Arcos Dorados Reports Second Quarter 2013 Financial Results

  Arcos Dorados Reports Second Quarter 2013 Financial Results

 Achieved double-digit comparable sales and organic revenue growth on strong
    contribution from largest regions and successful marketing initiatives

Business Wire

BUENOS AIRES -- August 6, 2013

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 second quarter ended
June 30, 2013.

Second Quarter 2013 Highlights

  *Revenues increased by 9.4% year-over-year to $989.2 million or by 16.9% on
    an organic basis. The reported results reflect double-digit comparable
    sales growth due to successful marketing initiatives and revenues from new
    restaurants.
  *Systemwide comparable sales increased by 11.6% year-over-year, driven by
    solid performances of the Company’s largest contributing countries.
  *Adjusted EBITDA remained stable at $67.4 million. Excluding currency
    translation and special items, Adjusted EBITDA grew 18.2% in comparison
    with 2Q12.
  *The Company reported net income of $8.8 million compared to $12.1 million
    the previous-year due primarily to lower operating results and higher
    foreign exchange losses resulting from currency depreciation.

“The achievement of double-digit comparable sales and organic revenue growth,
despite low consumer activity in Brazil and continued economic weakness in
Venezuela, underscores our brand strength, compelling marketing calendar, and
management’s ability to leverage its deep experience so that it may deliver
strong results in varying economic environments.”

“During the quarter, successful marketing activities drove traffic and
reinforced our leadership position. The lifestyle changes resulting from the
emergence of a strong middle class will continue providing strong demand for
our products.”

“Our cost containment initiatives continue to gain traction, resulting in G&A
leverage. First half results are on target and we currently expect to reach
our full year guidance. We will continue to focus on the areas in our control
such as marketing and promotions in order to sustain comparable sales growth”,
said Woods Staton, Chairman and Chief Executive Officer of Arcos Dorados.

Second Quarter 2013 Results

Consolidated
                                                                                 
                   Financial Highlights (Million US$)
                   2Q12      Special   Currency      Organic   2Q13        % As       %
                 (a)      Items    Translation  Growth   (a+b+c+d)  Reported  Organic
                             (b)       (c)           (d)
Total              1,858                                    1,971
Restaurants
Sales by
Company-operated   865.9               (64.6)        146.4     947.7       9.4%       16.9%
Restaurants
Revenues from
franchised        38.3             (3.2)        6.4      41.5       8.2%      16.7%
restaurants
Total Revenues    904.2            (67.8)       152.8    989.2      9.4%      16.9%
Comparable Sales                                                11.6%     
Adjusted EBITDA   67.3     (6.3)    (4.4)        10.9     67.4       0.2%      18.2%
Adjusted EBITDA    7.4%                                        6.8%
Margin
Net Income
attributable to    12.1      (6.3)     (1.3)         4.3       8.8         -27.4%
AD
No. of shares
outstanding       209,529                              209,749             
('000)
Basic EPS ($ per  0.06                                 0.04                
share)

(2Q13 = 2Q12 + Special items + Currency translation + Organic growth) Please
refer to “Definitions” section for further detail

Arcos Dorados’ second quarter revenues increased by 9.4% to $989.2 million, as
organic revenue growth of 16.9% was mainly offset by depreciation of local
currencies. Organic revenues were driven by systemwide comparable sales growth
of 11.6% and backed by the strong performance of marketing activities across
the region. The net addition of 113 restaurants during the last 12-month
period contributed $49.5 million in constant currency to revenues. Brazil and
SLAD were the primary contributors to revenue growth, reporting double-digit
increases in organic revenues and surpassing relevant consumer indicators.

Systemwide comparable sales growth was mainly driven by average check growth.
There is a strong marketing calendar in place for 2013, and in the second
quarter, the Company focused on highly differentiated activities, new product
and flavor introductions such as Quarter Pounder varieties and McFlurry
Suflair Dark in Brazil was a success.

Adjusted EBITDA for the second quarter was $67.4 million, in line with the
$67.3 million generated in the year-ago period. Adjusting for special items
and currency impact, organic Adjusted EBITDA grew by 18.2%, reflecting strong
comparable sales and contributions from new stores, along with improvements in
food & paper and G&A as a percentage of sales. However, they were partially
offset by increases in payroll as a percentage of sales.

Special items in both periods consisted of higher corporate G&A of $7.8
million explained by a net charge of $1.5 million in 2Q13 and a gain of $6.3
million in 2Q12 related to the CAD incentive plan. Furthermore, the Company
recognized an additional year-over-year benefit in 2Q13 of $1.5 million
related to the additional temporary royalty waiver from McDonald’s Corporation
for Venezuela (approved in April 2013).

The Adjusted EBITDA margin as a percentage of total revenues decreased by 62
basis points to 6.8% compared to the year-ago period. Margins in the Company’s
largest divisions, Brazil and SLAD, improved mainly due to strong comparable
sales in the quarter. However, these gains were offset by challenging
macroeconomic conditions in certain countries within NOLAD as well as the
Caribbean Division.

Net income attributable to the Company was $8.8 million in the second quarter
of 2013, compared to $12.1 million in the same period of 2012. The result
reflects lower operating results, higher foreign exchange charges and
increased interest expense recognized in the quarter, which was partially
offset by a decline in income taxes.

Non-operating Results

Non-operating results for the quarter reflected (i) an 11.8% increase in
overall funding costs (interest and derivative instruments expenses), mainly
due to higher debt levels, and partially offset by the positive impact of the
Brazilian devaluation over Real-denominated debt and (ii) higher foreign
currency exchange losses mainly resulting from the impact of currency
devaluation on intercompany loans.

Income tax expense for the quarter totaled $0.6 million, compared to $7.1
million in the year-ago period. The effective tax rate for the 2Q13 is the
consequence of income tax provision based on the first six months’ results and
which includes the negative impact on 1Q13 results of the official devaluation
of the Venezuelan currency.

The Company reported basic earnings per share (EPS) of $0.04 in the second
quarter of 2013, compared to $0.06 in the previous corresponding period. Total
weighted average shares for 2Q13 were 209,748,728 as compared to 209,529,412
in 2Q12, reflecting the issuance of shares as a result of the partial vesting
of restricted share units.

Analysis by Division:

Beginning January 2013, the Company reorganized its SLAD as well as its
Caribbean division. The Venezuela and Colombia operations are now part of the
Caribbean division. For comparison purposes, prior year information reflects
these changes.

Brazil                                                                 
Division
              Financial Highlights (Million US$)
              2Q12    Special   Currency      Organic   2Q13        % As       %
            (a)    Items    Translation  Growth   (a+b+c+d)  Reported  Organic
                      (b)       (c)           (d)
Total         677                                       746         10.2%
Restaurants
Comparable                                                          10.0%
Sales
Revenues     419.7          (26.2)       65.5     459.0      9.4%      15.6%
Adjusted     46.0           (3.0)        9.4      52.5       14.1%     20.5%
EBITDA

Brazil revenues grew by 9.4%, while excluding currency movements, organic
revenues grew 15.6%. Systemwide comparable sales growth of 10.0% in the
quarter was driven by increased average check over the past twelve months,
along with higher guest counts stemming from strong marketing activities.
These efforts drove increased traffic in the quarter and helped mitigate a
challenging consumer environment, including the impact of street
demonstrations in the second half of June.

The net addition of 69 restaurants during the last 12-month period contributed
$23.6 million to revenues in constant currency during the quarter. The
openings brought the restaurant count to a total of 746.

Adjusted EBITDA increased by 14.1% in the second quarter of 2013. Organic
Adjusted EBITDA grew 20.5% and resulted in a 48 basis point improvement in the
EBITDA margin in the quarter. The margin expansion was driven by revenue
growth, lower food & paper costs as a percentage of sales and lower occupancy
and other operating expenses as a percentage of sales. These factors were
partly offset by higher payroll as a percentage of sales, mainly due to (i)
initial burden of the migration to fixed schedule, but which is expected to
stabilize going forward, along with (ii) higher employee benefits.

NOLAD                                                                 
              Financial Highlights (Million US$)
              2Q12   Special   Currency      Organic   2Q13        % As       %
            (a)   Items    Translation  Growth   (a+b+c+d)  Reported  Organic
                     (b)       (c)           (d)
Total         492                                      502         2.0%
Restaurants
Comparable                                                         -4.2%
Sales
Revenues     95.0          4.6          2.0      101.6      6.9%      2.1%
Adjusted     7.4   0.0      (0.0)        (2.5)    4.9        -33.5%    -33.5%
EBITDA

NOLAD’s (Mexico, Panama and Costa Rica) revenues grew by 6.9% or 2.1% on an
organic basis, year-over-year. Systemwide comparable sales decreased by 4.2%
in the quarter, mainly due to the Easter holiday shift in Mexico along with
increased competition in Costa Rica. The net addition of 10 restaurants during
the last 12-month period contributed $5.3 million to revenues in constant
currency.

Adjusted EBITDA decreased to $4.9 million from $7.4 million in the previous
corresponding period. While food & paper costs as a percentage of sales
declined in the quarter, margins were negatively impacted by lower traffic
volumes, primarily affecting payroll costs as well as occupancy and other
operating expenses. As a result, the Adjusted EBITDA margin decreased to 4.8%.

SLAD                                                                   
              Financial Highlights (Million US$)
              2Q12    Special   Currency      Organic   2Q13        % As       %
            (a)    Items    Translation  Growth   (a+b+c+d)  Reported  Organic
                      (b)       (c)           (d)
Total         346                                       369         6.6%
Restaurants
Comparable                                                          21.4%
Sales
Revenues     205.8          (28.1)       57.4     235.2      14.3%     27.9%
Adjusted     20.0   0.0      (3.7)        8.9      25.2       26.1%     44.8%
EBITDA

SLAD’s (Argentina, Chile, Peru, Ecuador, and Uruguay) revenues grew by 14.3%
and 27.9% on an organic basis compared to the second quarter of 2012. Revenue
growth was driven by the Argentine operations as consumption and traffic grew,
favorably impacted by the strong performance of marketing activities while
average check continued to grow in line with inflation. As a result,
systemwide comparable sales for the division increased 21.4% in the quarter.
The net addition of 23 restaurants during the last 12-month period contributed
$14.0 million to revenues in constant currency in the quarter.

Adjusted EBITDA increased by 26.1% or 44.8% on an organic basis. Leverage in
most operating costs and expenses as a result of increased revenues resulted
in a 101 basis point year-over-year improvement in the Adjusted EBITDA margin
to 10.7%.

Caribbean                                                              
Division
              Financial Highlights (Million US$)
              2Q12    Special   Currency      Organic   2Q13        % As       %
            (a)    Items    Translation  Growth   (a+b+c+d)  Reported  Organic
                      (b)       (c)           (d)
Total         343                                       354         3.2%
Restaurants
Comparable                                                          14.6%
Sales
Revenues     183.6          (18.1)       27.9     193.4      5.3%      15.2%
Adjusted     12.9   1.5      (1.4)        (1.8)    11.2       -13.2%    -15.6%
EBITDA

The Caribbean division (Colombia, Venezuela, Puerto Rico, Martinique,
Guadeloupe, Aruba, Curaçao, French Guiana, Trinidad & Tobago, and the US
Virgin Islands of St. Thomas and St. Croix) reported revenue growth of 5.3%.
Excluding currency variations principally related to the devaluation of the
Venezuelan Bolivar, organic revenues increased by 15.2% compared to the 2Q12.
Systemwide comparable sales grew 14.6%. Despite challenging consumer
conditions, the performance of products such as McMenu in Venezuela and
Chicken McBites in Puerto Rico helped mitigate traffic declines. The net
addition of 11 restaurants during the last 12-month period contributed $6.5
million to revenues in constant currency during the quarter.

Adjusted EBITDA declined by 13.2% and amounted to $11.2 million in 2Q13. The
Company recognized a royalty waiver from McDonald’s Corporation for Venezuela
of $2.8 million in the 2Q13 (including $0.8 million of retroactive adjustment
as a result of an increase in the full year amount for 2013 from $5 million to
$8 million), versus $1.3 million recognized in the 2Q12. On an organic basis,
Adjusted EBITDA decreased by 15.6% compared to one year ago, reflecting higher
cost of dollar-denominated inputs in Venezuela as well as soft performance in
Colombia. These factors more than offset revenue growth, and improved payroll
and G&A as a percentage of sales for the division. As a result, the Adjusted
EBITDA margin decreased by 124 basis points to 5.8%.

New Unit Development

Total              June         Mar.        Dec.        Sept.       June
Restaurants     ‘13       ‘13      ‘12      ‘12      ‘12    
(eop)*
Brazil             746       735      731      691      677
NOLAD              502          503         503         496         492
SLAD               369          366         361         350         346
Caribbean          354       355      353      343      343
TOTAL              1,971     1,959    1,948    1,880    1,858
LTM Net            113       116      108      103      91
Openings

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

Note: Information for SLAD and Caribbean reflects the new division
restructuring

Gross openings of 130 restaurants over the twelve month period ended June 30,
2013, resulted in a total of 1,971 restaurants, 2,057 Dessert Centers, and 340
McCafe’s. The Company’s openings plan remains on-track, and more than 90% of
full year 2013 openings were secured as of period-end.

Balance Sheet & Cash Flow Highlights

Cash and cash equivalents were $128.8 million at June 30, 2013. The Company’s
total financial debt (including derivative instruments) was $691.1 million.
Net debt was $562.3 million and the Net Debt/Adjusted EBITDA ratio was 1.7x at
June 30, 2013.

Cash generated by operating activities was $18.6 million in the second quarter
of 2013. During the quarter, capital expenditures amounted to $49.4 million.

First Half 2013

For the six months ended June 30, 2013, the Company’s revenues grew by 7.7%
(16.3% on an organic basis) to $1,966.1 million. Additionally, Adjusted EBITDA
reached $136.1 million, a decrease of 6.4% compared to the first half of 2012.
On an organic basis, Adjusted EBITDA increased by 9.2%, driven by growth in
Brazil and SLAD. Revenue growth together with improved G&A as a percentage of
sales was partially offset mainly by currency devaluation impact over
dollar-denominated costs, particularly in Venezuela, as well as payroll
pressure. Year-to-date consolidated net income amounted to $2.2 million,
compared with $37.5 million in the first half of last year, mainly explained
by lower operating results and foreign exchange losses (generated by the
official devaluation of Venezuela’s currency in February of 2013 as well as by
the impact of the depreciation of local currencies on intercompany loans)
partially offset by lower income taxes. The effective tax rate for the first
six months of the year was 74.8% and is also impacted by the aforementioned
devaluation in Venezuela. Additionally, capital expenditures amounted to $86.3
million for the period.

Quarter Highlights & Recent Developments

Dividend

On July 5, 2013, the Company paid the second installment of its 2013
Dividends.

The total amount paid was $12.5 million or $0.0596 per share on outstanding
Class A and Class B shares.

SLAD Appointment

Alejandro Yapur was appointed Divisional President of SLAD. Previously,
Alejandro was the Managing Director of the Southern Cone Region. He graduated
from the Universidad de Estudios Empresariales in Buenos Aires, and
subsequently went on to earn a Master’s degree in Communications from
Universidad Austral. Alejandro has 26 years of experience in the Company and
his career commenced as a crew member of the first McDonald’s restaurant in
Argentina.

Board Member Appointment

José Fernandez, previously the Divisional President of operations for the
South Latin America Division (SLAD), was appointed a board member (Class iii),
starting in October 2013. He is a Mechanical Engineer from Instituto
Tecnológico Buenos Aires. José began his career at McDonald’s in 1986 and held
the positions of Development Director, Development Vice President and Managing
Director of Argentina before becoming the Divisional President of SLAD.

Definitions:

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

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

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

About Arcos Dorados

Arcos Dorados is the world’s largest McDonald’s franchisee in terms of
systemwide sales and number of restaurants, operating the largest quick
service restaurant (“QSR”) chain in Latin America and the Caribbean. It has
the exclusive right to own, operate and grant franchises of McDonald’s
restaurants in 20 Latin American and Caribbean countries and territories,
including Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curaçao,
Ecuador, French Guyana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto
Rico, St. Croix, St. Thomas, Trinidad & Tobago, Uruguay and Venezuela. The
Company operates or franchises 1,948 McDonald’s-branded restaurants with over
90,000 employees serving approximately 4.3 million customers a day, as of
December 2012. 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 2013. 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: 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.

Second Quarter & First Half 2013 Consolidated Results

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

                                                 
Second Quarter & First Half 2013 Consolidated Results
(In thousands of U.S. dollars, except per share data)
                                                                                  
                    For Three-Months ended          For Six-Months ended
                    June 30,                        June 30,
                    2013           2012            2013           2012
REVENUES
Sales by
Company-operated      947,698         865,877         1,881,761       1,748,716
restaurants
Revenues from
franchised           41,487         38,335         84,334         77,094
restaurants
Total Revenues       989,185        904,212        1,966,095      1,825,810
OPERATING COSTS
AND EXPENSES
Company-operated
restaurant
expenses:
Food and paper        (334,411)       (308,087)       (665,658)       (612,747)
Payroll and           (208,809)       (181,403)       (409,217)       (368,706)
employee benefits
Occupancy and
other operating       (260,693)       (237,936)       (523,155)       (474,935)
expenses
Royalty fees          (45,750)        (42,944)        (92,192)        (86,937)
Franchised
restaurants -         (15,911)        (13,745)        (31,619)        (27,849)
occupancy
expenses
General and
administrative        (83,119)        (74,962)        (163,452)       (152,591)
expenses
Other operating      (2,143)        (3,862)        (5,236)        (5,556)
expenses, net
Total operating
costs and            (950,836)      (862,939)      (1,890,529)    (1,729,321)
expenses
Operating income     38,349         41,273         75,566         96,489
Net interest          (15,822)        (13,960)        (30,787)        (25,939)
expense
Gain (loss) from
derivative            30              (163)           261             (1,326)
instruments
Foreign currency      (12,791)        (7,224)         (35,703)        (11,111)
exchange results
Other
non-operating        (374)          (707)          (690)          (1,260)
expenses, net
Income before        9,392          19,219         8,647          56,853
income taxes
Income tax           (617)          (7,077)        (6,469)        (19,223)
expense
Net income           8,775          12,142         2,178          37,630
Plus(Less): Net
loss (income)
attributable to      10             (34)           5              (127)
non-controlling
interests
Net income
attributable to      8,785          12,108         2,183          37,503
Arcos Dorados
Holdings Inc.
Earnings per
share information                                                
($ per share):
Basic net income    $ 0.04          $ 0.06          $ 0.01          $ 0.18
per common share
Weighted-average
number of common     209,748,728    209,529,412    209,639,676    209,529,412
shares
outstanding-Basic
Adjusted EBITDA
Reconciliation
Operating income      38,349          41,273          75,566          96,489
Depreciation and      28,535          22,609          57,656          42,738
amortization
Other operating
charges excluded     520            3,381          2,875          6,116
from EBITDA
computation
Adjusted EBITDA      67,404         67,263         136,097        145,343
Adjusted EBITDA
Margin as % of        6.8%            7.4%            6.9%            8.0%
total revenues
                                                                                  

                                                       
Second Quarter & First Half 2013 Results by Division
(In thousands of U.S. dollars)
                                                                                                        
            2Q                                            1H
            Three-Months ended   % Incr.  Constant      Six-Months ended       % Incr.  Constant
            June 30,              /         Curr.         June 30,                /         Curr.
            2013      2012       (Decr.)   Incr/(Decr)   2013       2012        (Decr.)   Incr/(Decr)
                                            %                                               %
Revenues
Brazil      459,031    419,743    9.4%      15.6%         919,953     869,712     5.8%      15.7%
Caribbean   193,402    183,581    5.3%      15.2%         384,862     359,779     7.0%      14.6%
NOLAD       101,564    95,043     6.9%      2.1%          199,578     184,486     8.2%      4.7%
SLAD        235,188    205,845    14.3%     27.9%         461,702     411,833     12.1%     24.2%
TOTAL       989,185    904,212    9.4%      16.9%         1,966,095   1,825,810   7.7%      16.3%
                                                                                                        
                                                                                                        
Operating
Income
Brazil      36,988     34,158     8.3%      14.3%         75,735      84,654      -10.5%    -2.2%
Caribbean   5,444      5,596      -2.7%     21.7%         11,054      12,514      -11.7%    5.8%
NOLAD       (2,693)    858        -413.9%   -362.2%       (5,171)     (2,702)     -91.4%    -71.2%
SLAD        19,455     15,489     25.6%     46.5%         34,170      31,577      8.2%      23.6%
Corporate   (20,845)   (14,828)   40.6%     63.0%         (40,222)    (29,554)    -36.1%    -57.3%
and Other
TOTAL       38,349     41,273     -7.1%     2.0%          75,566      96,489      -21.7%    -13.0%
                                                                                                        
                                                                                                        
Adjusted
EBITDA
Brazil      52,479     45,984     14.1%     20.5%         107,583     108,294     -0.7%     8.7%
Caribbean   11,222     12,928     -13.2%    -2.5%         23,444      25,965      -9.7%     -0.6%
NOLAD       4,896      7,361      -33.5%    -33.5%        9,617       10,430      -7.8%     -8.4%
SLAD        25,191     19,970     26.1%     44.8%         45,596      40,384      12.9%     27.1%
Corporate   (26,384)   (18,980)   39.0%     58.3%         (50,143)    (39,730)    -26.2%    -43.5%
and Other
TOTAL       67,404     67,263     0.2%      6.7%          136,097     145,343     -6.4%     1.4%
                                                                                                        
                                                                                                        
Average Exchange Rate per                
Quarter
                       Brazil     Mexico    Argentina
2Q13                   2.07       12.48     5.24
2Q12                1.96      13.53    4.45
                                                                                                        
Local $ per 1 US$
                                                                                                        

                                                                    
Summarized Consolidated Balance
Sheet
(In thousands of U.S. dollars)
                                                                             
                                        June 30, 2013    December 31,
                                                            2012
ASSETS
Current assets
Cash and cash equivalents               128,841             184,851
Accounts and notes receivable,          101,812             105,019
net
Other current assets (1)                319,869             311,628
Total current assets                    550,522             601,498
Non-current assets
Property and equipment, net             1,144,619           1,176,350
Net intangible assets and               64,075              67,271
goodwill
Deferred income taxes                   120,828             133,708
Other non-current assets (2)            87,514              70,336
Total non-current assets             1,417,036        1,447,665
Total assets                         1,967,558        2,049,163
LIABILITIES AND EQUITY
Current liabilities
Accounts payable                        211,799             244,365
Taxes payable (3)                       111,431             125,713
Accrued payroll and other               181,951             150,690
liabilities
Other current liabilities (4)           41,703              50,845
Provision for contingencies             108                 507
Financial debt (5)                      56,714              6,154
Total current liabilities               603,706             578,274
Non-current liabilities
Accrued payroll and other               35,383              40,115
liabilities
Provision for contingencies             16,759              20,092
Financial debt (5)                      635,741             655,365
Deferred income taxes                   7,315               9,007
Total non-current liabilities        695,198          724,579
Total liabilities                    1,298,904        1,302,853
Equity
Class A shares of common stock          358,754             351,654
Class B shares of common stock          132,915             132,915
Additional paid-in capital              16,256              18,634
Retained earnings                       352,616             400,761
Accumulated other comprehensive      (192,845)        (158,821)
loss
Total Arcos Dorados Holdings Inc     667,696          745,143
shareholders’ equity
Non-controlling interest in          958              1,167
subsidiaries
Total equity                         668,654          746,310
Total liabilities and equity         1,967,558        2,049,163
                                                                            

(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
                                             June 30,       December 31,
                                         2013        2012
Cash & cash equivalents                      128,841        184,851
Total Financial Debt (i)                     691,146        659,788
Net Financial Debt (ii)                      562,305        474,937
Total Financial Debt / LTM Adjusted          2.1            1.9
EBITDA ratio
Net Financial Debt / LTM Adjusted            1.7            1.4
EBITDA ratio
                                                    

(i) Total financial debt includes short-term debt, long-term debt and
derivative instruments (including the asset portion of derivatives amounting
to $1.3 million and $1.7 million as a reduction of financial debt as of June
30, 2013 and December 31, 2012, respectively).

(ii) Total financial debt less cash and cash equivalents.

Contact:

Arcos Dorados Holdings, Inc.
Investor Relations:
Sofia Chellew, (+5411) 4711-2515
Director, Investor Relations
sofia.chellew@ar.mcd.com
www.arcosdorados.com
 
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