 	15,792	 	 	 	(4,043	)	
Non-current portion	 	 	15,439	 	 	 	(15,962	)	 	 	13,892	 	 	 	(4,043	)	
Current portion	 	 	2,857	 	 	 	-	 	 	 	1,900	 	 	 	-	 	
 
The Atento Group has contracted interest rate swaps to hedge fluctuations in interest rates in respect of debentures issued in Brazil.
 
As of September 30, 2014, the notional amount of principal arranged in the interest rate swaps totals 595 million Brazilian reals equivalent to 243 million U.S. dollars (595 million Brazilian reals equivalent to 254 million U.S. dollars as of December 31, 2013).
 
The Atento Group has arranged cross-currency swap instruments to cover US dollar payments arising from the senior secured notes issued in 2013.
 
As of September 30, 2014 details of cross-currency swaps that are designated and qualified as cash flow hedge were as follows:
 
Bank	 	Date	 	Maturity	 	Purchase
currency	 	Amount
purchased
(thousands)	 	 	Fixed rate
bank
count-
party
payment	 	 	Selling
currency	 	Amount
sold
(thousands)	 	 	Fixed rate
Atento
payment	 	 	Spot	 	
Santander	 	01/29/2013	 	01/29/2018	 	USD	 	 	738	 	 	 	7.3750	%	 	EUR	 	 	560	 	 	 	7.5450	%	 	 	0.7588	 	
Santander	 	01/29/2018	 	01/29/2020	 	USD	 	 	922	 	 	 	7.3750	%	 	EUR	 	 	700	 	 	 	7.5450	%	 	 	0.7592	 	
Santander	 	01/29/2020	 	01/29/2020	 	USD	 	 	25,000	 	 	 	7.3750	%	 	EUR	 	 	18,560	 	 	 	7.5450	%	 	 	0.7424	 	
Goldman Sachs	 	01/29/2013	 	01/28/2018	 	USD	 	 	48,000	 	 	 	7.3750	%	 	EUR	 	 	35,635	 	 	 	7.5450	%	 	 	0.7424	 	
Goldman Sachs	 	01/29/2018	 	01/29/2020	 	USD	 	 	60,000	 	 	 	7.3750	%	 	EUR	 	 	44,543	 	 	 	7.5450	%	 	 	0.7424	 	
Nomura	 	01/29/2013	 	01/28/2018	 	USD	 	 	22,000	 	 	 	7.3750	%	 	EUR	 	 	16,333	 	 	 	7.6050	%	 	 	0.7424	 	
Nomura	 	01/29/2018	 	01/29/2020	 	USD	 	 	27,500	 	 	 	7.3750	%	 	EUR	 	 	20,416	 	 	 	7.6050	%	 	 	0.7424	 	
 
Gains and losses on interest rate swap hedges recognized in equity will be taken to the income statement up through maturity of the corresponding contracts as disclosed in the table above.
 
There were no ineffective hedge derivatives in the nine months ended September 30, 2014.
 
The Atento Group also contracted the following cross currency swaps that are not designated and qualified as hedging instruments:

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Bank	 	Date	 	Maturity	 	Purchase
currency	 	Amount
purchased
(thousands)	 	 	Fixed rate
bank
count-
party
payment	 	 	Selling
currency	 	Amount
sold
(thousands)	 	 	Fixed rate
Atento
payment	 	 	Spot	 	
Santander	 	01/29/2013	 	01/29/2018	 	USD	 	 	410	 	 	 	7.3750	%	 	MXN	 	 	9,144	 	 	 	12.9500	%	 	 	22.302	 	
Santander	 	01/29/2018	 	01/29/2020	 	USD	 	 	615	 	 	 	7.3750	%	 	MXN	 	 	13,716	 	 	 	12.9500	%	 	 	22.302	 	
Santander	 	01/29/2020	 	01/29/2020	 	USD	 	 	16,667	 	 	 	7.3750	%	 	MXN	 	 	211,833	 	 	 	12.9500	%	 	 	12.71	 	
Goldman Sachs	 	01/29/2013	 	01/28/2018	 	USD	 	 	40,000	 	 	 	7.3750	%	 	MXN	 	 	508,400	 	 	 	12.9120	%	 	 	12.71	 	
Goldman Sachs	 	01/29/2018	 	01/29/2020	 	USD	 	 	60,000	 	 	 	7.3750	%	 	MXN	 	 	762,600	 	 	 	12.9120	%	 	 	12.71	 	
Nomura	 	01/29/2013	 	01/28/2018	 	USD	 	 	23,889	 	 	 	7.3750	%	 	MXN	 	 	303,628	 	 	 	12.9000	%	 	 	12.71	 	
Nomura	 	01/29/2018	 	01/29/2020	 	USD	 	 	35,833	 	 	 	7.3750	%	 	MXN	 	 	455,442	 	 	 	12.9000	%	 	 	12.71	 	
Goldman Sachs	 	01/29/2013	 	01/29/2018	 	USD	 	 	7,200	 	 	 	7.3750	%	 	COP	 	 	12,819,600	 	 	 	8.2150	%	 	 	1780.5	 	
Goldman Sachs	 	01/29/2013	 	01/29/2018	 	USD	 	 	13,800	 	 	 	7.3750	%	 	PEN	 	 	35,356	 	 	 	7.7900	%	 	 	2.562	 	
BBVA	 	01/29/2013	 	01/29/2018	 	USD	 	 	28,800	 	 	 	7.3750	%	 	COP	 	 	51,278,400	 	 	 	8.2160	%	 	 	1780.5	 	
BBVA	 	01/29/2013	 	01/29/2018	 	USD	 	 	55,200	 	 	 	7.3750	%	 	PEN	 	 	141,422	 	 	 	7.7800	%	 	 	2.625	 	
 
During the nine months ended September 30, 2014, variations in fair value of the derivative financial instruments that are not considered as hedging derivatives recorded under the income statement amount to a net gain of 10,529 thousand U.S. dollars (net loss of 9,911 thousand U.S. dollars in the nine months ended September 30, 2013).
 
	11.	PROVISIONS AND CONTINGENCIES	
 
The movements in “Provisions” in the nine months ended September 30, 2014 are as follows:
 
 	 	Thousands of U.S. dollars	 	
 	 	Provisions for
Liabilities	 	 	Provisions for
taxes	 	 	Provisions
for
dismantling	 	 	Other provisions	 	 	Total	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at December 31, 2013 (Audited)	 	 	80,008	 	 	 	11,229	 	 	 	15,675	 	 	 	6,668	 	 	 	113,580	 	
Allocation	 	 	14,111	 	 	 	2,781	 	 	 	2,123	 	 	 	15,095	 	 	 	34,110	 	
Application	 	 	(18,979	)	 	 	(366	)	 	 	(187	)	 	 	(13,327	)	 	 	(32,859	)	
Reversals	 	 	(141	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(141	)	
Discount	 	 	(137	)	 	 	905	 	 	 	-	 	 	 	58	 	 	 	826	 	
Translation differences	 	 	(4,171	)	 	 	(710	)	 	 	(864	)	 	 	(706	)	 	 	(6,451	)	
Balance at September 30, 2014 (Unaudited)	 	 	70,691	 	 	 	13,839	 	 	 	16,747	 	 	 	7,788	 	 	 	109,065	 	
 
"Provisions for liabilities" primarily relates to provisions for legal claims underway in Brazil. As indicated in Note 9 “Other financial assets”, Atento Brasil, S.A. has made payments in escrow related to legal claims with ex-employees and the Brazilian Social Security Authority (Instituto Nacional do Seguro Social) amounting to 48,690 thousand U.S. dollars and 44,555 thousand U.S. dollars at December 31, 2013 and September 30, 2014, respectively.
 
"Provisions for taxes" mainly relates to probable contingencies in Brazil in respect of social security payments, which could be subject to varying interpretations by the social security authorities concerned.
 
The amount recognized under "Provision for dismantling" corresponds to the necessary cost of covering the dismantling process of the installations held under operating leases for those entities contractually required to do so.

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On June 26, 2014, the Company communicated to the Labor Unions a headcount reduction plan in Spain (“Expediente de Regulación de Empleo”) which took into consideration a maximum number of terminations amounting to 9% of the total headcount of Atento Teleservicios España, S.A.U.. In addition, on June 28, 2014 the Company submitted the plan to the Labor Authority in Spain (Ministerio de Empleo y Seguridad Social). The estimated costs incurred in the personnel restructuring and other costs directly attributable to the restructuring in an amount equivalent to 13,918 thousand U.S. dollars as of September 30, 2014 were accrued and registered in “Other provisions”. As of September 30, 2014, the vast majority of total costs incurred in connection with this restructuring process (11,484 thousand U.S. dollars) were already paid.
 
Given the nature of the risks covered by these provisions, it is not possible to determine a reliable schedule of potential payments, if any.
 
As of September 30, 2014 lawsuits still before the courts were as follows:
 
As of September 30, 2014 Atento Brasil was involved in approximately 10,171 labor-related disputes (8,610 in 2013), filed by Atento's employees or ex-employees for various reasons, such as dismissal or differences over employment conditions in general. The estimated value of these claims was 107,381 thousand U.S. dollars (110,089 thousand U.S. dollars as of December 31, 2013), of which 62,379 thousand U.S. dollars are classified as probable (71,883 thousand U.S. dollars as of December 31, 2013), 39,674 thousand U.S. dollars are classified as possible (34,606 thousand U.S. dollars as of December 31, 2013), and 5,328 thousand U.S. dollars are classified as remote (3,600 thousand U.S. dollars as of December 31, 2013) based on inputs from external and internal counsels as well as historical statistics. In the nine months ended September 30, 2014 an additional provision of 9,843 thousand U.S. dollars was made. The Company's directors and legal advisors consider that these amounts are sufficient to cover the probable risk of an outflow of funds in respect of the disputes.
 
Moreover, Atento Brasil, S.A. has 18 civil lawsuits ongoing for various reasons (17 in 2013). The total amount of these claims is approximately 590 thousand U.S. dollars (1,061 thousand U.S. dollars at December 31, 2013). According to the Company’s external attorneys, materialization of the risk event is possible.
 
In addition, as of September 30, 2014 Atento Brasil, S.A. has 28 contentious proceedings ongoing with the tax authorities and social security authorities, for various reasons relating to infraction proceedings filed (33 in 2013). The total amount of these claims is approximately 50,021 thousand U.S. dollars (47,532 thousand U.S. dollars at December 31, 2013). According to the Company’s external attorneys, materialization of the risk event is possible.
 
Lastly, there are other contingencies which are classified as possible by the Company amounting to 8,160 thousand U.S. dollars (8,535 thousand U.S. dollars as of December 31, 2013).
 
As of September 30, 2014 Teleatento del Perú, S.A.C. has a lawsuit underway with the Peruvian tax authorities in the amount of 8,631 thousand U.S. dollars (9,473 thousand U.S. dollars as of December 31, 2013). According to the Company’s external attorneys, materialization of the risk event is possible.
 
As of September 30, 2014 Atento Teleservicios España S.A.U. was party to labor-related disputes filed by Atento employees or former employees for different reasons, such as dismissals and disagreements regarding employment conditions, totaling 3,208 thousand U.S. dollars (2,251 thousand U.S. dollars as of December 31, 2013). According to the Company’s external lawyers, materialization of the risk event is possible.
 
As of September 30, 2014 Atento México S.A. de C.V. was party to labor-related disputes filed by Atento employees or former employees for different reasons, such as dismissals and disagreements regarding employment conditions, totaling 7,078 thousand U.S. dollars (4,823 thousand U.S. dollars as of December 31, 2013). According to the Company’s external lawyers, materialization of the risk event is possible.

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	12.	AVERAGE NUMBER OF GROUP EMPLOYEES	
 
The average headcount in the Atento Group in the nine months of 2013 and 2014 and the breakdown by countries are as follows:
 
 	 	Average headcount	 	
 	 	September 30,	 	
(Unaudited)	 	2013	 	 	2014	 	
Brazil	 	 	85,721	 	 	 	82,384	 	
Central America	 	 	4,147	 	 	 	3,939	 	
Chile	 	 	3,760	 	 	 	4,572	 	
Colombia	 	 	5,321	 	 	 	6,193	 	
Spain	 	 	13,938	 	 	 	12,344	 	
Morocco	 	 	1,610	 	 	 	1,394	 	
Mexico	 	 	18,293	 	 	 	20,086	 	
Peru	 	 	10,254	 	 	 	12,276	 	
Puerto Rico	 	 	776	 	 	 	700	 	
United States	 	 	386	 	 	 	397	 	
Czech Republic	 	 	916	 	 	 	679	 	
Argentina and Uruguay	 	 	9,316	 	 	 	8,024	 	
Corporate	 	 	79	 	 	 	77	 	
Total	 	 	154,517	 	 	 	153,065	 	
 
	13.	INCOME TAX	
 
The breakdown of the Atento Groups’s income tax expense is as follows:
 
 	 	Thousands of U.S. dollars	 	
 	 	Nine months ended September 30,	 	
 	 	2013	 	 	2014	 	
Income taxes	 	(Unaudited)	 	 	(Unaudited)	 	
Current tax expense	 	 	(9,046	)	 	 	(23,890	)	
Deferred tax	 	 	1,549	 	 	 	26,047	 	
Adjustment to prior years	 	 	1,978	 	 	 	(37	)	
Total income tax benefit/(expense)	 	 	(5,519	)	 	 	2,120	 	
 
The effective tax rate on the Atento Group's consolidated earnings in the nine months period ended September 30, 2014 was 11.5%. This rate is distorted because of the contribution of losses in the holding companies comprising the Group to Atento's pre-tax result and the tax effect of the impairment described in Note 7. Stripping out these effects, pre-tax profit would have stood at 85,425 thousand U.S. dollars, with an income tax expense of 29,446 thousand U.S. dollars. Consequently, the aggregate rate excluding the Group's holding companies is 34.5%.
 
The effective tax rate on the Atento Group's consolidated earnings in the nine months period ended September 30, 2013 was 42.7%. This rate is distorted because of the contribution of losses in the holding companies comprising the Group to Atento's pre-tax result. Stripping out this effect, pre-tax profit would have stood at 74,557 thousand U.S. dollars, with an income tax expense of 23,744 thousand U.S. dollars. Consequently, the consolidated rate excluding the Group's holding companies is 31.8%.
 
	14.	EARNINGS PER SHARE	
 
Basic earnings per share are calculated by dividing the profits attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the periods.

61 	

 	
 
 	 	Nine months ended September 30,	 	
 	 	2013	 	 	2014	 	
 	 	(Unaudited)	 	 	(Unaudited)	 	
 	 	 	 	 	 	 	
Result attributable to equity holders of the Company	 	 	 	 	 	 	 	 	
Net loss for the period (thousands of U.S. dollars)	 	 	(18,443	)	 	 	(16,301	)	
 	 	 	 	 	 	 	 	 	
Weighted average number of ordinary shares (*)	 	 	125,000,000	 	 	 	125,000,000	 	
 	 	 	 	 	 	 	 	 	
Basic results per share (U.S. dollars)	 	 	(0.15	)	 	 	(0.13	)	
 
(*) the quantity of shares was retroactively adjusted to reflect the share reduction approved on September 2, 2014, as mentioned in note 8 (62.5 shares for every share previously outstanding).
 
Diluted earnings per share are calculated by adjusting the weighted average number of ordinary shares outstanding to reflect the hypothetical conversion of all potentially dilutive ordinary shares. The Company has no potentially dilutive ordinary shares, and thus there is no difference between basic earnings per share and diluted earnings per share.
 
	15.	RELATED PARTIES	
 
Directors
 
The directors of the Company at the date on which the financial statements were prepared are Melissa Bethell, Aibhe Jennings, Aurelien Vasseur and Jay Corrigan.
 
The directors of Atento S.A. at the date on which the financial statements were prepared are Alejandro Reynal, Francisco Tosta Valim Filho, Melissa Bethell, Aurelien Vasseur, Mark Nunnelly, Luis Javier Castro, Stuart Gent and Devin O´Reilly.
 
The directors currently serving on the Board of the Company received no remuneration as directors in the nine months ended September 30, 2013 and 2014.
 
Key management personnel
 
Key management personnel include those persons empowered and responsible for planning, directing and controlling the Atento Group’s activities, either directly or indirectly.
 
Key management personnel with executive duties in the Atento Group in the nine months ended September 30, 2013 and 2014 are as follows:
 
2013

Name	 	Post	
Alejandro Reynal Ample	 	Chief Executive Officer	
Mª Reyes Cerezo Rodriguez Sedano	 	Chief Legal and Compliance Officer	
Mauricio Montilha Teles	 	Chief Financial Officer	
John Robson	 	Director of Global Techology	
José Ignacio Cebollero Bueno	 	Director of Human Resources	
Diego Lopez San Roman	 	Director of Sales and Business Development	
Miguel Matey Marañón	 	Regional Director – North America and Mexico	
Juan Enrique Gamé	 	Regional Director – South America	
Nelson Ambrust	 	Regional Director – Brazil	
Mariano Castaños	 	Regional Director – EMEA	

62 	

 	
 
2014

Name	 	Post	
Alejandro Reynal Ample	 	Chief Executive Officer	
Mª Reyes Cerezo Rodrigues Sedano	 	Chief Legal and Compliance Officer	
Mauricio Montilha Teles	 	Chief Financial Officer	
John Robson	 	Director of Global Technology	
José Ignacio Cebollero Bueno	 	Director of Human Resources	
Mariano Castaños	 	Director of Sales	
Michael Flodin	 	Operations Director	
Miguel Matey Marañón	 	Regional Director – North America and Mexico	
Juan Enrique Gamé	 	Regional Director – South America	
Nelson Ambrust	 	Regional Director – Brazil	
Jose María Pérez Melber	 	Regional Director – EMEA	
Bruce Dawson	 	Near Shore Regional Director	
 
The following table shows the total remuneration paid to the Atento Group’s key management personnel in the nine months ended September 30, 2013 and 2014:
 
 	 	Thousands of U.S.
dollars	 	
(Unaudited)	 	2013	 	 	2014	 	
Total remuneration paid to key management personnel	 	 	7,191	 	 	 	8,059	 	
 
The breakdown of the remuneration shown above is as follows:
 
 	 	Thousands of U.S. dollars	 	
(Unaudited)	 	2013	 	 	2014	 	
 	 	 	 	 	 	 	
Salaries and variable remuneration	 	 	6,895	 	 	 	7,644	 	
Salaries	 	 	2,429	 	 	 	3,310	 	
Variable remuneration	 	 	1,355	 	 	 	4,334	 	
Other remuneration related to Management Incentive Program	 	 	3,111	 	 	 	-	 	
Payment in kind	 	 	296	 	 	 	415	 	
Medical insurance	 	 	50	 	 	 	7	 	
Life insurance premiums	 	 	9	 	 	 	64	 	
Other	 	 	237	 	 	 	344	 	
Total	 	 	7,191	 	 	 	8,059	 	
 
On July 18, 2013, Atento Spain Holdco 2, S.A.U., an indirect subsidiary, entered into a revolving facility agreement with Atalaya Management Luxco Investment pursuant to which Atento Spain Holdco 2, S.A.U. provided a Euro revolving loan facility in an aggregate amount equal to 3 million euros (equivalent to 4.1 million U.S. dollars) to Atalaya Management Luxco Investment for the purpose of acquiring an immaterial ownership interest in a related party. As of December 31, 2013, the management loan had an outstanding balance of 2,423 thousand U.S. dollars which was included in other non-current receivables on the statement of financial position. The loan accrued interest at a rate of 6% per annum, matured on July 18, 2023.
 
On April 25, 2014, Atento Spain Holdco 2, S.A.U. contributed its receivable for the outstanding amount under the Facility (2,494 thousand euros equivalent to 3,449 U.S. dollars) to Atalaya Management Luxco Investment in exchange for the issuance by Atalaya Management Luxco Investment of a Class 4 Preference Share, fully subscribed by Atento Spain Holdco 2, S.A.U.. On May 30, 2014, the Class 4 Preference Share was redeemed for a total consideration of 2,508 thousand euros (equivalent to 3,413 thousand U.S. dollars). The redemption price was fully paid in cash.

63 	

 	
 
Balances and transactions with the Sole Shareholder and other related parties
 
The Group's sole shareholder is Atento, S.A.. As of September 30, 2014 the ultimate parent company of the group is Atalaya Luxco Topco, S.C.A.
 
The table below sets out balances and transactions with the Sole Shareholder and other related parties (in thousand U.S. dollars).
 
 	 	12/31/2013	 	 	09/30/2014	 	
 	 	(Audited)	 	 	(Unaudited)	 	
 	 	 	 	 	 	 	
Non-current payables to Group companies	 	 	519,607	 	 	 	578,773	 	
Atalaya Luxco Topco, S.C.A.	 	 	519,607	 	 	 	-	 	
Atalaya Luxco PIKco, S.C.A.	 	 	-	 	 	 	578,773	 	
 
As of December 31, 2013 Atalaya Luxco Topco, S.C.A. payables were composed of the following: (i) three series of Preferred Equity Certificates issued by the Company and subscribed by Atalaya Luxco Topco, totaling 517.4 million U.S. dollars as of December 31, 2013; (ii) accrued interests amounting to 2.2 million U.S. dollars as of December 31, 2013.
 
In May 15, 2014 Atalaya Luxco Topco S.C.A. and Atalaya Luxco PIKco, S.C.A. entered into a subscription agreement. This agreement stated that all of the PECs were entirely paid up by way of a contribution in kind from Atalaya Luxco Topco to Atalaya Luxco PIKco.
 
In addition, in May 30, 2014 the Company authorized issuance of the following Preferred Equity Certificates (PECs):
 
	·	Series 4: 50,000,000,000 PECs with a par value of 0.01 euro each. These PECs mature after 30 years, but may be withdrawn prior to this date in certain scenarios, and accrued interest of 5%. At June 30, 2014 the Company had issued 6,414,652,564 Series 4 PECs for an aggregate amount of 64,147 thousand euros, equivalent to 87,285 thousand U.S. dollars.	
 
As of September 30, 2014 Atalaya Luxco PIKco, S.C.A. payables are composed of the following: (i) four series of Preferred Equity Certificates issued by the Company and subscribed by Atalaya Luxco PIKco, totaling 552.8 million U.S. dollars as of September 30, 2014 and (ii) accrued interests amounting to 26.0 million U.S. dollars as of September 30, 2014.
 
The interest expense on these debts in the nine months ended September 30, 2014 was 25.8 million U.S. dollars (18.6 million U.S. dollars in the nine months ended September 30, 2013).
 
The PECs are classified as subordinated debt with respect to the Company's other present and future obligations. The table below provides a summary of PECs and their movements in the nine months ended September 30, 2014:
 
Thousands of U.S. Dollars	
PEC	 	Maturity	 	12/31/2013
(Audited)	 	 	Issuance	 	 	Interest	 	 	Translation
differences	 	 	09/30/2014
(Unaudited)	 	
Series 1 PECs	 	2042	 	 	353,867	 	 	 	-	 	 	 	21,040	 	 	 	(32,495	)	 	 	342,412	 	
Series 2 PECs	 	2042	 	 	3	 	 	 	-	 	 	 	3,266	 	 	 	(233	)	 	 	3,036	 	
Series 3 PECs	 	2072	 	 	165,737	 	 	 	-	 	 	 	-	 	 	 	(14,517	)	 	 	151,220	 	
Series 4 PECs	 	2044	 	 	-	 	 	 	87,285	 	 	 	1,497	 	 	 	(6,677	)	 	 	82,105	 	
Total	 	 	 	 	519,607	 	 	 	87,285	 	 	 	25,803	 	 	 	(53,922	)	 	 	578,773	 	
 
Given the specific features and conditions of these instruments and their recent date of issuance, the PECs’s book value approximates to their fair value, which fair value hierarchy is level 3.
 
For further information regarding the PECs, see Note 26 of our consolidated financial statements for the year ended December 31, 2013.

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Transactions with Bain Capital
 
A number of Atento Group companies receive consultancy services and other services from companies related to Bain Capital Partners, LLC. The services are provided under market conditions. Transactions with Bain Capital Partners in the nine months ended September 30, 2014 amounted to 7,285 thousand U.S. dollars and principally relate to services provided under the consulting services agreement entered to with the Company (8,924 thousand U.S. dollars in the nine months ended September 30, 2013 principally related to transaction fees in connection with the bond issuance and services provided under the consulting services agreement entered to with the Company).
 
This transaction services agreement and consulting services agreement will be terminated upon the conclusion of the IPO, resulting in termination fees to be paid to Bain Capital Partners, LLC in the amount of 23.0 million dollars and transaction fees of 1.5 million dollars. Refer to the subsequent events note 17.
 
	16.	OTHER INFORMATION	
 
	a.	Guarantees and commitments	
 
At September 30, 2014, the Company has guarantees and commitments with third parties amounting to 237,076 thousand U.S. dollars (233,413 thousand U.S. dollars at December 31, 2013).
 
The Company’s directors consider that no contingencies will arise from these guarantees in addition to those already recognized.
 
There has not been any material instance of a guarantee being drawn upon for the periods indicated, nor does management anticipate any liability as a result of a draw upon a guarantee in the future.
 
The total amount of operating lease expenses recognized in the interim consolidated income statement for the nine months ended September 30, 2014 was 79,381 thousand U.S. dollars (93,086 thousand U.S. dollars at September 30, 2013).
 
There are no contingent payments on operating leases recognized in the interim consolidated income statements for the nine months ended September 30, 2014 and 2013.
 
The operating leases where the Company acts as lessee are mainly on premises intended for use as call centers. These leases have various termination dates, with the latest terminating in 2024. As of September 30, 2014, the payment commitment for the early cancellation of these leases is 146,965 thousand U.S. dollars (147,914 thousand U.S. dollars at December 31, 2013).
 
	17.	EVENTS AFTER THE REPORTING PERIOD	
 
Reorganization transaction
 
Atento S.A. was formed as a direct subsidiary of Atalaya Luxco Topco S.C.A. (“Topco”). In April 2014, Topco also incorporated Atalaya Luxco PIKCo S.C.A. (“PikCo”) and on May 15, 2014 Topco contributed to PikCo: (i) all of its equity interests in its then direct subsidiary, Atalaya Luxco Midco S.à r.l. (“Midco”), the consideration for which was an allocation to PikCo’s account “capital contributions not remunerated by shares” (the “Reserve Account”) equal to €2 million, resulting in Midco becoming a direct subsidiary of PikCo; and (ii) all of its debt interests in Midco (comprising three series of Preferred Equity Certificates (the “Original Luxco PECs”)), the consideration for which was the issuance by PikCo to Topco of Preferred Equity Certificates having an equivalent value. On May 30, 2014, Midco authorized the issuance of, and PikCo subscribed for, a fourth series of Preferred Equity Certificates (together with the Original Luxco PECs, the “Luxco PECs”).
 
In October 2014, in connection with the completion of Atento S.A.’s initial public offering (the “IPO”), Topco transferred its entire interest in the Company (being €31,000 of share capital) to PikCo, the consideration for which was an allocation to PikCo’s Reserve Account equal to €31,000. PikCo then contributed (the “Contribution”) all of the Luxco PECs to Midco, the consideration for which was an allocation to Midco’s Reserve Account equal to the value of the Luxco PECs immediately prior to the Contribution. The Luxco PECs amounted to €460.0 million (578.8 million U.S. dollars) as of September 30, 2014 (€460.1 million or approx. 575.9 million of U.S. dollars as at capitalization date on October 3 rd ). Upon completion of the Contribution, the Luxco PECs were cancelled by Midco. PikCo then transferred the remainder of its interest in Midco (being €12,500 of share capital) to Atento S.A., in consideration for which Atento S.A. issued two new shares of its capital stock to PikCo. The difference between the nominal value of these shares and the value of Midco’s net equity was allocated to Atentos S.A.’s share premium account. As a result of such transfer, Midco became a direct subsidiary of Atento S.A.. It was also completed a share split whereby the Company issued approximately 2,219.212 for each 1 ordinary share outstanding as of September 3, 2014. The foregoing is collectively referred as the “Reorganization Transaction”.

65 	

 	
 
The Reorganization Transaction was implemented pursuant to which Midco became a wholly-owned subsidiary of Atento S.A., a newly-formed company incorporated under the laws of Luxembourg with nominal assets and liabilities for the purpose of facilitating the IPO, and which did not conduct any operations prior to the completion of the IPO. Following the Reorganization Transaction and the IPO, the financial statements present the consolidated results of operations of Midco. The consolidated financial statements of Midco are substantially the same as the consolidated financial statements of the Atento S.A. prior to the IPO, as adjusted for the Reorganization Transaction. Upon consummation, the Reorganization Transaction will be reflected retroactively in Atento’s earnings per share calculations.
 
The net proceeds of the IPO, together with cash on hand, were used to repay the entire outstanding amount due under the Vendor Loan Note issued to an affiliate of Telefónica in connection with the Acquisition, of which €23.3 million (29.5 million U.S. dollars at the exchange rate prevailing as of October 7, 2014) remains outstanding as of September 30, 2014 (the “Vendor Loan Note”), and to pay fees and expenses incurred in connection with the IPO, including fees payable to Bain Capital Partners, LLC, totaling 24.5 million U.S. dollars (refer to “Termination of Bain Capital Consulting Services Agreement and Transaction Services Agreement” below).
 
Termination of Bain Capital Consulting Services Agreement and Transaction Services Agreement
 
On December 12, 2012, Atento Spain Holdco, S.L.U., an indirect subsidiary of Atento S.A., entered into a consulting services agreement with Bain Capital Partners, LLC, an investment adviser to certain of the Bain Capital funds, to provide general executive, business development and other financial advisory services to us. Additionally, pursuant to this agreement, certain transaction-specific advisory services were also provided.
 
The transaction services agreement and consulting services agreements each have a one-year initial term and are thereafter subject to automatic one-year extensions unless Bain Capital Partners, LLC provides written notice of termination at least 90 days prior to the expiration of the initial term or any extension thereof. Bain Capital Partners, LLC may also terminate the agreements at any time by delivering to us written notice of termination. The agreements include customary indemnities in favor of Bain Capital Partners, LLC. The transaction services agreement and the consulting services agreement were amended on May 17, 2013.
 
The transaction services agreement and consulting services agreement terminated in October 7, 2014. In connection with such termination, Atento S.A. paid to Bain Capital Partners, LLC an amount of 24.5 million U.S. dollars, including a termination fee of 23.0 million U.S. dollars and transaction fees of 1.5 million U.S. dollars.
 
2014 Omnibus Incentive Plan
 
In October 2014, Atento S.A. adopted the 2014 Omnibus Incentive Plan (the “2014 Incentive Plan” or “the Plan”). The 2014 Incentive Plan provides grants of stock options, stock appreciation rights, restricted stock, other stock-based awards and other cash-based awards. Directors, officers and other employees of Atento S.A. and its subsidiaries, as well as others performing consulting or advisory services for the Company, are eligible for grants under the Plan. The purpose this Plan is to provide incentives to attract, retain and motivate high performing officers, directors, employees and consultants by providing them with appropriate incentives and rewards either through a proprietary interest in our long-term success or compensation based on their performance in fulfilling their personal responsibilities.
 
Restructuring Spain disclosure
 
On July 31st, the Company reached an agreement with the majority unions for the termination of 672 employees that was ratified by employee referendum on August 6th. Dismissals started immediately thereafter. An appeal against this agreement was filed by a minority of the unions, claiming that the restructuring was null and void for a number of reasons.  On November 12th, the court issued its decision, and rejected each of the minority unions’ claims, except a claim that there was a defect in the referendum procedure conducted by the majority unions.  The court ruled that there was in fact a defect in the majority unions’ referendum procedure, and as a result, the court declared the Company’s headcount reduction plan to be null and void. The court, based on that nullity, declared that Atento must reinstate all dismissed employees and pay their salaries in full for the time from when they were dismissed until they are reinstated. The employees would be required to pay back the severance payments received upon termination.  The Company is currently considering various options as to how to proceed in light of this decision.   As a result, the Company is currently unable to accurately estimate the effect of this decision on the Company or whether any such effect may be material to the results of operations and financial condition of the Company.  An appeal to this decision before the Supreme Court has been announced today.

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 PART II - OTHER INFORMATION
 
 LEGAL PROCEEDINGS
 
See Note 5 to the Condensed Consolidated Financial Statements.
 
Restructuring Spain disclosure
 
On July 31st, the Company reached an agreement with the majority unions for the termination of 672 employees that was ratified by employee referendum on August 6th. Dismissals started immediately thereafter. An appeal against this agreement was filed by a minority of the unions, claiming that the restructuring was null and void for a number of reasons.  On November 12th, the court issued its decision, and rejected each of the minority unions’ claims, except a claim that there was a defect in the referendum procedure conducted by the majority unions.  The court ruled that there was in fact a defect in the majority unions’ referendum procedure, and as a result, the court declared the Company’s headcount reduction plan to be null and void. The court, based on that nullity, declared that Atento must reinstate all dismissed employees and pay their salaries in full for the time from when they were dismissed until they are reinstated. The employees would be required to pay back the severance payments received upon termination.  The Company is currently considering various options as to how to proceed in light of this decision.   As a result, the Company is currently unable to accurately estimate the effect of this decision on the Company or whether any such effect may be material to the results of operations and financial condition of the Company.  An appeal to this decision before the Supreme Court has been announced today.
 
 RISK FACTORS
 
There were no material changes to the risk factors described in section “Risk Factors” in our Form F-1.

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SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 	ATENTO S.A.	
Date: November 19, 2014	 	
 	By:	/s/ Alejandro Reynal	
 	Name:	Alejandro Reynal	
 	Title:	Chief Executive Officer	
 	 	 	
 	By:	/s/ Mauricio Montilha	
 	Name:	Mauricio Montilha	
 	Title:	Chief Financial Officer	

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Exhibit 99.1

PRESS RELEASE

Atento Reports Third Quarter 2014 Results

	▪	Q3 results demonstrated meaningful progress against the Company’s key operating metrics: revenue, adjusted EBITDA and free cash flow	
	▪	Revenues grew 5.9% on constant currency basis, driven by a combined 9.1% growth in the Americas and Brazil	
	▪	Adjusted EBITDA up 10.1% on constant currency basis, driven by margin expansion initiatives	
	▪	Free cash flow increased 83.3%, expanding financial flexibility	

NEW YORK, NY, November 19, 2014 – Atento S.A. (NYSE: ATTO), the leading provider of customer relationship management and business process outsourcing services in Latin America and Spain, today announced its financial results for the third quarter of 2014.
 
“Our results in the third quarter demonstrate the strength and resilience of our business model, as we delivered solid growth in revenue, adjusted EBITDA and cash flow generation, throughout a range of macro-economic conditions”, said Alejandro Reynal, Chief Executive Officer of Atento. “We continue to benefit from very positive commercial momentum in the year, reflecting our ability to continue to provide value to existing, loyal clients, while also diversifying our client base with the addition of new customers. Throughout these developments, we remain focused on ongoing operating discipline as we execute on our margin expansion initiatives. These strengthened strategic and operating capabilities establish an excellent foundation to deliver significant value to our shareholders.”
 
Summary 
 
($ in millions, except percentage changes)	 	Q3 2013	 	 	Q3 2014	 	 	9M 2013	 	 	9M 2014	 	
Revenue	 	 	580.3	 	 	 	589.6	 	 	 	1,747.3	 	 	 	1,743.3	 	
CCY growth	 	 	 	 	 	 	5.9	%	 	 	 	 	 	 	8.4	%	
Adjusted EBITDA	 	 	85.8	 	 	 	88.2	 	 	 	209.6	 	 	 	219.8	 	
Margin	 	 	14.8	%	 	 	15.0	%	 	 	12.0	%	 	 	12.6	%	
CCY growth	 	 	 	 	 	 	10.1	%	 	 	 	 	 	 	13.9	%	
Free Cash Flow	 	 	10.2	 	 	 	18.7	 	 	 	15.7	 	 	 	44.0	 	
growth	 	 	 	 	 	 	83.3	%	 	 	 	 	 	 	180.3	%	
Net Debt (1)	 	 	503.8	 	 	 	430.6	 	 	 	503.8	 	 	 	430.6	 	
Cash and Cash equivalents (2)	 	 	218.6	 	 	 	243.3	 	 	 	218.6	 	 	 	243.3	 	

(1) Proforma Net Debt with third parties adjusted for the prepayment of the outstanding portion of the Vendor Loan Note to Telefónica in connection with IPO transaction.
(2) Cash and Cash equivalents includes short-term financial investments.

 	

 	
 
Consolidated Operating Results
 
For the third quarter of 2014, revenue was $589.6 million compared to $580.3 million for the same quarter of the previous year, an increase of 1.6 percent and 5.9 percent in constant currency, driven primarily by a strong performance in the Americas and Brazil, which largely offset the reduction in EMEA. Revenue in LatAm, including Americas and Brazil, increased 9.1% in constant currency.
 
Atento continued to successfully diversify its client base in the quarter, with non-Telefónica revenue accounting for 54% of total revenue, an increase of 3 percentage points over the same period last year.
 
EBITDA for the third quarter of 2014 was $77.5 million, or 13.1 percent of revenue, compared to $68.4 million, or 11.8 percent, for the third quarter of 2013.
 
Adjusted EBITDA for the third quarter of 2014 was $88.2 million, or 15.0 percent of revenue, compared to $85.8 million, or 14.8 percent, for the third quarter of 2013, an increase of 2.8 percent and 10.1 percent in constant currency. The increase in adjusted EBITDA was primarily attributable to growth with existing customers, better revenue margin mix and operational efficiencies achieved from our ongoing margin expansion initiatives.
 
Net income was $8.0 million in the third quarter of 2014, compared to $4.7 million for the same quarter of the previous year, an increase of 70.2 percent.
 
Adjusted earnings was $25.6 million in the third quarter of 2014, compared to $27.5 million for the third quarter of 2013. Adjusted earnings per share was $0.35 in the quarter, an increase of 12.0% in constant currency rate, despite $22 million negative impact from non-cash FX translation losses, over the same period of last year, and 35.7% over the last 9 months.
 
Free Cash Flow was $18.7 million for the third quarter of 2014 compared to $10.2 million in the same quarter last year, an 83.3% increase driven by a stronger net cash flow from operating activities.
 
Adjusted quarterly and full-year earnings and EBITDA are non-GAAP financial measures that are reconciled to their most directly comparable GAAP measures in the accompanying financial tables.
   
Segment Reporting
 
Atento reports financial results for the following three segments: Brazil, Americas and EMEA. Financial highlights for the segments are provided below .
 
Brazil Region
 
For the third quarter of 2014, revenue for the Brazil region was $307.7 million compared to $293.0 million for the same quarter of the previous year, an increase of 5.0 percent and 4.5 percent in constant currency, driven largely by growth with non-Telefónica clients in the telecom sector. Our performance in the Brazil region highlights the value proposition of Atento as a fully independent company, as we continue to execute on our revenue diversification strategy and drive growth outside of Telefónica, and our ability to perform strongly in different macro environments.
 
EBITDA for the third quarter of 2014 was $45.0 million, or 14.6 percent of revenue, compared to $40.6 million, or 13.9 percent of revenue, for the third quarter of 2013.
 
Adjusted EBITDA for the third quarter of 2014 was $46.8 million, or 15.2 percent of revenue, compared to $43.3 million, or 14.8 percent of revenue, for the third quarter of 2013. The increase was driven by strong growth in revenue, enhanced margin mix and operating efficiencies from our margin expansion initiatives.

 	

 	

Americas Region
 
For the third quarter of 2014, revenue for the Americas region was $204.3 million compared to $199.1 million for the same quarter of the previous year, an increase of 2.6 percent and 15.9 percent in constant currency; driven largely by solid performance across our main countries, including Mexico, Colombia, Chile and Peru, our increased share of wallet with existing clients and new customer wins. We continue to see sustainable growth in our operations in the Americas.
 
EBITDA for the third quarter of 2014 was $34.8 million, or 17.0 percent of revenue, compared to $34.1 million, or 17.1 percent of revenue, for the third quarter of 2013.
 
Adjusted EBITDA for the third quarter of 2014 was $35.5 million, or 17.4 percent of revenue, compared to $34.8 million, or 17.5 percent of revenue, for the third quarter of 2013 with strong performance across the region.
  
EMEA Region
 
For the third quarter of 2014, revenue for the EMEA region was $77.7 million compared to $88.5 million for the same quarter of the previous year, a decrease of 12.2 percent and 11.8 in constant currency; driven largely by a decrease in volume with Telefónica.
 
EBITDA for the third quarter of 2014 was $5.8 million, or 7.5 percent of revenue, compared to $7.4 million, or 8.4 percent of revenue, for the third quarter of 2013.
 
Adjusted EBITDA for the third quarter of 2014 was $6.5 million, or 8.4 percent of revenue, compared to $9.0 million, or 10.2 percent of revenue, for the third quarter of 2013.
  
Strong Balance Sheet and Ample Liquidity
 
At September 30, 2014, Atento had cash, cash equivalents and short-term financial investments totaling $243.3 million compared to $218.6 million over the same period last year.
 
Total net debt with third parties amounted to $459.9 million at September 30, 2014, compared to $658.3 million in the third quarter of 2013. Total net debt with third parties pro forma, adjusted for the prepayment of the Vendor Loan Note in connection with the initial public offering, was $430.6 million at September 30, 2014.
 
The Company’s LTM Adjusted EBITDA to net debt with third parties ratio was 1.5x at September 30, 2014, and Pro Forma Adjusted EBITDA to net debt amounted to 1.4x.
 
During the third quarter of 2014, the Company invested $24.8 million, or 4.2 percent of revenues, in capital expenditures primarily for the construction and initial fit-out of our service delivery centers, and the acquisition of computer and technology equipment.
 
On October 7, 2014, Atento completed its initial public offering of 10.0 million shares at a price of $15.00 per share. The gross proceeds from the offering were approximately $72.3 million for the Company and approximately $77.7 million for the selling shareholder, Atalaya Luxco Pikco S.C.A., an entity affiliated with Bain Capital. The net proceeds of the IPO were used to repay the entire outstanding amount due under the Vendor Loan Note issued to an affiliate of Telefónica, and to pay fees and expenses incurred in connection with the offering, including fees payable to Bain Capital Partners, LLC.

 	

 	

Conference Call
 
Atento will host a conference call and webcast for investors on Thursday, November 20, 2014 at 8:00 am EST to discuss the financial results. The conference call can be accessed by dialing (866) 388-1927 domestic, UK: (+44) 0 2071 070 685, Brazil: (+55) 11 3172 5540 (Access code: 893477#), or Spain: (+34) 91 789 51 31. The conference call will also be webcasted through a link on Atento's Investor Relations website at investors.atento.com. A web-based archive of the conference call will also be available at the above website.
 
About Atento
 
tento is the largest provider of customer relationship management and business process outsourcing ("CRM BPO") services in Latin America and Spain, and among the top three providers globally, based on revenues. Since 1999, the Company has developed its business model in 15 countries where it employs approximately 153,000 people. Atento has over 400 clients to whom it offers a wide range of CRM BPO services across multiple channels. Atento's clients are mostly leading multinational corporations in sectors such as telecommunications, banking and financial services, media and technology, health, retail and public administrations, among others.

Investor Relations
 
Elena Cebollero Fraile
+34 917 40 74 40
 
Ed Yuen
+1 203 962 5947
 
investor.relations@atento.com
 
Media
 
Maite Cordero Muñoz
+ 34 917 40 74 47
 
Eliot Rebensdorf
+1 212 850 5638
 
media@atento.com

 

 	

Forward-Looking Statements
 
This press release contains forward-looking statements. Forward-looking statements can be identified by the use of words such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "intends," "continue" or similar terminology. These statements reflect only Atento's current expectations and are not guarantees of future performance or results. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. These risks and uncertainties include, but are not limited to, competition in Atento’s highly competitive industries; increases in the cost of voice and data services or significant interruptions in these services; Atento’s ability to keep pace with its clients’ needs for rapid technological change and systems availability; the continued deployment and adoption of emerging technologies; the loss, financial difficulties or bankruptcy of any key clients; the effects of global economic trends on the businesses of Atento’s clients; the non-exclusive nature of Atento’s client contracts and the absence of revenue commitments; security and privacy breaches of the systems Atento uses to protect personal data; the cost of pending and future litigation; the cost of defending Atento against intellectual property infringement claims; extensive regulation affecting many of Atento’s businesses; Atento’s ability to protect its proprietary information or technology; service interruptions to Atento’s data and operation centers; Atento’s ability to retain key personnel and attract a sufficient number of qualified employees; increases in labor costs and turnover rates; the political, economic and other conditions in the countries where Atento operates; changes in foreign exchange rates; Atento’s ability to complete future acquisitions and integrate or achieve the objectives of its recent and future acquisitions; future impairments of our substantial goodwill, intangible assets, or other long-lived assets; and Atento’s ability to recover consumer receivables on behalf of its clients. In addition, Atento is subject to risks related to its level of indebtedness. Such risks include Atento’s ability to generate sufficient cash to service its indebtedness and fund its other liquidity needs; Atento’s ability to comply with covenants contained in its debt instruments; the ability to obtain additional financing; the incurrence of significant additional indebtedness by Atento and its subsidiaries; and the ability of Atento’s lenders to fulfill their lending commitments. Atento is also subject to other risk factors described in documents filed by the company with the United States Securities and Exchange Commission.
 
These forward-looking statements speak only as of the date on which the statements were made. Atento undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

 	

 	
  
SELECTED FINANCIAL DATA
 
The following selected financial information should be read in conjunction with the interim consolidated financial statements and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” presented elsewhere in the Form 6-K.
 
The unaudited Financial Information set forth below is derived from Midco’s financial statements, which, once the Reorganization Transaction (as described in the IPO prospectus) was implemented in October 2014 became a wholly-owned subsidiary of Atento S.A., a newly-formed company incorporated under the laws of Luxembourg with nominal assets and liabilities for the purpose of facilitating the IPO, and which did not conduct any operations prior to the completion of the IPO. Prior to the Reorganization Transaction and the IPO, our financial statements were represented by the consolidated results of operations of Midco. The consolidated financial statements of Midco are substantially the same as the consolidated financial statements of the Atento S.A. after to the IPO. For this reason, for all periods prior to the IPO, Midco consolidated financial statements will be presented. Subsequent to the Reorganization Transaction and the IPO the consolidated financial statements of Atento S.A. will be presented on a going forward basis.
 
Consolidated Income Statement

($ in thousands, except percentage changes)	 	For the three months ended 
September 30,	 	 	Change 
excluding	 	 	For the nine months ended 
September 30,	 	 	Change 
excluding	 	
		2013	 	 	2014	 	 	FX (%)	 	 	2013	 	 	2014	 	 	FX (%)	 	
 	 	 	(unaudited)	 	 	 	 	 	 	 	(unaudited)	 	 	 	 	 	
Revenue	 	 	580,261	 	 	 	589,646	 	 	 	5.9	 	 	 	1,747,332	 	 	 	1,743,264	 	 	 	8.4	 	
Other operating income	 	 	111	 	 	 	904	 	 	 	N.M.	 	 	 	687	 	 	 	1,760	 	 	 	N.M.	 	
Own work capitalized	 	 	533	 	 	 	202	 	 	 	(40.0	)	 	 	533	 	 	 	413	 	 	 	N.M.	 	
Other gains	 	 	-	 	 	 	(403	)	 	 	N.M.	 	 	 	-	 	 	 	34,478	 	 	 	N.M.	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Supplies	 	 	(25,502	)	 	 	(27,106	)	 	 	10.6	 	 	 	(71,563	)	 	 	(79,240	)	 	 	21.1	 	
Employee benefit expense	 	 	(396,725	)	 	 	(403,030	)	 	 	5.9	 	 	 	(1,226,843	)	 	 	(1,246,353	)	 	 	10.3	 	
Depreciation and amortisation	 	 	(30,923	)	 	 	(30,017	)	 	 	(1.0	)	 	 	(96,927	)	 	 	(91,640	)	 	 	0.3	 	
Changes in trade provisions	 	 	774	 	 	 	100	 	 	 	(87.5	)	 	 	2,996	 	 	 	(199	)	 	 	N.M.	 	
Other operating expenses	 	 	(91,105	)	 	 	(83,169	)	 	 	(6.9	)	 	 	(283,088	)	 	 	(250,227	)	 	 	(5.0	)	
Impairment charges	 	 	-	 	 	 	387	 	 	 	N.M.	 	 	 	-	 	 	 	(32,479	)	 	 	N.M.	 	
Total operating expenses	 	 	(543,481	)	 	 	(542,835	)	 	 	3.7	 	 	 	(1,675,425	)	 	 	(1,700,138	)	 	 	9.7	 	
Operating profit	 	 	37,424	 	 	 	47,514	 	 	 	40.6	 	 	 	73,127	 	 	 	79,777	 	 	 	24.5	 	
Finance income	 	 	4,074	 	 	 	21,243	 	 	 	N.M.	 	 	 	12,961	 	 	 	28,345	 	 	 	N.M.	 	
Finance costs	 	 	(37,513	)	 	 	(30,311	)	 	 	(18.1	)	 	 	(103,927	)	 	 	(108,138	)	 	 	7.3	 	
Net foreign exchange gain/(loss)	 	 	8,279	 	 	 	(22,014	)	 	 	N.M.	 	 	 	4,915	 	 	 	(18,405	)	 	 	N.M.	 	
Net finance expense	 	 	(25,160	)	 	 	(31,082	)	 	 	21.4	 	 	 	(86,051	)	 	 	(98,198	)	 	 	19.5	 	
Profit/(Loss) before tax	 	 	12,264	 	 	 	16,432	 	 	 	78.9	 	 	 	(12,924	)	 	 	(18,421	)	 	 	8.5		
Income tax benefit/(expense)	 	 	(7,594	)	 	 	(8,423	)	 	 	32.9	 	 	 	(5,519	)	 	 	2,120	 	 	 	(83.6	)	
Profit/(Loss) for the period	 	 	4,670	 	 	 	8,009	 	 	 	N.M.	 	 	 	(18,443	)	 	 	(16,301	)	 	 	31.0	 	
Basic and diluted result per share (in U.S. dollars)	 	 	0.04	 	 	 	0.06	 	 	 	N.M.	 	 	 	(0.15	)	 	 	(0.13	)	 	 	31.0	 	

 
Selected segmental income statement items

($ in millions, except percentage changes)	 	For the three months ended
September 30,	 	 	Change	 	 	Change excluding	 	 	For the nine months ended
September 30,	 	 	Change	 	 	Change excluding	 	
	 	2013	 	 	2014	 	 	(%)	 	 	FX (%)	 	 	2013	 	 	2014	 	 	(%)	 	 	FX (%)	 	
 	 	(unaudited)	 	 	 	 	 	 	 	 	(unaudited)	 	 	 	 	 	 	 	
Revenue:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Brazil	 	 	293.0	 	 	 	307.7	 	 	 	5.0	 	 	 	4.5	 	 	 	899.5	 	 	 	906.2	 	 	 	0.7	 	 	 	9.1	 	
Americas	 	 	199.1	 	 	 	204.3	 	 	 	2.6	 	 	 	15.9	 	 	 	574.4	 	 	 	576.7	 	 	 	0.4	 	 	 	14.6	 	
EMEA	 	 	88.5	 	 	 	77.7	 	 	 	(12.2	)	 	 	(11.8	)	 	 	274.1	 	 	 	260.8	 	 	 	(4.9	)	 	 	(7.4	)	
Other and eliminations	 	 	(0.3	)	 	 	(0.1	)	 	 	(66.7	)	 	 	N.M.	 	 	 	(0.7	)	 	 	(0.4	)	 	 	(42.9	)	 	 	(57.1	)	
Total revenue	 	 	580.3	 	 	 	589.6	 	 	 	1.6	 	 	 	5.9	 	 	 	1,747.3	 	 	 	1,743.3	 	 	 	(0.2	)	 	 	8.4	 	
Adjusted EBITDA:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Brazil	 	 	43.3	 	 	 	46.8	 	 	 	8.1	 	 	 	9.2	 	 	 	111.2	 	 	 	123.7	 	 	 	11.2	 	 	 	20.6	 	
Americas	 	 	34.8	 	 	 	35.5	 	 	 	2.0	 	 	 	18.1	 	 	 	83.8	 	 	 	85.2	 	 	 	1.7	 	 	 	12.1	 	
EMEA	 	 	9.0	 	 	 	6.5	 	 	 	(27.8	)	 	 	(24.4	)	 	 	22.4	 	 	 	17.4	 	 	 	(22.3	)	 	 	(23.2	)	
Other and eliminations	 	 	(1.3	)	 	 	(0.6	)	 	 	53.8	 	 	 	46.2	 	 	 	(7.8	)	 	 	(6.5	)	 	 	16.7	 	 	 	17.9	 	
Total Adjusted EBITDA (unaudited)	 	 	85.8	 	 	 	88.2	 	 	 	2.8	 	 	 	10.1	 	 	 	209.6	 	 	 	219.8	 	 	 	4.9	 	 	 	13.9	 	

 

 	

 	

 
Reconciliation of EBITDA and Adjusted EBITDA to profit/(loss) for the period from continuing operations

 	 	Three months ended
September 30,	 	 	Nine months ended
September 30,	 	
($ in millions)	 	2013	 	 	2014	 	 	2013	 	 	2014	 	
 	 	(unaudited)	 	 	(unaudited)	 	
Profit/(loss) for the period from continuing operations	 	 	4.7	 	 	 	8.0	 	 	 	(18.4	)	 	 	(16.3	)	
Net finance expense	 	 	25.2	 	 	 	31.1	 	 	 	86.0	 	 	 	98.2	 	
Income tax expense	 	 	7.6	 	 	 	8.4	 	 	 	5.5	 	 	 	(2.1	)	
Depreciation and amortisation	 	 	30.9	 	 	 	30.0	 	 	 	96.9	 	 	 	91.6	 	
EBITDA (non-GAAP) (unaudited)	 	 	68.4	 	 	 	77.5	 	 	 	170.1	 	 	 	171.4	 	
Acquisition and integration related costs (a)	 	 	8.3	 	 	 	2.3	 	 	 	21.1	 	 	 	7.7	 	
Restructuring costs (b)	 	 	2.5	 	 	 	2.3	 	 	 	4.0	 	 	 	23.8	 	
Sponsor management fees (c)	 	 	2.4	 	 	 	2.5	 	 	 	5.9	 	 	 	7.3	 	
Site relocation costs (d)	 	 	1.5	 	 	 	0.4	 	 	 	1.8	 	 	 	1.4	 	
Financing and IPO fees (e)	 	 	1.9	 	 	 	3.5	 	 	 	5.1	 	 	 	11.1	 	
Asset impairments and Other (f) .	 	 	0.8	 	 	 	(0.3	)	 	 	1.6	 	 	 	(2.9	)	
Adjusted EBITDA (non-GAAP) (unaudited)	 	 	85.8	 	 	 	88.2	 	 	 	209.6	 	 	 	219.8	 	

 
	(a)	Acquisition and integration related costs incurred for the three months ended September 30, 2013 and 2014 primarily include costs associated with the Acquisition. For the three months ended September 30, 2013, of the $8.3 million, $8.0 million are related to professional fees incurred to establish Atento as a standalone company not affiliated to Telefónica. These projects are mainly related to full strategy review including growth implementation plan and operational set-up with a leading consulting firm ($5.8 million), the improvement of financial and cash flow reporting ($0.9 million), improving the efficiency in procurement ($0.9 million) and headhunting fees related primarily to strengthening the senior management team post-Acquisition ($0.4 million). Acquisition and integration related cost incurred for the three months ended September 30, 2014 primarily resulted from consulting fees incurred in connection with the full strategy review including our growth implementation plan an operational set-up with a leading consulting firm. We expect these projects to be completed by the end of 2014.	
 
Acquisition and integration related costs incurred for the nine months ended September 30, 2013 and 2014 primarily include costs associated with the Acquisition. For the nine months ended September 30, 2013, of the $21.1 million, $20.1 million are related to professional fees incurred to establish Atento as a standalone company not affiliated to Telefónica. These projects are mainly related to full strategy review including growth implementation plan and operational set-up with a leading consulting firm ($10.9 million), the improvement of financial and cash flow reporting ($5.9 million), improving the efficiency in procurement ($0.9 million) and headhunting fees related primarily to strengthening the senior management team post-Acquisition ($1.3 million). Acquisition and integration related cost incurred for the nine months ended September 30, 2014 primarily resulted from consulting fees incurred in connection with the full strategy review including our growth implementation plan an operational set-up with a leading consulting firm ($4.0 million), improving the efficiency in procurement ($2.3 million), and IT transformation projects ($0.7 million). We expect these projects to be completed by the end of 2014.
 
	(b)	Restructuring costs primarily include a number of restructuring activities and other personnel cost that were not related to our core results of operations. Restructuring costs incurred for the three months ended September 30, 2013 primarily relate to restructuring costs as a consequence of significant reduction in activity levels as a result of adverse market conditions in Spain ($1.2 million), and related to the relocation of our corporate headquarters ($0.6 million). Restructuring costs incurred for the three months ended September 30, 2014 primarily relate to other costs in connection with Spain headcount reduction plan ($1.0 million), restructuring costs in Argentina ($0.4 million) and the relocation of corporate headquarter ($0.6 million).	

 	

 	

For the nine months ended September 30, 2013, we incurred in restructuring costs in Spain of $1.4 million (relating to restructuring expenses incurred as a consequence of significant reduction in activity levels as a result of adverse market conditions in Spain), in Chile of $0.8 million (relating to restructuring expenses incurred in connection with the implementation of a new service delivery model with Telefónica), and $0.8 million related to the relocation of our corporate headquarters. Restructuring costs incurred for the nine months ended September 30, 2014 primarily relate to the headcount reduction plan in Spain which will take into consideration a maximum number of terminations amounting to 9% of the total headcount of Atento Teleservicios España S.A.U. amounting to $13.9 million.
 
In addition, we incurred restructuring costs not related to our core results of operations in Argentina of $3.2 million (related to migration of offshore operations to Peru), and in Chile of $1.4 million (related to restructuring expenses incurred in connection with the implementation of a new service delivery model with Telefónica), and an additional $0.8 million related to the relocation of corporate headquarter.
 
	(c)	Sponsor management fees represent the annual advisory fee paid to Bain Capital Partners, LLC that are expensed during the period presented. These fees will cease following the offering.	
 
	(d)	Site relocation costs incurred for the three and nine months ended September 30, 2013 and 2014 include costs associated with our current strategic initiative of relocating call centers from tier 1 cities to tier 2 cities in Brazil in order to get efficiencies through rental cost reduction and attrition and absenteeism improvement.	
 
	(e)	Financing and IPO fees for the three and nine months ended September 30, 2013 primarily relate to professional fees incurred in 2013 in connection with the issuance of the Senior Secured Notes and to pay financial advisory fees. Financing fees and IPO fees for the three and nine months ended September 30, 2014 primarily relate to professional fees (advisory, auditing, legal fees, etc.) incurred by us during the IPO process. These fees are expected to cease in the fourth quarter of 2014.	
 
	(f)	Asset impairment and other costs for the three and nine months ended September 30, 2013 relates to charges associated to projects for inventory control in Brazil which are not related to our core results of operations. Asset impairments and other cost incurred for the nine months ended September 30, 2014, mainly relate to the goodwill and other intangible asset impairment relating to our operations in Czech Republic of $3.8 million and Spain of $28.7 million offset by the amendment of the MSA with Telefónica by which the minimum revenue commitment for Spain was reduced against a $34.5 million penalty fee compensated by Telefónica.	

 	

 	
  
Reconciliation of Adjusted Earnings to Earnings/(loss) for the period from continuing operations  

($ in millions, except percentage changes)	 	For the three months ended
September 30,	 	 	For the nine months ended
September 30,	 	
	 	2013	 	 	2014	 	 	2013	 	 	2014	 	
Loss attributable to equity holders of the parent	 	 	4.7	 	 	 	8.0	 	 	 	(18.4	)	 	 	(16.3	)	
Acquisition and integration related Costs (a)	 	 	8.3	 	 	 	2.3	 	 	 	21.1	 	 	 	7.7	 	
Amortization of Acquisition related Intangible assets (b)	 	 	9.6	 	 	 	8.9	 	 	 	29.9	 	 	 	28.5	 	
Restructuring Costs (c)	 	 	2.5	 	 	 	2.3	 	 	 	4.0	 	 	 	23.8	 	
Sponsor management fees (d)	 	 	2.4	 	 	 	2.5	 	 	 	5.9	 	 	 	7.3	 	
Site relocation costs (e)	 	 	1.5	 	 	 	0.4	 	 	 	1.8	 	 	 	1.4	 	
Financing and IPO fees (f)	 	 	1.9	 	 	 	3.5	 	 	 	5.1	 	 	 	11.1	 	
PECs interest expense (g)	 	 	6.5	 	 	 	7.2	 	 	 	18.9	 	 	 	25.8	 	
Asset impairments and Other (h)	 	 	0.8	 	 	 	(0.3	)	 	 	1.6	 	 	 	(2.9	)	
Tax effect (i)	 	 	(10.7	)	 	 	(9.2	)	 	 	(28.2	)	 	 	(35.4	)	
Adjusted Earnings /(Loss) (non-GAAP)
(unaudited)	 	 	27.5	 	 	 	25.6	 	 	 	41.7	 	 	 	51.0	 	
Adjusted Earnings per share (in U.S. dollars) (*)	 	 	0.37	 	 	 	0.35	 	 	 	0.57	 	 	 	0.69	 	

 
(*) Adjusted Earnings per share calculated assuming Atento S.A. ordinary shares of 73,619,511 giving effect to the completion of the IPO and the Reorganization Transaction
 
	(a)	Acquisition and integration related costs incurred for the three months ended September 30, 2013 and 2014 primarily include costs associated with the Acquisition. For the three months ended September 30, 2013, of the $8.3 million, $8.0 million are related to professional fees incurred to establish Atento as a standalone company not affiliated to Telefónica. These projects are mainly related to full strategy review including growth implementation plan and operational set-up with a leading consulting firm ($5.8 million), the improvement of financial and cash flow reporting ($0.9 million), improving the efficiency in procurement ($0.9 million) and headhunting fees related primarily to strengthening the senior management team post-Acquisition ($0.4 million). Acquisition and integration related cost incurred for the three months ended September 30, 2014 primarily resulted from consulting fees incurred in connection with the full strategy review including our growth implementation plan an operational set-up with a leading consulting firm. We expect these projects to be completed by the end of 2014.	
 
Acquisition and integration related costs incurred for the nine months ended September 30, 2013 and 2014 primarily include costs associated with the Acquisition. For the nine months ended September 30, 2013, of the $21.1 million, $20.1 million are related to professional fees incurred to establish Atento as a standalone company not affiliated to Telefónica. These projects are mainly related to full strategy review including growth implementation plan and operational set-up with a leading consulting firm ($10.9 million), the improvement of financial and cash flow reporting ($5.9 million), improving the efficiency in procurement ($0.9 million) and headhunting fees related primarily to strengthening the senior management team post-Acquisition ($1.3 million). Acquisition and integration related cost incurred for the nine months ended September 30, 2014 primarily resulted from consulting fees incurred in connection with the full strategy review including our growth implementation plan an operational set-up with a leading consulting firm ($4.0 million), improving the efficiency in procurement ($2.3 million), and IT transformation projects ($0.7 million). We expect these projects to be completed by the end of 2014.
 
	(b)	Amortization of Acquisition related intangible assets represents the amortization expense of intangible assets resulting from the Acquisition and has been adjusted to eliminate the impact of the amortization arising from the Acquisition which is not in the ordinary course of our daily operations and distorts comparison with peers and results for prior periods. Such intangible assets primarily include contractual relationships with customers, for which the useful life has been estimated at primarily nine years.	

 	

 	

	(c)	Restructuring costs primarily include a number of restructuring activities and other personnel cost that were not related to our core results of operations. Restructuring costs incurred for the three months ended September 30, 2013 primarily relate to restructuring costs as a consequence of significant reduction in activity levels as a result of adverse market conditions in Spain ($1.2 million), and related to the relocation of our corporate headquarters ($0.6 million). Restructuring costs incurred for the three months ended September 30, 2014 primarily relate to other costs in connection with Spain headcount reduction plan ($1.0 million), restructuring costs in Argentina ($0.4 million) and the relocation of corporate headquarter ($0.6 million).	
 
For the nine months ended September 30, 2013, we incurred in restructuring costs in Spain of $1.4 million (relating to restructuring expenses incurred as a consequence of significant reduction in activity levels as a result of adverse market conditions in Spain), in Chile of $0.8 million (relating to restructuring expenses incurred in connection with the implementation of a new service delivery model with Telefónica), and $0.8 million related to the relocation of our corporate headquarters. Restructuring costs incurred for the nine months ended September 30, 2014 primarily relate to the headcount reduction plan in Spain which will take into consideration a maximum number of terminations amounting to 9% of the total headcount of Atento Teleservicios España S.A.U. amounting to $13.9 million. In addition, we incurred restructuring costs not related to our core results of operations in Argentina of $3.2 million (related to migration of offshore operations to Peru), and in Chile of $1.4 million (related to restructuring expenses incurred in connection with the implementation of a new service delivery model with Telefónica), and an additional $0.8 million related to the relocation of corporate headquarter.
 
	(d)	Sponsor management fees represent the annual advisory fee paid to Bain Capital Partners, LLC that are expensed during the periods presented. These fees will cease following the offering.	
 
	(e)	Site relocation costs incurred for the three and nine months ended September 30, 2013 and 2014 include costs associated with our current strategic initiative of relocating call centers from tier 1 cities to tier 2 cities in Brazil in order to get efficiencies through rental cost reduction and attrition and absenteeism improvement.	
 
	(f)	Financing and IPO fees for the three and nine months ended September 30, 2013 primarily relate to professional fees incurred in 2013 in connection with the issuance of the Senior Secured Notes and to pay financial advisory fees. Financing fees and IPO fees for the three and nine months ended September 30, 2014 primarily relate to professional fees (advisory, auditing, legal fees, etc.) incurred by us during the IPO process. These fees are expected to cease in the fourth quarter of 2014.	
 
	(g)	PECs Interest expense represents accrued interest on the preferred equity certificates that were capitalized in connection with the IPO.	
 
	(h)	Asset impairment and other costs for the three and nine months ended September 30, 2013 relates to charges associated to projects for inventory control in Brazil which are not related to our core results of operations. Asset impairments and other cost incurred for the nine months ended September 30, 2014, mainly relate to the goodwill and other intangible asset impairment relating to our operations in Czech Republic of $3.8 million and Spain of $28.7 million offset by the amendment of the MSA with Telefónica by which the minimum revenue commitment for Spain was reduced against a $34.5 million penalty fee compensated by Telefónica.	
 
	(i)	The tax effect represents the tax impact of the total adjustments based on a tax rate of 31.8% for the nine months ended September 30, 2013 and 34.5% for the nine months ended September 30, 2014.	

 	

 	
  
Reconciliation of Total Debt to Net Debt with third parties
 
($ in millions, except Net Debt / Adj. EBITDA LTM)	 	As of September 30, 2014
(unaudited)	 	
 	 	 	 	
 	 	Actual	 	 	As Adjusted (1)	 	 	Pro Forma	 	
Cash and cash equivalents	 	 	190.7	 	 	 	190.7	 	 	 	190.7	 	
Short term financial investments	 	 	52.6	 	 	 	52.6	 	 	 	52.6	 	
Debt:	 	 	 	 	 	 	 	 	 	 	 	 	
   7.375% Sr. Sec. Notes due 2020	 	 	294.4	 	 	 	294.4	 	 	 	294.4	 	
   Brazilian Debentures	 	 	267.7	 	 	 	267.7	 	 	 	267.7	 	
   Vendor Loan Note (2)	 	 	29.3	 	 	 	29.3	 	 	 	-	 	
   Contingent Value Instrument	 	 	36.1	 	 	 	36.1	 	 	 	36.1	 	
   Revolving Credit Facility	 	 	-	 	 	 	-	 	 	 	-	 	
   Preferred Equity Certificates	 	 	578.8	 	 	 	-	 	 	 	-	 	
   Finance lease payables	 	 	8.7	 	 	 	8.7	 	 	 	8.7	 	
   Other borrowings	 	 	67.0	 	 	 	67.0	 	 	 	67.0	 	
Total Debt	 	 	1,282.0	 	 	 	703.2	 	 	 	673.9	 	
Net Debt (3)	 	 	 	 	 	 	459.9	 	 	 	430.6	 	
   Adjusted EBITDA LTM (4)	 	 	 	 	 	 	305.4	 	 	 	305.4	 	
Net Debt / Adjusted EBITDA LTM	 	 	 	 	 	 	1.5	x	 	 	1.4	x	
 
	(1)	Total capitalization as adjusted to give effect to the Reorganization Transaction, in connection with the completion of our IPO.	
 
	(2)	Reflects the liquidation of Vendor Loan Note.	
 
	(3)	In considering our financial condition, our management analyzes Net debt with third parties, which is defined as Total debt less cash, cash equivalents, and short-term financial investments. Net debt is not a measure defined by IFRS and it has limitations as an analytical tool. Net debt is neither a measure defined by or presented in accordance with IFRS nor a measure of financial performance, and should not be considered in isolation or as an alternative financial measure determined in accordance with IFRS. Net debt is not necessarily comparable to similarly titled measures used by other companies.	
 
	(4)	Adjusted EBITDA LTM is defined as EBITDA adjusted to exclude Acquisition and integration related costs, restructuring costs, sponsor management fees, asset impairments, site relocation costs, financing fees, IPO costs and other items, which are not related to our core results of operations for the last twelve months.	

 	

 	

Free cash flow

($ in millions)	 	For the three months ended
September 30,	 	 	For the nine months ended
September 30,	 	
 	 	2013	 	 	2014	 	 	2013	 	 	2014	 	
 	 	(unaudited)	 	 	(unaudited)	 	
Net cash flow from operating activities	 	 	34.2	 	 	 	43.5	 	 	 	68.4	 	 	 	109.4	 	
Capital expenditures (1)	 	 	24.0	 	 	 	24.8	 	 	 	52.7	 	 	 	65.4	 	
Free cash flow (non-GAAP) (unaudited)	 	 	10.2	 	 	 	18.7	 	 	 	15.7	 	 	 	44.0	 	
 
	(1)	We define capital expenditures as the sum of additions to property, plant and equipment and the additions to intangible assets during the period presented.	

 

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