<SEC-DOCUMENT>0000950103-16-013172.txt : 20160504
<SEC-HEADER>0000950103-16-013172.hdr.sgml : 20160504
<ACCEPTANCE-DATETIME>20160504084817
ACCESSION NUMBER:		0000950103-16-013172
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20160504
FILED AS OF DATE:		20160504
DATE AS OF CHANGE:		20160504

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Arcos Dorados Holdings Inc.
		CENTRAL INDEX KEY:			0001508478
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-EATING PLACES [5812]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-35129
		FILM NUMBER:		161617572

	BUSINESS ADDRESS:	
		STREET 1:		Roque Saenz Pena 432
		STREET 2:		B1636FFB Olivos
		CITY:			Buenos Aires
		STATE:			C1
		ZIP:			None
		BUSINESS PHONE:		011 54 11 4711 2000

	MAIL ADDRESS:	
		STREET 1:		Roque Saenz Pena 432
		STREET 2:		B1636FFB Olivos
		CITY:			Buenos Aires
		STATE:			C1
		ZIP:			None
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>dp65539_6k.htm
<DESCRIPTION>FORM 6-K
<TEXT>
<HTML>
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     <TITLE></TITLE>
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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 14pt"><B>UNITED
STATES</B>&nbsp;</FONT></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 14pt"><B>SECURITIES
AND EXCHANGE COMMISSION</B></FONT></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 14pt"><B>Washington,
D.C. 20549</B></FONT></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 16pt"><B>FORM 6-K<BR>
<BR>
</B></FONT></P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 6.85pt; text-align: center; text-indent: -6.85pt"><FONT STYLE="font-size: 12pt"><B>REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934</B></FONT></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 6.85pt; text-align: center; text-indent: -6.85pt"><FONT STYLE="font-size: 12pt">&nbsp;</FONT></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 12pt">For the month
of May, 2016</FONT></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 12pt">&nbsp;</FONT></P>

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<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 12pt"><B>&nbsp;</B></FONT>&nbsp;</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 12pt"><B>Commission
File Number: 001-35129</B></FONT></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 28pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 24pt"><B>Arcos
Dorados Holdings Inc.</B></FONT></P>

<P STYLE="font: 28pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>(Exact
name of registrant as specified in its charter)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 12pt"><B>Roque
Saenz Pe&ntilde;a 432 </B></FONT></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 12pt"><B>B1636FFB
Olivos, Buenos Aires, Argentina</B></FONT><B> </B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>(Address
of principal executive office)</B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt">Indicate
by check mark whether the registrant files or will file annual reports under cover of Form&nbsp;20-F or Form 40-F:</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt"></FONT></P>

<TABLE CELLPADDING="2" CELLSPACING="2" ALIGN="CENTER" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 60%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 20%; text-align: center"><FONT STYLE="font-size: 10pt">Form
    20-F<U> </U></FONT></TD>
    <TD STYLE="width: 20%; text-align: center; border-bottom: Black 1pt solid">X</TD>
    <TD STYLE="width: 20%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 20%; text-align: center"><FONT STYLE="font-size: 10pt">Form
    40-F<U> </U></FONT></TD>
    <TD STYLE="width: 20%; text-align: center; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT>&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt">Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation&nbsp;S-T&nbsp;Rule&nbsp;101(b)(1):</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><TABLE CELLPADDING="2" CELLSPACING="2" ALIGN="CENTER" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 60%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="text-align: center; width: 20%">Yes</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center; width: 20%">&nbsp;</TD>
    <TD STYLE="text-align: center; width: 20%">&nbsp;</TD>
    <TD STYLE="text-align: center; width: 20%">No</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center; width: 20%">X</TD></TR>
</TABLE></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt">Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation&nbsp;S-T&nbsp;Rule&nbsp;101(b)(7):</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><TABLE CELLPADDING="2" CELLSPACING="2" ALIGN="CENTER" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 60%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="text-align: center; width: 20%">Yes</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center; width: 20%">&nbsp;</TD>
    <TD STYLE="text-align: center; width: 20%">&nbsp;</TD>
    <TD STYLE="text-align: center; width: 20%">No</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center; width: 20%">X</TD></TR>
</TABLE></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B></B></P>

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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>ARCOS
DORADOS HOLDINGS INC.</B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>INCORPORATION
BY REFERENCE</B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">This report on Form 6-K
shall be deemed to be incorporated by reference into the registration statement on  Form S-8 (Registration Number:
333-173496) of Arcos Dorados Holdings Inc. and to be a part thereof from the date on which this report is filed, to the
extent not superseded by documents or reports subsequently filed or furnished.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>ARCOS
DORADOS HOLDINGS INC.</B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>TABLE
OF CONTENTS</B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="2" CELLPADDING="2" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 9%; font-size: 10pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>ITEM</B></FONT></td>
    <td style="width: 91%; font-size: 10pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></td></tr>
<tr style="vertical-align: top">
    <td style="font-size: 10pt; text-align: center"><FONT STYLE="font-size: 10pt">1.</FONT></td>
    <td style="font-size: 10pt"><FONT STYLE="font-size: 10pt">Arcos Dorados Holdings Inc. Consolidated Financial Statements
    as of March 31, 2016 and December 31, 2015 and for the three-month periods ended March 31, 2016 and 2015</FONT></td></tr>
</table>

<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>SIGNATURE</B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font-size: 10pt">Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="2" CELLPADDING="2" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td colspan="2"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></td>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></td>
    <td colspan="3"><FONT STYLE="font-size: 10pt"><B>Arcos Dorados Holdings Inc.</B></FONT></td></tr>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<tr style="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></td>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></td>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></td>
    <TD><FONT STYLE="font-size: 10pt">By:</FONT></td>
    <td colspan="2" style="border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">/s/ Juan David Bastidas</FONT></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="width: 5%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></td>
    <TD STYLE="width: 43%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></td>
    <TD STYLE="width: 2%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></td>
    <TD STYLE="width: 3%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></td>
    <TD STYLE="width: 7%"><FONT STYLE="font-size: 10pt">Name:</FONT></td>
    <TD STYLE="width: 40%"><FONT STYLE="font-size: 10pt">Juan David Bastidas</FONT></td></tr>
<tr style="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></td>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></td>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></td>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></td>
    <TD><FONT STYLE="font-size: 10pt">Title:</FONT></td>
    <TD><FONT STYLE="font-size: 10pt">Chief Legal Counsel</FONT></td></tr>
</table>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">Date:
May 4, 2016</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>



<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0; text-align: right"><B>Item 1</B></P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Arcos Dorados Holdings Inc.</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Condensed Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of March&nbsp;31, 2016 and December&nbsp;31,
2015 and for the three-month periods ended March 31, 2016 and 2015 (Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Arcos Dorados Holdings Inc.</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Consolidated Statements of Income</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT>For
the three-month periods ended March 31, 2016 and 2015 (Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amounts in thousands of US dollars, except
for share data and as otherwise indicated</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2016</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2015</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>REVENUES</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 64%">Sales by Company-operated restaurants</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">631,013</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">743,471</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Revenues from franchised restaurants</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">27,501</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">31,587</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><B>Total revenues</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>658,514</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>775,058</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>OPERATING COSTS AND EXPENSES</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Company-operated restaurant expenses:</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD STYLE="padding-left: 0.25in">Food and paper</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(228,018</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(259,461</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.25in">Payroll and employee benefits</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(139,152</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(171,355</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD STYLE="padding-left: 0.25in">Occupancy and other operating expenses</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(175,709</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(205,939</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.25in">Royalty fees</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(32,096</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(38,002</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>Franchised restaurants &ndash; occupancy expenses</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(12,596</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(15,226</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>General and administrative expenses</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(48,787</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(65,471</TD>
    <TD>)</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Other operating income (expenses), net</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">19</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">(14,219</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><B>Total operating costs and expenses</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right"><B>(636,339</B></TD>
    <TD STYLE="border-bottom: Black 2.25pt solid"><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right"><B>(769,673</B></TD>
    <TD STYLE="border-bottom: Black 2.25pt solid"><B>)</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><B>Operating income</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>22,175</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>5,385</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Net interest expense</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(14,259</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(16,324</TD>
    <TD>)</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Gain (loss) from derivative instruments</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">7</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(73</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Foreign currency exchange results</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">16,719</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(23,698</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>Other non-operating expenses, net</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(174</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(46</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><B>Income (loss) before income taxes</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>24,468</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>(34,756</B></TD>
    <TD STYLE="vertical-align: bottom"><B>)</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Income tax (expense) benefit</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">(8,342</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">6,587</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><B>Net income (loss)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>16,126</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>(28,169</B></TD>
    <TD STYLE="vertical-align: bottom"><B>)</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>Less: Net income attributable to non-controlling interests</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(62</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(64</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt"><B>Net income (loss) attributable to Arcos Dorados Holdings Inc.</B></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>16,064</B></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>(28,233</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>)</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD><B>Earnings (loss) per share information:</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Basic net income (loss) per common share attributable to Arcos Dorados Holdings Inc.</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">0.08</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(0.13</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Diluted net income (loss) per common share attributable to Arcos Dorados Holdings Inc.</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">0.08</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(0.13</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">See Notes to the Condensed Consolidated Financial Statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Arcos Dorados Holdings Inc.</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT><B>Consolidated
Statements of Comprehensive Income</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT>For
the three-month periods ended March 31, 2016 and 2015 (Unaudited)&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Amounts in thousands of US dollars</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2016</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2015</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 66%"><B>Net income (loss)</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 14%; text-align: right"><B>16,126</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 14%; text-align: right"><B>(28,169</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>)</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-decoration: none"><B><U>Other comprehensive gain (loss), net of tax</U>:</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Foreign currency translation</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">13,424</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(49,333</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Defined benefit pension plan:</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">&nbsp;&nbsp;&nbsp;Reclassification of net loss to consolidated statement of income</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">112</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">110</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Defined benefit pension plan (net of $58 and $57 of income taxes for the three-month periods ended March 31, 2016 and 2015, respectively)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">112</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">110</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>Cash flow hedges:</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-left: 0.25in">Net (loss) gain recognized in accumulated other comprehensive loss</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(17,626</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">11,006</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>&nbsp;&nbsp;Reclassification of net gain to consolidated statement of income</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(3,184</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(7,750</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Cash flow hedges&nbsp;(net of $nil of income taxes)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">(20,810</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">)</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">3,256</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD><B>Total other comprehensive loss</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right"><B>(7,274</B></TD>
    <TD STYLE="border-bottom: Black 2.25pt solid"><B>)</B></TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right"><B>(45,967</B></TD>
    <TD STYLE="border-bottom: Black 2.25pt solid"><B>)</B></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><B>Comprehensive gain (loss)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>8,852</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>(74,136</B></TD>
    <TD STYLE="vertical-align: bottom"><B>)</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>Less: Comprehensive income attributable to non-controlling interests</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(50</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(42</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt"><B>Comprehensive gain (loss) attributable to Arcos Dorados&nbsp;&nbsp;Holdings Inc.</B></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; text-align: right; border-bottom: Black 2.5pt double"><B>8,802</B></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; text-align: right; border-bottom: Black 2.5pt double"><B>(74,178</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>)</B></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">See Notes to the Condensed Consolidated Financial Statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt"><B>Arcos Dorados Holdings
Inc.</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT><B>Consolidated
Statements of Balance Sheet</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt">As of March&nbsp;31,
2016 and December&nbsp;31, 2015</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt">Amounts in thousands
of US dollars, except for share data and as otherwise indicated</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>As of</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>March 31, 2016</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>As of</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>(Unaudited)</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>December 31, 2015</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt"><B>ASSETS</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt"><B>Current assets</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 64%"><FONT STYLE="font-size: 10pt">Cash and cash equivalents</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right"><FONT STYLE="font-size: 10pt">266,135</FONT></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right"><FONT STYLE="font-size: 10pt">112,519</FONT></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Accounts and notes receivable, net</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">60,721</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">63,348</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Other receivables</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">32,146</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">35,629</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Inventories</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">45,283</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">44,641</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Prepaid expenses and other current assets</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">120,317</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">110,808</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Deferred income taxes</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">12,811</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">12,051</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>Total current assets</B></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt"><B>537,413</B></FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt"><B>378,996</B></FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 10pt"><B>Non-current assets</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Miscellaneous</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">69,437</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">62,524</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Collateral deposits</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">5,325</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">5,325</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Property and equipment, net</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">846,542</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">833,357</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Net intangible assets and goodwill</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">47,976</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">49,486</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Deferred income taxes</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">80,029</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">63,321</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Derivative instruments</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">5,283</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">6,741</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">McDonald&rsquo;s Corporation&rsquo;s indemnification for contingencies</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><FONT STYLE="font-size: 10pt">3,861</FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><FONT STYLE="font-size: 10pt">3,452</FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>Total non-current assets</B></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><FONT STYLE="font-size: 10pt"><B>1,058,453</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><FONT STYLE="font-size: 10pt"><B>1,024,206</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>Total assets</B></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1.5pt double"><FONT STYLE="font-size: 10pt"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1.5pt double; text-align: right"><FONT STYLE="font-size: 10pt"><B>1,595,866</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 1.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1.5pt double"><FONT STYLE="font-size: 10pt"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1.5pt double; text-align: right"><FONT STYLE="font-size: 10pt"><B>1,403,202</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 1.5pt double">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 10pt"><B>LIABILITIES AND EQUITY</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD><FONT STYLE="font-size: 10pt"><B>Current liabilities</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Accounts payable</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">169,721</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">187,685</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Royalties payable to McDonald&rsquo;s Corporation</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">11,797</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">14,834</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Income taxes payable</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">42,478</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">28,581</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Other taxes payable</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">58,421</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">69,006</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Accrued payroll and other liabilities</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">107,141</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">93,112</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Provision for contingencies</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">530</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">512</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Interest payable</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">4,405</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">15,990</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Short-term debt</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">-&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">2,500</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Current portion of long-term debt</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">176,636</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">161,240</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Derivative instruments</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">18,610</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">2,126</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Deferred income taxes</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><FONT STYLE="font-size: 10pt">1,818</FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><FONT STYLE="font-size: 10pt">1,728</FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>Total current liabilities</B></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt"><B>591,557</B></FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt"><B>577,314</B></FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 10pt"><B>Non-current liabilities</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Accrued payroll and other liabilities</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">19,786</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">19,381</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Provision for contingencies</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">22,211</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">20,066</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Long-term debt, excluding current portion</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">657,411</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">491,327</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Deferred income taxes</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><FONT STYLE="font-size: 10pt">8,284</FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><FONT STYLE="font-size: 10pt">8,224</FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>Total non-current liabilities</B></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><FONT STYLE="font-size: 10pt"><B>707,692</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><FONT STYLE="font-size: 10pt"><B>538,998</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>Total liabilities</B></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt"><B>1,299,249</B></FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt"><B>1,116,312</B></FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD><FONT STYLE="font-size: 10pt"><B>Equity</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Class A shares - no par value common stock; 420,000,000 shares authorized; 130,538,896 shares issued and outstanding</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">371,857</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">371,857</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Class B shares - no par value common stock; 80,000,000 shares authorized, issued and outstanding</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">132,915</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">132,915</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Additional paid-in capital</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">13,481</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">12,606</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Retained earnings</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">209,222</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">193,158</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD><FONT STYLE="font-size: 10pt">Accumulated other comprehensive losses</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(431,525</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt solid"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(424,263</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt solid"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>Total Arcos Dorados Holdings Inc. shareholders&rsquo; equity</B></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt"><B>295,950</B></FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt"><B>286,273</B></FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Non-controlling interests in subsidiaries</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><FONT STYLE="font-size: 10pt">667</FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><FONT STYLE="font-size: 10pt">617</FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>Total equity</B></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><FONT STYLE="font-size: 10pt"><B>296,617</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><FONT STYLE="font-size: 10pt"><B>286,890</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt"><FONT STYLE="font-size: 10pt"><B>Total liabilities and equity</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 10pt"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 10pt"><B>1,595,866</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 10pt"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 10pt"><B>1,403,202</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt; border-bottom: Black 2.5pt double">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">See Notes to the Condensed Consolidated Financial Statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt"><B>Arcos Dorados Holdings
Inc.</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT><B>Condensed
Consolidated Statements of Cash Flow</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT>For
the three-month periods ended March 31, 2016 and 2015 (Unaudited)&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt">Amounts in thousands
of US dollars</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2016</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2015</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>Operating activities</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 68%">Net income (loss) attributable to Arcos Dorados Holdings Inc.</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; text-align: right">16,064</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; text-align: right">(28,233</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Adjustments to reconcile net income (loss) attributable to Arcos Dorados Holdings Inc. to cash provided by operations:</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD STYLE="padding-left: 0.375in">Non-cash charges and credits:</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-left: 0.625in">Depreciation and amortization</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">25,187</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">27,696</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; padding-left: 0.625in">Impairment of long-lived assets</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">7,804</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-left: 0.625in">Foreign currency exchange results</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(16,337</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">21,333</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD STYLE="padding-left: 0.625in">Others, net</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(13,519</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(6,893</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.375in">Changes in assets and liabilities</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(30,254</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(52,115</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD><B>Net cash used in operating activities</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right"><B>(18,859</B></TD>
    <TD><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right"><B>(30,408</B></TD>
    <TD><B>)</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><B>Investing activities</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>Property and equipment expenditures</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(9,223</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(11,958</TD>
    <TD>)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Proceeds from sale of property and equipment and related prepayments</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">15,095</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">108</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Proceeds from sale of&nbsp;&nbsp;restaurant businesses</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">4,015</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Other investment activities</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(585</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(106</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><B>Net cash provided by (used in) investing activities</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>9,302</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>(11,956</B></TD>
    <TD STYLE="vertical-align: bottom"><B>)</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><B>Financing activities</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Dividend payments to Arcos Dorados Holdings Inc.&rsquo;s shareholders</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(12,509</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Proceeds from secured loan agreement</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">167,262</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 12pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Purchase of 2016 Notes</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(288</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 12pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Net short-term borrowings</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(2,500</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">10,559</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>Other financing activities</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(4,960</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(2,118</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><B>Net cash provided by (used in) financing activities</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>159,514</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>(4,068</B></TD>
    <TD STYLE="vertical-align: bottom"><B>)</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Effect of exchange rate changes on cash and cash equivalents</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">3,659</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">(20,710</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><B>Increase (decrease) in cash and cash equivalents</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>153,616</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>(67,142</B></TD>
    <TD STYLE="vertical-align: bottom"><B>)</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Cash and cash equivalents at the beginning of the year</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">$</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">112,519</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">$</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">139,030</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt"><B>Cash and cash equivalents at the end of the period</B></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>266,135</B></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>71,888</B></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt; border-bottom: Black 2.5pt double">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><B>Supplemental cash flow information:</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>Cash paid during the period for:</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">&nbsp;&nbsp;&nbsp;Interest</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">25,866</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">31,178</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">&nbsp;&nbsp;&nbsp;Income tax</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">9,647</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">3,407</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">See Notes to the Condensed Consolidated
Financial Statements<I>.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt"><B>Arcos Dorados Holdings
Inc.</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT><B>Statement
of Changes in Equity</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT>For
the three-month period ended March 31, 2016 (Unaudited)&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt">Amounts in thousands
of US dollars, except for share data and as otherwise indicated</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="23" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Arcos Dorados Holdings Inc.&rsquo; Shareholders</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: Black 2.25pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Class A shares of</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>common stock</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD>
    <TD></TD>
    <TD COLSPAN="5" STYLE="border-bottom: Black 2.25pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Class B shares of</B>&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>common stock</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Additional</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>paid-in</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>capital</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD>
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD COLSPAN="2" ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Retained</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>earnings</B>&nbsp;</P></TD>
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD COLSPAN="2" ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Accumulated</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>other</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>comprehensive</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>losses</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD>
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD COLSPAN="2" ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Total</B></TD>
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD COLSPAN="2" ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Non-</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>controlling</B>&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>interests</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD>
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD COLSPAN="2" ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Total</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 2.5pt solid"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Amount</B></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 15%"><B>Balances at beginning of fiscal year</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 7%; text-align: right"><B>130,538,896</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 7%; text-align: right"><B>371,857</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 7%; text-align: right"><B>80,000,000</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 7%; text-align: right"><B>132,915</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 6%; text-align: right"><B>12,606</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 6%; text-align: right"><B>193,158</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right"><B>(424,263</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 5%; text-align: right"><B>286,273</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 6%; text-align: right"><B>617</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 5%; text-align: right"><B>286,890</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Net income for the period (Unaudited)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">16,064</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">16,064</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">62</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">16,126</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Other comprehensive loss (Unaudited)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(7,262</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(7,262</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(12</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(7,274</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Stock-based compensation related to the 2011 Equity Incentive Plan (Unaudited)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">875</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">875</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">875</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><B>Balances at end of period (Unaudited)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>130,538,896</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>371,857</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>80,000,000</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>132,915</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>13,481</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>209,222</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>(431,525</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>295,950</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>667</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>296,617</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 31pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 31pt">See Notes to the Condensed Consolidated Financial
Statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 31pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 31pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 31pt">&nbsp;</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt"><B>Arcos Dorados Holdings
Inc.</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT><B>Statement
of Changes in Equity</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT>For
the three-month period ended March 31, 2015 (Unaudited)&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt">Amounts in thousands
of US dollars, except for share data and as otherwise indicated</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="23" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Arcos Dorados Holdings Inc.&rsquo; Shareholders</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: Black 2.25pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Class A shares of</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>common stock</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: Black 2.25pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Class B shares of</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>common stock</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Additional</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>paid-in</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>capital</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD>
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD COLSPAN="2" ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Retained</B>&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>earnings</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD>
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD COLSPAN="2" ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Accumulated</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>other</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>comprehensive</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>losses</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD>
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD COLSPAN="2" ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Total</B></TD>
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD COLSPAN="2" ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Non-</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>controlling</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>interests</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD>
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD COLSPAN="2" ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Total</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 2.5pt solid"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Amount</B></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 16%"><B>Balances at beginning of fiscal year</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 7%; text-align: right"><B>130,216,043</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 6%; text-align: right"><B>365,701</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 7%; text-align: right"><B>80,000,000</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 6%; text-align: right"><B>132,915</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 6%; text-align: right"><B>15,974</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 6%; text-align: right"><B>244,791</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right"><B>(302,467</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 5%; text-align: right"><B>456,914</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 7%; text-align: right"><B>673</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 5%; text-align: right"><B>457,587</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Net loss for the period (Unaudited)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(28,233</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(28,233</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">64</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(28,169</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Other comprehensive loss (Unaudited)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(45,945</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(45,945</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(22</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(45,967</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Stock-based compensation related to the 2011 Equity Incentive Plan (Unaudited)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">1,007</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">1,007</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">1,007</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><B>Balances at end of period (Unaudited)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>130,216,043</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>365,701</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>80,000,000</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>132,915</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>16,981</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>216,558</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>(348,412</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>383,743</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>715</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>384,458</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 31pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 31pt">See Notes to the Condensed Consolidated Financial
Statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 31pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 31pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 31pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"></P>

<P STYLE="font: 14pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Arcos
Dorados Holdings Inc.</B></FONT></P>

<P STYLE="font: 14pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Notes
to the Condensed Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">For
the three-month periods ended March 31, 2016 and 2015 (Unaudited)</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Amounts
in thousands of US dollars, except for share data and as otherwise indicated</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 31pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>1.</B></TD><TD><B>Organization and nature of business</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Arcos Dorados Holdings
Inc. (the &ldquo;Company&rdquo;) is a limited liability company organized and existing under the laws of the British Virgin Islands.
The Company&rsquo;s fiscal year ends on the last day of December. The Company has a 99.999% equity interest in Arcos Dorados Cooperatieve
U.A., which has a 100% equity interest in Arcos Dorados B.V. (&ldquo;ADBV&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 3, 2007 the
Company, indirectly through its wholly-owned subsidiary ADBV, entered into a Stock Purchase Agreement and Master Franchise Agreements
(&ldquo;MFAs&rdquo;) with McDonald&rsquo;s Corporation pursuant to which the Company completed the acquisition of the McDonald&rsquo;s
business in Latin America and the Caribbean (&ldquo;LatAm business&rdquo;). Prior to this acquisition, the Company did not carry
out operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company, through
ADBV&rsquo;s wholly-owned and majority owned subsidiaries operates and franchises McDonald&rsquo;s restaurants in the food service
industry. The Company has operations in twenty territories as follows: Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curacao,
Ecuador, French Guyana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto Rico, Trinidad and Tobago, Uruguay, the U.S. Virgin
Islands of St. Croix and St. Thomas and Venezuela. All restaurants are operated either by the Company&rsquo;s subsidiaries or by
independent entrepreneurs under the terms of sub-franchisee agreements (franchisees).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>2.</B></TD><TD><B>Basis of presentation and principles of consolidation</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The accompanying condensed
consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United
States of America (&ldquo;US GAAP&rdquo;) for interim financial information and include the accounts of the Company and its subsidiaries.
All significant intercompany balances and transactions have been eliminated in consolidation. The Company has elected to report
its consolidated financial statements in United States dollars (&ldquo;$&rdquo; or &ldquo;US dollars&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The accompanying condensed
consolidated financial statements do not include all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. Certain information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been condensed or omitted for purposes of this presentation.
The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated annual financial
statements of the Company as of December&nbsp;31, 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The accompanying condensed
consolidated financial statements are unaudited and include, in the opinion of management, all adjustments, consisting only of
normal recurring adjustments, which are considered necessary for the fair presentation of the information in the consolidated financial
statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&rsquo;s
revenues are generally greater in the second half of the year. Although the impact on the Company&rsquo;s results of operations
is relatively small, this impact is due to increased consumption of the Company&rsquo;s products during the winter and summer holiday
seasons, affecting July and December, respectively (for the Southern hemisphere).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Operating results for
the three-month period ended March 31, 2016 are not necessarily indicative of results that may be expected for any future periods.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Reclassifications</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Certain reclassifications
have been made from &quot;Occupancy and other operating expenses&quot; to &quot;Payroll and employee benefits&quot; in the Company&acute;s
consolidated statements of income, totaling $10,612; to the prior year information to conform to the current year presentation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 14pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Arcos
Dorados Holdings Inc.</B></FONT></P>

<P STYLE="font: 14pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Notes
to the Condensed Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">For
the three-month periods ended March 31, 2016 and 2015 (Unaudited)</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Amounts
in thousands of US dollars, except for share data and as otherwise indicated</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>2.</B></TD><TD><B>Basis of presentation and principles of consolidation
(continued)</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Reclassifications
(continued)</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">According to the Accounting
Standard Update 2015-03, debt issuance cost related to a recognized debt liability is required to be presented in the consolidated
statements of balance sheets as a direct deduction from the corresponding debt liability rather than as an asset for the fiscal
year beginning after December 15, 2015. As a result, certain reclassifications have been made from &quot;Miscellaneous&quot;, included
within &quot;Non-current asset&quot; amounting to $3,775 to &quot;Current portion of long-term debt&quot; and to &quot;Long-term
debt, excluding current portion&quot;, included within &quot;Liabilities&quot; in the Company&acute;s consolidated balance sheets
amounting to $359 and $3,416, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>3.</B></TD><TD><B>Summary of significant accounting policies</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There have been no
material changes in the Company&rsquo;s accounting policies disclosed in the notes to the consolidated annual financial statements
as of December 31, 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Use of estimates</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The preparation of
the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual
results could differ from those estimates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Foreign currency translation</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The financial statements
of the Company&rsquo;s foreign operating subsidiaries are translated in accordance with guidance in ASC 830 Foreign Currency Matters.
Except for the Company&rsquo;s Venezuelan operations, the functional currencies of the Company&rsquo;s foreign operating subsidiaries
are the local currencies of the countries in which they conduct their operations. Therefore, assets and liabilities are translated
into US dollars at the balance sheets date exchange rates, and revenues and expenses are translated at average rates prevailing
during the periods. Translation adjustments are included in the &ldquo;Accumulated other comprehensive losses&rdquo; component
of shareholders&rsquo; equity. The Company includes foreign currency exchange results related to monetary assets and liabilities
denominated in currencies other than its functional currencies in its income statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Effective January 1,
2010, Venezuela is considered to be highly inflationary, and as such, the financial statements of the Company&rsquo;s Venezuelan
subsidiaries are remeasured as if their functional currencies were the reporting currency (US dollars). As a result, remeasurement
gains and losses are recognized in earnings rather than in the cumulative translation adjustment, component of &ldquo;Accumulated
other comprehensive losses&rdquo; within shareholders&rsquo; equity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">See Note 13 for additional
information pertaining to the Company&rsquo;s Venezuelan operations, including currency restrictions and controls existing in the
country and a discussion of the exchange rate used for remeasurement purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Recent accounting pronouncements</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In May 2014, the FASB
issued guidance codified in Accounting Standards Codification (ASC) 606, &ldquo;Revenue Recognition - Revenue from Contracts with
Customers,&rdquo; which amends the guidance in former ASC 605, &ldquo;Revenue Recognition,&rdquo; and becomes effective beginning
January 1, 2017. In August 12, 2015, the FASB deferred the effective date to annual reporting periods beginning after December
15, 2017. The standard&rsquo;s core principle is that a company must recognize revenue when it transfers promised goods or services
to customers, in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods
or services. The Company is currently evaluating the impact of the provisions of ASC 606.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Arcos Dorados Holdings Inc.</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Condensed Consolidated Financial
Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the three-month periods ended March
31, 2016 and 2015 (Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amounts in thousands of US dollars, except
for share data and as otherwise indicated</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>3.</B></TD><TD><B>Summary of significant accounting policies (continued)</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Recent accounting pronouncements (continued)</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In February 2016, new
guidance about leases was issued. The new standard (ASC 842) supersede the lease requirements of ASC 840. The objective of the
new guidance is to establish the principles that lessees and lessors shall apply to report useful information to users of financial
statements about the amount, timing, and uncertainty of cash flows arising from a lease. This standard is effective for annual
periods beginning after December 15, 2018, including interim periods. The Company is currently evaluating the impact of the provisions
of ASC 842.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">No other new accounting
pronouncement issued or effective during the period had or is expected to have a material impact on the Company&rsquo;s consolidated
financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>4.</B></TD><TD><B>Short-term debt</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Short-term debt consists
of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>As of</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>March 31, 2016</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>As of</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>(Unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>December 31, 2015</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 58%">Revolving credit facilities (i)</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-bottom: Black 1pt solid">$</TD>
    <TD STYLE="vertical-align: bottom; width: 18%; border-bottom: Black 1pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-bottom: Black 1pt solid">$</TD>
    <TD STYLE="vertical-align: bottom; width: 18%; border-bottom: Black 1pt solid; text-align: right">2,500</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt; text-align: right; border-bottom: Black 2.5pt double"><B>&mdash;</B></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>2,500</B></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(i) <U>Revolving credit
facilities</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company entered
into revolving credit facilities in order to borrow money from time to time to cover its working capital needs and for other general
corporate purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On July 30, 2015, ADBV
renewed its committed revolving credit facility with Bank of America, N.A. (BOFA), as lender, for up to $50 million maturing on
August 3, 2016. As of March 16, 2016 the agreement was amended to change the aggregate commitment amount from $50 million to $25
million. Each loan made to ADBV under this agreement will bear interest at an annual rate equal to LIBOR plus 2.75%. Interest on
each loan will be payable on the date of any prepayment, at maturity and on a quarterly basis, beginning with the date that is
three calendar months following the date the loan is made.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, on August
31, 2015, effective as from October 1, 2015, ADBV entered into a revolving credit facility with JPMorgan Chase Bank, N.A, as lender,
for up to $25 million maturing on October 1, 2016. Each loan made to ADBV under this agreement will bear interest at an annual
rate equal to LIBOR plus 2.25%. Interest on each loan will be payable at maturity and on a quarterly basis, beginning with the
date that is three calendar months following the date the loan is made.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The obligations of
ADBV under the revolving credit facilities are jointly and severally guaranteed by certain of the Company&rsquo;s subsidiaries
on an unconditional basis. Furthermore, the agreements include customary covenants including, among others, restrictions on the
ability of ADBV, the guarantors and certain material subsidiaries to: (i) incur liens, (ii) enter into any merger, consolidation
or amalgamation; (iii) sell, assign, lease or transfer all or substantially all of the borrower&rsquo;s or guarantor&rsquo;s business
or property; (iv) enter into transactions with affiliates; (v) engage in substantially different lines of business; (vi) engage
in transactions that violate certain anti-terrorism laws; and (vii) permit the consolidated net indebtedness to EBITDA ratio to
be greater than 3.5 to 1 on the last day of any fiscal quarter of the borrower. The revolving credit facilities provide for customary
events of default, which, if any of them occurs, would permit or require the lender to terminate its obligation to provide loans
under the revolving credit facilities and/or to declare all sums outstanding under the loan documents immediately due and payable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Arcos Dorados Holdings Inc.</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Condensed Consolidated Financial
Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the three-month periods ended March
31, 2016 and 2015 (Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amounts in thousands of US dollars, except
for share data and as otherwise indicated</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>4.</B></TD><TD><B>Short-term debt (continued)</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(i) <U>Revolving credit
facilities (continued)</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As mentioned in Note
5, on March 29, 2016, the Company has entered into a secured loan agreement through its Brazilian subsidiary which is secured by
certain credit and debit card receivables derived from certain restaurants operated by the subsidiary. As the assumption of liens
mentioned in point (i) above, is restricted under the revolving credit facilities, on March 16, 2016, the lenders waived the Company
for any event of default that may occur pursuant these agreements solely in connection with this transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of March 31, 2016,
the ratio mentioned in point (vii) above was 2.68 and thus the Company is currently in compliance with the ratio requirement under
both revolving credit facilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>5.</B></TD><TD><B>Long-term debt</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Long-term debt consists
of the following:&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>As of</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>March 31, 2016</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>As of</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>(Unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>December 31, 2015</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 60%">2023 Notes</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 17%; text-align: right">466,313</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 17%; text-align: right">466,075</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">2016 Notes</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">174,394</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">158,428</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Secured loan agreement</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">164,019</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 12pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Capital lease obligations</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">5,634</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">5,599</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Other long-term borrowings</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">23,687</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">22,465</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><B>Total</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>834,047</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>652,567</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Current portion of long-term debt</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">176,636</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">161,240</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt"><B>Long-term debt, excluding current portion</B></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>657,411</B></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>491,327</B></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt; border-bottom: Black 2.5pt double">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U></U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>2023 and 2016 Notes</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT>The
following table presents information related to the 2023 and 2016 Notes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 90%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>&nbsp;Principal as of</B></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Annual interest rate</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Currency</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>March 31, <BR>
2016</B></TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>December 31, 2015</B></TD>
    <TD STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Maturity</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 29%"><FONT STYLE="font-size: 10pt">2023 Notes</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 13%; text-align: right"><FONT STYLE="font-size: 10pt">6.625</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 3%; text-align: right">%</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: center"><FONT STYLE="font-size: 10pt">USD</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">473,767</FONT></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; text-align: center"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 8%; text-align: right"><FONT STYLE="font-size: 10pt">473,767</FONT></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 21%; text-align: center"><FONT STYLE="font-size: 10pt">September 27, 2023</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">2016 Notes</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">10.25</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right">%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt">BRL</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">174,455</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">158,544</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt">July 13, 2016</FONT></TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>&nbsp;Interest Expense (i)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>&nbsp;DFC Amortization&nbsp;&nbsp;(i)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="8" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>&nbsp;Accretion of Premium and Amortization of Discount (i)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2016</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2015</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2016</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2015</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2016</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2015</B></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 29%">2023 Notes</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 8%; text-align: right">7,847</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 8%; text-align: right">7,847</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 8%; text-align: right">109</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 8%; text-align: right">109</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; text-align: right">129</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; text-align: right">126</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">2016 Notes</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">3,998</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">5,904</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">176</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">193</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(104</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(142</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(i) These charges are
included within &quot;Net interest expense&quot; in the consolidated statements of income.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Arcos Dorados Holdings Inc.</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Condensed Consolidated
Financial Statements</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the three-month periods ended March
31, 2016 and 2015 (Unaudited)&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amounts in thousands of US dollars, except
for share data and as otherwise indicated</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>5.</B></TD><TD><B>Long-term debt (continued)</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>2023 and 2016 Notes
(continued)</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 27, 2013,
the Company issued senior notes which are due in 2023 (the &quot;2023 Notes&quot;). Periodic payments of principal are not required
and interest is paid semi-annually commencing on March 27, 2014. The gross proceeds from the cash issuance of 2023 Notes amounting
to $378,409 were partially used to finance the purchase of 2019 Notes and to repay certain of the Company&rsquo;s short-term debt.
The 2019 Notes, were canceled during 2013, when the Company launched a tender and exchange offer pursuant to which it offered to
exchange any and all of the outstanding 2019 Notes for 2023 Notes and to purchase any and all of the outstanding 2019 Notes for
cash.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company recorded
the portion of 2023 Notes issued in exchange for cash at the original price of 100.909%. The portion of 2023 Notes issued as consideration
for the partial exchange of 2019 Notes was recorded at the carrying value of the 2019 Notes since there were no substantive modifications
to the terms of the debts according to ASC 470-50-40. The net discount amounting to $5,420 (comprised of a discount of $8,829 related
to the non-cash issuance, partially offset by $3,409 of a premium related to the cash issuance) is being accreted over the term
of the 2023 Notes and recognized as a higher interest expense. The Company incurred $3,313 of financing costs related to the cash
issuance of 2023 Notes, which were capitalized as deferred financing costs (&quot;DFC&quot;) and are being amortized over the life
of the notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On July 13, 2011, the
Company issued Brazilian reais notes due in 2016 (the &quot;2016 Notes&quot;). Periodic payments of principal are not required
and interest is paid semi-annually beginning on January 13, 2012. The Company incurred $3,699 of financing costs related to these
issuances, which were capitalized as deferred financing costs and are being amortized over the life of the notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During November 2015,
the Company redeemed 6.97% or Brazilian Reais (BRL) 47,039 of the outstanding principal amount of its 2016 Notes at a redemption
price equal to 93.75% (equivalent to $11,710) plus accrued and unpaid interest. Additionally, during the three month period ended
March 31, 2016, the Company redeemed 0.17% or BRL 1,180 of the outstanding principal amount at a redemption price equal to 97.75%
(equivalent to $288) plus accrued and unpaid interest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The 2023 and 2016 Notes
(the &quot;Notes&quot;) are redeemable, in whole or in part, at the option of the Company at any time at the applicable redemption
price set forth in the indenture governing them. The Notes are fully and unconditionally guaranteed on a senior unsecured basis
by certain of the Company&rsquo;s subsidiaries. The Notes and guarantees (i) are senior unsecured obligations and rank equal in
right of payment with all of the Company&rsquo;s and guarantors&rsquo; existing and future senior unsecured indebtedness; (ii)
will be effectively junior to all of Company&rsquo;s and guarantors&rsquo; existing and future secured indebtedness to the extent
of the value of the Company&rsquo;s assets securing that indebtedness; and (iii) are structurally subordinated to all obligations
of the Company&rsquo;s subsidiaries that are not guarantors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The indenture governing
the Notes limits the Company&rsquo;s and its subsidiaries&rsquo; ability to, among other things, (i) create certain liens; (ii)
enter into sale and lease-back transactions; and (iii) consolidate, merge or transfer assets. These covenants are subject to important
qualifications and exceptions. The indenture governing the Notes also provides for events of default, which, if any of them occurs,
would permit or require the principal, premium, if any, and interest on all of the then-outstanding 2023 and 2016 Notes to be due
and payable immediately.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 8, 2016, the
company launched a tender offer to redeem the Notes. Refer to Note 14 for more details.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Notes are listed on the Luxembourg Stock
Exchange and trade on the Euro MTF Market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Arcos Dorados Holdings Inc.</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Condensed Consolidated
Financial Statements</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the three-month periods ended March
31, 2016 and 2015 (Unaudited)&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amounts in thousands of US dollars, except
for share data and as otherwise indicated</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>5.</B></TD><TD><B>Long-term debt (continued)</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Secured loan agreement</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 29, 2016,
the Company&rsquo;s Brazilian subsidiary signed a $167,262 Secured Loan Agreement (the &quot;Loan&quot;) with five off-shore lenders
namely: Citibank N.A., Ita&uacute; BBA International plc, Santander (Brasil) S.A., Cayman Islands Branch, Bank of America N.A.
and JP Morgan Chase Bank, N.A. Each loan under the agreement bears interest at the following annual interest rates:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="2" CELLPADDING="2" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 60%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 51%; border-bottom: Black 2.25pt solid; text-align: center"><B>Lender</B></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 48%; border-bottom: Black 2.25pt solid; text-align: center"><B>Annual Interest Rate</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD STYLE="text-align: justify">Citibank N.A.</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">3M LIBOR + 2.439%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Ita&uacute; BBA International plc</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">5.26%</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; text-align: left">Banco Santander (Brasil) S.A., Cayman Islands Branch</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="text-align: center">4.7863%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Bank of America N.A</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">3M LIBOR + 4.00%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD STYLE="text-align: justify">JP Morgan Chase Bank, N.A.</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">3M LIBOR + 3.92%</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In order to fully convert
each loan of the agreement into BRL, the Brazilian subsidiary entered into five cross-currency interest rate swap agreements with
the local subsidiaries of the same lenders. Consequently, the loans were fully converted into BRL amounting to BRL613,850. Refer
to Note 6 for more details.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Considering the cross
currency interest rate swap agreements, the final interest rate of the Loan is the Interbank Market reference interest rate (known
in Brazil as &ldquo;CDI&rdquo;) plus 4.50% per year. Interest payments will be made quarterly, beginning June 2016 and principal
payments will be made semi-annually, beginning September 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Loan matures on
March 30, 2020 and periodic payments of principal are required: 10% of principal in September 2017, 15% in March and September
2018, and 20% in March and September 2019 and in March 2020. Prepayments are allowed without penalty.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Loan is fully and
unconditionally guaranteed on a senior secured basis by certain subsidiaries and is secured by certain credit and debit card receivables
arising from sales in certain Brazilian restaurants operated by the Brazilian subsidiary. The Loan ranks at least <I>pari passu</I>
in right of payment with all other unsubordinated and unsecured indebtedness of the borrower and the guarantors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Loan proceeds will
be used primarily to repay the 2016 Notes which mature on July 13, 2016. The Company previously repurchased BRL48,219 of the outstanding
BRL675,000 principal of the 2016 Notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company incurred
$ 3,243 of financing costs related to this issuance, which were capitalized as deferred financing costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Loan agreement
includes customary covenants including, among others, restrictions on the ability of the Company and certain subsidiaries to (i)
pay dividends; (ii) create liens; (iii) sell certain real estate assets; (iv) enter into sale and lease-back transactions; (v)
pay interest or principal on intercompany loans; and (vi) consolidate, merge or transfer assets. These covenants are subject to
important qualifications and exceptions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Loan, the
Company must maintain (i) a Consolidated Net Indebtedness to EBITDA ratio (as defined therein) lower than (a) 3.5 to 1 as of the
last day of the fiscal quarter ended March 31 and June 30, 2016, (b) 3.25 to 1 as of the last day of the fiscal quarter ended September
30, 2016 and (c) 3.0 to 1 as of the last day of the fiscal quarter ended December 31, 2016 and thereafter; and (ii) an EBITDA to
Consolidated Interest Expense ratio (as defined therein) greater than 2.5 to 1 as of the last day of any fiscal quarter. The Brazilian
subsidiary must maintain an Adjusted Net Indebtedness to EBITDA ratio lower than 2.0 to 1 as of the last day of any fiscal quarter.
The calculation of Adjusted Net Indebtedness of the Brazilian subsidiary shall exclude any intercompany indebtedness.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Arcos Dorados Holdings Inc.</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Condensed Consolidated
Financial Statements</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the three-month periods ended March
31, 2016 and 2015 (Unaudited)&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amounts in thousands of US dollars, except
for share data and as otherwise indicated</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>5.</B></TD><TD><B>Long-term debt (continued)</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Secured loan agreement
(continued)</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of March 31, 2016
the Company was in compliance with the ratio requirements; Consolidated Net Indebtedness to EBITDA ratio and EBITDA to consolidated
Interest Expense ratio were 2.55 and 3.42, respectively; and, the net indebtedness to EBITDA ratio of the Brazilian subsidiary
was 0.05.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Loan also provides
for customary events of default, which, if any of them occurs, would permit or require the principal and interest on all of the
outstanding amount to be due and payable immediately.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>6.</B></TD><TD><B>Derivative instruments</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Derivatives not designated as hedging
instruments </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Total equity return swap</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 13, 2012,
the Company entered into a total equity return swap agreement with Goldman Sachs International (GSI) in order to minimize earning
volatility related to ADBV Long-Term Incentive Plan (see Note 7 for more details). Under the agreement, the Company received (paid)
the appreciation (depreciation), plus any dividends, on a certain notional number of Class A shares over a reference price of approximately
$13.77 per share. The Company in turn paid interests at 3-month LIBOR plus 450 basis points (330 basis points at the inception
and 380 between August 2013 and September 2014). The agreement was renewed twice and as from the amendment signed on September
23, 2014, the Company was required to make a collateral deposit which returned to the Company with the maturity of the agreement
on September 12, 2015. During the third quarter of 2015, the Company paid $9,681 as settlement of the agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company did not
designate this swap as a hedge under ASC 815. Therefore, the agreement was carried at fair market value in the consolidated balance
sheets with changes reported in earnings, within &quot;General and administrative expenses&quot;. The interest portion was recorded
within &ldquo;Net interest expense&rdquo; in the Company&rsquo;s consolidated statement of income. See additional disclosures below
for further information about this swap agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Derivatives designated as hedging
instruments </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Forward contracts</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company has entered
into various forward contracts in a few territories in order to hedge a portion of the foreign exchange risk associated with forecasted
imports of goods. The effect of the hedges result in fixing the cost of goods acquired (i.e. the net settlement or collection adjusts
the cost of inventory paid to the suppliers). As of March&nbsp;31, 2016, the Company has forward contracts outstanding with a notional
amount of $17,313 that mature during 2016.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company made net
collections totaling $2,631, and $1,262 during the three-month periods ended March 31, 2016 and 2015, respectively, as a result
of the net settlements of these derivatives. See additional disclosures below for further information about these forward contracts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Cross-currency interest
rate swap</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On November 7, 2013,
the Company entered into a cross-currency interest rate swap agreement with JPMorgan Chase Bank, N.A., to hedge all the variability
in a portion (53.08%) of the principal and interest collections of its BRL intercompany loan receivable with ADBV which was amended
on November 13, 2015. All the terms of the swap agreement match the terms of the BRL intercompany loan receivable.&nbsp;Pursuant
to this agreement, the Company receives interests at a fixed rate of 4.38% over a notional amount of 28.3 million (47.3 million
at the inception) of US dollars and pays interest at a fixed rate of 13% over a notional amount of R$108 million on March 31 and
September 30 of each year. &nbsp;This agreement matures on September 29, 2023 with exchange of principal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Arcos Dorados Holdings Inc.</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Condensed Consolidated Financial
Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the three-month periods ended March
31, 2016 and 2015 (Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amounts in thousands of US dollars, except
for share data and as otherwise indicated</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>6.</B></TD><TD><B>Derivative instruments (continued)</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Cross-currency interest
rate swap (continued)</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As from the amendment,
the Company is required to make a collateral deposit equal to the excess of mark-to-market above a threshold of $5,000, with $250
as incremental basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a result of the
amendment, the Company collected $19,817 and recorded a loss of $2,650 within &ldquo;Loss from derivative instruments&rdquo; in
the income statement. Furthermore, according to ASC 815-30-40, the amount deferred in accumulated other comprehensive income until
the date of the amendment that equals to $6,666, will be amortize to earnings as the originally hedged cash flows affected earnings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 29, 2016,
the Company entered into five cross-currency interest rate swap agreements in order to fully hedge the principal and interest cash
flows of the Secured Loan Agreement described in Note 5, into BRL. The agreements were signed with the Brazilian subsidiaries of
the banks participating in the secured loan. All the terms of the cross-currency interest rate swap agreements match the terms
of the secured loan agreement. Pursuant to these agreements, the Company receives interest in US dollar at an interest rate equal
to the one it has to pay to the off-shore lenders over a notional amount of $167,3 million and pays interest in BRL at CDI plus
4.50% per year, over a notional amount of BRL 613,9 million quarterly, beginning June 2016.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company paid $1,331
and $1,177 of net interest during fiscal years 2016 and 2015, respectively</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">See additional disclosures
below for further information about this swap agreements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Additional disclosures</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
presents the fair values of derivative instruments included in the consolidated balance sheets as of March&nbsp;31, 2016 and December&nbsp;31,
2015:&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="9" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Asset (Liability) Derivatives</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Fair Value</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>As of</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Type of Derivative</B></TD>
    <TD>&nbsp;</TD>
    <TD ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Balance Sheets Location</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>March 31, 2016</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>As of</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>(Unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>December 31, 2015</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B><I>Derivatives designated as hedging instruments under ASC 815 Derivatives and Hedging</I></B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 33%">Forward contracts</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 20%">Other receivables</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 20%; text-align: right">39</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 20%; text-align: right">454</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">Accrued payroll and other liabilities</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(569</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Cross-currency interest rate swaps (i)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">Derivative instruments</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">(13,327</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">4,615</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><B>Total derivative instruments</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>(13,857</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>5,069</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 9pt"></TD><TD STYLE="width: 27pt">(i)</TD><TD STYLE="text-align: justify">At March&nbsp;31, 2016, disclosed in the consolidated balance sheet as follows: $5,283 as a non-current
assets and $18,610 as a current liability. At December&nbsp;31, 2015, disclosed in the consolidated balance sheet as follows: $6,741
as a non-current asset and $2,126 as a current liability.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following tables
present the pretax amounts affecting income and other comprehensive income for the three-month periods ended March 31, 2016 and
2015 for each type of derivative relationship:&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Arcos Dorados Holdings Inc.</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Condensed Consolidated Financial
Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the three-month periods ended March
31, 2016 and 2015 (Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amounts in thousands of US dollars, except
for share data and as otherwise indicated</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>6.</B></TD><TD><B>Derivative instruments (continued)</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Derivatives in Cash Flow</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Hedging Relationships</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Gain (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>(Gain) Loss Reclassified from Accumulated OCI into Income (Effective Portion) (i)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Gain (Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing and Ineffective Portion)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2016</B></TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2015</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2016</B></TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2015</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2016</B></TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2015</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 28%">Forward contracts</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">1,647</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">961</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">(2,631</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">)</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">(1,262</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">)</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Cross-currency interest rate swaps</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">(19,273</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">)</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">10,045</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">(553</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">)</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">(6,488</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><B>Total</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>(17,626</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>11,006</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>(3,184</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>(7,750</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>&mdash;</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>&mdash;</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 9pt"></TD><TD STYLE="width: 27pt">(i)</TD><TD STYLE="text-align: justify">The gain recognized in income related to forward contracts was recorded as an adjustment to food
and paper. The net gain (loss) recognized in income related to the cross-currency interest rate swaps is presented in the consolidated
income statement as follows: a gain of $1,373 and $6,853 for the three-month periods ended March 31, 2016 and 2015, respectively,
as an adjustment to foreign currency exchange results and a loss of $820 and $365 for the three-month periods ended March 31, 2016
and 2015, respectively, as an adjustment to net interest expense.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Derivatives Not Designated as Hedging
        Instruments</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD>
    <TD ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Location of Loss Recognized in Income</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Loss Recognized in Income on Derivative instruments</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2016</B></TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2015</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 37%">Total equity return swap</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="width: 32%">General and administrative expenses</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 12%; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 12%; text-align: right">(491</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD>Net interest expense</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(167</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Others</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">Loss from derivative instruments</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">7</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">(73</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><B>Total</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>7</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>(731</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>)</B></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>7.</B></TD><TD><B>Share-based compensation</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>ADBV Long-Term Incentive
Plan</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During 2008, the Company
implemented a long-term incentive plan to reward employees for increases in the fair value of the Company&rsquo;s stock subsequent
to the date of grant. In accordance with this plan, from 2008 to 2010 the Company granted units (called &ldquo;CADs&rdquo;) to
certain employees, pursuant to which the employees are entitled to receive, when vested, a cash payment equal to the appreciation
in fair value over the base value. Once the award becomes exercisable, it could be exercised until the date of the termination
which occurred three years after the fifth anniversary of the grant date. Exercisable outstanding awards at the date of termination
are automatically settled by the Company. During March 2015, the total amount of awards was vested.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The accrued liability
is remeasured at the end of each reporting period until settlement. As of March 31, 2016, it amounts to $330 and is disclosed within
&quot;Accrued payroll and other liabilities&quot; in the Company&rsquo;s consolidated balance sheet. As of March 31, 2016, the
exercisable units were 664,775.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Compensation expense
is included within &ldquo;General and administrative expenses&rdquo; in the consolidated statement of income. As discussed in Note
6, from August 2012 to September 2015, the Company entered into a total equity return swap agreement to minimize earnings volatility
related to these awards. The adjustments to the value of the swap tended to minimize the adjustments to the carrying value of ADBV
Long-Term Incentive Plan liability derived from changes in the Company&rsquo;s stock price, which were also recorded on &ldquo;General
and administrative expenses&rdquo;. As a result, there was a reduction of the impact on the Company&rsquo;s consolidated statement
of income as from the effective date of the agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Arcos Dorados Holdings Inc.</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Condensed Consolidated Financial
Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the three-month periods ended March
31, 2016 and 2015 (Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amounts in thousands of US dollars, except
for share data and as otherwise indicated</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>7.</B></TD><TD><B>Share-based compensation (continued)</B></TD>
</TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>2011 Equity Incentive
Plan</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In March 2011, the
Company adopted its Equity Incentive Plan, or 2011 Plan, to attract and retain the most highly qualified and capable professionals
and to promote the success of its business. This plan replaces ADBV Long-Term Incentive Plan discussed above, although the awards
that have already been granted will remain outstanding until their respective termination dates. Like ADBV Long-Term Incentive
Plan, the 2011 Plan is being used to reward certain employees for the success of the Company&rsquo;s business through an annual
award program. The 2011 Plan permits grants of awards relating to class A shares, including awards in the form of shares (also
referred to as stock), options, restricted shares, restricted share units, share appreciation rights, performance awards and other
share-based awards as will be determined by the Company&rsquo;s Board of Directors. The maximum number of shares that may be issued
under the 2011 Plan is 2.5% of the Company&rsquo;s total outstanding class A and class B shares immediately following its initial
public offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company made a
special grant of stock options and restricted share units in 2011 in connection with its initial public offering. Both types of
special awards vest as follows: 1/3 on each of the second, third and fourth anniversaries of the grant date. The Company also made
recurring grants of stock options and restricted share units in each of the fiscal years from 2011 to 2015 (for fiscal year 2015
only restricted share units).&nbsp;Both types of these recurring annual awards vest as follows: 40% on the second anniversary of
the date of grant and 20% on each of the following three anniversaries. For all grants, each stock option granted represents the
right to acquire a Class A share at its grant-date fair market value, while each restricted share unit represents the right to
receive a Class A share when vested. The exercise right for the stock options is cumulative and, once such right becomes exercisable,
it may be exercised in whole or in part during quarterly window periods until the date of termination, which occurs at the seventh
anniversary of the date of grant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company utilizes
a Black-Scholes option-pricing model to estimate the value of stock options at the grant date. The value of restricted shares units
is based on the quoted market price of the Company&rsquo;s class A shares at the grant date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company recognizes
stock-based compensation expense on a straight-line basis over the requisite service period&nbsp;for each separately vesting portion
of the award as if the award was, in substance, multiple awards. The Company recognized stock-based compensation expense in the
amount of $875 and $1,007 during the three-month periods ended March 31, 2016 and 2015, respectively, of which $nil and $215 relates
to the special awards granted in connection with the initial public offering. Stock-based compensation expense is included within
&ldquo;General and administrative expenses&rdquo; in the consolidated statements of income.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><I>Stock Options</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
summarizes the activity of stock options during the three-month period ended March 31, 2016:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Units</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Weighted-average strike price</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Weighted-average grant-date fair value</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 52%"><B>Outstanding at December 31, 2015</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 14%; text-align: right"><B>2,025,894</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 14%; text-align: right"><B>21.03</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 14%; text-align: right"><B>5.87</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Forfeitures</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(3,736</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">14.32</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">4.56</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Expired (i)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(3,630</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">14.33</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">4.77</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><B>Outstanding at March 31, 2016</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><B>2,018,528</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><B>21.08</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><B>5.88</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><B>Exercisable at March 31, 2016</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><B>1,329,111</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><B>19.34</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><B>5.35</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(i) As of March 31,
2016, Additional paid-in capital included $17 related to expired stock options.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Arcos Dorados Holdings Inc.</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Condensed Consolidated Financial
Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the three-month periods ended March
31, 2016 and 2015 (Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amounts in thousands of US dollars, except
for share data and as otherwise indicated</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>7.</B></TD><TD><B>Share-based compensation (continued)</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><I>Stock Options (continued)</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
provides a summary of outstanding stock options at March&nbsp;31, 2016:&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Vested (i)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Non-vested (ii)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Total</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 55%">Number of units outstanding</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 13%; text-align: right">1,329,111</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 13%; text-align: right">689,417</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 13%; text-align: right">2,018,528</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Weighted-average grant-date fair market value per unit</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">5.35</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">3.87</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">5.88</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Total grant-date fair value</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">7,105</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">2,670</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">9,775</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Weighted-average accumulated percentage of service</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">100</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">82.9</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">96.1</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Stock-based compensation recognized in Additional paid-in capital</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">7,105</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">2,212</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">9,317</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Compensation expense not yet recognized (iii)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">-</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">458</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">458</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 9pt"></TD><TD STYLE="width: 27pt">(i)</TD><TD>Related to exercisable awards.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 9pt"></TD><TD STYLE="width: 27pt">(ii)</TD><TD>Related to awards that will vest between fiscal years 2016 and 2019.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 9pt"></TD><TD STYLE="width: 27pt">(iii)</TD><TD>Expected to be recognized in a weighted-average period of 2.2 years.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><I>Restricted Share Units</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
summarizes the activity of restricted share units during the three-month period ended March 31, 2016:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Units</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Weighted-average grant-date fair value</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 60%"><B>Outstanding at December 31, 2015</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 18%; text-align: right"><B>1,230,210</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 18%; text-align: right"><B>7.96</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Forfeitures</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">(15,289</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">8.65</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><B>Outstanding at March 31, 2016</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><B>1,214,921</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><B>7.95</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><B>Exercisable at March 31, 2016</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">-</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">-</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
provides a summary of outstanding restricted share units at March&nbsp;31, 2016:&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 83%">Number of units outstanding (i)</TD>
    <TD STYLE="vertical-align: top; width: 16%; text-align: right">1,214,921</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Weighted-average grant-date fair market value per unit</TD>
    <TD STYLE="vertical-align: top; text-align: right">7.95</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Total grant-date fair value</TD>
    <TD STYLE="vertical-align: top; text-align: right">9,663</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Weighted-average accumulated percentage of service</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; text-align: right">52.7%</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Stock-based compensation recognized in Additional paid-in capital</TD>
    <TD STYLE="vertical-align: top; text-align: right">5,097</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Compensation expense not yet recognized (ii)</TD>
    <TD STYLE="vertical-align: top; text-align: right">4,566</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 9pt"></TD><TD STYLE="width: 27pt">(i)</TD><TD>Related to awards that will vest between fiscal years 2016 and 2020.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 9pt"></TD><TD STYLE="width: 27pt">(ii)</TD><TD>Expected to be recognized in a weighted-average period of 3.8 years.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Arcos Dorados Holdings Inc.</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Condensed Consolidated
Financial Statements</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the three-month periods ended March
31, 2016 and 2015 (Unaudited)&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amounts in thousands of US dollars, except
for share data and as otherwise indicated</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>8.</B></TD><TD><B>Commitments and contingencies</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Commitments</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The MFAs require the Company and its MF
subsidiaries, among other obligations:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 27pt">(i)</TD><TD STYLE="text-align: justify">to pay monthly royalties commencing at a rate of approximately 5% of gross sales of the restaurants,
substantially consistent with market;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 27pt">(ii)</TD><TD STYLE="text-align: justify">to agree with McDonald&rsquo;s on a restaurant opening plan and a reinvestment plan for each three-year
period and pay an initial franchise fee for each new restaurant opened;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 27pt">(iii)</TD><TD>to commit to funding a specified Strategic Marketing Plan;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 27pt">(iv)</TD><TD STYLE="text-align: justify">to own (or lease) directly or indirectly, the fee simple interest in all real property on which
any franchised restaurant is located; and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 27pt">(v)</TD><TD STYLE="text-align: justify">to maintain a minimum fixed charge coverage ratio (as defined therein) at least equal to 1.50 as
well as a maximum leverage ratio (as defined therein) of 4.25.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 10, 2015,
the Company reached an agreement with McDonald&rsquo;s Corporation to amend the opening plan mentioned in point (ii) above, from
250 to 150 new restaurant openings for the three-year period commenced on January 1, 2014, mainly in order to adjust this plan
to the current economic realities of the region. Under this agreement, the Company is also committed to execute at least 140 reimages
over the three-year period and to maintain the three-year reinvestment plan of at least $180 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company was not
in compliance with the leverage ratio mentioned in point (v) above for the three-month period ended as of March 31, 2016. The ratios
were as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 50%; border-collapse: collapse">
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 67%">Leverage Ratio</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 27%; text-align: right">4.80</TD>
    <TD STYLE="vertical-align: top; width: 4%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Fixed Charge Coverage Ratio</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">1.67</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 31.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 31.5pt">On March 17, 2016,
McDonald&rsquo;s Corporation granted the Company a limited waiver through and including March 31, 2016, during which time, the
Company is not required to comply with the financial ratios set forth in the MFA. After March 31, 2016, if the Company remains
non-compliant with the financial requirements and is unable to obtain an extension of the waiver or to comply with the original
commitments under the MFA, it could be in material breach. A breach of the MFA would give McDonald&rsquo;s Corporation certain
rights, including the ability to acquire all or portions of the business. Notwithstanding the foregoing, the Company does not expect
any material adverse effect to its business, results of operations, financial condition or cash flows as a result of this situation.
&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 31.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, the Company
maintains standby letters of credit with an aggregate drawing amount of $80 million in favor of McDonald&rsquo;s Corporation as
collateral for the obligations assumed under the MFAs. The letters of credit can be drawn if certain events occur, including the
failure to pay royalties. No amounts have been drawn at the date of issuance of these financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Provision for contingencies</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company has certain
contingent liabilities with respect to existing or potential claims, lawsuits and other proceedings, including those involving
labor, tax and other matters. At March&nbsp;31, 2016 the Company maintains a provision for contingencies, net of judicial deposits,
amounting to $22,741 ($20,578 at December&nbsp;31, 2015).As of March&nbsp;31, 2016 and December&nbsp;31, 2015, the net amount of
$22,741 and $20,578 is disclosed as follows: $530 and $512 as a current liability and $22,211 and $20,066 as a non-current liability,
respectively. The breakdown of the provision for contingencies is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Arcos Dorados Holdings Inc.</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Condensed Consolidated
Financial Statements</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the three-month periods ended March
31, 2016 and 2015 (Unaudited)&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amounts in thousands of US dollars, except
for share data and as otherwise indicated</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>8.</B></TD><TD><B>Commitments and contingencies (continued)</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Provision for contingencies
(continued)</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>As of</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>March 31, 2016</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>As of</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>(Unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>December 31, 2015</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 60%">Tax contingencies in Brazil</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 17%; text-align: right">6,687</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 17%; text-align: right">5,118</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Labor contingencies in Brazil</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">7,967</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">7,013</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Others</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">14,495</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">13,947</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Subtotal</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">29,149</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">26,078</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>Judicial deposits</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(6,408</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(5,500</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt"><B>Provision for contingencies</B></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>22,741</B></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>20,578</B></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt; border-bottom: Black 2.5pt double">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of March&nbsp;31,
2016, there are certain matters related to the interpretation of tax and labor laws for which there is a possibility that a loss
may have been incurred in accordance with ASC 450-20-50-4 within a range of $58 million and $80 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Additionally, there
is a lawsuit filed by several Puerto Rican franchisees against McDonald&rsquo;s Corporation and certain subsidiaries purchased
by the Company during the acquisition of the LatAm business (&ldquo;the Puerto Rican franchisees lawsuit&rdquo;). The claim seeks
declaratory judgment and damages in the aggregate amount of $66.7 million plus plaintiffs&rsquo; attorney fees. At the end of 2014
the plaintiffs finalized their presentation of evidence whereas the Company has not started yet. The Company believes that a final
negative resolution has a low probability of occurrence.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt">During 2014, another
franchisee filed a complaint (&ldquo;the related Puerto Rican franchisee lawsuit&rdquo;) against the Company and McDonald&rsquo;s
USA, LLC (a wholly owned subsidiary of McDonald&rsquo;s Corporation), asserting a very similar claim to the one filed in the Puerto
Rican franchisees lawsuit. The claim seeks declaratory judgment and damages in the amount of $30 million plus plaintiffs&rsquo;
attorney fees. Although this case is in its early stages, the Company believes that a final negative resolution has a low probability
of occurrence, since its close resemblance to the Puerto Rican franchisees lawsuit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Furthermore, the Puerto
Rico Owner Operator&rsquo;s Association (&ldquo;PROA&rdquo;), an association integrated by the Company&rsquo;s franchisees that
meets periodically to coordinate the development of promotional and marketing campaigns (an association that at the time of the
claim was formed solely by franchisees that are plaintiffs in the Puerto Rican franchisees lawsuit), filed a third party complaint
and counterclaim (&ldquo;the PROA claim&rdquo;) against the Company and other third party defendants, in the amount of $31 million.
Although certain negative resolution occurred in that lawsuit at the preliminary and first instance stage, no provision has been
recorded because the Company believes that a final negative resolution has a low probability of occurrence.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to Section
9.3 of the Stock Purchase Agreement, McDonald&rsquo;s Corporation indemnifies the Company for certain Brazilian claims as well
as for specific and limited claims arising from the Puerto Rican franchisees lawsuit. Pursuant to the MFA, the Company indemnifies
McDonald&rsquo;s for the related Puerto Rican franchisee lawsuit and the PROA claim.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At March&nbsp;31, 2016,
the non-current portion of the provision for contingencies includes $3,861 ($3,452 at December&nbsp;31, 2015) related to Brazilian
claims that are covered by the indemnification agreement. As a result, the Company has recorded a non-current asset in respect
of McDonald&rsquo;s Corporation&rsquo;s indemnity in the consolidated balance sheet.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Arcos Dorados Holdings Inc.</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Condensed Consolidated
Financial Statements</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the three-month periods ended March
31, 2016 and 2015 (Unaudited)&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amounts in thousands of US dollars, except
for share data and as otherwise indicated</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>9.</B></TD><TD><B>Segment and geographic information</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company is required
to report information about operating segments in annual financial statements and interim financial reports issued to shareholders
in accordance with ASC 280. Operating segments are components of a company about which separate financial information is available
that is regularly evaluated by the chief operating decision maker(s) in deciding how to allocate resources and assess performance.
ASC 280 also requires disclosures about the Company&rsquo;s products and services, geographical areas and major customers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As discussed in Note
1, the Company through its wholly-owned and majority-owned subsidiaries operates and franchises McDonald&rsquo;s restaurants in
the food service industry. The Company has determined that its reportable segments are those that are based on the Company&rsquo;s
method of internal reporting. The Company manages its business as distinct geographic segments and its operations are divided into
four geographical divisions, which are as follows: Brazil; the Caribbean division, consisting of Aruba, Curacao, Colombia, French
Guyana, Guadeloupe, Martinique, Puerto Rico, Trinidad and Tobago, the U.S. Virgin Islands of St. Croix and St. Thomas and Venezuela;
the North Latin America division (&ldquo;NOLAD&rdquo;), consisting of Costa Rica, Mexico and Panama; and the South Latin America
division (&ldquo;SLAD&rdquo;), consisting of Argentina, Chile, Ecuador, Peru and Uruguay. The accounting policies of the segments
are the same as those used in the preparation of the consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As from January 1,
2016, the Company made changes in the allocation of certain expenses previously included in the corporate segment to the operating
divisions in order to align the financial statement presentation with the revised allocation used by the Company&rsquo;s management
as from that date. In accordance with ASC 280, Segment Reporting, the Company has restated its comparative segment information
based on the new allocation of expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
presents information about profit or loss and assets for each reportable segment:&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>For the three-month periods ended</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>March 31,</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>2016</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>2015</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>(Unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>(Unaudited)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-decoration: underline"><B><U>Revenues:</U></B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 64%">Brazil</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">288,592</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">365,930</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Caribbean division</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">97,589</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">100,582</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">NOLAD</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">85,289</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">86,543</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">SLAD</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">187,044</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">222,003</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt"><B>Total revenues</B></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>658,514</B></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>775,058</B></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt; border-bottom: Black 2.5pt double">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-decoration: underline"><B><U>Adjusted EBITDA:</U></B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Brazil</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">35,292</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">35,240</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Caribbean division</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">2,461</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(2,733</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">NOLAD</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">7,642</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">5,306</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">SLAD</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">16,489</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">23,369</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><B>Total reportable segments</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>61,884</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>61,182</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Corporate and others (i)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(13,677</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(19,329</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt"><B>Total adjusted EBITDA</B></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>48,207</B></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>41,853</B></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt; border-bottom: Black 2.5pt double">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0"></P>

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<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Arcos Dorados Holdings Inc.</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Condensed Consolidated
Financial Statements</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the three-month periods ended March
31, 2016 and 2015 (Unaudited)&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amounts in thousands of US dollars, except
for share data and as otherwise indicate</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>9.</B></TD><TD><B>Segment and geographic information (continued)</B></TD>
</TR></TABLE>



<P STYLE="margin-top: 0; margin-bottom: 0; text-align: center"></P>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>For the three-month periods ended</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>March 31,</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>2016</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>2015</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>(Unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>(Unaudited)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-decoration: underline"><B><U>Adjusted EBITDA reconciliation:</U></B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 64%"><B>Total adjusted EBITDA</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right"><B>48,207</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right"><B>41,853</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD><B>Plus (Less) items excluded from computation that affect operating income:</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Depreciation and amortization</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(25,187</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(27,696</TD>
    <TD>)</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Gains from sale or insurance recovery of property and equipment</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">332</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">157</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Write-offs of property and equipment</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(1,094</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(777</TD>
    <TD>)</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Stock-based compensation related to the special awards in connection with the initial public offering under the 2011 Plan</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(215</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Impairment of long-lived assets</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(7,804</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>ADBV Long-Term Incentive Plan incremental compensation from modification</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(83</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(133</TD>
    <TD>)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><B>Operating income</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>22,175</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>5,385</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><B>Less:</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>Net interest expense</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(14,259</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(16,324</TD>
    <TD>)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Gain (loss) from derivative instruments</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">7</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(73</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Foreign currency exchange results</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">16,719</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(23,698</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Other non-operating expenses, net</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(174</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(46</TD>
    <TD>)</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Income tax (expense) benefit</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(8,342</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">6,587</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Net income attributable to non-controlling interests</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(62</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(64</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt"><B>Net income (loss) attributable to Arcos Dorados Holdings Inc.</B></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>16,064</B></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>(28,233</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>)</B></TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>For the three-month periods ended</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>March 31,</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>2016</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>2015</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>(Unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>(Unaudited)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-decoration: underline"><B><U>Depreciation and amortization:</U></B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 64%">Brazil</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">9,865</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">13,233</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Caribbean division</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">9,485</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">6,959</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">NOLAD</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">5,714</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">6,564</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">SLAD</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">3,595</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">4,897</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><B>Total reportable segments</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>28,659</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>31,653</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Corporate and others (i)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">1,297</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">2,233</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>Purchase price allocation (ii)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(4,769</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(6,190</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt"><B>Total depreciation and amortization</B></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>25,187</B></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>27,696</B></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt; border-bottom: Black 2.5pt double">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0"></P>

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<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Arcos Dorados Holdings Inc.</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Condensed Consolidated
Financial Statements</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the three-month periods ended March
31, 2016 and 2015 (Unaudited)&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amounts in thousands of US dollars, except
for share data and as otherwise indicate</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>9.</B></TD><TD><B>Segment and geographic information (continued)</B></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>For the three-month periods ended</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>March 31,</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>2016</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>2015</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>(Unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>(Unaudited)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-decoration: underline"><B><U>Property and equipment expenditures:</U></B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 64%">Brazil</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">3,423</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">3,928</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Caribbean division</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">1,532</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">1,336</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">NOLAD</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">438</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">1,615</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">SLAD</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">3,767</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">4,829</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><B>Total reportable segments</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>9,160</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>11,708</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Corporate and others (i)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">63</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">250</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt"><B>Total property and equipment expenditures</B></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>9,223</B></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>11,958</B></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt; border-bottom: Black 2.5pt double">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>As of</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>March 31,</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>2016</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>December 31,</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>(Unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2015</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-decoration: underline"><B><U>Total assets:</U></B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 64%">Brazil</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">846,206</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">612,074</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Caribbean division</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">370,406</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">382,022</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">NOLAD</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">300,060</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">308,632</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">SLAD</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">226,601</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">242,081</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><B>Total reportable segments</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>1,743,273</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>1,544,809</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Corporate and others (i)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">32,906</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">36,946</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>Purchase price allocation (ii)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(180,313</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(178,553</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt"><B>Total assets</B></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>1,595,866</B></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>1,403,202</B></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt; border-bottom: Black 2.5pt double">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 9pt"></TD><TD STYLE="width: 27pt">(i)</TD><TD STYLE="text-align: justify">Primarily relates to corporate general and administrative expenses, corporate supply chain operations
in Uruguay, and related assets. Corporate general and administrative expenses consist of corporate office support costs in areas
such as facilities, finance, human resources, information technology, legal, marketing, restaurant operations, supply chain and
training. As of March 31, 2016 corporate assets primarily include corporate cash and cash equivalents, a collateral deposit and
corporate deferred income taxes. As of December 31, 2015 corporate assets also included derivative instruments.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 9pt"></TD><TD STYLE="width: 27pt">(ii)</TD><TD STYLE="text-align: justify">Relates to the purchase price allocation adjustment made at corporate level, which reduces the
total assets and the corresponding depreciation and amortization.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&rsquo;s
revenues are derived from two sources: sales by Company-operated restaurants and revenues from restaurants operated by franchisees.
All of the Company&rsquo;s revenues are derived from foreign operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Long-lived assets consisting
of property and equipment totaled $846,542 and $833,357 at March&nbsp;31, 2016 and December&nbsp;31, 2015, respectively. All of
the Company&rsquo;s long-lived assets are related to foreign operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Arcos Dorados Holdings Inc.</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Condensed Consolidated
Financial Statements</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the three-month periods ended March
31, 2016 and 2015 (Unaudited)&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amounts in thousands of US dollars, except
for share data and as otherwise indicate</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>10.</B></TD><TD><B>Shareholders&rsquo; equity</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Authorized capital</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company is authorized
to issue a maximum of 500,000,000 shares, consisting of 420,000,000 class A shares and 80,000,000 class B shares of no par value
each.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Issued and outstanding capital</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At December&nbsp;31,
2015, the Company had 210,538,896 shares issued and outstanding with no par value, consisting of 130,538,896 Class A shares and
80,000,000 Class B shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Rights, privileges
and obligations</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Holders of Class A
shares are entitled to one vote per share and holders of Class B shares are entitled to five votes per share. Except with respect
to voting, the rights, privileges and obligations of the Class A shares and Class B shares are <I>pari passu</I> in all respects,
including with respect to dividends and rights upon liquidation of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Distribution of dividends</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company can only
make distributions to the extent that immediately following the distribution, its assets exceed its liabilities, and the Company
is able to pay its debts as they become due.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During fiscal year
2015 and for the three month period ended March 31,2016 , the Company did not declare a dividend distribution to its shareholders,
with respect to its results of operations for fiscal year 2014 and 2015 respectively. During fiscal years 2014 the Company declared
dividend distributions totaling $50,036. The last installment of that distribution was paid during the three month period ended
March 31, 2015 amounting to $12,509.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Accumulated Other Comprehensive Losses</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
sets forth information with respect to the components of &ldquo;Accumulated other comprehensive losses&rdquo; as of March&nbsp;31,
2016 and their related activity during the three-month period then ended:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Foreign currency translation</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Unrealized results on cash flow hedges</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Defined benefit pension plan (i)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Total Accumulated other comprehensive income (loss)</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 44%"><B>Balances at December 31, 2015</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; text-align: right"><B>(431,190</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; text-align: right"><B>7,876</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 12%; text-align: right"><B>(949</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 12%; text-align: right"><B>(424,263</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>)</B></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Other comprehensive gain (loss) before reclassifications (Unaudited)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">13,436</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(17,626</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(4,190</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Net (loss) gain reclassified from accumulated other comprehensive loss to consolidated statement of income (Unaudited)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">(3,184</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">112</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">(3,072</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Net current-period other comprehensive income (loss)&nbsp;&nbsp;(Unaudited)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">13,436</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(20,810</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">112</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(7,262</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD STYLE="padding-bottom: 2.5pt"><B>Balances at March 31, 2016 (Unaudited)</B></TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><B>(417,754</B></TD>
    <TD STYLE="border-bottom: Black 2.5pt double"><B>)</B></TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><B>(12,934</B></TD>
    <TD STYLE="border-bottom: Black 2.5pt double"><B>)</B></TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><B>(837</B></TD>
    <TD STYLE="border-bottom: Black 2.5pt double"><B>)</B></TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><B>(431,525</B></TD>
    <TD STYLE="border-bottom: Black 2.5pt double"><B>)</B></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Arcos Dorados Holdings Inc.</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Condensed Consolidated
Financial Statements</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the three-month periods ended March
31, 2016 and 2015 (Unaudited)&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amounts in thousands of US dollars, except
for share data and as otherwise indicated</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>10.</B></TD><TD><B>Shareholders&rsquo; equity (continued)</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Accumulated Other Comprehensive Losses
(continued)</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
sets forth information with respect to the components of &ldquo;Accumulated other comprehensive losses&rdquo; as of March&nbsp;31,
2015 and their related activity during the three-month period then ended:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Foreign currency translation</B>&nbsp;</P></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Unrealized results on cash flow
hedges</B>&nbsp;</P></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Defined benefit pension plan (i)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Total Accumulated other comprehensive income (loss)</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 42%"><B>Balances at December 31, 2014</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; text-align: right"><B>(302,889</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 12%; text-align: right"><B>1,598</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 12%; text-align: right"><B>(1,176</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 12%; text-align: right"><B>(302,467</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>)</B></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Other comprehensive (loss) gain before reclassifications (Unaudited)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(49,311</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">11,006</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(38,305</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Net (gain) loss reclassified from accumulated other comprehensive loss to consolidated statement of income (Unaudited)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">(7,750</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">110</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">(7,640</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Net current-period other comprehensive (loss) income (Unaudited)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(49,311</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">3,256</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">110</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(45,945</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt"><B>Balances at March 31, 2015 (Unaudited)</B></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>(352,200</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>4,854</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>(1,066</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>(348,412</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>)</B></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(i) Related to a post-employment
benefit in Venezuela established by the Organic Law of Labor and Workers (known as &ldquo;LOTTT&rdquo;, its Spanish acronym) in
2012. This benefit provides a payment of 30 days of salary per year of employment tenure based on the last wage earned to all workers
who leave the job for any reason. The term of service to calculate the post-employment payment of active workers run retroactively
since June 19, 1997. Annually, the Company obtains an actuarial valuation to measure the post-employment benefit obligation, using
the projected unit credit actuarial method and measures this benefit in accordance with ASC 715-30, similar to pension benefit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>11.</B></TD><TD><B>Earnings (loss) per share</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company is required
to present basic earnings per share and diluted earnings per share in accordance with ASC Topic 260. Earnings per share are based
on the weighted average number of shares outstanding during the period after consideration of the dilutive effect, if any, for
common stock equivalents, including stock options and restricted share units. Basic earnings per common share are computed by dividing
net income available to common shareholders by the weighted average number of shares of common stock outstanding during the period.
Diluted earnings per common share are computed by dividing net income by the weighted average number of shares of common stock
outstanding and dilutive securities outstanding during the period under the treasury method.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Arcos Dorados Holdings Inc.</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Condensed Consolidated
Financial Statements</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the three-month periods ended March
31, 2016 and 2015 (Unaudited)&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amounts in thousands of US dollars, except
for share data and as otherwise indicated</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>11.</B></TD><TD><B>Earnings (loss) per share (continued)</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
sets forth the computation of basic and diluted net income loss per common share attributable to Arcos Dorados Holdings Inc. for
all periods presented:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>For the three-month periods ended</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>March 31,</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>2016</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>2015</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>(Unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>(Unaudited)</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 64%">Net income (loss )attributable to Arcos Dorados Holdings Inc. available to common shareholders</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">16,064</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">(28,233</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Weighted-average number of common shares outstanding - Basic</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">210,538,896</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">210,216,043</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Incremental shares from assumed exercise of stock options (a)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Incremental shares from vesting of restricted stock units</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">31,590</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">148,486</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Weighted-average number of common shares outstanding - Diluted</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">210,570,486</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">210,364,529</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.5pt double">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt"><B>Basic net income (loss) per common share attributable to Arcos Dorados Holdings Inc.</B></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>0.08</B></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>(0.13</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>)</B></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt"><B>Diluted net income (loss) per common share attributable to Arcos Dorados Holdings Inc.</B></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>0.08</B></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 2.5pt; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>(0.13</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>)</B></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(a) Options to purchase
shares of common stock were outstanding during the three-month periods ended March 31, 2016 and 2015. See Note 7 for details. These
options were not included in the computation of diluted earnings per share because their inclusion would have been anti-dilutive.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>12.</B></TD><TD><B>Related party transactions</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company has entered
into a master commercial agreement on arm&rsquo;s length terms with Axionlog, a company under common control that operates the
distribution centers in Argentina, Chile, Colombia, Mexico, Venezuela, Uruguay and Peru (the &ldquo;Axionlog Business&rdquo;).
Pursuant to this agreement Axionlog provides the Company distribution inventory, storage and transportation services in the countries
in which it operates. On November 9, 2011 the Company entered into a revolving loan agreement as a creditor with Axionlog Distribution
B.V., a holding company of the Axionlog Business, for a total amount of $12 million at an interest rate of LIBOR plus 6%, in line
interest rates prevailing in the market at the time of the agreement, the loan will mature on November 7, 2016. As of March 31,
2016 and December&nbsp;31, 2015, Axionlog Distribution B.V. had borrowed $1,798 from the Company in connection with this revolving
loan agreement. The related receivable is included within &ldquo;Accounts and notes receivable, net&rdquo; in the Company&rsquo;s
consolidated balance sheets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
summarizes the outstanding balances between the Company and the Axionlog Business as of March&nbsp;31, 2016 and December&nbsp;31,
2015:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>As of</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>March 31,</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>2016</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>December 31,</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>(Unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2015</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 62%">Accounts and notes receivable, net</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 16%; text-align: right">1,886</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 16%; text-align: right">1,854</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Other receivables</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">2,356</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">2,266</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Prepaid expenses and other current assets</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">1,872</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Miscellaneous</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">1,775</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">1,729</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Accounts payable</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">5,506</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">5,110</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Arcos Dorados Holdings Inc.</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Condensed Consolidated
Financial Statements</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the three-month periods ended March
31, 2016 and 2015 (Unaudited)&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amounts in thousands of US dollars, except
for share data and as otherwise indicated</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>12.</B></TD><TD><B>Related party transactions (continued)</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
summarizes the transactions between the Company and the Axionlog Business for the three-month periods ended March 31, 2016 and
2015:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>For the three-month periods ended</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>March 31,</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>2016</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>2015</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>(Unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>(Unaudited)</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD STYLE="width: 62%">Food and paper (i)</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">$</TD>
    <TD STYLE="width: 16%; text-align: right">(37,381</TD>
    <TD STYLE="width: 1%">)</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">$</TD>
    <TD STYLE="width: 16%; text-align: right">(39,991</TD>
    <TD STYLE="width: 1%">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Occupancy and other operating expenses</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(866</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(742</TD>
    <TD>)</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Net interest income</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">31</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">199</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 9pt"></TD><TD STYLE="width: 27pt">(i)</TD><TD STYLE="text-align: justify">Includes $9,191 of distribution fees and $28,189 of suppliers purchases managed through the Axionlog
Business for the three-month period ended March 31, 2016; and, $9,769 and $30,222, respectively, for the three-month period ended
March 31, 2015.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of March&nbsp;31,
2016 the Company had other receivables and accounts payable with Lacoop, A.C. and Lacoop II, S.C. totaling $29 and $643, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>13</B>.</TD><TD><B>Venezuelan operations</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">The Company conducts
business in Venezuela where currency restrictions exist, limiting the Company&rsquo;s ability to immediately access cash through
repatriations at the government&rsquo;s official exchange rate. The Company&rsquo;s access to Venezuelan Bol&iacute;vares (VEF)
held by its Venezuelan subsidiaries remains available for use within this jurisdiction and is not restricted. The official exchange
rate is established by the Central Bank of Venezuela and the Venezuelan Ministry of Finance and the acquisition of foreign currency
at the official exchange rate by Venezuelan companies to pay foreign debt or dividends is subject to a registration and approval
process by the relevant Venezuelan authorities. Since these restrictions are in place, the Company has not been able to access
the official exchange rate to pay dividends and has been limited in its ability to pay royalties at the official exchange rate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Revenues and operating
loss of the Venezuelan operations were $15,234 and $(4,815), respectively, for the three-month period ended March 31, 2016; and
$13,602 and $(15,089), respectively, for the three-month period ended March 31, 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Arcos Dorados Holdings Inc.</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Condensed Consolidated Financial
Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the three-month periods ended March
31, 2016 and 2015 (Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amounts in thousands of US dollars, except
for share data and as otherwise indicated</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>13</B>.</TD><TD><B>Venezuelan operations (continued)</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Since February 2013,
the Venezuelan government has announced several changes in the currency exchange regulations. As a consequence, the Company reassessed
the exchange rate used for remeasurement purposes as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 95%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="8" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Effects of exchange rate change</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT><B>Period</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Exchange rate System applied</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Exchange rate at System date change</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(VEF per
US dollar)</B>&nbsp;</P></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Write down of inventories (i)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Impairment of long-lived assets (i)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Foreign currency exchange loss (ii)</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 33%">From January 1, 2013 to February 7, 2013</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 14%">SITME</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; text-align: right">5.30</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">From February 8, 2013 to February 28, 2014</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">Official exchange rate</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">6.30</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">15,379</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">From March 1, 2014 to May 31, 2014</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">SICAD</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">11.80</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">7,611</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">19,697</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">From June 1, 2014 to February 28, 2015</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">SICAD II</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">49.98</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">9,937</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">45,186</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">38,963</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">From March 1, 2015 to March 9, 2016</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">SIMADI</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">177.00</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">3,250</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">7,804</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">8,046</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">From March 10, 2016 up to date</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">DICOM</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">215.34</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">401</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">117</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD>Presented within Other operating income (expenses), net</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(ii)</TD><TD>Presented within Foreign currency exchange results</TD></TR></TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Effective from March
10, 2016, a new Exchange Agreement was issued that set forth the new rules that govern foreign exchange transactions carried out
by public and private entities and individuals in Venezuela. Hereafter, the SICAD and SIMADI systems were eliminated and a dual
exchange system was created: (i) the protected rate called DIPRO, with an initial exchange rate of 10 VEF per US dollar, and (ii)
the supplementary floating market rate called DICOM, with an initial exchange rate of 215.34 VEF per US dollar. As a result of
the announcement, the Company reassessed the exchange rate used for remeasurement purposes with no material impacts within &ldquo;other
operating income (expense), net&rdquo; or &ldquo;Foreign exchange results&rdquo;.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of March 31, 2016,
the DIPRO exchange rate settled at 10 VEF per US dollar and DICOM exchange rate settled at 272.91 VEF per US dollar.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of March 31, 2016,
the Company&rsquo;s local currency denominated net monetary position, which would be subject to remeasurement in the event of further
changes in the DICOM rate was $2.3 million (including $2.6 million of cash and cash equivalents). Venezuela&rsquo;s non-monetary
assets were $53.1 million at March 31, 2016 and included approximately $42.9 million of fixed assets and advances to suppliers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to exchange
controls, the Venezuelan market is subject to price controls. The Venezuelan government issued a regulation establishing a maximum
profit margin for companies and maximum prices for certain goods and services. As of March 31, 2016, the Company&rsquo;s pricing
plan was not affected by these regulations.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&rsquo;s
Venezuelan operations, and the Company&rsquo;s ability to repatriate its earnings, continue to be negatively affected by these
difficult conditions and would be further negatively affected by additional devaluations or the imposition of additional or more
stringent controls on foreign currency exchange, pricing, payments, profits or imports or other governmental actions or continued
or increased labor unrest. The Company continues to closely monitor developments in this dynamic environment, to assess evolving
business risks and actively manage its operations in Venezuela.</P>

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<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Arcos Dorados Holdings Inc.</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to the Condensed Consolidated
Financial Statements</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the three-month periods ended March
31, 2016 and 2015 (Unaudited)&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amounts in thousands of US dollars, except
for share data and as otherwise indicated</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>14.</B></TD><TD><B>Subsequent events</B></TD>
</TR></TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">On April 8, 2016, the
Company launched a cash tender offer for any and all of its outstanding 2016 Notes (the &quot;Notes&quot;). The offer is scheduled
to expire on May 5, 2016. Prior to April 21, 2016, 67.29% of the Holders of the outstanding Notes tendered their Notes. These Holders
received a purchase price of BRL1,000 per BRL1,000 principal amount of Notes, which included an early tender payment of BRL30 per
BRL1,000 principal amount of Notes. On April 26, 2016 the Company paid $118,797 (equal to BRL 421,765 considering a settlement
rate of 3.5503 BRL per US Dollar) related to the early tender offer, excluding accrued and unpaid interest. Holders who tender
their Notes after April 21, 2016 and prior to the expiration date of the tender offer, will be entitled to receive the purchase
price of BRL1,000 per BRL1,000 principal amount of Notes minus the early tender payment of BRL30 per BRL1,000 principal amount
of Notes.</P>

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