Arcos Dorados Reports Third Quarter 2012 Financial Results On track with restaurant opening plan and achieved double-digit organic revenue growth, despite impact of weak Brazilian consumption on comparable sales Business Wire BUENOS AIRES, Argentina -- November 02, 2012 Arcos Dorados Holdings, Inc. (NYSE: ARCO) (“Arcos Dorados” or the “Company”), Latin America’s largest restaurant chain and the world’s largest McDonald’s franchisee, today reported its unaudited results for the third quarter ended September 30, 2012. To better discern underlying business trends, this release uses non-GAAP financial measures that segregate year-over-year growth into three categories: (i) currency translation, (ii) special items and (iii) organic growth. (i) Currency translation reflects the impact on growth of the appreciation or depreciation of the local currencies in which we conduct our business against the US dollar (the currency in which our financial statements are prepared). (ii) Special items include the impact of CAD related awards and other events that management does not consider part of the underlying performance of the business. (iii) Organic growth reflects the underlying growth of the business excluding the effect from currency translation and special items. Management believes organic growth better reflects the underlying growth from the ongoing activities of our business and provides improved comparability of results. Additionally, the Company has modified the presentation of quarterly and accumulated amounts in this release, providing an analysis by geographic division. The information presented is the same as in prior releases. Third quarter 2012 Highlights *Revenues decreased 2.2% year-over-year to US$ 961.9 million, but increased 11.6% on an organic basis, as comparable sales growth and revenues from new stores did not fully offset a reduction in reported revenues from the impact of the depreciation of local currencies versus the US dollar *Systemwide comparable sales increased 6.5% year-over-year. The result is in addition to a 15.7% increase in comparable sales in 3Q11 *103 net new restaurants opened during the last 12 months, contributing US$ 47.7 million to revenues in constant currency. The full-year opening plan is on track, with outstanding restaurants under construction *Adjusted EBITDA decreased 12.0% to US$ 83.6 million, due primarily to the 24.5% depreciation of the Brazilian currency versus the prior year period. Excluding currency translation and special items, organic Adjusted EBITDA was 7.3% lower year-over-year *Net income amounted to US$ 32.6 million compared to US$ 19.6 million one year ago, when the Company incurred debt restructuring charges “Third quarter results were impacted by continued low consumer activity in Brazil. Excluding the depreciation of local currencies versus the US dollar, we achieved double-digit organic revenue growth in addition to strong growth in the year-ago period.” “We continue to strategically expand our regional footprint and are on track to execute our full year restaurant opening plan. Next year’s unit openings are expected to continue at a strong pace and will tap into the rapid population growth and the emerging middle class in our targeted markets.” “While the long-term prospects of this region remain strong, the recovery in Brazilian consumption is taking longer to materialize. In addition, we continue to experience geopolitical and macroeconomic headwinds in several of our markets. As a result, we are revising downward our full year guidance,” said Woods Staton, Chairman and Chief Executive Officer of Arcos Dorados. Third quarter 2012 Results Consolidated Financial Highlights (Million US$) 3Q11 Special Currency Organic 3Q12 % As % (a) Items Translation Growth (a+b+c+d) Reported Organic (b) (c) (d) Total 1,777 1,880 Restaurants Sales by Company-operated 943.2 - (130) 107.8 920.5 -2.4% 11.4% Restaurants Revenues from franchised 40.8 - (5.5) 6.1 41.4 1.4% 14.9% restaurants Total Revenues 984.0 - (136.0) 113.9 961.9 -2.2% 11.6% Comparable Sales 6.5% Adjusted EBITDA 95.0 9.7 (14.1) (6.9) 83.6 -12.0% -7.3% Adjusted EBITDA 9.7% 8.7% Margin Net Income attributable to 0.0 26.3 (7.1) (6.2) 32.6 66.5% -31.6% AD No. of shares 209,529,412 209,529,412 outstanding EPS ($ per 0.09 0.16 share) (3Q12 = 3Q11 + Special items + Currency translation + Organic growth) Arcos Dorados’ third quarter revenues decreased 2.2% to US$ 961.9 million, as organic revenue growth of 11.6% was offset by depreciation of local currencies, which reduced revenue when expressed in US dollars. The increase in organic revenues was driven by systemwide comparable sales growth of 6.5% and US$ 47.7 million in constant currency added by the net addition of 103 restaurants during the last 12-month period. The SLAD region delivered revenue growth during the quarter, as did NOLAD and the Caribbean division. Systemwide comparable sales growth of 6.5% was primarily a reflection of average check growth. The result was impacted by lower regional sales of the August Happy Meal promotion. Adjusted EBITDA Adjusted EBITDA for the third quarter of 2012 was US$ 83.6 million, a 12.0% decrease compared with the same period of 2011. During the quarter the Company recognized a net gain related to its CAD incentive plan of US$ 2.9 million which included (i) a charge of US$ 0.9 million from ongoing CAD accrual, which was offset by (ii) a gain of US$ 3.8 million resulting from the hedge announced in September 2012, which minimizes the impact of share price variations over results. Additionally, in the third quarter of 2011, the Company recognized a charge of US$ 8.5 million related to its CAD incentive plan. Summary of CAD accrual effects 3Q12 3Q11 Var. $ CAD accrual -0.9 -8.5 7.6 Hedge 3.8 - 3.8 Net Effect in G&A 2.9 -8.5 11.4 Therefore, adjusting for special items (CAD in both periods, along with the Brazil CIDE tax charge of US$ 3.0 million and the Venezuela royalty waiver of US$ 1.2 million in 3Q12) and currency impact, organic Adjusted EBITDA decreased 7.3%. The result reflects lower Adjusted EBITDA in the Brazil division, while the remaining divisions grew. The Adjusted EBITDA margin as a percentage of total revenues was 8.7% for the quarter, down 1 percentage point from the third quarter of 2011. The decline primarily reflects higher occupancy & other expenses and lower margins in the Brazilian division mainly due to increased US dollar denominated F&P costs that were impacted by a weaker Brazilian currency. Nevertheless the rest of the divisions posted an improvement in F&P as a percentage of sales. Additionally, margins expanded in SLAD and the Caribbean division and remained stable in NOLAD. G&A as a percentage of sales decreased compared to the year-ago period in all divisions. Net income attributable to the Company was US$ 32.6 million in the third quarter of 2012, compared with US$ 19.6 million in the same period of 2011, on an as reported basis. The result reflects lower non-operating charges that were partially offset by lower operating income and higher income taxes. Non-operating Results Improved non-operating results reflected lower overall funding costs as a result of the debt restructuring process carried out during the last twelve months. This process included the issuance of Real denominated debt in July 2011 and April 2012, along with the settlement of the majority of derivatives related to existing US dollar denominated debt. It should be noted that the Company recognized a charge of US$ 16.6 million (including US$ 13.9 million in net interest expense) related to the debt restructuring of July, 2011. Additionally, during the third quarter of 2011, the Company registered a foreign exchange charge of US$ 20.1 million, mainly as a result of the impact of the Real devaluation on intercompany debt and receivables, as explained in 3Q11. However, as a result of the Real denominated debt issuances of July 2011 and April 2012, the Company reduced the impact from variations of the Brazilian currency. In addition, this exchange rate did not vary significantly from June 30^th to September 30^th 2012, reducing the balance sheet impact. Foreign exchange charges for the third quarter of 2012 were mainly related to the Venezuelan operations. Income tax expense for the quarter totaled US$ 11.4 million, resulting in an effective tax rate of 26.0% for the quarter. This compares to an effective tax rate of 32.3% in the year-ago period, which was impacted by non-deductible charges. The Company reported basic earnings per share (EPS) of US$ 0.16 in the third quarter of 2012, compared to US$ 0.09 in the previous corresponding period, which included debt restructuring charges. Brazil Division Financial Highlights (Million US$) 3Q11 Special Currency Organic 3Q12 % As % (a) Items Translation Growth (a+b+c+d) Reported Organic (b) (c) (d) Total 627 691 10.2% Restaurants Comparable 3.2% Sales Revenues 507.7 - (109.5) 46.5 444.7 -12.4% 9.2% Adjusted 80.6 (3.0) (13.2) (14.1) 50.3 -37.6% -17.5% EBITDA Brazil revenues declined 12.4% due to a higher average exchange rate as compared to the previous year’s third quarter. Excluding currency movements, organic revenues grew 9.2%. The result was driven by systemwide comparable sales growth of 3.2% in the quarter, which was impacted by slow overall consumption in the country as economic activity takes longer to recover than expected. The net addition of 64 restaurants during the last 12-month period contributed US$29.3 million to revenues in constant currency during the quarter. Adjusted EBITDA decreased 37.6% in the third quarter, primarily due to currency translation. As a reference, the average exchange rate was R$1.63 in 3Q2011 and R$2.03 in 3Q2012. The mild comparable sales growth, the Real devaluation effect over dollar denominated costs along with higher operating expenses as a percentage of revenues negatively impacted adjusted EBITDA margins in 3Q12. These factors offset the improvement in G&A leverage. As a result, organic Adjusted EBITDA contracted 17.5%, excluding the CIDE tax on royalty payments (US$3.0 million) that was not recognized until 4Q11. This tax is ongoing and will no longer be considered a special item in 2013 for comparison purposes. In September 2012, the successful Big Mac sandwich was featured in the Value Platform offering and drove traffic going into the fourth quarter. NOLAD Financial Highlights (Million US$) 3Q11 Special Currency Organic 3Q12 % As % (a) Items Translation Growth (a+b+c+d) Reported Organic (b) (c) (d) Total 473 496 4.9% Restaurants Comparable 1.3% Sales Revenues 93.7 - (3.8) 8.2 98.0 4.6% 8.7% Adjusted 7.0 - (0.1) 0.4 7.2 3.7% 5.2% EBITDA NOLAD’s (Mexico, Panama and Costa Rica) revenues grew 4.6% or 8.7% on an organic basis, year-over-year. The increase included systemwide comparable sales growth of 1.3%, which reflected lower sales of the Happy Meal/Family business in August. Additionally, the net addition of 23 restaurants during the last 12-month period contributed US$ 6.0 million to revenues in constant currency. Adjusted EBITDA grew 3.7% in the quarter, or 5.2% on an organic basis. F&P efficiencies stemming from improved controllable expenses provided by the MFY platform offset the mild comparable sales increase and resulted in a stable Adjusted EBITDA margin of 7.4%. SLAD Financial Highlights (Million US$) 3Q11 Special Currency Organic 3Q12 % As % (a) Items Translation Growth (a+b+c+d) Reported Organic (b) (c) (d) Total 533 556 4.3% Restaurants Comparable 15.4% Sales Revenues 314.7 - (19.9) 56.3 351.0 11.6% 17.9% Adjusted 36.3 1.2 (3.0) 8.4 43.0 18.4% 23.1% EBITDA SLAD’s (Argentina, Venezuela, Colombia, Chile, Perú, Ecuador, and Uruguay) revenues grew by 11.6% and 17.9% on an organic basis compared to the third quarter of 2011. Systemwide comparable sales increased 15.4% and the net addition of 23 restaurants during the last 12-month period contributed US$ 12.0 million to revenues in constant currency in the quarter. Adjusted EBITDA increased as temporary royalty relief in Venezuela (US$ 1.2 million), along with F&P efficiencies and G&A leverage, offset the negative impact of higher payroll costs as a percentage of sales. On an organic basis, Adjusted EBITDA rose 23.1%, while margins also improved to 12.2% in the quarter. Caribbean Division Financial Highlights (Million US$) 3Q11 Special Currency Organic 3Q12 % As % (a) Items Translation Growth (a+b+c+d) Reported Organic (b) (c) (d) Total 144 137 -4.9% Restaurants Comparable 1.9% Sales Revenues 68.0 - (2.8) 2.9 68.1 0.2% 4.3% Adjusted 1.8 - (0.4) 2.9 4.3 143.2% 166.1% EBITDA The Caribbean division (Puerto Rico, Martinique, Guadeloupe, Aruba, Curaçao, French Guiana, Trinidad & Tobago, US Virgin Islands of St. Thomas and St. Croix) reported stable revenues, with reported growth of 0.2%. On an organic basis, revenues gained 4.3% compared to the third quarter of 2011. Systemwide comparable sales increased 1.9%, in part due to the successful roll out of the combined beverage business (CBB) earlier this year, helping to offset prevailing economic conditions. Adjusted EBITDA grew by US$ 2.5 million and reached US$ 4.3 million for the quarter. The adjusted EBITDA margin increased to 6.3% of revenues, mainly driven by efficiencies in payroll as well as fixed cost leverage. New Unit Development Total Restaurants Sept. ‘12 June ‘12 March ‘12 Dec ‘11 Sept. ‘11 (eop) Brazil 691 677 666 662 627 NOLAD 496 492 490 484 473 SLAD 556 553 548 547 533 Caribbean 137 136 139 147 144 TOTAL 1,880 1,858 1,843 1,840 1,777 LTM Net Openings 103 91 86 85 64 *Considers company-operated and franchised restaurants at period-end The Company continued to expand at a faster year-over-year pace for the twelve months ended September 30, 2012, adding 103 net new restaurants throughout its territories. Having commenced construction on all outstanding units, Arcos expects to achieve its full year target of 130 gross openings. More than half of the openings are located within Brazil, where fundamentals and potential for the business remain strong, as demonstrated by superior average restaurant revenues. In addition, the Company is advancing with its restaurant expansion plan for the following year and is developing a strong pipeline of attractive growth opportunities in key locations. As of the quarter end, 73% of Arcos Dorados’ restaurants were Company operated. Balance Sheet & Cash Flow Highlights Cash and cash equivalents were US$ 244.1 million at September 30, 2012. The Company’s total financial debt (including derivative instruments) was US$ 653.1 million, which included US$ 306.7 million corresponding to the accounting balance of the 2019 US Dollar Notes and R$ 675 million (equivalent to US$ 336.2 million) related to the BRL 2016 Notes issued in July, 2011, and April, 2012. Net debt was US$ 409.0 million and the solid Net Debt/Adjusted EBITDA ratio was 1.2 at September 30, 2012. Cash generated from operating activities was US$ 91.2 million in the third quarter of 2012. During the quarter, capital expenditures amounted to US$ 75.6 million. First nine months 2012 For the nine months ended September 30, 2012, the Company’s revenues grew by 3.3% (14.4% on an organic basis) to US$ 2,787.7 million. Additionally, adjusted EBITDA reached US$ 229.0 million, representing a 2.7% decrease (increase of 0.2% on an organic basis) compared to the first nine months of 2011. Results were impacted by lower results in the Brazil division, which offset improvements in SLAD and NOLAD. Despite the impact of currency and soft consumption in Brazil on revenues, G&A has stabilized and is showing leverage sequentially. Year-to-date consolidated net income amounted to US$ 70.1 million, in line with US$ 69.3 million in the first nine months of 2011. The year-to-date effective tax rate was 30.4%. Additionally, total capital expenditure amounted to US$ 171.1 million for the period, compared with US$ 182.5 million in the first nine months of 2011. As a reference, capital expenditure amounts are affected by currency variations. Quarter Highlights & Recent Developments Guidance 2012 Given soft comparable sales growth in October and the absence of clear signs of a recovery in consumption in the Brazilian market, the Company expects the following growth rates with respect to 2011, in constant currency and excluding the CAD related impact on results from the stock variations of 2012. (Please note CAD variation impacts have been reduced through an Equity Swap as of September, 2012): *Revenue growth at the low end of the range of 15-17% *Adj. EBITDA growth in the range of 3-5%; and an *Effective tax rate for the year in the range of 31-33%. The capital expenditures plan remains unchanged and includes 130 gross openings, with total capital expenditures for the full year of approximately US$ 300-320 million. Board Member Appointment Mr. Alejandro Ramírez Magaña was appointed an independent board member of the Company. Mr. Ramírez Magaña is the General Director of Cinépolis, the largest cineplex chain in Latin America and the fourth largest in the world. He recently co-chaired the 2012 Annual Meeting of the World Economic Forum and was also appointed by President Calderón as Chair of the G20’s Business Summit (B20), in Mexico in June, 2012. Mr. Ramírez holds a Bachelor of Arts in Economics from Harvard University, a Masters of Sciences in Development Economics from the University of Oxford and an MBA from Harvard Business School. He currently serves as committee advisor for the World Bank and the United Nations Development Programme (UNDP). In 2005, he was also appointed as “Young Global Leader” by the Davos World Economic Forum, in Switzerland. With this appointment, the Company’s Board now comprises 9 members. CAD Hedge On September 5, 2012, the Company announced that it had entered into a Total Return Equity Swap transaction to reduce most of the impact that its stock price variation has on its income statement as a result of recognizing the compensation expense from the Long Term Incentive Plan (the CAD program). The goal of the transaction is to reduce the future volatility of Arcos Dorados’ results of operations resulting from fluctuations in its stock price. Under the Total Return Equity Swap, the Company receives (or pays) the gains (or losses) plus dividends on a notional number of 2,272,551 of its Class A shares. The reference price for the Total Return Equity Swap is $13.7689 per share. Dividend On October 26, 2012, the Company paid the third installment of its 2012 Dividends. The total amount paid was US$ 12.5 million or US$ 0.0597 per share on outstanding Class A and Class B shares, to shareholders of record at October 24, 2012. Subsequent payment dates are to be determined by the Board of Directors. Definitions: Systemwide comparable sales growth refers to the change, measured in constant currency, in our Company-operated and franchised restaurant sales in one period from a comparable period for restaurants that have been open for thirteen months or longer. While sales by our franchisees are not recorded as revenues by us, we believe the information is important in understanding our financial performance because these sales are the basis on which we calculate and record franchised revenues, and are indicative of the financial health of our franchisee base. Constant currency basis refers to amounts calculated using the same exchange rate over the periods under comparison to remove the effects of currency fluctuations from this trend analysis. About Arcos Dorados Arcos Dorados is the world’s largest McDonald’s franchisee in terms of systemwide sales and number of restaurants, operating the largest quick service restaurant (“QSR”) chain in Latin America and the Caribbean. It has the exclusive right to own, operate and grant franchises of McDonald’s restaurants in 20 Latin American and Caribbean countries and territories, including Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curaçao, Ecuador, French Guyana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto Rico, St. Croix, St. Thomas, Trinidad & Tobago, Uruguay and Venezuela. The Company operates or franchises 1,840 McDonald’s-branded restaurants with over 90,000 employees serving approximately 4.3 million customers a day, as of December 2011. Recognized as one of the best companies to work for in Latin America, Arcos Dorados is traded on the New York Stock Exchange (NYSE: ARCO). To learn more about the Company, please visit the Investors section of our website: www.arcosdorados.com Cautionary Statement on Forward-Looking Statements This press release contains forward-looking statements. The forward-looking statements contained herein include statements about the Company’s business prospects, its ability to attract customers, its affordable platform, its expectation for revenue generation and its outlook for 2012. These statements are subject to the general risks inherent in Arcos Dorados' business. These expectations may or may not be realized. Some of these expectations may be based upon assumptions or judgments that prove to be incorrect. In addition, Arcos Dorados' business and operations involve numerous risks and uncertainties, many of which are beyond the control of Arcos Dorados, which could result in Arcos Dorados' expectations not being realized or otherwise materially affect the financial condition, results of operations and cash flows of Arcos Dorados. Additional information relating to the uncertainties affecting Arcos Dorados' business is contained in its filings with the Securities and Exchange Commission. The forward-looking statements are made only as of the date hereof, and Arcos Dorados does not undertake any obligation to (and expressly disclaims any obligation to) update any forward-looking statements to reflect events or circumstances after the date such statements were made, or to reflect the occurrence of unanticipated events. Use of Non-GAAP Financial Measures In addition to financial measures prepared in accordance with the general accepted accounting principles (GAAP), within this press release and the accompanying tables, we use a financial measure titled ‘Adjusted EBITDA’. We use Adjusted EBITDA to facilitate operating performance comparisons from period to period. Adjusted EBITDA is defined as our operating income plus depreciation and amortization plus/minus the following losses/gains included within other operating expenses, net and within general and administrative expenses in our statement of income: compensation expense related to a special award granted to our chief executive officer, incremental compensation expense related to our 2008 long-term incentive plan, gains from sale of property and equipment, write-off of property and equipment, contract termination losses, and impairment of long-lived assets and goodwill, and stock-based compensation and bonuses incurred in connection with the Company’s initial public listing. Third quarter 2012 Consolidated Results (Unaudited) (In thousands of U.S. dollars, except per share data) For Three-Months ended September 30, 2012 2011 REVENUES Sales by Company-operated restaurants 920,513 943,166 Revenues from franchised restaurants 41,394 40,837 Total Revenues 961,907 984,003 OPERATING COSTS AND EXPENSES Company-operated restaurant expenses: Food and paper (323,061 ) (328,173 ) Payroll and employee benefits (186,320 ) (189,371 ) Occupancy and other operating expenses (250,436 ) (242,345 ) Royalty fees (45,662 ) (45,732 ) Franchised restaurants - occupancy (13,348 ) (13,252 ) expenses General and administrative expenses (76,614 ) (89,403 ) Other operating expenses, net (6,410 ) (1,466 ) Total operating costs and expenses (901,851 ) (909,742 ) Operating income 60,056 74,261 Net interest expense (13,812 ) (27,996 ) Gain from derivative instruments 289 4,675 Foreign currency exchange results (1,960 ) (20,909 ) Other non-operating expenses, net (463 ) (725 ) Income before income taxes 44,110 29,306 Income tax expense (11,449 ) (9,476 ) Net income 32,661 19,830 Less: Net income attributable to (53 ) (248 ) non-controlling interests Net income attributable to Arcos Dorados 32,608 19,582 Holdings Inc. Earnings per share information ($ per share): Basic net income per common share attributable to Arcos Dorados Holdings $ 0.16 $ 0.09 Inc. Weighted-average number of common shares 209,529,412 209,529,412 outstanding-Basic Adjusted EBITDA Reconciliation Operating income 60,056 74,261 Depreciation and amortization 22,568 18,089 Other operating items excluded from EBITDA 987 2,662 computation Adjusted EBITDA 83,611 95,012 Adjusted EBITDA Margin as % of total 8.7 % 9.7 % revenues First Nine Months 2012 Consolidated Results (Unaudited) (In thousands of U.S. dollars, except per share data) For Nine-Months ended September 30, 2012 2011 REVENUES Sales by Company-operated restaurants 2,669,229 2,586,560 Revenues from franchised restaurants 118,488 112,589 Total Revenues 2,787,717 2,699,149 OPERATING COSTS AND EXPENSES Company-operated restaurant expenses: Food and paper (935,808 ) (908,343 ) Payroll and employee benefits (555,026 ) (517,077 ) Occupancy and other operating expenses (725,371 ) (684,999 ) Royalty fees (132,599 ) (125,687 ) Franchised restaurants - occupancy (41,197 ) (37,645 ) expenses General and administrative expenses (229,205 ) (253,848 ) Other expenses, net (11,966 ) (604 ) Total operating costs and expenses (2,631,172 ) (2,528,203 ) Operating income 156,545 170,946 Net interest expense (39,751 ) (48,195 ) Loss from derivative instruments (1,037 ) (7,550 ) Foreign currency exchange results (13,071 ) (19,045 ) Other non-operating expenses, net (1,723 ) (1,908 ) Income before income taxes 100,963 94,248 Income tax expense (30,672 ) (24,422 ) Net income 70,291 69,826 Less: Net income attributable to (180 ) (519 ) non-controlling interests Net income attributable to Arcos Dorados 70,111 69,307 Holdings Inc. Earnings per share information ($ per share): Basic net income per common share attributable to Arcos Dorados Holdings $ 0.33 $ 0.32 Inc. Weighted-average number of common shares 209,529,412 217,405,469 outstanding-Basic Adjusted EBITDA Reconciliation Operating income 156,545 170,946 Depreciation and amortization 65,306 49,212 Other operating items excluded from EBITDA 7,103 15,048 computation Adjusted EBITDA 228,954 235,206 Adjusted EBITDA Margin as % of total 8.2 % 8.7 % revenues Third quarter and First nine months 2012 Results by Division (Unaudited) (In thousands of U.S. dollars) Three-Months % Incr. Constant Nine-Months % Incr. Constant ended / ended / September30, Curr. September30, Curr. (Decr.) Incr/(Decr) (Decr.) Incr/(Decr) 2012 2011 % 2012 2011 % Revenues Brazil 444,742 507,683 -12.4% 9.2% 1,314,454 1,399,746 -6.1% 10.5% Caribbean 68,091 67,963 0.2% 4.3% 203,547 200,019 1.8% 4.8% NOLAD 98,027 93,681 4.6% 8.7% 282,513 265,424 6.4% 12.5% SLAD 351,047 314,676 11.6% 17.9% 987,203 833,960 18.4% 23.8% TOTAL 961,907 984,003 -2.2% 11.6% 2,787,717 2,699,149 3.3% 14.4% Operating Income Brazil 39,002 63,468 -38.5% -23.3% 123,656 175,097 -29.4% -17.5% Caribbean 989 (1,475) -167.1% -189.6% (3,324) (937) -254.7% -199.8% NOLAD 713 316 125.6% 52.8% (1,989) (5,857) 66.0% 44.7% SLAD 36,067 29,967 20.4% 29.2% 84,471 63,677 32.7% 40.6% Corporate (16,715) (18,015) -7.2% 6.9% (46,269) (61,034) 24.2% 13.4% and Other TOTAL 60,056 74,261 -19.1% -5.8% 156,545 170,946 -8.4% 2.4% Adjusted EBITDA Brazil 50,342 80,625 -37.6% -22.1% 158,636 209,191 -24.2% -11.3% Caribbean 4,285 1,762 143.2% 166.1% 8,690 8,044 8.0% 16.6% NOLAD 7,217 6,961 3.7% 5.2% 17,647 14,829 19.0% 20.5% SLAD 42,985 36,296 18.4% 26.6% 104,929 79,229 32.4% 39.7% Corporate (21,218) (30,632) -30.7% -22.4% (60,948) (76,087) 19.9% 11.2% and Other TOTAL 83,611 95,012 -12.0% 2.1% 228,954 235,206 -2.7% 8.8% Average Exchange Rate per Quarter Brazil Mexico Argentina 3Q12 2.03 13.15 4.61 3Q11 1.63 12.30 4.17 Local $ per 1 US$ Summarized Consolidated Balance Sheet (In thousands of U.S. dollars) As of, As of, September 30, 2012 December 31, 2011 (Unaudited) ASSETS Current assets Cash and cash equivalents 244,137 176,301 Accounts and notes receivable, net 84,616 93,862 Other current assets (1) 306,910 318,451 Total current assets 635,663 588,614 Non-current assets Property and equipment, net 1,098,845 1,023,180 Net intangible assets and goodwill 60,268 58,419 Deferred income taxes 118,004 142,848 Other non-current assets (2) 63,426 62,345 Total non-current assets 1,340,543 1,286,792 Total assets 1,976,206 1,875,406 LIABILITIES AND EQUITY Current liabilities Accounts payable 154,975 184,113 Taxes payable (3) 122,043 138,989 Accrued payroll and other 242,809 183,549 liabilities Other current liabilities (4) 29,293 35,030 Provision for contingencies 135 41,959 Financial debt (5) 2,141 5,652 Total current liabilities 551,396 589,292 Non-current liabilities Accrued payroll and other 45,513 52,065 liabilities Provision for contingencies 17,998 23,077 Financial debt (5) 656,215 526,693 Deferred income taxes 3,956 4,650 Total non-current liabilities 723,682 606,485 Total liabilities 1,275,078 1,195,777 Equity Class A shares of common stock 351,654 351,654 Class B shares of common stock 132,915 132,915 Additional paid-in capital 15,196 5,734 Retained earnings 356,540 336,707 Accumulated other comprehensive (156,275) (148,389) loss Total Arcos Dorados Holdings Inc 700,030 678,621 shareholders’ equity Non-controlling interest in 1,098 1,008 subsidiaries Total Equity 701,128 679,629 Total liabilities and equity 1,976,206 1,875,406 (1) Includes "Other receivables", "Inventories", "Prepaid expenses and other current assets", "Derivative instruments", "Deferred income taxes" and "McDonald’s Corporation’s indemnification for contingencies ". (2) Includes "Miscellaneous", "Collateral deposits" and "McDonald´s Corporation´ indemnification for contingencies". (3) Includes "Income taxes payable" and "Other taxes payable". (4) Includes "Royalties payable to McDonald´s Corporation" and "Interest payable". (5) Includes "Short-term debt", "Long-term debt" and "Derivative instruments" Consolidated Financial Ratios (In thousands of U.S. dollars, except ratios) As of As of September 30, 2012 December 31, (Unaudited) 2011 Cash & cash equivalents 244,137 176,301 Total Financial Debt (i) 653,093 532,345 Net Financial Debt (ii) 408,956 356,044 Total Financial Debt / LTM Adjusted EBITDA 2.0 1.6 ratio Net Financial Debt / LTM Adjusted EBITDA 1.2 1.0 ratio (i) Total financial debt includes short-term debt, long-term debt and derivative instruments (including the asset portion of derivatives amounting to $5,263 as a reduction of financial debt) (ii) Total financial debt less cash and cash equivalents Contact: Investor Relations Contact Arcos Dorados - Director, Investor Relations Sofia Chellew, (+5411) 4711-2515 email@example.com www.arcosdorados.com
Arcos Dorados Reports Third Quarter 2012 Financial Results
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