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Segment and geographic information | 12 Months Ended
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Dec. 31, 2024
Segment Reporting [Abstract] |
Segment and geographic information | Segment and geographic information 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’s products and services, geographic areas and major customers. As discussed in Note 1, the Company through its wholly-owned and majority-owned subsidiaries operates and franchises McDonald’s restaurants in the food service industry. The Company has determined that its reportable segments are those that are based on the Company’s method of internal reporting. The Company manages its business as distinct geographic segments and its operations are divided into three geographic divisions, as follows: (i) Brazil, (ii) the North Latin American division, or “NOLAD,” which is comprised of Costa Rica, Mexico, Panama, Puerto Rico, Martinique, Guadeloupe, French Guiana and the U.S. Virgin Islands of St. Croix and St. Thomas and (iii) the South Latin American division, or “SLAD,” which is comprised of Argentina, Chile, Ecuador, Peru, Uruguay, Colombia, Venezuela, Trinidad and Tobago, Aruba and Curaçao. The accounting policies of the segments are the same as those described in Note 3. The Company's chief operating decision maker is the Chief Executive Officer ("CEO”) and adjusted EBITDA is the measure of segment's profit or loss used to evaluate segment performance and resource allocation. The following tables present information about profit, or loss, significant expenses, other segment items and assets for each reportable segment:
|  | For the fiscal years ended December 31,
|  | 2024 |  | 2023 |  | 2022
Revenues: |  |  |  |  |  |
Brazil |  | $ | 1,768,311 |  |  | $ | 1,701,547 |  |  | $ | 1,429,105 |
NOLAD |  | 1,225,751 |  |  | 1,132,912 |  |  | 920,189 |
SLAD |  | 1,476,100 |  |  | 1,497,419 |  |  | 1,269,608 |
Total revenues |  | $ | 4,470,162 |  |  | $ | 4,331,878 |  |  | $ | 3,618,902 |
Significant expenses (a) |  |  |  |  |  |
Company-operated restaurant expenses |  |  |  |  |  |
Brazil |  | $ | (1,338,301) |  |  | $ | (1,301,637) |  |  | $ | (1,096,919) |
NOLAD |  | (1,048,552) |  |  | (962,214) |  |  | (777,989) |
SLAD |  | (1,277,019) |  |  | (1,270,959) |  |  | (1,087,953) |
Total Company-operated restaurant expenses |  | $ | (3,663,872) |  |  | $ | (3,534,810) |  |  | $ | (2,962,861) |
Franchised restaurants-occupancy expenses |  |  |  |  |  |
Brazil |  | $ | (54,089) |  |  | $ | (54,031) |  |  | $ | (42,995) |
NOLAD |  | $ | (11,020) |  |  | (10,465) |  |  | (9,053) |
SLAD |  | $ | (9,754) |  |  | (9,243) |  |  | (7,240) |
Total Franchised restaurants-occupancy expenses |  | $ | (74,863) |  |  | $ | (73,739) |  |  | $ | (59,288) |
General and administrative expenses |  |  |  |  |  |
Brazil |  | $ | (54,007) |  |  | $ | (58,608) |  |  | $ | (53,810) |
NOLAD |  | (50,197) |  |  | (48,188) |  |  | (37,645) |
SLAD |  | (54,169) |  |  | (51,973) |  |  | (44,854) |
Corporate |  | (89,990) |  |  | (104,118) |  |  | (88,305) |
Total General and administrative expenses |  | $ | (248,363) |  |  | $ | (262,887) |  |  | $ | (224,614) |
Other segment items |  |  |  |  |  |
Brazil |  | $ | 18,088 |  |  | $ | 12,906 |  |  | $ | 6,965 |
NOLAD |  | $ | 274 |  |  | 3,319 |  |  | (212) |
SLAD |  | $ | (1,466) |  |  | (4,864) |  |  | $ | 4,692 |
Corporate |  | $ | 140 |  |  | 501 |  |  | $ | 2,980 |
Total Other segment items (a) (b) |  | $ | 17,036 |  |  | $ | 11,862 |  |  | $ | 14,425 |
Adjusted EBITDA: |  |  |  |  |  |
Brazil |  | $ | 340,002 |  |  | $ | 300,177 |  |  | $ | 242,346 |
NOLAD |  | 116,256 |  |  | 115,364 |  |  | 95,290 |
SLAD |  | 133,692 |  |  | 160,380 |  |  | 134,253 |
Total reportable segments |  | 589,950 |  |  | 575,921 |  |  | 471,889 |
Corporate and others (i) |  | (89,850) |  |  | (103,617) |  |  | (85,325) |
Total adjusted EBITDA |  | $ | 500,100 |  |  | $ | 472,304 |  |  | $ | 386,564 |
(a) Depreciation & amortization are not included within the significant expenses, such as Company-operated restaurant expenses, Franchised restaurants-occupancy expenses, Selling, general & administrative expenses and Other segment items. (b) Other segment items includes gains related to sales and exchange of restaurant businesses, rental income of excess properties, accrual for contingencies, recovery of taxes, results from equity method investments, write-offs of inventory and other miscellaneous items.
|  | For the fiscal years ended December 31,
|  | 2024 |  | 2023 |  | 2022
Adjusted EBITDA reconciliation: |  |  |  |  |  |
Total Adjusted EBITDA |  | $ | 500,100 |  |  | $ | 472,304 |  |  | $ | 386,564 |
(Less) Plus items excluded from computation that affect operating income: |  |  |  |  |  |
Depreciation and amortization |  | (177,354) |  |  | (149,268) |  |  | (119,777) |
Gains from sale and insurance recovery of property and equipment |  | 5,486 |  |  | 2,030 |  |  | 1,949 |
Write-offs of long-lived assets |  | (2,650) |  |  | (8,401) |  |  | (3,143) |
Impairment of long-lived assets |  | (1,067) |  |  | (2,626) |  |  | (1,171) |
Operating income |  | 324,515 |  |  | 314,039 |  |  | 264,422 |
(Less) Plus: |  |  |  |  |  |
Net interest expense and other financing results |  | (47,238) |  |  | (32,275) |  |  | (43,750) |
Gain (loss) from derivative instruments |  | 941 |  |  | (13,183) |  |  | (10,490) |
Foreign currency exchange results |  | (15,063) |  |  | 10,774 |  |  | 16,501 |
Other non-operating expenses, net |  | (3,873) |  |  | (1,238) |  |  | (287) |
Income tax expense, net |  | (109,903) |  |  | (95,702) |  |  | (85,476) |
Net income attributable to non-controlling interests |  | (620) |  |  | (1,141) |  |  | (577) |
Net income attributable to Arcos Dorados Holdings Inc. |  | $ | 148,759 |  |  | $ | 181,274 |  |  | $ | 140,343 |
|  | For the fiscal years ended December 31,
|  | 2024 |  | 2023 |  | 2022
Depreciation and amortization: |  |  |  |  |  |
Brazil |  | $ | 70,868 |  |  | $ | 68,249 |  |  | $ | 55,003 |
NOLAD |  | 50,481 |  |  | 41,195 |  |  | 32,377 |
SLAD |  | 46,432 |  |  | 32,302 |  |  | 25,932 |
Total reportable segments |  | 167,781 |  |  | 141,746 |  |  | 113,312 |
Corporate and others (i) |  | 9,966 |  |  | 8,178 |  |  | 7,134 |
Purchase price allocation (ii) |  | (393) |  |  | (656) |  |  | (669) |
Total depreciation and amortization |  | $ | 177,354 |  |  | $ | 149,268 |  |  | $ | 119,777 |
Property and equipment expenditures: |  |  |  |  |  |
Brazil |  | $ | 108,140 |  |  | $ | 121,913 |  |  | $ | 68,661 |
NOLAD |  | 99,140 |  |  | 113,823 |  |  | 69,966 |
SLAD |  | 120,301 |  |  | 122,616 |  |  | 78,162 |
Others |  | 55 |  |  | 1,745 |  |  | 326 |
Total property and equipment expenditures |  | $ | 327,636 |  |  | $ | 360,097 |  |  | $ | 217,115 |
|  | As of December 31,
|  | 2024 |  | 2023
Total assets: |  |  |  |
Brazil |  | $ | 1,164,179 |  |  | $ | 1,304,759 |
NOLAD |  | 959,403 |  |  | 900,429 |
SLAD |  | 822,342 |  |  | 748,073 |
Total reportable segments |  | 2,945,924 |  |  | 2,953,261 |
Corporate and others (i) |  | 40,366 |  |  | 171,255 |
Purchase price allocation (ii) |  | (93,636) |  |  | (105,278) |
Total assets |  | $ | 2,892,654 |  |  | $ | 3,019,238 |
(i)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, 2024, corporate assets primarily include cash and cash equivalents, short-term investments and lease right of use. As of December 31, 2023, corporate assets primarily include cash and cash equivalents and short-term investments. (ii)Relates to the purchase price allocation adjustment made at corporate level, which reduces the accounting value of our long-lived assets (excluding Lease right of use) and goodwill, considering the corresponding depreciation and amortization. As of December 31, 2024 and 2023, primarily related with the reduction of goodwill. The Company’s revenues are derived from two sources: sales by Company-operated restaurants and revenues from restaurants operated by franchisees. All of the Company’s revenues are derived from foreign operations. The following table presents information about revenues by geographic area for fiscal years ended December 31, 2024, 2023 and 2022:
|  | For the fiscal years ended December 31,
|  | 2024 |  | 2023 |  | 2022
Revenues: |  |  |  |  |  |
Brazil |  | $ | 1,768,311 |  |  | $ | 1,701,547 |  |  | $ | 1,429,105 |
Argentina |  | 600,298 |  |  | 683,231 |  |  | 604,347 |
México |  | 447,388 |  |  | 394,528 |  |  | 278,414 |
Other countries |  | 1,654,165 |  |  | 1,552,572 |  |  | 1,307,036 |
Total revenues |  | $ | 4,470,162 |  |  | $ | 4,331,878 |  |  | $ | 3,618,902 |
Long-lived assets consisting of property and equipment totaled $1,127,042 a nd $1,119,885 as of December 31, 2024 and 2023, respectively. All of the Company’s long-lived assets are related to foreign operations. The following table presents information about long-lived assets by geographic area as of December 31, 2024, and 2023:
|  | As of December 31,
|  | 2024 |  | 2023
Long-lived assets |  |  |  |
Brazil |  | $ | 370,419 |  |  | $ | 431,360 |
Mexico |  | 168,588 |  |  | 177,428 |
Argentina |  | 117,206 |  |  | 95,374 |
Other countries |  | 470,829 |  |  | 415,723 |
Total long-lived assets |  | $ | 1,127,042 |  |  | $ | 1,119,885 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 48 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-48 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards 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