Arcos Dorados Reports Third Quarter 2013 Financial Results

  Arcos Dorados Reports Third Quarter 2013 Financial Results

 Achieved double-digit comparable sales, organic revenue and Adjusted EBITDA
       growth supported by margin improvement in the largest division.

Business Wire

BUENOS AIRES, Argentina -- November 5, 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 third quarter ended
September 30, 2013.

Third Quarter 2013 Highlights

  *Revenues increased by 6.2% year-over-year to $1.0 billion or by 18.5% on
    an organic basis. Revenue growth reflected double-digit comparable sales
    increase and revenues from new restaurants, which were partially offset by
    the impact of the depreciation of local currencies versus the US dollar.
  *Systemwide comparable sales increased by 12.6% year-over-year, driven by
    broad based growth across the Company’s four divisions.
  *Adjusted EBITDA gained 8.1% versus the 3Q12 to $90.4 million. Excluding
    currency translation and special items, Adjusted EBITDA grew 25.8%
  *The Company reported net income of $19.6 million compared to $32.6 million
    in the prior-year period, due primarily to increased net interest expense
    as a result of a one-time charge (of $12.7 million or $ 0.06 per share)
    related to the Debt Tender and Exchange Offer.

“Double-digit third quarter comparable sales, organic revenue and Adjusted
EBITDA growth underscore the strength of the partnership between Arcos
Dorados’ operations with the McDonald’s brand in Latin America. We overcame
continued soft consumption across some markets by focusing on those factors
within our control, namely the continued successful execution of a strong
marketing calendar. This resulted in broad based comparable sales growth
across all four divisions, reinforcing our leading brand position throughout
the region and increasing market share compared to our largest competitors.
During the quarter, we also completed a successful debt transaction, which
reduces our blended interest rate and extends the average maturity of our

“Given solid results for the first nine months of the year, we continue to
expect to report revenues within the 2013 guidance range and expect organic
growth in Adjusted EBITDA to exceed the range. While we have made excellent
headway in improving the efficiency of our operations, we recognise that there
is more to be done in this area. Given continued mixed signals in the regional
macroeconomic environment, we plan to open 130 new restaurants by year-end and
moderate the pace of our restaurant openings in the near term. In this low
growth macro economic environment we will redouble our efforts to improve
profitability,” said Woods Staton, Chairman and Chief Executive Officer of
Arcos Dorados.

Third Quarter 2013 Results


                   Financial Highlights (Million US$)
                                 Special     Currency        Organic
                     3Q12                                                3Q13          % As         %
                            Items     Translation   Growth                           Organic
                     (a)                                                 (a+b+c+d)     Reported
                                 (b)         (c)             (d)
Total                1,880                                       1,993                 
Sales by
Company-operated     920.5                   (112.9)         169.5       977.2         6.2%         18.4%
Revenues from
franchised         41.4               (5.5)         8.2       44.1        6.4%       19.8%
Total Revenues     961.9              (118.4)       177.7     1,021.2     6.2%       18.5%
Comparable Sales                                                      12.6%      
Adjusted EBITDA    83.6      (2.2)     (11.5)        20.5      90.4        8.1%       25.8%
Adjusted EBITDA      8.7%                                                8.8%          1.8%
Net Income
attributable to      32.6        (14.9)      (4.9)           6.7         19.6          -40.0%
No. of shares
outstanding        209,529                                  209,866               
EPS ($ per         0.16                                     0.09                  

(3Q13 = 3Q12 + Special items + Currency translation + Organic growth) Please
refer to “Definitions” section for further detail

Arcos Dorados’ third quarter revenues increased by 6.2% to $1.0 billion, as
organic revenue growth of 18.5% was partially offset by depreciation of local
currencies. Strong organic revenues were driven by systemwide comparable sales
growth of 12.6% and supported by successful marketing activities across the
region. The net addition of 113 restaurants during the last 12-month period
contributed $58.1 million in constant currency to revenues.

Systemwide comparable sales growth of 12.6% was primarily driven by average
check growth. The Company has a strong marketing calendar in place for 2013.
The momentum created by the recent successful launch of Chicken McBites in
most markets underpinned sales in the quarter. In addition, the family
business performed well.

Adjusted EBITDA for the third quarter was $90.4 million, representing an 8.1%
increase compared to the same period of 2012. Adjusting for special items and
currency impact, organic Adjusted EBITDA grew by 25.8%. With the exception of
payroll, the Company was able to lower most cost items as a percentage of
sales in the quarter. This achievement reflected strong revenue growth,
combined with certain hedges, G&A leverage, and other operating efficiencies.

Special items consisted of higher corporate G&A of $2.9 million, explained by
a net gain of $2.9 million in 3Q12 related to the CAD incentive plan, versus a
minimal net charge in 3Q13. Furthermore, the Company recognized an additional
year-over-year benefit in 3Q13 of $0.8 million related to the temporary
royalty waiver from McDonald’s Corporation for Venezuela.

The Adjusted EBITDA margin as a percentage of total revenues increased by 16
basis points to 8.8% compared to the year-ago period, mainly due to improved
margins in Brazil and NOLAD.

Net income attributable to the Company was $19.6 million in the third quarter
of 2013, compared to $32.6 million in the same period of 2012. Improved
operating results, along with an improvement in foreign exchange, were more
than offset by increased net interest expense and higher income tax recognized
in the quarter.

Non-operating Results

Non-operating results for the quarter reflected (i) a 107.7% increase in
overall funding costs (net interest and derivative instruments expenses),
mainly due to a $12.7 million one-time charge (or $0.06 per share) related to
the Debt Tender and Exchange Offer (please refer to “Recent Developments”)
disclosed as a Special Item, and (ii) a foreign currency exchange gain of $0.4
million compared with a loss of $2.0 million in the third quarter of 2012.

Income tax expense for the quarter totaled $15.0 million, compared to $11.4
million in the year-ago period. The effective 3Q13 tax rate was mainly
explained by the before-mentioned one-time charge related to the Debt Tender &
Exchange Offer and recent tax reforms in the Caribbean.

The Company reported basic earnings per share (EPS) of $0.09 in the third
quarter of 2013, compared to $0.16 in the previous corresponding period.

Analysis by Division:

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

Brazil Division

               Financial Highlights (Million US$)
                            Special     Currency        Organic
                  3Q12                                              3Q13          % As         %
                      Items     Translation   Growth                           Organic
                  (a)                                               (a+b+c+d)     Reported
                            (b)         (c)             (d)
Total             691                                       762         10.3%     
Comparable                                                                        5.6%
Revenues       444.7            (57.1)        56.9      444.5       0.0%       12.8%
Adjusted       50.3             (7.1)         13.1      56.3        11.8%      26.0%

Brazil revenues were flat in the third quarter when compared with the same
period of 2012. Excluding currency movements, organic revenues grew by 12.8%.
Systemwide comparable sales growth of 5.6% in the quarter was driven by
increased average check. Comparatively, traffic during the month of September
2012 was stronger, due primarily to the inclusion of the Big Mac sandwich in
the Value Platform at that time. During the quarter, the Company’s Chicken
McBites offering surpassed internal forecasts, while the family business and a
compelling Affordability platform, also underpinned sales.

The net addition of 71 restaurants during the last 12-month period contributed
$31.5 million to revenues in constant currency during the quarter. The
openings brought the restaurant count to a total of 762.

Adjusted EBITDA increased by 11.8% in the third quarter of 2013, or 26.0% on
an organic basis. Adjusted EBITDA margin improved 135 basis points to 12.7% in
3Q13. While revenue growth remained flat when compared to 3Q12, margin
expansion was driven by reduced food & paper costs, as well as lower occupancy
and other operating expenses (mainly Utilities) as a percentage of sales.
These factors were partly offset by increased G&A and higher payroll as a
percentage of sales, mainly due to (i) the initial impact of the migration to
fixed work schedules, along with (ii) a higher employee benefits provision.
Higher costs stemming from the transition to fixed schedules are expected to
stabilize going forward.


               Financial Highlights (Million US$)
                           Special     Currency        Organic
                  3Q12                                             3Q13          % As         %
                     Items     Translation   Growth                           Organic
                  (a)                                              (a+b+c+d)     Reported
                           (b)         (c)             (d)
Total             496                                      503         1.4%      
Comparable                                                                       1.2%
Revenues       98.0            1.2           6.5       105.7       7.9%       6.6%
Adjusted       7.2    0.0       0.1           0.8       8.1         12.8%      11.2%

NOLAD’s (Mexico, Panama and Costa Rica) revenues grew by 7.9% or 6.6% on an
organic basis, year-over-year. Systemwide comparable sales increased by 1.2%
in the quarter, mainly driven by the strong performance of the family business
and the Desserts category, despite a soft consumer environment in Mexico. The
net addition of 7 restaurants during the last 12-month period contributed $5.7
million to revenues in constant currency.

Adjusted EBITDA increased by 12.8% to $8.1 million from $7.2 million in the
previous corresponding period. Margins benefited from lower food & paper costs
as a percentage of sales, which more than offset increased payroll as a
percentage of sales. Consequently, the Adjusted EBITDA margin increased by 34
basis points to 7.7%.


               Financial Highlights (Million US$)
                            Special     Currency        Organic
                  3Q12                                              3Q13          % As         %
                      Items     Translation   Growth                           Organic
                  (a)                                               (a+b+c+d)     Reported
                            (b)         (c)             (d)
Total             350                                       372         6.3%      
Comparable                                                                        25.0%
Revenues       226.7            (41.0)        70.6      256.3       13.1%      31.2%
Adjusted       28.6    0.0       (5.6)         8.9       32.0        11.9%      31.3%

SLAD’s (Argentina, Chile, Peru, Ecuador, and Uruguay) revenues grew by 13.1%
and 31.2% on an organic basis, compared to the third quarter of 2012. During
the quarter, successful products launches, such as Chicken McBites, along with
the solid performance of the family business, underpinned a 25.0% increase in
systemwide comparable sales for the division. The net addition of 22
restaurants during the last 12-month period contributed $15.8 million to
revenues in constant currency in the quarter.

Adjusted EBITDA increased by 11.9% or 31.3% on an organic basis, driven by
revenue growth, which was partially offset by higher occupancy and other
expenses. Adjusted EBITDA margin for the quarter reached 12.5%.

Caribbean Division

               Financial Highlights (Million US$)
                            Special     Currency        Organic
                  3Q12                                              3Q13          % As         %
                      Items     Translation   Growth                           Organic
                  (a)                                               (a+b+c+d)     Reported
                            (b)         (c)             (d)
Total             343                                       356         3.8%      
Comparable                                                                        22.5%
Revenues       192.5            (21.5)        43.7      214.7       11.5%      22.7%
Adjusted       18.7    0.8       (2.6)         2.4       19.2        2.9%       13.9%

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 11.5%.
Excluding currency variations principally related to the devaluation of the
Venezuelan Bolivar, organic revenues increased by 22.7% compared to the 3Q12.
Systemwide comparable sales grew 22.5%, driven by increased average check.
Despite challenging conditions in markets like Venezuela, brand preference
remains strong. The Company’s vast product offering and successful regional
and local marketing campaigns, such as Chicken McBites in Colombia and the New
Quarter Pounder Flavors in Puerto Rico, helped mitigate traffic declines in
the division. The net addition of 13 restaurants during the last 12-month
period contributed $5.2 million to revenues in constant currency during the

Adjusted EBITDA grew by 2.9% and amounted to $19.2 million in 3Q13. The
Company recognized a royalty waiver from McDonald’s Corporation for Venezuela
of $2.0 million in the 3Q13, versus $1.3 million in the 3Q12. On an organic
basis, Adjusted EBITDA increased by 13.9% compared to the year-ago period. The
Adjusted EBITDA margin declined 75 basis points to 9.0%, as higher
dollar-denominated food and paper costs in Venezuela more than offset revenue
growth and improvements in all other cost items in the division as a
percentage of sales.

New Unit Development

Total Restaurants       Sept.    June ‘13   Mar.     Dec.     Sept.
(eop)*                    ‘13                     ‘13        ‘12        ‘12
Brazil                    762      746        735      731      691
NOLAD                     503        502          503        503        496
SLAD                      372        369          366        361        350
Caribbean                 356      354        355      353      343
TOTAL                     1,993    1,971      1,959    1,948    1,880
LTM Net Openings          113      113        116      108      103

*Considers company-operated and franchised restaurants at period-end
Note: Information for SLAD and Caribbean reflects the new division

Gross openings of 129 restaurants over the twelve month period ended September
30, 2013, resulted in a total of 1,993 restaurants, 2,157 Dessert Centers, and
344 McCafe’s.

Balance Sheet & Cash Flow Highlights

Cash and cash equivalents were $338.0 million at September 30, 2013. The
Company’s total financial debt (including derivative instruments) was $911.5
million. Net debt was $573.5 million and the Net Debt/Adjusted EBITDA ratio
was 1.7x at September 30, 2013.

Cash generated by operating activities was $79.1 million in the third quarter
of 2013. Additionally, net cash provided by financing activities totaled
$193.7 million. During the quarter, capital expenditures amounted to $62.8

First Nine Months of 2013

For the nine months ended September 30, 2013, the Company’s revenues grew by
7.2% (17.0% on an organic basis) to $3.0 billion. Additionally, Adjusted
EBITDA was broadly stable year-over-year, declining 1.1% to $226.5 million
compared to the first nine months of 2012. On an organic basis, Adjusted
EBITDA increased by 16.0%, driven by strong growth in Brazil and SLAD. Revenue
growth, together with improved G&A as a percentage of sales, was partially
offset by higher food and paper costs as a percentage of sales (due to the
impact of currency devaluation on dollar-denominated costs, particularly in
Venezuela), as well as higher payroll as a percentage of sales. Year-to-date
consolidated net income amounted to $21.8 million, compared with $70.1 million
in the first nine months of last year. The result reflected lower operating
income, higher foreign exchange losses (generated by the depreciation of local
currencies, including the devaluation of the official exchange rate in
Venezuela) and higher net interest expense (primarily due to the one-time
charge related to the Debt Tender and Exchange Offer), all of which were
partially offset by lower income taxes. The effective tax rate for the first
nine months of the year was 49.7%, compared to 30.4% in 2012 and was impacted
by the aforementioned special items. Excluding the impact of such charges
(Venezuela devaluation and Debt transaction), the effective tax rate would
have remained largely stable. Additionally, capital expenditures amounted to
$149.2 million for the period.

Quarter Highlights & Recent Developments

CAD Hedge

During 3Q 2013, the Company renewed the Total Return Equity Swap transaction
which it entered into in September 2012 to reduce the impact that its stock
price variation has on the income statement related to compensation expense
from the Long Term Incentive Plan (the CAD program). The term of the renewal
is one year.


On October 4, 2013, the Company paid the third 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.

Debt Tender & Exchange Offer

On October 7, 2013, the Company concluded a Debt Tender and Exchange Offer
launched on September 10, 2013. Under the terms of the transaction, Arcos
Dorados offered to exchange its outstanding 7.50% Senior Notes due 2019 for
the Company’s newly issued US dollar-denominated 6.625% Senior Notes due 2023,
and to purchase for cash the outstanding aforementioned 2019 bonds. The total
aggregate principal amount of 2019 Existing Notes validly tendered in the
Exchange Offer and tendered to purchase for cash was US$90.5 million and
US$118.4 million, respectively. As a result, the Company issued a total amount
of US$473.8 million of 2023 notes.

In addition to the uses connected with the Debt Tender and Exchange Offer, the
majority of the proceeds from the issuance, after fees, commissions and
expenses, were subsequently dedicated to repay certain short-term debt, unwind
a cross-currency swap and for general corporate purposes. As a result of the
transaction, the Company was able to reduce its blended interest rate,
including new hedges, by up to 30 b.p. and extend the average maturity of its
debt by almost two years.

Brazil Employee Benefits Ruling: Programa de Alimentação do Trabalhador (PAT)

In October, Brazil authorities issued a preliminary ruling in favor of the
Company’s legal appeal regarding the employee meals and benefits provision.
The Company is currently evaluating this decision and its potential benefit.

Guidance 2013

Given solid year-to-date results, the Company now expects the following growth
rates with respect to 2012, on an organic basis:

  *Reiterate growth within the range of 15-18%
  *Adj. EBITDA growth exceeding 8-10%%; and an
  *Effective tax rate for the year in the range of 35-38% (excluding
    financing activities)

Given slower economic growth as well as a continued consumer pressure in the
near term in important parts of the region, the Company is delaying the
opening of certain restaurants previously slated for 2013. As a result, the
Company currently expects approximately 130 gross openings in 2013, compared
with a prior estimate of 140. Additionally, total capital expenditures are
predicted to reach approximately US$270 million.


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 1,993 McDonald’s-branded restaurants with over
90,000 employees serving approximately 4.3 million customers a day, as of
September 2013. 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

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

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.

Third Quarter & First Nine Months 2013 Consolidated Results

(In thousands of U.S. dollars, except per share data)
                      For Three-Months ended          For Nine-Months ended
                      Sep 30,                         Sep 30,
                      2013          2012            2013          2012
Sales by
Company-operated      977,156         920,513         2,858,917       2,669,229
Revenues from
franchised            44,056          41,394          128,390         118,488
Total Revenues        1,021,212       961,907         2,987,307       2,787,717
Food and paper        (341,898)       (323,061)       (1,007,556)     (935,808)
Payroll and           (205,901)       (186,320)       (615,118)       (555,026)
employee benefits
Occupancy and
other operating       (263,387)       (250,436)       (786,542)       (725,371)
Royalty fees          (47,539)        (45,662)        (139,731)       (132,599)
restaurants -         (16,034)        (13,348)        (47,653)        (41,197)
General and
administrative        (76,820)        (76,614)        (240,272)       (229,205)
Other operating       (7,360)         (6,410)         (12,596)        (11,966)
expenses, net
Total operating
costs and             (958,939)       (901,851)       (2,849,468)     (2,631,172)
Operating income      62,273          60,056          137,839         156,545
Net interest          (27,784)        (13,812)        (58,571)        (39,751)
(Loss) Gain from
derivative            (303)           289             (42)            (1,037)
Foreign currency      448             (1,960)         (35,255)        (13,071)
exchange results
non-operating         (168)           (463)           (858)           (1,723)
expenses, net
Income before         34,466          44,110          43,113          100,963
income taxes
Income tax            (14,955)        (11,449)        (21,424)        (30,672)
Net income            19,511          32,661          21,689          70,291
Plus(Less): Net
loss (income)
attributable to       70              (53)            75              (180)
Net income
attributable to       19,581          32,608          21,764          70,111
Arcos Dorados
Holdings Inc.
Earnings per
share information                                              
($ per share):
Basic net income      $ 0.09        $ 0.16          $ 0.10        $ 0.33
per common share
number of common      209,866,194     209,529,412     209,716,012     209,529,412
Adjusted EBITDA
Operating income      62,273          60,056          137,839         156,545
Depreciation and      28,823          22,568          86,479          65,306
(income) charges
excluded from         (721)           987             2,154           7,103
Adjusted EBITDA       90,375          83,611          226,472         228,954
Adjusted EBITDA
Margin as % of        8.8%            8.7%            7.6%            8.2%
total revenues

Third Quarter & First Nine Months 2013 Results by Division

(In thousands of U.S. dollars)
                3Q                                                     YTD
                Three-Months ended       % Incr.   Constant        Nine-Months ended         % Incr.   Constant
                Sep 30,                    /           Curr.           Sep 30,                     /           Curr.
                2013        2012       (Decr.)   Incr/(Decr)     2013        2012        (Decr.)   Incr/(Decr)
                                                       %                                                       %
Brazil          444,537       444,742      0.0%        12.8%           1,364,490     1,314,454     3.8%        14.7%
Caribbean       214,678       192,485      11.5%       22.7%           599,540       552,264       8.6%        17.4%
NOLAD           105,745       98,027       7.9%        6.6%            305,323       282,513       8.1%        5.4%
SLAD            256,252     226,653    13.1%     31.2%           717,954     638,486     12.4%     26.7%
TOTAL           1,021,212   961,907    6.2%      18.5%           2,987,307   2,787,717   7.2%      17.0%

Brazil          41,979        39,002       7.6%        21.2%           117,714       123,656       -4.8%       5.2%
Caribbean       11,937        13,271       -10.1%      6.6%            22,991        25,785        -10.8%      6.2%
NOLAD           328           713          -54.0%      -55.1%          (4,843)       (1,989)       -143.5%     -116.5%
SLAD            26,364        23,785       10.8%       31.1%           60,534        55,362        9.3%        26.8%
Corporate       (18,335)    (16,715)   9.7%      34.3%           (58,557)    (46,269)    -26.6%    -49.0%
and Other
TOTAL           62,273      60,056     3.7%      17.3%           137,839     156,545     -11.9%    -1.4%
Brazil          56,303        50,342       11.8%       26.0%           163,886       158,636       3.3%        14.2%
Caribbean       19,239        18,700       2.9%        17.0%           42,683        44,665        -4.4%       6.8%
NOLAD           8,142         7,217        12.8%       11.2%           17,759        17,647        0.6%        -0.4%
SLAD            31,959        28,570       11.9%       31.3%           77,555        68,954        12.5%       28.9%
Corporate       (25,268)    (21,218)   19.1%     36.4%           (75,411)    (60,948)    -23.7%    -39.0%
and Other
TOTAL           90,375      83,611     8.1%      21.9%           226,472     228,954     -1.1%     9.4%
Average Exchange Rate per Quarter
                              Brazil       Mexico      Argentina
3Q13                          2.29         12.91       5.59
3Q12                    2.03       13.15     4.61
Local $
per 1 US$

Summarized Consolidated Balance Sheets

(In thousands of U.S. dollars)
                                  September 30, 2013   December 31, 2012
Current assets
Cash and cash equivalents             338,006                184,851
Accounts and notes receivable,        86,493                 105,019
Other current assets (1)              329,962                311,628
Total current assets                  754,461                601,498
Non-current assets
Property and equipment, net           1,163,777              1,176,350
Net intangible assets and             71,204                 67,271
Deferred income taxes                 124,161                133,708
Other non-current assets (2)          99,753                 70,336
Total non-current assets           1,458,895            1,447,665
Total assets                       2,213,356            2,049,163
Current liabilities
Accounts payable                      221,227                244,365
Taxes payable (3)                     126,246                125,713
Accrued payroll and other             184,464                150,690
Other current liabilities (4)         30,265                 50,845
Provision for contingencies           198                    507
Financial debt (5)                    26,416                 6,154
Total current liabilities             588,816                578,274
Non-current liabilities
Accrued payroll and other             34,812                 40,115
Provision for contingencies           14,265                 20,092
Financial debt (5)                    886,332                655,365
Deferred income taxes                 7,244                  9,007
Total non-current liabilities      942,653              724,579
Total liabilities                  1,531,469            1,302,853
Class A shares of common stock        358,820                351,654
Class B shares of common stock        132,915                132,915
Additional paid-in capital            15,256                 18,634
Retained earnings                     372,197                400,761
Accumulated other comprehensive    (198,068)            (158,821)
Total Arcos Dorados Holdings       681,120              745,143
Inc shareholders’ equity
Non-controlling interest in        767                  1,167
Total equity                       681,887              746,310
Total liabilities and equity       2,213,356            2,049,163

(1) Includes "Other receivables", "Inventories", "Prepaid expenses and other
current assets", "Derivative instruments", and "Deferred income taxes".
(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
(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,     December 31,
                                            2013            2012
Cash & cash equivalents                         338,006           184,851
Total Financial Debt (i)                        911,459           659,788
Net Financial Debt (ii)                         573,453           474,937
Total Financial Debt / LTM Adjusted             2.7               1.9
EBITDA ratio
Net Financial Debt / LTM Adjusted EBITDA        1.7               1.4

       Total financial debt includes short-term debt, long-term debt and
(i)   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 September 30, 2013 and December 31, 2012, respectively).
(ii)   Total financial debt less cash and cash equivalents.


Arcos Dorados - Investor Relations
Sofia Chellew / Patricio Esnaola /
(+5411) 4711-2567
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