<SEC-DOCUMENT>0000950103-19-003761.txt : 20190327
<SEC-HEADER>0000950103-19-003761.hdr.sgml : 20190327
<ACCEPTANCE-DATETIME>20190327081413
ACCESSION NUMBER:		0000950103-19-003761
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20190327
FILED AS OF DATE:		20190327
DATE AS OF CHANGE:		20190327

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:		19706689

	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>dp104134_6k.htm
<DESCRIPTION>FORM 6-K
<TEXT>
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<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>&nbsp;</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 March, 2019</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">&nbsp;</P>



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

<P STYLE="font: 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&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Montevideo, Uruguay, 11300 WTC Free
Zone </B>&nbsp;</P>

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

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

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

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

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="width: 60%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 29%; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form
    20-F</FONT></TD>
    <TD STYLE="width: 14%"><P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 0.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">X&nbsp;</FONT></P></TD>
    <TD STYLE="width: 15%; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 28%; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form
    40-F</FONT></TD>
    <TD STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 0.5pt solid; width: 14%"></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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

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

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="width: 60%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 29%; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Yes</FONT></TD>
    <TD STYLE="font: 12pt 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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 28%; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">No</FONT></TD>
    <TD STYLE="width: 14%"><P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 0.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">X&nbsp;</FONT></P></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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

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

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="width: 60%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 29%; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Yes</FONT></TD>
    <TD STYLE="font: 12pt 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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 28%; font-size: 10pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">No</FONT></TD>
    <TD STYLE="width: 14%"><P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 0.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">X&nbsp;</FONT></P></TD></TR>
</TABLE>


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

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

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

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

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

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

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

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

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

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

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0.1in"><FONT STYLE="font-size: 10pt">This report on Form 6-K shall
be deemed to be incorporated by reference into the registration statements on Form S-8 (Registration Number: 333-173496) of Arcos
Dorados Holdings Inc. and to be a part thereof from the date on which this report is filed, to the extent not superseded by documents
or reports subsequently filed or furnished.</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0.1in">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0.1in"></P>

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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0.1in">&nbsp;</P>



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

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

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

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

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

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

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%; font-size: 10pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>ITEM</B></FONT></TD>
    <TD STYLE="width: 91%; font-size: 10pt; text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt; text-align: center"><FONT STYLE="font-size: 10pt">1.</FONT></TD>
    <TD STYLE="padding-left: 0.1in; font-size: 10pt"><FONT STYLE="font-size: 10pt">Consolidated Financial Statements as of December 31, 2018 and 2017 and for each of the three years in the period ended December
31, 2018</FONT></TD></TR>
</TABLE>

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

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>SIGNATURE</B></FONT></P>

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

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

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3"><FONT STYLE="font-size: 10pt"><B>Arcos Dorados Holdings Inc.</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="white-space: nowrap"><FONT STYLE="font-size: 10pt">By:&nbsp;&nbsp;</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%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 27%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 30%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 7%; white-space: nowrap"><FONT STYLE="font-size: 10pt">Name:</FONT></TD>
    <TD STYLE="width: 28%"><FONT STYLE="font-size: 10pt">Juan David Bastidas</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Title:</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Chief Legal Counsel</FONT></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">Date:
March 27, 2019</FONT></P>

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


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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><FONT STYLE="font-size: 10pt"><B>Item 1</B></FONT></P>

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



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

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

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

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

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Consolidated Financial Statements</B></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of December&nbsp;31, 2018 and 2017 and for each of the three
years in the period ended December&nbsp;31, 2018</P>

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


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INDEX TO FINANCIAL STATEMENTS</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>Audited Consolidated Financial Statements
&ndash; Arcos Dorados Holdings Inc.</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: bottom">
    <TD STYLE="width: 93%">Report of Independent Registered Public Accounting Firm</TD>
    <TD STYLE="width: 7%; text-align: center"><FONT STYLE="color: blue">3</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Consolidated Statements of Income for the fiscal years ended December 31, 2018, 2017 and 2016</TD>
    <TD STYLE="text-align: center"><FONT STYLE="color: blue">4</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Consolidated Statements of Comprehensive (Loss) Income for the fiscal years ended December 31, 2018, 2017 and 2016</TD>
    <TD STYLE="text-align: center"><FONT STYLE="color: blue">5</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Consolidated Balance Sheet as of December 31, 2018 and 2017</TD>
    <TD STYLE="text-align: center"><FONT STYLE="color: blue">6</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2018, 2017 and 2016</TD>
    <TD STYLE="text-align: center"><FONT STYLE="color: blue">7</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Consolidated Statements of Changes in Equity for the fiscal years ended December 31, 2018, 2017 and 2016</TD>
    <TD STYLE="text-align: center"><FONT STYLE="color: blue">8</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Notes to the Consolidated Financial Statements as of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</TD>
    <TD STYLE="text-align: center"><FONT STYLE="color: blue">9</FONT></TD></TR>
</TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</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">To the Board of Directors and Shareholders of</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>ARCOS DORADOS HOLDINGS INC.:</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">Opinion on the Financial Statements</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.4pt">We have audited the
accompanying consolidated balance sheets of Arcos Dorados Holdings Inc. (the &ldquo;Company&rdquo;) as of December&nbsp;31, 2018
and 2017, and the related consolidated statements of income, comprehensive (loss) income, changes in equity and cash flows for
each of the three years in the period ended December&nbsp;31, 2018 and the related notes (collectively referred to as the &ldquo;financial
statements&rdquo;). In our opinion, the financial statements present fairly, in all material respects, the financial position of
the Company at December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in
the period ended December 31, 2018, in conformity with U.S. generally accepted accounting principles.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.4pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Basis for Opinion</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: 35.4pt">These financial statements
are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company&rsquo;s financial
statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.4pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.4pt">We conducted our audits
in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included
performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud,
and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe
that our audits provide a reasonable basis for our opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.4pt">&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: 32%; border-bottom: Black 1pt solid">/s/ Pistrelli, Henry Martin y Asociados S.R.L.</TD>
    <TD STYLE="width: 68%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>PISTRELLI, HENRY MARTIN Y ASOCIADOS S.R.L.</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-indent: 0pt">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-indent: 0pt">Member of Ernst &amp; Young Global</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 12.1pt">&nbsp;</P></TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We have served as the Company&rsquo;s auditor since 2007</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">Buenos Aires, Argentina</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">March&nbsp;27, 2019</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>&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the fiscal years ended December&nbsp;31,
2018, 2017 and 2016</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>REVENUES</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2016</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 64%">Sales by Company-operated restaurants</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">2,932,609</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">3,162,256</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">2,803,334</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <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 1pt solid; text-align: right">148,962</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">157,269</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">125,296</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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>3,081,571</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>3,319,525</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>2,928,630</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>OPERATING COSTS AND EXPENSES</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Company-operated restaurant expenses:</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.125in">Food and paper</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(1,030,499</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(1,110,240</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(1,012,976</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.125in">Payroll and employee benefits</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(607,793</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(683,954</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(607,082</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.125in">Occupancy and other operating expenses</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(803,539</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(842,519</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(752,428</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.125in">Royalty fees</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(157,886</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(163,954</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(142,777</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Franchised restaurants &ndash; occupancy expenses</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(67,927</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(69,836</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(55,098</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>General and administrative expenses</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(229,324</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(244,664</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(221,075</TD>
    <TD>)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Other operating (expenses) income, net</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(61,145</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">68,577</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">41,386</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>Total operating costs and expenses</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><B>(2,958,113</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><B>(3,046,590</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><B>(2,750,050</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><B>)</B></TD></TR>
<TR>
    <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>123,458</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>272,935</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>178,580</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Net interest expense</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(52,868</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(68,357</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(66,880</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Loss from derivative instruments</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(565</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(7,065</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(3,065</TD>
    <TD>)</TD></TR>
<TR>
    <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">14,874</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(14,265</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">32,354</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Other non-operating income (expenses), net</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">270</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(435</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(2,360</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD></TR>
<TR>
    <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>85,169</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>182,813</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>138,629</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Income tax expense</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(48,136</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(53,314</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(59,641</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD></TR>
<TR>
    <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>37,033</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>129,499</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>78,988</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Less: Net income attributable to non-controlling interests</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(186</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(333</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(178</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD></TR>
<TR>
    <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 medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>36,847</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>129,166</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>78,810</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</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>Earnings per share information:</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <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">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">0.18</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">0.61</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">0.37</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">0.18</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">0.61</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">0.37</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 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"><B>Consolidated Statements of Comprehensive
(Loss) 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">For the fiscal years ended December&nbsp;31,
2018, 2017 and 2016</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&#9;Amounts in thousands of US dollars</P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2016</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 65%"><B>Net income</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right"><B>37,033</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 8%; text-align: right"><B>129,499</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>78,988</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</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><U>Other comprehensive (loss) income, net of tax:</U></B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <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">(63,130</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">4,783</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(9,929</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Post-employment benefits (expenses):</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;&nbsp;&nbsp;Loss recognized in accumulated other comprehensive loss</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(418</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(938</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(310</TD>
    <TD>)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;&nbsp;&nbsp;Reclassification of net loss to consolidated statement of income</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">494</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">386</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">386</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Post-employment benefits (expenses) (net of deferred income taxes of $122, $(272) and $(39))</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">76</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(552</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">76</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Cash flow hedges:</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;&nbsp;&nbsp;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">13,888</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">6,462</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(18,813</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;&nbsp;&nbsp;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 1pt solid; text-align: right">(23,887</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">1,592</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">11,242</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Cash flow hedges&nbsp;(net of deferred income taxes of $4,062, $(3,938) and $nil)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(9,999</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">8,054</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(7,571</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Total other comprehensive (loss) income</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><B>(73,053</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><B>12,285</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><B>(17,424</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><B>)</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Comprehensive (loss) income</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>(36,020</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>141,784</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>61,564</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
        <P STYLE="margin-top: 0; margin-bottom: 0">Less: Comprehensive income attributable to non-controlling interests</P></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(52</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(316</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(140</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Comprehensive (loss) income attributable to Arcos Dorados Holdings Inc.</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>(36,072</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>141,468</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>61,424</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium 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 Consolidated Financial Statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&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: 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"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Consolidated Balance Sheet</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">As
of December&nbsp;31, 2018 and 2017&nbsp;</P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amounts in thousands of US dollars, except for share data and as otherwise indicated</P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P><P STYLE="margin: 0pt"></P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B></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: bottom">
    <TD><FONT STYLE="font-size: 10pt"><B>ASSETS</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2017</B></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>
    <TD STYLE="vertical-align: bottom; width: 76%"><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">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">197,282</FONT></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">308,491</FONT></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Short-term investment</FONT></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>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">19,588</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">84,287</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">111,302</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">25,350</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">36,310</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">46,089</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">82,735</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">109,230</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">94,204</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">2,324</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">407</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <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>464,562</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>653,037</B></FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <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>
    <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">99,049</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">98,291</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">2,500</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">2,500</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">856,192</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">890,736</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">41,021</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">47,729</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">58,334</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">74,299</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">54,735</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">35,069</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">1,646</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">2,082</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <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 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt"><B>1,113,477</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt"><B>1,150,706</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <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 medium double"><FONT STYLE="font-size: 10pt"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><FONT STYLE="font-size: 10pt"><B>1,578,039</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><FONT STYLE="font-size: 10pt"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><FONT STYLE="font-size: 10pt"><B>1,803,743</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <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">
    <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>
    <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">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">242,455</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">303,452</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">14,576</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">13,729</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">53,843</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">54,592</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">61,006</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">82,326</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">94,166</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">119,088</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">2,436</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">2,529</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">9,951</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">9,986</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">356</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>
    <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">3,836</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">4,359</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">10,687</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">15,522</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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; border-top: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt"><B>493,312</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt"><B>605,583</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <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>
    <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">35,322</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">29,366</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">26,073</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">25,427</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">626,424</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">629,142</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">3,192</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">7,506</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">957</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">10,577</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <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 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt"><B>691,968</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt"><B>702,018</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>Total liabilities</B></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><FONT STYLE="font-size: 10pt"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><FONT STYLE="font-size: 10pt"><B>1,185,280</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><FONT STYLE="font-size: 10pt"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><FONT STYLE="font-size: 10pt"><B>1,307,601</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <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>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Class A shares of common stock</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">379,845</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">376,732</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Class B shares of common stock</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>
    <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">14,850</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">14,216</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">413,074</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">401,134</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Accumulated other comprehensive losses</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(502,266</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(429,347</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Common stock in treasury</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(46,035</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></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>
    <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; border-top: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">392,383</FONT></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">495,650</FONT></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <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; text-align: right"><FONT STYLE="font-size: 10pt">376</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">492</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt"><B>392,759</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt"><B>496,142</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <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 medium double"><FONT STYLE="font-size: 10pt"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><FONT STYLE="font-size: 10pt"><B>1,578,039</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><FONT STYLE="font-size: 10pt"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><FONT STYLE="font-size: 10pt"><B>1,803,743</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium 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 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>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Consolidated Statements of Cash Flows</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 fiscal years ended December&nbsp;31,
2018, 2017 and 2016</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 1pt solid; text-align: center"><B>2018</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2016</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt"><B>Operating activities</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 64%"><FONT STYLE="font-size: 10pt">Net income attributable to Arcos Dorados Holdings Inc.</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">36,847</FONT></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">129,166</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">78,810</FONT></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Adjustments to reconcile net income attributable to Arcos Dorados Holdings Inc. to cash provided by operations:</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</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">Non-cash charges and credits:</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Depreciation and amortization</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">105,800</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">99,382</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">92,969</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Loss from 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">565</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">7,065</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">3,065</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Amortization and accrual of letter of credit fees and deferred financing costs</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">3,189</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">3,433</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">3,974</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain of property and equipment sales</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(2,030</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(93,122</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(55,163</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR>
    <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">648</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">1,731</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">5,499</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Foreign currency exchange results</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(15,388</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">20,366</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">(33,348</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Accrued net share-based compensation expense</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">2,638</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">4,216</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">3,558</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Impairment of long-lived 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">19,117</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">17,764</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">12,742</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Write-offs of property and equipment</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">4,167</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">8,528</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">5,776</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Gain on Sales of restaurants businesses</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(6,154</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(14,742</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(16,549</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Others, 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">8,896</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">6,305</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">6,637</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Changes in assets and liabilities:</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Accounts 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">16,563</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">102,660</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">35,815</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Accounts and notes receivable and other receivables</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(35,770</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(50,211</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(32,604</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Inventories, prepaid and other 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">(12,074</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(53,466</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">26,763</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">12,529</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">18,946</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">9,480</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">8,675</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">12,672</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">8,180</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">(35</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">2,942</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">(9,533</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Accrued payroll and other liabilities and 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">27,134</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">35,075</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">15,412</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Others</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">4,414</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(3,540</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">2,706</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD><FONT STYLE="font-size: 10pt"><B>Net cash provided by operating activities</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>179,731</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>255,170</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>164,189</B></FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt"><B>Investing activities</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</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">Property and equipment expenditures</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(197,041</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(174,766</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(92,282</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Purchases of restaurant businesses paid at acquisition date</FONT></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>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(870</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></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>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Proceeds from sale of property and equipment and related advances</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">2,891</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">61,983</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">88,380</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Proceeds from sales of restaurant businesses and related advances</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">10,158</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">10,407</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">25,090</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Recovery (acquisitions) of short-term investments</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">19,588</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(19,588</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></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>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Other investing activity</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">620</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(1,646</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">1,830</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>Net cash (used in) provided by investing activities</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>(163,784</B></FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>)</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>(124,480</B></FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>)</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>23,018</B></FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt"><B>Financing activities</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Issuance of 2027 Notes</FONT></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>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">265,000</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>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">(Repayment of) / proceeds from secured loan agreement</FONT></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>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(169,511</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">167,262</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Purchase of 2023 Notes</FONT></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>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(48,885</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(80,800</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Net payment of 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">&mdash;</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">(40,822</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(6,268</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Dividend payments to Arcos Dorados Holdings Inc.&rsquo; shareholders</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(20,937</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></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>
    <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>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Purchase and repayment of 2016 Notes</FONT></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>
    <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>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(181,156</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Treasury stock purchases</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(46,035</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></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>
    <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="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Other financing activities</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(6,470</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(9,135</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(12,033</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt"><B>Net cash used in financing activities</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-size: 10pt"><B>(73,442</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><B>)</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-size: 10pt"><B>(3,353</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><B>)</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-size: 10pt"><B>(112,995</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><B>)</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Effect of exchange rate changes on cash and cash equivalents</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(53,714</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(13,649</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">8,072</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>(Decrease) increase in cash and cash equivalents</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>(111,209</B></FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>)</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>113,688</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>82,284</B></FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Cash and cash equivalents at the beginning of the year</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">308,491</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">194,803</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">112,519</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>Cash and cash equivalents at the end of the year</B></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><FONT STYLE="font-size: 10pt"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><FONT STYLE="font-size: 10pt"><B>197,282</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><FONT STYLE="font-size: 10pt"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><FONT STYLE="font-size: 10pt"><B>308,491</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><FONT STYLE="font-size: 10pt"><B>$</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><FONT STYLE="font-size: 10pt"><B>194,803</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</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>Supplemental cash flow information:</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</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">Cash paid during the year for:</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;Interest</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">55,400</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">53,206</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">76,605</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;Income tax</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">32,188</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">24,112</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">39,135</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Non-cash investing and financing activities:</FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;Seller financing pending of payment and settlement of franchise receivables related to purchases of restaurant businesses</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">469</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">36</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>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;Exchange of 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">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">6,721</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">2,150</FONT></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 Consolidated Financial Statements.</P>

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


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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: normal 10pt Times New Roman, Times, Serif">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: 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"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Consolidated Statements of Changes in Equity</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 fiscal years ended December&nbsp;31, 2018, 2017 and 2016</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"></P><P STYLE="margin: 0pt"></P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B></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>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="29" STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt"><B>Arcos Dorados Holdings Inc.&rsquo; Shareholders</B></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="vertical-align: bottom; border-top: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Class A shares of common stock</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="vertical-align: bottom; border-top: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Class B shares of common stock</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" ROWSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Additional paid-in capital</B></FONT></TD>
    <TD ROWSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" ROWSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Retained earnings</B></FONT></TD>
    <TD ROWSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" ROWSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Accumulated other comprehensive loss</B></FONT></TD>
    <TD ROWSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="vertical-align: bottom; border-top: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Common Stock in treasury</B></FONT></TD>
    <TD ROWSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" ROWSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></TD>
    <TD ROWSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" ROWSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: center; border-top: Black 1pt solid"><FONT STYLE="font-size: 10pt"><B>Non-controlling interests</B></FONT></TD>
    <TD ROWSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" ROWSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: center; border-top: Black 1pt solid"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Number</B></FONT></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Amount</B></FONT></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Number</B></FONT></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Amount</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center; border-top: Black 1pt solid"><FONT STYLE="font-size: 10pt"><B>Number</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Amount</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 19%"><FONT STYLE="font-size: 10pt"><B>Balances at December 31, 2015</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 5%; text-align: right"><FONT STYLE="font-size: 10pt"><B>130,538,896</B></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: 4%; text-align: right"><FONT STYLE="font-size: 10pt"><B>371,857</B></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: 5%; text-align: right"><FONT STYLE="font-size: 10pt"><B>80,000,000</B></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: 4%; text-align: right"><FONT STYLE="font-size: 10pt"><B>132,915</B></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: 5%; text-align: right"><FONT STYLE="font-size: 10pt"><B>12,606</B></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: 4%; text-align: right"><FONT STYLE="font-size: 10pt"><B>193,158</B></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: 7%; text-align: right"><FONT STYLE="font-size: 10pt"><B>(424,263</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><FONT STYLE="font-size: 10pt"><B>)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 5%; text-align: right"><FONT STYLE="font-size: 10pt"><B>&mdash;</B></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: 4%; text-align: right"><FONT STYLE="font-size: 10pt"><B>&mdash;</B></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: 4%; text-align: right"><FONT STYLE="font-size: 10pt"><B>286,273</B></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: 5%; text-align: right"><FONT STYLE="font-size: 10pt"><B>617</B></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: 5%; text-align: right"><FONT STYLE="font-size: 10pt"><B>286,890</B></FONT></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Net income for the year</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt"><B>&mdash;</B></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"><B>&mdash;</B></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"><B>&mdash;</B></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"><B>&mdash;</B></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"><B>&mdash;</B></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">78,810</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">&mdash;</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">&mdash;</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">&mdash;</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">78,810</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">178</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">78,988</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Other comprehensive loss</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt"><B>&mdash;</B></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"><B>&mdash;</B></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"><B>&mdash;</B></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"><B>&mdash;</B></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"><B>&mdash;</B></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">&mdash;</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">(17,386</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></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; 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; text-align: right"><FONT STYLE="font-size: 10pt">(17,386</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(38</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(17,424</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR>
    <TD><FONT STYLE="font-size: 10pt">Issuance of shares in connection with the partial vesting of outstanding restricted share units under the 2011 Equity Incentive Plan</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">172,328</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">2,112</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"><B>&mdash;</B></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"><B>&mdash;</B></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">(2,112</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></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; 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; 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; 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; 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; 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; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Stock-based compensation related to the 2011 Equity Incentive Plan</FONT></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; 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; 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; 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; text-align: right"><FONT STYLE="font-size: 10pt">3,294</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">&mdash;</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">&mdash;</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">&mdash;</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">&mdash;</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">3,294</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">&mdash;</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">3,294</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Dividends to non-controlling interests</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(172</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(172</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>Balances at December 31, 2016</B></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt"><B>130,711,224</B></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"><B>373,969</B></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"><B>80,000,000</B></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"><B>132,915</B></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"><B>13,788</B></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"><B>271,968</B></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"><B>(441,649</B></FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt"><B>&mdash;</B></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"><B>&mdash;</B></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"><B>350,991</B></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"><B>585</B></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"><B>351,576</B></FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Net income for the year</FONT></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; 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; 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; 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; 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; text-align: right"><FONT STYLE="font-size: 10pt">129,166</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">&mdash;</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">&mdash;</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">&mdash;</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">129,166</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">333</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">129,499</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Other comprehensive income</FONT></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; 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; 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; 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; 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; 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; text-align: right"><FONT STYLE="font-size: 10pt">12,302</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">&mdash;</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">&mdash;</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">12,302</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">(17</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">12,285</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Issuance of shares in connection with the partial vesting of outstanding restricted share units under the 2011 Equity Incentive Plan</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">361,284</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">2,763</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">&mdash;</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">&mdash;</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">(2,763</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></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; 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; 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; 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; 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; 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; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Stock-based compensation related to the 2011 Equity Incentive Plan</FONT></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; 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; 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; 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; text-align: right"><FONT STYLE="font-size: 10pt">3,191</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">&mdash;</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">&mdash;</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">&mdash;</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">&mdash;</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">3,191</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">&mdash;</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">3,191</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD><FONT STYLE="font-size: 10pt">Portion of non-controlling interests related to business sold</FONT></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; 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; 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; 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; 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; 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; 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; 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; 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; 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; text-align: right"><FONT STYLE="font-size: 10pt">(108</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(108</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Dividends to non-controlling interests</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(301</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(301</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>Balances at December 31, 2017</B></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt"><B>131,072,508</B></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"><B>376,732</B></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"><B>80,000,000</B></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"><B>132,915</B></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"><B>14,216</B></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"><B>401,134</B></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"><B>(429,347</B></FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt"><B>&mdash;</B></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"><B>&mdash;</B></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"><B>495,650</B></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"><B>492</B></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"><B>496,142</B></FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Net income for the year</FONT></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; 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; 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; 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; 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; text-align: right"><FONT STYLE="font-size: 10pt">36,847</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">&mdash;</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">&mdash;</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">&mdash;</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">36,847</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">186</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">37,033</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Other comprehensive loss</FONT></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; 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; 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; 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; 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; 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; text-align: right"><FONT STYLE="font-size: 10pt">(72,919</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></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; 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; text-align: right"><FONT STYLE="font-size: 10pt">(72,919</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(134</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(73,053</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; text-align: justify"><FONT STYLE="font-size: 10pt">Dividends to Arcos Dorados Holdings Inc.&rsquo;s shareholders ($0.10 per share)</FONT></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; 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; 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; 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; 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; text-align: right"><FONT STYLE="font-size: 10pt">(20,937</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></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; 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; 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; text-align: right"><FONT STYLE="font-size: 10pt">(20,937</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></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; text-align: right"><FONT STYLE="font-size: 10pt">(20,937</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Dividends&nbsp;on restricted share units under the 2011 Equity Incentive Plan</FONT></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; 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; 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; 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; 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; text-align: right"><FONT STYLE="font-size: 10pt">(174</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></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; 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; 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; text-align: right"><FONT STYLE="font-size: 10pt">(174</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></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; text-align: right"><FONT STYLE="font-size: 10pt">(174</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Issuance of shares in connection with the partial vesting of outstanding restricted share units under the 2011 Equity Incentive Plan</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">520,565</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">3,113</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">&mdash;</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">&mdash;</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">(3,113</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></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; 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; 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; 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; 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; 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; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Stock-based compensation related to the 2011 Equity Incentive Plan</FONT></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; 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; 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; 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; text-align: right"><FONT STYLE="font-size: 10pt">3,747</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">&mdash;</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">&mdash;</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">&mdash;</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">&mdash;</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">3,747</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">&mdash;</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">3,747</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Treasury stock purchases</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></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; 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; 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; 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; 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; 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; 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; text-align: right"><FONT STYLE="font-size: 10pt">(6,360,826</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(46,035</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(46,035</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></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; text-align: right"><FONT STYLE="font-size: 10pt">(46,035</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Dividends to non-controlling interests</FONT></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; 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; 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; 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; 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; 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; 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; 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; 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; 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; text-align: right"><FONT STYLE="font-size: 10pt">(168</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(168</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Adoption of accounting standard ASC 606 -net of $1,555 of deferred
        income tax-</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(3,796</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(3,796</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(3,796</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>Balances at December 31, 2018</B></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><FONT STYLE="font-size: 10pt"><B>131,593,073</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><FONT STYLE="font-size: 10pt"><B>379,845</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><FONT STYLE="font-size: 10pt"><B>80,000,000</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><FONT STYLE="font-size: 10pt"><B>132,915</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><FONT STYLE="font-size: 10pt"><B>14,850</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><FONT STYLE="font-size: 10pt"><B>413,074</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><FONT STYLE="font-size: 10pt"><B>(502,266</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><FONT STYLE="font-size: 10pt"><B>)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><FONT STYLE="font-size: 10pt"><B>(6,360,826</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><FONT STYLE="font-size: 10pt"><B>)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><FONT STYLE="font-size: 10pt"><B>(46,035</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><FONT STYLE="font-size: 10pt"><B>)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><FONT STYLE="font-size: 10pt"><B>392,383</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><FONT STYLE="font-size: 10pt"><B>376</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><FONT STYLE="font-size: 10pt"><B>392,759</B></FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 1.5pt 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 Consolidated Financial Statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&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: 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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>1.</B></TD><TD><B>Organization and nature of business</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0.5in; text-align: justify">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 through its wholly-owned
Company Arcos Dorados Group B.V., 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-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0.5in; text-align: justify">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;). See Note 4 for details. 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. 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>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>2.</B></TD><TD><B>Basis of presentation and principles of consolidation</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The accompanying consolidated
financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America
(&ldquo;US GAAP&rdquo;) 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>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>3.</B></TD><TD><B>Summary of significant accounting policies</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The&nbsp;following&nbsp;is&nbsp;a&nbsp;summary&nbsp;of&nbsp;significant&nbsp;accounting&nbsp;policies&nbsp;followed&nbsp;by&nbsp;the&nbsp;Company&nbsp;in&nbsp;the&nbsp;preparation&nbsp;of&nbsp;the
consolidated&nbsp;financial&nbsp;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-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 and Argentinian 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 sheet date exchange rates, and revenues, expenses and cash flow are translated
at average rates prevailing during the periods. Translation adjustments are included in the &ldquo;Accumulated other comprehensive
loss&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 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>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>3.</B></TD><TD><B>Summary of significant accounting policies (continued)</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Foreign currency matters (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">Since January 1, 2010
and July 1, 2018, Venezuela and Argentina, respectively, were considered to be highly inflationary, and as such, the financial
statements of these subsidiaries are remeasured as if its functional currency was the reporting currency of the immediate parent
company (US dollars for Venezuelan operation and Brazilian reais (&ldquo;BRL&rdquo;) for Argentinian operation). As a result, remeasurement
gains and losses are recognized in earnings rather than in the cumulative translation adjustment, component of &ldquo;Accumulated
other comprehensive loss&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"><U>Cash and cash equivalents</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 considers
all highly liquid investments with an original maturity of three months or less, from the date of purchase, to be cash equivalents.</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>Revenue recognition</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&rsquo;s
revenues consist of sales by Company-operated restaurants and revenues from restaurants operated by franchisees. Sales by Company-operated
restaurants are recognized at the point of sale. The Company presents sales net of sales tax and other sales-related taxes. Revenues
from restaurants operated by franchisees include rental income, initial franchise fees and royalty income. Rental income is measured
on a monthly basis based on the greater of a fixed rent, computed on a straight-line basis, or a certain percentage of gross sales
reported by franchisees. Initial franchise fees represent the difference between the amount the Company collects from the franchisee
and the amount the Company pays to McDonald&rsquo;s Corporation upon the opening of a new restaurant. Royalty income represents
the difference, if any, between the amount the Company collects from the franchisee and the amount the Company is required to pay
to McDonald&rsquo;s Corporation. Royalty income is recognized in the period earned.</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 May 2014, the FASB
issued Accounting Standards Update No. 2014-09 (ASC 606), &ldquo;Revenue Recognition - Revenue from Contracts with Customers&rdquo;,
which amends the guidance in former ASC 605, &ldquo;Revenue Recognition&rdquo;, and requires entities to recognize revenue when
it transfers promised goods or services to customers, in an amount that reflects the consideration to which the company expects
to be entitled in exchange for those goods or services.</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 January 1, 2018,
the Company adopted this new accounting standard using modified retrospective method and concluded that the sole source of revenue
affected is the initial franchise fee. The Company's previous accounting policy was to recognize it when a new restaurant opens
or at the start of a new franchise term, however, in accordance with the new guidance, the initial franchise services are not distinct
from the continuing rights or services offered during the term of the franchise agreement, and should be treated as a single performance
obligation. As such, initial franchise fees received are deferred over the term of the franchise agreement.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In accordance with
the modified retrospective method, the Company recognized the cumulative effect of applying the new standard at the date of initial
application with no restatement to the comparative information. Furthermore, the changes made to the consolidated balance sheet
as of January 1, 2018 for the adoption of ASC 606 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>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>3.</B></TD><TD><B>Summary of significant accounting policies (continued)</B></TD>
</TR></TABLE>

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

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

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

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 80%; border-collapse: collapse">
<TR>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Balance Sheet</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Balance at December 31, 2017</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Adjustments Due to ASC 606</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Balance at January 1, 2018</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>ASSETS</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>Non-current Assets</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Deferred income taxes</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">74,299</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">1,555</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">75,854</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>LIABILITIES AND EQUITY</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>Current liabilities</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Accrued payroll and other liabilities</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">119,088</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">339</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">119,427</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>Non-current liabilities</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Accrued payroll and other liabilities</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">29,366</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">5,012</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">34,378</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>EQUITY</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 42%"><B>Retained earnings</B></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 18%; text-align: right">401,134</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 17%; text-align: right">(3,796</TD>
    <TD STYLE="width: 1%">)</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 16%; text-align: right">397,338</TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR>
    <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; text-align: justify; text-indent: 0.5in">There are no expectations
that the adoption of the new revenue standard will have a material impact within the net income on an ongoing basis. The disclosure
of the impact of adoption on the consolidated balance sheet and income statements, as of December 31, 2018 and for the fiscal year
ended December 31, 2018, 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>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 80%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="11" STYLE="text-align: center"><B>As of December 31, 2018</B></TD></TR>
<TR>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center; border-top: Black 1pt solid"><B>Balance Sheet</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>As Reported</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center; border-top: Black 1pt solid"><B>Balances Without Adoption of ASC 606</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center; border-top: Black 1pt solid"><B>Effect of Change</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>ASSETS</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</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>Non-current Assets</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 41%">Deferred income taxes</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 17%; text-align: right">58,334</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%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 17%; text-align: right">56,522</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%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 16%; text-align: right">1,812</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>LIABILITIES AND EQUITY</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</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>Current liabilities</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Accrued payroll and other liabilities</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">94,166</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">93,770</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">396</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>Non-current liabilities</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Accrued payroll and other liabilities</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">35,322</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">29,495</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">5,827</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>EQUITY</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Retained earnings</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">413,074</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">417,485</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">(4,411</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 80%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD COLSPAN="12" STYLE="text-align: center"><B>For the fiscal year ended December 31, 2018</B></TD></TR>
<TR>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center; border-top: Black 1pt solid"><B>Income Statement</B></TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center; border-top: Black 1pt solid"><B>As Reported</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center; border-top: Black 1pt solid"><B>Balances Without Adoption of ASC 606</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center; border-top: Black 1pt solid"><B>Effect of Change</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 40%">Revenues from franchised restaurants</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 17%; text-align: right">148,962</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%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 17%; text-align: right">149,834</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%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 17%; text-align: right">(872</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">)</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Income tax expense</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(48,136</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(48,393</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">257</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
</TABLE>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B>3.</B></TD><TD><B>Summary of significant accounting policies (continued)</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Accounts and notes receivable and allowance
for doubtful accounts</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">Accounts receivable
primarily consist of royalty and rent receivables due from franchisees and debit and credit card receivables. Accounts receivable
are initially recorded at fair value and do not bear interest. Notes receivable relates to interest-bearing financing granted to
certain franchisees in connection with the acquisition of equipment and third-party suppliers. The Company maintains an allowance
for doubtful accounts in an amount that it considers sufficient to cover losses resulting from the inability of its franchisees
to make required payments. In judging the adequacy of the allowance for doubtful accounts, the Company considers multiple factors
including historical bad debt experience, the current economic environment and the aging of the receivables.</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>Other receivables</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">As of December&nbsp;31,
2018, other receivables primarily consist of insurance claim receivables, related party receivables, value-added tax and other
tax receivables, amounting to $16,809. As of December&nbsp;31, 2017, other receivables primarily consist of value-added tax and
other tax receivables amounting to $16,215.</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">Other receivables are
reported at the amount expected to be collected.</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>Inventories</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-indent: 0.5in">Inventories are stated at the lower of cost
or market, with cost being determined on a first-in, first-out basis.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Property and equipment, net</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">Property and equipment
are stated at cost, net of accumulated depreciation. Property costs include costs of land and building for both company-operated
and franchise restaurants while equipment costs primarily relate to company-operated restaurants. Cost of property and equipment
acquired from McDonald&rsquo;s Corporation (as part of the acquisition of LatAm business) was determined based on its estimated
fair market value at the acquisition date, then partially reduced by the allocation of the negative goodwill that resulted from
the purchase price allocation. Cost of property and equipment acquired or constructed after the acquisition of LatAm business in
connection with the Company&rsquo;s restaurant reimaging and extension program is comprised of acquisition and construction costs
and capitalized internal costs. Capitalized internal costs include payroll expenses related to employees fully dedicated to restaurant
construction projects and related travel expenses. Capitalized payroll costs are allocated to each new restaurant location based
on the actual time spent on each project. The Company commences capitalizing costs related to construction projects when it becomes
probable that the project will be developed &ndash; when the site has been identified and the related profitability assessment
has been approved. Maintenance and repairs are expensed as incurred. Accumulated depreciation is calculated using the straight-line
method over the following estimated useful lives: buildings &ndash; up to 40 years; leasehold improvements &ndash; the lesser of
useful lives of assets or lease terms which generally include option periods; and equipment 3 to 12 years.</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>Intangible assets,
net</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">Intangible assets include
computer software costs, initial franchise fees, reacquired rights under franchise agreements, letter of credit fees and others.</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 follows
the provisions of ASC 350-40-30 within ASC 350 Intangibles, Subtopic 40 Internal Use Software which requires the capitalization
of costs incurred in connection with developing or obtaining software for internal use. These costs are amortized over a period
of three years on a straight line basis.</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: 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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>3.</B></TD><TD STYLE="padding-left: 0.25in"><B>Summary of significant accounting policies (continued)</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Intangible assets, net (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 Company is required
to pay to McDonald&rsquo;s Corporation an initial franchisee fee upon opening of a new restaurant. The initial franchise fee related
to Company-operated restaurants is capitalized as an intangible asset and amortized on a straight-line basis over the term of the
franchise.</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">A reacquired franchise
right is recognized as an intangible asset as part of the business combination in the acquisition of franchised restaurants apart
from goodwill with an assigned amortizable life limited to the remaining contractual term (i.e., not including any renewal periods).
The value assigned to the reacquired franchise right excludes any amounts recognized as a settlement gain or loss and is limited
to the value associated with the remaining contractual term and operating conditions for the acquired restaurants. The reacquired
franchise right is measured using a valuation technique that considers restaurant's cash flows after payment of an at-market royalty
rate to the Company. The cash flows are projected for the remaining contractual term, regardless of whether market participants
would consider potential contractual renewals in determining its fair value.</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">Letter of credit fees
are amortized on a straight-line basis over the term of the Letter of Credit.</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>Impairment and disposal
of long-lived assets</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 accordance with
the guidance within ASC 360-10-35, the Company reviews long-lived assets for impairment whenever events or changes in circumstances
indicate the carrying value of the asset may not be recoverable. For purposes of reviewing assets for potential impairment, assets
are grouped at a country level for each of the operating markets. The Company manages its restaurants as a group or portfolio with
significant common costs and promotional activities; as such, each restaurant&rsquo;s cash flows are not largely independent of
the cash flows of others in a market. If an indicator of impairment exists for any grouping of assets, an estimate of undiscounted
future cash flows produced by each individual restaurant within the asset grouping is compared to its carrying value. If an individual
restaurant is determined to be impaired, the loss is measured by the excess of the carrying amount of the restaurant over its fair
value considering its highest and best use, as determined by an estimate of discounted future cash flows or its market value.</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 assessed
all markets for impairment indicators during the fourth quarter of 2018, 2017 and 2016. In addition, in June and September 2018,
the Company performed impairment testings of its long-lived assets in Venezuela considering the operating losses incurred in this
market as a consequence of currency exchange rate changes (indicator of potential impairment), as mentioned in Note 22. As a result
of those assessments, the Company concluded that the second step was required to be performed as a component of the impairment
testing of its long-lived assets, on a per store basis, in: Puerto Rico, Mexico, Peru, Aruba, U.S. Virgin Islands of St. Croix
and St. Thomas, Venezuela, Colombia, Ecuador and Trinidad and Tobago for the fiscal years 2018, 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>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a result of the
impairment testing the Company recorded the following impairment charges, for the markets indicated below, within Other operating
(expenses) income, net on 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>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Fiscal year</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Markets</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Total</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 10%; text-align: right">2018</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 77%">Mexico, Puerto Rico, USVI, Peru, Colombia, Venezuela and Trinidad and Tobago</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">18,950</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; text-align: right">2017</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">Mexico, Puerto Rico, USVI, Peru, Ecuador, Colombia, Venezuela and Trinidad and Tobago</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">17,564</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; text-align: right">2016</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">Mexico, Puerto Rico, USVI, Peru, Ecuador, Venezuela and Trinidad and Tobago</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">7,697</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
</TABLE>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>3.</B></TD><TD STYLE="padding-left: 0.25in"><B>Summary of significant accounting policies (continued)</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Goodwill</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">Goodwill represents
the excess of cost over the estimated fair market value of net tangible assets and identifiable intangible assets acquired. In
accordance with the guidance within ASC 350 Intangibles-Goodwill and Other, goodwill is stated at cost and reviewed for impairment
on an annual basis. The annual impairment test is performed during the fourth quarter of the fiscal year and compares the fair
value of each reporting unit, generally based on discounted future cash flows, with its carrying amount including goodwill. If
the carrying amount of the reporting unit exceeds its fair value, an impairment loss is measured as the difference between the
implied fair value of the reporting unit&rsquo;s goodwill and the carrying amount of goodwill.</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 assessing the recoverability
of the goodwill, the Company considers changes in economic conditions and makes assumptions regarding estimated future cash flows
and other factors. Estimates of future cash flows are highly subjective judgments based on the Company&rsquo;s experience and knowledge
of its operations. These estimates can be significantly impacted by many factors including changes in global and local business
and economic conditions, operating costs, inflation, competition, and consumer and demographic trends.</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
analyses performed the Company recorded the following impairment charges, related to goodwill generated in the acquisition of franchised
restaurants, for the markets indicated below within Other operating (expenses) income, net on 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>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 40%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Fiscal year</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Markets</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Total</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 34%; text-align: right">2018</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 32%">Peru</TD>
    <TD STYLE="vertical-align: bottom; width: 2%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 2%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 28%; text-align: right">167</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; text-align: right">2017</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">Mexico</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">200</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; text-align: right">2016</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">Mexico</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">5,045</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="color: White"><U>&nbsp;</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Advertising costs</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">Advertising costs are
expensed as incurred. Advertising expenses related to Company-operated restaurants were $120,839, $130,277 and $117,250 in 2018,
2017 and 2016, respectively. Advertising expenses related to franchised operations do not affect the Company&rsquo;s expenses since
these are recovered from franchisees. Advertising expenses related to franchised operations were $43,940, $46,536 and $36,374 in
2018, 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-indent: 0.5in"><U>Accounting for income taxes</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 records
deferred income taxes using the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases.&nbsp;The guidance requires companies to set up a valuation allowance for that component of net deferred tax assets which
does not meet the more likely than not criterion for realization.</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">Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the enactment date.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company is regularly
audited by tax authorities, and tax assessments may arise several years after tax returns have been filed. Accordingly, tax liabilities
are recorded when, in management&rsquo;s judgment, an uncertain tax position does not meet the more likely than not threshold for
recognition. For tax positions that meet the more likely than not threshold, a tax liability may be recorded depending on management&rsquo;s
assessment of how the tax position will ultimately be settled. The Company records interest and penalties on unrecognized tax benefits
in the provision for income taxes.</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: 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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>3.</B></TD><TD STYLE="padding-left: 0.25in"><B>Summary of significant accounting policies (continued)</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Accounts payable outsourcing</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 offers
its suppliers access to an accounts payable services arrangement provided by third party financial institutions. This service allows
the Company&rsquo;s suppliers to view its scheduled payments online, enabling them to better manage their cash flow and reduce
payment processing costs. Independent of the Company, the financial institutions also allow suppliers to sell their receivables
to the financial institutions in an arrangement separately negotiated by the supplier and the financial institution. The Company
has no economic interest in the sale of these receivables and no direct relationship with the financial institutions concerning
the sale of receivables. All of the Company&rsquo;s obligations, including amounts due, remain to the Company&rsquo;s suppliers
as stated in the supplier agreements. As of December&nbsp;31, 2018 and 2017, $4,014 and $2,117, respectively, of the Company&rsquo;s
total accounts payable are available for this purpose and have been sold by suppliers to participating financial institutions.</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>Share-based compensation</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 recognizes
compensation expense as services required to earn the benefits are rendered. See Note 17 for details of the outstanding plans and
the related accounting policies.</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>Derivative financial
instruments</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 utilizes
certain hedge instruments to manage its interest rate and foreign currency rate exposures. The counterparties to these instruments
generally are major financial institutions. The Company does not hold or issue derivative instruments for trading purposes. In
entering into these contracts, the Company assumes the risk that might arise from the possible inability of counterparties to meet
the terms of their contracts. The Company does not expect any losses as a result of counterparty defaults. All derivatives are
recognized as either assets or liabilities in the balance sheets and are measured at fair value. Additionally, the fair value adjustments
will affect either shareholders&rsquo; equity as accumulated other comprehensive loss or net income depending on whether the derivative
instrument qualifies as a hedge for accounting purposes and, if so, the nature of the hedging activity.</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>Severance payments</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">Under certain laws
and labor agreements of the countries in which the Company operates, the Company is required to make minimum severance payments
to employees who are dismissed without cause and employees leaving its employment in certain other circumstances. The Company accrues
severance costs if they relate to services already rendered, are related to rights that accumulate or vest, are probable of payment
and can be reasonably estimated. Otherwise, severance payments are expensed as incurred.</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>Provision for contingencies</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 accrues
liabilities when it is probable that future costs will be incurred and such costs can be reasonably estimated. Such accruals are
based on developments to date, the Company&rsquo;s estimates of the outcomes of these matters and the Company&rsquo;s lawyers&rsquo;
experience in contesting, litigating and settling other matters. As the scope of the liabilities becomes better defined, there
may be changes in the estimates of future costs. See Note 18 for details.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Comprehensive (loss) income</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">Comprehensive (loss)
income includes net income as currently reported under generally accepted accounting principles and also includes the impact of
other events and circumstances from non-owner sources which are recorded as a separate component of shareholders&rsquo; equity.
The Company reports foreign currency translation gains and losses, unrealized results on cash flow hedges as well as unrecognized
post-retirement benefits as components of comprehensive (loss) income.</P>

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

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

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>3.</B></TD><TD STYLE="padding-left: 0.25in"><B>Summary of significant accounting policies (continued)</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Sales of property
and equipment and restaurant businesses</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 recognizes
the sale of property and equipment when: (a) the profit is determinable, that is, the collectibility of the sales price is reasonably
assured or the amount that will not be collectible can be estimated, and (b) the earnings process is virtually complete, that is,
the Company is not obliged to perform significant activities after the sale to earn the profit. The sale of restaurant businesses,
related to the refranchising of company-operated restaurants, is recognized when the Company transfers substantially all of the
risks and rewards of ownership.</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 order to determine
the gain or loss on the disposal, the goodwill associated with the sold of property and equipment and restaurant business, if any,
is considered within the carrying value. The amount of goodwill to be included in that carrying amount is based on the relative
fair value of the item to be disposed and the portion of the reporting unit that will be retained.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During fiscal years
2018, 2017 and 2016, the Company recorded results from sales of property and equipment and restaurant businesses, amounting to
$8,184, $107,867 and $71,712, respectively, included within &ldquo;Other operating (expenses) income, net&rdquo;. The sales performed
during fiscal years 2017 and 2016, were primarily related to the redevelopment of certain real estate assets.</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>Recent accounting
pronouncements</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 February 2016, the
FASB issued ASU No. 2016-02, Leases (Topic 842), which modifies lease accounting for lessees to increase transparency and comparability
by recording a right-of-use asset and lease liability on their balance sheet for operating leases. Entities will need to disclose
qualitative and quantitative information about their leases, including characteristics and amounts recognized in the financial
statements. This standard is effective for annual periods beginning after December 15, 2018, including interim periods.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company will adopt
ASU 2016-02 in its first quarter of 2019 utilizing the modified retrospective method, without restatement of comparative financial
information periods, and will apply the package of transition practical expedients allowed by the standard. The adoption, and the
ultimate effect on the consolidated financial statements, will be based on an evaluation of the contract-specific facts and circumstances.
The Company estimates adoption of the standard will result in the recognition of lease right-of-use assets and lease liabilities
within a range of approximately $860 million to $920 million, as of January 1, 2019. The operating leases are mainly related to
restaurant and dessert center locations. The standard will not have a significant impact on the Company&rsquo;s consolidated <FONT STYLE="color: #252525">statements
of income and cash flows, except for the exchange results related to lease liabilities denominated in other currencies than its
functional one.</FONT></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 periods 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.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Acquisition
of businesses</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>LatAm Business</U></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 3, 2007,
the Company, indirectly through its wholly-owned subsidiary ADBV, entered into a Stock Purchase Agreement 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
for a final purchase price of $698,080.</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 acquisition of
the LatAm business was accounted for by the purchase method of accounting and, accordingly, the purchase price was allocated to
the assets acquired and liabilities assumed based on the estimated fair values at the date of acquisition. When the fair value
of the net assets acquired exceeded the purchase price, the resulting negative goodwill was allocated to partially reduce the fair
value of the non-current assets acquired on a pro-rata basis.</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: 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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>4.</B></TD><TD STYLE="padding-left: 0.25in"><B>Acquisition of businesses (continued)</B></TD>
</TR></TABLE>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection with
this transaction, ADBV and certain subsidiaries (the &ldquo;MF subsidiaries&rdquo;) also entered into 20-year Master Franchise
Agreements (&ldquo;MFAs&rdquo;) with McDonald&rsquo;s Corporation which grants to the Company and its MF subsidiaries 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 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: 22.5pt; text-align: left">i.</TD><TD>The right to own and operate, directly or indirectly,
franchised restaurants&nbsp;in each territory;</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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: 22.5pt; text-align: left">ii.</TD><TD>The right and license to grant sub franchises in each
territory;</TD>
</TR></TABLE>

<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: 22.5pt">iii.</TD><TD>The right to adopt and use, and to grant the right and license to sub franchisees to adopt and use, the system in each territory;</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" 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: 22.5pt; text-align: left">iv.</TD><TD>The right to advertise to the public that it is a franchisee
of McDonald&rsquo;s;</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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: 22.5pt">v.</TD><TD>The right and license to grant sub franchises and sublicenses of each of the foregoing rights and licenses to each MF subsidiary.</TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company is required
to pay to McDonald&rsquo;s Corporation continuing franchise fees (Royalty fees) on a monthly basis. The amount to be paid during
the first 10 years of the MFAs is equal to 5% of the US dollar equivalent of the gross product sales of each of the franchised
restaurants. This percentage increases to 6% and 7% for the subsequent two 5-year periods of the agreement. Payment of monthly
royalties is due on the seventh business day of the next calendar month.</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 the MFAs
provisions, McDonald&rsquo;s Corporation has the right to (a) terminate the MFAs, or (b) exercise a call option over the Company&rsquo;s
shares or any MF subsidiary, if the Company or any MF subsidiary (i) fails to comply with the McDonald&rsquo;s System (as defined
in the MFAs), (ii) files for bankruptcy, (iii) defaults on its financial debt payments, (iv) substantially fails to achieve targeted
openings and reinvestments requirements, or (v) upon the occurrence of any other event of default as defined in the MFAs.</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>Other acquisitions</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 fiscal years
2018 and 2017, the Company acquired certain franchised restaurants in certain territories. No acquisitions of franchised restaurant
were made during fiscal year 2016. Presented below is supplemental information about these acquisitions:</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><B>Purchases of restaurant businesses:</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 64%">Property and equipment</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">413</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">429</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Identifiable intangible assets</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">56</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">5,346</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Goodwill</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">200</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Gain on purchase of franchised restaurants</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(4,808</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Purchase price</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>469</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>1,167</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Restaurants sold in exchange</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">(261</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Settlement of franchise receivables</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(469</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(36</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Net cash paid at acquisition date</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>&mdash;</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>870</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
</TABLE>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>5</B>.</TD><TD STYLE="padding-left: 0.25in"><B>Accounts and notes receivable, net</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Accounts and notes
receivable, net consist of the following at year end:</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 1pt solid; text-align: center"><B>2018</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 64%">Receivables from franchisees</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">55,672</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">67,115</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Debit and credit card receivables</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">40,474</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">48,610</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Meal voucher receivables</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">10,565</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">11,683</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Notes receivable</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">2,575</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">3,685</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Allowance for doubtful accounts</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(24,999</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(19,791</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>84,287</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>111,302</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>6.</B></TD><TD STYLE="padding-left: 0.25in"><B>Prepaid expenses and other current assets</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Prepaid expenses and
other current assets consist of the following at year end:</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 1pt solid; text-align: center"><B>2018</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 64%">Prepaid taxes</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">74,538</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">48,076</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Prepaid expenses</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">21,868</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">27,478</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Promotion items and related advances</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">12,417</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">17,683</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Others</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">407</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">967</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>109,230</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>94,204</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>7.</B></TD><TD STYLE="padding-left: 0.25in"><B>Miscellaneous</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Miscellaneous consist
of the following at year end:</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 1pt solid; text-align: center"><B>2018</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 65%">Judicial deposits</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><FONT STYLE="font-size: 11pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 14%; text-align: right">43,168</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">44,854</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Tax credits</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">27,563</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">22,402</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Prepaid property and equipment</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">9,775</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">10,317</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Notes receivable</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">4,241</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">4,406</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Rent deposits</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">2,908</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">3,273</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Others</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">11,394</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">13,039</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>99,049</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>98,291</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black medium double">&nbsp;</TD></TR>
</TABLE>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>8.</B></TD><TD STYLE="padding-left: 0.25in"><B>Property and equipment, net</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Property and equipment,
net consist of the following at year-end:</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 1pt solid; text-align: center"><B>2018</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 64%">Land</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">142,262</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">158,634</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Buildings and leasehold improvements</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">623,612</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">633,747</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Equipment</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">673,117</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">642,449</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Total cost</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">1,438,991</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">1,434,830</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Total accumulated depreciation</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(582,799</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(544,094</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>856,192</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>890,736</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT>Total
depreciation expense for fiscal years 2018, 2017 and 2016 amounted to $94,490, $89,085 and $83,993, respectively.</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>9.</B></TD><TD STYLE="padding-left: 0.25in"><B>Net intangible assets and goodwill</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Net intangible assets
and goodwill consist of the following at year-end:</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 1pt solid; text-align: center"><B>2018</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD></TR>
<TR>
    <TD><B>Net intangible assets (i)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 64%">Computer software cost</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">69,700</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">72,717</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Initial franchise fees</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">14,614</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">15,572</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Reacquired franchised rights</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">12,511</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">13,667</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Letter of credit fees</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">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">940</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Others</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">1,000</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">1,000</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Total cost</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>98,765</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>103,896</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Total accumulated amortization</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(63,683</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(63,245</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD></TR>
<TR>
    <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>35,082</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>40,651</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
</TABLE>
<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>Goodwill (ii)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Brazil</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">4,280</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">5,013</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Chile</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">1,073</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">1,209</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Ecuador</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">273</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">273</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Argentina</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">226</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">350</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Colombia</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">87</TD>
    <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</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Peru</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">174</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Subtotal</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><B>5,939</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><B>7,078</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 64%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-bottom: Black medium double; text-align: right"><B>41,021</B></TD>
    <TD STYLE="vertical-align: top; width: 1%; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-bottom: Black medium double; text-align: right"><B>47,729</B></TD>
    <TD STYLE="vertical-align: top; width: 1%; border-bottom: Black medium double">&nbsp;</TD></TR>
<TR>
    <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>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD STYLE="text-align: justify">Total amortization expense for fiscal years 2018, 2017 and 2016 amounted to $11,310, $10,297 and
$8,976, respectively. The estimated aggregate amortization expense for each of the five succeeding fiscal years and thereafter
is as follows: $14,557 for 2019, $10,395 for 2020; $3,428 for 2021; $1,232 for 2022; $1,154 for 2023; and thereafter $4,316.</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(ii)</TD><TD STYLE="text-align: justify">Related to the acquisition of franchised restaurants (Brazil, Chile, Argentina, Colombia and Peru)
and non-controlling interests in subsidiaries (Ecuador and Chile).</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&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: 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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>10.</B></TD><TD STYLE="padding-left: 0.25in"><B>Accrued payroll and other liabilities</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Accrued payroll and
other liabilities consist of the following at year end:</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 1pt solid; text-align: center"><B>2018</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>Current:</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 64%">Accrued payroll</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">77,286</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">97,995</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Accrued expenses</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">10,330</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">13,574</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Other liabilities</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">6,550</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">7,519</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>94,166</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>119,088</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>Non-current:</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Deferred rent</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">16,404</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">15,198</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Deferred revenues - Initial franchise fee</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">5,827</TD>
    <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>
    <TD STYLE="vertical-align: bottom">Other liabilities</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">13,091</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">14,168</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>35,322</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>29,366</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>11.</B></TD><TD STYLE="padding-left: 0.25in"><B>Short-term debt</B></TD>
</TR></TABLE>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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 1pt solid; text-align: center"><B>2018</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Bank overdrafts</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">356</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 64%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-bottom: Black medium double; text-align: right"><B>356</B></TD>
    <TD STYLE="vertical-align: top; width: 1%; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-bottom: Black medium double; text-align: right"><B>&mdash;</B></TD>
    <TD STYLE="vertical-align: top; width: 1%; border-bottom: Black medium double">&nbsp;</TD></TR>
<TR>
    <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; 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 3, 2018,
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, 2019. Each loan made to ADBV under this agreement will bear interest at an annual rate equal to LIBOR plus 2.40%.
In addition, on November 1, 2018, ADBV renewed its revolving credit facility with JPMorgan Chase Bank, N.A, for up to $25 million
maturing on November 10, 2019, with an annual interest rate equal to LIBOR plus 2.25%. Interest on each loan will be payable at
maturity and on a quarterly basis, beginning with the date that is three calendar months following the date the loan is made. Principal
is due upon maturity.</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 as of any last day of the fiscal quarter of the borrower. The revolving credit facilities provide
for customary events of default, which, if any of them occurs, would permit or require the lender to terminate its obligation to
provide loans under the revolving credit facilities and/or to declare all sums outstanding under the loan documents immediately
due and payable.</P>

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


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 -->

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<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>11.</B></TD><TD STYLE="padding-left: 0.25in"><B>Short-term debt (continued)</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Revolving credit facilities (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">As of December&nbsp;31,
2018, the mentioned ratio was 0.97 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; text-align: justify; text-indent: 0.5in">No amounts are due
at the date of issuance of these consolidated financial statements in connection with these 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; text-align: justify"><B>12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term
debt</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -76.5pt">Long-term
debt consists of the following at year-end:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -76.5pt">&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 1pt solid; text-align: center"><B>2018</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD></TR>
<TR>
    <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%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">265,000</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">265,000</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <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">348,069</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">6,503</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">4,539</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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 1pt solid; text-align: right">16,676</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">22,900</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <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>636,248</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>640,508</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Discount on 2023 Notes</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(3,156</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(3,804</TD>
    <TD>)</TD></TR>
<TR>
    <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">1,187</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">1,438</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Deferred financing costs</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(4,019</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(4,641</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Total</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>630,260</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>633,501</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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 1pt solid; text-align: right">3,836</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">4,359</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <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 medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>626,424</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>629,142</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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

<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="7" STYLE="text-align: center"><B>&nbsp;Principal as of December 31,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Annual interest rate</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Currency</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Maturity</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 33%">2027 Notes</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; text-align: right">5.875</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; text-align: right">%</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: center">USD</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; text-align: right">265,000</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; 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: 19%; text-align: center">April 4, 2027</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">2023 Notes</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">6.625</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">USD</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">348,069</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">September 27, 2023</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="text-align: center; border-bottom: Black 1pt solid"><B>&nbsp;Interest Expense (i)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="11" STYLE="text-align: center"><B>&nbsp;DFC Amortization (i)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="11" STYLE="text-align: center"><B>Amortization of Discount, net (i)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2016</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2016</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2016</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 19%">2027 Notes</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 6%; text-align: right">15,569</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 6%; text-align: right">11,547</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%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 6%; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 6%; text-align: right">299</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%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 6%; text-align: right">224</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 6%; 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%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 6%; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 6%; 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: 6%; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <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">23,060</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">23,885</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">28,516</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">323</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">610</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">943</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">397</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">752</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">1,157</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">2016 Notes</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">&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">6,668</TD>
    <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">391</TD>
    <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">(266</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
</TABLE>
<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD>These charges are included within &quot;Net interest expense&quot; in the consolidated statements of income.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&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: 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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>12.</B></TD><TD STYLE="padding-left: 0.25in"><B>Long-term debt (continued)</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><U>2027, 2023 and 2016 Notes (continued):</U></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 BRL 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"><B>Amount</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center; border-top: Black 1pt solid"><B>Date</B></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center; border-top: Black 1pt solid"><B>Redemption price</B></TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>BRL</B></TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>$</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 40%">November 25, 2015</TD>
    <TD STYLE="vertical-align: bottom; width: 21%; text-align: center">93.75%</TD>
    <TD STYLE="vertical-align: bottom; width: 18%; text-align: right">40,000</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: 17%; text-align: right">9,995</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">November 30, 2015</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">93.75%</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">7,039</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">1,715</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">January 29, 2016</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">97.75%</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">1,180</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">288</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">April 21, 2016</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">100.00%</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">421,765</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">118,797</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">May 5, 2016</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">97.00%</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">4,025</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">1,106</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">July 13, 2016</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: center">100.00%</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">200,991</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">60,965</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD><B>Total</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="text-align: right"><B>675,000</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="text-align: right"><B>192,866</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 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 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">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 16.90% 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 13), pay the principal and premium on the 2023 Notes (in connection with the 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>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>12.</B></TD><TD STYLE="padding-left: 0.25in"><B>Long-term debt (continued)</B></TD>
</TR></TABLE>

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

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

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 40%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 51%; border-bottom: Black 1pt solid; text-align: center"><B>Lender</B></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 48%; border-bottom: Black 1pt solid; text-align: center"><B>Annual Interest Rate</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <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">
    <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">
    <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">
    <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">
    <TD STYLE="text-align: justify">JP Morgan Chase Bank, N.A.</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">3M LIBOR + 3.92%</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In order to fully convert
each loan of the agreement into BRL, the Brazilian subsidiary entered into five cross-currency interest rate swap agreements with
the local subsidiaries of the same lenders. Consequently, the loans were fully converted into BRL amounting to BRL 613,850. Refer
to Note 13 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 would have
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>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>12.</B></TD><TD STYLE="padding-left: 0.25in"><B>Long-term debt (continued)</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Secured Loan Agreement (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
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" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 80%; border-collapse: collapse">
<TR>
    <TD COLSPAN="11" STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;Interest Expense (i) (ii)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;DFC Amortization (ii)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;Other Costs (ii) (iii)</B></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2016</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2016</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: center; border-top: Black 1pt solid"><B>2017</B></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: center; border-top: Black 1pt solid"><B>2016</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; border-top: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">2,570</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">6,519</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">3,251</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">814</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">2,249</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 17%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 6%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 6%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD STYLE="text-align: justify">These charges do not include the effect of the cross-currency interest rate swap agreements mentioned
in Note 13, amounting to a loss of $6,921 and $18,177, during fiscal years 2017 and 2016, respectively. Including these effects
the total interest cost amounts to $9,491 and $24,696, respectively.</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: 0.5in"></TD><TD STYLE="width: 0.5in">(ii)</TD><TD>These charges are included within &quot;Net interest expense&quot; in the consolidated statement of income.</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: 0.5in"></TD><TD STYLE="width: 0.5in">(iii)</TD><TD>Transaction costs related to the repayment of the Loan.</TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Other required disclosure</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-indent: 0.5in">At December&nbsp;31, 2018, future payments
related to the Company&rsquo;s long-term debt are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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 1pt solid; text-align: center"><B>Principal</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Interest</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Total</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 52%">2019</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; text-align: right">3,836</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; text-align: right">40,537</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">44,373</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">2020</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">3,355</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">40,243</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">43,598</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">2021</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">3,298</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">39,941</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">43,239</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">2022</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">3,493</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">39,598</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">43,091</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">2023</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">351,074</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">39,314</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">390,388</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Thereafter</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">271,192</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">57,175</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">328,367</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Total payments</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>636,248</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>256,808</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>893,056</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Interest</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">(256,808</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(256,808</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Discount on 2023 Notes</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(3,156</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">(3,156</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR>
    <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">1,187</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">&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">1,187</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Deferred financing cost</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(4,019</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(4,019</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Long-term debt</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>630,260</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>&mdash;</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>630,260</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium 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: normal 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: 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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>13.</B></TD><TD STYLE="padding-left: 0.25in"><B>Derivative instruments</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
presents the fair values of derivative instruments included in the consolidated balance sheets as of December&nbsp;31, 2018 and
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" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 95%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD 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 1pt solid">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="border-top: Black 1pt solid; text-align: center"><B>Fair Value as of December 31,</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Type of Derivative</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Balance Sheets Location</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2017</B></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>
    <TD STYLE="vertical-align: bottom; width: 44%">Forward contracts</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 23%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Other receivables</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; text-align: right">628</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; text-align: right">309</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Forward contracts</TD>
    <TD>&nbsp;</TD>
    <TD>Accrued payroll and other liabilities</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(180</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(517</TD>
    <TD>)</TD></TR>
<TR>
    <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">29,141</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">7,835</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">16,867</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">15,114</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Coupon-only swap (i)</TD>
    <TD>&nbsp;</TD>
    <TD>Derivative instruments</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(5,152</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(10,908</TD>
    <TD>)</TD></TR>
<TR>
    <TD><B>Subtotal</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-top: Black 1pt solid; border-bottom: Black 1pt solid"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right"><B>41,304</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right"><B>11,833</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B><I>Derivatives not designated as hedging instruments</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>
    <TD STYLE="vertical-align: bottom">Forward contracts</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">Other receivables</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">99</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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 COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(144</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Subtotal</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 1pt solid"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><B>(45</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><B>&mdash;</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <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 medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>41,259</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>11,833</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD STYLE="text-align: justify">At December&nbsp;31, 2018, presented in the consolidated balance sheet as follows: $54,735 as non-current
asset, $10,687 as a current liability and $3,192 as a non-current liability. At December&nbsp;31, 2017, presented in the consolidated
balance sheet as follows: $35,069 as a non-current asset, $15,522 as a current liability and $7,506 as a non-current liability.</TD></TR></TABLE>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Cash flow hedge</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-indent: 0.5in"><U>Forward contracts</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 has entered
into various forward contracts in a few territories to hedge a portion of the foreign exchange risk associated with forecasted
imports of goods. The effect of the hedges results 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 December 31, 2018, the Company has forward contracts outstanding with
a notional amount of $24,145 that mature during 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">The Company made net
collections (payments) totaling $75, $(1,236) and $(1,307) during fiscal years 2018, 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>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>13.</B></TD><TD STYLE="padding-left: 0.25in"><B>Derivative instruments (continued)</B></TD>
</TR></TABLE>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Cash flow hedge
(continued)</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">The Company entered
into three cross-currency interest rate swap agreements to hedge all the variability in a portion (73%) 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), June and July 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>

<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 1pt 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 1pt solid; text-align: center"><B>Interest payment dates</B></TD>
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD ROWSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Maturity</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Currency</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Amount</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Interest rate</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Currency</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Amount</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Interest rate</B></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 18%">JP Morgan Chase Bank, N.A. (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">108,000</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">13</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; text-align: right">%</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: center">$</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 7%; text-align: right">35,400</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 6%; text-align: right">4.38</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; text-align: right">%</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 12%">March 31/ September 30</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 14%">September 2023</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">JP Morgan Chase Bank, N.A.</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">BRL</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">98,670</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">13</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">$</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: right">%</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>
<TR>
    <TD STYLE="vertical-align: bottom">Citibank 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">94,200</TD>
    <TD STYLE="vertical-align: top">&nbsp;</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: right">%</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">6.29</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">%</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="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD STYLE="text-align: justify">During the fiscal year ended December&nbsp;31, 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
loss until the date of the last amendment, amounting to $677 as of December&nbsp;31, 2017, will be amortized to earnings as the
originally hedged cash flows affects the statement of income.</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">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 1pt 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 1pt solid; text-align: center"><B>Interest payment dates</B></TD>
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD ROWSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Maturity</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Currency</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Amount</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Interest rate</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Currency</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Amount</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Interest rate</B></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 18%">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: 8%; 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: right">%</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: center">$</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 8%; text-align: right">50,000</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 5%; text-align: right">6.91</TD>
    <TD STYLE="vertical-align: bottom; width: 2%; text-align: right">%</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 14%">March 31/ September 30</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 10%">April 2027</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Banco Santander S.A.</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">BRL</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">155,500</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">13.77</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">$</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: right">%</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="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD>Bank of America Merrill Lynch Banco M&uacute;ltiplo S.A.</TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company paid $10,671,
$6,163 and $2,795 of net interest during the fiscal years ended December&nbsp;31, 2018, 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>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>13.</B></TD><TD STYLE="padding-left: 0.25in"><B>Derivative instruments (continued)</B></TD>
</TR></TABLE>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Cash flow hedge
(continued)</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>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 STYLE="vertical-align: bottom">
    <TD ROWSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Bank</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="5" STYLE="text-align: center"><B>Nominal Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Strike price</B></TD>
    <TD>&nbsp;</TD>
    <TD ROWSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Maturity</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Currency</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; text-align: center"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center"><B>Call option written</B></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Call option bought</B></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <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">$</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; border-top: Black 1pt solid; text-align: right">50,000</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-top: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 21%; border-top: Black 1pt solid; text-align: right">4.49</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 19%; text-align: right">3.11</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 16%">September 2023</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">JP Morgan S.A.</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">$</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">&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>
<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>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 1pt 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 1pt solid; text-align: center"><B>Interest payment dates</B></TD>
    <TD ROWSPAN="2">&nbsp;</TD>
    <TD ROWSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Maturity</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Currency</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Amount</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Interest rate</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Currency</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Amount</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Interest rate</B></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <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: 8%; 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: 7%; text-align: right">11.08</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; text-align: right">%</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: center">$</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 7%; text-align: right">50,000</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 6%; text-align: right">6.91</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; text-align: right">%</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 19%">June 30/ December 31</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 10%">September 2023</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">JP Morgan S.A.</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">BRL</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">156,250</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">11.18</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">$</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: right">%</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 $2,900
and $1,390 of net interest during the fiscal years ended December&nbsp;31, 2018 and 2017 respectively, 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>


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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: normal 10pt Times New Roman, Times, Serif">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->27<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>13.</B></TD><TD STYLE="padding-left: 0.25in"><B>Derivative instruments (continued)</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Derivatives designated
as hedging instruments (continued)</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>Cash flow hedge
(continued)</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>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 fiscal years ended December&nbsp;31, 2018, 2017
and 2016 for each type of derivative relationship:</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="border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Derivatives in Cash Flow</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Hedging Relationships</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="8" STYLE="text-align: center"><B>Gain (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion)</B></TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD COLSPAN="13" STYLE="text-align: center"><B>&nbsp;(Gain) Loss Reclassified from Accumulated OCI into Income (Effective Portion) (i)</B></TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD COLSPAN="12" STYLE="text-align: center"><B>(Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing and Ineffective Portion) (ii)</B></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2016</B></TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD COLSPAN="4" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD COLSPAN="4" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2016</B></TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD COLSPAN="4" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD COLSPAN="4" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD COLSPAN="4" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2016</B></TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Forward contracts</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">731</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(1,344</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(1,861)</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(75</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">1,236</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">1,307</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <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">11,279</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">5,828</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(16,952)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(18,888</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; text-align: right">1,965</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; text-align: right">9,935</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <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">4,034</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">21,047</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(15,421</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; text-align: right">2,791</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <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 1pt solid; text-align: right">1,864</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(13,598</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">2,415</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(5,933</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(679</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(101</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <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 medium double; text-align: right"><B>17,908</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>11,933</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>(18,813)</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>(31,969</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>)</B></TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>59</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>11,242</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>(679</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>)</B></TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>(101</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>)</B></TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>&mdash;</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD STYLE="width: 17%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 6%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 6%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 6%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 6%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD STYLE="text-align: justify">The results recognized in income related to forward contracts were recorded as an adjustment to
food and paper. The net gain (loss) recognized in income, related to cross-currency interest rate swaps is presented as follows:</TD></TR></TABLE>

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

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 80%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD><B>Adjustment to:</B></TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2016</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 39%">Foreign currency exchange results</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 18%; border-top: Black 1pt solid; text-align: right">28,588</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 18%; border-top: Black 1pt solid; text-align: right">7,532</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 17%; border-top: Black 1pt solid; text-align: right">(6,997</TD>
    <TD STYLE="vertical-align: bottom; width: 1%; border-top: Black 1pt solid">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Net interest expense</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(9,700</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(9,497</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(2,938</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Total</B></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1.5pt double; text-align: right"><B>18,888</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 1.5pt double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1.5pt double; text-align: right"><B>(1,965</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1.5pt double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1.5pt double; text-align: right"><B>(9,935</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1.5pt double"><B>)</B></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">The results 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 1in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(ii)</TD><TD>The loss recognized in income is presented within &quot;Loss from derivative instruments&quot;.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&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: 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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>13.</B></TD><TD STYLE="padding-left: 0.25in"><B>Derivative instruments (continued)</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Derivatives designated
as hedging instruments (continued)</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 0pt 0.5in"><B><I><U>Fair value hedge</U></I></B></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"><U>Cross-currency interest
rate swaps</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 to fully hedge the principal and interest cash flows
of the Secured Loan Agreement described in Note 12, into BRL. The agreements were signed with the Brazilian subsidiaries of the
banks participating in the secured loan. All the terms of the cross-currency interest rate swap agreements matched the terms of
the Secured Loan Agreement. Pursuant to these agreements, the Company received interest in US dollar at an interest rate equal
to the one it had to pay to the off-shore lenders over a notional amount of $167.3 million and paid 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 12. 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-indent: 0.5in">During fiscal years 2017 and 2016, the accrued
interest amounted to $6,921 and $18,177, respectively. These charges do not include the effect of the Secured Loan Agreement mentioned
in Note 12, amounting to a loss of $2,570 and $6,519, respectively. Including these effects the total interest cost amounts to
$9,491 and $24,696, respectively.</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">These amounts were
recorded within &ldquo;Net interest expense&rdquo; in the Company&rsquo;s consolidated statement of income. 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 fiscal years ended December&nbsp;31, 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>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 60%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="4" STYLE="text-align: center"><B>Cross-currency swaps (i)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>Derivatives in Fair Value Hedging Relationships</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2016</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 66%">Loss recognized in Income on hedging derivatives</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 16%; text-align: right">(9,599</TD>
    <TD STYLE="width: 1%">)</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 15%; text-align: center">(5,814)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Gain recognized in Income on hedging items</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">4,118</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">2,877</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD STYLE="text-align: justify">The loss amounting to $5,481 and $2,937, in 2017 and 2016, respectively, 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.</TD></TR></TABLE>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-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 within &quot;loss
from derivative instruments&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">The Company paid $81
and $1,156 during the fiscal year ended December 31, 2018 and 2017, respectively, related to those forward contracts.</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: 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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>14.</B></TD><TD STYLE="padding-left: 0.25in"><B>Operating lease agreements</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At December&nbsp;31,
2018, the Company was the lessee at 3,090 locations through ground leases (the Company leases the land and owns the building) and
through improved leases (the Company leases land and buildings). Lease terms for most restaurants vary between 10 and 20 years
and, in many cases, include renewal options provided by the agreement. Although, certain leases contain purchase options, is not
reasonably certain that the Company will exercise them. In addition, many agreements include escalation amounts that vary by reporting
unit, with examples including fixed-rent escalations, escalations based on an inflation index, and fair value adjustments. According
to rental terms, the Company pays monthly rent based on the greater of a fixed rent or a certain percentage of the Company&rsquo;s
gross sales. For most locations, the Company is obligated for the related occupancy costs including property taxes, insurance and
maintenance. However, for franchised sites, the Company requires the franchisees to pay these costs. In addition, the Company is
the lessee under non-cancelable leases covering certain offices and warehouses.</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 2010, the
Company entered into an aircraft operating lease agreement for a term of 8 years, which provides for quarterly payments of $690.
The agreement includes a purchase option at the end of the lease term at fair market value and also an early purchase option at
a fixed amount of $26,685 at maturity of the 24<FONT STYLE="font-size: 11pt"><SUP>th</SUP></FONT> quarterly payment. On December
22, 2017, the Company entered into an amendment to the agreement, extending the term of the aircraft operating lease for an additional
10 years, with quarterly payments (retroactively effective as of December 5, 2017) of $442. The Company was required to make a
cash collateral deposit of $2,500 under this agreement.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At December&nbsp;31,
2018, future minimum payments required under existing operating leases with initial terms of one year or more are:</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 1pt solid; text-align: center"><B>Restaurant</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Other</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Total (i)</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 52%">2019</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; border-top: Black 1pt solid; text-align: right">137,049</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; border-top: Black 1pt solid; text-align: right">6,427</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 1pt solid">&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%; border-top: Black 1pt solid; text-align: right">143,476</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">2020</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">122,163</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">6,090</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">128,253</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">2021</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">106,503</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">4,685</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">111,188</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">2022</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">91,112</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">2,335</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">93,447</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">2023</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">77,830</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">2,206</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">80,036</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Thereafter</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">409,694</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">9,771</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">419,465</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Total minimum payment</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>944,351</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>31,514</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>975,865</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 31.5pt"></TD><TD STYLE="width: 36pt">(i)</TD><TD STYLE="text-align: justify">For sites that have lease escalations tied to an index, future minimum payments reflect the current
index adjustments through December 31, 2018. In addition, future minimum payments exclude renewal options provided by government&rsquo;s
regulation that have not yet been exercised.</TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
provides detail of rent expense for fiscal years 2018, 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>

<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 1pt solid; text-align: center"><B>2018</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2016</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 59%">Company-operated restaurants (i)</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; border-top: Black 1pt solid; text-align: right">139,279</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; border-top: Black 1pt solid; text-align: right">148,505</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; border-top: Black 1pt solid; text-align: right">131,142</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Franchised restaurants (ii)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">45,565</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">54,711</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">43,311</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Total rent expense</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>184,844</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>203,216</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>174,453</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD>Included within &ldquo;Occupancy and other operating expenses&rdquo; in the consolidated statements of income.</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(ii)</TD><TD>Included within &ldquo;Franchised restaurants &ndash; occupancy expenses&rdquo; in the consolidated statements of income.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&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: 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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>14.</B></TD><TD STYLE="padding-left: 0.25in"><B>Operating lease agreements (continued)</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
provides a breakdown detail of rent expense between minimum and contingent rentals for fiscal years 2018, 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>

<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 1pt solid; text-align: center"><B>2018</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2016</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 58%">Minimum rentals</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: right">136,328</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: right">138,496</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%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: right">122,726</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Contingent rentals based on sales</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">48,516</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">64,720</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">51,727</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Total rent expense</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>184,844</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>203,216</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>174,453</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>15.</B></TD><TD STYLE="padding-left: 0.25in"><B>Franchise arrangements</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Individual franchise
arrangements generally include a lease, a license and provide for payment of initial franchise fees, as well as continuing rent
and service fees (royalties) to the Company based upon a percentage of sales with minimum rent payments. The Company&rsquo;s franchisees
are granted the right to operate a restaurant using the McDonald&rsquo;s system and, in most cases, the use of a restaurant facility,
generally for a period of 20 years. Franchisees pay related occupancy costs including property taxes, insurance and maintenance.
Pursuant to the MFAs, the Company pays initial fees and continuing service fees for franchised restaurants to McDonald&rsquo;s
Corporation. Therefore, the margin for franchised restaurants is primarily comprised of rental income net of occupancy expenses
(depreciation for owned property and equipment and/or rental expense for leased properties).</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 December&nbsp;31,
2018 and 2017, net property and equipment under franchise arrangements totaled $124,039 and $138,587, respectively (including land
for $34,109 and $41,057, 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">Revenues from franchised restaurants for
fiscal years 2018, 2017 and 2016 consisted of:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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 1pt solid; text-align: center"><B>2018</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2016</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 58%">Rent</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: right">148,094</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: right">155,405</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%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: right">123,311</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Initial fees (i) (ii)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">195</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">1,205</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">1,386</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Royalty fees (iii)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">673</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">659</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">599</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Total</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>148,962</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>157,269</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>125,296</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
</TABLE>
<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD STYLE="text-align: justify">Presented net of initial fees paid to McDonald&rsquo;s Corporation for $1,323, $1,417 and $1,588
in 2018, 2017 and 2016, respectively.</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(ii)</TD><TD STYLE="text-align: justify">On January 1, 2018, the Company adopted ASC 606 &ldquo;Revenue Recognition - Revenue from Contracts
with Customers&rdquo;. As such, initial franchise fees received are deferred over the term of the franchise agreement. See Note
3 Revenue Recognition, for details.</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(iii)</TD><TD STYLE="text-align: justify">Presented net of royalties fees paid to McDonald&rsquo;s Corporation for $57,733, $64,806 and $50,839
in 2018, 2017 and 2016, respectively.</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">At December&nbsp;31,
2018, future minimum rent payments due to the Company under existing franchised agreements are:</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 1pt solid; text-align: center"><B>Owned sites</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Leased sites</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Total</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 56%">2019</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 12%; text-align: right">5,965</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: right">60,578</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 12%; text-align: right">66,543</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">2020</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">5,503</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">57,009</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">62,512</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">2021</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">4,952</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">51,809</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">56,761</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">2022</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">4,254</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">45,335</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">49,589</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">2023</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">3,552</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">37,394</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">40,946</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Thereafter</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">15,356</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">155,948</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">171,304</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Total</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>39,582</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>408,073</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>447,655</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
</TABLE>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>16.</B></TD><TD STYLE="padding-left: 0.25in"><B>Income taxes</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&rsquo;s
operations are conducted by its foreign subsidiaries in Latin America and the Caribbean. The foreign subsidiaries are incorporated
under the laws of their respective countries and as such the Company is taxed in such foreign countries.</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">Statutory tax rates
in the countries in which the Company operates for fiscal years 2018, 2017 and 2016 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" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 58%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; border-bottom: Black 1pt solid; text-align: center"><B>2016</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">Puerto Rico</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">20%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">20%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">20%</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Martinique, French Guyana, Guadeloupe</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">33%</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">35%</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">35%</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">St Croix, St. Thomas</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">23%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">35%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">35%</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">Aruba</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">25%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">35%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">35%</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">Curacao</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">22%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">35%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">35%</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">Argentina</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">30%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">35%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">35%</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">Brazil and Venezuela</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">34%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">34%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">34%</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">Colombia</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">37%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">40%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">40%</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">Peru</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">30%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">30%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">28%</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">Costa Rica and Mexico</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">30%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">30%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">30%</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">Panam&aacute;, Uruguay, Trinidad and Tobago and Netherlands</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">25%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">25%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">25%</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">Ecuador</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">28%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">25%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">25%</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">Chile</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">27%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">26%</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">24%</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Income tax expense
for fiscal years 2018, 2017 and 2016 consisted 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="border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2016</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 58%">Current income tax expense</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: right">47,488</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: right">51,215</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%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: right">54,142</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Deferred income tax expense</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">648</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">2,099</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">5,499</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Income tax expense</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>48,136</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>53,314</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>59,641</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
</TABLE>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>16.</B></TD><TD STYLE="padding-left: 0.25in"><B>Income taxes (continued)</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Income tax expense
for fiscal years 2018, 2017 and 2016 differed from the amounts computed by applying the Company&rsquo;s weighted-average statutory
income tax rate to pre-tax income as a result 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="border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2016</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 62%">Pre-tax income</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; text-align: right">85,169</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">182,813</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; text-align: right">138,629</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Weighted-average statutory income tax rate (i)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: right">42.7</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right">%</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: right">35.5</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right">%</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: right">35.4</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right">%</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Income tax expense at weighted-average statutory tax rate on pre-tax income</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">36,354</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">64,901</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">49,030</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 34pt"><U>Permanent differences</U>:</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Change in valuation allowance (ii)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(24,307</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(21,241</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(19,217</TD>
    <TD>)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Expiration and changes in tax loss carryforwards (iii)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">18,599</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">12,785</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">18,234</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD>Venezuelan remeasurement and inflationary impacts (iv)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">16,857</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">2,683</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">4,368</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Non-taxable income and non-deductible expenses</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">8,406</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">10,157</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">12,915</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Tax benefits, including Brazil and other</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(11,403</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(10,744</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(14,437</TD>
    <TD>)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Income taxes withholdings on intercompany transactions (v)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">7,723</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">6,804</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">22,379</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Differences including exchange rate, inflation adjustment and filing differences</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(2,815</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(11,909</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(13,002</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Alternative Taxes</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(1,283</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">156</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(114</TD>
    <TD>)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Others</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">5</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(278</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(515</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Income tax expense</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>48,136</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>53,314</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>59,641</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD STYLE="text-align: justify">Weighted-average statutory income tax rate is calculated based on the aggregated amount of the
income before taxes by country multiplied by the prevailing statutory income tax rate, divided by the consolidated income before
taxes.</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(ii)</TD><TD STYLE="text-align: justify">Comprises net changes in valuation allowances for the year, mainly related to Non-Operating Losses
(NOLs).</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(iii)</TD><TD STYLE="text-align: justify">Expiration of loss tax carryforwards are mainly generated by Holding legal entities and the Caribbean
division.</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(iv)</TD><TD STYLE="text-align: justify">Comprises changes in valuation allowance during 2018, 2017 and 2016 for $304, $2,108 and $2,180,
respectively.</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(v)</TD><TD STYLE="text-align: justify">Comprises income tax withheld on the payment of interest on intercompany loans. In 2016 this item
also includes the withholding income tax of $18.2 million due the repayment of the Company&rsquo;s 2016 Notes.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&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: 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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>16.</B></TD><TD STYLE="padding-left: 0.25in"><B>Income taxes (continued)</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The tax effects of
temporary differences and carryforwards that comprise significant portions of deferred tax assets and liabilities at December&nbsp;31,
2018 and 2017 are presented below:</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 1pt solid; text-align: center"><B>2018</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 68%">Tax loss carryforwards (i)</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; text-align: right">178,993</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; text-align: right">238,082</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Purchase price allocation adjustment</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">17,006</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">24,437</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Property and equipment, tax inflation</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">38,588</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">37,577</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Other accrued payroll and other liabilities</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">30,300</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">30,730</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Share-based compensation</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">2,591</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">3,850</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Provision for contingencies</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">2,708</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">2,478</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Other deferred tax assets (ii)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">26,193</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">21,528</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Other deferred tax liabilities (iii)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(7,979</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(10,670</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Property and equipment - difference in depreciation rates</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(11,103</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(12,639</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Valuation allowance (iv)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(219,920</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(271,651</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Net deferred tax asset</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>57,377</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>63,722</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD STYLE="text-align: justify">As of December&nbsp;31, 2018, the Company and its subsidiaries has accumulated operating tax loss
carryforwards amounting to $649,312. The Company has operating tax loss carryforwards amounting to $151,343, expiring between 2019
and 2023. In addition, the Company has operating tax loss carryforwards amounting to $211,043 expiring after 2023 and operating
tax loss carryforwards amounting to $286,926 that do no expire. Changes in tax loss carryforwards for the year relate to the use
of NOLs, mainly in Brazil, Colombia and Chile, and the expiration of tax loss carryforwards in other markets.</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(ii)</TD><TD STYLE="text-align: justify">Other deferred tax assets reflect the net tax effects of temporary differences between the carrying
amounts of assets for financial reporting purposes (accounting base) and the amounts used for income tax purposes (tax base). For
the fiscal year ended December&nbsp;31, 2018, this item includes: bad debt reserve in Puerto Rico for $4,967, provision for regular
expenses for $10,458, mainly corresponding to Brazil, Mexico and Colombia; and foreign currency exchange differences in Argentina
and Brazil for $4,736. For the fiscal year ended December 31, 2017 this item includes regular expenses provisions for $9,824, for
Brazil, Mexico and Colombia; $698 related to foreign currency exchange differences in Venezuela and $3,782 in Puerto Rico, related
to bad debt reserve.</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(iii)</TD><TD>Primarily related to intangible assets and accelerated depreciation of fixed assets.</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(iv)</TD><TD STYLE="text-align: justify">In assessing the realization of deferred income tax assets, the Company considers whether it is
more likely than not that some portion or all of the deferred income tax assets will not be realized.</TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The total amount of
$57,377 for the year ended December&nbsp;31, 2018, is presented in the consolidated balance sheet as non-current asset and non-current
liability amounting to $58,334 and $957, 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">The total amount of
$63,722 for the year ended December 31, 2017, is presented in the consolidated balance sheet as non-current asset and non-current
liability amounting to $74,299 and $10,577, 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">Deferred income taxes
have not been recorded for temporary differences related to investments in certain foreign subsidiaries. These temporary differences,
comprise undistributed earnings considered permanently invested in subsidiaries amounted to $141,431 at December&nbsp;31, 2018.
Determination of the deferred income tax liability on these unremitted earnings is not practicable because such liability, if any,
is dependent on circumstances existing if and when remittance occurs.</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&nbsp;of&nbsp;December&nbsp;31,&nbsp;2018,&nbsp;and&nbsp;2017,&nbsp;the&nbsp;Company
has not identified unrecognized&nbsp;tax&nbsp;benefits that&nbsp;would&nbsp;favorably&nbsp;affect&nbsp;the&nbsp;effective&nbsp;tax&nbsp;rate&nbsp;if&nbsp;resolved&nbsp;in&nbsp;the&nbsp;Company&rsquo;s&nbsp;favor.</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="margin-top: 6pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt; font: normal 10pt Times New Roman, Times, Serif">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->34<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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"><B>16.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Income
taxes (continued)</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 account
for uncertain tax positions by determining the minimum recognition threshold that a tax position is required to meet before being
recognized in the financial statements. This determination requires the use of significant judgment in evaluating the tax positions
and assessing the timing and amounts of deductible and taxable items. The Company is regularly under audit in multiple tax jurisdictions
and is currently under examination in several jurisdictions. The Company is generally no longer subject to income tax examinations
by tax authorities for years prior to 2012.</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 December 31,
2018, 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 $181 million, related
to assessments for the fiscal years 2009 to 2014. No formal claim has been made for fiscal years within the statute of limitation
by Tax authorities in any of the mentioned matters, however those years are still subject to audit and claims may be asserted in
the future.</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">It is reasonably possible
that, as a result of audit progression within the next 12 months, there may be new information that causes the Company to reassess
the tax positions because the outcome of tax audits cannot be predicted with certainty. While the Company cannot estimate the impact
that new information may have on their unrecognized tax benefit balance, it believes that the liabilities recorded are appropriate
and adequate as determined under ASC 740.</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>17.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Share-based
compensation</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>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 2018 (from 2015 to 2018 only restricted share units). 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. However, in the event of death, disability
or retirement of the employee, any unvested portion of the annual award will be fully vested. 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 grant date. 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.</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 $3,661, $3,267 and $3,303 during fiscal years 2018, 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>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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"><B>17.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Share-based
compensation (continued)</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>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 Company recognized
$(175), $151 and $688 of related income tax (expense) benefit during fiscal years 2018, 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-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 fiscal years 2018, 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>

<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 1pt solid; text-align: center"><B>Units</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Weighted-average strike price</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Weighted-average grant-date fair value</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 61%"><B>Outstanding at December 31, 2015</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: right"><B>2,025,894</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: right"><B>21.03</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: right"><B>5.87</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Forfeitures</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(80,734</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">10.30</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">2.68</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Expired (i)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(51,305</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">14.05</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">4.02</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Modification (ii)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(1,117,380</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">19.07</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">5.30</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Outstanding at December 31, 2016</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><B>776,475</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><B>15.55</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><B>4.46</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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>
    <TD STYLE="vertical-align: bottom; text-align: justify"><B>Outstanding at December 31, 2017</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; text-align: right"><B>634,489</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; text-align: right"><B>14.28</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; text-align: right"><B>4.28</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Expired (i)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(143,416</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">5.89</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Outstanding at December 31, 2018</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right"><B>491,073</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right"><B>12.26</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right"><B>3.81</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Exercisable at December 31, 2018</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><B>455,719</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><B>12.55</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><B>3.95</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD STYLE="text-align: justify">As of December&nbsp;31, 2018, 2017 and 2016, additional paid-in capital included $844, $750 and
$206 respectively, related to expired stock options.</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(ii)</TD><TD>Corresponds to stock options converted to a liability award.</TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
provides a summary of outstanding stock options at December&nbsp;31, 2018:&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>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: center"><B>Vested (i)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: center"><B>Non-vested (ii)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: center"><B>Total</B></TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Number of units outstanding</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">455,719</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">35,354</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">491,073</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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: bottom; text-align: right">3.95</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">1.98</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">3.81</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Total grant-date fair value</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">1,800</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">70</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">1,870</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Weighted-average accumulated percentage of service</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">100%</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">92.9%</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">99.7%</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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: bottom; text-align: right">1,800</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">65</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">1,865</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Compensation expense not yet recognized (iii)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">5</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">5</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="width: 56%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 12%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 12%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 12%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
</TABLE>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left">(i)</TD><TD>Related to exercisable awards.</TD>
</TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left">(ii)</TD><TD>Related to awards that will vest in 2019.</TD>
</TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left">(iii)</TD><TD>Expected to be recognized in 4.5 months.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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: 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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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; 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>17.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Share-based
compensation (continued)</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-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 fiscal years 2018, 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>

<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 1pt solid; text-align: center"><B>Units</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Weighted-average grant-date fair value</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 65%"><B>Outstanding at December 31, 2015</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right"><B>1,230,210</B></TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 16%; text-align: right"><B>7.96</B></TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">2016 annual grant</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">865,291</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">4.70</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Partial vesting</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(172,328</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">12.25</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Forfeitures</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(142,176</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">6.64</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Outstanding at December 31, 2016</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><B>1,780,997</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><B>6.07</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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>
    <TD STYLE="vertical-align: bottom">Partial vesting</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(361,284</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">7.65</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Forfeitures</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(180,828</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">5.99</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; text-align: justify"><B>Outstanding at December 31, 2017</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><B>1,736,845</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><B>6.65</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">2018 annual grant</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">520,393</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">8.50</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Partial vesting</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(534,589</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">6.01</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Forfeitures</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(117,600</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">7.24</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Outstanding at December 31, 2018</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><B>1,605,049</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right"><B>7.41</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Exercisable at December 31, 2018</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The total fair value
of restricted share units vested during 2018, 2017 and 2016 was $3,214, $2,763 and $3,214, respectively. As of December 31, 2018
the Company issued 520,565 Class A shares in connection with this partial vesting. Therefore, accumulated recorded compensation
expense totaling $3,113 was reclassified from &ldquo;Additional paid-in capital&rdquo; to &ldquo;Common Stock&rdquo; upon issuance.</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 December&nbsp;31, 2018:</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 STYLE="vertical-align: bottom; width: 83%">Number of units outstanding (i)</TD>
    <TD STYLE="vertical-align: bottom; width: 16%; text-align: right">1,605,049</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Weighted-average grant-date fair market value per unit</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">7.41</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Total grant-date fair value</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">11,900</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Weighted-average accumulated percentage of service</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">51.70%</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Stock-based compensation recognized in Additional paid-in capital</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">6,157</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Compensation expense not yet recognized (ii)</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">5,743</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD>Related to awards that will vest between fiscal years 2019 and 2023.</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(ii)</TD><TD>Expected to be recognized in a weighted-average period of 2.0 years.</TD></TR></TABLE>

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


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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>
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<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>18.</B></TD><TD STYLE="padding-left: 0.25in"><B>Commitments and contingencies</B></TD>
</TR></TABLE>

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

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

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

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

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(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: 0.5in"></TD><TD STYLE="width: 0.5in">(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: 0.5in"></TD><TD STYLE="width: 0.5in">(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: 0.5in"></TD><TD STYLE="width: 0.5in">(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: 0.5in"></TD><TD STYLE="width: 0.5in">(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 a consolidated
effective royalty rate of 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">McDonald&rsquo;s Corporation
granted the Company limited waivers through and including June 30, 2016, during which time the Company was not required to comply
with the financial ratios set forth in the MFA, mentioned in point (v) above. If the Company would not be in compliance with the
financial requirements and would be unable to obtain an extension of the waiver or to comply with the original commitments under
the MFA, it could be in material breach. A breach of the MFA would give McDonald&rsquo;s Corporation certain rights, including
the ability to acquire all or portions of the business.</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: 35pt">The following table
summarize Company&rsquo;s ratios requirements for the three-month periods ended from March&nbsp;31, 2016 to December&nbsp;31, 2018:</P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 50%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Fixed Charge Coverage Ratio</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Leverage Ratio</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>March 31, 2016</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">1.67</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">4.80</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 30%">June 30, 2016</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 34%; text-align: right">1.64</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: 31%; text-align: right">4.40</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">September 30, 2016</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">1.67</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">4.08</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>December 31, 2016</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">1.64</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">4.21</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>March 31, 2017</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">1.65</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">4.12</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>June 30, 2017</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">1.65</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">4.05</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">September 30, 2017</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">1.69</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">4.02</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">December 31, 2017</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">1.77</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">3.80</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">March 31, 2018</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">1.70</TD>
    <TD STYLE="vertical-align: top">&nbsp;</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">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">June 30, 2018</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">1.74</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">4.02</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">September 30, 2018</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">1.81</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">3.83</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">December 31, 2018</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">1.70</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">4.07</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 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>


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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: normal 10pt Times New Roman, Times, Serif">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->38<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>18.</B></TD><TD STYLE="padding-left: 0.25in"><B>Commitments and contingencies (continued)</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Provision for contingencies</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 December&nbsp;31, 2018 and 2017, the Company maintains a provision for contingencies, net of judicial
deposits, amounting to $28,509 and $27,956, respectively, presented as follow: $2,436 and $2,529 as a current liability and $26,073
and $25,427 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>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><B>Description</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Balance at beginning of period</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Accruals, net</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Settlements</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Reclassifications and increase of judicial deposits</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Translation</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Balance at end of period</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>Year ended December 31, 2018:</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 29%">Tax contingencies in Brazil (i)</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 7%; text-align: right">9,324</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 7%; text-align: right">1,805</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%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">(1,632</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">)</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 8%; text-align: right">9,497</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Labor contingencies in Brazil (ii)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">21,061</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">20,785</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(17,718</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">(3,020</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">21,108</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Other (iii)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">15,646</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">1,405</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(1,984</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(3,605</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">11,462</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <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">46,031</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">23,995</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(19,702</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">(8,257</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">42,067</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Judicial deposits (iv)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(18,075</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">1,843</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">2,674</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(13,558</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD></TR>
<TR>
    <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 medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>27,956</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>23,995</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>(19,702</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>1,843</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>(5,583</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>28,509</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</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>Year ended December 31, 2017:</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Tax contingencies in Brazil (i)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">13,312</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(2,599</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(337</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(667</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(385</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">9,324</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Labor contingencies in Brazil (ii)</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>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">31,448</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(21,130</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">(407</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">21,061</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Other (iii)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">12,222</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">7,150</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(3,960</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">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">217</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">15,646</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Subtotal</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid; text-align: right">36,684</TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid; text-align: right">35,999</TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid; text-align: right">(25,427</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid; text-align: right">(650</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid; text-align: right">(575</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid; text-align: right">46,031</TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Judicial deposits (iv)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(18,572</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">161</TD>
    <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">(60</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">396</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">(18,075</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Provision for contingencies</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>18,112</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>36,160</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>(25,427</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>(710</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>(179</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>27,956</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black medium double">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</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>Year ended December 31, 2016:</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Tax contingencies in Brazil (i)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">5,118</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">7,196</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">998</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">13,312</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Labor contingencies in Brazil (ii)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">7,013</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">19,903</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(17,523</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">1,757</TD>
    <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>
    <TD STYLE="vertical-align: bottom">Other (iii)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">13,947</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">1,478</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(3,031</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(37</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(135</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">12,222</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <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">26,078</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">28,577</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(20,554</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(37</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">2,620</TD>
    <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>
    <TD STYLE="vertical-align: bottom">Judicial deposits (iv)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(5,500</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">&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">(11,458</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(1,614</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(18,572</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Provision for contingencies</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>20,578</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>28,577</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>(20,554</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>(11,495</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>1,006</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>18,112</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black medium double">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD>In 2018 and 2017, it includes mainly CIDE. In 2016 it includes mainly PIS/COFINS.</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(ii)</TD><TD>It primarily relates to dismissals in the normal course of business.</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(iii)</TD><TD>It relates to tax and labor contingencies in other countries and civil contingencies in all the countries.</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(iv)</TD><TD STYLE="text-align: justify">It primarily relates to judicial deposits the Company was required to make in connection with the
proceedings in Brazil.</TD></TR></TABLE>

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


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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: normal 10pt Times New Roman, Times, Serif">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->39<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 -->

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<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>18.</B></TD><TD STYLE="padding-left: 0.25in"><B>Commitments and contingencies (continued)</B></TD>
</TR></TABLE>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of December&nbsp;31,
2018, there are certain matters related to the interpretation of tax and labor laws for which there is a possible that a loss may
have been incurred in accordance with ASC 450-20-50-4 within a range of $188 million and $196 million.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Additionally, there
is a lawsuit filed by several Puerto Rican franchisees against McDonald&rsquo;s Corporation and certain subsidiaries purchased
by the Company during the acquisition of the LatAm business (&ldquo;the Puerto Rican franchisees lawsuit&rdquo;).</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 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. At that time, the Company filed a Motion of Non
Suit that has not been resolved by the Commissioner assigned to this case. The Company believes that the probability of a loss
is remote.</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 also believes that the litigation probability of a loss is remote, 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 First Instance 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. By means of a Motion to Reconsider, the Company opposed such determination. In December 2018, the First
Instance Court confirmed his determination and the Company filed a Certiorari in the Court of Appeals. The Company continues to
oppose this determination 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 the probability of a loss is remote, 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>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At December&nbsp;31,
2018, the provision for contingencies includes $3,970 ($2,489 at December&nbsp;31, 2017), related to Brazilian claims that are
covered by the indemnification agreement. As a result, the Company has recorded a current asset and non-current asset in respect
of McDonald&rsquo;s Corporation&rsquo;s indemnity in the consolidated balance sheet. The current asset in respect of McDonald&rsquo;s
Corporation&rsquo;s indemnity represents the amount of cash to be received as a result of settling certain Brazilian labor and
tax contingencies.</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: 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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>19.</B></TD><TD STYLE="padding-left: 0.25in"><B>Disclosures about fair value of financial instruments</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As defined in ASC 820
Fair Value Measurement and Disclosures, fair value is the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date (exit price). The transaction is based on a hypothetical
transaction in the principal or most advantageous market considered from the perspective of the market participant that holds the
asset or owes the liability. The valuation techniques that can be used under this guidance are the market approach, income approach
or cost approach. The market approach uses prices and other information for market transactions involving identical or comparable
assets or liabilities, such as matrix pricing. The income approach uses valuation techniques to convert future amounts to a single
discounted present amount based on current market conditions about those future amounts, such as present value techniques, option
pricing models (e.g. Black-Scholes model) and binomial models (e.g. Monte-Carlo model). The cost approach is based on current replacement
cost to replace an asset.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company utilizes
market data or assumptions that market participants who are independent, knowledgeable and willing and able to transact would use
in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique.
These inputs can be readily observable, market corroborated or generally unobservable. The Company attempts to utilize valuation
techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The Company is able to classify
fair value balances based on the observance of those inputs. The guidance establishes a formal fair value hierarchy based on the
inputs used to measure fair value. The hierarchy gives the highest priority to level 1 measurements and the lowest priority to
level 3 measurements, and accordingly, level 1 measurement should be used whenever possible.</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 three levels of
the fair value hierarchy as defined by the guidance are as follows:</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Level 1</U>: Valuations
utilizing quoted, unadjusted prices for identical assets or liabilities in active markets that the Company has the ability to access.
This is the most reliable evidence of fair value and does not require a significant degree of judgment. Examples include exchange-traded
derivatives and listed equities that are actively traded.</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>Level 2</U>: Valuations
utilizing quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs
are observable, either directly or indirectly for substantially the full term of the asset or liability.</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">Financial instruments
that are valued using models or other valuation methodologies are included. Models used should primarily be industry-standard models
that consider various assumptions and economic measures, such as interest rates, yield curves, time value, volatilities, contract
terms, current market prices, credit risk or other market-corroborated inputs. Examples include most over-the-counter derivatives
(non-exchange traded), physical commodities, most structured notes and municipal and corporate bonds.</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>Level 3</U>: Valuations
utilizing significant unobservable inputs provides the least objective evidence of fair value and requires a significant degree
of judgment. Inputs may be used with internally developed methodologies and should reflect an entity&rsquo;s assumptions using
the best information available about the assumptions that market participants would use in pricing an asset or liability. Examples
include certain corporate loans, real-estate and private equity investments and long-dated or complex over-the-counter 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">Depending on the particular
asset or liability, input availability can vary depending on factors such as product type, longevity of a product in the market
and other particular transaction conditions. In some cases, certain inputs used to measure fair value may be categorized into different
levels of the fair value hierarchy. For disclosure purposes under this guidance, the lowest level that contains significant inputs
used in valuation should be chosen. Pursuant to ASC 820-10-50, the Company has classified its assets and liabilities into these
levels depending upon the data relied on to determine the fair values. The fair values of the Company&rsquo;s derivatives are valued
based upon quotes obtained from counterparties to the agreements and are designated as Level 2.</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: 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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>19.</B></TD><TD STYLE="padding-left: 0.25in"><B>Disclosures about fair value of financial instruments
(continued)</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following fair value hierarchy table presents information
about the Company&rsquo;s assets and liabilities measured at fair value on a recurring basis as of December&nbsp;31, 2018 and 2017:</P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="7">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Quoted Prices in</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Active Markets</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>For Identical Assets</B>&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Level 1)</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="10">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Significant Other</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Observable Inputs</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>(Level 2)</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Significant</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>Unobservable Inputs</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>(Level 3)</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Balance as of</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December 31,</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Balance as of</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>December 31,</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>Assets</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="6">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Cash equivalents</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">118,948</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">93,541</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">&mdash;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</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>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">118,948</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">93,541</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Short-term Investments</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="3" STYLE="vertical-align: bottom; text-align: right">&mdash;</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="4" STYLE="vertical-align: bottom; text-align: right">19,588</TD>
    <TD COLSPAN="2" 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 STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">19,588</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Derivatives</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="3" STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">55,462</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="4" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">35,378</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-bottom: Black 1pt 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; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">55,462</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">35,378</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Total Assets</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>118,948</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>93,541</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>55,462</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>54,966</B></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>&mdash;</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>&mdash;</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>174,410</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>148,507</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black medium double">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>Liabilities</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="6">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Derivatives</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</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>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">14,203</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">$</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">23,545</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">14,203</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">23,545</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Share-based compensation</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="4" STYLE="vertical-align: bottom; text-align: right">1,483</TD>
    <TD COLSPAN="2" 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 STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">1,483</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Total Liabilities</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>&mdash;</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>&mdash;</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>14,203</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>25,028</B></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>&mdash;</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>&mdash;</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>14,203</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-top: Black 1pt solid; border-bottom: Black medium double; text-align: right"><B>25,028</B></TD>
    <TD STYLE="vertical-align: top; border-top: Black 1pt solid; border-bottom: Black medium double">&nbsp;</TD></TR>
<TR>
    <TD STYLE="width: 25%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 6%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 6%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 6%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 4%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 6%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The derivative contracts
were valued using various pricing models or discounted cash flow analyses that incorporate observable market parameters, such as
interest rate yield curves, option volatilities and currency rates that were observable for substantially the full term of the
derivative contracts.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Certain financial
assets and liabilities not measured at fair value</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 December&nbsp;31,
2018, the fair value of the Company&rsquo;s short-term and long-term debt was estimated at $633,489, compared to a carrying amount
of $640,567. This fair value was estimated using various pricing models or discounted cash flow analysis that incorporated quoted
market prices, and is similar to Level 2 within the valuation hierarchy. The carrying amount for notes receivable approximates
fair value.</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>Non-financial assets
and liabilities measured at fair value on a nonrecurring basis</U></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Certain assets and
liabilities are measured at fair value on a nonrecurring basis; that is, the assets and liabilities are not measured at fair value
on an ongoing basis but are subject to fair value adjustments in certain circumstances (e.g., when there is evidence of impairment).
At December&nbsp;31, 2018, no material fair value adjustments or fair value measurements were required for non-financial assets
or liabilities, except for those required in connection with the impairment of long-lived assets and goodwill. Refer to Note 3
for more details, including inputs and valuation techniques used to measure fair value of these non-financial assets.</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: 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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>20.</B></TD><TD STYLE="padding-left: 0.25in"><B>Certain risks and concentrations</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&rsquo;s
financial instruments that are exposed to concentration of credit risk primarily consist of cash and cash equivalents and accounts
and notes receivable. Cash and cash equivalents are deposited with various creditworthy financial institutions, and therefore the
Company believes it is not exposed to any significant credit risk related to cash and cash equivalents. Concentrations of credit
risk with respect to accounts and notes receivable are generally limited due to the large number of franchisees comprising the
Company&rsquo;s franchise base.</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">All the Company&rsquo;s
operations are concentrated in Latin America and the Caribbean. As a result, the Company&rsquo;s financial condition and results
of operations depend, to a significant extent, on macroeconomic and political conditions prevailing in the region. See Note 22
for additional information pertaining to the Company&rsquo;s Venezuelan operations.</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>21.</B></TD><TD STYLE="padding-left: 0.25in"><B>Segment and geographic information</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;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 described in Note 3.</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: 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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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">&nbsp;</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>21.</B></TD><TD STYLE="padding-left: 0.25in"><B>Segment and geographic information (continued)</B></TD>
</TR></TABLE>

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



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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></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:</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="11" STYLE="text-align: center"><B>For the fiscal years ended December 31,</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2016</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>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 58%">Brazil</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: right">1,345,453</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: right">1,496,573</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: 11%; text-align: right">1,333,237</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <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">483,743</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">474,822</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">409,671</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">NOLAD</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">406,848</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">386,874</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">363,965</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">SLAD</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">845,527</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">961,256</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">821,757</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <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 medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>3,081,571</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>3,319,525</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>2,928,630</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</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><U>Adjusted EBITDA:</U></B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Brazil</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">218,391</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">218,172</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">168,076</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">(8,281</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">40,844</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">18,049</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">NOLAD</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">32,313</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">33,717</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">36,288</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">SLAD</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">73,670</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">87,083</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">76,327</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <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>316,093</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>379,816</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>298,740</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Corporate and others (i)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(58,096</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(74,879</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(60,295</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD></TR>
<TR>
    <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 medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>257,997</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>304,937</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>238,445</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
</TABLE>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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>
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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="text-align: left; width: 0.25in"><B>21.</B></TD><TD STYLE="padding-left: 0.25in"><B>Segment and geographic information (continued)</B></TD>
</TR>
</TABLE>

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="11" STYLE="text-align: center"><B>For the fiscal years ended December 31,</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2016</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>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 58%"><B>Total Adjusted EBITDA</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: right"><B>257,997</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: right"><B>304,937</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: 11%; text-align: right"><B>238,445</B></TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</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>(Less) Plus 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>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Depreciation and amortization</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(105,800</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(99,382</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(92,969</TD>
    <TD>)</TD></TR>
<TR>
    <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">4,973</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">95,081</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">57,244</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Write-offs of property and equipment</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(4,167</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(8,528</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(5,776</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Impairment of long-lived assets</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(18,950</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(17,564</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(7,697</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Impairment of goodwill</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(167</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(200</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(5,045</TD>
    <TD>)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Reorganization and optimization plan expenses</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(11,003</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">(5,341</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">ADBV Long-Term Incentive Plan incremental compensation from modification</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">575</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(1,409</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(281</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD></TR>
<TR>
    <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>123,458</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>272,935</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>178,580</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>(Less) Plus:</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Net interest expense</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(52,868</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(68,357</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(66,880</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Loss from derivative instruments</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(565</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(7,065</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(3,065</TD>
    <TD>)</TD></TR>
<TR>
    <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">14,874</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(14,265</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">32,354</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Other non-operating expenses, net</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">270</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(435</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(2,360</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Income tax expense</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(48,136</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(53,314</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(59,641</TD>
    <TD>)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Net income attributable to non-controlling interests</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(186</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(333</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(178</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD></TR>
<TR>
    <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 medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>36,847</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>129,166</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>78,810</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
</TABLE>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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>
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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="text-align: left; width: 0.25in"><B>21.</B></TD><TD STYLE="padding-left: 0.25in"><B>Segment and geographic information (continued)</B></TD>
</TR>
</TABLE>

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="11" STYLE="text-align: center"><B>For the fiscal years ended December 31,</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2016</B></TD></TR>
<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>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 58%">Brazil</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: right">52,632</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: right">52,442</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: 11%; text-align: right">43,733</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <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">22,835</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">25,210</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">27,376</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">NOLAD</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">20,829</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">20,635</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">21,975</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">SLAD</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">19,293</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">15,292</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">14,477</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <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>115,589</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>113,579</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>107,561</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">5,696</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">5,978</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">5,478</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Purchase price allocation (ii)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(15,485</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(20,175</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(20,070</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD></TR>
<TR>
    <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 medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>105,800</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>99,382</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>92,969</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</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><U>Property and equipment expenditures:</U></B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Brazil</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">100,926</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">91,769</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">42,657</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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">18,640</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">16,759</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">14,387</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">NOLAD</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">24,145</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">17,565</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">10,117</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">SLAD</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">53,300</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">48,621</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">24,967</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Others</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">30</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">52</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">154</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <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 medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>197,041</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>174,766</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>92,282</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center"><B>As of December 31,</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B><U>Total assets:</U></B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 65%">Brazil</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 1%">$</TD>
    <TD STYLE="vertical-align: top; width: 14%; text-align: right">751,550</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: right">786,897</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Caribbean division</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; text-align: right">303,467</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; text-align: right">416,541</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">NOLAD</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; text-align: right">247,697</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; text-align: right">271,558</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">SLAD</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-bottom: Black 1pt solid; text-align: right">291,300</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-bottom: Black 1pt solid; text-align: right">297,581</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Total reportable segments</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; text-align: right"><B>1,594,014</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; text-align: right"><B>1,772,577</B></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Corporate and others (i)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; text-align: right">105,835</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; text-align: right">172,400</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Purchase price allocation (ii)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-bottom: Black 1pt solid; text-align: right">(121,810</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-bottom: Black 1pt solid; text-align: right">(141,234</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Total assets</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double; text-align: right"><B>1,578,039</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double; text-align: right"><B>1,803,743</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD STYLE="text-align: justify">Primarily relates to corporate general and administrative expenses, corporate supply chain operations
in Uruguay, and related assets. Corporate general and administrative expenses consist of corporate office support costs in areas
such as facilities, finance, human resources, information technology, legal, marketing, restaurant operations, supply chain and
training. As of December 31, 2018 and 2017, corporate assets primarily includes corporate cash and cash equivalents.</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(ii)</TD><TD STYLE="text-align: justify">Relates to the purchase price allocation adjustment made at corporate level, which reduces the
total assets and the corresponding depreciation and amortization.</TD></TR></TABLE>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Long-lived assets consisting
of property and equipment totaled $856,192 and $890,736 at December&nbsp;31, 2018 and 2017, respectively. All of the Company&rsquo;s
long-lived assets are related to foreign operations.</P>

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


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>22.</B></TD><TD STYLE="padding-left: 0.25in"><B>Venezuelan operations</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">The Company conducts
business in Venezuela where currency restrictions exist, limiting the Company&rsquo;s ability to immediately access cash through
repatriations at the government&rsquo;s official exchange rate. The Company&rsquo;s access to Venezuelan Bol&iacute;vares (VEF
or VES) 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.</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: 35pt">Since February 2013,
the Venezuelan government has announced several changes in the currency exchange regulations. The last modification was in February
2018, when the Venezuelan government announced the unification of the formerly exchange rate systems, DIPRO and DICOM II, into
a sole foreign exchange mechanism (NEW DICOM). The unified system operates through an auction mechanism similar to the formerly
DICOM II. The first auction was published on February 5, 2018, with an exchange rate of 25,000 VEF per US dollar. As a consequence
of those changes announced by the Government, the Company reassessed the exchange rate used for remeasurement purposes as follows:</P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 90%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="8" STYLE="text-align: center"><B>Effects of exchange rate change</B></TD></TR>
<TR>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT><B>Period</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Exchange rate System applied</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Exchange rate at System date change</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(VEF per US dollar)</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Write down of inventories (i)</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Impairment of long-lived assets (i)</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Foreign currency exchange (loss) income (ii)</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 30%">From February 8, 2013 to February 28, 2014</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 15%">Official exchange rate</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 14%; text-align: right">6.30</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: right">(15,379</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">From March 1, 2014 to May 31, 2014</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">SICAD</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">11.80</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">7,611</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(19,697</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">From June 1, 2014 to February 28, 2015</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">SICAD II</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">49.98</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">9,937</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">45,186</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(38,963</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">From March 1, 2015 to March 9, 2016</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">SIMADI</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">177.00</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">3,250</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">7,804</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(8,046</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">From March 10, 2016 to May 30, 2017</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">DICOM</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">215.34</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">401</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(117</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">From May 31, 2017 to January 31, 2018</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">DICOM II</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">2,010.00</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">1,375</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(2,554</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">From February 1, 2018 up to date</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">NEW DICOM</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">25,000.00</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">38,095</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">11,223</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
</TABLE>
<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD>Presented within Other operating (expenses) income, net.</TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.5in">(ii)</TD><TD>Presented within Foreign currency exchange results.</TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 20, 2018,
the Government announced the removal of five zeros from the Venezuelan currency and renamed it as &ldquo;Sovereign Bolivar&rdquo;
(VES). In addition, the new currency devaluated from 2.48 to 59.93 VES 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">Although the Company
has participated in several auctions since the new mechanism was in place on June 1, 2018, it was granted with $20 for the first
time at an exchange rate of 600,000 VEF per US dollar. Afterwards, the Company was granted in July and December. Those transactions
occurred at an exchange rate greater than the one published by the governmental authorities. Considering that under ASC 830, foreign
currency transactions are required to be remeasured at the applicable rate at which a particular transaction could be settled,
each time the Company access to NEW DICOM at an exchange rate greater than the one published, this rate was considered for remeasurements
purposes. As a consequence of these reassessments, the Company recognized a foreign currency exchange loss of $6.1 million and
a write down of certain inventories of $23 million due to the currency exchange rate change impact on their net recoverable value.</P>

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

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

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt"></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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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">&nbsp;</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>22.</B></TD><TD STYLE="padding-left: 0.25in"><B>Venezuelan operations (continued)</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Revenues and operating
(loss) income of the Venezuelan operations were $78,859 and $(52,054), respectively, for fiscal year 2018; $101,477 and $6,804,
respectively, for fiscal year 2017; and $51,615 and $(8,608), respectively, for fiscal year 2016.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company performed
the impairment testing of its long-lived assets in accordance with the guidance within ASC 360-10-35, as mentioned in Note 3. As
a result of the analysis, the Company recorded an impairment charge of $12,089. The Company will continue closely monitoring 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 December 31,
2018, the Company&rsquo;s local currency denominated net monetary position, which would be subject to remeasurement in the event
of further changes in the exchange rate, was net liability $0.1 million. In addition, Venezuela&rsquo;s non-monetary assets were
$16.8 million (mainly fixed assets).</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: 35pt">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 fiscal year ended December 31, 2018.</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">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>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>23.</B></TD><TD STYLE="padding-left: 0.25in"><B>Shareholders&rsquo; equity</B></TD>
</TR></TABLE>

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

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During fiscal years
2018, 2017 and 2016, the Company issued 520,565, 361,284 and 172,328 Class A shares, respectively, in connection with the partial
vesting of restricted share units under the 2011 Equity Incentive Plan.</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 May 22, 2018, The
Board of Directors approved the adoption of a share repurchase program, pursuant to which the Company may repurchase from time
to time up to $60,000 of issued and outstanding Class A shares of no par value of the Company (&ldquo;The Repurchase Program&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 Repurchase Program
began on May 22, 2018 and will expire at the close of business on May 22, 2019. However, it could terminate prior to such 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">As of December 31,
2018, the Company purchased 6,360,826 shares amounting to $46,035.</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">Therefore, at December&nbsp;31,
2018, 2017 and 2016 the Company had 211,593,073; 211,072,508 and 210,711,224 shares issued with no par value, consisting of 131,593,073;
131,072,508 and 130,711,224 Class A shares, respectively, and 80,000,000 for Class B shares for each year.</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: 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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>23.</B></TD><TD STYLE="padding-left: 0.25in"><B>Shareholders&rsquo; equity (continued)</B></TD>
</TR></TABLE>

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

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

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

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

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

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 20, 2018,
the Company approved a dividend distribution to all Class A and Class B shareholders of $0.10 per share, to be paid in two equal
installments of $0.05 per share on April 5, 2018 and October 5, 2018, amounting to $20,937. During fiscal years 2017 and 2016,
the Company did not declare a dividend distribution to its shareholders.</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>Accumulated other
comprehensive loss</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
sets forth information with respect to the components of &ldquo;Accumulated other comprehensive loss&rdquo; as of December&nbsp;31,
2018 and their related activity during the three-years in the 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 1pt solid; text-align: center"><B>Foreign currency translation</B></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Cash flow hedges</B></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Post-employment benefits (i)</B></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Total Accumulated other comprehensive loss</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 46%"><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>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right"><B>(431,190</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; 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>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; text-align: right"><B>(949</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; width: 14%; text-align: right"><B>(424,263</B></TD>
    <TD STYLE="vertical-align: bottom; width: 1%"><B>)</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Other comprehensive loss before reclassifications</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(9,891</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(18,813</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(310</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(29,014</TD>
    <TD>)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Net loss reclassified from accumulated other comprehensive loss to consolidated statement of income</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">11,242</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">386</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">11,628</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Net current-period other comprehensive (loss) income</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(9,891</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(7,571</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">76</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(17,386</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Balances at December 31, 2016</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>(441,081</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>305</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>(873</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>(441,649</B></TD>
    <TD STYLE="vertical-align: bottom"><B>)</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Other comprehensive income (loss) before reclassifications</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">4,800</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">6,462</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(938</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">10,324</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Net loss reclassified from accumulated other comprehensive loss to consolidated statement of income</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">1,592</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">386</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">1,978</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Net current-period other comprehensive income (loss)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">4,800</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">8,054</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(552</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">12,302</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Balances at December 31, 2017</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right"><B>(436,281</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>8,359</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>(1,425</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>(429,347</B></TD>
    <TD STYLE="vertical-align: bottom"><B>)</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Other comprehensive (loss) income before reclassifications</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(62,996</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">13,888</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(418</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(49,526</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Net loss reclassified from accumulated other comprehensive loss to consolidated statement income</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">&mdash;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(23,887</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">494</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(23,393</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Net current-period other comprehensive (loss) income</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(62,996</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(9,999</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">76</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(72,919</TD>
    <TD STYLE="vertical-align: bottom">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>Balances at December 31, 2018</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="border-bottom: Black medium double; text-align: right"><B>(499,277</B></TD>
    <TD STYLE="border-bottom: Black medium double"><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="border-bottom: Black medium double; text-align: right"><B>(1,640</B></TD>
    <TD STYLE="border-bottom: Black medium double"><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="border-bottom: Black medium double; text-align: right"><B>(1,349</B></TD>
    <TD STYLE="border-bottom: Black medium double"><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="border-bottom: Black medium double; text-align: right"><B>(502,266</B></TD>
    <TD STYLE="border-bottom: Black medium double"><B>)</B></TD></TR>
</TABLE>
<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD STYLE="text-align: justify">Mainly 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. 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.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&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: 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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>24.</B></TD><TD STYLE="padding-left: 0.25in"><B>Earnings per share</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company is required
to present basic earnings per share and diluted earnings per share in accordance with ASC 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
years presented:</P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="11" STYLE="text-align: center"><B>For the fiscal years ended December 31,</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2016</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 61%">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%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; border-top: Black 1pt solid; text-align: right">36,847</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; border-top: Black 1pt solid; text-align: right">129,166</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; border-top: Black 1pt solid; text-align: right">78,810</TD>
    <TD STYLE="vertical-align: top; width: 1%; border-top: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <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">209,136,832</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">210,935,685</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">210,646,955</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <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>
    <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>
    <TD STYLE="vertical-align: bottom">Incremental shares from vesting of restricted share units</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">983,634</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">1,060,726</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">377,653</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <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 1pt solid; text-align: right">210,120,466</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">211,996,411</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">211,024,608</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black medium double">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black medium double">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black medium double">&nbsp;</TD></TR>
<TR>
    <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 medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>0.18</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>0.61</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>0.37</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
<TR>
    <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 medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>0.18</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>0.61</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>0.37</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
</TABLE>
<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD STYLE="text-align: justify">Options to purchase shares of common stock were outstanding during fiscal years 2018, 2017 and
2016. See Note 17 for details. These options were not included in the computation of diluted earnings per share because their inclusion
would have been anti-dilutive.</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" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>25.</B></TD><TD STYLE="padding-left: 0.25in"><B>Related party transactions</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company has entered
into a master commercial agreement on arm&rsquo;s length terms with Axionlog, a company under common control that operates the
distribution centers in Argentina, Chile, Colombia, Ecuador, Mexico, Peru, Uruguay and Venezuela (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
with interest rates prevailing in the market at the time of the agreement. Notwithstanding the fact that the loan maturity date
was November&nbsp;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, included within &quot;Other investing activity&quot; in the consolidated statements
of Cash Flows.</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: 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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>25.</B></TD><TD STYLE="padding-left: 0.25in"><B>Related party transactions (continued)</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
summarizes the outstanding balances between the Company and the Axionlog Business as of December&nbsp;31, 2018 and 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="7" STYLE="text-align: center"><B>As of December 31,</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 66%">Accounts and notes receivable</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 14%; text-align: right">860</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 14%; text-align: right">1,097</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Other receivables</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">1,676</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">979</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Miscellaneous</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">2,963</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">3,126</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Accounts payable</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(14,984</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(11,727</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 fiscal years ended December&nbsp;31, 2018, 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>

<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="11" STYLE="text-align: center"><B>Fiscal years ended December 31,</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2018</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2017</B></TD>
    <TD STYLE="border-top: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2016</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 58%">Food and paper (i)</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">$</TD>
    <TD STYLE="width: 11%; text-align: right">(177,356</TD>
    <TD STYLE="width: 1%">)</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">$</TD>
    <TD STYLE="width: 11%; text-align: right">(173,387</TD>
    <TD STYLE="width: 1%">)</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">$</TD>
    <TD STYLE="width: 11%; text-align: right">(163,536</TD>
    <TD STYLE="width: 1%">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Occupancy and other operating expenses</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(5,322</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(4,281</TD>
    <TD>)</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">(3,882</TD>
    <TD>)</TD></TR>
<TR>
    <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">&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">47</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
</TABLE>
<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD STYLE="text-align: justify">Includes $41,633 of distribution fees and $135,723 of suppliers purchases managed through the Axionlog
Business for the fiscal year ended December&nbsp;31, 2018; $48,773 and $124,614, respectively, for the fiscal year ended December&nbsp;31,
2017; and $40,714 and $122,822, respectively, for the fiscal year ended December&nbsp;31, 2016.</TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of December&nbsp;31,
2018 and 2017, the Company had other receivables totaling $2,692 and $2,112, respectively and accounts payable with Lacoop, A.C.
and Lacoop II, S.C. totaling $1,634 and $1,113, respectively.</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: 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 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">As of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018</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 CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>26.</B></TD><TD STYLE="padding-left: 0.25in"><B>Valuation and qualifying accounts</B></TD>
</TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
presents the information required by Rule 12-09 of Regulation S-X in regards to valuation and qualifying accounts for each of the
periods presented:</P>

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid"><B>Description</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Balance at beginning of period</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Additions (i)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Deductions (ii)</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Translation</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; text-align: center"><B>Balance at end of period</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>Year ended December 31, 2018:</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Deducted from assets accounts:</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; width: 41%">Allowance for doubtful accounts (iii)</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">21,467</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">6,064</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">(1,860</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">)</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">$</TD>
    <TD STYLE="vertical-align: bottom; width: 9%; text-align: right">(132</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: 8%; text-align: right">25,539</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Valuation allowance on deferred tax assets</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">271,651</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">13,107</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(37,718</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(27,120</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">219,920</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Reported as liabilities:</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for contingencies</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">27,956</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">25,838</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(19,702</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(5,583</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">28,509</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Total</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>321,074</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>45,009</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>(59,280</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>(32,835</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>273,968</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>Year ended December 31, 2017:</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Deducted from assets accounts:</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Allowance for doubtful accounts (iii)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">16,367</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">6,386</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(1,244</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(42</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">21,467</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Valuation allowance on deferred tax assets</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">290,620</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">8,382</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(27,515</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">164</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">271,651</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Reported as liabilities:</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Provision for contingencies</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">18,112</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">36,160</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(26,137</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(179</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">27,956</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Total</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>325,099</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>50,928</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>(54,896</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>(57</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>321,074</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><B>Year ended December 31, 2016:</B></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Deducted from assets accounts:</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Allowance for doubtful accounts</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">12,768</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">5,367</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(1,647</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">(121</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">$</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">16,367</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Valuation allowance on deferred tax assets</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">297,891</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">36,778</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(24,967</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">(19,082</TD>
    <TD STYLE="vertical-align: bottom">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; text-align: right">290,620</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Reported as liabilities:</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Provision for contingencies</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">20,578</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">28,577</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">(32,049</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">1,006</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: right">18,112</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><B>Total</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>331,237</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>70,722</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>(58,663</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>(18,197</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>)</B></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double"><B>$</B></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black medium double; text-align: right"><B>325,099</B></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black medium double">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(i)</TD><TD STYLE="text-align: justify">Additions in valuation allowance on deferred tax assets are charged to income tax expense.</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 0pt 0.5in; text-align: justify">Additions in provision for contingencies
are explained as follows:</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">Fiscal years 2018, 2017 and 2016
&ndash; Relate to the accrual of $23,995, $36,160 and $28,577, respectively, and a reclassification of $1,843, during fiscal year
2018. See Note 18 for details.</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(ii)</TD><TD STYLE="text-align: justify">Deductions in valuation allowance on deferred tax assets are charged to income tax expense.</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 0pt 0.5in; text-align: justify">Deductions in provision for contingencies
are explained as follows:</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">Corresponds to the settlements
and reclassifications amounting to $19,702 and $nil, respectively, during fiscal year 2018; $25,427 and $710, respectively, during
fiscal year 2017; and $20,554 and $11,495, respectively, during fiscal year 2016; as discussed in Note 18.</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(iii)</TD><TD STYLE="text-align: justify">Presented in the consolidated balance sheet as follow: $24,999 and $19,791 at December 31, 2018
and 2017, respectively, within Accounts and notes receivable, net and $540 and $1,676 at December 31, 2018 and 2017, respectively,
within Other receivables.</TD></TR></TABLE>

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


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<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>27.</B></TD><TD STYLE="padding-left: 0.25in"><B>Subsequent events</B></TD>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 26, 2019,
the Company approved a dividend distribution to all Class A and Class B shareholders of $0.11 per share to be paid in three installments,
as follows: $0.05 per share on April 12, 2019, $0.03 per share on August 14, 2019, and $0.03 per share on December 12, 2019.</P>

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