Arcos Dorados Reports Fourth Quarter & Full Year 2013 Financial Results

  Arcos Dorados Reports Fourth Quarter & Full Year 2013 Financial Results

   Achieved double-digit organic revenue and Adjusted EBITDA growth in the
     quarter and full year on double-digit expansion in comparable sales

Business Wire

BUENOS AIRES, Argentina -- March 11, 2014

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 unaudited results for the fourth quarter and
audited results for the full year ended December 31, 2013.

Fourth Quarter 2013 Highlights

  *Revenues totaled $1.05 billion, an increase of 3.6% or 15.8% on an organic
    basis year-over-year, as double-digit comparable sales growth and the
    contribution from new restaurants more than offset local currency
    depreciation.
  *Systemwide comparable sales increased by 10.6% year-over-year.
  *Adjusted EBITDA increased by 5.7% to $118.0 million, on an as reported
    basis. Excluding currency translation and special items, Adjusted EBITDA
    was 20.0% higher year-over-year.
  *Net income was $32.1 million compared to $44.2 million one year ago,
    mainly due to a one-time charge related to the full redemption of the 2019
    Notes, included within “Net interest expense”. Organic net income grew by
    25.5%.

Full Year 2013 Highlights

  *Revenues amounted to $4.03 billion, a 6.2% year-over-year increase or
    16.7% rise on an organic basis, as double-digit comparable sales growth
    and revenues from new restaurants more than offset local currency
    depreciation.
  *Systemwide comparable sales increased by 11.2% year-over-year.
  *130 new restaurants opened in 2013 and contributed to the overall
    restaurant count of 2,062. Capital expenditures for the year totaled
    $313.5 million.
  *Adjusted EBITDA improved versus the prior year and totaled $344.5 million,
    increasing 1.1%, or 18.7% on an organic basis.
  *The Company reported net income of $53.9 million, down from $114.3 million
    one year ago. The results mainly reflect higher foreign currency exchange
    losses and higher net interest expense, primarily due to one-time charges
    related to the debt restructuring in both 3Q13 and 4Q13. On an organic
    basis, net income increased by 16.2% to $103.4 million.

“I am pleased to report double-digit growth in our consolidated operating
results for both the fourth quarter and full year 2013. Despite an economic
deceleration in a number of key markets, revenue growth was solidly in line
with guidance. Adjusted EBITDA exceeded our annual target, due to G&A leverage
and proactive currency hedging.”

“We remain the dominant player in the industry, with an unparalleled
restaurant portfolio. From this position of strength, and in response to a
deterioration in the operating environment, we are adjusting the pace of our
unit expansion for 2014. Nevertheless, we expect double-digit top line growth
in 2014 and a higher baseline level of operating profitability as we focus on
expanding market share, maximizing traffic and containing costs.”

“Our 30-year history in the region equips us with tested strategies to improve
operating results in challenging market conditions. As the largest franchisee
of one of the world’s most iconic brands in an underpenetrated region, I
remain confident in the Company’s long-term prospects,” said Woods Staton,
Chairman and Chief Executive Officer of Arcos Dorados.

Fourth Quarter 2013 Results

Consolidated      
                   Financial Highlights (Million US$)
                            Special  Currency     Organic                      
                   4Q12      Items     Translation   Growth    4Q13        % As
                 (a)      (b)      (c)          (d)      (a+b+c+d)  Reported  %
                                                                                      Organic
Total              1,948                                       2,062
Restaurants
Sales by
Company-operated   965.1               (117.8)       153.6     1001.0      3.7%       15.9%
Restaurants
Revenues from
franchised        44.5             (5.5)        6.0      45.0       1.1%      13.4%
restaurants
Total Revenues    1009.7           (123.3)      159.6    1046.0     3.6%      15.8%
Systemwide                                                      10.6%     
Comparable Sales
Adjusted EBITDA   111.6    1.5      (15.5)       20.4     118.0      5.7%      20.0%
Adjusted EBITDA    11.1%                                       11.3%       2.1%
Margin
Net Income
attributable to    44.2      (13.5)    (7.5)         8.8       32.1        -27.4%     25.5%
AD
No. of shares
outstanding       209,529                              209,867             
('000)
EPS ($ per        0.21                                 0.15                
share)

(4Q13 = 4Q12 + Special items + Currency translation + Organic growth). Please
refer to “Definitions” section for further detail.

Arcos Dorados’ fourth quarter revenues increased by 3.6% to $1.05 billion, as
organic revenue growth of 15.8% was partially offset by depreciation of local
currencies, mainly in Brazil, Venezuela and Argentina. Strong organic revenue
growth was driven by a 10.6% expansion in systemwide comparable sales and a
contribution of $58.5 million in constant currency from the net addition of
114 restaurants during the last 12-month period. The Caribbean division and
SLAD reported double-digit increases in comparable sales and organic revenues.

Marketing activities in the fourth quarter included strong promotions in the
Company’s value platform across the region, and the successful launch of
premium products such as the Cheddar Bacon Onion, and campaigns including
Dijon and Tabasco. The Dessert category also outperformed internal targets.

Adjusted EBITDA for the fourth quarter was $118.0 million, representing a 5.7%
increase compared to the same period of 2012. Adjusting for special items and
currency impact, organic adjusted EBITDA grew by 20.0%, supported by
double-digit comparable sales growth, the contribution from new restaurants
and 85 basis points of organic G&A leverage.

Special items impacting Adjusted EBITDA consisted of:

($ million)                                     4Q13     4Q12    Variation
Recovery of Brazilian taxes (i)                 -        $12.0   ($12.0)
Reversal (accrual) of PAT provision in Brazil    $9.1      ($2.0)   $11.1
(ii)
Royalty waiver for Venezuela                     $2.0      $1.2     $0.8
CADs net expense (iii)                          ($0.03)  ($1.7)  $1.7
Total                                           $11.1    $9.6    $1.5

I. Please refer to 4Q12 earnings release.
II. Employee meals program in Brazil.
III. Compensation expense. Includes the result from the total equity return
swap entered into 3Q12 to hedge the expense.

The reported Adjusted EBITDA margin as a percentage of total revenues
increased over 20 basis points to 11.3%, compared to the fourth quarter of
2012. All divisions except the Caribbean achieved improved margins versus the
previous year. Additionally, reported G&A as a percentage of revenues
decreased by 105 basis points compared to the year-ago period.

Net income attributable to the Company was $32.1 million in the fourth quarter
of 2013, compared to $44.2 million in the same period of 2012. The result
reflects improved operating and foreign exchange results, which were more than
offset by higher net interest expense, losses from derivative instruments and
increased income tax recognized in the quarter.

Non-operating Results

Non-operating results for the quarter reflected (i) an increase in net
interest and derivative instrument expenses, mainly attributable to a $10.8
million one-time charge related to the full redemption of the 2019 Notes, a
$4.2 million loss incurred in connection with the unwind of the cross currency
swap, and $2.9 million of additional interest year-over-year on incremental
debt, and (ii) a foreign currency exchange loss of $3.5 million compared with
a higher loss of $5.3 million in 4Q12.

Income tax expense for the quarter totaled $21.3 million, resulting in an
effective tax rate of 39.8% for the quarter, compared to 26.2% in the year-ago
period. The higher 4Q13 effective tax rate was mainly explained by the
reversal of certain valuation allowances over deferred tax assets in 4Q12 and
by a one-time charge related to the full redemption of the 2019 Notes, that
reduced income before taxes in 4Q13.

The Company reported basic earnings per share (EPS) of $0.15 in the fourth
quarter of 2013, compared to $0.21 in the previous corresponding period.

Analysis by Division:

Brazil Division

             Financial Highlights (Million US$)
                     Special  Currency     Organic                      
              4Q12    Items     Translation   Growth    4Q13        % As
            (a)    (b)      (c)          (d)      (a+b+c+d)  Reported  %
                                                                               Organic
Total         731                                       812         11.1%
Restaurants
Systemwide
Comparable                                                          2.2%
Sales
Revenues     483.1          (51.0)       45.8     477.8      -1.1%     9.5%
Adjusted     82.3   (0.9)    (9.1)        9.8      82.1       -0.3%     13.5%
EBITDA

Brazil revenues declined by 1.1% in the fourth quarter, however, excluding an
11% year-over-year average depreciation in the Brazilian Real, organic
revenues grew by 9.5%. Product mix management and menu board adjustments drove
a 2.2% increase in systemwide comparable sales. Throughout the year, the
Company implemented a successful marketing calendar, which in the fourth
quarter included the Tabasco Campaign and the addition of the Double Bacon
sandwich in the GPPP value platform.

While the Company continued to gain market share, supported by brand strength
and compelling marketing initiatives, performance in Brazil was affected by a
soft consumption environment.

The net addition of 81 restaurants during the last 12-month period contributed
$32.8 million to revenues in constant currency during the quarter. The
openings brought the year-end restaurant total to 812.

Adjusted EBITDA decreased by 0.3% in the fourth quarter of 2013. Reported
Adjusted EBITDA margin increased by 14 basis points to 17.2% and was driven by
reduced payroll costs and G&A expenses, mainly as a consequence of the
reversal of the PAT provision.

Special items impacting Adjusted EBITDA in the quarter included the reversal
of the PAT provision in 4Q13 (compared to a charge in 4Q12) and the recovery
of tax credits from prior periods in 4Q12. Excluding currency movements and
the aforementioned special items, fourth quarter organic Adjusted EBITDA
increased by 13.5%, driven by revenue growth and G&A leverage.

NOLAD

             Financial Highlights (Million US$)
                     Special  Currency     Organic                      
              4Q12    Items     Translation   Growth    4Q13        % As
            (a)    (b)      (c)          (d)      (a+b+c+d)  Reported  %
                                                                               Organic
Total         503                                       507         0.8%
Restaurants
Systemwide
Comparable                                                          -2.3%
Sales
Revenues     101.5          (0.3)        1.3      102.4      0.9%      1.2%
Adjusted     9.1    -        (0.0)        0.6      9.6        6.0%      6.3%
EBITDA

NOLAD’s revenues grew by 0.9% or 1.2% on an organic basis, year-over-year.
Systemwide comparable sales declined by 2.3%, mainly affected by a weak
consumer environment in Mexico and Costa Rica. Additionally, the net addition
of 4 restaurants during the last 12-month period contributed $3.6 million to
revenues in constant currency.

Adjusted EBITDA increased by 6.0% to $9.6 million, from $9.1 million in the
previous corresponding period. The reported Adjusted EBITDA margin increased
by 45 basis points to 9.4%, due to lower Food and Paper and Occupancy & Other
Operating Expenses as a percentage of revenues. On an organic basis, Adjusted
EBITDA increased by 6.3%.

SLAD

             Financial Highlights (Million US$)
                     Special  Currency     Organic                      
              4Q12    Items     Translation   Growth    4Q13        % As
            (a)    (b)      (c)          (d)      (a+b+c+d)  Reported  %
                                                                               Organic
Total         361                                       378         4.7%
Restaurants
Systemwide
Comparable                                                          21.3%
Sales
Revenues     222.6          (47.6)       59.8     234.8      5.5%      26.9%
Adjusted     24.8   -        (6.6)        9.7      27.9       12.7%     39.2%
EBITDA

SLAD’s revenues grew by 5.5% or 26.9% on an organic basis (excluding currency
movements, mainly the devaluation of the Argentine Peso) compared to the
fourth quarter of 2012. During the quarter, systemwide comparable sales
increased by 21.3% on stable volumes. The Company implemented a successful
marketing calendar, including the addition of the Premium Angus Burger line
and Chicken McWraps to the Flavors Festival campaign, as well as the launch of
McFlurry Vauquita in the Dessert category in Argentina. The net addition of 17
restaurants during the last 12-month period contributed $14.5 million to
revenues in constant currency in the quarter.

Adjusted EBITDA increased by 12.7% year-over-year, or 39.2% on an organic
basis, resulting in an Adjusted EBITDA margin of 11.9%. The 76 basis points
margin expansion was supported by leverage in F&P and payroll costs. These
factors were partially offset by higher Occupancy and Other Operating Expenses
as a percentage of revenues.

Caribbean Division

             Financial Highlights (Million US$)
                     Special  Currency     Organic                      
              4Q12    Items     Translation   Growth    4Q13        % As
            (a)    (b)      (c)          (d)      (a+b+c+d)  Reported  %
                                                                               Organic
Total         353                                       365         3.4%
Restaurants
Systemwide
Comparable                                                          27.2%
Sales
Revenues     202.5          (24.3)       52.8     230.9      14.0%     26.1%
Adjusted     24.4   0.8      (3.9)        3.2      24.5       0.2%      14.0%
EBITDA

The Caribbean division reported revenue growth of 14.0% in the fourth quarter
of 2013. Excluding currency movements (mainly the devaluation of the
Venezuelan Bolivar), organic revenues increased by 26.1% compared to the
fourth quarter of 2012. Systemwide comparable sales increased by 27.2%, driven
by average check. Despite ongoing challenging conditions in Venezuela, brand
preference remained strong. The Company maintained its leading market share
through the execution of a strong marketing calendar, including the Cheddar
Bacon Onion (beef and chicken), and the launch of McFlurry Tres Leches and
McFlurry Flaquito Chocolate in the Dessert category. The net addition of 12
restaurants during the last 12-month period contributed $7.7 million to
revenues in constant currency.

Adjusted EBITDA grew by 0.2% and amounted to $24.5 million in 4Q13. The
Adjusted EBITDA margin declined 146 basis points to 10.6%, driven by higher
payroll costs and new legislation on rents in Venezuela, which more than
offset efficiencies in all other costs items in the division. Special items
impacting Adjusted EBITDA included the recognition of a royalty waiver from
McDonald’s Corporation of $2.0 million in 4Q13, versus $1.2 million in 4Q12.
On an organic basis, Adjusted EBITDA increased by 14.0% compared to the
year-ago period.

New Unit Development

Total Restaurants       Dec. ‘13  Sept.   June ‘13  Mar. ‘13  Dec. ‘12
(eop)*                                ‘13
Brazil                     812       762     746       735       731
NOLAD                      507        503      502        503        503
SLAD                       378        372      369        366        361
Caribbean                  365       356     354       355       353
TOTAL                      2,062     1,993   1,971     1,959     1,948
LTM Net Openings           114       113     113       116       108

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

The Company completed 130 restaurant openings for the year ended December 31,
2013. The openings brought the year-end total to 2,062 restaurants. Also in
2013, the Company added 317 dessert centers and 20 McCafés, bringing the total
to 2,259 and 348 respectively.

Balance Sheet & Cash Flow Highlights

Cash and cash equivalents were $175.6 million at December 31, 2013. The
Company’s total financial debt (including derivative instruments) was $785.0
million. Net debt was $609.4 million and the Net Debt/Adjusted EBITDA ratio
was 1.8x at December 31, 2013.

Cash generated from operating activities was $133.5 million in the fourth
quarter of 2013, while cash used in financing activities amounted to $130.8
million. During the quarter, capital expenditures amounted to $164.3 million,
including a $57.4 million real estate purchase in Venezuela.

Full Year 2013

For the full year ended December 31, 2013, the Company’s revenues reached
$4.03 billion, up 6.2% or 16.7% on an organic basis. Systemwide comparable
sales grew by 11.2%, supported by positive contributions from Brazil, SLAD and
the Caribbean division.

Adjusted EBITDA was broadly stable year-over-year, increasing by 1.1% to
$344.5 million. The Adjusted EBITDA margin contracted 43 basis points
year-over-year to 8.5%, driven by higher F&P (due to the impact of the
devaluation of local currencies on dollar-linked costs, mainly in Venezuela)
and payroll costs as a percentage of sales, which more than offset lower G&A
as a percentage of revenues.

On an organic basis, Adjusted EBITDA increased by 18.7%, driven by solid
growth in Brazil and SLAD, while the organic Adjusted EBITDA margin increased
by 14 basis points year-over-year, supported by 72 basis points of leverage in
organic G&A.

Special items impacting the year-over-year change in Adjusted EBITDA consisted
of:

($ million)                                      FY13    FY12    Variation
Recovery of Brazilian taxes (i)                  -       $12.0   ($12.0)
Reversal (accrual) of PAT provision in Brazil     $3.3     ($3.3)   $6.5
(ii)
Royalty waiver for Venezuela                      $8.0     $5.0     $3.0
CADs net (expense) gain (iii)                    ($1.2)  $11.6   ($12.9)
Total                                            $10.0   $25.4   ($15.4)

I. Please refer to 4Q12 earnings release.
II. Employee meals program in Brazil.
III. Compensation expense. Includes the result from the total equity return
swap entered into 3Q12 to hedge the expense.

For the full year 2013, consolidated net income attributable to the Company
amounted to $53.9 million, compared with $114.3 million registered in 2012.
The decline primarily reflects higher foreign currency exchange losses
(explained by the depreciation of local currencies, including the devaluation
of the Bolivar in Venezuela), and also higher net interest expense (primarily
due to one-time charges related to the debt restructuring), all of which were
partially offset by slightly lower income tax expense. The effective tax rate
was 44.2% in 2013, compared to 28.8% in 2012, and was impacted by the
aforementioned one-time charges affecting net interest expense, as well as the
loss incurred as a result of the devaluation in Venezuela, all of which have
no related tax benefits. Excluding the impact of such charges, the effective
tax rate would have remained at the low end of guidance. On an organic basis,
net income was $103.4 million, increasing by 16.2%.

Cash generated by operating activities was $217.0 million for the year, while
cash provided by financing activities amounted to $102.3 million.
Additionally, total capital expenditures amounted to $313.5 million for the
year, which includes a $57.4 million real estate purchase in Venezuela.

2014 Guidance

The Company’s outlook for full year 2014 growth versus 2013 is provided on an
organic basis (constant currency and excluding special items in both years).
Guidance for 2014 also excludes the Venezuelan business, as explained below.

                            2014
Revenue Growth               + 13% - 16%
Adjusted EBITDA Growth        + 15% - 18%
Effective Tax Rate            35% - 37%
Capital Expenditures (US$)    $200 million
Restaurant openings (Gross)  90

The increasingly complex operating environment in Venezuela has reduced the
degree of certainty with respect to full year projections for the Venezuelan
operation.

Importantly, the Company believes that its Venezuelan business will not
require operating cash support during the 2014 calendar year. Please refer to
the Company’s Form 6-K filed with the SEC today, which provides Venezuela’s
revenue and operating income for 2011, 2012 and 2013.

Quarter Highlights & Recent Developments

Restaurant opening target for 2014-2016

The Company agreed with McDonald’s Corporation on February 11, 2014, to open a
minimum of 250 restaurants during the 3-year period from 2014 to 2016.

Full redemption of 2019 Notes

In December 2013, the Company exercised its option to redeem all of the
outstanding principal amount of Arcos Dorados B.V. 7.50% Senior Notes due 2019
at a redemption price equal to 109.129% of the principal amount of the Notes,
plus accrued and unpaid interest. The transaction resulted in a one-time,
non-operating charge of $10.8 million in net interest expense, which was
recognized in the fourth quarter of 2013.

Reversal of the PAT provision in Brazil

After being notified of the confirmation of a preliminary ruling issued in
October of 2013 by Brazilian authorities in favor of the Company regarding an
employee meals program, also known as Programa de Alimentação do Trabalhador
(PAT), in 4Q13 the Company reversed a provision that was in place from August
2012 through September 2013. The reversal amounted to $9.1 million and,
combined with lower payroll costs in 4Q13 when compared to 4Q12, resulted in a
4Q13 benefit of $11.1 million year-over-year. The ruling will result in
reduced payroll costs going forward.

Dividend

On January 3, 2014, the Company paid the fourth 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, thus completing a total payment for
the year of $50.0 million or $0.24 per share for the full year 2013.

Daniel Schleiniger Appointed as Investor Relations Director

Daniel Schleiniger joined the Company as the new Corporate Director of
Investor Relations. Daniel began his career as a corporate banking
relationship manager for one of Brazil’s largest banks and has held positions
in equity research, investor relations, financial planning and analysis as
well as treasury and portfolio management. Daniel holds a bachelor of science
degree in chemistry from the University of Delaware (USA) and an MBA in
Finance from the same academic institution. Daniel will be based in Miami.

Annual General Shareholders Meeting

On March 6, 2014, the Board set the date for the Company’s Annual General
Shareholders’ Meeting. The AGM will be held on April 21, 2014, in Bogotá,
Colombia, at 10:00 a.m. (local time), to all shareholders as of record on
March 19, 2014.

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 2,062 McDonald’s-branded restaurants with over
90,000 employees serving approximately 4.3 million customers a day, as of
December 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
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.


Fourth Quarter & Full Year 2013 Consolidated Results
(In thousands of U.S. dollars, except per share data)
                                                
                  For Three-Months ended          For Twelve-Months ended
                  Dec 31,                         Dec 31,
                  2013           2012            2013           2012
REVENUES
Sales by
Company-operated    1,000,966       965,142         3,859,883       3,634,371
restaurants
Revenues from
franchised         45,037         44,535         173,427        163,023
restaurants
Total Revenues     1,046,003      1,009,677      4,033,310      3,797,394
OPERATING COSTS
AND EXPENSES
Company-operated
restaurant
expenses:
Food and paper      (342,959)       (333,338)       (1,350,515)     (1,269,146)
Payroll and         (198,994)       (198,094)       (814,112)       (753,120)
employee benefits
Occupancy and
other operating     (268,646)       (258,633)       (1,055,188)     (984,004)
expenses
Royalty fees        (49,154)        (47,948)        (188,885)       (180,547)
Franchised
restaurants -       (15,620)        (14,860)        (63,273)        (56,057)
occupancy
expenses
General and
administrative      (77,473)        (85,414)        (317,745)       (314,619)
expenses
Other operating
(expenses)         (2,474)        8,705          (15,070)       (3,261)
income, net
Total operating
costs and          (955,320)      (929,582)      (3,804,788)    (3,560,754)
expenses
Operating income   90,683         80,095         228,522        236,640
Net interest        (29,585)        (14,496)        (88,156)        (54,247)
expense
(Loss) Gain from
derivative          (4,099)         146             (4,141)         (891)
instruments
Foreign currency    (3,528)         (5,349)         (38,783)        (18,420)
exchange results
Other
non-operating      10             (396)          (848)          (2,119)
income
(expenses), net
Income before      53,481         60,000         96,594         160,963
income taxes
Income tax         (21,298)       (15,703)       (42,722)       (46,375)
expense
Net income         32,183         44,297         53,872         114,588
Less: Net income
attributable to    (93)           (76)           (18)           (256)
non-controlling
interests
Net income
attributable to    32,090         44,221         53,854         114,332
Arcos Dorados
Holdings Inc.
Earnings per
share information                                            
($ per share):
Basic net income  $ 0.15         $ 0.21          $ 0.26         $ 0.55
per common share
Weighted-average
number of common   209,867,426    209,529,412    209,754,176    209,529,412
shares
outstanding-Basic
Adjusted EBITDA
Reconciliation
Operating income    90,683          80,095          228,522         236,640
Depreciation and    28,381          27,022          114,860         92,328
amortization
Operating
(income) charges
excluded from      (1,069)        4,490          1,085          11,593
EBITDA
computation
Adjusted EBITDA    117,995        111,607        344,467        340,561
Adjusted EBITDA
Margin as % of      11.3%           11.1%           8.5%            9.0%
total revenues
                                                                    

                                                                                                              
Fourth Quarter & Full Year 2013 Results by Division
(In thousands of U.S. dollars)
                                                                                                              
           4Q                                               FY
            Three-Months ended     % Incr.  Constant          Twelve-Months ended    % Incr.  Constant
            Dec 31,                 /         Curr.             Dec 31,                 /         Curr.
            2013       2012       (Decr.)  Incr/(Decr)       2013       2012       (Decr.)  Incr/(Decr)
                                              %                                                   %
Revenues                                                                 
Brazil      477,834     483,102     -1.1%     9.5%              1,842,324   1,797,556   2.5%      13.3%
Caribbean   230,907     202,466     14.0%     26.1%             830,447     754,730     10.0%     19.7%
NOLAD       102,449     101,528     0.9%      1.2%              407,772     384,041     6.2%      4.3%
SLAD        234,813    222,581    5.5%     26.9%             952,767     861,067     10.6%     26.7%
TOTAL       1,046,003  1,009,677  3.6%     15.8%             4,033,310   3,797,394   6.2%      16.7%
                                                                                                              
                                                                                                              
Operating
Income
Brazil      70,731      69,683      1.5%      12.9%             188,445     193,339     -2.5%     8.0%
Caribbean   14,846      14,906      -0.4%     23.8%             37,837      40,692      -7.0%     12.7%
NOLAD       (471)       (3,568)     -86.8%    -86.0%            (5,314)     (5,557)     4.4%      13.5%
SLAD        23,790      19,463      22.2%     53.0%             84,324      74,824      12.7%     33.6%
Corporate   (18,213)   (20,389)   -10.7%   12.4%             (76,770)   (66,658)   -15.2%   -37.8%
and Other
TOTAL       90,683     80,095     13.2%    29.2%             228,522    236,640    -3.4%    9.0%
                                                                                                              
                                                                                                              
Adjusted
EBITDA
Brazil      82,071      82,318      -0.3%     10.8%             245,957     240,954     2.1%      13.0%
Caribbean   24,497      24,444      0.2%      16.3%             67,180      69,109      -2.8%     10.2%
NOLAD       9,638       9,091       6.0%      6.3%              27,397      26,738      2.5%      1.9%
SLAD        27,940      24,802      12.7%     39.2%             105,495     93,756      12.5%     31.6%
Corporate   (26,151)   (29,048)   -10.0%   4.4%              (101,562)  (89,996)   -12.9%   -27.8%
and Other
TOTAL       117,995    111,607    5.7%     19.6%             344,467    340,561    1.1%     12.8%
                                                                                                              

                                        
Average Exchange Rate per Quarter
             Brazil       Mexico       Argentina
                                                     
4Q13         2.28         13.01        6.07
4Q12     2.06      12.95     4.80
Local $ per 1 US$

                                                        
Summarized Consolidated Balance
Sheets
(In thousands of U.S. dollars)
                                                                             
                                                        
                                      December 31, 2013  December 31, 2012
                                                       
ASSETS
Current assets
Cash and cash equivalents              175,648             184,851
Accounts and notes receivable, net     110,696             105,019
Other current assets (1)               380,107             311,628
Total current assets                   666,451             601,498
                                       -
Non-current assets
Property and equipment, net            1,244,311           1,176,350
Net intangible assets and goodwill     70,375              67,271
Deferred income taxes                  97,687              133,708
Other non-current assets (2)           101,435             70,336
Total non-current assets              1,513,808          1,447,665
Total assets                          2,180,259          2,049,163
LIABILITIES AND EQUITY
Current liabilities
Accounts payable                       311,060             244,365
Taxes payable (3)                      137,492             125,713
Accrued payroll and other              141,970             150,690
liabilities
Other current liabilities (4)          52,562              50,845
Provision for contingencies            1,748               507
Financial debt (5)                     14,324              6,154
Total current liabilities              659,156             578,274
Non-current liabilities
Accrued payroll and other              35,446              40,115
liabilities
Provision for contingencies            13,074              20,092
Financial debt (5)                     771,171             655,365
Deferred income taxes                  6,113               9,007
Total non-current liabilities         825,804            724,579
Total liabilities                     1,484,960          1,302,853
Equity
Class A shares of common stock         358,820             351,654
Class B shares of common stock         132,915             132,915
Additional paid-in capital             17,250              18,634
Retained earnings                      404,287             400,761
Accumulated other comprehensive       (218,735)          (158,821)
losses
Total Arcos Dorados Holdings Inc      694,537            745,143
shareholders’ equity
Non-controlling interest in           762                1,167
subsidiaries
Total equity                          695,299            746,310
Total liabilities and equity          2,180,259          2,049,163

(1) Includes "Other receivables", "Inventories", "Prepaid expenses and other
current assets", "Derivative instruments", "McDonald´s Corporation´
indemnification for contingencies" and "Deferred income taxes".

(2) Includes "Miscellaneous", "Collateral deposits", "Derivative instruments"
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
                                                 December 31,   December 31,
                                               2013          2012
Cash & cash equivalents                          175,648        184,851
Total Financial Debt (i)                         785,005        659,788
Net Financial Debt (ii)                          609,357        474,937
Total Financial Debt / LTM Adjusted EBITDA       2.3            1.9
ratio
Net Financial Debt / LTM Adjusted EBITDA ratio   1.8            1.4

(i) Total financial debt includes short-term debt, long-term debt and
derivative instruments (including the asset portion of derivatives amounting
to $0.5 million and $1.7 million as a reduction of financial debt as of
December 31, 2013 and 2012, respectively).

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

Contact:

Arcos Dorados Holdings, Inc.
Investor Relations:
Daniel Schleiniger, +54 11 4711-2675
daniel.schleiniger@ar.mcd.com
www.arcosdorados.com
or
Media:
MBS Value Partners
Farrell Kramer, +1 212 710-9685
farrell.kramer@mbsvalue.com
 
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