<SEC-DOCUMENT>0000950103-17-007726.txt : 20170809
<SEC-HEADER>0000950103-17-007726.hdr.sgml : 20170809
<ACCEPTANCE-DATETIME>20170809081733
ACCESSION NUMBER:		0000950103-17-007726
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20170809
FILED AS OF DATE:		20170809
DATE AS OF CHANGE:		20170809

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:		171016512

	BUSINESS ADDRESS:	
		STREET 1:		DR. LUIS BONAVITA 1294, OFFICE 501
		STREET 2:		WTC FREE ZONE
		CITY:			MONTEVIDEO
		STATE:			X3
		ZIP:			11300
		BUSINESS PHONE:		598 2626-3000

	MAIL ADDRESS:	
		STREET 1:		DR. LUIS BONAVITA 1294, OFFICE 501
		STREET 2:		WTC FREE ZONE
		CITY:			MONTEVIDEO
		STATE:			X3
		ZIP:			11300
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>dp79348_6k-2.htm
<DESCRIPTION>FORM 6-K
<TEXT>
<HTML>
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<P STYLE="margin: 0"></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 1pt; margin-bottom: 1pt"><DIV STYLE="font-size: 1pt; border-top: Black 3.5pt solid; border-bottom: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<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>UNITED STATES</B>&nbsp;</P>

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

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

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORM 6-K<BR>
</B></P>

<P STYLE="font: 18pt 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 0pt 6.85pt; text-align: center; text-indent: -6.85pt"><B>REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934</B></P>

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

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the month of August, 2017</P>

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

<HR SIZE="2" NOSHADE ALIGN="CENTER" STYLE="width: 21%; color: black">

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Commission File Number: 001-35129</B></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"><B>Arcos Dorados Holdings Inc.</B></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"><B>(Exact name of registrant as specified
in its charter)</B></P>

<P STYLE="font: 12pt 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"><B>Dr. Luis Bonavita 1294, Office 501 </B></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>Montevideo, Uruguay, 11300 WTC Free Zone
</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"><B>(Address of principal executive office)</B></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; text-align: center">Indicate by check mark whether the registrant
files or will file annual reports under cover of Form&nbsp;20-F or Form 40-F:</P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 40%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 29%; font-size: 10pt; text-align: center"><FONT STYLE="font-size: 10pt">Form 20-F</FONT></TD>
    <TD STYLE="width: 14%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 0.5pt solid">X</P>
</TD>
    <TD STYLE="width: 15%; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 28%; font-size: 10pt; text-align: center"><FONT STYLE="font-size: 10pt">Form 40-F</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 0.5pt solid; width: 14%">
<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 1pt; margin-bottom: 1pt"></DIV></DIV><!-- Field: /Rule-Page --></TD></TR>
</TABLE>
<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; text-align: center">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):</P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 40%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 29%; font-size: 10pt; text-align: center"><FONT STYLE="font-size: 10pt">Yes</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 0.5pt solid; width: 14%">
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    <TD STYLE="width: 15%; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 28%; font-size: 10pt; text-align: center"><FONT STYLE="font-size: 10pt">No</FONT></TD>
    <TD STYLE="width: 14%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 0.5pt solid">X</P>
</TD></TR>
</TABLE>
<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; text-align: center">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):</P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 40%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 29%; font-size: 10pt; text-align: center"><FONT STYLE="font-size: 10pt">Yes</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 0.5pt solid; width: 14%">
</TD>
    <TD STYLE="width: 15%; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 28%; font-size: 10pt; text-align: center"><FONT STYLE="font-size: 10pt">No</FONT></TD>
    <TD STYLE="width: 14%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 0.5pt solid">X</P>
</TD></TR>
</TABLE><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; text-align: center">&nbsp;</P>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ARCOS DORADOS HOLDINGS INC.</B></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; text-align: center"><B>INCORPORATION BY REFERENCE</B></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 0.1in">This report on Form 6-K shall be deemed to be incorporated
by reference into the registration statements on Form F-3ASR (Registration Number: 333-187531) and 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ARCOS DORADOS HOLDINGS INC.</B></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; text-align: center"><B>TABLE OF CONTENTS</B></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: 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">&nbsp;</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="padding-left: 0.1in; font-size: 10pt"><FONT STYLE="font-size: 10pt">Condensed Consolidated Financial Statements as of June 30, 2017 and December&nbsp;31, 2016 and for the six-month periods ended June 30, 2017 and 2016 (Unaudited)</FONT></TD></TR>
</TABLE>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURE</B></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; text-indent: 0.25in">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.</P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</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">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</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: 7%">&nbsp;</TD>
    <TD STYLE="width: 27%">&nbsp;</TD>
    <TD STYLE="width: 26%">&nbsp;</TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 6%"><FONT STYLE="font-size: 10pt">Name:</FONT></TD>
    <TD STYLE="width: 29%"><FONT STYLE="font-size: 10pt">Juan David Bastidas</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</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: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Date: August 9, 2017</P>

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


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>Item 1</B></P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of June&nbsp;30, 2017 and December&nbsp;31,
2016 and for the six-month periods ended June 30, 2017 and 2016 (Unaudited)</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: 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"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT>For
the six-month periods ended June 30, 2017 and 2016 (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 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>2017</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2016</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">Sales by Company-operated restaurants</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">1,507,630</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">1,290,089</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">72,548</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">55,726</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>1,580,178</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>1,345,815</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: 0.5in">Food and paper</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(536,205</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(470,716</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.5in">Payroll and employee benefits</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(334,893</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(284,011</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD STYLE="padding-left: 0.5in">Occupancy and other operating expenses</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(409,747</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(359,097</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.5in">Royalty fees</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(77,357</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(65,699</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">(32,651</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(25,790</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">(115,747</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(101,999</TD>
    <TD>)</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Other operating income, 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">51,336</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">47,423</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</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>(1,455,264</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>(1,259,889</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>124,914</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>85,926</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">(39,458</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(35,037</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>Loss from derivative instruments</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(7,231</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(30</TD>
    <TD>)</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">(24,111</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">32,206</TD>
    <TD STYLE="vertical-align: top">&nbsp;</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">(1,125</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">(766</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><B>Income before income taxes</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>52,989</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>82,299</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>Income tax expense</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(16,351</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">(22,729</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><B>Net income</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>36,638</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>59,570</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</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">(148</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">(77</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><B>Net income attributable to Arcos Dorados Holdings Inc.</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>36,490</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>59,493</B></TD>
    <TD STYLE="vertical-align: top; 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>&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 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 per common share attributable to Arcos Dorados Holdings Inc.</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">0.17</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">0.28</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Diluted net income per common share attributable to Arcos Dorados Holdings Inc.</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">0.17</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">0.28</TD>
    <TD STYLE="vertical-align: top">&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>


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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></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"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT><B>Consolidated
Statements of Comprehensive 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"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT>For
the six-month periods ended June 30, 2017 and 2016 (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</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>2017</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2016</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 66%"><B>Net income</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right"><B>36,638</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right"><B>59,570</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><B><U>Other comprehensive income, 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">16,907</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">14,919</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Post-employment benefits:</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; padding-left: 0.125in">Reclassification of 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">193</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">224</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">Post-employment benefits (net of $100 and $115 of deferred income taxes, 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">193</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">224</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: 0.125in">Net gain (loss) recognized in accumulated other comprehensive loss</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">9,616</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">(55,742</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; padding-left: 0.125in">Reclassification of net (gain) 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">(4,012</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">30,568</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">Cash flow hedges&nbsp;(net of $2,907 and $nil of income taxes, 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">5,604</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">(25,174</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><B>Total other comprehensive income (loss)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><B>22,704</B></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"><B>(10,031</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid"><B>)</B></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><B>Comprehensive income</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>59,342</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>49,539</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</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">(138</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">(56</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><B>Comprehensive income attributable to Arcos Dorados&nbsp;Holdings Inc.</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>59,204</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>49,483</B></TD>
    <TD STYLE="vertical-align: top; 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>


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<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 June&nbsp;30, 2017
and December&nbsp;31, 2016</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" NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>June 30, 2017</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" NOWRAP STYLE="border-bottom: Black 2.25pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>December 31, 2016</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">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">237,797</FONT></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">194,803</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">69,719</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">83,239</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">26,979</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">28,841</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">49,506</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">48,915</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">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">74,104</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">87,643</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">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">&mdash;</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">1,749</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 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>458,105</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>445,190</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">95,121</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">89,661</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">872,675</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">847,966</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">42,032</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">43,044</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">62,381</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">70,446</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">27,476</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">&mdash;</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">2,628</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">3,421</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>1,107,638</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>1,059,863</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 2.5pt double"><FONT STYLE="font-size: 10pt"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 10pt"><B>1,565,743</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 10pt"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 10pt"><B>1,505,053</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt 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">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">206,858</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">217,914</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">14,287</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">17,585</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">22,786</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">38,912</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">66,692</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">73,681</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">127,500</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">144,442</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">720</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">764</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">10,040</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">7,035</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="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">106</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">&mdash;</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">4,153</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">28,099</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; border-bottom: Black 2.25pt solid; text-align: right"><FONT STYLE="font-size: 10pt">12,724</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">19,876</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 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>465,866</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>548,308</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>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: 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">26,954</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">23,760</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">21,393</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">17,348</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">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">630,340</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">551,580</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">7,106</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">10,615</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">2,010</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">1,866</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>687,803</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>605,169</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>1,153,669</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>1,153,477</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="background-color: White">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Class A shares - no par value common stock; 420,000,000 shares authorized; 131,072,041 shares issued and outstanding</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">376,728</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">373,969</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">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: White">
    <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">12,395</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">13,788</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">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">308,458</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">271,968</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <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">(418,935</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">(441,649</FONT></TD>
    <TD STYLE="border-bottom: Black 2.25pt solid"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <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>411,561</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>350,991</B></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">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">513</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">585</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 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>412,074</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>351,576</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 and equity</B></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 10pt"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 10pt"><B>1,565,743</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 10pt"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 10pt"><B>1,505,053</B></FONT></TD>
    <TD STYLE="vertical-align: top; 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>


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<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>Condensed
Consolidated Statements of Cash Flows</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"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT>For
the six-month periods ended June 30, 2017 and 2016 (Unaudited)</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</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>2017</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2016</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: 64%">Net income attributable to Arcos Dorados Holdings Inc.</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">36,490</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">59,493</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Adjustments to reconcile net income attributable to Arcos Dorados Holdings Inc. to cash provided by operating activities:</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">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="padding-left: 0.5in">Depreciation and amortization</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">47,892</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">49,590</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD STYLE="padding-left: 0.5in">Gain of property and equipment sales</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(56,212</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(48,723</TD>
    <TD>)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="padding-left: 0.5in">Deferred income taxes</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">7,538</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">672</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="padding-left: 0.5in">Foreign currency exchange results</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">34,750</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">(33,038</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.5in">Gain on sales of restaurants businesses</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(3,089</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(4,885</TD>
    <TD>)</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="padding-left: 0.5in">Others, net</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">12,044</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">9,607</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-left: 0.25in">Changes in assets and liabilities</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">1,046</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">(23,036</TD>
    <TD STYLE="vertical-align: bottom; 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 operating activities</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>80,459</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>9,680</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</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">(65,198</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(27,867</TD>
    <TD>)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Loans collected from related parties</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">1,800</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Purchases of restaurant businesses paid at acquisition date</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(551</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: White">
    <TD STYLE="vertical-align: bottom">Proceeds from sale of property and equipment and related advances</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">35,010</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">63,457</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;restaurant businesses&nbsp;and related advances</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">4,311</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">9,710</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Other investing activity</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(93</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">(400</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 (used in) provided by investing activities</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>(26,521</B></TD>
    <TD STYLE="vertical-align: bottom"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>46,700</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</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">(Repayment of) / proceeds from Secured Loan Agreement</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(169,511</TD>
    <TD STYLE="vertical-align: bottom">)</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></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Issuance of 2027 Notes</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">265,000</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: rgb(213,234,234)">
    <TD>Net payment of derivative instruments</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(40,822</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(3,011</TD>
    <TD>)</TD></TR>
<TR STYLE="background-color: White">
    <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">&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">(120,191</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>Purchase of 2023 Notes</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(48,885</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(80,800</TD>
    <TD>)</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">104</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">(2,486</TD>
    <TD STYLE="vertical-align: bottom">)</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">(5,444</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">(6,810</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>442</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>(46,036</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">(11,386</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">13,927</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>Increase 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>42,994</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>24,271</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</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">$</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">194,803</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">$</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">112,519</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>Cash and cash equivalents at the end of the period</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>237,797</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>136,790</B></TD>
    <TD STYLE="vertical-align: top; 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; padding-left: 0.125in">&nbsp;&nbsp;&nbsp;Interest</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">30,187</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">39,864</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; padding-left: 0.125in">&nbsp;&nbsp;&nbsp;Income tax</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">11,473</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">21,475</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Non-cash investing activities:</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></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; padding-left: 0.125in">&nbsp;&nbsp;&nbsp;Exchange of assets</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">2,000</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">2,100</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>


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<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
Statement of Changes in Equity</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"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT>For
the six-month period ended June 30, 2017 (Unaudited)</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>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt"></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="29" STYLE="text-align: center"><B>Arcos Dorados Holdings Inc.&rsquo; Shareholders</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-top: 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"><B>common stock</B></P>
</TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-top: 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"><B>common stock</B></P>
</TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: 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"><B>paid-in</B></P>

        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B></B></P>
</TD>
    <TD ROWSPAN="2" STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: 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"><B></B></P>
</TD>
    <TD ROWSPAN="2" STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: 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"><B>other</B></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"><B></B></P>
</TD>
    <TD ROWSPAN="2" STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; text-align: center"><B></B></TD>
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD COLSPAN="3">
        <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"><B>controlling</B></P>

        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B></B></P>
</TD>
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B></B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Number</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Number</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>capital</B></TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>earnings</B></TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>losses</B></TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Total</B></TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>interests</B></TD>
    <TD COLSPAN="3" 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: 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>130,711,224</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>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 6%; text-align: right"><B>373,969</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 7%; text-align: right"><B>80,000,000</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></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: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 5%; text-align: right"><B>13,788</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 5%; text-align: right"><B>271,968</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>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 8%; text-align: right"><B>(441,649</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 4%; text-align: right"><B>350,991</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>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 5%; text-align: right"><B>585</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 4%; text-align: right"><B>351,576</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 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 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>
    <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">36,490</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">36,490</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">148</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">36,638</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Other comprehensive income (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 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 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>
    <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>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">22,714</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">22,714</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">(10</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">22,704</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Issuance of shares in connection with the partial vesting of outstanding restricted share units under the 2011 Equity Incentive Plan (Unaudited)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">360,817</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">2,759</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 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">(2,759</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">&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>
    <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: rgb(213,234,234)">
    <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 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 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>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">1,366</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">&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">1,366</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">1,366</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Dividends to non-controlling interests (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 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 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>
    <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>
    <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>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(210</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(210</TD>
    <TD STYLE="vertical-align: bottom">)</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>131,072,041</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"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>376,728</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>80,000,000</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double"><B>$</B></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"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>12,395</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>308,458</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"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>(418,935</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>411,561</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"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>513</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>412,074</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-align: center; text-indent: 31pt"></P>

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


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<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"><B>Consolidated&nbsp;Statement
of Changes in Equity</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"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT>For
the six-month period ended June 30, 2016 (Unaudited)</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>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 31pt"></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="29" STYLE="text-align: center"><B>Arcos Dorados Holdings Inc.&rsquo; Shareholders</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-top: 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"><B>common stock</B></P>
</TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-top: 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"><B>common stock</B></P>
</TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: 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"><B>paid-in</B></P>

        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B></B></P>
</TD>
    <TD ROWSPAN="2" STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: 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"><B></B></P>
</TD>
    <TD ROWSPAN="2" STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: 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"><B>other</B></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"><B></B></P>
</TD>
    <TD ROWSPAN="2" STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; text-align: center"><B></B></TD>
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD COLSPAN="3">
        <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"><B>controlling</B></P>

        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B></B></P>
</TD>
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B></B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Number</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Number</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>capital</B></TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>earnings</B></TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>losses</B></TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Total</B></TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>interests</B></TD>
    <TD COLSPAN="3" 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: 14%"><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: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 5%; text-align: right"><B>371,857</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 7%; text-align: right"><B>80,000,000</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 5%; 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: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 6%; text-align: right"><B>12,606</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 5%; 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: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right"><B>(424,263</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 4%; 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: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 6%; text-align: right"><B>617</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 4%; 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 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 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>
    <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">59,493</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">59,493</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">77</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">59,570</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 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 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>
    <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>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(10,010</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(10,010</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</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(10,031</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Issuance of shares in connection with the partial vesting of outstanding restricted share units under the 2011 Equity Incentive Plan (Unaudited)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">171,035</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">2,101</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 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">(2,101</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">&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>
    <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: rgb(213,234,234)">
    <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 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 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>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">1,593</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">&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">1,593</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">1,593</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Dividends&nbsp;&nbsp;to non-controlling interests (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; 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 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">&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">&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">&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">&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; 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; border-bottom: Black 2.25pt solid; text-align: right">(60</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">(60</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">)</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>130,709,931</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>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>373,958</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>80,000,000</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>132,915</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>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>12,098</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>252,651</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>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>(434,273</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.5pt double; text-align: right"><B>337,349</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-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>613</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>337,962</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD></TR>
</TABLE>


<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">&nbsp;</P>

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


<!-- Field: Page; Sequence: 11 -->
    <DIV STYLE="margin-top: 6pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->7<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red"></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 six-month periods ended June 30, 2017 and 2016 (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="margin: 0pt"></P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Organization
and nature of business</B></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; 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. The Company&rsquo;s rights to operate and franchise McDonald&rsquo;s-branded restaurants in the Territories,
and therefore the ability to conduct the business, derive exclusively from the rights granted by McDonald&rsquo;s Corporation in
the MFAs through 2027. The initial term of the MFA for French Guyana, Guadeloupe and Martinique was ten years through August 2,
2017 with an option to extend the agreement for these territories for an additional period of ten years, through August 2, 2027.&nbsp;
On July 20, 2016, the Company has exercised its option to extend the MFA for these three territories</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 (USVI) 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>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basis of presentation
and principles of consolidation </B></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; 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, 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 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 six-month period ended June 30, 2017 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>


<!-- Field: Page; Sequence: 12 -->
    <DIV STYLE="margin-top: 6pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->8<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red"></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 six-month periods ended June 30, 2017 and 2016 (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="margin: 0pt"></P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Summary of significant
accounting policies </B></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; 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&nbsp;31, 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-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 matters</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
transactions, including intercompany transactions, 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 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>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Short-term debt</B></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; 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>June 30, 2017</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" NOWRAP STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>December 31, 2016</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 64%">Bank overdrafts</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-bottom: Black 2.25pt solid">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; border-bottom: Black 2.25pt solid; text-align: right">106</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-bottom: Black 2.25pt solid">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; border-bottom: Black 2.25pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-bottom: Black 2.25pt solid">&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; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>106</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>&mdash;</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD></TR>
</TABLE>

<!-- Field: Page; Sequence: 13 -->
    <DIV STYLE="margin-top: 6pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->9<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red"></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 six-month periods ended June 30, 2017 and 2016 (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="margin: 0pt"></P></DIV>
    <!-- Field: /Page -->

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Short-term debt
(continued)</B></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; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Revolving credit facilities</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 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 August 1, 2016,
ADBV renewed its committed revolving credit facility with Bank of America, N.A. (BOFA), as lender, for up to $25 million maturing
on August 3, 2017. In addition, on November 10, 2016, ADBV entered into a revolving credit facility with JPMorgan Chase Bank, N.A,
for up to $25 million maturing on November 10, 2017. Each loan made to ADBV under these agreements will bear interest at an annual
rate equal to LIBOR plus 2.50%. 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) is required to comply with a consolidated net indebtedness
to EBITDA ratio lower than 3.0 to 1 as of the last day of the fiscal quarter ended December 31, 2016 and thereafter. 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">As of June 30, 2017,
the mentioned ratio was 1.28 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>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term debt
</B></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; 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" STYLE="text-align: center"><B>As of</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; text-align: center"><B>June 30, 2017</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="3" ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>December 31, 2016</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></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 64%">2027 Notes</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">265,000</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</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">2023 Notes</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">348,069</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">393,767</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">&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">167,262</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">4,310</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">4,704</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">24,628</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">25,553</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>Subtotal</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>642,007</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>591,286</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>Discount on 2023 Notes</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(4,125</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(5,029</TD>
    <TD>)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Premium on 2023 Notes</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">1,563</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">1,910</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Fair value adjustment related to Secured Loan Agreement (i)</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">(2,877</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Deferred financing costs</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: right">(4,952</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">(5,611</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>Total</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><B>634,493</B></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"><B>579,679</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">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">4,153</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">28,099</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>Long-term debt, excluding current portion</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>630,340</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>551,580</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD></TR>
</TABLE>

<!-- Field: Page; Sequence: 14 -->
    <DIV STYLE="margin-top: 6pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->10<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red"></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 six-month periods ended June 30, 2017 and 2016 (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="margin: 0pt"></P></DIV>
    <!-- Field: /Page -->

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term debt
(continued)</B></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 0pt 0.5in; text-align: justify"></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
carrying value of hedged items in fair value hedges, are adjusted for fair value changes to the extent they are attributable to
the risks designated as being hedged. The related hedging instrument is also recorded at fair value included within &quot;Derivative
instruments&quot; in current and non-current liabilities as of December&nbsp;31, 2016.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>2027, 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-align: justify; text-indent: 0.5in">The following table
presents additional information related to the 2027, 2023 and 2016 Notes (the &quot;Notes&quot;):</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>



<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>

<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 COLSPAN="2">&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>June 30, 2017 (Unaudited)</B></TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>December 31, 2016</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: 28%"><FONT STYLE="font-size: 10pt">2027 Notes</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 13%; text-align: right"><FONT STYLE="font-size: 10pt">5.875</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 3%; text-align: left">%</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">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: right"><FONT STYLE="font-size: 10pt">265,000</FONT></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 8%; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 20%; text-align: center"><FONT STYLE="font-size: 10pt">April 4, 2027</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">2023 Notes</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">6.625</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: left">%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt">USD</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">348,069</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">393,767</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt">September 27, 2023</FONT></TD></TR>
</TABLE>


<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">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></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>&nbsp;Interest Expense (i)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>&nbsp;DFC Amortization&nbsp;&nbsp;(i)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="8" STYLE="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-top: Black 2.25pt solid; text-align: center"><B>2017 (Unaudited)</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-top: Black 2.25pt solid"><B>2016 (Unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; text-align: center"><B>2017 (Unaudited)</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; text-align: center"><B>2016 (Unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; text-align: center"><B>2017 (Unaudited)</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; text-align: center"><B>2016 (Unaudited)</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 25%"><FONT STYLE="font-size: 10pt">2027 Notes</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 4%; border-top: Black 2.25pt solid"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 7%; border-top: Black 2.25pt solid; text-align: right"><FONT STYLE="font-size: 10pt">3,762</FONT></TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 4%; border-top: Black 2.25pt solid"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 7%; border-top: Black 2.25pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-top: Black 2.25pt solid"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; border-top: Black 2.25pt solid; text-align: right"><FONT STYLE="font-size: 10pt">75</FONT></TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 5%; border-top: Black 2.25pt solid"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 5%; border-top: Black 2.25pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-top: Black 2.25pt solid"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; border-top: Black 2.25pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-top: Black 2.25pt solid"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; border-top: Black 2.25pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">2023 Notes</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">12,355</FONT></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"><FONT STYLE="font-size: 10pt">15,487</FONT></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"><FONT STYLE="font-size: 10pt">449</FONT></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"><FONT STYLE="font-size: 10pt">760</FONT></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"><FONT STYLE="font-size: 10pt">556</FONT></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"><FONT STYLE="font-size: 10pt">939</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">2016 Notes</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></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"><FONT STYLE="font-size: 10pt">6,240</FONT></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"><FONT STYLE="font-size: 10pt">&mdash;</FONT></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"><FONT STYLE="font-size: 10pt">383</FONT></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"><FONT STYLE="font-size: 10pt">&mdash;</FONT></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"><FONT STYLE="font-size: 10pt">(224</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 0pt 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 and
April 24, 2012, the Company issued Brazilian reais notes due in 2016 (the &quot;2016 Notes&quot;) amounting to Brazilian reais
(&ldquo;BRL&rdquo;) 675,000. Periodic payments of principal were not required and interest was 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 (&quot;DFC&quot;) and were 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">The following table
presents information related to the purchase and repayments of the 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>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 50%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="6" STYLE="text-align: center; border-bottom: Black 2pt solid"><B>Amount</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Date</B></TD>
    <TD STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Redemption price</B></TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>BRL</B></TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>$</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD STYLE="width: 40%">November 25, 2015</TD>
    <TD STYLE="width: 21%; text-align: center">93.75%</TD>
    <TD STYLE="width: 18%; text-align: right">40,000</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 17%; text-align: right">9,995</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>November 30, 2015</TD>
    <TD STYLE="text-align: center">93.75%</TD>
    <TD STYLE="text-align: right">7,039</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">1,715</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>January 29, 2016</TD>
    <TD STYLE="text-align: center">97.75%</TD>
    <TD STYLE="text-align: right">1,180</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">288</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>April 21, 2016</TD>
    <TD STYLE="text-align: center">100.00%</TD>
    <TD STYLE="text-align: right">421,765</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">118,797</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>May 5, 2016</TD>
    <TD STYLE="text-align: center">97.00%</TD>
    <TD STYLE="text-align: right">4,025</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">1,106</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-bottom: Black 2.25pt solid">July 13, 2016</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid; text-align: center">100.00%</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid; text-align: right">200,991</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid; text-align: right">60,965</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD><B>Total</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><B>675,000</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><B>192,866</B></TD>
    <TD>&nbsp;</TD>
    <TD>&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">On September 27, 2013,
the Company issued senior notes for an aggregate principal amount of $473.8 million, 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 Company incurred
$3,313 of financing costs related to the cash issuance of 2023 Notes, which were capitalized as deferred DFC 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>


<!-- Field: Page; Sequence: 15 -->
    <DIV STYLE="margin-top: 6pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->11<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red"></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 six-month periods ended June 30, 2017 and 2016 (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="margin: 0pt"></P></DIV>
    <!-- Field: /Page -->

<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"><B>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term debt
(continued)</B></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; 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"><U>2027, 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 June 1, 2016, the
Company launched a cash tender offer to purchase $80,000 of its outstanding 2023 Notes, at a redemption price equal to 98%, which
expired on June 28, 2016. The holders who tendered their 2023 Notes prior to June 14, received a redemption price equal to 101%.
As a consequence of this transaction, the Company redeemed 16.9% of the outstanding principal. The total payment was $80,800 (including
$800 of early tender payment) 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 results related
to the cash tender offer and the accelerated amortization of the related DFC were recognized as interest expense within the consolidated
statement 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">Furthermore, on March
16, 2017, the Company launched another cash tender offer to purchase $80,000 of its outstanding 2023 Notes, at a redemption price
equal to 104%, which expired on April 12, 2017. The holders who tendered their 2023 Notes prior to March 29, 2017, received a redemption
price equal to 107%. As a consequence of this transaction, the Company redeemed 11.6% of the outstanding principal. The total payment
was $48,885 (including $3,187 of early tender payment) plus accrued and unpaid interest. The results related to the cash tender
offer and the accelerated amortization of the related DFC were recognized as interest expense within the consolidated statement
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">In April 2017, the
Company issued senior notes for an aggregate principal amount of $265 million, which are due in 2027 (the &ldquo;2027 Notes&rdquo;).
Periodic payments of principal are not required and interest is paid semi-annually commencing on October 4, 2017. The proceeds
from the issuance of the 2027 Notes were used to repay the Secured Loan Agreement, unwind the related derivative instruments (described
in Note 6), to pay the principal and premium on the 2023 Notes, in connection with aforementioned tender offer, and for general
purposes. The Company incurred $3,001 of financing costs related to the issuance of 2027 Notes, which were capitalized as DFC 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">The Notes 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 the 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. In addition, the indenture governing
the 2027 Notes limits the Company&rsquo;s and its subsidiaries&rsquo; ability to: incur in additional indebtedness and make certain
restricted payments, including dividends. 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 occur, would permit or require the principal, premium,
if any, and interest on all of the then-outstanding 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">The 2023 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-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>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 bore 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>


<!-- Field: Page; Sequence: 16 -->
    <DIV STYLE="margin-top: 6pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->12<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red"></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 six-month periods ended June 30, 2017 and 2016 (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="margin: 0pt"></P></DIV>
    <!-- Field: /Page -->

<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"><B>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term debt
(continued)</B></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; 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"><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>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 50%; 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="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD STYLE="text-align: justify">Banco Santander (Brasil) S.A., Cayman Islands Branch</TD>
    <TD>&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>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
</TABLE>
<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 was the Interbank Market reference interest rate (known
in Brazil as &ldquo;CDI&rdquo;) plus 4.50% per year. Interest payments were made quarterly, beginning June 2016 and principal payments
were 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 proceeds were
used primarily to repay the 2016 Notes mentioned above.</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 matured on
March 30, 2020 and periodic payments of principal were required. Prepayments were allowed without penalty. On April 11, 2017, the
Company repaid the Loan with a total payment of $169.7 million including the outstanding principal, plus accrued and unpaid interest
and certain transaction 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 Company incurred
$3,243 of financing costs related to the issuance of the Loan, which were capitalized as DFC and were amortized over the life of
the Loan. As a consequence of the repayment, the remaining DFC were recognized as interest expense in the consolidated statement
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">The following table
presents information related to the Secured Loan Agreement:</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 COLSPAN="7" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>&nbsp;Interest Expense (i) (ii)</B></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;DFC Amortization&nbsp;&nbsp;(ii)</B></TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>&nbsp;Other Costs (ii) (iii)</B></TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="4" STYLE="text-align: center"><B>2017 (Unaudited)</B></TD>
    <TD COLSPAN="4" STYLE="text-align: center"><B>2016 (Unaudited)</B></TD>
    <TD COLSPAN="4" STYLE="text-align: center"><B>2017 (Unaudited)</B></TD>
    <TD COLSPAN="4" STYLE="text-align: center"><B>2016 (Unaudited)</B></TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>2017 (Unaudited)</B></TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>2016 (Unaudited)</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 1%; border-top: Black 2.25pt solid">$</TD>
    <TD STYLE="vertical-align: bottom; width: 14%; border-top: Black 2.25pt solid; text-align: right">2,570</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-top: Black 2.25pt solid">$</TD>
    <TD STYLE="vertical-align: bottom; width: 12%; border-top: Black 2.25pt solid; text-align: right">2,152</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-top: Black 2.25pt solid">$</TD>
    <TD STYLE="vertical-align: bottom; width: 20%; border-top: Black 2.25pt solid; text-align: right">3,251</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-top: Black 2.25pt solid">$</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; border-top: Black 2.25pt solid; text-align: right">308</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 7%; border-top: Black 2.25pt solid; text-align: right">2,249</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 8%; border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; border-top: Black 2.25pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-top: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
charge does not include the effect of the 2016 Cross-currency interest rate swap agreements mentioned in Note 6, amounting to a
loss of $6,921. Including this effect the total interest cost amounts to $9,491.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(iii) Transaction costs related
to the repayment of the Loan.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Derivative instruments
</B></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; 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 June&nbsp;30, 2017 and December&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>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red"></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 six-month periods ended June 30, 2017 and 2016 (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="margin: 0pt"></P></DIV>
    <!-- Field: /Page -->

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Derivative instruments
(continued)</B></P>

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



<P STYLE="margin-top: 0; margin-bottom: 0"></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="9" STYLE="text-align: center"><B>Derivatives</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="border-top: 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="border-top: Black 2.25pt solid; text-align: center"><B>As of</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; text-align: center"><B>As of</B></TD></TR>
<TR>
    <TD ROWSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: center"><B>Type of Derivative</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD ROWSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: center"><B>Balance Sheets Location</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; text-align: center"><B>June 30, 2017</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="3" ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>December 31, 2016</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></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3"><B><I>Derivatives designated as hedging instruments</I></B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B><I><U>Cash flow hedge</U></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: 35%">Forward contracts</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 32%">Other receivables</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; text-align: right">190</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; text-align: right">&mdash;</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>Accrued payroll and other liabilities</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(329</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(100</TD>
    <TD>)</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Cross-currency interest rate swap (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; text-align: right">4,750</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">(3,274</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Call spread (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; text-align: right">13,183</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: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Coupon-only swap (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; text-align: right">(10,287</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="vertical-align: bottom; background-color: White">
    <TD><B><I><U>Fair value hedge</U></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">Cross-currency interest rate swap (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">&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">(27,217</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">)</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">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><B>7,507</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><B>(30,591</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid"><B>)</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>&nbsp;</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="vertical-align: bottom; background-color: White">
    <TD COLSPAN="3"><B><I>Derivatives not designated as hedging instruments</I></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>&nbsp;</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: White">
    <TD STYLE="vertical-align: bottom">Forward contracts</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 STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">$</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">(1,273</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">$</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></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <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">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><B>(1,273</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><B>&mdash;</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>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>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>6,234</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>(30,591</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 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
June&nbsp;30, 2017, presented in the consolidated balance sheet as follows: $27,476 as non-current asset, $12,724 as a current
liability and $7,106 as non-current liability. At December&nbsp;31, 2016, presented in the consolidated balance sheet as follows:
$19,876 as a current liability and $10,615 as a non-current liability.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; 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-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"><B><I><U>Cash flow
hedge</U></I></B></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>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 June 30, 2017, the Company has forward contracts outstanding for a notional
amount of $25,132 that mature during 2017 and 2018.</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
(payments) collections totaling $(625) and $2,369 during the six-month period ended June 30, 2017 and 2016, respectively, as a
result of the net settlements of these derivatives.</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">The Company entered
into two cross-currency interest rate swap agreements to hedge all the variability in a portion (70%) of the principal and interest
collections of its BRL intercompany loan receivables with ADBV. The agreements were signed during November, 2013 (amended in February
2017) and June, 2017. The following table presents information related to the terms of the agreements:</P>

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


<!-- Field: Page; Sequence: 18 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red"></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 six-month periods ended June 30, 2017 and 2016 (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="margin: 0pt"></P></DIV>
    <!-- Field: /Page -->

<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"><B>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Derivative instruments
(continued)</B></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; 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"><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>

<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; text-align: center"><B>Bank</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="6" STYLE="text-align: center"><B>Payable</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>Receivable</B></TD>
    <TD>&nbsp;</TD>
    <TD ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Interest payment dates</B></TD>
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Maturity</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Currency</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Amount</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Interest rate</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Currency</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Amount</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Interest rate</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 19%">JP Morgan Chase Bank, N.A. (i)</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; text-align: center">BRL</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 8%; text-align: right">108,000</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 6%; text-align: right">13</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; text-align: left">%</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; text-align: center">$</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 7%; text-align: right">35,400</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 6%; text-align: right">4.38</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; text-align: left">%</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 13%">March 31/ September 30</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 10%">September 2023</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">JP Morgan Chase Bank, N.A.</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">BRL</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">98,670</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">13</TD>
    <TD STYLE="vertical-align: bottom; text-align: left">%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">$</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">30,000</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">6.02</TD>
    <TD STYLE="vertical-align: bottom; text-align: left">%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">March 31/ September 30</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">September 2023</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
the six-month period ended June 30, 2017, the agreement was amended twice: on February 9, 2017 and February 22, 2017. All the terms
of the swap agreement match the terms of the BRL intercompany loan receivable. As a result of the amendments the Company paid $
2,689. According to ASC 815-30-40, the amount deferred in accumulated other comprehensive income (loss) until the date of the last
amendment, amounting to $(735) as of June&nbsp;30, 2017, will be amortized to earnings as the originally hedged cash flows affects
the statement of income.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During April 2017,
the Company&rsquo;s Brazilian subsidiary entered into similar agreements in order to hedge all the variability in a portion (50%)
of the principal and interest payable of intercompany loan payables nominated in 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">The following table
presents information related to the terms of the agreements:</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 ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Bank</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>Payable</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>Receivable</B></TD>
    <TD>&nbsp;</TD>
    <TD ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Interest payment dates</B></TD>
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Maturity</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Currency</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Amount</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Interest rate</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Currency</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Amount</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Interest rate</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 21%">BAML (i)</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: center">BRL</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 7%; text-align: right">156,250</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">13.64</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; text-align: left">%</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: center">$</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 7%; text-align: right">50,000</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 6%; text-align: right">6.91</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; text-align: left">%</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 13%">March 31/ September 30</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 10%">April 2027</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Banco Santander S.A.</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">BRL</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">155,500</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">13.77</TD>
    <TD STYLE="vertical-align: bottom; text-align: left">%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">$</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">50,000</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">6.91</TD>
    <TD STYLE="vertical-align: bottom; text-align: left">%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">June 30/ December 31</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">September 2023</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank
of America Merrill Lynch Banco M&uacute;ltiplo S.A.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 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 $2,119
and $7,701 of net interest during the six-month period ended June 30, 2017 and 2016, 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"><U>Call spread</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 April 2017,
the Company&rsquo;s Brazilian subsidiary entered into two call spread agreements in order to hedge the variability in a portion
(50%) of the principal of intercompany loan payables nominated in US dollar. Call spread agreements consist of a combination of
two call options: the Company bought an option to buy US dollar at a strike price equal to the BRL exchange rate at the date of
the agreements, and wrote an option to buy US dollar at a higher strike price than the previous one. Both pair of options have
the same notional amount and are based on the same underlying with the same maturity 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 following table
presents information related to the terms of the agreements:</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>
    <TD ROWSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: center"><B>Bank</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="4" STYLE="vertical-align: bottom; text-align: center"><B>Nominal Amount</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; text-align: center"><B>Strike price</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD ROWSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: center"><B>Maturity</B></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Currency</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Call option written</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Call option bought</B></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 15%">Citibank S.A.</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 12%; text-align: center">$</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: right">50,000</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 21%; text-align: right">4.49</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 19%; text-align: right">3.11</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 16%">September 2023</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">JP Morgan S.A.</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">$</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">50,000</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">5.20</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">3.13</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">April 2027</TD></TR>
</TABLE>

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    <DIV STYLE="margin-top: 6pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->15<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red"></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 six-month periods ended June 30, 2017 and 2016 (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="margin: 0pt"></P></DIV>
    <!-- Field: /Page -->

<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"><B>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Derivative instruments
(continued)</B></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; text-align: justify; text-indent: 0.5in"><U>Coupon-only 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">During April 2017,
the Company&rsquo;s Brazilian subsidiary entered into two coupon-only swap agreements in order to hedge the variability (50%) in
the interest payable related to the intercompany loan aforementioned.</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 related to the terms of the agreements:</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 ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Bank</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>Payable</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>Receivable</B></TD>
    <TD>&nbsp;</TD>
    <TD ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Interest payment dates</B></TD>
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Maturity</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Currency</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Amount</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Interest rate</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Currency</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Amount</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Interest rate</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 13%">Citibank S.A.</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: center">BRL</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 7%; text-align: right">155,500</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">11.08</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; text-align: left">%</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: center">$</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 7%; text-align: right">50,000</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 6%; text-align: right">6.91</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; text-align: left">%</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 21%">June 30/ December 31</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 10%">September&nbsp;&nbsp;2023</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">JP Morgan S.A.</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">BRL</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">156,250</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">11.18</TD>
    <TD STYLE="vertical-align: bottom; text-align: left">%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">$</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">50,000</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">6.91</TD>
    <TD STYLE="vertical-align: bottom; text-align: left">%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">March 31/ September 30</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">April 2027</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 Company paid $386
of net interest during the six-month period ended June 30, 2017, related to these 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
present the pretax amounts affecting income and other comprehensive income for the six-month periods ended June 30, 2017 and 2016
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>

<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"><B>Hedging Relationships</B></P>
</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>&nbsp;(Loss) Gain Recognized in Accumulated OCI on Derivative (Effective Portion) (Unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>&nbsp;Loss (Gain) Reclassified from Accumulated OCI into Income (Effective Portion) (i) (Unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>Gain (Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing and Ineffective Portion) (Unaudited)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>2017</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>2016</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>2017</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>2016</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>2017</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>2016</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%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">(664</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">)</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">893</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%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">625</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">(2,369</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; text-align: right">8,292</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">(56,635</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(2,884</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">32,937</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">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Call Spread</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">18,885</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">(5,702</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">&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">Coupon-only swap</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">(10,823</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">&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">782</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>
    <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">(246</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">&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>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>15,690</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>(55,742</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>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>(7,179</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>30,568</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>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>(246</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>&mdash;</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
(loss) 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 Cross-currency interest rate swaps is presented in the consolidated statement of income as follows:
a gain (loss) of $5,692 and $(7,274), respectively, as an adjustment to foreign currency exchange results and a loss of $2,808
and $25,663, respectively as an adjustment to net interest expense. The (loss) gain recognized in income related to call spread
agreements and coupon-only swap agreements were recorded as an adjustment to foreign currency exchange and interest expense, respectively.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I><U>Fair value
hedge</U></I></B></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 March 29, 2016,
the Company entered into five cross-currency interest rate swap agreements (the &quot;2016 cross-currency interest rate swap&quot;)
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 2016
cross-currency interest rate swap agreements match the terms of the Secured Loan</P>

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


<!-- Field: Page; Sequence: 20 -->
    <DIV STYLE="margin-top: 6pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->16<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red"></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 six-month periods ended June 30, 2017 and 2016 (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="margin: 0pt"></P></DIV>
    <!-- Field: /Page -->

<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"><B>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Derivative instruments
(continued)</B></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; 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">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">During April 2017,
the Company unwound these agreements as a consequence of the repayment of the Secured Loan Agreement mentioned in Note 5. The total
payment amounted to $39,1 million (BRL122,7 million), including $0,9 million of 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">Until settlement, the
accrued interest amounted to $6,921. This charge does not include the effect of the Secured Loan Agreement mentioned in Note 5,
amounting to a loss of $2,570. Including this effect the total interest cost amounts to $9,491.</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">These amounts were
recorded within &ldquo;Net interest expense&rdquo; in the Company&rsquo;s consolidated statement 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">According to ASC 815-25-35,
the change in the fair value of the hedging instrument and the change in the fair value of the hedged item shall be recognized
in earnings. If those results are not perfectly offset, the difference shall be considered as hedge ineffectiveness.</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 pretax amounts affecting income for the six-month period ended June 30, 2017:</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" ROWSPAN="2" STYLE="border-top: Black 2.25pt solid; text-align: center"><B>Loss recognized in Income on hedging derivatives</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="2" ROWSPAN="2" STYLE="border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: center"><B>Gain recognized in Income on hedging items</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>Derivatives in Fair Value Hedging Relationships</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 47%">Cross-currency interest rate swap (i)</TD>
    <TD STYLE="vertical-align: bottom; width: 3%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 21%; text-align: right">(9,599</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">)</TD>
    <TD STYLE="vertical-align: bottom; width: 2%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 25%; text-align: right">4,118</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="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
loss amounting to $5,481, related to the ineffective portion of derivatives, was recorded within &ldquo;Loss from derivative instruments&rdquo;
in the Company&rsquo;s consolidated statement of income.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; 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-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 enters
into certain derivatives that are not designated for hedge accounting, therefore the changes in the fair value of these derivatives
are recognized immediately in earnings together with the gain or loss from the hedged balance sheet position.</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">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></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 NOWRAP><B>Derivatives Not Designated as Hedging Instruments</B></TD>
    <TD ROWSPAN="2" STYLE="border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center"><B>Location of Loss Recognized in Income</B></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="9" 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 STYLE="border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>2017</B></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid">&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></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Forward Contracts</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 STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(1,624</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</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></TR>
<TR STYLE="background-color: White">
    <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">120</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right">(30</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></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 31%"><B>Total</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 33%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right; width: 12%"><B>(1,504</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-bottom: Black 2.5pt double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-bottom: Black 2.5pt double; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-bottom: Black 2.5pt double; text-align: right"><B>(30</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-bottom: Black 2.5pt double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%; 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"></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"></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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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red"></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 six-month periods ended June 30, 2017 and 2016 (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="margin: 0pt"></P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in"><B>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Derivative
instruments (continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&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 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, which are totally
vested. The Company also made recurring grants of stock options and restricted share units in each of the fiscal years from 2011
to 2017 (from 2015 to 2017 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. 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">On June 28, 2016, 1,117,380
stock options were converted to a liability award maintaining the original conditions of the 2011 Plan. There were not incremental
compensation costs resulting from the modification. The employees affected by this modification were 104. The accrued liability
is remeasured on a monthly basis until settlement. As of June&nbsp;30, 2017, the outstanding units related to this liability award
were 611,531 and the accumulated Additional paid-in capital related to these units as from the grant date amounts to $5,854 (net
of $23 reclassified to &quot;Accrued payroll and other liabilities&quot; in the Company&rsquo;s 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>

<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 $1,381 and $1,602 during the six-month periods ended June 30, 2017 and 2016, respectively. 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 six-month period ended June 30, 2017:</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="text-align: center"><B>Units</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center"><B>Weighted-average strike price</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="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: 41%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Outstanding at December 31, 2016</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 17%; border-top: Black 2.25pt solid; text-align: right"><B>776,475</B></TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 17%; border-top: Black 2.25pt solid; text-align: right"><B>15.55</B></TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 19%; border-top: Black 2.25pt solid; text-align: right"><B>4.46</B></TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Expired (i)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(141,986</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">21.20</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">5.28</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom"><B>Outstanding at June 30, 2017</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: right"><B>634,489</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: right"><B>14.28</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid; text-align: right"><B>4.28</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 2.25pt solid; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><B>Exercisable at June 30, 2017</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><B>540,331</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>15.03</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>4.58</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 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of
June&nbsp;30, 2017, Additional paid-in capital included $750 related to expired stock options.</P>

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


<!-- Field: Page; Sequence: 22 -->
    <DIV STYLE="margin-top: 6pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->18<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red"></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 six-month periods ended June 30, 2017 and 2016 (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="margin: 0pt"></P></DIV>
    <!-- Field: /Page -->

<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"><B>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation
(continued)</B></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; 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>2011 Equity Incentive
Plan (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">The following table
provides a summary of outstanding stock options at June&nbsp;30, 2017:&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">540,331</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">94,158</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">634,489</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">4.58</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">2.53</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">4.28</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">2,476</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">238</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">2,714</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">75.7</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">97.9</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">2,476</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">180</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">2,656</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">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">58</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">58</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Related
to exercisable awards.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Related
to awards that will vest between fiscal years 2017 and 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expected
to be recognized in a weighted-average period of 0.4 years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&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 six-month period ended June 30, 2017:</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, 2016</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 18%; text-align: right"><B>1,780,997</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>6.07</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">2017 annual grant</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">497,960</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">9.20</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Partial vesting of 2012 grant (i)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(23,003</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">14.35</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Partial vesting of 2013 grant (i)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(24,073</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">14.31</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Partial vesting of 2014 grant (i)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(44,312</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">8.58</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Partial vesting of 2015 grant (i)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(269,896</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">6.33</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <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">(146,075</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">5.87</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>Outstanding at June 30, 2017</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><B>1,771,598</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>6.64</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 June 30, 2017</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid; text-align: right"><B>&mdash;</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>&mdash;</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 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company issued 360,817 Class A shares in connection with this partial vesting. Therefore, accumulated recorded compensation expense
totaling $2,759 was reclassified from &ldquo;Additional paid-in capital&rdquo; to &ldquo;Common Stock&rdquo; upon issuance. As
of June&nbsp;30, 2017, there were 467 Class A shares, amounting to $4, pending of issuance in connection with this partial vestings.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The resulting value
of restricted share units granted during fiscal year 2017 was $4,581.</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
provides a summary of outstanding restricted share units at June&nbsp;30, 2017:&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">1,771,598</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">6.64</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">11,768</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: top; text-align: right">33.2</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: top; text-align: right">3,911</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">7,857</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
</TABLE>

<!-- Field: Page; Sequence: 23 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red"></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 six-month periods ended June 30, 2017 and 2016 (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="margin: 0pt"></P></DIV>
    <!-- Field: /Page -->

<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"><B>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation
(continued)</B></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; text-align: justify; text-indent: 0.5in"><U>2011 Equity Incentive
Plan (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 CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; 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; text-align: left">(i)</TD><TD>Related to awards that will vest between fiscal years
2018 and 2022.</TD>
</TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; 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; text-align: left">(ii)</TD><TD>Expected to be recognized in a weighted-average period
of 2.4 years.</TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>8.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Commitments
and contingencies </B></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; 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,
during the first 10 years, substantially consistent with market. This percentage increases to 6% and 7% for the subsequent two
5-year periods of the agreement;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&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">(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">&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">(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">&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">(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">&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">(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 January 26, 2017,
the Company reached an agreement with McDonald&rsquo;s Corporation related to the restaurant opening and reinvestment plan, mentioned
in point (ii) above, for the three-year period commenced on January 1, 2017. Under the agreement, the Company committed to open
180 new restaurants and to reinvest $292 million in existing restaurants. On January 25, 2017, McDonald&rsquo;s Corporation agreed
to provide growth support for the same period. The Company projects that the impact of this support could result in an effective
royalty rate of 5.3% in 2017, 5.7% in 2018 and 5.9% in 2019.</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">For the six-month period
ended June 30, 2017<FONT STYLE="font-size: 8pt">,</FONT> the Company was in compliance with the ratio requirements mentioned in
point (v) above. The ratios for the period mentioned, 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="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>June 30, 2017</B><BR>
<B>(Unaudited)</B></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>March 31, 2017</B><BR>
<B>(Unaudited)</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 47%">Fixed Charge Coverage Ratio</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 23%; text-align: right">1.65</TD>
    <TD STYLE="vertical-align: top; width: 3%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 25%; text-align: right">1.65</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="2">&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Leverage Ratio</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">4.05</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">4.12</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">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 June&nbsp;30, 2017, the Company maintains a provision for contingencies, net of judicial deposits,
amounting to $22,113 ($18,112 at December&nbsp;31, 2016). As of June&nbsp;30, 2017 and December&nbsp;31, 2016, the net amount of
$22,113 and $18,112 is disclosed as follows: $720 and $764 as a current liability and $21,393 and $17,348 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>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red"></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 six-month periods ended June 30, 2017 and 2016 (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="margin: 0pt"></P></DIV>
    <!-- Field: /Page -->

<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"><B>8.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Commitments
and contingencies (continued)</B></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; 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>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></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" STYLE="text-align: center"><B>As of</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>June 30, 2017</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>(Unaudited)</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 2.25pt solid"><B>December 31, 2016</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 64%">Tax contingencies in Brazil</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">16,708</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">13,312</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">13,942</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">11,150</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">12,061</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">12,222</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">42,711</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">36,684</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">(20,598</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">(18,572</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><B>Provision for contingencies</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>22,113</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>18,112</B></TD>
    <TD STYLE="vertical-align: top; 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">&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">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of June&nbsp;30,
2017, 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 $99 million and $135 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">As of June&nbsp;30,
2017, there are certain matters related to the interpretation of income tax laws for which there is a possibility that a loss may
have been incurred, as of the date of the financial statements in accordance with ASC 740 in an amount of $20.5 million, related
to assessments for the fiscal years 2010 and 2011.</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: 0.5in">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. The Company believes that in this case 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: 0.5in">&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.
On June 9, 2014, after several motions for summary judgment duly filed and opposed by the parties, the Court entered a &ldquo;Partial
Summary Judgment and Resolution&rdquo; in favor of PROA, before initiating the discovery phase, finding that the Company must participate
and contribute funds to the association. However, the Court did not specify any amount for which the Company should be held liable,
due to its preliminary and interlocutory nature, and the lack of discovery conducted regarding the amounts claimed by the plaintiffs.
The Company is opposing this claim vigorously because it believes that there is no legal basis for it, considering: (i) the obligation
to contribute is not directed towards a cooperative, (ii) the franchise agreement does not contain a provision that makes it mandatory
to participate in the cooperative, and (iii) PROA&rsquo;s by-laws state that participation in the cooperative is voluntary, among
other arguments. According to the points previously mentioned, the Company believes that a final negative resolution has a low
probability of occurrence, therefore no provision has been recorded.</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>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red"></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 six-month periods ended June 30, 2017 and 2016 (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="margin: 0pt"></P></DIV>
    <!-- Field: /Page -->

<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"><B>8.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Commitments
and contingencies (continued)</B></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; 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>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At June&nbsp;30, 2017,
the non-current portion of the provision for contingencies includes $2,628 ($5,170 at December&nbsp;31, 2016) 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>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>9.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Segment
and geographic information </B></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; 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">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 six-month periods ended</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>June 30,</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; text-align: center"><B>2017</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; text-align: center"><B>2016</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><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%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">714,934</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">598,028</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">222,515</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">196,286</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">180,468</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">173,460</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">462,261</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">378,041</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 STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>1,580,178</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>1,345,815</B></TD>
    <TD STYLE="vertical-align: top; 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><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">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">90,654</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">65,795</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">7,758</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">3,917</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">13,575</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">15,465</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">38,501</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">32,084</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>150,488</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>117,261</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">(31,206</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">(28,250</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>Total adjusted EBITDA</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>119,282</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>89,011</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD></TR>
</TABLE>

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    <DIV STYLE="margin-top: 6pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->22<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red"></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 six-month periods ended June 30, 2017 and 2016 (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="margin: 0pt"></P></DIV>
    <!-- Field: /Page -->

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Segment and geographic
information (continued)</B></P>

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


</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>For the six-month periods ended</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>June 30,</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; text-align: center"><B>2017</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; text-align: center"><B>2016</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><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>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right"><B>119,282</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right"><B>89,011</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">(47,892</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(49,590</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">56,317</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">49,072</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">(2,018</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(2,344</TD>
    <TD>)</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Impairment of goodwill</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(200</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="vertical-align: bottom; background-color: White">
    <TD>ADBV Long-Term Incentive Plan incremental compensation from modification</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: right">(575</TD>
    <TD STYLE="border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: right">(223</TD>
    <TD STYLE="border-bottom: Black 1pt solid">)</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>124,914</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>85,926</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><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: White">
    <TD>Net interest expense</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(39,458</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(35,037</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD>Loss from derivative instruments</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(7,231</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(30</TD>
    <TD>)</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">(24,111</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">32,206</TD>
    <TD STYLE="vertical-align: top">&nbsp;</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="text-align: right">(1,125</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(766</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Income tax expense</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(16,351</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(22,729</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <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">(148</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">(77</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><B>Net income attributable to Arcos Dorados Holdings Inc.</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>36,490</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>59,493</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>

<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><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%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">25,194</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">20,793</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">12,078</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">17,509</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">10,183</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">11,367</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">7,546</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">7,256</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>55,001</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>56,925</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">2,851</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">2,481</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">(9,960</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">(9,816</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><B>Total depreciation and amortization</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>47,892</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>49,590</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD></TR>
</TABLE>

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    <DIV STYLE="margin-top: 6pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->23<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red"></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 six-month periods ended June 30, 2017 and 2016 (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="margin: 0pt"></P></DIV>
    <!-- Field: /Page -->

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Segment and geographic
information (continued)</B></P>

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


</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>For the six-month periods ended</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>June 30,</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; text-align: center"><B>2017</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; text-align: center"><B>2016</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><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%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">33,715</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">10,484</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">7,941</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">4,690</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">3,365</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">2,747</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">20,172</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">9,811</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>65,193</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>27,732</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">5</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">135</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 property and equipment expenditures</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>65,198</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>27,867</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>

<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>As of</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; text-align: center"><B>June 30,</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>2017</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>2016</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><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%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">719,041</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">726,250</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">342,384</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">355,568</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">259,584</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">247,546</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">246,188</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">246,344</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>1,567,197</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>1,575,708</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; text-align: right">150,111</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">82,822</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">(151,565</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">(153,477</TD>
    <TD STYLE="border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><B>Total assets</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>1,565,743</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>1,505,053</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 June 30, 2017 and December 31,
2016, corporate assets primarily includes corporate cash and cash equivalents.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Relates
to the purchase price allocation adjustment made at corporate level, which reduces the total assets and the corresponding depreciation
and amortization.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&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 $872,675 and $847,966 at June&nbsp;30, 2017 and December&nbsp;31, 2016, 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>


<!-- Field: Page; Sequence: 28 -->
    <DIV STYLE="margin-top: 6pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->24<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red"></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 six-month periods ended June 30, 2017 and 2016 (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="margin: 0pt"></P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders&rsquo;
equity </B></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; 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 June&nbsp;30, 2017,
the Company had 211,072,041 shares issued and outstanding with no par value, consisting of 131,072,041 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. In addition, the 2027 Notes impose certain restrictions on the distribution of dividends.</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">For the six-month period
ended June 30, 2017, and during fiscal year 2016, the Company did not declare a dividend distribution to its shareholders, with
respect to its results of operations for fiscal year 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-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 June&nbsp;30,
2017 and their related activity during the six-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>
</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>Cash flow hedges</B></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>Post-employment <br>benefits</B></P>

        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(i)</B></P>
</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Total Accumulated other comprehensive loss</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 44%"><B>Balances at December 31, 2016</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; text-align: right"><B>(441,081</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; text-align: right"><B>305</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>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 12%; text-align: right"><B>(873</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; text-align: right; width: 12%"><B>(441,649</B></TD>
    <TD STYLE="vertical-align: bottom; text-align: left; width: 1%"><B>)</B></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-left: 9pt; text-indent: -9pt">Other comprehensive gain before reclassifications (Unaudited)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">16,917</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">9,616</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">26,533</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; padding-left: 9pt; text-indent: -9pt">Net (gain) loss reclassified from accumulated other comprehensive income 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">(4,012</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">193</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">(3,819</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.25pt solid">)</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-left: 9pt; text-indent: -9pt">Net current-period other comprehensive gain&nbsp;&nbsp;(Unaudited)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">16,917</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">5,604</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">193</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">22,714</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 June 30, 2017 (Unaudited)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>(424,164</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>5,909</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>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>(680</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>(418,935</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>)</B></TD></TR>
</TABLE>

<!-- Field: Page; Sequence: 29 -->
    <DIV STYLE="margin-top: 6pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->25<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red"></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 six-month periods ended June 30, 2017 and 2016 (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="margin: 0pt"></P></DIV>
    <!-- Field: /Page -->

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders&rsquo;
equity (continued)</B></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; 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 June&nbsp;30,
2016 and their related activity during the six-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>
</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>Cash flow hedges</B></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>Post-employment <br>benefits</B></P>

        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(i)</B></P>
</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.25pt solid; text-align: center"><B>Total Accumulated other comprehensive loss</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 42%"><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: 12%; 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; text-align: right; width: 12%"><B>(424,263</B></TD>
    <TD STYLE="vertical-align: bottom; text-align: left; width: 1%"><B>)</B></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-left: 9pt; text-indent: -9pt">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">14,940</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">(55,742</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">(40,802</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; padding-left: 9pt; text-indent: -9pt">Net 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">30,568</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">224</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">30,792</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-left: 9pt; text-indent: -9pt">Net current-period other comprehensive gain (loss) (Unaudited)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">14,940</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">(25,174</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">224</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">(10,010</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(213,234,234)">
    <TD><B>Balances at June 30, 2016 (Unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><B>(416,250</B></TD>
    <TD STYLE="border-bottom: Black 2.5pt double"><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><B>(17,298</B></TD>
    <TD STYLE="border-bottom: Black 2.5pt double"><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><B>(725</B></TD>
    <TD STYLE="border-bottom: Black 2.5pt double"><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><B>(434,273</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 0pt 0.5in; text-align: justify">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Earnings per
share</B></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; 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">The following table
sets forth the computation of basic and diluted net income 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>


<!-- Field: Page; Sequence: 30 -->
    <DIV STYLE="margin-top: 6pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->26<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red"></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 six-month periods ended June 30, 2017 and 2016 (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="margin: 0pt"></P></DIV>
    <!-- Field: /Page -->

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Earnings per
share (continued)</B></P>

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


</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>For the six-month periods ended</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>June 30,</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; text-align: center"><B>2017</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; text-align: center"><B>2016</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 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%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">36,490</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">59,493</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</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">210,796,678</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">210,582,170</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 (i)</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">976,798</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">53,715</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">211,773,476</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">210,635,885</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD>&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"><B>Basic net income per common share attributable to Arcos Dorados Holdings Inc.</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>0.17</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>0.28</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom"><B>Diluted net income per common share attributable to Arcos Dorados Holdings Inc.</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>0.17</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 2.5pt double; text-align: right"><B>0.28</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 2.5pt double">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Options
to purchase shares of common stock were outstanding during the six-month periods ended June 30, 2017 and 2016. 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 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Related party
transactions </B></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; 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. Notwithstanding the fact that the loan maturity date was
November 7, 2016, the parties decided to terminate the agreement early as of May 27, 2016. As a result, the Company collected the
outstanding principal amount of $1,800.</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 June&nbsp;30, 2017 and December&nbsp;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="7" 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-top: Black 2.25pt solid; text-align: center"><B>June 30,</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"><B>2017</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>2016</B></TD></TR>
<TR STYLE="background-color: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom; width: 64%">Other receivables</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">1,157</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">1,050</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <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">3,763</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: rgb(213,234,234)">
    <TD STYLE="vertical-align: bottom">Miscellaneous</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">2,679</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">3,612</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Accounts payable</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(7,200</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(10,355</TD>
    <TD>)</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
summarizes the transactions between the Company and the Axionlog Business for the six-month periods ended June 30, 2017 and 2016:</P>

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


<!-- Field: Page; Sequence: 31 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red"></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 six-month periods ended June 30, 2017 and 2016 (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="margin: 0pt"></P></DIV>
    <!-- Field: /Page -->

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Related party
transactions (continued)</B></P>

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


</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>For the six-month periods ended</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>June 30,</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; text-align: center"><B>2017</B></TD>
    <TD STYLE="border-top: Black 2.25pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 2.25pt solid; text-align: center"><B>2016</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: 64%">Food and paper (i)</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">$</TD>
    <TD STYLE="width: 9%; text-align: right">(84,586</TD>
    <TD STYLE="width: 1%">)</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">$</TD>
    <TD STYLE="width: 9%; text-align: right">(76,341</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">(2,232</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(1,816</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">&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">31</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Includes
$23,818 of distribution fees and $60,768 of suppliers&rsquo; purchases managed through the Axionlog Business for the six-month
period ended June 30, 2017; and, $18,391 and $57,950, respectively, for the six-month period ended June 30, 2016.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of June&nbsp;30,
2017, the Company had other receivables and accounts payable with Lacoop, A.C. and Lacoop II, S.C. totaling $112 and $1,286, 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"><B>13</B>.<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Venezuelan
operations </B></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; 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 $40,441 and $3,322, respectively, for the six-month period ended June 30, 2017; and $25,213
and $10,871, respectively, for the six-month period ended June 30, 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">Since February 2013,
the Venezuelan government has announced several changes in the currency exchange regulations. Therefore, the Company reassessed
the exchange rate used for remeasurement purposes several times. Effective May 19, 2017, a new Exchange Agreement was issued setting
new rules on foreign exchange transactions and replacing the existing mechanism called DICOM. Under the new regulation, the access
to the supplementary floating market rate, called DICOM II, operates through an auction mechanism. To participate in DICOM II,
the parties must be previously registered and make a sworn statement of the origin or destination of the funds. The first auction
was published on May 31, 2017 with an exchange rate of 2,010 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 a result of the
remeasurement under DICOM II, the Company recognized a foreign currency exchange loss of $2,554 and a write down of certain inventories
of $1,375 due to the currency exchange rate change impact on their net recoverable value. In addition, the Company performed the
impairment testing of its long-lived assets in accordance with the guidance within ASC 360-10-35 concluding that no impairment
was needed. The Company will continue closing monitor any indicator of impairment in Venezuela.</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 June&nbsp;30,
2017, the DICOM II exchange rate settled at 2,640 VEF per 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 June&nbsp;30,
2017, 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 II rate was $0.8 million (including $3.0 million of cash and cash equivalents). Venezuela&rsquo;s
non-monetary assets were $48.7 million at June&nbsp;30, 2017 and included approximately $41.9 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>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red"></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 six-month periods ended June 30, 2017 and 2016 (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="margin: 0pt"></P></DIV>
    <!-- Field: /Page -->

<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"><B>13</B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Venezuelan
operations (continued)</B></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; 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. Although these regulations caused a delay in the
pricing plan, the Company was able to increase prices during the six-month period ended June 30, 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 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>

<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: left"></P>

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