\n| \n \n\u00a0\n<\/p>\n<\/td>\n | \n \nFor definitions, please refer to page 15 of this document.\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \n\u201cA consistent, strategic approach to building a sustainable business model has been the hallmark of Arcos Dorados\u2019 growth in local currency for fourteen years. Our performance in this last quarter and, indeed, over the last eighteen months is a reflection of that philosophy. The Latin American QSR industry\u2019s largest free-standing restaurant portfolio, a strong balance sheet and superior cash flows are the foundation of the competitive advantages we are now leveraging through our Three D\u2019s strategy of Drive-thru, Delivery and Digital, while at the same time contributing to the wellbeing of our people, guests and the communities we serve,\u201d said Marcelo Rabach, Chief Executive Officer of Arcos Dorados.\n<\/p>\n \n\u201cSecond quarter 2021 systemwide comparable sales rebounded strongly versus the prior year and were essentially flat on a 2-year basis despite the fact that the on-premise business in our street-facing and mall-based stores has not yet fully recovered and is still subject to government-imposed operating restrictions. Profitability in the quarter also came very close to pre-pandemic levels, overcoming significant challenges related to the government-imposed operating restrictions and higher input costs. As we transition into the Full Revival Phase of our plan, we will enhance convenience, improve personalization and increase frequency by expanding our Digital capabilities and loyalty programs to allow our guests to move seamlessly across our on-premise, take-away and delivery sales segments.\u201d\n<\/p>\n \n\u201cWith the continued normalization of operating conditions, we now have enough visibility to resume planning for the long-term and are developing a new plan that will go well beyond just the next year. The opportunity for growth in our main markets remains robust, both organically with the emergence of new sales segments such as our record-setting McDelivery and inorganically through new, free-standing unit openings. We will focus on the factors we can control to capture these local growth opportunities while continuing to provide our guests with the best restaurant experience in Latin America and the Caribbean,\u201d he concluded.\n<\/p>\n Second Quarter 2021 Results<\/span><\/b><\/p>\nConsolidated<\/b><\/p>\n\n\nFigure 1. AD Holdings Inc Consolidated: Key Financial Results
(In millions of U.S. dollars, except as noted)<\/b><\/td>\n<\/tr>\n\n | \n2Q20
(a)<\/b><\/td>\n | Currency
Translation –
Excl.
Venezuela
(b)
<\/b><\/td>\n | Constant
Currency
Growth –
Excl.
Venezuela
(c) <\/b><\/td>\n | Venezuela
(d)<\/b><\/td>\n | 2Q21
(a+b+c+d)<\/b><\/td>\n | % As
Reported<\/b><\/td>\n<\/tr>\n\n| Total Restaurants (Units)<\/b><\/td>\n | \n 2,291<\/b><\/p>\n<\/td>\n | | \n | \n | \n\n 2,255<\/b><\/p>\n<\/td>\n | | <\/tr>\n \n | \n | \n | \n | \n | \n | \n\u00a0<\/td>\n<\/tr>\n | \n| Sales by Company-operated Restaurants<\/td>\n | \n \n279.7\n<\/p>\n<\/td>\n | \n \n(7.0)\n<\/p>\n<\/td>\n | \n \n292.4\n<\/p>\n<\/td>\n | \n \n0.9\n<\/p>\n<\/td>\n | \n \n566.1\n<\/p>\n<\/td>\n | \n \n102.4%\n<\/p>\n<\/td>\n<\/tr>\n | \n| Revenues from franchised restaurants<\/td>\n | \n \n12.8\n<\/p>\n<\/td>\n | \n \n0.8\n<\/p>\n<\/td>\n | \n \n12.8\n<\/p>\n<\/td>\n | \n \n0.2\n<\/p>\n<\/td>\n | \n \n26.6\n<\/p>\n<\/td>\n | \n \n107.6%\n<\/p>\n<\/td>\n<\/tr>\n | \n| Total Revenues<\/b><\/td>\n | \n 292.5<\/b><\/p>\n<\/td>\n | \n (6.2)<\/b><\/p>\n<\/td>\n | \n 305.3<\/b><\/p>\n<\/td>\n | \n 1.1<\/b><\/p>\n<\/td>\n | \n 592.7<\/b><\/p>\n<\/td>\n | \n 102.6%<\/b><\/p>\n<\/td>\n<\/tr>\n\n | \n | \n | \n | \n | \n | \n\u00a0<\/td>\n<\/tr>\n | \n| Adjusted EBITDA<\/b><\/td>\n | \n (42.9)<\/b><\/p>\n<\/td>\n | \n 3.2<\/b><\/p>\n<\/td>\n | \n 86.8<\/b><\/p>\n<\/td>\n | \n 0.1<\/b><\/p>\n<\/td>\n | \n 47.2<\/b><\/p>\n<\/td>\n | \n NM<\/b><\/p>\n<\/td>\n<\/tr>\n\n| Adjusted EBITDA Margin<\/i><\/td>\n | \n -14.7%<\/i><\/p>\n<\/td>\n | | \n | \n | \n\n 8.0%<\/i><\/p>\n<\/td>\n | | <\/tr>\n \n| Net income (loss) attributable to AD<\/b><\/td>\n | \n (89.5)<\/b><\/p>\n<\/td>\n | \n 3.4<\/b><\/p>\n<\/td>\n | \n 89.3<\/b><\/p>\n<\/td>\n | \n 1.7<\/b><\/p>\n<\/td>\n | \n 4.9<\/b><\/p>\n<\/td>\n | \n NM<\/b><\/p>\n<\/td>\n<\/tr>\n\n| No. of shares outstanding (thousands)<\/td>\n | \n \n207,278\n<\/p>\n<\/td>\n | | \n | \n | \n\n \n210,360\n<\/p>\n<\/td>\n | | <\/tr>\n \n| EPS (US$\/Share)<\/b><\/td>\n | \n (0.43)<\/b><\/p>\n<\/td>\n | | \n | \n | \n\n 0.02<\/b><\/p>\n<\/td>\n | | <\/tr>\n \n| \n \n(2Q21 = 2Q20 + Currency Translation Excl. Venezuela + Constant Currency Growth Excl. Venezuela + Venezuela). Refer to \u201cDefinitions\u201d section for further detail.\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \nArcos Dorados\u2019 consolidated results may continue to be impacted by Venezuela\u2019s macroeconomic volatility, including the ongoing hyperinflationary environment, which has historically led the Company to record significant non-cash accounting charges to operations in this market. As such, the discussion of the Company\u2019s operating performance continues to be focused on consolidated results that exclude Venezuela.\n<\/p>\n Main variations in Other Operating Income \/ (Expenses), net <\/b><\/p>\n Included in Adjusted EBITDA<\/span>: The positive variation in other operating income \/ (expense) is mainly explained by an $11.9 million net tax credit in Brazil in this year\u2019s second quarter, compared with the negative impact of the recognition of food donations related to COVID-19 in the second quarter last year.\n<\/p>\nExcluded from Adjusted EBITDA<\/span>: The positive variation is mainly explained by impairment charges of $3.8 million in the prior year quarter\u2019s result.\n<\/p>\n\nSecond quarter net income attributable to the Company totaled $4.9 million, compared to a net loss of $89.5 million in the same period of 2020. Arcos Dorados\u2019 recorded earnings of $0.02 per share in the second quarter of 2021 compared to a loss of $(0.43) per share in the corresponding 2020 period. Total weighted average shares for the second quarter of 2021 amounted to 210,359,930 compared to 207,278,249 in the prior year\u2019s quarter.\n<\/p>\n Consolidated \u2013 excluding Venezuela<\/b><\/p>\n\n\nFigure 2. AD Holdings Inc Consolidated – Excluding Venezuela: Key Financial Results
(In millions of U.S. dollars, except as noted)<\/b><\/td>\n<\/tr>\n\n | \n2Q20
(a)<\/b><\/td>\n | Currency
Translation
(b)
<\/b><\/td>\n | Constant
Currency
Growth
(c) <\/b><\/td>\n | 2Q21
(a+b+c)<\/b><\/td>\n | % US Dollars<\/b><\/td>\n | % Constant
Currency<\/b><\/td>\n<\/tr>\n\n| Total Restaurants (Units)<\/b><\/td>\n | \n 2,173<\/b><\/p>\n<\/td>\n | | \n | \n\n 2,151<\/b><\/p>\n<\/td>\n | | \n | <\/tr>\n \n | \n | \n | \n | \n | \n | \n\u00a0<\/td>\n<\/tr>\n | \n| Sales by Company-operated Restaurants<\/td>\n | \n \n279.4\n<\/p>\n<\/td>\n | \n \n(7.0)\n<\/p>\n<\/td>\n | \n \n292.4\n<\/p>\n<\/td>\n | \n \n564.9\n<\/p>\n<\/td>\n | \n \n102.2%\n<\/p>\n<\/td>\n | \n \n104.7%\n<\/p>\n<\/td>\n<\/tr>\n | \n| Revenues from franchised restaurants<\/td>\n | \n \n12.8\n<\/p>\n<\/td>\n | \n \n0.8\n<\/p>\n<\/td>\n | \n \n12.8\n<\/p>\n<\/td>\n | \n \n26.4\n<\/p>\n<\/td>\n | \n \n106.8%\n<\/p>\n<\/td>\n | \n \n100.4%\n<\/p>\n<\/td>\n<\/tr>\n | \n| Total Revenues<\/b><\/td>\n | \n 292.2<\/b><\/p>\n<\/td>\n | \n (6.2)<\/b><\/p>\n<\/td>\n | \n 305.3<\/b><\/p>\n<\/td>\n | \n 591.3<\/b><\/p>\n<\/td>\n | \n 102.4%<\/b><\/p>\n<\/td>\n | \n 104.5%<\/b><\/p>\n<\/td>\n<\/tr>\n\n| Systemwide Comparable Sales<\/i><\/td>\n | | \n | \n | \n | \n | \n\n 98.7%<\/i><\/p>\n<\/td>\n<\/tr>\n\n| Adjusted EBITDA<\/b><\/td>\n | \n (41.7)<\/b><\/p>\n<\/td>\n | \n 3.2<\/b><\/p>\n<\/td>\n | \n 86.8<\/b><\/p>\n<\/td>\n | \n 48.3<\/b><\/p>\n<\/td>\n | \n NM<\/b><\/p>\n<\/td>\n | \n NM<\/b><\/p>\n<\/td>\n<\/tr>\n\n| Adjusted EBITDA Margin<\/i><\/td>\n | \n -14.3%<\/i><\/p>\n<\/td>\n | | \n | \n\n 8.2%<\/i><\/p>\n<\/td>\n | | \n | <\/tr>\n \n| Net income (loss) attributable to AD<\/b><\/td>\n | \n (87.4)<\/b><\/p>\n<\/td>\n | \n 3.4<\/b><\/p>\n<\/td>\n | \n 89.3<\/b><\/p>\n<\/td>\n | \n 5.3<\/b><\/p>\n<\/td>\n | \n NM<\/b><\/p>\n<\/td>\n | \n NM<\/b><\/p>\n<\/td>\n<\/tr>\n\n| No. of shares outstanding (thousands)<\/td>\n | \n \n207,278\n<\/p>\n<\/td>\n | | \n | \n\n \n210,360\n<\/p>\n<\/td>\n | | \n | <\/tr>\n \n| EPS (US$\/Share)<\/b><\/td>\n | \n (0.42)<\/b><\/p>\n<\/td>\n | | \n | \n\n 0.03<\/b><\/p>\n<\/td>\n | | \n | <\/tr>\n<\/table>\n\nExcluding Arcos Dorados\u2019 Venezuelan operation, total revenues in US dollars increased 102.4% year-over-year. The Company\u2019s Three D\u2019s strategy across Drive-thru, Delivery and Digital, along with reduced government-imposed operating restrictions, drove the rebound from the prior year\u2019s pandemic-impacted results. Constant currency revenues grew 104.5% in the quarter, with strong results in all the Company\u2019s divisions. In fact, constant currency revenues were in line with or already above the second quarter of 2019 in three of four divisions, despite the still-recovering, on-premise segments and restaurant formats.\n<\/p>\n \nAs of the date of this press release, substantially all the Company\u2019s restaurants are operating at least one sales segment and approximately 75% are operating all sales segments. Operating hours and on-premise sales segments continue to be subject to government-imposed restrictions in most markets.\n<\/p>\n \nSystemwide comparable sales for the second quarter increased 98.7% versus the second quarter of 2020 and were down only 0.6% on a 2-year basis, including positive 2-year systemwide comparable sales in both May and June. SLAD and NOLAD contributed the highest levels of growth with both the Caribbean and Brazil also performing strongly. The Drive-thru and Delivery sales segments grew on top of a strong prior year, rising 29% and 94% in constant currency, respectively.\n<\/p>\n \nSustained growth in the Delivery segment demonstrates the Company\u2019s success in generating an additional consumption occasion among guests, which is expected to remain after operating conditions are fully normalized. Sales growth and margin performance have been further boosted by expanding Digital capabilities, especially in the segmentation of guests to increase loyalty, thus driving frequency of visit and average check growth in the long term. The Company is also leveraging the significant competitive advantage of its historical commitment to building an unmatched and growing footprint of free-standing restaurants.\n<\/p>\n Adjusted EBITDA \u2013 Excluding Venezuela<\/b> ($ million)\n<\/p>\n \nSecond quarter consolidated Adjusted EBITDA reached $48.3 million, with all four divisions contributing to the strong rebound in profitability. Consolidated Adjusted EBITDA margin was up 22.4 percentage points, or 20.4 percentage points when adjusted for the $11.9 million net tax credit in Brazil. Margin expansion was highlighted by a 50 basis point improvement in Food & Paper (F&P) costs as a percentage of sales and significant operating leverage in both Payroll and Occupancy and Other Operating Expenses due to the rebound in sales performance.\n<\/p>\n \nConsolidated General & Administrative (G&A) expenses declined by 380 basis points as a percentage of sales despite rising 32.3% in US dollars and 41.0% in constant currency terms versus the same period in 2020. The prior year\u2019s low base of comparison resulted from the extraordinary cost saving measures the Company implemented to stabilize its operating cash flow at the peak of the pandemic.\n<\/p>\n Non-operating Results<\/b><\/p>\n \nArcos Dorados\u2019 non-operating results for the second quarter included a $15.0 million non-cash foreign currency exchange gain, compared to a non-cash loss of $4.1 million in the same period of 2020. The Company also recorded a $4.2 million loss from derivative instruments in the second quarter of 2021 and a gain of $8.7 million related to transactions with certain securities in the second quarter of 2020. Net interest expense was $1.4 million lower year-over-year. The Company estimated income tax expense of $10.3 million in the second quarter, compared to income tax expense of $2.4 million in the prior-year period.\n<\/p>\n \nSecond quarter net income attributable to the Company totaled $5.3 million, compared to a net loss of $87.4 million in the prior year period. Earnings per share was $0.03 in the second quarter 2021 compared to loss per share of $(0.42) in the prior year quarter.\n<\/p>\n Analysis by Division<\/span>:<\/b><\/p>\nBrazil Division<\/b><\/p>\n\n\nFigure 3. Brazil Division: Key Financial Results
(In millions of U.S. dollars, except as noted)<\/b><\/td>\n<\/tr>\n\n | \n2Q20
(a)<\/b><\/td>\n | Currency
Translation
(b)
<\/b><\/td>\n | Constant
Currency
Growth
(c) <\/b><\/td>\n | 2Q21
(a+b+c)<\/b><\/td>\n | % As
Reported<\/b><\/td>\n | % Constant
Currency<\/b><\/td>\n<\/tr>\n\n| Total Restaurants (Units)<\/b><\/td>\n | \n 1,024<\/b><\/p>\n<\/td>\n | | \n | \n\n 1,044<\/b><\/p>\n<\/td>\n | | \n | <\/tr>\n \n | \n | \n | \n | \n | \n | \n\u00a0<\/td>\n<\/tr>\n | \n| Total Revenues<\/b><\/td>\n | \n 132.2<\/b><\/p>\n<\/td>\n | \n 4.2<\/b><\/p>\n<\/td>\n | \n 89.4<\/b><\/p>\n<\/td>\n | \n 225.7<\/b><\/p>\n<\/td>\n | \n 70.7%<\/b><\/p>\n<\/td>\n | \n 67.6%<\/b><\/p>\n<\/td>\n<\/tr>\n\n| Systemwide Comparable Sales<\/i><\/td>\n | | \n | \n | \n | \n | \n\n 65.6%<\/i><\/p>\n<\/td>\n<\/tr>\n\n| Adjusted EBITDA<\/b><\/td>\n | \n (7.1)<\/b><\/p>\n<\/td>\n | \n 1.1<\/b><\/p>\n<\/td>\n | \n 39.8<\/b><\/p>\n<\/td>\n | \n 33.8<\/b><\/p>\n<\/td>\n | \n NM<\/b><\/p>\n<\/td>\n | \n NM<\/b><\/p>\n<\/td>\n<\/tr>\n\n| Adjusted EBITDA Margin<\/i><\/td>\n | \n -5.4%<\/i><\/p>\n<\/td>\n | | \n | \n\n 15.0%<\/i><\/p>\n<\/td>\n | \n 20.3%<\/i><\/p>\n<\/td>\n | | <\/tr>\n<\/table>\n\nAfter a challenging start to the quarter due to tightened government-imposed operating restrictions in April, especially in Brazil, as reported revenues rose 70.7%, or 67.6% on a constant currency basis, including 65.6% growth in systemwide comparable sales. On a 2-year basis, total revenues were down only 7.8% in constant currency and systemwide comparable sales in the quarter were down only 10.6%. Ongoing government-imposed operating restrictions have hampered the recovery of the on-premise sales segments due to capacity and operating hour limits as well as having a negative impact on consumption patterns in the country. Digital channels generated 49% of the division\u2019s systemwide sales in the quarter, including 13% from self-order kiosks in the market\u2019s large network of Experience of the Future (EOTF) restaurants.\n<\/p>\n \nMarketing activities in the second quarter focused on the Company\u2019s strengths: core products, the Three D\u2019s and the unique emotional bond the McDonald\u2019s brand has with its guests. Aligned with the local \u201cM\u00e9quizice\u201d campaign that encouraged guests to share their own special McDonald\u2019s orders, the Company participated in the global famous orders platform with the launch of the BTS Meal. Guests were able to order a chicken McNuggets combo with special sweet chili and Cajun dipping sauces, inspired by the K-pop boyband, BTS. This campaign was integrated with the Company\u2019s Digital, Drive-thru and Delivery channels and produced record-breaking, triple-digit chicken sales growth as well as unprecedented levels of digital engagement.\n<\/p>\n \nAdditionally, Brazil introduced its first loyalty program, focused on the Drive-thru segment to leverage the significant competitive advantage of its 483 free-standing restaurants. The \u201cM\u00e9qui VIP Drive\u201d club surpassed one million registered members in just three months and has already become an important frequency driver, supported by the Company\u2019s enhanced Customer Relationship Management (CRM) capabilities. Members of the program receive special offers, early access to new product launches and other personalized experiences.\n<\/p>\n \nDelivery once again broke its sales record in local currency, growing 91% versus the prior year quarter and 11% sequentially. This growth came on top of the 152% year-over-year local currency growth recorded in the second quarter 2020 versus the same period in 2019.\n<\/p>\n \nGrowth in Delivery was supported by the industry\u2019s highest-rated Mobile App, which has been downloaded 29 million times in Brazil, more than any other brand in the country according to AppAnnie, with around twice as many active users as the next closest competitor.\n<\/p>\n \nAs reported Adjusted EBITDA in the division reached $33.8 million in the quarter, after the negative $7.1 million result in the prior year period. This drove a 20.3 percentage point improvement in Adjusted EBITDA margin versus the prior year quarter, or 15.1 percentage points excluding the $11.9 million net tax credit, which resulted from the exclusion of ICMS from the Pis\/Cofins calculation base. Profitability improved thanks to significant operating leverage across all line items except F&P costs, which saw an increase of less than 80 basis points as a percentage of sales versus the prior year quarter.\n<\/p>\n \nAs of the date of this press release, more than 99% of Brazil\u2019s restaurants are operating at least one sales segment and 56% are operating all sales segments. The operating environment is normalizing after tightened government-imposed restrictions were once-again relaxed over the course of the second quarter in most parts of the country. However, it is important to note that most restaurants remain subject to operating hour and capacity limits.\n<\/p>\n NOLAD<\/b><\/p>\n\n\nFigure 4. NOLAD Division: Key Financial Results
(In millions of U.S. dollars, except as noted)<\/b><\/td>\n<\/tr>\n\n | \n2Q20
(a)<\/b><\/td>\n | Currency
Translation
(b)
<\/b><\/td>\n | Constant
Currency
Growth
(c) <\/b><\/td>\n | 2Q21
(a+b+c)<\/b><\/td>\n | % As
Reported<\/b><\/td>\n | % Constant
Currency<\/b><\/td>\n<\/tr>\n\n| Total Restaurants (Units)<\/b><\/td>\n | \n 530<\/b><\/p>\n<\/td>\n | | \n | \n\n 507<\/b><\/p>\n<\/td>\n | | \n | <\/tr>\n \n | \n | \n | \n | \n | \n | \n\u00a0<\/td>\n<\/tr>\n | \n| Total Revenues<\/b><\/td>\n | \n 51.9<\/b><\/p>\n<\/td>\n | \n 5.6<\/b><\/p>\n<\/td>\n | \n 48.7<\/b><\/p>\n<\/td>\n | \n 106.2<\/b><\/p>\n<\/td>\n | \n 104.4%<\/b><\/p>\n<\/td>\n | \n 93.8%<\/b><\/p>\n<\/td>\n<\/tr>\n\n| Systemwide Comparable Sales<\/i><\/td>\n | | \n | \n | \n | \n | \n\n 99.9%<\/i><\/p>\n<\/td>\n<\/tr>\n\n| Adjusted EBITDA<\/b><\/td>\n | \n (4.1)<\/b><\/p>\n<\/td>\n | \n 0.1<\/b><\/p>\n<\/td>\n | \n 12.3<\/b><\/p>\n<\/td>\n | \n 8.4<\/b><\/p>\n<\/td>\n | \n NM<\/b><\/p>\n<\/td>\n | \n NM<\/b><\/p>\n<\/td>\n<\/tr>\n\n| Adjusted EBITDA Margin<\/i><\/td>\n | \n -7.8%<\/i><\/p>\n<\/td>\n | | \n | \n\n 7.9%<\/i><\/p>\n<\/td>\n | \n 15.7%<\/i><\/p>\n<\/td>\n | | <\/tr>\n<\/table>\n\nAs reported revenues rose 104.4%, or 93.8% on a constant currency basis, including a doubling of systemwide comparable sales versus the prior year quarter. Importantly, the quarter\u2019s topline results reflect a return to pre-pandemic sales levels with the steady, sequential improvement of the last four quarters leading to a 1.2% increase in systemwide comparable sales on a 2-year basis.\n<\/p>\n \nMarketing activities in the second quarter continued to focus on the Company\u2019s core products and brand building activities. All three markets introduced the BTS Meal on June 1st<\/sup>, selling out within just a few days and enhancing the unique emotional bond the McDonald\u2019s brand has with guests in Mexico, Panama, and Costa Rica.\n<\/p>\n\nSales results in Mexico, which opened its first EOTF restaurant in the quarter, reached double-digit growth compared with the same period in 2019 helped by accelerating Drive-thru sales boosted by the mobility campaign. Panama launched Spicy McNuggets on the \u201cMcNuggetear\u201d platform, doubling the unit sales of chicken McNuggets and strengthening this item with younger guests. Finally, Delivery accelerated sales supported by co-branded campaigns with the delivery aggregators and product bundles to celebrate various occasions and special dates.\n<\/p>\n \nAs reported Adjusted EBITDA reached $8.4 million in the second quarter compared with negative $4.1 million in the prior year quarter. Adjusted EBITDA margin rose 15.7 percentage points, reflecting operating leverage in all cost and expense line items, especially Payroll, Occupancy and Other Operating expenses as well as G&A. Adjusted EBITDA in constant currency reached 95% of 2019\u2019s level in US dollars.\n<\/p>\n \nAs of the date of this release, substantially all the division\u2019s restaurants were operating all sales segments. However, all three markets remain subject to government-imposed operating restrictions to varying degrees.\n<\/p>\n SLAD<\/b><\/p>\n\n\nFigure 5. SLAD Division: Key Financial Results
(In millions of U.S. dollars, except as noted)<\/b><\/td>\n<\/tr>\n\n | \n2Q20
(a)<\/b><\/td>\n | Currency
Translation
(b)
<\/b><\/td>\n | Constant
Currency
Growth
(c) <\/b><\/td>\n | 2Q21
(a+b+c)<\/b><\/td>\n | % As
Reported<\/b><\/td>\n | % Constant
Currency<\/b><\/td>\n<\/tr>\n\n| Total Restaurants (Units)<\/b><\/td>\n | \n 402<\/b><\/p>\n<\/td>\n | | \n | \n\n 395<\/b><\/p>\n<\/td>\n | | \n | <\/tr>\n \n | \n | \n | \n | \n | \n | \n\u00a0<\/td>\n<\/tr>\n | \n| Total Revenues<\/b><\/td>\n | \n 44.7<\/b><\/p>\n<\/td>\n | \n (18.7)<\/b><\/p>\n<\/td>\n | \n 116.1<\/b><\/p>\n<\/td>\n | \n 142.1<\/b><\/p>\n<\/td>\n | \n 217.8%<\/b><\/p>\n<\/td>\n | \n 259.6%<\/b><\/p>\n<\/td>\n<\/tr>\n\n| Systemwide Comparable Sales<\/i><\/td>\n | | \n | \n | \n | \n | \n\n 254.3%<\/i><\/p>\n<\/td>\n<\/tr>\n\n| Adjusted EBITDA<\/b><\/td>\n | \n (17.5)<\/b><\/p>\n<\/td>\n | \n (1.4)<\/b><\/p>\n<\/td>\n | \n 29.3<\/b><\/p>\n<\/td>\n | \n 10.3<\/b><\/p>\n<\/td>\n | \n NM<\/b><\/p>\n<\/td>\n | \n NM<\/b><\/p>\n<\/td>\n<\/tr>\n\n| Adjusted EBITDA Margin<\/i><\/td>\n | \n -39.2%<\/i><\/p>\n<\/td>\n | | \n | \n\n 7.3%<\/i><\/p>\n<\/td>\n | \n 46.5%<\/i><\/p>\n<\/td>\n | | <\/tr>\n<\/table>\n\nAs reported revenues increased 217.8%, despite the 28% year-over-year average depreciation of the Argentine peso against the US dollar. The strong recovery in the division led to a constant currency revenue increase of 259.6%. Systemwide comparable sales increased 254.3% versus the second quarter of 2020 and rose 17.1% on a 2-year basis.\n<\/p>\n \nSales growth in the quarter was driven by the Chilean and Argentine markets, where Delivery sales reached record levels and the \u201cClub VIP Automac\u201d program supported the Drive-thru segment. Operating conditions in Uruguay, Ecuador and Peru are gradually improving but remain challenging due largely to government-imposed operating restrictions.\n<\/p>\n \nMarketing activities for the second quarter included the digital sponsorship of the Argentine Soccer Association (A.F.A.) which helped boost digital sales and improve guest experience through promotional activities in the restaurants during the Copa Am\u00e9rica, the region\u2019s most important international soccer tournament. In Chile the Company launched the \u201cQuarter Pounder Lover\u201d program, growing total combo sales by more than 40%.\n<\/p>\n \nAs reported Adjusted EBITDA totaled $10.3 million, compared with negative $17.5 million in the prior year. All cost and expense line items improved versus the prior year, with significant operating leverage of Payroll, Occupancy and Other Operating expenses as well as G&A. The Adjusted EBITDA result was up 8.7% in constant currency terms on a 2-year basis.\n<\/p>\n \nThe SLAD division was operating at least one sales segment in substantially all its restaurants, with 87% operating all sales segments, as of the date of this press release. Government-imposed operating restrictions continue to limit the Company\u2019s ability to operate its restaurants under normal hours and capacity.\n<\/p>\n Caribbean Division<\/b><\/p>\n\n\nFigure 6. Caribbean Division: Key Financial Results
(In millions of U.S. dollars, except as noted)<\/b><\/td>\n<\/tr>\n\n | \n2Q20
(a)<\/b><\/td>\n | Currency
Translation –
Excl.
Venezuela
(b)
<\/b><\/td>\n | Constant
Currency
Growth –
Excl.
Venezuela
(c) <\/b><\/td>\n | Venezuela
(d)<\/b><\/td>\n | 2Q21
(a+b+c+d)<\/b><\/td>\n | % As
Reported<\/b><\/td>\n<\/tr>\n\n| Total Restaurants (Units)<\/b><\/td>\n | \n 335<\/b><\/p>\n<\/td>\n | | \n | \n | \n\n 309<\/b><\/p>\n<\/td>\n | | <\/tr>\n \n | \n | \n | \n | \n | \n | \n\u00a0<\/td>\n<\/tr>\n | \n| Total Revenues<\/b><\/td>\n | \n 63.7<\/b><\/p>\n<\/td>\n | \n 2.9<\/b><\/p>\n<\/td>\n | \n 51.1<\/b><\/p>\n<\/td>\n | \n 1.0<\/b><\/p>\n<\/td>\n | \n 118.7<\/b><\/p>\n<\/td>\n | \n 86.5%<\/b><\/p>\n<\/td>\n<\/tr>\n\n | \n | \n | \n | \n | \n | \n\u00a0<\/td>\n<\/tr>\n | \n| Adjusted EBITDA<\/b><\/td>\n | \n (3.3)<\/b><\/p>\n<\/td>\n | \n 0.4<\/b><\/p>\n<\/td>\n | \n 14.3<\/b><\/p>\n<\/td>\n | \n 0.1<\/b><\/p>\n<\/td>\n | \n 11.4<\/b><\/p>\n<\/td>\n | \n NM<\/b><\/p>\n<\/td>\n<\/tr>\n\n| Adjusted EBITDA Margin<\/i><\/td>\n | \n -5.2%<\/i><\/p>\n<\/td>\n | | \n | \n | \n\n 9.6%<\/i><\/p>\n<\/td>\n | \n 14.8%<\/i><\/p>\n<\/td>\n<\/tr>\n<\/table>\n \nThe Caribbean division\u2019s results may continue to be impacted by Venezuela\u2019s macroeconomic volatility, including the ongoing hyperinflationary environment, which has historically led the Company to record significant non-cash accounting charges to operations in this market. As such, the discussion of the Caribbean division\u2019s operating performance focuses on results that exclude the Company\u2019s operations in this country.\n<\/p>\n Caribbean Division \u2013 excluding Venezuela<\/b><\/p>\n\n\nFigure 7. Caribbean Division – Excluding Venezuela: Key Financial Results
(In millions of U.S. dollars, except as noted)<\/b><\/td>\n<\/tr>\n\n | \n2Q20
(a)<\/b><\/td>\n | Currency
Translation
(b)
<\/b><\/td>\n | Constant
Currency
Growth
(c) <\/b><\/td>\n | 2Q21
(a+b+c)<\/b><\/td>\n | % US Dollars<\/b><\/td>\n | % Constant
Currency<\/b><\/td>\n<\/tr>\n\n| Total Restaurants (Units)<\/b><\/td>\n | \n 215<\/b><\/p>\n<\/td>\n | | \n | \n\n 205<\/b><\/p>\n<\/td>\n | | \n | <\/tr>\n \n | \n | \n | \n | \n | \n | \n\u00a0<\/td>\n<\/tr>\n | \n| Total Revenues<\/b><\/td>\n | \n 63.3<\/b><\/p>\n<\/td>\n | \n 2.9<\/b><\/p>\n<\/td>\n | \n 51.1<\/b><\/p>\n<\/td>\n | \n 117.3<\/b><\/p>\n<\/td>\n | \n 85.2%<\/b><\/p>\n<\/td>\n | \n 80.7%<\/b><\/p>\n<\/td>\n<\/tr>\n\n| Systemwide Comparable Sales<\/i><\/td>\n | | \n | \n | \n | \n | \n\n 77.3%<\/i><\/p>\n<\/td>\n<\/tr>\n\n| Adjusted EBITDA<\/b><\/td>\n | \n (2.1)<\/b><\/p>\n<\/td>\n | \n 0.4<\/b><\/p>\n<\/td>\n | \n 14.3<\/b><\/p>\n<\/td>\n | \n 12.6<\/b><\/p>\n<\/td>\n | \n NM<\/b><\/p>\n<\/td>\n | \n NM<\/b><\/p>\n<\/td>\n<\/tr>\n\n| Adjusted EBITDA Margin<\/i><\/td>\n | \n -3.3%<\/i><\/p>\n<\/td>\n | | \n | \n\n 10.7%<\/i><\/p>\n<\/td>\n | \n 14.0%<\/i><\/p>\n<\/td>\n | | <\/tr>\n<\/table>\n\nRevenues in the Caribbean division, excluding Venezuela, increased 85.2% in US dollars, or 80.7% in constant currency terms. Systemwide comparable sales increased 77.3% versus the prior year quarter and 9.3% against the same period in 2019. Revenue growth was driven by continued strong performances in the US dollar Puerto Rico market, and the euro-denominated French West Indies markets. Colombia delivered another quarter of sustained sales growth, generated primarily by the Drive-thru and Delivery segments, benefitting from the implementation of a new CRM platform that enhanced the Company\u2019s eCommerce capabilities in that market. Additionally, Colombia\u2019s revenues have benefitted from the suspension of VAT for the restaurant industry since July of 2020.\n<\/p>\n \nMarketing activities for the second quarter in Puerto Rico and Colombia included the launch of the BTS Meal, driving customer excitement and a significant increase in chicken McNuggets sales. Also on the chicken platform, the Company maintained the momentum of the successful launch of its Crispy Chicken Sandwiches in Puerto Rico.\n<\/p>\n \nThe Dessert platform added the McFlurry Caramel Brownie in Puerto Rico and the locally-relevant McFlurry \u201cOblea\u201d in Colombia as these markets continue on the path to normalized operations. Finally, Drive-Thru sales have accelerated thanks to improved service times, reduced menu complexity, focus on customer experience and growth in the Club VIP Automac program.\n<\/p>\n \nAs reported Adjusted EBITDA reached $12.6 million, compared with a negative $2.1 million result in the prior-year quarter and positive $5.1 million in the second quarter of 2019. The hard currency markets of Puerto Rico and the French West Indies together with Colombia contributed most of the improvement. Operating leverage was relatively uniform across most cost and expense line items, with the strongest performance coming from Occupancy and Other Operating expenses. Adjusted EBITDA margin reached 10.7%, an improvement of 5.6 percentage points compared with the second quarter of 2019.\n<\/p>\n \nAs of the date of this release, 95% of restaurants were operating at least one sales segment and 81% were operating all sales segments. The Caribbean division has the highest penetration of street-facing restaurants, with 79% in either the free-standing or in-store format.\n<\/p>\n New Unit Development<\/b><\/p>\n\n\n| Figure 8. Total Restaurants (eop)*<\/b><\/td>\n | | \n | \n | \n | \n | <\/tr>\n \n | \nJune
2021<\/b><\/td>\n | March
2021<\/b><\/td>\n | December
2020<\/b><\/td>\n | September
2020<\/b><\/td>\n | June
2020<\/b><\/td>\n<\/tr>\n\n| Brazil<\/td>\n | \n \n1,044\n<\/p>\n<\/td>\n | \n \n1,030\n<\/p>\n<\/td>\n | \n \n1,020\n<\/p>\n<\/td>\n | \n \n1,023\n<\/p>\n<\/td>\n | \n \n1,024\n<\/p>\n<\/td>\n<\/tr>\n | \n| NOLAD<\/td>\n | \n \n507\n<\/p>\n<\/td>\n | \n \n507\n<\/p>\n<\/td>\n | \n \n507\n<\/p>\n<\/td>\n | \n \n513\n<\/p>\n<\/td>\n | \n \n530\n<\/p>\n<\/td>\n<\/tr>\n | \n| SLAD<\/td>\n | \n \n395\n<\/p>\n<\/td>\n | \n \n391\n<\/p>\n<\/td>\n | \n \n391\n<\/p>\n<\/td>\n | \n \n397\n<\/p>\n<\/td>\n | \n \n402\n<\/p>\n<\/td>\n<\/tr>\n | \n| Caribbean<\/td>\n | \n \n309\n<\/p>\n<\/td>\n | \n \n314\n<\/p>\n<\/td>\n | \n \n318\n<\/p>\n<\/td>\n | \n \n324\n<\/p>\n<\/td>\n | \n \n335\n<\/p>\n<\/td>\n<\/tr>\n | \n| TOTAL<\/b><\/td>\n | \n 2,255<\/b><\/p>\n<\/td>\n | \n 2,242<\/b><\/p>\n<\/td>\n | \n 2,236<\/b><\/p>\n<\/td>\n | \n 2,257<\/b><\/p>\n<\/td>\n | \n 2,291<\/b><\/p>\n<\/td>\n<\/tr>\n\n* Considers Company-operated and franchised restaurants at period-end<\/td>\n<\/tr>\n<\/table>\n\n\n| Figure 9. Footprint as of June 30, 2021<\/b><\/td>\n | | \n | <\/tr>\n \n | \nStore Type*<\/b><\/td>\n | Total
Restaurants<\/b><\/td>\n | Ownership<\/b><\/td>\n | McCafes<\/b><\/td>\n | Dessert
Centers<\/b><\/td>\n<\/tr>\n\n | \nFS & IS<\/b><\/td>\n | MS & FC<\/b><\/td>\n | \n Company
\n
Operated<\/b><\/p>\n<\/td>\n | Franchised<\/b><\/td>\n | | \n | <\/tr>\n \n| Brazil<\/td>\n | \n \n576\n<\/p>\n<\/td>\n | \n \n468\n<\/p>\n<\/td>\n | \n 1,044<\/b><\/p>\n<\/td>\n | \n \n625\n<\/p>\n<\/td>\n | \n \n419\n<\/p>\n<\/td>\n | \n 83<\/b><\/p>\n<\/td>\n | \n 2,003<\/b><\/p>\n<\/td>\n<\/tr>\n\n| NOLAD<\/td>\n | \n \n315\n<\/p>\n<\/td>\n | \n \n192\n<\/p>\n<\/td>\n | \n 507<\/b><\/p>\n<\/td>\n | \n \n354\n<\/p>\n<\/td>\n | \n \n153\n<\/p>\n<\/td>\n | \n 14<\/b><\/p>\n<\/td>\n | \n 565<\/b><\/p>\n<\/td>\n<\/tr>\n\n| SLAD<\/td>\n | \n \n232\n<\/p>\n<\/td>\n | \n \n163\n<\/p>\n<\/td>\n | \n 395<\/b><\/p>\n<\/td>\n | \n \n348\n<\/p>\n<\/td>\n | \n \n47\n<\/p>\n<\/td>\n | \n 127<\/b><\/p>\n<\/td>\n | \n 389<\/b><\/p>\n<\/td>\n<\/tr>\n\n| Caribbean<\/td>\n | \n \n245\n<\/p>\n<\/td>\n | \n \n64\n<\/p>\n<\/td>\n | \n 309<\/b><\/p>\n<\/td>\n | \n \n265\n<\/p>\n<\/td>\n | \n \n44\n<\/p>\n<\/td>\n | \n 32<\/b><\/p>\n<\/td>\n | \n 314<\/b><\/p>\n<\/td>\n<\/tr>\n\n| TOTAL<\/b><\/td>\n | \n 1,368<\/b><\/p>\n<\/td>\n | \n 887<\/b><\/p>\n<\/td>\n | \n 2,255<\/b><\/p>\n<\/td>\n | \n 1,592<\/b><\/p>\n<\/td>\n | \n 663<\/b><\/p>\n<\/td>\n | \n 256<\/b><\/p>\n<\/td>\n | \n 3,271<\/b><\/p>\n<\/td>\n<\/tr>\n\n| * FS: Free-Standing; IS: In-Store; MS: Mall Store; FC: Food Court.<\/td>\n<\/tr>\n<\/table>\n \nArcos Dorados opened 32 new restaurants during the twelve-month period ended June 30, 2021. For the year-to-date, the Company opened 29 new restaurants, including 27 street-facing and 20 company-operated units. At the end of the second quarter, the Company had 789 Experience of the Future Restaurants.\n<\/p>\n | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |