Arcos Dorados (ARCO) - 2024 Q3 - Quarterly Report

Financial Performance - Total revenues for the nine-month period ended September 30, 2024, increased to $3,325,942, up 5.4$3,156,423 in 2023[10] - Net income attributable to Arcos Dorados Holdings Inc. for the same period was $90,355, a decrease of 28.1$125,496 in 2023[10] - Basic and diluted net income per common share attributable to Arcos Dorados Holdings Inc. was $0.43, down from$0.60 in 2023[10] - Total operating costs and expenses rose to $3,104,347, an increase of 6.2$2,924,171 in 2023[10] - Comprehensive income attributable to Arcos Dorados Holdings Inc. was $47,479, significantly lower than$158,135 in 2023[13] - Adjusted EBITDA for the same period was $352,716, up from$339,680 in 2023, reflecting a growth of 3.05%[94] Cash Flow and Liquidity - Cash and cash equivalents decreased to $115,908 as of September 30, 2024, from$196,661 at the end of 2023[16] - Net cash provided by operating activities for the nine-month period was $159,794, down from$232,277 in 2023[18] - The company maintained a provision for contingencies of $36,151 as of September 30, 2024, down from$50,619 at the end of 2023[87] - The fair value of cash equivalents as of September 30, 2024, was $57,381,000, compared to$113,726,000 at December 31, 2023, reflecting a decrease of 49.5%[121] Assets and Liabilities - Total assets decreased to $2,961,117 as of September 30, 2024, from$3,019,238 at the end of 2023[16] - Total liabilities decreased to $2,447,643 as of September 30, 2024, from$2,502,399 at the end of 2023[16] - The company reported a retained earnings balance of $510,410 thousand at the end of the period, up from$424,936 thousand at the beginning of the fiscal year[23] - Long-term debt totaled $719,307 thousand as of September 30, 2024, slightly up from$714,841 thousand as of December 31, 2023, reflecting a marginal increase of approximately 0.65%[53] Shareholder Information - The company declared cash dividends of $0.19 per share, totaling$40,022 thousand to shareholders during the nine-month period[23] - The company plans to distribute a cash dividend of $0.24 per share in four installments throughout 2024, with$37,917 paid as of September 30, 2024[104] - As of September 30, 2023, total shareholders' equity amounted to $442,681 thousand, reflecting an increase from$441,763 thousand at the beginning of the fiscal year[23] Market Presence and Operations - The company operates and franchises McDonald's restaurants across 20 territories in Latin America and the Caribbean, indicating a strong market presence[27] - The company plans to finalize a new 20-year Master Franchise Agreement with McDonald's Corporation, effective January 1, 2025, which will enhance its operational framework[26] - The company plans to open at least 200 new restaurants and modernize at least 400 restaurants, with capital expenditures of approximately $650 million from 2022 to 2024[80] Foreign Currency and Derivatives - The company reported a foreign currency translation loss of$51,044 for the nine-month period ended September 30, 2024[13] - The Company has implemented measures to mitigate foreign currency fluctuations through various derivative instruments, including cross-currency interest rate swaps and foreign currency forwards[56] - The total fair value of derivative instruments was $70,176,000, compared to$46,605,000 as of December 31, 2023, representing a significant increase[58] Debt and Financing - The Company renewed its revolving credit facility with J.P. Morgan for $25 million, maturing on February 17, 2026, and signed additional revolving credit facilities totaling$50 million with Itaú Unibanco S.A. and Banco Santander (Brasil) S.A.[47] - The net indebtedness to EBITDA ratio was reported at 1.23x as of September 30, 2024, well below the covenant requirement of 3.00x[49] - The maximum leverage ratio required by the banks was 4.25, while the actual ratios were significantly lower at 0.27 for Itaú and 0.46 for both Credit Suisse and J.P. Morgan as of September 30, 2024[85] Other Comprehensive Income - The company reported a net current-period other comprehensive loss of $42,876,000 for the nine-month period ended September 30, 2024[106] - As of September 30, 2024, total accumulated other comprehensive loss was$605,957,000, compared to $563,081,000 at December 31, 2023, indicating an increase of 7.6$255,469,000, an increase of 9.7% from $232,755,000 in 2023[110] - The company reported property and equipment expenditures of$239,169 for the nine-month period, compared to $227,753 in 2023, indicating an increase of 5.88%[96]