Cover
Cover | 12 Months Ended |
Dec. 31, 2020shares | |
Entity Information [Line Items] | |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Period End Date | Dec. 31, 2020 |
Current Fiscal Year End Date | --12-31 |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 001-35129 |
Entity Registrant Name | Arcos Dorados Holdings Inc. |
Entity Incorporation, State or Country Code | D8 |
Entity Address, Address Line One | Dr. Luis Bonavita 1294, Office 501 |
Entity Address, City or Town | Montevideo |
Entity Address, Country | UY |
Entity Address, Postal Zip Code | 11300 WTC Free Zone |
Title of 12(b) Security | Class A shares, no par value |
Trading Symbol | ARCO |
Security Exchange Name | NYSE |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Accelerated Filer |
Entity Emerging Growth Company | false |
ICFR Auditor Attestation Flag | true |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Entity Central Index Key | 0001508478 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | FY |
Amendment Flag | false |
Business Contact | |
Entity Information [Line Items] | |
Entity Address, Address Line One | Dr. Luis Bonavita 1294, 5th floor, Office 501, WTC Free Zone |
Entity Address, City or Town | Montevideo |
Entity Address, Country | UY |
Entity Address, Postal Zip Code | 11300 |
Contact Personnel Name | Juan David Bastidas |
City Area Code | 598 |
Local Phone Number | 2626-3000 |
Contact Personnel Fax Number | 598 2626-3018 |
Class A | |
Entity Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 127,265,773 |
Class B | |
Entity Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 80,000,000 |
Consolidated Statements of (Los
Consolidated Statements of (Loss) Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
REVENUES | |||
Revenues | $ 1,984,219 | $ 2,959,077 | $ 3,081,571 |
Company-operated restaurant expenses: | |||
Food and paper | (677,087) | (1,007,584) | (1,030,499) |
Payroll and employee benefits | (413,074) | (567,653) | (607,793) |
Occupancy and other operating expenses | (624,154) | (799,633) | (803,539) |
Royalty fees | (110,957) | (155,388) | (157,886) |
Franchised restaurants – occupancy expenses | (43,512) | (61,278) | (67,927) |
General and administrative expenses | (171,382) | (212,515) | (229,324) |
Other operating (expenses) income, net | (10,807) | 4,910 | (61,145) |
Total operating costs and expenses | (2,050,973) | (2,799,141) | (2,958,113) |
Operating (loss) income | (66,754) | 159,936 | 123,458 |
Net interest expense | (59,068) | (52,079) | (52,868) |
(Loss) gain from derivative instruments | (2,297) | 439 | (565) |
Gain from securities | 25,676 | 0 | 0 |
Foreign currency exchange results | (31,707) | 12,754 | 14,874 |
Other non-operating income (expenses), net | 2,296 | (2,097) | 270 |
(Loss) income before income taxes | (131,854) | 118,953 | 85,169 |
Income tax expense | (17,532) | (38,837) | (48,136) |
Net (loss) income | (149,386) | 80,116 | 37,033 |
Less: Net income attributable to non-controlling interests | (65) | (220) | (186) |
Net (loss) income attributable to Arcos Dorados Holdings Inc. | $ (149,451) | $ 79,896 | $ 36,847 |
(Loss) earnings per share information: | |||
Basic net (loss) income per common share attributable to Arcos Dorados Holdings Inc. (in dollars per share) | $ (0.73) | $ 0.39 | $ 0.18 |
Diluted net (loss) income per common share attributable to Arcos Dorados Holdings Inc. (in dollars per share) | $ (0.73) | $ 0.39 | $ 0.18 |
Sales by Company-operated restaurants | |||
REVENUES | |||
Revenues | $ 1,894,618 | $ 2,812,287 | $ 2,932,609 |
Revenues from franchised restaurants | |||
REVENUES | |||
Revenues | $ 89,601 | $ 146,790 | $ 148,962 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net (loss) income | $ (149,386) | $ 80,116 | $ 37,033 |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation | (76,382) | (12,246) | (63,130) |
Post-employment benefits (expenses): | |||
Loss recognized in accumulated other comprehensive loss | (195) | (55) | (418) |
Reclassification of net loss to consolidated statement of income | 236 | 864 | 494 |
Post-employment benefits (net of deferred income taxes of $70, $42 and $122). | 41 | 809 | 76 |
Cash flow hedges: | |||
Net gain (loss) recognized in accumulated other comprehensive loss | 54,287 | (5,185) | |
Net gain (loss) recognized in accumulated other comprehensive loss | 13,888 | ||
Reclassification of net (gain) loss to consolidated statement of income | (43,324) | 85 | |
Reclassification of net (gain) loss to consolidated statement of income | (23,887) | ||
Cash flow hedges (net of deferred income taxes of $(2,582), $1,290 and $4,062) | 10,963 | (5,100) | |
Cash flow hedges (net of deferred income taxes of $(2,582), $1,290 and $4,062) | (9,999) | ||
Total other comprehensive (loss) income | (65,378) | (16,537) | (73,053) |
Comprehensive (loss) income | (214,764) | 63,579 | (36,020) |
Less: Comprehensive income attributable to non-controlling interests | (42) | (142) | (52) |
Comprehensive (loss) income attributable to Arcos Dorados Holdings Inc. | $ (214,806) | $ 63,437 | $ (36,072) |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive (Loss) Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Defined benefit pension plan, tax | $ 70 | $ 42 | $ 122 |
Cash Flow Hedges, Tax | $ (2,582) | $ 1,290 | |
Cash flow hedges, tax | $ 4,062 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 165,989 | $ 121,880 |
Short-term investment | 0 | 25 |
Accounts and notes receivable, net | 94,249 | 99,862 |
Other receivables | 19,946 | 28,174 |
Inventories | 33,601 | 37,815 |
Prepaid expenses and other current assets | 100,469 | 117,612 |
Derivative instruments | 702 | 0 |
McDonald’s Corporation’s indemnification for contingencies | 575 | 0 |
Total current assets | 415,531 | 405,368 |
Non-current assets | ||
Miscellaneous | 72,649 | 95,814 |
Collateral deposits | 2,500 | 2,500 |
Property and equipment, net | 796,532 | 960,986 |
Net intangible assets and goodwill | 37,046 | 43,044 |
Deferred income taxes | 55,567 | 68,368 |
Derivative instruments | 121,901 | 57,828 |
McDonald’s Corporation’s indemnification for contingencies | 1,259 | 1,612 |
Lease right of use asset, net | 790,969 | 922,165 |
Total non-current assets | 1,878,423 | 2,152,317 |
Total assets | 2,293,954 | 2,557,685 |
Current liabilities | ||
Accounts payable | 209,535 | 259,577 |
Royalties payable to McDonald’s Corporation | 44,779 | 17,132 |
Income taxes payable | 34,447 | 61,982 |
Other taxes payable | 56,837 | 61,823 |
Accrued payroll and other liabilities | 79,218 | 86,379 |
Provision for contingencies | 2,024 | 2,035 |
Interest payable | 11,947 | 9,936 |
Short-term debt | 0 | 13,296 |
Current portion of long-term debt | 3,129 | 3,233 |
Derivative instruments | 4,727 | 9,907 |
Operating lease liabilities | 56,828 | 70,147 |
Total current liabilities | 503,471 | 595,447 |
Non-current liabilities | ||
Accrued payroll and other liabilities | 21,884 | 23,497 |
Provision for contingencies | 24,924 | 24,123 |
Long-term debt, excluding current portion | 773,445 | 623,575 |
Derivative instruments | 14,534 | 3,598 |
Deferred income taxes | 5,067 | 4,297 |
Operating lease liabilities | 752,613 | 861,582 |
Total non-current liabilities | 1,592,467 | 1,540,672 |
Total liabilities | 2,095,938 | 2,136,119 |
Equity | ||
Additional paid-in capital | 11,540 | 13,375 |
Retained earnings | 290,895 | 471,149 |
Accumulated other comprehensive loss | (584,860) | (519,505) |
Common stock in treasury | (39,547) | (60,000) |
Total Arcos Dorados Holdings Inc. shareholders’ equity | 197,546 | 421,138 |
Non-controlling interests in subsidiaries | 470 | 428 |
Total equity | 198,016 | 421,566 |
Total liabilities and equity | 2,293,954 | 2,557,685 |
Class A | ||
Equity | ||
Common stock | 386,603 | 383,204 |
Class B | ||
Equity | ||
Common stock | $ 132,915 | $ 132,915 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating activities | |||
Net (loss) income attributable to Arcos Dorados Holdings Inc. | $ (149,451) | $ 79,896 | $ 36,847 |
Non-cash charges and credits: | |||
Depreciation and amortization | 126,853 | 123,218 | 105,800 |
Loss (gain) from derivative instruments | 2,297 | (439) | 565 |
Amortization and accrual of letter of credit fees and deferred financing costs | 3,505 | 3,190 | 3,189 |
Gain of property and equipment sales | (201) | (664) | (2,030) |
Deferred income taxes | 471 | (7,974) | 648 |
Foreign currency exchange results | 35,928 | (11,656) | (15,388) |
Accrued net share-based compensation expense | 1,360 | 4,060 | 2,638 |
Impairment of long-lived assets and goodwill | 7,721 | 9,063 | 19,117 |
Write-offs of property and equipment | 4,501 | 4,733 | 4,167 |
Gain on Sales of restaurants businesses | 0 | (5,078) | (6,154) |
Others, net | (10,234) | (955) | 8,896 |
Changes in assets and liabilities: | |||
Accounts payable | (23,993) | 39,434 | 16,563 |
Accounts and notes receivable and other receivables | (13,210) | (27,988) | (35,770) |
Inventories, prepaid and other assets | (25,032) | (21,802) | (12,074) |
Income taxes payable | (5,825) | 10,931 | 12,529 |
Other taxes payable | 13,014 | 20,891 | 8,675 |
Interest payable | 0 | 0 | 0 |
Accrued payroll and other liabilities and provision for contingencies | 16,755 | 1,320 | 27,134 |
Royalties payable to McDonald’s Corporation | 28,981 | 2,979 | 4,302 |
Others | 2,526 | 322 | 77 |
Net cash provided by operating activities | 15,966 | 223,481 | 179,731 |
Investing activities | |||
Property and equipment expenditures | (86,311) | (265,235) | (197,041) |
Purchases of restaurant businesses paid at acquisition date | (3,833) | (2,658) | 0 |
Proceeds from sales of property and equipment and related advances | 800 | 3,340 | 2,891 |
Proceeds from sales of restaurant businesses and related advances | 0 | 4,818 | 10,158 |
Recovery of short-term investments | 0 | 0 | 19,588 |
Other investing activity | 638 | (1,256) | 620 |
Net cash used in investing activities | (88,706) | (260,991) | (163,784) |
Financing activities | |||
Issuance of 2027 Notes | 153,375 | 0 | 0 |
Dividend payments to Arcos Dorados Holdings Inc.’ shareholders | (10,220) | (22,425) | (20,937) |
Net short-term borrowings | (10,578) | 13,159 | 0 |
Treasury stock purchases | 0 | (13,965) | (46,035) |
Other financing activities | (6,568) | (6,401) | (6,470) |
Net cash provided by used in financing activities | 126,009 | (29,632) | (73,442) |
Effect of exchange rate changes on cash and cash equivalents | (9,160) | (8,260) | (53,714) |
Increase (decrease) in cash and cash equivalents | 44,109 | (75,402) | (111,209) |
Cash and cash equivalents at the beginning of the year | 121,880 | 197,282 | 308,491 |
Cash and cash equivalents at the end of the year | 165,989 | 121,880 | 197,282 |
Supplemental cash flow information: | |||
Interest | 57,066 | 52,458 | 55,400 |
Income tax | 22,502 | 34,092 | 32,188 |
Non-cash investing and financing activities: | |||
Stock dividend payments to Arcos Dorados Holdings Inc.’ Shareholders, at cost | 20,453 | 0 | 0 |
Seller financing pending of payment and settlement of franchise receivables related to purchases of restaurant businesses | $ 1,606 | $ 905 | $ 469 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Arcos Dorados Holdings Inc.’ Shareholders | Arcos Dorados Holdings Inc.’ ShareholdersCumulative Effect, Period of Adoption, Adjustment | Additional paid-in capital | Retained earnings | Retained earningsCumulative Effect, Period of Adoption, Adjustment | Accumulated other comprehensive loss | Accumulated other comprehensive lossCumulative Effect, Period of Adoption, Adjustment | Common Stock in treasury | Non-controlling interests | Class A shares of common stock | Class A shares of common stockCommon Stock | Class B shares of common stockCommon Stock |
Balance of common stock, shares at Dec. 31, 2017 | 0 | 131,072,508 | 80,000,000 | |||||||||||
Balance at period start at Dec. 31, 2017 | $ 496,142 | $ (3,796) | $ 495,650 | $ (3,796) | $ 14,216 | $ 401,134 | $ (3,796) | $ (429,347) | $ 0 | $ 492 | $ 376,732 | $ 132,915 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net income for the year | 37,033 | 36,847 | 36,847 | 186 | ||||||||||
Other comprehensive income (loss) | (73,053) | (72,919) | (72,919) | (134) | ||||||||||
Dividends to Arcos Dorados Holdings Inc.’s shareholders | (20,937) | (20,937) | (20,937) | |||||||||||
Dividends on restricted share units under the 2011 Equity Incentive Plan | (174) | (174) | (174) | |||||||||||
Issuance of shares in connection with the partial vesting of outstanding restricted share units under the 2011 Equity Incentive Plan, shares | 520,565 | 520,565 | ||||||||||||
Issuance of shares in connection with the partial vesting of outstanding restricted share units under the 2011 Equity Incentive Plan | 0 | (3,113) | $ 3,113 | |||||||||||
Stock-based compensation related to the 2011 Equity Incentive Plan | 3,747 | 3,747 | 3,747 | |||||||||||
Treasury stock purchases, shares | (6,360,826) | |||||||||||||
Treasury stock purchases | (46,035) | (46,035) | $ (46,035) | |||||||||||
Dividends to non-controlling interests | (168) | (168) | ||||||||||||
Balance of common stock, shares at Dec. 31, 2018 | 6,360,826 | 131,593,073 | 80,000,000 | |||||||||||
Balance at period end at Dec. 31, 2018 | $ 392,759 | $ 0 | 392,383 | 14,850 | 413,074 | $ 780 | (502,266) | $ (780) | $ (46,035) | 376 | $ 379,845 | $ 132,915 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201712Member | |||||||||||||
Net income for the year | $ 80,116 | 79,896 | 79,896 | 220 | ||||||||||
Other comprehensive income (loss) | (16,537) | (16,459) | (16,459) | (78) | ||||||||||
Dividends to Arcos Dorados Holdings Inc.’s shareholders | (22,425) | (22,425) | (22,425) | |||||||||||
Dividends on restricted share units under the 2011 Equity Incentive Plan | (176) | (176) | (176) | |||||||||||
Issuance of shares in connection with the partial vesting of outstanding restricted share units under the 2011 Equity Incentive Plan, shares | 470,558 | 470,558 | ||||||||||||
Issuance of shares in connection with the partial vesting of outstanding restricted share units under the 2011 Equity Incentive Plan | 0 | (3,359) | $ 3,359 | |||||||||||
Stock-based compensation related to the 2011 Equity Incentive Plan | 1,884 | 1,884 | 1,884 | |||||||||||
Treasury stock purchases, shares | (1,632,776) | |||||||||||||
Treasury stock purchases | (13,965) | (13,965) | $ (13,965) | |||||||||||
Dividends to non-controlling interests | (90) | (90) | ||||||||||||
Balance of common stock, shares at Dec. 31, 2019 | 7,993,602 | 132,063,631 | 80,000,000 | |||||||||||
Balance at period end at Dec. 31, 2019 | 421,566 | 421,138 | 13,375 | 471,149 | (519,505) | $ (60,000) | 428 | $ 383,204 | $ 132,915 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net income for the year | (149,386) | (149,451) | (149,451) | 65 | ||||||||||
Other comprehensive income (loss) | (65,378) | (65,355) | (65,355) | (23) | ||||||||||
Dividends to Arcos Dorados Holdings Inc.’s shareholders | (10,220) | (10,220) | (10,220) | |||||||||||
Cash Dividends on restricted share units under the 2011 Equity Incentive Plan | (130) | (130) | (130) | |||||||||||
Stock Dividends to Arcos Dorados Holdings Inc.’s shareholders (75 shares per share) | 0 | (20,453) | $ 20,453 | |||||||||||
Stock Dividends to Arcos Dorados Holdings Inc.’s shareholders (in shares) | 2,723,614 | |||||||||||||
Issuance of shares in connection with the partial vesting of outstanding restricted share units under the 2011 Equity Incentive Plan, shares | 472,130 | 472,130 | ||||||||||||
Issuance of shares in connection with the partial vesting of outstanding restricted share units under the 2011 Equity Incentive Plan | 0 | (3,399) | $ 3,399 | |||||||||||
Stock-based compensation related to the 2011 Equity Incentive Plan | 1,564 | 1,564 | 1,564 | |||||||||||
Balance of common stock, shares at Dec. 31, 2020 | 5,269,988 | 132,535,761 | 80,000,000 | |||||||||||
Balance at period end at Dec. 31, 2020 | $ 198,016 | $ 197,546 | $ 11,540 | $ 290,895 | $ (584,860) | $ (39,547) | $ 470 | $ 386,603 | $ 132,915 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Equity (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Dividends (in dollars per share) | $ 0.05 | $ 0.11 | $ 0.10 |
Deferred income taxes | $ 55,567 | $ 68,368 | $ 58,334 |
Stock dividends, share per share | 75 |
Organization and nature of busi
Organization and nature of business | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and nature of business | Organization and nature of business Arcos Dorados Holdings Inc. (the “Company”) is a company limited by shares incorporated and existing under the laws of the British Virgin Islands. The Company’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. (“ADBV”). On August 3, 2007 the Company, indirectly through its wholly-owned subsidiary ADBV, entered into a Stock Purchase Agreement and Master Franchise Agreements (“MFAs”) with McDonald’s Corporation pursuant to which the Company completed the acquisition of the McDonald’s business in Latin America and the Caribbean (“LatAm business”). See Note 4 for details. Prior to this acquisition, the Company did not carry out operations. The Company’s rights to operate and franchise McDonald’s-branded restaurants in the Territories, and therefore the ability to conduct the business, derive exclusively from the rights granted by McDonald’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. The Company, through ADBV’s wholly-owned and majority owned subsidiaries, operates and franchises McDonald’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’s subsidiaries or by independent entrepreneurs under the terms of sub-franchisee agreements (franchisees). COVID - 19 On March 11, 2020, a novel virus known as COVID-19 was declared by the World Health Organization’s (WHO) as a pandemic, resulting in federal, state and local governments mandating various restrictions, including travel restrictions, restrictions on public gatherings, stay at home orders and advisories, curfews and quarantining of people who may have been exposed to the virus. In order to comply with these government measures, some of our markets closed all restaurants for a period of time, especially from the end of March through the middle of April 2020. During that period, approximately 50% of our entire restaurant footprint was fully closed. These limitations have significantly disrupted the Company’s business operations with a negative impact on the Company’s financial results, including a decline in revenues as well as cash from operations. However, starting in the middle of April 2020, we began steadily re-opening restaurants and were able to resume operating at least one sales channel, such as drive-thru, delivery and/or take away, in nearly all restaurants, as well as, the vast majority of our dessert centers by December 31, 2020. In order to mitigate the impact on Company’s business, results of operations, financial conditions and outlook, the Company has implemented several cash preservation measures including, but not limited to, reducing costs and expenses, limiting capital expenditures and renegotiating terms and conditions with lessors and other suppliers of goods and services. The Company expects to continue with cash preservation measures while the environment remains dynamic. In addition, on July 6, 2020, the Company announced the cancellation of the two remaining cash dividend installments to be paid in August and December, 2020 and approved a stock dividend distributed on August, 2020. See note 23 for details. Moreover, McDonald’s granted the Company a deferral of all the royalty payments due related to sales in March, April, May, June and July 2020 until the first half of 2021; a reduction in the advertising and promotion spending requirements from 5% to 4% for the annual period 2020 and the withdrawal of the previously-approved 2020-2022 restaurant opening plan and reinvestment plan, agreeing in place of this obligation a plan for 2021 only. In addition, McDonald’s provided the Company with a growth support which is expected to result in a consolidated royalty effective rate of about 5.3% in 2021.See note 18 for details. Furthermore, the Company had drawn short-term debt in most of its Territories, from March to September 2020, in order to maintain liquidity. Short-term debt was $136 million, $158.2 million, $11 million and $nil at the end of each quarter COVID - 19 (continued) during 2020. On September 11, 2020 the Company announced the issuance of $150 million aggregate principal amount of 2027 Notes. See Note 12 for further information. The proceeds from the aggregate 2027 Notes were used mainly to repay short-term indebtedness. As the cash flow from operations has been stabilized during the second quarter of the year and sequential sales recovery continue quarter by quarter, the Company does not expect significant increases in short-term debt. However, all short-term lines are available if needed. Additionally, in order to extend the maturity profile of the long-term debt, on September 15, 2020 the Company launched an offer to exchange any and all of the 2023 Notes for newly issued 2027 Notes. As a result of this exchange, the Company issued 2027 Notes for an aggregate principal amount of $138,354. See Note 12 for further information. Additionally, the Company benefited from some government measures enacted in Latin America and the Caribbean to help companies deal with the economic fallout of the COVID-19 pandemic. Government measures include: modification of existing regulations to reduce workdays or tax costs, tax payment deferral and subsidies related to labor costs, among others. All subsidies granted were recognized on a systematic basis over the periods in which the related expenses were recorded, within “payroll and employee benefits” or “General and administrative expenses” in the consolidated statement of income. The Company fulfils all the terms and conditions required by the governments to maintain the benefits granted. Although as of December 31, 2020, some of the government measures continued in force, the Company cannot predict the extent or duration of current or forthcoming programs. |
Basis of presentation and princ
Basis of presentation and principles of consolidation | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation and principles of consolidation | Basis of presentation and principles of consolidation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The Company has elected to report its consolidated financial statements in United States dollars (“$” or “US dollars”). |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Summary of significant accounting policies The following is a summary of significant accounting policies followed by the Company in the preparation of the consolidated financial statements. Use of estimates 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. Foreign currency matters The financial statements of the Company’s foreign operating subsidiaries are translated in accordance with guidance in ASC 830 Foreign Currency Matters. Except for the Company’s Venezuelan and Argentinian operations, the functional currencies of the Company’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 “Accumulated other comprehensive loss” component of shareholders’ equity. The Company includes foreign Foreign currency matters (continued) 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 (loss) income. 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, Brazilian reais (“BRL”) for Argentinian operation from July 2018 to June 2020 and US dollars since July 2020). As a result, remeasurement gains and losses are recognized in earnings rather than in the cumulative translation adjustment, component of “Accumulated other comprehensive loss” within shareholders’ equity. In addition, in these territories, there are foreign currency restrictions. Since 2019, in Argentina several measures have been adopted including, among others: (i) limitation to hoarding and consumption in foreign currency for natural persons, (ii) taxes to increase the official exchange rate, (iii) approvals issued by the Central Bank of Argentina to access foreign currency to settle imports of goods or services, principal and interest from financial payables to foreign parties, profits and dividends. See Note 22 for information about foreign currency restrictions in Venezuela. Cash and cash equivalents 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. Revenue recognition The Company’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’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’s Corporation. Royalty income is recognized in the period earned. In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASC 606), “Revenue Recognition - Revenue from Contracts with Customers”, which amends the guidance in former ASC 605, “Revenue Recognition”, 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. 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. 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: Revenue recognition (continued) Balance Sheet Balance at December 31, 2017 Adjustments Due to ASC 606 Balance at January 1, 2018 ASSETS Non-current Assets Deferred income taxes 74,299 1,555 75,854 LIABILITIES AND EQUITY Current liabilities Accrued payroll and other liabilities 119,088 339 119,427 Non-current liabilities Accrued payroll and other liabilities 29,366 5,012 34,378 EQUITY Retained earnings 401,134 (3,796) 397,338 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, were as follows: As of December 31, 2018 Balance Sheet As Reported Balances Without Adoption of ASC 606 Effect of Change ASSETS Non-current Assets Deferred income taxes 58,334 56,522 1,812 LIABILITIES AND EQUITY Current liabilities Accrued payroll and other liabilities 94,166 93,770 396 Non-current liabilities Accrued payroll and other liabilities 35,322 29,495 5,827 EQUITY Retained earnings 413,074 417,485 (4,411) For the fiscal year ended December 31, 2018 Income Statement As Reported Balances Without Adoption of ASC 606 Effect of Change Revenues from franchised restaurants 148,962 149,834 (872) Income tax expense (48,136) (48,393) 257 Accounts and notes receivable and allowance for doubtful accounts Accounts receivable primarily consist of royalty and rent receivables due from franchisees, debit, credit and delivery vendor 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 the expected credit losses. In judging the adequacy of the allowance for doubtful accounts, the Company follows ASC 326 "Financial Instruments - Credit Losses" considering, multiple factors including historical bad debt experience, the aging of the receivables, the current economic environment, remote risks of loss and future economic conditions. Other receivables As of December 31, 2020, other receivables primarily consist of related party receivables, value-added tax and other tax receivables, insurance claim receivables, amounting to $10,110. As of December 31, 2019, other receivables primarily consist of insurance claim receivables, value-added tax, other tax receivables and related party receivables, amounting to $17,046. Other receivables are reported at the amount expected to be collected. Inventories Inventories are stated at the lower of cost or market, with cost being determined on a first-in, first-out basis. Property and equipment, net 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’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’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 – 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 – up to 40 years; leasehold improvements – the lesser of useful lives of assets or lease terms which generally include renewal options; and equipment 3 to 10 years. Intangible assets, net Intangible assets include computer software costs, initial franchise fees, reacquired rights under franchise agreements, letter of credit fees and others. 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. The Company is required to pay to McDonald’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. Intangible assets, net (continued) 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. Letter of credit fees are amortized on a straight-line basis over the term of the Letter of Credit. Impairment and disposal of long-lived assets In accordance with the guidance within ASC 360-10-35, the Company reviews long-lived assets (including property and equipment, intangible assets with definite useful lives and lease right of use asset, net) for impairment whenever events or changes in circumstances indicate the carrying value of the asset may not be recoverable. For p urposes 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’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. The Company assessed all markets for impairment indicators during the fourth quarter of 2020, 2019 and 2018. However, as a consequence of the impact that the spread of COVID-19 caused in Company’s operations, during 2020 the Company performed impairment testing of its long-lived assets in some territories in previous quarters; as well as it did during 2018 in Venezuela as a consequence of currency exchange rate changes. 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: Ecuador, Puerto Rico, Mexico, Peru, Aruba, USVI, Venezuela, Colombia, Trinidad and Tobago, Curacao, Panama and Argentina for the fiscal years ended December 31, 2020; Curacao, Puerto Rico, Mexico, Peru, Aruba, USVI, Venezuela, Colombia and Trinidad and Tobago for the fiscal year ended December 31, 2019 and in Ecuador, Aruba, Puerto Rico, Mexico, Peru, USVI, Venezuela, Colombia and Trinidad and Tobago for the fiscal years ended December 31, 2018. As a result of the impairment testing the Company recorded the following impairment charges, for the markets indicated below, within Other operating income (expenses), net on the consolidated statements of income: Fiscal year Markets Total 2020 Mexico, Puerto Rico, USVI, Peru, Aruba, Colombia, Venezuela, Ecuador, Panama and Argentina $ 6,636 2019 Mexico, Puerto Rico, USVI, Peru, Aruba, Curacao, Colombia and Venezuela 8,790 2018 Mexico, Puerto Rico, USVI, Peru, Colombia, Venezuela and Trinidad and Tobago. 18,950 While the extent and duration of the economic fallout from the COVID-19 pandemic remains unclear, the Company will be monitoring the situation closely. Goodwill 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 during the fourth quarter, or when an impairment indicator exists. The impairment test 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’s goodwill and the carrying amount of goodwill. 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’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. As a result of the analyses performed during the fiscal years 2020, 2019 and 2018, 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: Fiscal year Markets Total 2020 Mexico $ 1,085 2019 Ecuador 273 2018 Peru 167 Advertising costs Advertising costs are expensed as incurred. Advertising expenses related to Company-operated restaurants were $60,855, $115,568 and $120,839 in 2020, 2019 and 2018, respectively. Advertising expenses related to franchised operations do not affect the Company’s expenses since these are recovered from franchisees. Advertising expenses related to franchised operations were $26,486, $43,039 and $43,940 in 2020, 2019 and 2018, respectively. Accounting for income taxes 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. 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. 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. 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’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’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. Accounts payable outsourcing The Company offers its suppliers access to an accounts payable services arrangement provided by third party financial institutions. This service allows the Company’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’s obligations, including amounts due, remain to the Company’s suppliers as stated in the supplier agreements. As of December 31, 2020 and 2019, $13,354 and $8,896, respectively, of the Company’s total accounts payable are available for this purpose and have been sold by suppliers to participating financial institutions. Share-based compensation 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. Derivative financial instruments 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’ 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. Severance payments 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. Provision for contingencies 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’s estimates of the outcomes of these matters and the Company’s lawyers’ 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. Comprehensive (loss) income 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’ equity. The Company reports foreign currency translation losses and gains, unrealized results on cash flow hedges as well as unrecognized post-retirement benefits as components of comprehensive (loss) income. Sales of property and equipment and restaurant businesses The Company recognizes the sale of property and equipment when: (a) the profit is determinable, that is, the collectability 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. 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. During fiscal years 2020, 2019 and 2018, the Company recorded results from sales of property and equipment and restaurant businesses, amounting to $201, $6,415 and $8,184, respectively, included within “Other operating (expenses) income, net”. Recent accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC 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 need to disclose qualitative and quantitative information about their leases, including characteristics and amounts recognized in the financial statements. This standard was effective for annual periods beginning after December 15, 2018, including interim periods. The Company adopted ASU 2016-02 in its first quarter of 2019 utilizing the modified retrospective method, without restatement of comparative financial information periods, and applied the package of practical expedients permitted under the transition guidance within the standard which, among other things, allowed the Company to carry forward the historical lease classification. The adoption, and the ultimate effect on the consolidated financial statements, was based on an evaluation of the contract-specific facts and circumstances. The Company adoption of the standard resulted in the recognition of lease right-of-use assets and lease liabilities of $913 million, as of January 1, 2019. The right-of-use assets and lease liabilities were recognized at the commencement date based on the present value of the remaining future minimum lease payments, which include options that are reasonably assured of being exercised. As the interest rate implicit in the Company’s leases was not readily determinable, the Company utilizes its incremental borrowing rate to discount the lease payments. Furthermore, the changes made to the consolidated balance sheet as of January 1, 2019 for the adoption of ASC 842 were as follows: Consolidated Balance Sheet Balance at December 31, 2018 Adjustments Due to ASC 842 Balance at January 1, 2019 ASSETS Non-current assets Lease right of use asset, net — 896,682 896,682 (i) LIABILITIES AND EQUITY Current liabilities Operating lease liabilities — 72,272 72,272 (ii) Non-current liabilities Accrued payroll and other liabilities 35,322 (16,404) 18,918 (iii) Operating lease liabilities — 840,814 840,814 (iv) Recent accounting pronouncements (continued) (i) Represents capitalization of operating lease right of use assets of $913,086 net of the reclassification of straight-line rent accrual of $16,404. (ii) Represents recognition of current portion of operating lease liabilities. (iii) Represents reclassification of straight-line rent accrual to lease right of use asset, net. (iv) Represents recognition of non-current portion of operating lease liabilities. The standard did not have a significant impact on the Company’s consolidated statements of income and cash flows, except for the exchange results related to lease liabilities denominated in other currencies than its functional one. The disclosure of the impact of adoption on the consolidated balance sheet and income statement, as of December 31, 2019 and for the fiscal year ended in December 31, 2019, were as follows: As of December 31, 2019 Consolidated Balance Sheet As Reported Balances Without Adoption of ASC 842 Effect of Change ASSETS Non-current assets Lease right of use asset, net 922,165 — 922,165 LIABILITIES AND EQUITY Current liabilities Operating lease liabilities 70,147 — 70,147 Non-current liabilities Accrued payroll and other liabilities 23,497 41,084 (17,587) Operating lease liabilities 861,582 — 861,582 EQUITY Retained earnings 471,149 467,560 3,589 Accumulated other comprehensive loss (519,505) (523,939) 4,434 For the fiscal year ended December 31, 2019 Consolidated Statement of Income As Reported Balances Without Adoption of ASC 842 Effect of Change Foreign currency exchange results 12,754 9,165 3,589 In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” ASU 2017-12 expanded components of fair value hedging, specifies the recognition and presentation of the effects of hedging instruments, and eliminates the separate measurement and presentation of hedge ineffectiveness. The Company adopted the new standard during this year and applied the presentation and disclosure guidance on a prospective basis. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", which modifies the measurement and recognition of expected credit losses on financial assets. The Company adopted this guidance effective January 1, 2020, prospectively. The adoption of the new standard did not have a material impact on the Company’s consolidated financial statements. The Company will continue to actively monitor the impact of the COVID-19 pandemic on expected losses. |
Acquisition of businesses
Acquisition of businesses | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisition of businesses | Acquisition of businesses LatAm Business On August 3, 2007, the Company, indirectly through its wholly-owned subsidiary ADBV, entered into a Stock Purchase Agreement with McDonald’s Corporation pursuant to which the Company completed the acquisition of the McDonald’s business in Latin America and the Caribbean for a final purchase price of $698,080. 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. In connection with this transaction, ADBV and certain subsidiaries (the “MF subsidiaries”) also entered into 20-year Master Franchise Agreements (“MFAs”) with McDonald’s Corporation which grants to the Company and its MF subsidiaries the following: i. The right to own and operate, directly or indirectly, franchised restaurants in each territory; ii. The right and license to grant sub franchises in each territory; iii. 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; iv. The right to advertise to the public that it is a franchisee of McDonald’s; v. The right and license to grant sub franchises and sublicenses of each of the foregoing rights and licenses to each MF subsidiary. The Company is required to pay to McDonald’s Corporation continuing franchise fees (Royalty fees) on a monthly basis. The amount to be paid during the first 10 years of the MFAs was equal to 5% of the US dollar equivalent of the gross product sales of each of the franchised restaurants. This percentage increased to 6% for the subsequent 5-year period and will increase to 7% during the last 5-year period of the agreement. Payment of monthly royalties is due on the seventh business day of the next calendar month. As a consequence of the negative impacts of the spread of COVID-19 on the Company’s operations, McDonald’s granted the Company a deferral of all the royalty payments due related to sales in March, April, May and July 2020 until the first half of 2021. Pursuant to the MFAs provisions, McDonald’s Corporation has the right to (a) terminate the MFAs, or (b) exercise a call option over the Company’s shares or any MF subsidiary, if the Company or any MF subsidiary (i) fails to comply with the McDonald’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. Other acquisitions During fiscal years 2020, 2019 and 2018, the Company acquired certain franchised restaurants in certain territories. Presented below is supplemental information about these acquisitions: Purchases of restaurant businesses: 2020 2019 2018 Property and equipment $ 16,756 $ 1,471 $ 413 Identifiable intangible assets 4,922 1,347 56 Goodwill 1,224 1,589 — Assumed debt — (77) — Gain on purchase of franchised restaurants (1,708) (767) — Purchase price 21,194 3,563 469 Seller financing (1,000) — — Settlement of franchise receivables (16,361) (905) (469) Net cash paid at acquisition date $ 3,833 $ 2,658 $ — Since the acquisition of the McDonald’s business in Latin America and the Caribbean, Puerto Rican franchisees had filed some lawsuits against McDonald’s Corporation and certain subsidiaries purchased by the Company. On December 28, 2019 and March 31, 2020, the Company reached confidential settlement agreements with these franchisees, finalizing all controversies and disputes among the parties. As a consequence of the agreements, during January and May 2020, the Company acquired all the restaurants pertaining to the Puerto Rican franchisees, increasing its property and equipment in $14,290. |
Accounts and notes receivable,
Accounts and notes receivable, net | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Accounts and notes receivable, net | Accounts and notes receivable, net Accounts and notes receivable, net consist of the following at year end: 2020 2019 Receivables from franchisees $ 45,427 $ 63,618 Debit and credit card receivables 38,388 43,741 Meal voucher receivables 4,857 13,017 Notes receivable 6,163 1,928 Allowance for doubtful accounts (586) (22,442) $ 94,249 $ 99,862 |
Prepaid expenses and other curr
Prepaid expenses and other current assets | 12 Months Ended |
Dec. 31, 2020 | |
Prepaid Expense and Other Assets [Abstract] | |
Prepaid expenses and other current assets | Prepaid expenses and other current assets Prepaid expenses and other current assets consist of the following at year end: 2020 2019 Prepaid taxes $ 48,781 $ 73,932 Prepaid expenses 30,175 24,266 Promotion items and related advances 20,701 19,092 Others 812 322 $ 100,469 $ 117,612 |
Miscellaneous
Miscellaneous | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Miscellaneous | Miscellaneous Miscellaneous consist of the following at year end: 2020 2019 Judicial deposits $ 36,943 $ 46,148 Tax credits 10,365 21,067 Prepaid property and equipment 5,967 7,770 Notes receivable 4,484 5,876 Rent deposits 2,991 3,196 Others 11,899 11,757 $ 72,649 $ 95,814 |
Property and equipment, net
Property and equipment, net | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment, net | Property and equipment, net Property and equipment, net consist of the following at year-end: 2020 2019 Land $ 134,148 $ 146,517 Buildings and leasehold improvements 657,652 710,046 Equipment 734,995 784,181 Total cost 1,526,795 1,640,744 Total accumulated depreciation (730,263) (679,758) $ 796,532 $ 960,986 |
Net intangible assets and goodw
Net intangible assets and goodwill | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Net intangible assets and goodwill | Net intangible assets and goodwill Net intangible assets and goodwill consist of the following at year-end: 2020 2019 Net intangible assets (i) Computer software cost $ 69,999 $ 75,224 Initial franchise fees 14,223 16,146 Reacquired franchised rights 16,884 13,296 Letter of credit fees 940 940 Others 1,000 1,000 Total cost 103,046 106,606 Total accumulated amortization (71,601) (70,345) Subtotal 31,445 36,261 Goodwill (ii) 2020 2019 Brazil 3,196 4,124 Argentina 1,276 1,585 Chile 1,047 988 Colombia 82 86 Subtotal 5,601 6,783 $ 37,046 $ 43,044 (i) Total amortization expense for fiscal years 2020, 2019 and 2018 amounted to $11,822, $11,580 and $11,310, respectively. The estimated aggregate amortization expense for each of the five succeeding fiscal years and thereafter is as follows: $12,581 for 2021, $8,017 for 2022; $2,714 for 2023; $1,768 for 2024; $1,739 for 2025; and thereafter $4,626. (ii) Related to the acquisition of franchised restaurants (Brazil, Argentina, Chile and Colombia) and non-controlling interests in Chile. |
Accrued payroll and other liabi
Accrued payroll and other liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accrued payroll and other liabilities | Accrued payroll and other liabilities Accrued payroll and other liabilities consist of the following at year end: 2020 2019 Current: Accrued payroll $ 59,772 $ 77,087 Accrued expenses 14,993 6,586 Other liabilities 4,453 2,706 $ 79,218 $ 86,379 Non-current: Phantom RSU award liability $ 2,730 $ 2,102 Deferred revenues - Initial franchise fee 4,612 5,802 Deferred income 6,075 6,392 Security deposits 5,976 6,836 Other liabilities 2,491 2,365 $ 21,884 $ 23,497 |
Short-term debt
Short-term debt | 12 Months Ended |
Dec. 31, 2020 | |
Short-term Debt [Abstract] | |
Short-term debt | Short-term debt Short-term debt consists of the following: 2020 2019 Short-term bank loans (i) — 10,794 Revolving Credit Facility (ii) — 2,500 Bank overdrafts — 2 $ — $ 13,296 (i) Short-term bank loans As of December 31, 2019, comprised two loans. In Brazil, granted by Banco Bradesco S.A, amounting to $7,454, which matured in February 2020 and the interest rate was the Interbank Market reference interest rate (known in Brazil as “CDI” Certificados de Depósitos Interbancários) plus 0.67% per year. In Argentina, granted by Banco de la Ciudad de Buenos Aires, amounting to $3,340 which matured in January 2020 and the interest rate was 54% per year. Brazilian and Argentinian loans were renewed during 2020 and cancelled in September 2020 and October 2020, respectivel y. (ii) Revolving credit facility On December 11, 2020, the Company renewed its committed revolving credit facility with JPMorgan Chase Bank, N.A (JPMorgan), for up to $25 million maturing on December 11, 2021. This revolving credit facility will permit the Company to borrow money from time to time to cover its working capital needs and for other general corporate purposes. Principal is due upon maturity. However, prepayments are permitted without premium or penalty. Each loan made under this agreement will bear interest annually at LIBOR plus 3% that will be payable on the date of any prepayment or at maturity. The obligations of the Company under the revolving credit facility are jointly and severally guaranteed by certain of the Company’s subsidiaries on an unconditional basis. The revolving credit facility includes customary covenants including, among others, restrictions on the ability of the Company, 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’s or guarantor’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. In addition, the Company is required, among others, to: maintain unrestricted cash, cash equivalents and/or marketable securities in a minimum aggregate amount equal to $50 million. ; and (ii) comply, as of the last day of each quarter during the agreement, with a consolidated net indebtedness (including interest payable) to EBITDA ratio lower than: As of December 31, 2020 9.5 As of March 31, 2021 15.25 As of June 30, 2021 5.25 As of September 30, 2021 4.25 As of December 31, 2020, the Company’s net indebtedness (including interest payable) to EBITDA ratio was 7.62 and thus it is currently in compliance with the ratio requirement . The revolving credit facility provides 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 facility and/or to declare all sums outstanding under the loan documents immediately due and payable. No amounts are due at the date of issuance of these consolidated financial statements in connection with this revolving credit facility. As of December 31, 2019, there was $2.5 million related to a previous committed revolving credit facility between ADBV and Bank of America that was not renewed after its maturity. |
Long-term debt
Long-term debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long-term debt | Long-term debt Long-term debt consists of the following at year-end: 2020 2019 2027 Notes $ 553,354 $ 265,000 2023 Notes 216,593 348,069 Finance lease obligations 5,941 5,419 Other long-term borrowings 10,199 13,284 Subtotal 786,087 631,772 Discount on 2023 Notes (1,147) (2,504) Discount on 2027 Notes (7,358) — Premium on 2023 Notes 427 937 Premium on 2027 Notes 3,206 — Deferred financing costs (4,641) (3,397) Total 776,574 626,808 Current portion of long-term debt 3,129 3,233 Long-term debt, excluding current portion $ 773,445 $ 623,575 2027 and 2023 Notes The following table presents additional information related to the 2027 and 2023 Notes (the "Notes"): Principal as of December 31, Annual interest rate Currency 2020 2019 Maturity 2027 Notes 5.875 % USD $ 553,354 $ 265,000 April 4, 2027 2023 Notes 6.625 % USD 216,593 348,069 September 27, 2023 Interest Expense (i) DFC Amortization (i) Amortization of Premium/Discount, net (i) 2020 2019 2018 2020 2019 2018 2020 2019 2018 2027 Notes $ 20,269 $ 15,569 $ 15,569 $ 402 $ 299 $ 299 $ 133 $ — $ — 2023 Notes 20,882 23,060 23,060 294 323 323 371 402 397 (i) These charges are included within "Net interest expense" in the consolidated statements of income. On September 27, 2013, the Company issued senior notes for an aggregate principal amount of $473.8 million, which are due in 2023 (the "2023 Notes"). Periodic payments of principal are not required and interest is paid semi-annually commencing on March 27, 2014. The Company incurred $3,313 of financing costs related to the cash issuance of 2023 Notes, which were capitalized as deferred financing costs ("DFC") and are being amortized over the life of the notes. 2027 and 2023 Notes (continued) 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. 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. Furthermore, on March 16, 2017, the Company launched a second 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 second cash tender offer and the accelerated amortization of the related DFC were recognized as interest expense within the consolidated statement of income. On September 15, 2020 the Company launched an offer to exchange any and all of 2023 Notes for an additional issuance of 2027 Notes that expired on October 13, 2020 (the “expiration date”). The purpose of the exchange offer was to extend the maturity profile of the Company’s long-term debt. The settlement date was on October 15, 2020. Eligible holders who validly tendered their 2023 Notes for exchange prior to September 28, 2020 (the “early participation date”), received $1,055 (expressed as whole number) of 2027 Notes per $1,000 (expressed as whole number) of 2023 Notes at the settlement date. Eligible holders who validly tendered their 2023 Notes for exchange after the early participation date, but on or prior to the expiration date received $1,005 (expressed as whole number) of 2027 Notes per $1,000 (expressed as whole number) of 2023 Notes at the settlement date. In addition, any fractional portion of the 2027 Notes less than $1,000 (expressed as whole number) and accrued and unpaid interest were paid in cash. As of September 28, 2020, the early participation date, the Company accepted to exchange $126,801 of 2023 Notes, representing 36.43% of the outstanding principal amount of the 2023 Notes. In addition, on October 13, 2020, the Company accepted to exchange $4,675, representing 1.34% of the outstanding principal amount of 2023 Notes. On October 15, 2020, the Company issued $133,668 of 2027 Notes, paid $107.1 for fractional portion and $180.1 for accrued and unpaid interest related to the early participation and $4,686 of 2027 Notes, paid $12.4 for fractional portion and $7.1 for unpaid interest related to the exchange after the early participation date . On April 2017, the Company issued senior notes for an aggregate principal amount of $265 million, which are due in 2027 (the “2027 Notes”). The proceeds from this issuance of the 2027 Notes were used to repay the Secured Loan Agreement, unwind the related derivative instruments, pay the principal and premium on the 2023 Notes (in connection with the aforementioned second tender offer) and for general purposes. In addition, on September 11, 2020, the Company issued additional 2027 Notes for an aggregate principal amount of $150 million at a price of 102.250%. The proceeds from the second issuance were used mainly to repay short-term indebtedness. Periodic payments of principal are not required, and interest is paid semi-annually commencing on October 4, 2017. The Company incurred $3,001 of financing costs related to the first issuance of 2027 Notes and $2,000 related to the second issuance, which were capitalized as DFC and are being amortized over the life of the notes. 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’s subsidiaries. The Notes and guarantees (i) are senior unsecured obligations and rank equal in right of payment with all of the Company’s and guarantors’ existing and future senior unsecured indebtedness; 2027 and 2023 Notes (continued) (ii) will be effectively junior to all of the Company’s and guarantors’ existing and future secured indebtedness to the extent of the value of the Company’s assets securing that indebtedness; and (iii) are structurally subordinated to all obligations of the Company’s subsidiaries that are not guarantors. The indenture governing the Notes limits the Company’s and its subsidiaries’ 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’s and its subsidiaries’ 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. The 2023 Notes are listed on the Luxembourg Stock Exchange and trade on the Euro MTF Market. Other required disclosure At December 31, 2020, future payments related to the Company’s long-term debt are as follows: Principal Interest Total 2021 $ 3,129 $ 47,999 $ 51,128 2022 4,126 47,796 51,922 2023 219,204 47,527 266,731 2024 2,204 32,949 35,153 2025 553 32,832 33,385 Thereafter 556,871 50,632 607,503 Total payments 786,087 259,735 1,045,822 Interest — (259,735) (259,735) Discount on 2023 Notes (1,147) — (1,147) Discount on 2027 Notes (7,358) — (7,358) Premium on 2023 Notes 427 — 427 Premium on 2027 Notes 3,206 — 3,206 Deferred financing cost (4,641) — (4,641) Long-term debt $ 776,574 $ — $ 776,574 |
Derivative instruments
Derivative instruments | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative instruments | Derivative instruments The following table presents the fair values of derivative instruments included in the consolidated balance sheets as of December 31, 2020 and 2019: Assets Liabilities Type of Derivative Balance Sheets Location 2020 2019 Balance Sheets Location 2020 2019 Derivatives designated as hedging instruments Cash Flow hedge Forward contracts Other receivables $ — $ 259 Accrued payroll and other liabilities $ (1,264) $ (532) Cross-currency interest rate swap Derivative instruments 86,534 37,219 Derivative instruments (6,194) (8,179) Call spread Derivative instruments 21,858 20,609 Derivative instruments — — Coupon-only swap Derivative instruments 3,591 — Derivative instruments — (5,326) Subtotal 111,983 58,087 (7,458) (14,037) Derivatives not designated as hedging instruments Forward contracts Other receivables — 20 Accrued payroll and other liabilities — — Call spread Derivative instruments 3,798 — Derivative instruments — — Coupon-only swap Derivative instruments 202 — Derivative instruments (5,017) — Call Spread + Coupon-only swap Derivative instruments 6,620 — Derivative instruments (8,050) — Subtotal 10,620 20 (13,067) — Total derivative instruments $ 122,603 $ 58,107 $ (20,525) $ (14,037) Derivatives designated as hedging instruments Cash flow hedge Forward contracts 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, 2020, the Company had forward contracts outstanding with a notional amount of $20,276 that mature during 2021. The Company made net collections totaling $1,757, $711 and $75 during fiscal years 2020, 2019 and 2018, respectively, as a result of the net settlements of these derivatives. Cross-currency interest rate swap The Company entered into four cross-currency interest rate swap agreements to hedge all the variability 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 and October 2020. The following table presents information related to the terms of the agreements: Derivatives designated as hedging instruments (continued) Cash flow hedge (continued) Cross-currency interest rate swap (continued) Bank Payable Receivable Interest payment dates Maturity Currency Amount Interest rate Currency Amount Interest rate JP Morgan Chase Bank, N.A. BRL 108,000 13 % $ 35,400 4.38 % March 31/ September 30 September 2023 JP Morgan Chase Bank, N.A. BRL 98,670 13 % $ 30,000 6.02 % March 31/ September 30 September 2023 Citibank N.A. BRL 94,200 13 % $ 30,000 6.29 % March 31/ September 30 September 2023 Citibank N.A. BRL 112,738 13 % $ 20,049 8.08 % March 31/ September 30 September 2023 During April 2017, the Company’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 certain intercompany loan payables nominated in US dollar. The following table presents information related to the terms of the agreements: Bank Payable Receivable Interest payment dates Maturity Currency Amount Interest rate Currency Amount Interest rate BAML (i) BRL 156,250 13.64 % $ 50,000 6.91 % March 31/ September 30 April 2027 Banco Santander S.A. BRL 155,500 13.77 % $ 50,000 6.91 % June 30/ December 31 September 2023 (i) Bank of America Merrill Lynch Banco Múltiplo S.A. The Company paid $4,031, $8,692 and $10,671 of net interest during the fiscal years ended December 31, 2020, 2019 and 2018, respectively. Call spread During April 2017, the Company’s Brazilian subsidiary entered into two call spread agreements in order to hedge all variability in a portion (50%) of the principal of certain 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. Derivatives designated as hedging instruments (continued) Cash flow hedge (continued) Call spread (continued) The following table presents information related to the terms of the agreements: Bank Nominal Amount Strike price Maturity Currency Amount Call option written Call option bought Citibank S.A. $ 50,000 4.49 3.11 September 2023 JP Morgan S.A. $ 50,000 5.20 3.13 April 2027 Coupon-only swap During April 2017, the Company’s Brazilian subsidiary entered into two coupon-only swap agreements in order to hedge all the variability in a portion (50%) in the interest payable related to the intercompany loan aforementioned. The following table presents information related to the terms of the agreements: Bank Payable Receivable Interest payment dates Maturity Currency Amount Interest rate Currency Amount Interest rate Citibank S.A. BRL 155,500 11.08 % $ 50,000 6.91 % June 30/ December 31 September 2023 JP Morgan S.A. BRL 156,250 11.18 % $ 50,000 6.91 % March 31/ September 30 April 2027 The Company paid $197, $2,036 and $2,900 of net interest during the fiscal years ended December 31, 2020, 2019 and 2018, respectively, related to these agreements. Additional disclosures The following table present the pretax amounts affecting income and other comprehensive income for the fiscal years ended December 31, 2020, 2019 and 2018 for each type of derivative relationship: Derivatives designated as hedging instruments (continued) Cash flow hedge (continued) Additional disclosures (continued) Derivatives in Cash Flow Gain (Loss) Recognized in Accumulated OCI on Derivative (Gain) Loss Reclassified from Accumulated OCI into (loss) income (i) 2020 2019 2018 2020 2019 2018 Forward contracts $ 904 $ (10) $ 731 $ (1,895) $ (711) $ (75) Cross-currency interest rate swaps 55,124 (8,506) 11,279 (37,376) 2,056 (18,888) Call Spread 6,758 4,377 4,034 (18,153) (3,561) (15,421) Coupon-only swap 8,604 (1,889) 1,864 (421) 1,860 2,415 Total $ 71,390 $ (6,028) $ 17,908 $ (57,845) $ (356) $ (31,969) (i) 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: Adjustment to: 2020 2019 2018 Foreign currency exchange results $ 40,353 $ 6,346 $ 28,588 Net interest expense (2,977) (8,402) (9,700) Total $ 37,376 $ (2,056) $ 18,888 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. Derivatives not designated as hedging instruments In October 2020, the Company’s Brazilian subsidiary enters into certain derivatives that are not designated as hedge accounting, therefore the changes in the fair value of these derivatives are recognized immediately in earnings, within "Gain (loss) from derivative instruments". These agreements are: – A call spread with JPMorgan. It consists of a combination of two call options likewise the ones previously mention. This agreement matures in April 2027. The following table presents information related to the terms of the agreements: Derivatives not designated as hedging instruments (continued) Nominal Amount Strike price Currency Amount Call option written Call option bought $ 30,000 8.20 5.62 – A coupon-only swap with JP Morgan that matures in April 2027. The following table presents information related to the terms of the agreements: Payable Receivable Interest payment dates Currency Amount Interest rate (i) Currency Amount Interest rate BRL 168,690 CDI plus 2.42% $ 30,000 5.46 % April 30/ October 31 (i) “CDI” Certificados de Depósitos Interbancários – A combination of call spread + coupon only swap into one agreement with Itaú Unibanco S.A, that matures in April 2027. The following tables present information related to the terms of the agreements: Nominal Amount Strike price Currency Amount Call option written Call option bought $ 50,000 8.20 5.62 Payable Receivable Interest payment dates Currency Amount Interest rate (i) Currency Amount Interest rate BRL 281,150 CDI plus 2.47% $ 50,000 5.46% April 30/ October 31 (i) “CDI” Certificados de Depósitos Interbancários In addition, during the fiscal years ended December 31, 2020, 2019 and 2018, the Company entered into certain forward contracts that generated net (payments) and collections for $(39), $787 and ($81). |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | Leases The Company leases locations through ground leases (the Company leases the land and owns the building) and through improved leases (the Company leases land and buildings). The operating leases are mainly related to restaurant and dessert center locations. The average of lease’s terms is about 15 years and, in many cases, include renewal options provided by the agreement or government’s regulations, as there are reasonably certain to be exercised. Typically, renewal options are considered reasonably assured of being exercised if the associated asset lives of the building or leasehold improvements exceed the initial lease term, and the sales performance of the restaurant remains strong. Therefore, its associated payments are included in the measurement of the right-of-use asset and lease liability. Although, certain leases contain purchase options, is not reasonably certain that the Company will exercise them. In addition, many agreements include escalations amounts that vary by reporting unit, for example, 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’s gross sales. The lease agreements do not contain any material residual value guarantees or material restrictive covenants. Furthermore, the Company is the lessee under non-cancelable leases covering certain offices and warehouses. The right-of-use assets and lease liabilities are recognized using the present value of the remaining future minimum lease payments discounted by the Company’s incremental borrowing rate. The Company has elected not to separate non-lease components from lease components in its lessee portfolio. For most locations, the Company is obliged for the related occupancy costs, such as maintenance. In addition, 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 th quarterly payment. On December 22, 2017, the Company signed an amendment, 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. In order to mitigate the negative impact of COVID-19 on its financial results, the Company has been renegotiating terms and conditions with several lessors. The Company decided not to evaluate whether the potential concessions provided by the lessors are lease modifications under ASU No. 2016-02, Leases (Topic 842) according to the interpretive guidance issued by the FASB staff in April 2020. At December 31, 2020, maturities of lease liabilities under existing operating leases are: Restaurant Other Total (i) 2021 $ 122,497 $ 5,705 $ 128,202 2022 117,025 4,221 121,246 2023 112,715 3,199 115,914 2024 109,398 2,747 112,145 2025 104,984 2,601 107,585 Thereafter 822,563 7,667 830,230 Total lease payments $ 1,389,182 $ 26,140 $ 1,415,322 Lease discount (605,881) Operating lease liability $ 809,441 (i) The Company has certain leases subject to index adjustments. As part of the adoption of ASC 842, the Company used the effective index rate at transition date in its disclosure and calculation of the lease liability. However, for leases entered into after January 1, 2019, the inflation index rate will be used to calculate the lease liability only when a lease modification occurs. The Company maintains a few finance leases agreements, previously classified as capital leases. As of December 31, 2020 and 2019 the obligation amounts to $5,941 and $5,419 respectively, included within "Long-term debt" in the Consolidated Balance Sheet. The following table is a summary of the Company´s components of lease cost for fiscal years 2020, 2019 and 2018: Lease Expense Statements of Income Location 2020 2019 2018 Operating lease expense - Minimum rentals: Company-operated restaurants Occupancy and other operating expenses $ (69,151) $ (104,236) $ (105,358) Franchised restaurants Franchised restaurants - occupancy expenses (23,510) (34,727) (30,970) General and administrative General and administrative expenses (7,062) (7,614) (7,610) Subtotal (99,723) (146,577) (143,938) Variable lease expense - Contingent rentals based on sales: Company-operated restaurants Occupancy and other operating expenses (26,153) (29,562) (33,921) Franchised restaurants Franchised restaurants - occupancy expenses (13,248) (12,878) (14,595) Subtotal (39,401) (42,440) (48,516) Total lease expense $ (139,124) $ (189,017) $ (192,454) Other information 2020 Weighted-average remaining lease term (years) Operating leases 8 Weighted-average discount rate Operating leases 6.6 % |
Leases | Leases The Company leases locations through ground leases (the Company leases the land and owns the building) and through improved leases (the Company leases land and buildings). The operating leases are mainly related to restaurant and dessert center locations. The average of lease’s terms is about 15 years and, in many cases, include renewal options provided by the agreement or government’s regulations, as there are reasonably certain to be exercised. Typically, renewal options are considered reasonably assured of being exercised if the associated asset lives of the building or leasehold improvements exceed the initial lease term, and the sales performance of the restaurant remains strong. Therefore, its associated payments are included in the measurement of the right-of-use asset and lease liability. Although, certain leases contain purchase options, is not reasonably certain that the Company will exercise them. In addition, many agreements include escalations amounts that vary by reporting unit, for example, 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’s gross sales. The lease agreements do not contain any material residual value guarantees or material restrictive covenants. Furthermore, the Company is the lessee under non-cancelable leases covering certain offices and warehouses. The right-of-use assets and lease liabilities are recognized using the present value of the remaining future minimum lease payments discounted by the Company’s incremental borrowing rate. The Company has elected not to separate non-lease components from lease components in its lessee portfolio. For most locations, the Company is obliged for the related occupancy costs, such as maintenance. In addition, 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 th quarterly payment. On December 22, 2017, the Company signed an amendment, 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. In order to mitigate the negative impact of COVID-19 on its financial results, the Company has been renegotiating terms and conditions with several lessors. The Company decided not to evaluate whether the potential concessions provided by the lessors are lease modifications under ASU No. 2016-02, Leases (Topic 842) according to the interpretive guidance issued by the FASB staff in April 2020. At December 31, 2020, maturities of lease liabilities under existing operating leases are: Restaurant Other Total (i) 2021 $ 122,497 $ 5,705 $ 128,202 2022 117,025 4,221 121,246 2023 112,715 3,199 115,914 2024 109,398 2,747 112,145 2025 104,984 2,601 107,585 Thereafter 822,563 7,667 830,230 Total lease payments $ 1,389,182 $ 26,140 $ 1,415,322 Lease discount (605,881) Operating lease liability $ 809,441 (i) The Company has certain leases subject to index adjustments. As part of the adoption of ASC 842, the Company used the effective index rate at transition date in its disclosure and calculation of the lease liability. However, for leases entered into after January 1, 2019, the inflation index rate will be used to calculate the lease liability only when a lease modification occurs. The Company maintains a few finance leases agreements, previously classified as capital leases. As of December 31, 2020 and 2019 the obligation amounts to $5,941 and $5,419 respectively, included within "Long-term debt" in the Consolidated Balance Sheet. The following table is a summary of the Company´s components of lease cost for fiscal years 2020, 2019 and 2018: Lease Expense Statements of Income Location 2020 2019 2018 Operating lease expense - Minimum rentals: Company-operated restaurants Occupancy and other operating expenses $ (69,151) $ (104,236) $ (105,358) Franchised restaurants Franchised restaurants - occupancy expenses (23,510) (34,727) (30,970) General and administrative General and administrative expenses (7,062) (7,614) (7,610) Subtotal (99,723) (146,577) (143,938) Variable lease expense - Contingent rentals based on sales: Company-operated restaurants Occupancy and other operating expenses (26,153) (29,562) (33,921) Franchised restaurants Franchised restaurants - occupancy expenses (13,248) (12,878) (14,595) Subtotal (39,401) (42,440) (48,516) Total lease expense $ (139,124) $ (189,017) $ (192,454) Other information 2020 Weighted-average remaining lease term (years) Operating leases 8 Weighted-average discount rate Operating leases 6.6 % |
Franchise arrangements
Franchise arrangements | 12 Months Ended |
Dec. 31, 2020 | |
Franchise Arrangements [Abstract] | |
Franchise arrangements | Franchise arrangementsIndividual 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’s franchisees are granted the right to operate a restaurant using the McDonald’s system and, in most cases, the use of a restaurant facility, generally for a period of 20 years. At the end of the 20-year franchise arrangement, the Company maintains control of the underlying real estate and building and can either enter into a new franchise arrangement with the existing franchisee or a different franchisee, or close the restaurant. 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’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). At December 31, 2020 and 2019, net property and equipment under franchise arrangements totaled $92,354 and $123,832, respectively (including land for $24,661 and $32,373, respectively). Revenues from franchised restaurants for fiscal years 2020, 2019 and 2018 consisted of: 2020 2019 2018 Rent (i) $ 89,123 $ 145,860 $ 148,094 Initial fees (ii) (iii) 203 287 195 Royalty fees (iv) 275 643 673 Total $ 89,601 $ 146,790 $ 148,962 (i) Includes rental income of own buildings and subleases. As of December 31, 2020 and 2019 the subleases rental income amounted to $74,723 and $114,459, respectively. (ii) Presented net of initial fees owed to McDonald’s Corporation for $493, $1,456 and $1,323 in 2020, 2019 and 2018, respectively. (iii) On January 1, 2018, the Company adopted ASC 606 “Revenue Recognition - Revenue from Contracts with Customers”. As such, initial franchise fees received are deferred over the term of the franchise agreement. See Note 3 Revenue Recognition, for details. (iv) Presented net of royalties fees owed to McDonald’s Corporation for $36,554, $57,709 and $57,733 in 2020, 2019 and 2018, respectively. As a consequence of the negative impacts of the spread of COVID-19 in the operations, McDonald’s granted a deferral of all the royalties payments due to sales in March, April, May, June and July 2020 until the first half of 2021. At December 31, 2020, future minimum rent payments due to the Company under existing franchised agreements are: Owned sites Leased sites Total 2021 $ 3,312 $ 47,661 $ 50,973 2022 2,648 42,458 45,106 2023 2,413 36,985 39,398 2024 2,321 31,915 34,236 2025 2,315 28,547 30,862 Thereafter 9,754 135,349 145,103 Total $ 22,763 $ 322,915 $ 345,678 |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes The Company’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. Statutory tax rates in the countries in which the Company operates for fiscal years 2020, 2019 and 2018 were as follows: 2020 2019 2018 Puerto Rico 18.5% 18.5% 20.0% Curacao 22.0% 22.0% 22.0% USVI 22.5% 22.5% 22.5% Aruba, Panama, Uruguay and Netherlands 25.0% 25.0% 25.0% Ecuador 25.0% 25.0% 28.0% Chile 27.0% 27.0% 27.0% Martinique, French Guyana and Guadeloupe 28.0% 31.0% 33.3% Peru 29.5% 29.5% 29.5% Trinidad and Tobago 30.0% 25.0% 25.0% Argentina Costa Rica and México 30.0% 30.0% 30.0% Colombia 32.0% 33.0% 37.0% Brazil and Venezuela 34.0% 34.0% 34.0% Income tax expense for fiscal years 2020, 2019 and 2018 consisted of the following: 2020 2019 2018 Current income tax expense $ 17,061 $ 46,811 $ 47,488 Deferred income tax expense 471 (7,974) 648 Income tax expense $ 17,532 $ 38,837 $ 48,136 Income tax expense for fiscal years 2020, 2019 and 2018, differed from the amounts computed by applying the Company’s weighted-average statutory income tax rate to pre-tax income (loss) as a result of the following: 2020 2019 2018 Pre-tax (loss) income $ (131,854) $ 118,953 $ 85,169 Weighted-average statutory income tax rate (i) 22.9 % 36.6 % 42.7 % Income tax (benefit) expense at weighted-average statutory tax rate on pre-tax income (loss) (30,226) 43,488 36,354 Permanent differences : Change in valuation allowance (ii) 2,958 (24,864) (24,307) Expiration and changes in tax loss carryforwards (iii) 13,820 17,799 18,599 Venezuelan remeasurement and inflationary impacts (iv) 1,682 1,743 16,857 Non-taxable income and non-deductible expenses 12,092 7,545 10,085 Tax benefits (1,701) (9,667) (11,403) Income taxes withholdings on intercompany transactions (v) 6,515 5,005 7,723 Differences including exchange rate, inflation adjustment and filing differences 6,684 (5,291) (2,574) Alternative Taxes 2,054 658 (1,283) Others (vi) 3,654 2,421 (1,915) Income tax expense $ 17,532 $ 38,837 $ 48,136 (i) 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. (ii) Comprises net changes in valuation allowances for the year, mainly related to net operating losses. (iii) Expiration of loss tax carryforwards are mainly generated by Caribbean division. (iv) Comprises changes in valuation allowance during 2020, 2019 and 2018 for $43,249, $983 and $(304), respectively. (v) Comprises income tax withheld on the payment of interest on intercompany loans. (vi) Mainly comprises income tax effects over intercompany transactions which are eliminated for consolidation purposes. The tax effects of temporary differences and carryforwards that comprise significant portions of deferred tax assets and liabilities as of December 31, 2020 and 2019 are presented below: 2020 2019 Tax loss carryforwards (i) $ 186,781 $ 144,759 Purchase price allocation adjustment 12,247 15,158 Property and equipment, tax inflation 31,080 36,690 Other accrued payroll and other liabilities 29,622 33,065 Share-based compensation 1,719 2,062 Provision for contingencies, bad debts and obsolescence 4,621 2,534 Other deferred tax assets (ii) 75,121 56,927 Other deferred tax liabilities (iii) (47,593) (32,280) Property and equipment - difference in depreciation rates (7,902) (418) Valuation allowance (iv) (235,196) (194,426) Net deferred tax asset $ 50,500 $ 64,071 (i) As of December 31, 2020, the Company and its subsidiaries has accumulated net operating losses amounting to $656,119. The Company has net operating losses amounting to $145,127, expiring between 2021 and 2025. In addition, the Company has net operating losses amounting to $317,650 expiring after 2025 and net operating losses amounting to $193,342 that do not expire. Changes in tax loss carryforwards for the year relate to the creation of NOLs, mainly in Venezuela. (ii) 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 31, 2020, this item includes: difference in depreciation of leases (related to differences between ASC842 and local tax regulation) for $51,772 in Brazil and provision for regular expenses for $10,098 in Brazil, Colombia and Argentina. For the Fiscal year ended December 31, 2019 this item includes difference in depreciation of leases in Brazil for $30,524, provision for regular expenses for $10,376, in Brazil, Mexico and Colombia and bad debt reserve in Puerto Rico for $4,218. (iii) Primarily related to leases contracts (related to differences between ASC842 and local tax regulation). (iv) 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. The total amount of $50,500 for the year ended December 31, 2020, is presented in the consolidated balance sheet as non-current asset and non-current liability amounting to $55,567 and $5,067, respectively. The total amount of $64,071 for the year ended December 31, 2019, is presented in the consolidated balance sheet as non-current asset and non-current liability amounting to $68,368 and $4,297, respectively. 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 $187,215 a t December 31, 2020. 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. As of December 31, 2020, and 2019, the Company has not identified unrecognized tax benefits that would favorably affect the effective tax rate if resolved in the Company’s favor. 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 2014. As of December 31, 2020, there are certain matters related to the interpretation of income tax laws which could be challenged by tax authorities in an amount of $169 million, related to assessments for the fiscal years 2009 to 2015. 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. 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. |
Share-based compensation
Share-based compensation | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-based compensation | Share-based compensation 2011 Equity Incentive Plan 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’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’s Board of Directors. The maximum number of shares that may be issued under the 2011 Plan is 2.5% of the Company’s total outstanding class A and class B shares immediately following its initial public offering 2011. 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 2019 (from 2015 to 2019 only restricted share units). From 2011 to 2018, 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. The 2019 award vested on May 10, 2020. 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’s class A shares at the grant date. 2011 Equity Incentive Plan (continued) 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 was remeasured on a monthly basis until settlement. This liability award plan expired on May 2020. The Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in substance, multiple awards. The Company recognized stock-based compensation expense related to this award in the amount of $1,564, $1,884 and $3,661 during fiscal years 2020, 2019 and 2018, respectively. Stock-based compensation expense is included within “General and administrative expenses” in the consolidated statements of income. The Company recognized $(244), $(422) and $(175) of related income tax expense during fiscal years 2020, 2019 and 2018, respectively. Stock Options The following table summarizes the activity of stock options during fiscal years 2020, 2019 and 2018: Units Weighted-average strike price Weighted-average grant-date fair value Outstanding at December 31, 2017 634,489 14.28 4.28 Expired (i) (143,416) 21.20 5.89 Outstanding at December 31, 2018 491,073 12.26 3.81 Expired (i) (216,633) 14.35 5.13 Outstanding at December 31, 2019 274,440 10.62 2.77 Expired (i) (97,672) 14.31 4.19 Outstanding at December 31, 2020 176,768 8.58 1.98 Exercisable at December 31, 2020 176,768 8.58 1.98 (i) As of December 31, 2020, 2019 and 2018, additional paid-in capital included $409, $1,111 and $844, respectively, related to expired stock options. The following table provides a summary of outstanding stock options at December 31, 2020: Vested (i) Number of units outstanding 176,768 Weighted-average grant-date fair market value per unit 1.98 Total grant-date fair value 350 Weighted-average accumulated percentage of service 100 % Stock-based compensation recognized in Additional paid-in capital 350 (i) Related to exercisable awards. Restricted Share Units The following table summarizes the activity of restricted share units during fiscal years 2020, 2019 and 2018: Units Weighted-average grant-date fair value Outstanding at December 31, 2017 1,736,845 6.65 2018 annual grant 520,393 8.50 Partial vesting (534,589) 6.01 Forfeitures (117,600) 7.24 Outstanding at December 31, 2018 1,605,049 7.41 2019 annual grant 35,000 8.00 Partial vesting of 2014 grant (38,222) 8.58 Partial vesting of 2015 grant (115,634) 6.33 Partial vesting of 2016 grant (134,501) 4.70 Partial vesting of 2017 grant (174,232) 9.20 Forfeitures (239,621) 7.74 Outstanding at December 31, 2019 937,839 7.50 Partial vesting of 2015 grant (101,928) 6.33 Partial vesting of 2016 grant (114,045) 4.70 Partial vesting of 2017 grant (67,606) 9.20 Partial vesting of 2018 grant (163,695) 8.50 Vesting of 2019 grant (35,000) 8.00 Forfeitures (4,367) 7.75 Outstanding at December 31, 2020 451,198 7.80 Exercisable at December 31, 2020 — — The total fair value of restricted share units vested during 2020, 2019 and 2018 was $3,475, $3,295 and $3,214, respectively. As of December 31, 2020 the Company issued 472,130 Class A shares. Therefore, accumulated recorded compensation expense totaling $3,399 w as reclassified from “Additional paid-in capital” to “Common Stock” upon issuance. As of December 31, 2020, there were 10,392, 3,032 and $2,775 Class A shares, amounting to $76, $19 and $17, pending of issuance in connection with the partial vestings 2020, 2019 and 2018, respectively. The following table provides a summary of outstanding restricted share units at December 31, 2020: Restricted Share Units (continued) Number of units outstanding (i) 451,198 Weighted-average grant-date fair market value per unit 7.80 Total grant-date fair value 3,519 Weighted-average accumulated percentage of service 80.44 % Stock-based compensation recognized in Additional paid-in capital 2,831 Compensation expense not yet recognized (ii) 688 (i) Related to awards that will vest between fiscal years 2021 and 2023. (ii) Expected to be recognized in a weighted-average period of 0.7 years. Phantom RSU Award In May 2019, the Company implemented a new long-term incentive plan (called Phantom RSU Award) to reward employees giving them the opportunity to share the success of the Company in the creation of value for its shareholders. In accordance with this plan, the Company granted units (called “Phantom RSU”) to certain employees, pursuant to which they are entitled to receive, when vested, a cash payment equal to the closing price of one Class A share on the respective day in which this benefit is due and the corresponding dividends per-share (if any) formally declared and paid during the service period. The award has two types of grant. Phantom RSU type one has 465,202 units which vest over a requisite service period of five years as follows: 40% at the second anniversary of the date of grant and 20% at each of the following three years. Phantom RSU type two has 1,207,455 units which vest 100% at the fifth anniversary from the date of grant. However, in the event of death, disability or retirement of the employee, any unvested portion of the annual award will be fully vested. The Company recognizes compensation expense related to these benefits on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in substance, multiple awards. The grant-date stock price of both types of grants was $6.78. On December 2020, the Company implemented a new Phantom RSU type two with 65,440 units at a price of $4.89 that vest 100% at May 2021. The total compensation cost as of December 31, 2020 and 2019, amounts to $1,232 and $2,102 respectively, which has been recorded under “General and administrative expenses” within the consolidated statement of income. The accrued liability is remeasured at the end of each reporting period until settlement. The following table summarizes the activity under the plan as of December 31, 2020: Units Outstanding at December 31, 2019 1661820 Grant 2020 65,440 Partial vesting of 2019 Grant (5,162) Forfeitures (31,614) Outstanding at December 31, 2020 1,690,484 Exercisable at December 31, 2020 — Phantom RSU Award (continued) Total Non-vested (i) Number of units outstanding 1,690,484 Current share price 5.03 Total fair value of the plan 8,503 Weighted-average accumulated percentage of service 39.00 % Accrued liability (ii) 3,316 Compensation expense not yet recognized (iii) 5,187 (i) Related to awards that will vest between May 2021 and May 2024. (ii) Presented within “Accrued payroll and other liabilities” in the Company’s current and non current liabilities balance sheet. (iii) Expected to be recognized in a weighted-average period of 2.93 years. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies Commitments The MFAs require the Company and its MF subsidiaries, among other obligations: (i) to agree with McDonald’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; (ii) 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. Nevertheless, on occasions McDonald’s provides support in royalties in order to encourage the Company´s growth plan; (iii) to commit to funding a specified Strategic Marketing Plan; that includes the expenditure of 5% of the Company gross sales on Advertising and Promotion activities. (iv) to own (or lease) directly or indirectly, the fee simple interest in all real property on which any franchised restaurant is located; and (v) 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. As a consequence of the negative impacts of the spread of COVID-19 on the Company’s operations, during 2020, McDonald’s granted the Company a deferral of all the royalty payments due related to sales in March, April, May, June and July 2020 until the first half of 2021; a reduction in the advertising and promotion spending requirements from 5% to 4% for the annual period 2020 and the withdrawal of the previously-approved 2020-2022 restaurant opening plan and reinvestment plan, agreeing in place of this obligation a plan for 2021 only. In addition, McDonald’s provided the Company with a growth support which is expected to result in a consolidated royalty effective rate of about 5.3% in 2021. For the three-month periods ended from March 31, 2020 to December 31, 2020, the Company was not in compliance with the ratio requirements mentioned in point (v) above. The ratios for the period mentioned, were as follows: Commitments (continued) Fixed Charge Coverage Ratio Leverage Ratio March 31, 2020 1.74 4.15 June 30, 2020 1.35 5.37 September 30, 2020 1.15 6.31 December 31, 2020 0.96 7.71 However, McDonald’s Corporation granted the Company limited waivers from June 30, 2020 through and including December 31, 2021, during which time the Company is not required to comply with the financial ratios set forth in the MFA. After December 31, 2021, if the Company remains non-compliant with the financial requirements and is unable to obtain an extension of the waiver or to comply with the original commitments under the MFA, it could be in material breach. A breach of the MFA would give McDonald’s Corporation certain rights, including the ability to acquire all or portions of the business. Notwithstanding the foregoing, the Company does not expect any material adverse effect to its business, results of operations, financial condition or cash flows as a result of this situation. In addition, ADBV maintains standby letters of credit with an aggregate drawing amount of $80 million in favor of McDonald’s Corporation as collateral for the obligations assumed under the MFAs. The letters of credit were issued by Credit Suisse amounting to $45 million, Itaú Unibanco S.A. (Itaú) amounting to $15 million and JPMorgan amounting to $20 million. They 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. The letters of credit contain a limited number of customary affirmative and negative covenants, including a maximum indebtedness to EBITDA ratio of 4.0 for Credit Suisse and Itaú letters and 4.5 for JPMorgan letter. As of December 31, 2020, ADBV was not in compliance with these ratios. However, ADBV received waivers from each of its lenders under these letters of credit if any event of default occurs for compliance with the applicable ratios. If ADBV is unable to comply with the conditions of the waivers or to obtain further waivers for future non-compliance with any terms of the letters of credit and its lenders terminate the letters of credit, we would be in breach of our obligations under the MFAs, if ADBV cannot replace the instrument or use cash as collateral. Provision for contingencies 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 31, 2020 and 2019, the Company maintains a provision for contingencies, net of judicial deposits, amounting to $26,948 and $26,158, respectively, presented as follow: $2,024 and $2,035 as a current liability and $24,924 and $24,123 as a non-current liability, respectively. The breakdown of the provision for contingencies is as follows: Provision for contingencies (continued) Description Balance at beginning of period Accruals, net Settlements Reclassifications and increase of judicial deposits Translation Balance at end of period Year ended December 31, 2020: Tax contingencies in Brazil (i) $ 10,595 $ 2,040 $ — $ 435 $ (2,408) $ 10,662 Labor contingencies in Brazil (ii) 16,839 12,087 (10,499) — (3,913) 14,514 Other (iii) 11,404 1,203 (1,421) — (1,279) 9,907 Subtotal 38,838 15,330 (11,920) 435 (7,600) 35,083 Judicial deposits (iv) (12,680) — — 1,626 2,919 (8,135) Provision for contingencies $ 26,158 $ 15,330 $ (11,920) $ 2,061 $ (4,681) $ 26,948 Year ended December 31, 2019: Tax contingencies in Brazil (i) $ 9,497 $ 1,455 $ — $ — $ (357) $ 10,595 Labor contingencies in Brazil (ii) 21,108 12,916 (16,068) — (1,117) 16,839 Other (iii) 11,462 3,070 (1,700) — (1,428) 11,404 Subtotal 42,067 17,441 (17,768) — (2,902) 38,838 Judicial deposits (iv) (13,558) — — 354 524 (12,680) Provision for contingencies $ 28,509 $ 17,441 $ (17,768) $ 354 $ (2,378) $ 26,158 Year ended December 31, 2018: Tax contingencies in Brazil (i) $ 9,324 $ 1,805 $ — $ — $ (1,632) $ 9,497 Labor contingencies in Brazil (ii) 21,061 20,785 (17,718) — (3,020) 21,108 Other (iii) 15,646 1,405 (1,984) — (3,605) 11,462 Subtotal 46,031 23,995 (19,702) — (8,257) 42,067 Judicial deposits (iv) (18,075) — — 1,843 2,674 (13,558) Provision for contingencies $ 27,956 $ 23,995 $ (19,702) $ 1,843 $ (5,583) $ 28,509 (i) In 2020, 2019 and 2018, it includes mainly CIDE. (ii) It primarily relates to dismissals in the normal course of business. (iii) It relates to tax and labor contingencies in other countries and civil contingencies in all the countries. (iv) It primarily relates to judicial deposits the Company was required to make in connection with the proceedings in Brazil. As of December 31, 2020, there are certain matters related to the interpretation of tax, labor and civil laws for which there is a possibility that a loss may have been incurred in accordance with ASC 450-20-50-4 within a range of $226 million and $249 million. During previous years, there was a lawsuit filed by several Puerto Rican franchisees against McDonald’s Corporation and certain subsidiaries purchased by the Company during the acquisition of the LatAm business (“the Puerto Rican franchisees lawsuit”). The claim sought declaratory judgment and damages in the aggregate amount of $66.7 million plus plaintiffs’ attorney fees. During the years the lawsuit was in force, the Company believed that the probability of loss was remote. On December 28, 2019 and March 31, 2020, the Company reached confidential settlement agreements with Puerto Rican franchisees finalizing all controversies and disputes among the parties. All corresponding judicial documentation was filed to end the proceedings and the case was successfully dismissed by the Court, finalizing all controversies and disputes among the parties. Provision for contingencies (continued) Additionally, during 2014, another franchisee filed a complaint (“the related Puerto Rican franchisee lawsuit”) against the Company and McDonald’s USA, LLC (a wholly owned subsidiary of McDonald’s Corporation), asserting a very similar claim to the one filed in the Puerto Rican franchisees lawsuit. The claim sought declaratory judgment and damages in the amount of $30 million plus plaintiffs’ attorney fees. During December 2019, the franchisee reached a Confidential Settlement Agreement with the Company finalizing all controversies and disputes among them. Furthermore, the Puerto Rico Owner Operator’s Association (“PROA”), an association integrated by the Company’s franchisees that met 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 (“the PROA claim”) against the Company and other third party defendants, in the amount of $31 million. During the years the lawsuit was in force, the Company believed that the probability of loss was remote. On December 28, 2019 and March 31, 2020 the Company reached confidential settlement agreements with Puerto Rican franchisees, sole members of PROA, finalizing all controversies and disputes among the parties. All corresponding judicial documentation was filed to end this proceeding and the case was successfully dismissed by the Court. |
Disclosures about fair value of
Disclosures about fair value of financial instruments | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Disclosures about fair value of financial instruments | Disclosures about fair value of financial instruments 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. 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. The three levels of the fair value hierarchy as defined by the guidance are as follows: Level 1 : 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. Level 2 : 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. 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. Level 3 : 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’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. 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’s derivatives are valued based upon quotes obtained from counterparties to the agreements and are designated as Level 2. The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2020 and 2019: Quoted Prices in Significant Other Significant Balance as of Balance as of 2020 2019 2020 2019 2020 2019 2020 2019 Assets Cash equivalents $ 106,856 $ 49,038 $ — $ — $ — $ — $ 106,856 $ 49,038 Short-term Investments — 25 — — — — — 25 Derivatives — — 122,603 58,107 — — 122,603 58,107 Total Assets $ 106,856 $ 49,063 $ 122,603 $ 58,107 $ — $ — $ 229,459 $ 107,170 Liabilities Derivatives $ — — 20,525 $ 14,037 $ — $ — 20,525 14,037 Total Liabilities $ — $ — $ 20,525 $ 14,037 $ — $ — $ 20,525 $ 14,037 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. Certain financial assets and liabilities not measured at fair value At December 31, 2020, the fair value of the Company’s long-term debt was estimated at $832,753, compared to a carrying amount of $788,521. 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. Non-financial assets and liabilities measured at fair value on a nonrecurring basis 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 31, 2020, 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. |
Certain risks and concentration
Certain risks and concentrations | 12 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Certain risks and concentrations | Certain risks and concentrationsThe Company’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’s franchise base. All the Company’s operations are concentrated in Latin America and the Caribbean. As a result, the Company’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’s Venezuelan operations. |
Segment and geographic informat
Segment and geographic information | 12 Months Ended |
Dec. 31, 2020 | |
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, geographical 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 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 (“NOLAD”), consisting of Costa Rica, Mexico and Panama; and the South Latin America division (“SLAD”), consisting of Argentina, Chile, Ecuador, Peru and Uruguay. The accounting policies of the segments are the same as those described in Note 3. The following table presents information about profit or loss and assets for each reportable segment: For the fiscal years ended December 31, 2020 2019 2018 Revenues: Brazil $ 862,748 $ 1,385,566 $ 1,345,453 Caribbean division 381,090 399,251 483,743 NOLAD 311,887 431,266 406,848 SLAD 428,494 742,994 845,527 Total revenues $ 1,984,219 $ 2,959,077 $ 3,081,571 Adjusted EBITDA: Brazil $ 76,155 $ 227,844 $ 218,391 Caribbean division 28,847 24,955 (8,281) NOLAD 10,207 39,027 32,313 SLAD 3,272 63,120 73,670 Total reportable segments 118,481 354,946 316,093 Corporate and others (i) (50,370) (63,171) (58,096) Total adjusted EBITDA $ 68,111 $ 291,775 $ 257,997 For the fiscal years ended December 31, 2020 2019 2018 Adjusted EBITDA reconciliation: Total Adjusted EBITDA $ 68,111 $ 291,775 $ 257,997 (Less) Plus items excluded from computation that affect operating (loss) income: Depreciation and amortization (126,853) (123,218) (105,800) Gains from sale or insurance recovery of property and equipment 4,210 5,175 4,973 Write-offs of property and equipment (4,501) (4,733) (4,167) Impairment of long-lived assets (6,636) (8,790) (18,950) Impairment of goodwill (1,085) (273) (167) Reorganization and optimization plan expenses — — (11,003) 2008 Long-Term Incentive Plan incremental compensation from modification — — 575 Operating (loss) income (66,754) 159,936 123,458 (Less) Plus: Net interest expense (59,068) (52,079) (52,868) (Loss) gain from derivative instruments (2,297) 439 (565) Gain from securities 25,676 — — Foreign currency exchange results (31,707) 12,754 14,874 Other non-operating income (expenses), net 2,296 (2,097) 270 Income tax expense (17,532) (38,837) (48,136) Net income attributable to non-controlling interests (65) (220) (186) Net (loss) income attributable to Arcos Dorados Holdings Inc. $ (149,451) $ 79,896 $ 36,847 For the fiscal years ended December 31, 2020 2019 2018 Depreciation and amortization: Brazil $ 59,466 $ 63,467 $ 52,632 Caribbean division 20,742 18,481 22,835 NOLAD 22,200 21,422 20,829 SLAD 20,329 20,713 19,293 Total reportable segments 122,737 124,083 115,589 Corporate and others (i) 5,288 4,894 5,696 Purchase price allocation (ii) (1,172) (5,759) (15,485) Total depreciation and amortization $ 126,853 $ 123,218 $ 105,800 Property and equipment expenditures: Brazil $ 39,127 $ 146,322 $ 100,926 Caribbean division 9,582 15,934 18,640 NOLAD 9,627 32,662 24,145 SLAD 27,975 70,280 53,300 Others — 37 30 Total property and equipment expenditures $ 86,311 $ 265,235 $ 197,041 As of December 31, 2020 2019 Total assets: Brazil $ 1,102,009 $ 1,328,984 Caribbean division 420,481 429,170 NOLAD 412,045 458,235 SLAD 372,974 389,976 Total reportable segments 2,307,509 2,606,365 Corporate and others (i) 95,802 67,195 Purchase price allocation (ii) (109,357) (115,875) Total assets $ 2,293,954 $ 2,557,685 (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 31,2020 and 2019, corporate assets primarily include corporate derivatives, cash and cash equivalents and lease right of use. (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 and the corresponding depreciation and amortization. As of December 31,2020 and 2019 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. |
Venezuelan operations
Venezuelan operations | 12 Months Ended |
Dec. 31, 2020 | |
Venezuelan Operations [Abstract] | |
Venezuelan operations | Venezuelan operations The Company conducts business in Venezuela where currency restrictions exist, limiting the Company’s ability to immediately access cash through repatriations at the government’s official exchange rate. The Company’s access to Venezuelan Bolívares (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. Since February 2013, the Venezuelan government has announced several changes in the currency exchange regulations, including different mechanisms to access foreign currency. During 2018, the applicable system was DICOM that operated through an auction mechanism. The Company had access to DICOM 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 accessed to DICOM at an exchange rate greater than the one published, this rate was considered for remeasurements purposes. Moreover, during 2019, the Central Bank of Venezuela permitted financial institution to participate as intermediaries in foreign currency operations. On August 20, 2018, the Government announced the removal of five zeros from the Venezuelan currency and renamed it as “Sovereign Bolivar” (VES). In addition, the new currency devaluated from 2.48 to 59.93 VES per US dollar. Since that moment, the Sovereign Bolivar has been depreciating its value against US dollar. The consequence of several reassessment of the exchange rate used for remeasurement purposes, the Company recognized negative impacts within the Consolidated Statement of Income, mainly related to the write down of certain inventories due to the impact on their net recoverable value, impairment of long-lived assets and foreign currency exchange results. The following table summarizes the impacts during fiscal years 2020, 2019 and 2018: 2020 2019 2018 Write down of inventories (i) $ (1,625) $ (4,468) $ (61,007) Impairment of long-lived assets (i) (904) (2,123) (12,089) Foreign currency exchange income (loss) (ii) 27 (583) 5,061 (i) Presented within Other operating income (expenses), net. (ii) Presented within Foreign currency exchange results. Revenues and operating (loss) income of the Venezuelan operations were $4,494 and $(7,712), respectively, for fiscal year 2020; $10,184 and $(8,240), respectively, for fiscal year 2019; and $78,859 and $(52,054), respectively, for fiscal year 2018. As of December 31, 2020, the Company did not have a material monetary position, which would be subject to remeasurement in the event of further changes in the exchange rate. In addition, Venezuela’s non-monetary assets were $10.1 million (mainly fixed assets). 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. However, the Company was able to increase prices during the fiscal year ended December 31, 2020. The Company’s Venezuelan operations, continue to be impacted by the country’s macroeconomic volatility, including the ongoing highly inflationary environment. Additionally, the operations would be further affected by more |
Shareholders' equity
Shareholders' equity | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' equity | Shareholders’ equity Authorized capital The Company is authorized to issue a maximum of 500,000,000 shares, consisting of 420,000,000 Class A shares and 80,000,000 Class B shares of no par value each. Issued and outstanding capital At December 31, 2017, the Company had 211,072,508 shares issued and outstanding with no par value, consisting of 131,072,508 class A shares and 80,000,000 class B shares. During fiscal years 2020, 2019 and 2018, the Company issued 472,130, 470,558 and 520,565 Class A shares, respectively, in connection with the partial vesting of restricted share units under the 2011 Equity Incentive Plan. 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, along one year, up to $60,000 of issued and outstanding Class A shares of no par value of the Company. As of February 15, 2019, the Company purchased 7,993,602 shares amounting to $60,000 and the program concluded. The shares reacquired were recorded at cost within “Common stock in treasury” in the Consolidated Statement of Changes in Equity. On August 12, 2020, the Company used 2,723,614 of treasury shares to satisfy a stock dividend distribution. As of December 31, 2020, 2019 and 2018 the Company had 207,265,773; 204,070,029 and 205,232,247 outstanding shares, consisting of 127,265,773; 124,070,029 and 125,232,247 Class A shares, respectively, and 80,000,000 for Class B shares for each year. Rights, privileges and obligations 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 pari passu in all respects, including with respect to dividends and rights upon liquidation of the Company. Distribution of dividends 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. On March 3, 2020, the Company approved a cash 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 10, 2020, $0.03 per share on August 13, 2020 and $0.03 per share on December 10, 2020. On July 6, 2020, the Company cancelled the two remaining cash dividend payments of $0.03 cents per share each, scheduled for August 13 and December 10, 2020. As of December 31, 2020 the cash dividend paid was $10,204. 23. Shareholders’ equity (continued) Distribution of dividends (continued) On July 6, 2020, the Company approved a stock dividend to all Class A and Class B shareholders to be distributed on August 12, 2020. The Company distributed a dividend of one share for every seventy-five shares held by its shareholders and paid cash in lieu of fractional shares. Therefore, the Company distributed 2,723,614 repurchased shares, and paid cash $16 for fractional shares. Accumulated other comprehensive income (loss) The following table sets forth information with respect to the components of “Accumulated other comprehensive income (loss)” as of December 31, 2020 and their related activity during the three-years in the period then ended: Foreign currency translation Cash flow hedges Post-employment benefits (i) Total Accumulated other comprehensive loss Balances at December 31, 2017 $ (436,281) $ 8,359 $ (1,425) $ (429,347) Other comprehensive (loss) income before reclassifications (62,996) 13,888 (418) (49,526) Net (income) loss reclassified from accumulated other comprehensive loss to consolidated statement of income — (23,887) 494 (23,393) Net current-period other comprehensive (loss) income (62,996) (9,999) 76 (72,919) Balances at December 31, 2018 (499,277) (1,640) (1,349) (502,266) Other comprehensive (loss) income before reclassifications (12,168) (5,185) (55) (17,408) Net (income) loss reclassified from accumulated other comprehensive income to consolidated statement of income — 85 864 949 Adoption of ASU 2017-12 — (780) — (780) Net current-period other comprehensive (loss) income (12,168) (5,880) 809 (17,239) Balances at December 31, 2019 (511,445) (7,520) (540) (519,505) Other comprehensive loss before reclassifications (76,359) 54,287 (195) (22,267) Net loss reclassified from accumulated other comprehensive loss to consolidated statement income — (43,324) 236 (43,088) Net current-period other comprehensive (loss) income (76,359) 10,963 41 (65,355) Balances at December 31, 2020 $ (587,804) $ 3,443 $ (499) $ (584,860) (i) Mainly related to a post-employment benefit in Venezuela established by the Organic Law of Labor and Workers (known as “LOTTT”, 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. |
Earnings per share
Earnings per share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per share | Earnings per share 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. 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: For the fiscal years ended December 31, 2020 2019 2018 Net (loss) income attributable to Arcos Dorados Holdings Inc. available to common shareholders $ (149,451) $ 79,896 $ 36,847 Weighted-average number of common shares outstanding - Basic 205,417,516 204,003,977 209,136,832 Incremental shares from assumed exercise of stock options (i) — — — Incremental shares from vesting of restricted share units 287,965 664,375 983,634 Weighted-average number of common shares outstanding - Diluted 205,705,481 204,668,352 210,120,466 Basic net (loss) income per common share attributable to Arcos Dorados Holdings Inc. $ (0.73) $ 0.39 $ 0.18 Diluted net (loss) income per common share attributable to Arcos Dorados Holdings Inc. $ (0.73) $ 0.39 $ 0.18 (i) Options to purchase shares of common stock were outstanding during fiscal years 2020, 2019 and 2018. 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. |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related party transactions | Related party transactions The Company has entered into a master commercial agreement on arm’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 “Axionlog Business”). Pursuant to this agreement Axionlog provides the Company distribution inventory, storage and transportation services in the countries in which it operates. The following table summarizes the outstanding balances between the Company and the Axionlog Business as of December 31, 2020 and 2019: As of December 31, 2020 2019 Accounts and notes receivable, net $ 272 $ 177 Other receivables 2,392 2,201 Miscellaneous 3,665 3,719 Accounts payable (6,378) (8,747) The following table summarizes the transactions between the Company and the Axionlog Business for the fiscal years ended December 31, 2020, 2019 and 2018: Fiscal years ended December 31, 2020 2019 2018 Food and paper (i) $ (124,416) $ (188,276) $ (177,356) Occupancy and other operating expenses (3,667) (7,252) (5,322) (i) Includes $24,303 of distribution fees and $100,114 of suppliers purchases managed through the Axionlog Business for the fiscal year ended December 31, 2020; $38,658 and $149,618, respectively, for the fiscal year ended December 31, 2019; and $41,633 and $135,723, respectively, for the fiscal year ended December 31, 2018. As of December 31, 2020 and 2019, the Company had other receivables totaling $1,761 and $2,325, respectively, and accounts payable with Lacoop, A.C. and Lacoop II, S.C. totaling $(508) and nil, respectively. |
Valuation and qualifying accoun
Valuation and qualifying accounts | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Valuation and qualifying accounts | Valuation and qualifying accounts 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: Description Balance at beginning of period Additions (i) Deductions (ii) Translation Balance at end of period Year ended December 31, 2020: Deducted from assets accounts: Allowance for doubtful accounts (iii) $ 23,076 $ 937 $ (22,929) $ (141) $ 943 Valuation allowance on deferred tax assets 194,426 65,077 (18,870) (5,437) 235,196 Reported as liabilities: Provision for contingencies 26,158 17,391 (11,920) (4,681) 26,948 Total $ 243,660 $ 83,405 $ (53,719) $ (10,259) $ 263,087 Year ended December 31, 2019: Deducted from assets accounts: Allowance for doubtful accounts (iii) $ 25,539 $ 8,524 $ (10,892) $ (95) $ 23,076 Valuation allowance on deferred tax assets 219,920 2,375 (26,252) (1,617) 194,426 Reported as liabilities: Provision for contingencies 28,509 17,795 (17,768) (2,378) 26,158 Total $ 273,968 $ 28,694 $ (54,912) $ (4,090) $ 243,660 Year ended December 31, 2018: Deducted from assets accounts: Allowance for doubtful accounts (iii) $ 21,467 $ 6,064 $ (1,860) $ (132) $ 25,539 Valuation allowance on deferred tax assets 271,651 13,107 (37,718) (27,120) 219,920 Reported as liabilities: Provision for contingencies 27,956 25,838 (19,702) (5,583) 28,509 Total $ 321,074 $ 45,009 $ (59,280) $ (32,835) $ 273,968 (i) Additions in valuation allowance on deferred tax assets are charged to income tax expense. Additions in provision for contingencies are explained as follows: Fiscal years 2020, 2019 and 2018 – Relate to the accrual of $15,330, $17,441 and $23,995, respectively, and a reclassification of $2,061 and $354, during fiscal years 2020 and 2019, respectively. See Note 18 for details. (ii) Deductions in valuation allowance on deferred tax assets are charged to income tax expense. Deductions in provision for contingencies are explained as follows: Corresponds to the settlements amounting to $11,920; $17,768 and $19,702 during fiscal years 2020, 2019 and 2018, respectively. as discussed in Note 18. Deductions in allowance for doubtful accounts during fiscal years 2020 and 2019 mainly relate to reductions in the accrual and the write-off of some receivables from franchisees in Puerto Rico as a consequence of the confidential settlement agreements reached in December 2020 and March 2021 with Puerto Rican franchisees. For details see note 18. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Use of estimates | Use of estimates 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. |
Foreign currency matters | Foreign currency matters The financial statements of the Company’s foreign operating subsidiaries are translated in accordance with guidance in ASC 830 Foreign Currency Matters. Except for the Company’s Venezuelan and Argentinian operations, the functional currencies of the Company’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 “Accumulated other comprehensive loss” component of shareholders’ equity. The Company includes foreign Foreign currency matters (continued) 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 (loss) income. 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, Brazilian reais (“BRL”) for Argentinian operation from July 2018 to June 2020 and US dollars since July 2020). As a result, remeasurement gains and losses are recognized in earnings rather than in the cumulative translation adjustment, component of “Accumulated other comprehensive loss” within shareholders’ equity. In addition, in these territories, there are foreign currency restrictions. Since 2019, in Argentina several measures have been adopted including, among others: (i) limitation to hoarding and consumption in foreign currency for natural persons, (ii) taxes to increase the official exchange rate, (iii) approvals issued by the Central Bank of Argentina to access foreign currency to settle imports of goods or services, principal and interest from financial payables to foreign parties, profits and dividends. See Note 22 for information about foreign currency restrictions in Venezuela. |
Cash and cash equivalents | Cash and cash equivalents 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. |
Revenue recognition | Revenue recognition The Company’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’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’s Corporation. Royalty income is recognized in the period earned. In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASC 606), “Revenue Recognition - Revenue from Contracts with Customers”, which amends the guidance in former ASC 605, “Revenue Recognition”, 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. 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. |
Accounts and notes receivable and allowance for doubtful accounts | Accounts and notes receivable and allowance for doubtful accounts Accounts receivable primarily consist of royalty and rent receivables due from franchisees, debit, credit and delivery vendor 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 the expected credit losses. In judging the adequacy of the allowance for doubtful accounts, the Company follows ASC 326 "Financial Instruments - Credit Losses" considering, multiple factors including historical bad debt experience, the aging of the receivables, the current economic environment, remote risks of loss and future economic conditions. |
Other receivables | Other receivables As of December 31, 2020, other receivables primarily consist of related party receivables, value-added tax and other tax receivables, insurance claim receivables, amounting to $10,110. As of December 31, 2019, other receivables primarily consist of insurance claim receivables, value-added tax, other tax receivables and related party receivables, amounting to $17,046. |
Inventories | Inventories Inventories are stated at the lower of cost or market, with cost being determined on a first-in, first-out basis. |
Property and equipment, net | Property and equipment, net 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’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’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 – 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 – up to 40 years; leasehold improvements – the lesser of useful lives of assets or lease terms which generally include renewal options; and equipment 3 to 10 years. |
Intangible assets, net | Intangible assets, net Intangible assets include computer software costs, initial franchise fees, reacquired rights under franchise agreements, letter of credit fees and others. 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. The Company is required to pay to McDonald’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. Intangible assets, net (continued) 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. |
Impairment and disposal of long-lived assets | Impairment and disposal of long-lived assets In accordance with the guidance within ASC 360-10-35, the Company reviews long-lived assets (including property and equipment, intangible assets with definite useful lives and lease right of use asset, net) for impairment whenever events or changes in circumstances indicate the carrying value of the asset may not be recoverable. For p |
Goodwill | Goodwill 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 during the fourth quarter, or when an impairment indicator exists. The impairment test 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’s goodwill and the carrying amount of goodwill. 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’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. |
Advertising costs | Advertising costs Advertising costs are expensed as incurred. |
Accounting for income taxes | Accounting for income taxes 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. 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. 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. |
Accounts payable outsourcing | Accounts payable outsourcing The Company offers its suppliers access to an accounts payable services arrangement provided by third party financial institutions. This service allows the Company’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’s obligations, including amounts due, remain to the Company’s suppliers as stated in the supplier agreements. |
Share-based compensation | Share-based compensation The Company recognizes compensation expense as services required to earn the benefits are rendered. |
Derivative financial instruments | Derivative financial instruments 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’ 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. |
Severance payments | Severance payments 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. |
Provision for contingencies | Provision for contingencies 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’s estimates of the outcomes of these matters and the Company’s lawyers’ 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. |
Comprehensive (loss) income | Comprehensive (loss) income 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’ equity. The Company reports foreign currency translation losses and gains, unrealized results on cash flow hedges as well as unrecognized post-retirement benefits as components of comprehensive (loss) income. |
Sales of property and equipment and restaurant businesses | Sales of property and equipment and restaurant businesses The Company recognizes the sale of property and equipment when: (a) the profit is determinable, that is, the collectability 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. 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. |
Recent accounting pronouncements | Recent accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC 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 need to disclose qualitative and quantitative information about their leases, including characteristics and amounts recognized in the financial statements. This standard was effective for annual periods beginning after December 15, 2018, including interim periods. The Company adopted ASU 2016-02 in its first quarter of 2019 utilizing the modified retrospective method, without restatement of comparative financial information periods, and applied the package of practical expedients permitted under the transition guidance within the standard which, among other things, allowed the Company to carry forward the historical lease classification. The adoption, and the ultimate effect on the consolidated financial statements, was based on an evaluation of the contract-specific facts and circumstances. The Company adoption of the standard resulted in the recognition of lease right-of-use assets and lease liabilities of $913 million, as of January 1, 2019. The right-of-use assets and lease liabilities were recognized at the commencement date based on the present value of the remaining future minimum lease payments, which include options that are reasonably assured of being exercised. As the interest rate implicit in the Company’s leases was not readily determinable, the Company utilizes its incremental borrowing rate to discount the lease payments. Furthermore, the changes made to the consolidated balance sheet as of January 1, 2019 for the adoption of ASC 842 were as follows: Consolidated Balance Sheet Balance at December 31, 2018 Adjustments Due to ASC 842 Balance at January 1, 2019 ASSETS Non-current assets Lease right of use asset, net — 896,682 896,682 (i) LIABILITIES AND EQUITY Current liabilities Operating lease liabilities — 72,272 72,272 (ii) Non-current liabilities Accrued payroll and other liabilities 35,322 (16,404) 18,918 (iii) Operating lease liabilities — 840,814 840,814 (iv) Recent accounting pronouncements (continued) (i) Represents capitalization of operating lease right of use assets of $913,086 net of the reclassification of straight-line rent accrual of $16,404. (ii) Represents recognition of current portion of operating lease liabilities. (iii) Represents reclassification of straight-line rent accrual to lease right of use asset, net. (iv) Represents recognition of non-current portion of operating lease liabilities. The standard did not have a significant impact on the Company’s consolidated statements of income and cash flows, except for the exchange results related to lease liabilities denominated in other currencies than its functional one. The disclosure of the impact of adoption on the consolidated balance sheet and income statement, as of December 31, 2019 and for the fiscal year ended in December 31, 2019, were as follows: As of December 31, 2019 Consolidated Balance Sheet As Reported Balances Without Adoption of ASC 842 Effect of Change ASSETS Non-current assets Lease right of use asset, net 922,165 — 922,165 LIABILITIES AND EQUITY Current liabilities Operating lease liabilities 70,147 — 70,147 Non-current liabilities Accrued payroll and other liabilities 23,497 41,084 (17,587) Operating lease liabilities 861,582 — 861,582 EQUITY Retained earnings 471,149 467,560 3,589 Accumulated other comprehensive loss (519,505) (523,939) 4,434 For the fiscal year ended December 31, 2019 Consolidated Statement of Income As Reported Balances Without Adoption of ASC 842 Effect of Change Foreign currency exchange results 12,754 9,165 3,589 In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” ASU 2017-12 expanded components of fair value hedging, specifies the recognition and presentation of the effects of hedging instruments, and eliminates the separate measurement and presentation of hedge ineffectiveness. The Company adopted the new standard during this year and applied the presentation and disclosure guidance on a prospective basis. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", which modifies the measurement and recognition of expected credit losses on financial assets. The Company adopted this guidance effective January 1, 2020, prospectively. The adoption of the new standard did not have a material impact on the Company’s consolidated financial statements. The Company will continue to actively monitor the impact of the COVID-19 pandemic on expected losses. |
Summary of significant accoun_3
Summary of significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of impact of adoption | Furthermore, the changes made to the consolidated balance sheet as of January 1, 2018 for the adoption of ASC 606 were as follows: Revenue recognition (continued) Balance Sheet Balance at December 31, 2017 Adjustments Due to ASC 606 Balance at January 1, 2018 ASSETS Non-current Assets Deferred income taxes 74,299 1,555 75,854 LIABILITIES AND EQUITY Current liabilities Accrued payroll and other liabilities 119,088 339 119,427 Non-current liabilities Accrued payroll and other liabilities 29,366 5,012 34,378 EQUITY Retained earnings 401,134 (3,796) 397,338 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, were as follows: As of December 31, 2018 Balance Sheet As Reported Balances Without Adoption of ASC 606 Effect of Change ASSETS Non-current Assets Deferred income taxes 58,334 56,522 1,812 LIABILITIES AND EQUITY Current liabilities Accrued payroll and other liabilities 94,166 93,770 396 Non-current liabilities Accrued payroll and other liabilities 35,322 29,495 5,827 EQUITY Retained earnings 413,074 417,485 (4,411) For the fiscal year ended December 31, 2018 Income Statement As Reported Balances Without Adoption of ASC 606 Effect of Change Revenues from franchised restaurants 148,962 149,834 (872) Income tax expense (48,136) (48,393) 257 Furthermore, the changes made to the consolidated balance sheet as of January 1, 2019 for the adoption of ASC 842 were as follows: Consolidated Balance Sheet Balance at December 31, 2018 Adjustments Due to ASC 842 Balance at January 1, 2019 ASSETS Non-current assets Lease right of use asset, net — 896,682 896,682 (i) LIABILITIES AND EQUITY Current liabilities Operating lease liabilities — 72,272 72,272 (ii) Non-current liabilities Accrued payroll and other liabilities 35,322 (16,404) 18,918 (iii) Operating lease liabilities — 840,814 840,814 (iv) Recent accounting pronouncements (continued) (i) Represents capitalization of operating lease right of use assets of $913,086 net of the reclassification of straight-line rent accrual of $16,404. (ii) Represents recognition of current portion of operating lease liabilities. (iii) Represents reclassification of straight-line rent accrual to lease right of use asset, net. (iv) Represents recognition of non-current portion of operating lease liabilities. As of December 31, 2019 Consolidated Balance Sheet As Reported Balances Without Adoption of ASC 842 Effect of Change ASSETS Non-current assets Lease right of use asset, net 922,165 — 922,165 LIABILITIES AND EQUITY Current liabilities Operating lease liabilities 70,147 — 70,147 Non-current liabilities Accrued payroll and other liabilities 23,497 41,084 (17,587) Operating lease liabilities 861,582 — 861,582 EQUITY Retained earnings 471,149 467,560 3,589 Accumulated other comprehensive loss (519,505) (523,939) 4,434 For the fiscal year ended December 31, 2019 Consolidated Statement of Income As Reported Balances Without Adoption of ASC 842 Effect of Change Foreign currency exchange results 12,754 9,165 3,589 |
Summary of impairment charges | As a result of the impairment testing the Company recorded the following impairment charges, for the markets indicated below, within Other operating income (expenses), net on the consolidated statements of income: Fiscal year Markets Total 2020 Mexico, Puerto Rico, USVI, Peru, Aruba, Colombia, Venezuela, Ecuador, Panama and Argentina $ 6,636 2019 Mexico, Puerto Rico, USVI, Peru, Aruba, Curacao, Colombia and Venezuela 8,790 2018 Mexico, Puerto Rico, USVI, Peru, Colombia, Venezuela and Trinidad and Tobago. 18,950 |
Schedule of goodwill impairment | As a result of the analyses performed during the fiscal years 2020, 2019 and 2018, 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: Fiscal year Markets Total 2020 Mexico $ 1,085 2019 Ecuador 273 2018 Peru 167 |
Acquisition of businesses (Tabl
Acquisition of businesses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of non-significant acquisitions | During fiscal years 2020, 2019 and 2018, the Company acquired certain franchised restaurants in certain territories. Presented below is supplemental information about these acquisitions: Purchases of restaurant businesses: 2020 2019 2018 Property and equipment $ 16,756 $ 1,471 $ 413 Identifiable intangible assets 4,922 1,347 56 Goodwill 1,224 1,589 — Assumed debt — (77) — Gain on purchase of franchised restaurants (1,708) (767) — Purchase price 21,194 3,563 469 Seller financing (1,000) — — Settlement of franchise receivables (16,361) (905) (469) Net cash paid at acquisition date $ 3,833 $ 2,658 $ — |
Accounts and notes receivable_2
Accounts and notes receivable, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Schedule of accounts and notes receivable, net | Accounts and notes receivable, net consist of the following at year end: 2020 2019 Receivables from franchisees $ 45,427 $ 63,618 Debit and credit card receivables 38,388 43,741 Meal voucher receivables 4,857 13,017 Notes receivable 6,163 1,928 Allowance for doubtful accounts (586) (22,442) $ 94,249 $ 99,862 |
Prepaid expenses and other cu_2
Prepaid expenses and other current assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Prepaid Expense and Other Assets [Abstract] | |
Schedule of prepaid expenses and other current assets | Prepaid expenses and other current assets consist of the following at year end: 2020 2019 Prepaid taxes $ 48,781 $ 73,932 Prepaid expenses 30,175 24,266 Promotion items and related advances 20,701 19,092 Others 812 322 $ 100,469 $ 117,612 |
Miscellaneous (Tables)
Miscellaneous (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of miscellaneous assets | Miscellaneous consist of the following at year end: 2020 2019 Judicial deposits $ 36,943 $ 46,148 Tax credits 10,365 21,067 Prepaid property and equipment 5,967 7,770 Notes receivable 4,484 5,876 Rent deposits 2,991 3,196 Others 11,899 11,757 $ 72,649 $ 95,814 |
Property and equipment, net (Ta
Property and equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | Property and equipment, net consist of the following at year-end: 2020 2019 Land $ 134,148 $ 146,517 Buildings and leasehold improvements 657,652 710,046 Equipment 734,995 784,181 Total cost 1,526,795 1,640,744 Total accumulated depreciation (730,263) (679,758) $ 796,532 $ 960,986 |
Net intangible assets and goo_2
Net intangible assets and goodwill (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of net intangible assets and goodwill | Net intangible assets and goodwill consist of the following at year-end: 2020 2019 Net intangible assets (i) Computer software cost $ 69,999 $ 75,224 Initial franchise fees 14,223 16,146 Reacquired franchised rights 16,884 13,296 Letter of credit fees 940 940 Others 1,000 1,000 Total cost 103,046 106,606 Total accumulated amortization (71,601) (70,345) Subtotal 31,445 36,261 Goodwill (ii) 2020 2019 Brazil 3,196 4,124 Argentina 1,276 1,585 Chile 1,047 988 Colombia 82 86 Subtotal 5,601 6,783 $ 37,046 $ 43,044 (i) Total amortization expense for fiscal years 2020, 2019 and 2018 amounted to $11,822, $11,580 and $11,310, respectively. The estimated aggregate amortization expense for each of the five succeeding fiscal years and thereafter is as follows: $12,581 for 2021, $8,017 for 2022; $2,714 for 2023; $1,768 for 2024; $1,739 for 2025; and thereafter $4,626. (ii) Related to the acquisition of franchised restaurants (Brazil, Argentina, Chile and Colombia) and non-controlling interests in Chile. |
Accrued payroll and other lia_2
Accrued payroll and other liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Summary of accrued payroll and other liabilities | Accrued payroll and other liabilities consist of the following at year end: 2020 2019 Current: Accrued payroll $ 59,772 $ 77,087 Accrued expenses 14,993 6,586 Other liabilities 4,453 2,706 $ 79,218 $ 86,379 Non-current: Phantom RSU award liability $ 2,730 $ 2,102 Deferred revenues - Initial franchise fee 4,612 5,802 Deferred income 6,075 6,392 Security deposits 5,976 6,836 Other liabilities 2,491 2,365 $ 21,884 $ 23,497 |
Short-term debt (Tables)
Short-term debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Short-term Debt [Abstract] | |
Schedule of short-term debt | Short-term debt consists of the following: 2020 2019 Short-term bank loans (i) — 10,794 Revolving Credit Facility (ii) — 2,500 Bank overdrafts — 2 $ — $ 13,296 As of December 31, 2020 9.5 As of March 31, 2021 15.25 As of June 30, 2021 5.25 As of September 30, 2021 4.25 |
Long-term debt (Tables)
Long-term debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt consists of the following at year-end: 2020 2019 2027 Notes $ 553,354 $ 265,000 2023 Notes 216,593 348,069 Finance lease obligations 5,941 5,419 Other long-term borrowings 10,199 13,284 Subtotal 786,087 631,772 Discount on 2023 Notes (1,147) (2,504) Discount on 2027 Notes (7,358) — Premium on 2023 Notes 427 937 Premium on 2027 Notes 3,206 — Deferred financing costs (4,641) (3,397) Total 776,574 626,808 Current portion of long-term debt 3,129 3,233 Long-term debt, excluding current portion $ 773,445 $ 623,575 The following table presents additional information related to the 2027 and 2023 Notes (the "Notes"): Principal as of December 31, Annual interest rate Currency 2020 2019 Maturity 2027 Notes 5.875 % USD $ 553,354 $ 265,000 April 4, 2027 2023 Notes 6.625 % USD 216,593 348,069 September 27, 2023 Interest Expense (i) DFC Amortization (i) Amortization of Premium/Discount, net (i) 2020 2019 2018 2020 2019 2018 2020 2019 2018 2027 Notes $ 20,269 $ 15,569 $ 15,569 $ 402 $ 299 $ 299 $ 133 $ — $ — 2023 Notes 20,882 23,060 23,060 294 323 323 371 402 397 (i) These charges are included within "Net interest expense" in the consolidated statements of income. |
Schedule of future payments related to long-term debt | At December 31, 2020, future payments related to the Company’s long-term debt are as follows: Principal Interest Total 2021 $ 3,129 $ 47,999 $ 51,128 2022 4,126 47,796 51,922 2023 219,204 47,527 266,731 2024 2,204 32,949 35,153 2025 553 32,832 33,385 Thereafter 556,871 50,632 607,503 Total payments 786,087 259,735 1,045,822 Interest — (259,735) (259,735) Discount on 2023 Notes (1,147) — (1,147) Discount on 2027 Notes (7,358) — (7,358) Premium on 2023 Notes 427 — 427 Premium on 2027 Notes 3,206 — 3,206 Deferred financing cost (4,641) — (4,641) Long-term debt $ 776,574 $ — $ 776,574 |
Derivative instruments (Tables)
Derivative instruments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments, Fair Value | The following table presents the fair values of derivative instruments included in the consolidated balance sheets as of December 31, 2020 and 2019: Assets Liabilities Type of Derivative Balance Sheets Location 2020 2019 Balance Sheets Location 2020 2019 Derivatives designated as hedging instruments Cash Flow hedge Forward contracts Other receivables $ — $ 259 Accrued payroll and other liabilities $ (1,264) $ (532) Cross-currency interest rate swap Derivative instruments 86,534 37,219 Derivative instruments (6,194) (8,179) Call spread Derivative instruments 21,858 20,609 Derivative instruments — — Coupon-only swap Derivative instruments 3,591 — Derivative instruments — (5,326) Subtotal 111,983 58,087 (7,458) (14,037) Derivatives not designated as hedging instruments Forward contracts Other receivables — 20 Accrued payroll and other liabilities — — Call spread Derivative instruments 3,798 — Derivative instruments — — Coupon-only swap Derivative instruments 202 — Derivative instruments (5,017) — Call Spread + Coupon-only swap Derivative instruments 6,620 — Derivative instruments (8,050) — Subtotal 10,620 20 (13,067) — Total derivative instruments $ 122,603 $ 58,107 $ (20,525) $ (14,037) |
Schedule of Derivative Instruments | The following table presents information related to the terms of the agreements: Derivatives designated as hedging instruments (continued) Cash flow hedge (continued) Cross-currency interest rate swap (continued) Bank Payable Receivable Interest payment dates Maturity Currency Amount Interest rate Currency Amount Interest rate JP Morgan Chase Bank, N.A. BRL 108,000 13 % $ 35,400 4.38 % March 31/ September 30 September 2023 JP Morgan Chase Bank, N.A. BRL 98,670 13 % $ 30,000 6.02 % March 31/ September 30 September 2023 Citibank N.A. BRL 94,200 13 % $ 30,000 6.29 % March 31/ September 30 September 2023 Citibank N.A. BRL 112,738 13 % $ 20,049 8.08 % March 31/ September 30 September 2023 The following table presents information related to the terms of the agreements: Bank Payable Receivable Interest payment dates Maturity Currency Amount Interest rate Currency Amount Interest rate BAML (i) BRL 156,250 13.64 % $ 50,000 6.91 % March 31/ September 30 April 2027 Banco Santander S.A. BRL 155,500 13.77 % $ 50,000 6.91 % June 30/ December 31 September 2023 (i) Bank of America Merrill Lynch Banco Múltiplo S.A. The following table presents information related to the terms of the agreements: Bank Nominal Amount Strike price Maturity Currency Amount Call option written Call option bought Citibank S.A. $ 50,000 4.49 3.11 September 2023 JP Morgan S.A. $ 50,000 5.20 3.13 April 2027 The following table presents information related to the terms of the agreements: Bank Payable Receivable Interest payment dates Maturity Currency Amount Interest rate Currency Amount Interest rate Citibank S.A. BRL 155,500 11.08 % $ 50,000 6.91 % June 30/ December 31 September 2023 JP Morgan S.A. BRL 156,250 11.18 % $ 50,000 6.91 % March 31/ September 30 April 2027 Nominal Amount Strike price Currency Amount Call option written Call option bought $ 30,000 8.20 5.62 The following table presents information related to the terms of the agreements: Payable Receivable Interest payment dates Currency Amount Interest rate (i) Currency Amount Interest rate BRL 168,690 CDI plus 2.42% $ 30,000 5.46 % April 30/ October 31 The following tables present information related to the terms of the agreements: Nominal Amount Strike price Currency Amount Call option written Call option bought $ 50,000 8.20 5.62 Payable Receivable Interest payment dates Currency Amount Interest rate (i) Currency Amount Interest rate BRL 281,150 CDI plus 2.47% $ 50,000 5.46% April 30/ October 31 |
Schedule of Cash Flow Hedges Included In Accumulated Other Comprehensive Income (Loss) | The following table present the pretax amounts affecting income and other comprehensive income for the fiscal years ended December 31, 2020, 2019 and 2018 for each type of derivative relationship: Derivatives designated as hedging instruments (continued) Cash flow hedge (continued) Additional disclosures (continued) Derivatives in Cash Flow Gain (Loss) Recognized in Accumulated OCI on Derivative (Gain) Loss Reclassified from Accumulated OCI into (loss) income (i) 2020 2019 2018 2020 2019 2018 Forward contracts $ 904 $ (10) $ 731 $ (1,895) $ (711) $ (75) Cross-currency interest rate swaps 55,124 (8,506) 11,279 (37,376) 2,056 (18,888) Call Spread 6,758 4,377 4,034 (18,153) (3,561) (15,421) Coupon-only swap 8,604 (1,889) 1,864 (421) 1,860 2,415 Total $ 71,390 $ (6,028) $ 17,908 $ (57,845) $ (356) $ (31,969) (i) 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: Adjustment to: 2020 2019 2018 Foreign currency exchange results $ 40,353 $ 6,346 $ 28,588 Net interest expense (2,977) (8,402) (9,700) Total $ 37,376 $ (2,056) $ 18,888 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. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of future minimum rental payments for operating leases | At December 31, 2020, maturities of lease liabilities under existing operating leases are: Restaurant Other Total (i) 2021 $ 122,497 $ 5,705 $ 128,202 2022 117,025 4,221 121,246 2023 112,715 3,199 115,914 2024 109,398 2,747 112,145 2025 104,984 2,601 107,585 Thereafter 822,563 7,667 830,230 Total lease payments $ 1,389,182 $ 26,140 $ 1,415,322 Lease discount (605,881) Operating lease liability $ 809,441 (i) The Company has certain leases subject to index adjustments. As part of the adoption of ASC 842, the Company used the effective index rate at transition date in its disclosure and calculation of the lease liability. However, for leases entered into after January 1, 2019, the inflation index rate will be used to calculate the lease liability only when a lease modification occurs. |
Schedule of components of lease cost | The following table is a summary of the Company´s components of lease cost for fiscal years 2020, 2019 and 2018: Lease Expense Statements of Income Location 2020 2019 2018 Operating lease expense - Minimum rentals: Company-operated restaurants Occupancy and other operating expenses $ (69,151) $ (104,236) $ (105,358) Franchised restaurants Franchised restaurants - occupancy expenses (23,510) (34,727) (30,970) General and administrative General and administrative expenses (7,062) (7,614) (7,610) Subtotal (99,723) (146,577) (143,938) Variable lease expense - Contingent rentals based on sales: Company-operated restaurants Occupancy and other operating expenses (26,153) (29,562) (33,921) Franchised restaurants Franchised restaurants - occupancy expenses (13,248) (12,878) (14,595) Subtotal (39,401) (42,440) (48,516) Total lease expense $ (139,124) $ (189,017) $ (192,454) Other information 2020 Weighted-average remaining lease term (years) Operating leases 8 Weighted-average discount rate Operating leases 6.6 % |
Franchise arrangements (Tables)
Franchise arrangements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Franchise Arrangements [Abstract] | |
Schedule of revenues from franchised restaurants | Revenues from franchised restaurants for fiscal years 2020, 2019 and 2018 consisted of: 2020 2019 2018 Rent (i) $ 89,123 $ 145,860 $ 148,094 Initial fees (ii) (iii) 203 287 195 Royalty fees (iv) 275 643 673 Total $ 89,601 $ 146,790 $ 148,962 (i) Includes rental income of own buildings and subleases. As of December 31, 2020 and 2019 the subleases rental income amounted to $74,723 and $114,459, respectively. (ii) Presented net of initial fees owed to McDonald’s Corporation for $493, $1,456 and $1,323 in 2020, 2019 and 2018, respectively. (iii) On January 1, 2018, the Company adopted ASC 606 “Revenue Recognition - Revenue from Contracts with Customers”. As such, initial franchise fees received are deferred over the term of the franchise agreement. See Note 3 Revenue Recognition, for details. (iv) Presented net of royalties fees owed to McDonald’s Corporation for $36,554, $57,709 and $57,733 in 2020, 2019 and 2018, respectively. As a consequence of the negative impacts of the spread of COVID-19 in the operations, McDonald’s granted a deferral of all the royalties payments due to sales in March, April, May, June and July 2020 until the first half of 2021. |
Schedule of future minimum rental payments for operating leases | At December 31, 2020, future minimum rent payments due to the Company under existing franchised agreements are: Owned sites Leased sites Total 2021 $ 3,312 $ 47,661 $ 50,973 2022 2,648 42,458 45,106 2023 2,413 36,985 39,398 2024 2,321 31,915 34,236 2025 2,315 28,547 30,862 Thereafter 9,754 135,349 145,103 Total $ 22,763 $ 322,915 $ 345,678 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of statutory tax rates | Statutory tax rates in the countries in which the Company operates for fiscal years 2020, 2019 and 2018 were as follows: 2020 2019 2018 Puerto Rico 18.5% 18.5% 20.0% Curacao 22.0% 22.0% 22.0% USVI 22.5% 22.5% 22.5% Aruba, Panama, Uruguay and Netherlands 25.0% 25.0% 25.0% Ecuador 25.0% 25.0% 28.0% Chile 27.0% 27.0% 27.0% Martinique, French Guyana and Guadeloupe 28.0% 31.0% 33.3% Peru 29.5% 29.5% 29.5% Trinidad and Tobago 30.0% 25.0% 25.0% Argentina Costa Rica and México 30.0% 30.0% 30.0% Colombia 32.0% 33.0% 37.0% Brazil and Venezuela 34.0% 34.0% 34.0% |
Schedule of components of income tax expense | Income tax expense for fiscal years 2020, 2019 and 2018 consisted of the following: 2020 2019 2018 Current income tax expense $ 17,061 $ 46,811 $ 47,488 Deferred income tax expense 471 (7,974) 648 Income tax expense $ 17,532 $ 38,837 $ 48,136 |
Schedule of components of income tax expense by applying weighted-average statutory income tax rate | Income tax expense for fiscal years 2020, 2019 and 2018, differed from the amounts computed by applying the Company’s weighted-average statutory income tax rate to pre-tax income (loss) as a result of the following: 2020 2019 2018 Pre-tax (loss) income $ (131,854) $ 118,953 $ 85,169 Weighted-average statutory income tax rate (i) 22.9 % 36.6 % 42.7 % Income tax (benefit) expense at weighted-average statutory tax rate on pre-tax income (loss) (30,226) 43,488 36,354 Permanent differences : Change in valuation allowance (ii) 2,958 (24,864) (24,307) Expiration and changes in tax loss carryforwards (iii) 13,820 17,799 18,599 Venezuelan remeasurement and inflationary impacts (iv) 1,682 1,743 16,857 Non-taxable income and non-deductible expenses 12,092 7,545 10,085 Tax benefits (1,701) (9,667) (11,403) Income taxes withholdings on intercompany transactions (v) 6,515 5,005 7,723 Differences including exchange rate, inflation adjustment and filing differences 6,684 (5,291) (2,574) Alternative Taxes 2,054 658 (1,283) Others (vi) 3,654 2,421 (1,915) Income tax expense $ 17,532 $ 38,837 $ 48,136 (i) 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. (ii) Comprises net changes in valuation allowances for the year, mainly related to net operating losses. (iii) Expiration of loss tax carryforwards are mainly generated by Caribbean division. (iv) Comprises changes in valuation allowance during 2020, 2019 and 2018 for $43,249, $983 and $(304), respectively. (v) Comprises income tax withheld on the payment of interest on intercompany loans. (vi) Mainly comprises income tax effects over intercompany transactions which are eliminated for consolidation purposes. |
Schedule of deferred tax assets and liabilities | The tax effects of temporary differences and carryforwards that comprise significant portions of deferred tax assets and liabilities as of December 31, 2020 and 2019 are presented below: 2020 2019 Tax loss carryforwards (i) $ 186,781 $ 144,759 Purchase price allocation adjustment 12,247 15,158 Property and equipment, tax inflation 31,080 36,690 Other accrued payroll and other liabilities 29,622 33,065 Share-based compensation 1,719 2,062 Provision for contingencies, bad debts and obsolescence 4,621 2,534 Other deferred tax assets (ii) 75,121 56,927 Other deferred tax liabilities (iii) (47,593) (32,280) Property and equipment - difference in depreciation rates (7,902) (418) Valuation allowance (iv) (235,196) (194,426) Net deferred tax asset $ 50,500 $ 64,071 (i) As of December 31, 2020, the Company and its subsidiaries has accumulated net operating losses amounting to $656,119. The Company has net operating losses amounting to $145,127, expiring between 2021 and 2025. In addition, the Company has net operating losses amounting to $317,650 expiring after 2025 and net operating losses amounting to $193,342 that do not expire. Changes in tax loss carryforwards for the year relate to the creation of NOLs, mainly in Venezuela. (ii) 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 31, 2020, this item includes: difference in depreciation of leases (related to differences between ASC842 and local tax regulation) for $51,772 in Brazil and provision for regular expenses for $10,098 in Brazil, Colombia and Argentina. For the Fiscal year ended December 31, 2019 this item includes difference in depreciation of leases in Brazil for $30,524, provision for regular expenses for $10,376, in Brazil, Mexico and Colombia and bad debt reserve in Puerto Rico for $4,218. (iii) Primarily related to leases contracts (related to differences between ASC842 and local tax regulation). (iv) 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. |
Share-based compensation (Table
Share-based compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of activity of stock options | The following table summarizes the activity of stock options during fiscal years 2020, 2019 and 2018: Units Weighted-average strike price Weighted-average grant-date fair value Outstanding at December 31, 2017 634,489 14.28 4.28 Expired (i) (143,416) 21.20 5.89 Outstanding at December 31, 2018 491,073 12.26 3.81 Expired (i) (216,633) 14.35 5.13 Outstanding at December 31, 2019 274,440 10.62 2.77 Expired (i) (97,672) 14.31 4.19 Outstanding at December 31, 2020 176,768 8.58 1.98 Exercisable at December 31, 2020 176,768 8.58 1.98 (i) As of December 31, 2020, 2019 and 2018, additional paid-in capital included $409, $1,111 and $844, respectively, related to expired stock options. The following table provides a summary of outstanding stock options at December 31, 2020: Vested (i) Number of units outstanding 176,768 Weighted-average grant-date fair market value per unit 1.98 Total grant-date fair value 350 Weighted-average accumulated percentage of service 100 % Stock-based compensation recognized in Additional paid-in capital 350 (i) Related to exercisable awards. |
Summary of activity of restricted share units | The following table summarizes the activity of restricted share units during fiscal years 2020, 2019 and 2018: Units Weighted-average grant-date fair value Outstanding at December 31, 2017 1,736,845 6.65 2018 annual grant 520,393 8.50 Partial vesting (534,589) 6.01 Forfeitures (117,600) 7.24 Outstanding at December 31, 2018 1,605,049 7.41 2019 annual grant 35,000 8.00 Partial vesting of 2014 grant (38,222) 8.58 Partial vesting of 2015 grant (115,634) 6.33 Partial vesting of 2016 grant (134,501) 4.70 Partial vesting of 2017 grant (174,232) 9.20 Forfeitures (239,621) 7.74 Outstanding at December 31, 2019 937,839 7.50 Partial vesting of 2015 grant (101,928) 6.33 Partial vesting of 2016 grant (114,045) 4.70 Partial vesting of 2017 grant (67,606) 9.20 Partial vesting of 2018 grant (163,695) 8.50 Vesting of 2019 grant (35,000) 8.00 Forfeitures (4,367) 7.75 Outstanding at December 31, 2020 451,198 7.80 Exercisable at December 31, 2020 — — Restricted Share Units (continued) Number of units outstanding (i) 451,198 Weighted-average grant-date fair market value per unit 7.80 Total grant-date fair value 3,519 Weighted-average accumulated percentage of service 80.44 % Stock-based compensation recognized in Additional paid-in capital 2,831 Compensation expense not yet recognized (ii) 688 (i) Related to awards that will vest between fiscal years 2021 and 2023. (ii) Expected to be recognized in a weighted-average period of 0.7 years. |
Summary of phantom RSU award activity | The following table summarizes the activity under the plan as of December 31, 2020: Units Outstanding at December 31, 2019 1661820 Grant 2020 65,440 Partial vesting of 2019 Grant (5,162) Forfeitures (31,614) Outstanding at December 31, 2020 1,690,484 Exercisable at December 31, 2020 — Phantom RSU Award (continued) Total Non-vested (i) Number of units outstanding 1,690,484 Current share price 5.03 Total fair value of the plan 8,503 Weighted-average accumulated percentage of service 39.00 % Accrued liability (ii) 3,316 Compensation expense not yet recognized (iii) 5,187 (i) Related to awards that will vest between May 2021 and May 2024. (ii) Presented within “Accrued payroll and other liabilities” in the Company’s current and non current liabilities balance sheet. (iii) Expected to be recognized in a weighted-average period of 2.93 years. |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of debt covenant ratios | The ratios for the period mentioned, were as follows: Commitments (continued) Fixed Charge Coverage Ratio Leverage Ratio March 31, 2020 1.74 4.15 June 30, 2020 1.35 5.37 September 30, 2020 1.15 6.31 December 31, 2020 0.96 7.71 |
Schedule of provision for contingencies | The breakdown of the provision for contingencies is as follows: Provision for contingencies (continued) Description Balance at beginning of period Accruals, net Settlements Reclassifications and increase of judicial deposits Translation Balance at end of period Year ended December 31, 2020: Tax contingencies in Brazil (i) $ 10,595 $ 2,040 $ — $ 435 $ (2,408) $ 10,662 Labor contingencies in Brazil (ii) 16,839 12,087 (10,499) — (3,913) 14,514 Other (iii) 11,404 1,203 (1,421) — (1,279) 9,907 Subtotal 38,838 15,330 (11,920) 435 (7,600) 35,083 Judicial deposits (iv) (12,680) — — 1,626 2,919 (8,135) Provision for contingencies $ 26,158 $ 15,330 $ (11,920) $ 2,061 $ (4,681) $ 26,948 Year ended December 31, 2019: Tax contingencies in Brazil (i) $ 9,497 $ 1,455 $ — $ — $ (357) $ 10,595 Labor contingencies in Brazil (ii) 21,108 12,916 (16,068) — (1,117) 16,839 Other (iii) 11,462 3,070 (1,700) — (1,428) 11,404 Subtotal 42,067 17,441 (17,768) — (2,902) 38,838 Judicial deposits (iv) (13,558) — — 354 524 (12,680) Provision for contingencies $ 28,509 $ 17,441 $ (17,768) $ 354 $ (2,378) $ 26,158 Year ended December 31, 2018: Tax contingencies in Brazil (i) $ 9,324 $ 1,805 $ — $ — $ (1,632) $ 9,497 Labor contingencies in Brazil (ii) 21,061 20,785 (17,718) — (3,020) 21,108 Other (iii) 15,646 1,405 (1,984) — (3,605) 11,462 Subtotal 46,031 23,995 (19,702) — (8,257) 42,067 Judicial deposits (iv) (18,075) — — 1,843 2,674 (13,558) Provision for contingencies $ 27,956 $ 23,995 $ (19,702) $ 1,843 $ (5,583) $ 28,509 (i) In 2020, 2019 and 2018, it includes mainly CIDE. (ii) It primarily relates to dismissals in the normal course of business. (iii) It relates to tax and labor contingencies in other countries and civil contingencies in all the countries. |
Disclosures about fair value _2
Disclosures about fair value of financial instruments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value, assets and liabilities measured on recurring basis | The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2020 and 2019: Quoted Prices in Significant Other Significant Balance as of Balance as of 2020 2019 2020 2019 2020 2019 2020 2019 Assets Cash equivalents $ 106,856 $ 49,038 $ — $ — $ — $ — $ 106,856 $ 49,038 Short-term Investments — 25 — — — — — 25 Derivatives — — 122,603 58,107 — — 122,603 58,107 Total Assets $ 106,856 $ 49,063 $ 122,603 $ 58,107 $ — $ — $ 229,459 $ 107,170 Liabilities Derivatives $ — — 20,525 $ 14,037 $ — $ — 20,525 14,037 Total Liabilities $ — $ — $ 20,525 $ 14,037 $ — $ — $ 20,525 $ 14,037 |
Segment and geographic inform_2
Segment and geographic information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Profit or loss and assets for reportable segment | The following table presents information about profit or loss and assets for each reportable segment: For the fiscal years ended December 31, 2020 2019 2018 Revenues: Brazil $ 862,748 $ 1,385,566 $ 1,345,453 Caribbean division 381,090 399,251 483,743 NOLAD 311,887 431,266 406,848 SLAD 428,494 742,994 845,527 Total revenues $ 1,984,219 $ 2,959,077 $ 3,081,571 Adjusted EBITDA: Brazil $ 76,155 $ 227,844 $ 218,391 Caribbean division 28,847 24,955 (8,281) NOLAD 10,207 39,027 32,313 SLAD 3,272 63,120 73,670 Total reportable segments 118,481 354,946 316,093 Corporate and others (i) (50,370) (63,171) (58,096) Total adjusted EBITDA $ 68,111 $ 291,775 $ 257,997 For the fiscal years ended December 31, 2020 2019 2018 Adjusted EBITDA reconciliation: Total Adjusted EBITDA $ 68,111 $ 291,775 $ 257,997 (Less) Plus items excluded from computation that affect operating (loss) income: Depreciation and amortization (126,853) (123,218) (105,800) Gains from sale or insurance recovery of property and equipment 4,210 5,175 4,973 Write-offs of property and equipment (4,501) (4,733) (4,167) Impairment of long-lived assets (6,636) (8,790) (18,950) Impairment of goodwill (1,085) (273) (167) Reorganization and optimization plan expenses — — (11,003) 2008 Long-Term Incentive Plan incremental compensation from modification — — 575 Operating (loss) income (66,754) 159,936 123,458 (Less) Plus: Net interest expense (59,068) (52,079) (52,868) (Loss) gain from derivative instruments (2,297) 439 (565) Gain from securities 25,676 — — Foreign currency exchange results (31,707) 12,754 14,874 Other non-operating income (expenses), net 2,296 (2,097) 270 Income tax expense (17,532) (38,837) (48,136) Net income attributable to non-controlling interests (65) (220) (186) Net (loss) income attributable to Arcos Dorados Holdings Inc. $ (149,451) $ 79,896 $ 36,847 For the fiscal years ended December 31, 2020 2019 2018 Depreciation and amortization: Brazil $ 59,466 $ 63,467 $ 52,632 Caribbean division 20,742 18,481 22,835 NOLAD 22,200 21,422 20,829 SLAD 20,329 20,713 19,293 Total reportable segments 122,737 124,083 115,589 Corporate and others (i) 5,288 4,894 5,696 Purchase price allocation (ii) (1,172) (5,759) (15,485) Total depreciation and amortization $ 126,853 $ 123,218 $ 105,800 Property and equipment expenditures: Brazil $ 39,127 $ 146,322 $ 100,926 Caribbean division 9,582 15,934 18,640 NOLAD 9,627 32,662 24,145 SLAD 27,975 70,280 53,300 Others — 37 30 Total property and equipment expenditures $ 86,311 $ 265,235 $ 197,041 As of December 31, 2020 2019 Total assets: Brazil $ 1,102,009 $ 1,328,984 Caribbean division 420,481 429,170 NOLAD 412,045 458,235 SLAD 372,974 389,976 Total reportable segments 2,307,509 2,606,365 Corporate and others (i) 95,802 67,195 Purchase price allocation (ii) (109,357) (115,875) Total assets $ 2,293,954 $ 2,557,685 (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 31,2020 and 2019, corporate assets primarily include corporate derivatives, cash and cash equivalents and lease right of use. (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 and the corresponding depreciation and amortization. As of December 31,2020 and 2019 primarily related with the reduction of goodwill. |
Venezuelan operations (Tables)
Venezuelan operations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Venezuelan Operations [Abstract] | |
Schedule of foreign currency translation | The following table summarizes the impacts during fiscal years 2020, 2019 and 2018: 2020 2019 2018 Write down of inventories (i) $ (1,625) $ (4,468) $ (61,007) Impairment of long-lived assets (i) (904) (2,123) (12,089) Foreign currency exchange income (loss) (ii) 27 (583) 5,061 (i) Presented within Other operating income (expenses), net. (ii) Presented within Foreign currency exchange results. |
Shareholders' equity (Tables)
Shareholders' equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | The following table sets forth information with respect to the components of “Accumulated other comprehensive income (loss)” as of December 31, 2020 and their related activity during the three-years in the period then ended: Foreign currency translation Cash flow hedges Post-employment benefits (i) Total Accumulated other comprehensive loss Balances at December 31, 2017 $ (436,281) $ 8,359 $ (1,425) $ (429,347) Other comprehensive (loss) income before reclassifications (62,996) 13,888 (418) (49,526) Net (income) loss reclassified from accumulated other comprehensive loss to consolidated statement of income — (23,887) 494 (23,393) Net current-period other comprehensive (loss) income (62,996) (9,999) 76 (72,919) Balances at December 31, 2018 (499,277) (1,640) (1,349) (502,266) Other comprehensive (loss) income before reclassifications (12,168) (5,185) (55) (17,408) Net (income) loss reclassified from accumulated other comprehensive income to consolidated statement of income — 85 864 949 Adoption of ASU 2017-12 — (780) — (780) Net current-period other comprehensive (loss) income (12,168) (5,880) 809 (17,239) Balances at December 31, 2019 (511,445) (7,520) (540) (519,505) Other comprehensive loss before reclassifications (76,359) 54,287 (195) (22,267) Net loss reclassified from accumulated other comprehensive loss to consolidated statement income — (43,324) 236 (43,088) Net current-period other comprehensive (loss) income (76,359) 10,963 41 (65,355) Balances at December 31, 2020 $ (587,804) $ 3,443 $ (499) $ (584,860) (i) Mainly related to a post-employment benefit in Venezuela established by the Organic Law of Labor and Workers (known as “LOTTT”, 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. |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of computation of earnings per share | 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: For the fiscal years ended December 31, 2020 2019 2018 Net (loss) income attributable to Arcos Dorados Holdings Inc. available to common shareholders $ (149,451) $ 79,896 $ 36,847 Weighted-average number of common shares outstanding - Basic 205,417,516 204,003,977 209,136,832 Incremental shares from assumed exercise of stock options (i) — — — Incremental shares from vesting of restricted share units 287,965 664,375 983,634 Weighted-average number of common shares outstanding - Diluted 205,705,481 204,668,352 210,120,466 Basic net (loss) income per common share attributable to Arcos Dorados Holdings Inc. $ (0.73) $ 0.39 $ 0.18 Diluted net (loss) income per common share attributable to Arcos Dorados Holdings Inc. $ (0.73) $ 0.39 $ 0.18 (i) Options to purchase shares of common stock were outstanding during fiscal years 2020, 2019 and 2018. 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. |
Related party transactions (Tab
Related party transactions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of outstanding balance with related party | The following table summarizes the outstanding balances between the Company and the Axionlog Business as of December 31, 2020 and 2019: As of December 31, 2020 2019 Accounts and notes receivable, net $ 272 $ 177 Other receivables 2,392 2,201 Miscellaneous 3,665 3,719 Accounts payable (6,378) (8,747) |
Summary of related party transactions | The following table summarizes the outstanding balances between the Company and the Axionlog Business as of December 31, 2020 and 2019: As of December 31, 2020 2019 Accounts and notes receivable, net $ 272 $ 177 Other receivables 2,392 2,201 Miscellaneous 3,665 3,719 Accounts payable (6,378) (8,747) The following table summarizes the transactions between the Company and the Axionlog Business for the fiscal years ended December 31, 2020, 2019 and 2018: Fiscal years ended December 31, 2020 2019 2018 Food and paper (i) $ (124,416) $ (188,276) $ (177,356) Occupancy and other operating expenses (3,667) (7,252) (5,322) |
Valuation and qualifying acco_2
Valuation and qualifying accounts (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule of valuation and qualifying accounts | 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: Description Balance at beginning of period Additions (i) Deductions (ii) Translation Balance at end of period Year ended December 31, 2020: Deducted from assets accounts: Allowance for doubtful accounts (iii) $ 23,076 $ 937 $ (22,929) $ (141) $ 943 Valuation allowance on deferred tax assets 194,426 65,077 (18,870) (5,437) 235,196 Reported as liabilities: Provision for contingencies 26,158 17,391 (11,920) (4,681) 26,948 Total $ 243,660 $ 83,405 $ (53,719) $ (10,259) $ 263,087 Year ended December 31, 2019: Deducted from assets accounts: Allowance for doubtful accounts (iii) $ 25,539 $ 8,524 $ (10,892) $ (95) $ 23,076 Valuation allowance on deferred tax assets 219,920 2,375 (26,252) (1,617) 194,426 Reported as liabilities: Provision for contingencies 28,509 17,795 (17,768) (2,378) 26,158 Total $ 273,968 $ 28,694 $ (54,912) $ (4,090) $ 243,660 Year ended December 31, 2018: Deducted from assets accounts: Allowance for doubtful accounts (iii) $ 21,467 $ 6,064 $ (1,860) $ (132) $ 25,539 Valuation allowance on deferred tax assets 271,651 13,107 (37,718) (27,120) 219,920 Reported as liabilities: Provision for contingencies 27,956 25,838 (19,702) (5,583) 28,509 Total $ 321,074 $ 45,009 $ (59,280) $ (32,835) $ 273,968 (i) Additions in valuation allowance on deferred tax assets are charged to income tax expense. Additions in provision for contingencies are explained as follows: Fiscal years 2020, 2019 and 2018 – Relate to the accrual of $15,330, $17,441 and $23,995, respectively, and a reclassification of $2,061 and $354, during fiscal years 2020 and 2019, respectively. See Note 18 for details. (ii) Deductions in valuation allowance on deferred tax assets are charged to income tax expense. Deductions in provision for contingencies are explained as follows: Corresponds to the settlements amounting to $11,920; $17,768 and $19,702 during fiscal years 2020, 2019 and 2018, respectively. as discussed in Note 18. Deductions in allowance for doubtful accounts during fiscal years 2020 and 2019 mainly relate to reductions in the accrual and the write-off of some receivables from franchisees in Puerto Rico as a consequence of the confidential settlement agreements reached in December 2020 and March 2021 with Puerto Rican franchisees. For details see note 18. |
Organization and nature of bu_2
Organization and nature of business (Details) $ in Thousands | Sep. 15, 2020USD ($) | Apr. 15, 2020 | Dec. 31, 2021 | Dec. 31, 2020USD ($)territory | Dec. 31, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 11, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Apr. 30, 2017USD ($) | Jul. 20, 2016territory |
Schedule of Equity Method Investments [Line Items] | |||||||||||
Number of territories with operations | territory | 20 | ||||||||||
Percentage of entire restaurant footprint closed (as a percent) | 50.00% | ||||||||||
Percentage of gross sales on advertising and promotion activities | 5.00% | 5.00% | |||||||||
Percentage of gross sales of restaurants | 5.00% | ||||||||||
Short-term debt | $ 0 | $ 13,296 | $ 11,000 | $ 158,200 | $ 136,000 | ||||||
2027 Notes | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Aggregate principal amount | $ 150,000 | $ 265,000 | |||||||||
Proceeds from exchange of notes | $ 138,354 | ||||||||||
Scenario, Forecast | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Percentage of gross sales of restaurants | 5.30% | ||||||||||
Covid-19 Pandemic | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Percentage of gross sales on advertising and promotion activities | 4.00% | ||||||||||
Martinique, French Guyana and Guadeloupe | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Franchise agreement term | 10 years | ||||||||||
Renewed franchise agreement term | 10 years | ||||||||||
Number of territories under renewed franchise agreement | territory | 3 | ||||||||||
Arcos Dorados B.V. | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Equity interest (as a percent) | 100.00% |
Summary of significant accoun_4
Summary of significant accounting policies - Effect of Topic 606 (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2019 | Jan. 01, 2018 | Dec. 31, 2017 | |
Balance Sheet | ||||||
Deferred income taxes | $ 55,567 | $ 68,368 | $ 58,334 | $ 75,854 | ||
Accrued payroll and other liabilities - current | 79,218 | 86,379 | 94,166 | 119,427 | ||
Accrued payroll and other liabilities - non-current | 21,884 | 23,497 | 35,322 | $ 18,918 | 34,378 | |
Retained earnings | 290,895 | 471,149 | 413,074 | 397,338 | ||
Income Statement | ||||||
Revenues from franchised restaurants | 1,984,219 | 2,959,077 | 3,081,571 | |||
Income tax expense | (17,532) | (38,837) | (48,136) | |||
Revenues from franchised restaurants | ||||||
Income Statement | ||||||
Revenues from franchised restaurants | $ 89,601 | $ 146,790 | 148,962 | |||
Balances Without Adoption of ASC 606 | ||||||
Balance Sheet | ||||||
Deferred income taxes | 56,522 | |||||
Accrued payroll and other liabilities - current | 93,770 | |||||
Accrued payroll and other liabilities - non-current | 29,495 | |||||
Retained earnings | 417,485 | |||||
Income Statement | ||||||
Income tax expense | (48,393) | |||||
Balances Without Adoption of ASC 606 | Revenues from franchised restaurants | ||||||
Income Statement | ||||||
Revenues from franchised restaurants | 149,834 | |||||
Previously Reported | ||||||
Balance Sheet | ||||||
Deferred income taxes | $ 74,299 | |||||
Accrued payroll and other liabilities - current | 119,088 | |||||
Accrued payroll and other liabilities - non-current | 35,322 | 29,366 | ||||
Retained earnings | 401,134 | |||||
Accounting Standards Update 2014-09 | Effect of Change | ||||||
Balance Sheet | ||||||
Deferred income taxes | 1,812 | |||||
Accrued payroll and other liabilities - current | 396 | |||||
Accrued payroll and other liabilities - non-current | 5,827 | |||||
Retained earnings | (4,411) | |||||
Income Statement | ||||||
Income tax expense | 257 | |||||
Accounting Standards Update 2014-09 | Effect of Change | Revenues from franchised restaurants | ||||||
Income Statement | ||||||
Revenues from franchised restaurants | $ (872) | |||||
Accounting Standards Update 2014-09 | Restatement Adjustment | ||||||
Balance Sheet | ||||||
Deferred income taxes | $ 1,555 | 1,555 | ||||
Accrued payroll and other liabilities - current | 339 | |||||
Accrued payroll and other liabilities - non-current | 5,012 | |||||
Retained earnings | $ (3,796) |
Summary of significant accoun_5
Summary of significant accounting policies - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2019 | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Insurance claim receivables, related party receivables, value-added tax and other tax receivables | $ 10,110 | |||
Value added tax and other tax receivable | $ 17,046 | |||
Accounts payable for outsourcing | 13,354 | 8,896 | ||
Sale of properties, equipment and restaurant businesses | 201 | 6,415 | $ 8,184 | |
Lease right of use asset, net | 790,969 | 922,165 | $ 896,682 | |
Operating lease liability | 809,441 | |||
Company-operated Restaurants | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Advertising expense | 60,855 | 115,568 | 120,839 | |
Franchised Operations | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Advertising expense | $ 26,486 | 43,039 | $ 43,940 | |
Internal Used Software | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Finite-lived intangible asset, useful life | 3 years | |||
Minimum | Equipment | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment, useful life | 3 years | |||
Maximum | Building | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment, useful life | 40 years | |||
Maximum | Equipment | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment, useful life | 10 years | |||
ASC 842 | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Lease right of use asset, net | $ 922,165 | 913,000 | ||
Operating lease liability | $ 913,000 |
Summary of significant accoun_6
Summary of significant accounting policies - Impairment Charges (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Line Items] | |||
Impairment of long-lived assets | $ 6,636 | $ 8,790 | $ 18,950 |
Impairment of goodwill | 1,085 | 273 | 167 |
Mexico | |||
Goodwill [Line Items] | |||
Impairment of goodwill | $ 1,085 | ||
Ecuador | |||
Goodwill [Line Items] | |||
Impairment of goodwill | $ 273 | ||
Peru | |||
Goodwill [Line Items] | |||
Impairment of goodwill | $ 167 |
Summary of significant accoun_7
Summary of significant accounting policies (Effect of Topic 842) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2019 | Jan. 01, 2018 | Dec. 31, 2017 | |
Non-current assets | ||||||
Lease right of use asset, net | $ 790,969 | $ 922,165 | $ 896,682 | |||
Current liabilities | ||||||
Operating lease liabilities | 56,828 | 70,147 | 72,272 | |||
Non-current liabilities | ||||||
Accrued payroll and other liabilities | 21,884 | 23,497 | $ 35,322 | 18,918 | $ 34,378 | |
Operating lease liabilities | 752,613 | 861,582 | 840,814 | |||
Equity | ||||||
Retained earnings | 290,895 | 471,149 | 413,074 | $ 397,338 | ||
Accumulated other comprehensive loss | (584,860) | (519,505) | ||||
Foreign currency exchange results | $ (31,707) | 12,754 | 14,874 | |||
Previously Reported | ||||||
Non-current liabilities | ||||||
Accrued payroll and other liabilities | 35,322 | $ 29,366 | ||||
Equity | ||||||
Retained earnings | $ 401,134 | |||||
ASC 842 | ||||||
Non-current assets | ||||||
Lease right of use asset, net | 922,165 | 913,000 | ||||
Current liabilities | ||||||
Operating lease liabilities | 70,147 | |||||
Non-current liabilities | ||||||
Accrued payroll and other liabilities | (17,587) | |||||
Operating lease liabilities | 861,582 | |||||
Equity | ||||||
Retained earnings | 3,589 | |||||
Accumulated other comprehensive loss | 4,434 | |||||
Capitalization of operating lease right of use assets | 913,086 | |||||
Straight-line rent accrual | $ 16,404 | |||||
Foreign currency exchange results | 3,589 | |||||
ASC 842 | Restatement Adjustment | ||||||
Non-current assets | ||||||
Lease right of use asset, net | 896,682 | |||||
Current liabilities | ||||||
Operating lease liabilities | 72,272 | |||||
Non-current liabilities | ||||||
Accrued payroll and other liabilities | (16,404) | |||||
Operating lease liabilities | $ 840,814 | |||||
Pro Forma | ||||||
Non-current assets | ||||||
Lease right of use asset, net | 0 | |||||
Current liabilities | ||||||
Operating lease liabilities | 0 | |||||
Non-current liabilities | ||||||
Accrued payroll and other liabilities | 41,084 | |||||
Operating lease liabilities | 0 | |||||
Equity | ||||||
Retained earnings | 467,560 | |||||
Accumulated other comprehensive loss | (523,939) | |||||
Foreign currency exchange results | $ 9,165 |
Acquisition of businesses - Nar
Acquisition of businesses - Narrative (Details) - USD ($) $ in Thousands | Aug. 03, 2007 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||
Length of MFAs | 20 years | |
First Ten Years | ||
Business Acquisition [Line Items] | ||
First franchise fee payment period | 10 years | |
Royalty fee (as a percent) | 5.00% | |
Next Five Years | ||
Business Acquisition [Line Items] | ||
Royalty fee (as a percent) | 6.00% | |
Subsequent period of the agreement | 5 years | |
Last Five Years | ||
Business Acquisition [Line Items] | ||
Royalty fee (as a percent) | 7.00% | |
Subsequent period of the agreement | 5 years | |
Latin America and Caribbean McDonald's | ||
Business Acquisition [Line Items] | ||
Final purchase price | $ 698,080 |
Acquisition of businesses - Sch
Acquisition of businesses - Schedule of Non-Significant Acquisitions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 5,601 | $ 6,783 | |
Net cash paid at acquisition date | 3,833 | 2,658 | $ 0 |
Franchised Restaurants | |||
Business Acquisition [Line Items] | |||
Property and equipment | 16,756 | 1,471 | 413 |
Identifiable intangible assets | 4,922 | 1,347 | 56 |
Goodwill | 1,224 | 1,589 | 0 |
Assumed debt | 0 | (77) | 0 |
Gain on purchase of franchised restaurants | (1,708) | (767) | 0 |
Purchase price | 21,194 | 3,563 | 469 |
Seller financing | (1,000) | 0 | 0 |
Settlement of franchise receivables | (16,361) | (905) | (469) |
Net cash paid at acquisition date | 3,833 | $ 2,658 | $ 0 |
Puerto Rican Franchisees | |||
Business Acquisition [Line Items] | |||
Property and equipment | $ 14,290 |
Accounts and notes receivable_3
Accounts and notes receivable, net (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Receivables from franchisees | $ 45,427 | $ 63,618 |
Debit and credit card receivables | 38,388 | 43,741 |
Meal voucher receivables | 4,857 | 13,017 |
Notes receivable | 6,163 | 1,928 |
Allowance for doubtful accounts | (586) | (22,442) |
Accounts and notes receivable, net | $ 94,249 | $ 99,862 |
Prepaid expenses and other cu_3
Prepaid expenses and other current assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Prepaid Expense and Other Assets [Abstract] | ||
Prepaid taxes | $ 48,781 | $ 73,932 |
Prepaid expenses | 30,175 | 24,266 |
Promotion items and related advances | 20,701 | 19,092 |
Others | 812 | 322 |
Prepaid expense and other assets, total | $ 100,469 | $ 117,612 |
Miscellaneous (Details)
Miscellaneous (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Judicial deposits | $ 36,943 | $ 46,148 |
Tax credits | 10,365 | 21,067 |
Prepaid property and equipment | 5,967 | 7,770 |
Notes receivable | 4,484 | 5,876 |
Rent deposits | 2,991 | 3,196 |
Others | 11,899 | 11,757 |
Miscellaneous | $ 72,649 | $ 95,814 |
Property and equipment, net (De
Property and equipment, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Total cost | $ 1,526,795 | $ 1,640,744 | |
Total accumulated depreciation | (730,263) | (679,758) | |
Property and equipment, net | 796,532 | 960,986 | |
Depreciation expense | 115,031 | 111,638 | $ 94,490 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | 134,148 | 146,517 | |
Buildings and leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | 657,652 | 710,046 | |
Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | $ 734,995 | $ 784,181 |
Net intangible assets and goo_3
Net intangible assets and goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||
Total cost | $ 103,046 | $ 106,606 | |
Total accumulated amortization | (71,601) | (70,345) | |
Subtotal | 31,445 | 36,261 | |
Goodwill | 5,601 | 6,783 | |
Net intangible assets including goodwill | 37,046 | 43,044 | |
Total amortization expense | 11,822 | 11,580 | $ 11,310 |
Estimated aggregate amortization expense for 2021 | 12,581 | ||
Estimated aggregate amortization expense for 2022 | 8,017 | ||
Estimated aggregate amortization expense for 2023 | 2,714 | ||
Estimated aggregate amortization expense for 2024 | 1,768 | ||
Estimated aggregate amortization expense for 2025 | 1,739 | ||
Estimated aggregate amortization expense for 2026 and thereafter | 4,626 | ||
Brazil | |||
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | 3,196 | 4,124 | |
Argentina | |||
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | 1,276 | 1,585 | |
Chile | |||
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | 1,047 | 988 | |
Colombia | |||
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | 82 | 86 | |
Computer software cost | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total cost | 69,999 | 75,224 | |
Initial franchise fees | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total cost | 14,223 | 16,146 | |
Reacquired franchised rights | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total cost | 16,884 | 13,296 | |
Letter of credit fees | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total cost | 940 | 940 | |
Others | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total cost | $ 1,000 | $ 1,000 |
Accrued payroll and other lia_3
Accrued payroll and other liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Jan. 01, 2018 |
Current: | |||||
Accrued payroll | $ 59,772 | $ 77,087 | |||
Accrued expenses | 14,993 | 6,586 | |||
Other liabilities | 4,453 | 2,706 | |||
Accrued payroll and other liabilities, current | 79,218 | 86,379 | |||
Non-current: | |||||
Phantom RSU award liability | 2,730 | 2,102 | |||
Security deposits | 5,976 | 6,836 | |||
Other liabilities | 2,491 | 2,365 | |||
Accrued payroll and other liabilities, non-current | 21,884 | 23,497 | $ 18,918 | $ 35,322 | $ 34,378 |
Initial fees | |||||
Non-current: | |||||
Deferred income | 4,612 | 5,802 | |||
Excluding Franchise, Initial Fees | |||||
Non-current: | |||||
Deferred income | $ 6,075 | $ 6,392 |
Short-term debt - Schedule of S
Short-term debt - Schedule of Short-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Short-term Debt [Line Items] | |||||
Short-term debt | $ 0 | $ 11,000 | $ 158,200 | $ 136,000 | $ 13,296 |
Short-term bank loans | |||||
Short-term Debt [Line Items] | |||||
Short-term debt | 0 | 10,794 | |||
Revolving Credit Facility | |||||
Short-term Debt [Line Items] | |||||
Short-term debt | 0 | 2,500 | |||
Bank overdrafts | |||||
Short-term Debt [Line Items] | |||||
Short-term debt | $ 0 | $ 2 |
Short-term debt - Narrative (De
Short-term debt - Narrative (Details) | Dec. 11, 2020USD ($) | Dec. 31, 2019USD ($)loan | Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) |
Line of Credit Facility [Line Items] | ||||||
Short-term debt | $ 13,296,000 | $ 0 | $ 11,000,000 | $ 158,200,000 | $ 136,000,000 | |
Ratio of net indebtedness to EBITDA | 7.62 | |||||
CDI | Banco Bradesco S.A. | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, basis spread on variable rate (as a percent) | 0.67% | |||||
CDI | Banco de la Ciudad de Buenos Aires | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, basis spread on variable rate (as a percent) | 54.00% | |||||
Short-term bank loans | ||||||
Line of Credit Facility [Line Items] | ||||||
Number of loans | loan | 2 | |||||
Short-term debt | $ 10,794,000 | $ 0 | ||||
Short-term bank loans | Banco Bradesco S.A. | ||||||
Line of Credit Facility [Line Items] | ||||||
Short-term debt | 7,454,000 | |||||
Short-term bank loans | Banco de la Ciudad de Buenos Aires | ||||||
Line of Credit Facility [Line Items] | ||||||
Short-term debt | 3,340,000 | |||||
Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Short-term debt | 2,500,000 | 0 | ||||
Minimum aggregate amount of unrestricted cash, cash equivalents and/or marketable securities | $ 50,000,000 | |||||
Line of credit, current | $ 2,500,000 | $ 0 | ||||
Revolving Credit Facility | JPMorgan | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility, maximum borrowing amount | $ 25,000,000 | |||||
Revolving Credit Facility | LIBOR | JPMorgan | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, basis spread on variable rate (as a percent) | 3.00% |
Short-term debt - Schedule of C
Short-term debt - Schedule of Consolidated Net Indebtedness to EBITDA Ratio (Details) | Dec. 11, 2020 |
As of December 31, 2020 | |
Line of Credit Facility [Line Items] | |
Debt to EBITDA ratio (lower than) | 9.5 |
As of March 31, 2021 | |
Line of Credit Facility [Line Items] | |
Debt to EBITDA ratio (lower than) | 15.25 |
As of June 30, 2021 | |
Line of Credit Facility [Line Items] | |
Debt to EBITDA ratio (lower than) | 5.25 |
As of September 30, 2021 | |
Line of Credit Facility [Line Items] | |
Debt to EBITDA ratio (lower than) | 4.25 |
Long-term debt - Schedule of Lo
Long-term debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 11, 2020 | Dec. 31, 2019 | Apr. 30, 2017 | Sep. 27, 2013 |
Debt Instrument [Line Items] | |||||
Finance lease obligations | $ 5,941 | $ 5,419 | |||
Other long-term borrowings | 10,199 | 13,284 | |||
Subtotal | 786,087 | 631,772 | |||
Deferred financing costs | (4,641) | (3,397) | |||
Total | 776,574 | 626,808 | |||
Current portion of long-term debt | 3,129 | 3,233 | |||
Long-term debt, excluding current portion | 773,445 | 623,575 | |||
2027 Notes | |||||
Debt Instrument [Line Items] | |||||
Notes payable | 553,354 | 265,000 | |||
Discount on Notes | (7,358) | 0 | |||
Premium on Notes | 3,206 | 0 | |||
Deferred financing costs | $ (2,000) | $ (3,001) | |||
2023 Notes | |||||
Debt Instrument [Line Items] | |||||
Notes payable | 216,593 | 348,069 | |||
Discount on Notes | (1,147) | (2,504) | |||
Premium on Notes | $ 427 | $ 937 | |||
Deferred financing costs | $ (3,313) |
Long-term debt - Principal Outs
Long-term debt - Principal Outstanding (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Principal outstanding | $ 786,087 | |
2027 Notes | ||
Debt Instrument [Line Items] | ||
Annual interest rate | 5.875% | |
Principal outstanding | $ 553,354 | $ 265,000 |
2023 Notes | ||
Debt Instrument [Line Items] | ||
Annual interest rate | 6.625% | |
Principal outstanding | $ 216,593 | $ 348,069 |
Long-term debt - Additional Req
Long-term debt - Additional Required Disclosures (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
2027 Notes | |||
Debt Instrument [Line Items] | |||
Interest expense | $ 20,269 | $ 15,569 | $ 15,569 |
DFC Amortization | 402 | 299 | 299 |
Amortization of Discount, net | 133 | 0 | 0 |
2023 Notes | |||
Debt Instrument [Line Items] | |||
Interest expense | 20,882 | 23,060 | 23,060 |
DFC Amortization | 294 | 323 | 323 |
Amortization of Discount, net | $ 371 | $ 402 | $ 397 |
Long-term debt - Narrative (Det
Long-term debt - Narrative (Details) - USD ($) | Oct. 15, 2020 | Oct. 13, 2020 | Sep. 28, 2020 | Sep. 27, 2020 | Sep. 11, 2020 | Mar. 29, 2017 | Mar. 29, 2017 | Mar. 16, 2017 | Jun. 14, 2016 | Jun. 01, 2016 | Oct. 15, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Apr. 30, 2017 | Sep. 27, 2013 |
Debt Instrument [Line Items] | |||||||||||||||||||
Deferred financing costs | $ 4,641,000 | $ 3,397,000 | |||||||||||||||||
Short-term debt | 0 | 13,296,000 | $ 11,000,000 | $ 158,200,000 | $ 136,000,000 | ||||||||||||||
2023 Notes | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Aggregate principal amount issued | $ 473,800,000 | ||||||||||||||||||
Deferred financing costs | $ 3,313,000 | ||||||||||||||||||
Redemption price, principal amount redeemed | $ 80,000,000 | $ 80,000,000 | |||||||||||||||||
Redemption price (as a percent) | 102.25% | 107.00% | 104.00% | 101.00% | 98.00% | ||||||||||||||
Redemption price, percentage of principal amount redeemed | 11.60% | 16.90% | |||||||||||||||||
Redemption price, amount | $ 48,885,000 | $ 48,885,000 | $ 80,800,000 | ||||||||||||||||
Early tender payment | $ 3,187,000 | $ 800,000 | |||||||||||||||||
Accrued interest effect of Secured Loan Agreement | 20,882,000 | 23,060,000 | $ 23,060,000 | ||||||||||||||||
2023 Notes | Exchangeable Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Redemption price, percentage of principal amount redeemed | 1.34% | 36.43% | |||||||||||||||||
Debt instrument, settlement amount | $ 1,000 | $ 1,000 | |||||||||||||||||
Short-term debt | $ 4,675,000 | $ 126,801,000 | |||||||||||||||||
2027 Notes | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Aggregate principal amount issued | $ 150,000,000 | $ 265,000,000 | |||||||||||||||||
Deferred financing costs | $ 2,000,000 | $ 3,001,000 | |||||||||||||||||
Accrued interest effect of Secured Loan Agreement | $ 20,269,000 | $ 15,569,000 | $ 15,569,000 | ||||||||||||||||
2027 Notes | Exchangeable Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt instrument, settlement amount | $ 1,000 | $ 1,055 | $ 1,005 | ||||||||||||||||
Proceeds from issuance of debt | 133,668,000 | 4,686,000 | |||||||||||||||||
Accrued interest effect of Secured Loan Agreement | 180,100 | 7,100 | |||||||||||||||||
Payment for fractional potion of exchangeable debt | $ 107,100 | $ 12,400 |
Long-term debt - Schedule of Fu
Long-term debt - Schedule of Future Payments Related to Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
2021, Principal | $ 3,129 | |
2021, Interest | 47,999 | |
2021, Principal and Interest Total | 51,128 | |
2022, Principal | 4,126 | |
2022, Interest | 47,796 | |
2022, Principal and Interest Total | 51,922 | |
2023, Principal | 219,204 | |
2023, Interest | 47,527 | |
2023, Principal and Interest Total | 266,731 | |
2024, Principal | 2,204 | |
2024, Interest | 32,949 | |
2024, Principal and Interest Total | 35,153 | |
2025, Principal | 553 | |
2025, Interest | 32,832 | |
2025, Principal and Interest Total | 33,385 | |
Thereafter, Principal | 556,871 | |
Thereafter, Interest | 50,632 | |
Thereafter, Principal and Interest Total | 607,503 | |
Total payments, Principal | 786,087 | |
Total payments, Interest | 259,735 | |
Total payments, Principal and future interest expense | 1,045,822 | |
Interest | (259,735) | |
Deferred financing cost | (4,641) | $ (3,397) |
Long term debt | 776,574 | $ 626,808 |
2023 Notes | ||
Debt Instrument [Line Items] | ||
Discount on Notes | (1,147) | |
Premium on Notes | 427 | |
2027 Notes | ||
Debt Instrument [Line Items] | ||
Discount on Notes | (7,358) | |
Premium on Notes | $ 3,206 |
Derivative instruments - Schedu
Derivative instruments - Schedule of Derivative Instruments, Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Assets | $ 122,603 | $ 58,107 |
Liabilities | (20,525) | (14,037) |
Derivatives not designated as hedging instruments | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 10,620 | 20 |
Liabilities | (13,067) | 0 |
Cash Flow hedge | Derivatives designated as hedging instruments | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 111,983 | 58,087 |
Liabilities | (7,458) | (14,037) |
Cash Flow hedge | Derivatives designated as hedging instruments | Forward contracts | Other receivables | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 0 | 259 |
Cash Flow hedge | Derivatives designated as hedging instruments | Forward contracts | Accrued payroll and other liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liabilities | (1,264) | (532) |
Cash Flow hedge | Derivatives designated as hedging instruments | Cross-currency interest rate swap | Derivative instruments | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 86,534 | 37,219 |
Liabilities | (6,194) | (8,179) |
Cash Flow hedge | Derivatives designated as hedging instruments | Call spread | Derivative instruments | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 21,858 | 20,609 |
Liabilities | 0 | 0 |
Cash Flow hedge | Derivatives designated as hedging instruments | Coupon-only swap | Derivative instruments | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 3,591 | 0 |
Liabilities | 0 | (5,326) |
Cash Flow hedge | Derivatives not designated as hedging instruments | Forward contracts | Other receivables | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 0 | 20 |
Cash Flow hedge | Derivatives not designated as hedging instruments | Forward contracts | Accrued payroll and other liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liabilities | 0 | 0 |
Cash Flow hedge | Derivatives not designated as hedging instruments | Call spread | Derivative instruments | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 3,798 | 0 |
Liabilities | 0 | 0 |
Cash Flow hedge | Derivatives not designated as hedging instruments | Coupon-only swap | Derivative instruments | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 202 | 0 |
Liabilities | (5,017) | 0 |
Cash Flow hedge | Derivatives not designated as hedging instruments | Call Spread + Coupon-only swap | Derivative instruments | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 6,620 | 0 |
Liabilities | $ (8,050) | $ 0 |
Derivative instruments - Narrat
Derivative instruments - Narrative (Details) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Oct. 31, 2020instrument | Apr. 30, 2017instrument | |
Derivative [Line Items] | |||||
Interest paid net | $ 57,066 | $ 52,458 | $ 55,400 | ||
Derivatives not designated as hedging instruments | Forward contracts | |||||
Derivative [Line Items] | |||||
Collected (paid) derivative Instrument | 39 | (787) | (81) | ||
Cash Flow Hedging | Forward contracts | |||||
Derivative [Line Items] | |||||
Net collections (payments) to derivative instrument hedges | 1,757 | 711 | 75 | ||
Cash Flow Hedging | Cross-currency interest rate swap | |||||
Derivative [Line Items] | |||||
Interest paid net | 4,031 | 8,692 | 10,671 | ||
Cash Flow Hedging | Coupon-only swap | |||||
Derivative [Line Items] | |||||
Interest paid net | 197 | $ 2,036 | $ 2,900 | ||
Cash Flow Hedging | Derivatives designated as hedging instruments | Forward contracts | |||||
Derivative [Line Items] | |||||
Notional amount outstanding | $ 20,276 | ||||
Cash Flow Hedging | Derivatives designated as hedging instruments | Cross-currency interest rate swap | |||||
Derivative [Line Items] | |||||
Number of instruments held | instrument | 4 | ||||
Cash Flow Hedging | Subsidiaries | Cross-currency interest rate swap | |||||
Derivative [Line Items] | |||||
Percentage of principal and interest collections hedged (as a percent) | 50.00% | ||||
Cash Flow Hedging | Subsidiaries | Call spread | |||||
Derivative [Line Items] | |||||
Number of instruments held | instrument | 2 | ||||
Percentage of principal and interest collections hedged (as a percent) | 50.00% | ||||
Cash Flow Hedging | Subsidiaries | Coupon-only swap | |||||
Derivative [Line Items] | |||||
Number of instruments held | instrument | 2 | ||||
Percentage of principal and interest collections hedged (as a percent) | 50.00% |
Derivative instruments - Cross-
Derivative instruments - Cross-currency Interest Rate Swap (Details) - Cross-currency interest rate swap - Cash Flow Hedging R$ in Thousands, $ in Thousands | Oct. 31, 2020BRL (R$) | Oct. 31, 2020USD ($) | Apr. 30, 2017BRL (R$) | Apr. 30, 2017USD ($) |
Cross-Currency Interest Rate Swap Originated November 2013 | JP Morgan Chase Bank, N.A. | Payable | ||||
Derivative [Line Items] | ||||
Payable Amount | R$ | R$ 108000 | |||
Cross-Currency Interest Rate Swap Originated November 2013 | JP Morgan Chase Bank, N.A. | Receivable | ||||
Derivative [Line Items] | ||||
Interest rate | 4.38% | 4.38% | ||
Receivable Amount | $ | $ 35,400 | |||
Cross-Currency Interest Rate Swap Originated November 2013 | Brazil Real | JP Morgan Chase Bank, N.A. | Payable | ||||
Derivative [Line Items] | ||||
Interest rate | 13.00% | 13.00% | ||
Cross-Currency Interest Rate Swap Originated June 2017 | JP Morgan Chase Bank, N.A. | Payable | ||||
Derivative [Line Items] | ||||
Payable Amount | R$ | R$ 98670 | |||
Cross-Currency Interest Rate Swap Originated June 2017 | JP Morgan Chase Bank, N.A. | Receivable | ||||
Derivative [Line Items] | ||||
Interest rate | 6.02% | 6.02% | ||
Receivable Amount | $ | $ 30,000 | |||
Cross-Currency Interest Rate Swap Originated June 2017 | Brazil Real | JP Morgan Chase Bank, N.A. | Payable | ||||
Derivative [Line Items] | ||||
Interest rate | 13.00% | 13.00% | ||
Cross-Currency Interest Rate Swap Originated July 2017 | Citibank N.A. | Payable | ||||
Derivative [Line Items] | ||||
Payable Amount | R$ | R$ 94200 | |||
Cross-Currency Interest Rate Swap Originated July 2017 | Citibank N.A. | Receivable | ||||
Derivative [Line Items] | ||||
Interest rate | 6.29% | 6.29% | ||
Receivable Amount | $ | $ 30,000 | |||
Cross-Currency Interest Rate Swap Originated July 2017 | Brazil Real | Citibank N.A. | Payable | ||||
Derivative [Line Items] | ||||
Interest rate | 13.00% | 13.00% | ||
Cross-Currency Interest Rate Swap Originated October 2020 | Citibank N.A. | Payable | ||||
Derivative [Line Items] | ||||
Payable Amount | R$ | R$ 112738 | |||
Cross-Currency Interest Rate Swap Originated October 2020 | Citibank N.A. | Receivable | ||||
Derivative [Line Items] | ||||
Interest rate | 8.08% | 8.08% | ||
Receivable Amount | $ | $ 20,049 | |||
Cross-Currency Interest Rate Swap Originated October 2020 | Brazil Real | Citibank N.A. | Payable | ||||
Derivative [Line Items] | ||||
Interest rate | 13.00% | 13.00% | ||
Subsidiaries | Banco Santander S.A. | Payable | ||||
Derivative [Line Items] | ||||
Payable Amount | R$ | R$ 155500 | |||
Subsidiaries | Banco Santander S.A. | Receivable | ||||
Derivative [Line Items] | ||||
Interest rate | 6.91% | 6.91% | ||
Receivable Amount | $ | $ 50,000 | |||
Subsidiaries | Brazil Real | Banco Santander S.A. | Payable | ||||
Derivative [Line Items] | ||||
Interest rate | 13.77% | 13.77% | ||
Subsidiaries | Cross-Currency Interest Rate Swap Originated November 2013 | BAML | Payable | ||||
Derivative [Line Items] | ||||
Payable Amount | R$ | R$ 156250 | |||
Subsidiaries | Cross-Currency Interest Rate Swap Originated November 2013 | BAML | Receivable | ||||
Derivative [Line Items] | ||||
Interest rate | 6.91% | 6.91% | ||
Receivable Amount | $ | $ 50,000 | |||
Subsidiaries | Cross-Currency Interest Rate Swap Originated November 2013 | Brazil Real | BAML | Payable | ||||
Derivative [Line Items] | ||||
Interest rate | 13.64% | 13.64% |
Derivative instruments - Call S
Derivative instruments - Call Spread (Details) - Subsidiaries - Derivatives designated as hedging instruments - Call spread - Cash Flow Hedging $ in Thousands | Apr. 30, 2017USD ($)$ / option |
Citibank S.A. | |
Derivative [Line Items] | |
Notional Amount | $ | $ 50,000 |
Citibank S.A. | Written | |
Derivative [Line Items] | |
Strike price (in usd per option) | 4.49 |
Citibank S.A. | Bought | |
Derivative [Line Items] | |
Strike price (in usd per option) | 3.11 |
JP Morgan S.A. | |
Derivative [Line Items] | |
Notional Amount | $ | $ 50,000 |
JP Morgan S.A. | Written | |
Derivative [Line Items] | |
Strike price (in usd per option) | 5.20 |
JP Morgan S.A. | Bought | |
Derivative [Line Items] | |
Strike price (in usd per option) | 3.13 |
Derivative instruments - Coupon
Derivative instruments - Coupon-only Swap (Details) - Derivatives designated as hedging instruments - Subsidiaries - Coupon-only swap - Cash Flow Hedging R$ in Thousands, $ in Thousands | Apr. 30, 2017BRL (R$) | Apr. 30, 2017USD ($) |
Citibank S.A. | Payable | ||
Derivative [Line Items] | ||
Payable Amount | R$ | R$ 155500 | |
Citibank S.A. | Receivable | ||
Derivative [Line Items] | ||
Interest rate | 6.91% | 6.91% |
Receivable Amount | $ | $ 50,000 | |
JP Morgan S.A. | Payable | ||
Derivative [Line Items] | ||
Payable Amount | R$ | R$ 156250 | |
JP Morgan S.A. | Receivable | ||
Derivative [Line Items] | ||
Interest rate | 6.91% | 6.91% |
Receivable Amount | $ | $ 50,000 | |
Brazil Real | Citibank S.A. | Payable | ||
Derivative [Line Items] | ||
Interest rate | 11.08% | 11.08% |
Brazil Real | JP Morgan S.A. | Payable | ||
Derivative [Line Items] | ||
Interest rate | 11.18% | 11.18% |
Derivative instruments - Sche_2
Derivative instruments - Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) (Details) - Cash Flow Hedging - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) Recognized in Accumulated OCI on Derivative | $ 71,390 | $ (6,028) | |
Gain (Loss) Recognized in Accumulated OCI on Derivative | $ 17,908 | ||
(Gain) Loss Reclassified from Accumulated OCI into (loss) income (i) | 57,845 | 356 | |
(Gain) Loss Reclassified from Accumulated OCI into Income (Effective Portion) | (31,969) | ||
Forward contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) Recognized in Accumulated OCI on Derivative | 904 | (10) | |
Gain (Loss) Recognized in Accumulated OCI on Derivative | 731 | ||
(Gain) Loss Reclassified from Accumulated OCI into (loss) income (i) | 1,895 | 711 | |
(Gain) Loss Reclassified from Accumulated OCI into Income (Effective Portion) | (75) | ||
Cross-currency interest rate swap | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) Recognized in Accumulated OCI on Derivative | 55,124 | (8,506) | |
Gain (Loss) Recognized in Accumulated OCI on Derivative | 11,279 | ||
(Gain) Loss Reclassified from Accumulated OCI into (loss) income (i) | 37,376 | (2,056) | |
(Gain) Loss Reclassified from Accumulated OCI into Income (Effective Portion) | (37,376) | 2,056 | (18,888) |
Call spread | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) Recognized in Accumulated OCI on Derivative | 6,758 | 4,377 | |
Gain (Loss) Recognized in Accumulated OCI on Derivative | 4,034 | ||
(Gain) Loss Reclassified from Accumulated OCI into (loss) income (i) | 18,153 | 3,561 | |
(Gain) Loss Reclassified from Accumulated OCI into Income (Effective Portion) | (15,421) | ||
Coupon-only swap | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) Recognized in Accumulated OCI on Derivative | 8,604 | (1,889) | |
Gain (Loss) Recognized in Accumulated OCI on Derivative | 1,864 | ||
(Gain) Loss Reclassified from Accumulated OCI into (loss) income (i) | $ 421 | $ (1,860) | |
(Gain) Loss Reclassified from Accumulated OCI into Income (Effective Portion) | $ 2,415 |
Derivative instruments - Cash F
Derivative instruments - Cash Flow Hedges Schedule Footnote (Details) - Cash Flow Hedging - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total | $ 31,969 | ||
Cross-currency interest rate swap | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Foreign currency exchange results | $ 40,353 | $ 6,346 | 28,588 |
Net interest expense | (2,977) | (8,402) | (9,700) |
Total | $ 37,376 | $ (2,056) | $ 18,888 |
Derivative instruments - Call_2
Derivative instruments - Call Spread and Coupon Only Swap (Details) - Apr. 30, 2017 - Subsidiaries - Cash Flow hedge - Derivatives not designated as hedging instruments R$ in Thousands, $ in Thousands | BRL (R$)$ / option | USD ($)$ / option |
Call spread | JP Morgan S.A. | ||
Derivative [Line Items] | ||
Notional Amount | $ | $ 30,000 | |
Call spread | JP Morgan S.A. | Payable | ||
Derivative [Line Items] | ||
Strike price (in usd per option) | $ / option | 8.20 | 8.20 |
Call spread | JP Morgan S.A. | Receivable | ||
Derivative [Line Items] | ||
Strike price (in usd per option) | $ / option | 5.62 | 5.62 |
Coupon-only swap | JP Morgan S.A. | Payable | ||
Derivative [Line Items] | ||
Payable Amount | R$ | R$ 168690 | |
Coupon-only swap | JP Morgan S.A. | Receivable | ||
Derivative [Line Items] | ||
Notional Amount | $ | $ 30,000 | |
Interest rate | 5.46% | 5.46% |
Coupon-only swap | JP Morgan S.A. | Receivable | CDI, Certificados de Depósitos Interbancários | ||
Derivative [Line Items] | ||
Interest rate | 2.42% | 2.42% |
Call Spread + Coupon-only swap | Itau Unibanco S.A | ||
Derivative [Line Items] | ||
Notional Amount | $ | $ 50,000 | |
Call Spread + Coupon-only swap | Itau Unibanco S.A | Payable | ||
Derivative [Line Items] | ||
Strike price (in usd per option) | $ / option | 8.20 | 8.20 |
Payable Amount | R$ | R$ 281150 | |
Call Spread + Coupon-only swap | Itau Unibanco S.A | Receivable | ||
Derivative [Line Items] | ||
Notional Amount | $ | $ 50,000 | |
Strike price (in usd per option) | $ / option | 5.62 | 5.62 |
Interest rate | 5.46% | 5.46% |
Call Spread + Coupon-only swap | Itau Unibanco S.A | Receivable | CDI, Certificados de Depósitos Interbancários | ||
Derivative [Line Items] | ||
Interest rate | 2.47% | 2.47% |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | Dec. 22, 2017 | Mar. 31, 2010 | Dec. 31, 2020 | Dec. 31, 2019 |
Lessee, Lease, Description [Line Items] | ||||
Lease term of aircraft operating lease agreement | 8 years | |||
Periodic payments for aircraft operating lease agreement | $ 690 | |||
Fixed amount of early purchase option | $ 26,685 | |||
Aircraft operating lease renewal term | 10 years | |||
Periodic payments for aircraft renewal operating lease agreement | $ 442 | |||
Collateral deposit for aircraft operating lease | $ 2,500 | |||
Finance lease obligations | $ 5,941 | $ 5,419 | ||
Arithmetic Average | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease term for most restaurants | 15 years |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Rental Payments for Operating Leases (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Lessee, Lease, Description [Line Items] | |
2021 | $ 128,202 |
2022 | 121,246 |
2023 | 115,914 |
2024 | 112,145 |
2025 | 107,585 |
Thereafter | 830,230 |
Total lease payments | 1,415,322 |
Lease discount | (605,881) |
Operating lease liability | 809,441 |
Restaurant | |
Lessee, Lease, Description [Line Items] | |
2021 | 122,497 |
2022 | 117,025 |
2023 | 112,715 |
2024 | 109,398 |
2025 | 104,984 |
Thereafter | 822,563 |
Total lease payments | 1,389,182 |
Other | |
Lessee, Lease, Description [Line Items] | |
2021 | 5,705 |
2022 | 4,221 |
2023 | 3,199 |
2024 | 2,747 |
2025 | 2,601 |
Thereafter | 7,667 |
Total lease payments | $ 26,140 |
Leases - Schedule of Details of
Leases - Schedule of Details of Rent Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Lessee, Lease, Description [Line Items] | |||
Operating lease expense - Minimum rentals | $ (99,723) | $ (146,577) | $ (143,938) |
Variable lease expense - Contingent rentals based on sales | (39,401) | (42,440) | (48,516) |
Total lease expense | (139,124) | (189,017) | (192,454) |
General and administrative expenses | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease expense - Minimum rentals | (7,062) | (7,614) | (7,610) |
Company-operated restaurants | Occupancy and other operating expenses | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease expense - Minimum rentals | (69,151) | (104,236) | (105,358) |
Variable lease expense - Contingent rentals based on sales | (26,153) | (29,562) | (33,921) |
Franchised restaurants | Franchised restaurants - occupancy expenses | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease expense - Minimum rentals | (23,510) | (34,727) | (30,970) |
Variable lease expense - Contingent rentals based on sales | $ (13,248) | $ (12,878) | $ (14,595) |
Leases - Schedule of Rent Expen
Leases - Schedule of Rent Expense (Details) | Dec. 31, 2020 |
Leases [Abstract] | |
Weighted-average remaining lease term, operating leases | 8 years |
Weighted-average discount rate, operating leases | 6.60% |
Franchise arrangements - Narrat
Franchise arrangements - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Franchise Arrangements [Line Items] | ||
Property and equipment, net | $ 796,532 | $ 960,986 |
Property and Equipment Under Franchise Arrangements | ||
Franchise Arrangements [Line Items] | ||
Property and equipment, net | 92,354 | 123,832 |
Land | $ 24,661 | $ 32,373 |
Initial Franchise Fee | ||
Franchise Arrangements [Line Items] | ||
Finite-lived intangible asset, useful life | 20 years |
Franchise arrangements - Schedu
Franchise arrangements - Schedule of Revenues from Franchised Restaurants (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 1,984,219 | $ 2,959,077 | $ 3,081,571 |
Revenues from franchised restaurants | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 89,601 | 146,790 | 148,962 |
Rent | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 89,123 | 145,860 | 148,094 |
Sublease Income | 74,723 | 114,459 | |
Initial fees | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 203 | 287 | 195 |
Initial fees paid to McDonald's Corporation | 493 | 1,456 | 1,323 |
Royalty fees | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 275 | 643 | 673 |
Royalty fees paid to McDonald's Corporation | $ 36,554 | $ 57,709 | $ 57,733 |
Franchise arrangements - Sche_2
Franchise arrangements - Schedule of Future Minimum Rent Payments Due to the Company Under Existing Franchised Agreements (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Franchise Arrangements [Line Items] | |
2021 | $ 50,973 |
2022 | 45,106 |
2023 | 39,398 |
2024 | 34,236 |
2025 | 30,862 |
Thereafter | 145,103 |
Total | 345,678 |
Owned sites | |
Franchise Arrangements [Line Items] | |
2021 | 3,312 |
2022 | 2,648 |
2023 | 2,413 |
2024 | 2,321 |
2025 | 2,315 |
Thereafter | 9,754 |
Total | 22,763 |
Leased sites | |
Franchise Arrangements [Line Items] | |
2021 | 47,661 |
2022 | 42,458 |
2023 | 36,985 |
2024 | 31,915 |
2025 | 28,547 |
Thereafter | 135,349 |
Total | $ 322,915 |
Income taxes - Schedule of Stat
Income taxes - Schedule of Statutory Tax Rates (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes [Line Items] | |||
Statutory tax rate (as a percent) | 22.90% | 36.60% | 42.70% |
Puerto Rico | |||
Income Taxes [Line Items] | |||
Statutory tax rate (as a percent) | 18.50% | 18.50% | 20.00% |
Curacao | |||
Income Taxes [Line Items] | |||
Statutory tax rate (as a percent) | 22.00% | 22.00% | 22.00% |
USVI | |||
Income Taxes [Line Items] | |||
Statutory tax rate (as a percent) | 22.50% | 22.50% | 22.50% |
Aruba, Panama, Uruguay and Netherlands | |||
Income Taxes [Line Items] | |||
Statutory tax rate (as a percent) | 25.00% | 25.00% | 25.00% |
Ecuador | |||
Income Taxes [Line Items] | |||
Statutory tax rate (as a percent) | 25.00% | 25.00% | 28.00% |
Chile | |||
Income Taxes [Line Items] | |||
Statutory tax rate (as a percent) | 27.00% | 27.00% | 27.00% |
Martinique, French Guyana and Guadeloupe | |||
Income Taxes [Line Items] | |||
Statutory tax rate (as a percent) | 28.00% | 31.00% | 33.30% |
Peru | |||
Income Taxes [Line Items] | |||
Statutory tax rate (as a percent) | 29.50% | 29.50% | 29.50% |
Trinidad and Tobago | |||
Income Taxes [Line Items] | |||
Statutory tax rate (as a percent) | 30.00% | 25.00% | 25.00% |
Argentina Costa Rica and México | |||
Income Taxes [Line Items] | |||
Statutory tax rate (as a percent) | 30.00% | 30.00% | 30.00% |
Colombia | |||
Income Taxes [Line Items] | |||
Statutory tax rate (as a percent) | 32.00% | 33.00% | 37.00% |
Brazil and Venezuela | |||
Income Taxes [Line Items] | |||
Statutory tax rate (as a percent) | 34.00% | 34.00% | 34.00% |
Income taxes - Schedule of Comp
Income taxes - Schedule of Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Current income tax expense | $ 17,061 | $ 46,811 | $ 47,488 |
Deferred income tax expense | 471 | (7,974) | 648 |
Income tax expense | $ 17,532 | $ 38,837 | $ 48,136 |
Income taxes - Schedule of Co_2
Income taxes - Schedule of Components of Income Tax Expense by Applying Weighted-Average Statutory Income Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Pre-tax (loss) income | $ (131,854) | $ 118,953 | $ 85,169 |
Weighted-average statutory income tax rate | 22.90% | 36.60% | 42.70% |
Income tax (benefit) expense at weighted-average statutory tax rate on pre-tax income (loss) | $ (30,226) | $ 43,488 | $ 36,354 |
Change in valuation allowance | 2,958 | (24,864) | (24,307) |
Expiration and changes in tax loss carryforwards | 13,820 | 17,799 | 18,599 |
Venezuelan remeasurement and inflationary impacts | 1,682 | 1,743 | 16,857 |
Non-taxable income and non-deductible expenses | 12,092 | 7,545 | 10,085 |
Tax benefits | (1,701) | (9,667) | (11,403) |
Income taxes withholdings on intercompany transactions | 6,515 | 5,005 | 7,723 |
Differences including exchange rate, inflation adjustment and filing differences | 6,684 | (5,291) | (2,574) |
Alternative Taxes | 2,054 | 658 | (1,283) |
Others | 3,654 | 2,421 | (1,915) |
Income tax expense | $ 17,532 | $ 38,837 | $ 48,136 |
Income taxes - Schedule of Defe
Income taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Tax loss carryforwards | $ 144,759 | $ 186,781 |
Purchase price allocation adjustment | 15,158 | 12,247 |
Property and equipment, tax inflation | 36,690 | 31,080 |
Other accrued payroll and other liabilities | 33,065 | 29,622 |
Share-based compensation | 2,062 | 1,719 |
Provision for contingencies, bad debts and obsolescence | 2,534 | 4,621 |
Other deferred tax assets | 56,927 | 75,121 |
Other deferred tax liabilities | (32,280) | (47,593) |
Property and equipment - difference in depreciation rates | (418) | (7,902) |
Valuation allowance | (194,426) | (235,196) |
Net deferred tax asset | 64,071 | 50,500 |
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 656,119 | |
Brazil | ||
Operating Loss Carryforwards [Line Items] | ||
Difference in depreciation of leases | 51,772 | |
Brazil, Mexico, and Colombia | ||
Operating Loss Carryforwards [Line Items] | ||
Provision for regular expenses | 10,376 | 10,098 |
Puerto Rico | ||
Operating Loss Carryforwards [Line Items] | ||
Bad debt expense | 30,524 | |
Argentina and Brazil | ||
Operating Loss Carryforwards [Line Items] | ||
Foreign currency translation adjustment | $ 4,218 | |
Expire Between 2021 and 2025 | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 145,127 | |
Expiring After 2025 | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 317,650 | |
Do Not Expire | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 193,342 |
Income taxes - Narrative (Detai
Income taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2018 | |
Income Taxes [Line Items] | ||||
Change in valuation allowance | $ (2,958) | $ 24,864 | $ 24,307 | |
Net deferred tax asset | 50,500 | 64,071 | ||
Non-current deferred tax assets | 55,567 | 68,368 | 58,334 | $ 75,854 |
Non-current deferred tax liabilities | 5,067 | 4,297 | ||
Temporary differences related to investments in foreign subsidiaries | 187,215 | |||
Tax Year 2009 to 2015 | ||||
Income Taxes [Line Items] | ||||
Estimate of possible loss | 169,000 | |||
Non-current Assets | ||||
Income Taxes [Line Items] | ||||
Non-current deferred tax assets | 55,567 | 68,368 | ||
Non-current Liabilities | ||||
Income Taxes [Line Items] | ||||
Non-current deferred tax liabilities | 5,067 | 4,297 | ||
Venezuela | ||||
Income Taxes [Line Items] | ||||
Change in valuation allowance | $ 43,249 | $ 983 | $ (304) |
Share-based compensation - Narr
Share-based compensation - Narrative (Details) $ / shares in Units, $ in Thousands | Jun. 28, 2016employeeshares | Mar. 30, 2011 | Dec. 31, 2020USD ($)grant$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Accumulated compensation expense | $ | $ 0 | $ 0 | $ 0 | ||
Number of grant types | grant | 2 | ||||
2011 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of total outstanding shares of the entity immediately follow the IPO that is authorized under equity incentive plan | 2.50% | ||||
Options converted into liability award (in shares) | 1,117,380 | ||||
Number of employees affected by plan modification | employee | 104 | ||||
Share-based compensation expense | $ | $ 1,564 | 1,884 | 3,661 | ||
Related income tax (expense) benefit | $ | (244) | (422) | (175) | ||
Restricted Share Units | 2011 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total fair value of share units | $ | $ 3,475 | $ 3,295 | $ 3,214 | ||
Grant (in shares) | 35,000 | 520,393 | |||
Grant price (in dollars per share) | $ / shares | $ 8 | $ 8.50 | |||
Phantom RSU Award | Phantom RSU Award Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Grant (in shares) | 65,440 | ||||
Grant price (in dollars per share) | $ / shares | $ 6.78 | ||||
Allocated share-based compensation expense | $ | $ 1,232 | $ 2,102 | |||
Phantom RSU Award Type One | Phantom RSU Award Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Requisite service period | 5 years | ||||
Grant (in shares) | 465,202 | ||||
Phantom RSU Award Type Two | Phantom RSU Award Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Grant (in shares) | 1,207,455 | ||||
Phantom RSU Award Type Two | Phantom RSU Award Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting percentage | 100.00% | ||||
Grant (in shares) | 65,440 | ||||
Grant price (in dollars per share) | $ / shares | $ 4.89 | ||||
Second Anniversary of Grant Date | 2011 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting percentage | 40.00% | ||||
Second Anniversary of Grant Date | Phantom RSU Award Type One | Phantom RSU Award Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting percentage | 40.00% | ||||
Three Years Following The Grant Date | 2011 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting percentage | 20.00% | ||||
Three Years Following The Grant Date | Phantom RSU Award Type One | Phantom RSU Award Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting percentage | 20.00% | ||||
Fourth Anniversary of Grant Date | 2011 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting percentage | 20.00% | ||||
Fourth Anniversary of Grant Date | Phantom RSU Award Type One | Phantom RSU Award Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting percentage | 20.00% | ||||
Fifth Anniversary of Grant Date | 2011 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting percentage | 20.00% | ||||
Fifth Anniversary of Grant Date | Phantom RSU Award Type One | Phantom RSU Award Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting percentage | 20.00% | ||||
Fifth Anniversary of Grant Date | Phantom RSU Award Type Two | Phantom RSU Award Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting percentage | 100.00% | ||||
Class A | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares issued during the period | 472,130 | 470,558 | 520,565 | ||
Class A | Partial Vesting 2019 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Value of shares pending for issuance in connection with partial vesting | $ | $ 76 | $ 19 | |||
Class A | Partial Vesting 2018 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares pending issuance in connection with partial vesting | 10,392 | 3,032 | 2,775,000 | ||
Value of shares pending for issuance in connection with partial vesting | $ | $ 17 | ||||
Common Stock | Class A | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares issued during the period | 472,130 | 470,558 | 520,565 | ||
Accumulated compensation expense | $ | $ 3,399 | $ 3,359 | $ 3,113 |
Share-based compensation - Summ
Share-based compensation - Summary of Activity of Stock Options (Details) - Stock Option - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Weighted-average grant-date fair value | |||
Additional paid-in capital | $ 409 | $ 1,111 | $ 844 |
2011 Equity Incentive Plan | |||
Units | |||
Units, beginning balance (in shares) | 274,440 | 491,073 | 634,489 |
Units, expired (in shares) | (97,672) | (216,633) | (143,416) |
Units, ending balance (in shares) | 176,768 | 274,440 | 491,073 |
Units, exercisable (in shares) | 176,768 | ||
Weighted-average strike price | |||
Units, beginning balance (in dollars per share) | $ 10.62 | $ 12.26 | $ 14.28 |
Units, expired (in dollars per share) | 14.31 | 14.35 | 21.20 |
Units, ending balance (in dollars per share) | 8.58 | 10.62 | 12.26 |
Units, exercisable (in dollars per share) | 8.58 | ||
Weighted-average grant-date fair value | |||
Units, beginning balance (in dollars per share) | 2.77 | 3.81 | 4.28 |
Units, expired (in dollars per share) | 4.19 | 5.13 | 5.89 |
Units, ending balance (in dollars per share) | 1.98 | $ 2.77 | $ 3.81 |
Units, exercisable (in dollars per share) | $ 1.98 | ||
Number of units outstanding | 176,768 | ||
Weighted-average grant-date fair market value per unit (in dollars per share) | $ 1.98 | ||
Total grant-date fair value | $ 350 | ||
Weighted-average accumulated percentage of service | 100.00% | ||
Stock-based compensation recognized in Additional paid-in capital | $ 350 |
Share-based compensation - Su_2
Share-based compensation - Summary of Activity of Restricted Share Units (Details) - Restricted Share Units - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
2011 Equity Incentive Plan | |||
Units | |||
Units, beginning balance (in shares) | 937,839 | 1,605,049 | 1,736,845 |
Annual grant (in shares) | 35,000 | 520,393 | |
Forfeitures (in shares) | (4,367) | (239,621) | (117,600) |
Units, ending balance (in shares) | 451,198 | 937,839 | 1,605,049 |
Units, exercisable (in shares) | 0 | ||
Weighted-average strike price | |||
Units, beginning balance (in dollars per share) | $ 7.50 | $ 7.41 | $ 6.65 |
Annual grant (in dollars per share) | 8 | 8.50 | |
Forfeitures (in dollars per share) | 7.75 | 7.74 | 7.24 |
Units, ending balance (in dollars per share) | 7.80 | $ 7.50 | $ 7.41 |
Units, exercisable (in dollars per share) | $ 0 | ||
Number of units outstanding | 451,198 | ||
Weighted-average grant-date fair market value per unit (in dollars per share) | $ 7.80 | ||
Total grant-date fair value | $ 3,519 | ||
Weighted-average accumulated percentage of service | 80.44% | ||
Stock-based compensation recognized in Additional paid-in capital | $ 2,831 | ||
Compensation expense not yet recognized | $ 688 | ||
Weighted-average period for recognition | 8 months 12 days | ||
Partial Vesting | |||
Units | |||
Partial vesting (in shares) | (534,589) | ||
Weighted-average strike price | |||
Partial vesting (in dollars per share) | $ 6.01 | ||
2014 grant | |||
Units | |||
Partial vesting (in shares) | (38,222) | ||
Weighted-average strike price | |||
Partial vesting (in dollars per share) | $ 8.58 | ||
2015 grant | |||
Units | |||
Partial vesting (in shares) | (101,928) | (115,634) | |
Weighted-average strike price | |||
Partial vesting (in dollars per share) | $ 6.33 | $ 6.33 | |
2016 grant | |||
Units | |||
Partial vesting (in shares) | (114,045) | (134,501) | |
Weighted-average strike price | |||
Partial vesting (in dollars per share) | $ 4.70 | $ 4.70 | |
2017 grant | |||
Units | |||
Partial vesting (in shares) | (67,606) | (174,232) | |
Weighted-average strike price | |||
Partial vesting (in dollars per share) | $ 9.20 | $ 9.20 | |
2018 grant | |||
Units | |||
Partial vesting (in shares) | (163,695) | ||
Weighted-average strike price | |||
Partial vesting (in dollars per share) | $ 8.50 | ||
2019 grant | |||
Units | |||
Partial vesting (in shares) | (35,000) | ||
Weighted-average strike price | |||
Partial vesting (in dollars per share) | $ 8 |
Share-based compensation - Su_3
Share-based compensation - Summary of Phantom RSU Award Activity (Details) - Phantom RSU Award Plan - Phantom RSU Award $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
Units | |
Units, beginning balance (in shares) | 1,661,820 |
Grant (in shares) | 65,440 |
Partial vesting of 2019 Grant (in shares) | (5,162) |
Forfeitures (in shares) | (31,614) |
Units, ending balance (in shares) | 1,690,484 |
Units, exercisable (in shares) | 0 |
Number of units outstanding | 1,690,484 |
Current share price (in dollars per share) | $ / shares | $ 5.03 |
Total fair value of the plan | $ | $ 8,503 |
Weighted-average accumulated percentage of service | 39.00% |
Accrued liability | $ | $ 3,316 |
Compensation expense not yet recognized | $ | $ 5,187 |
Weighted-average period for recognition | 2 years 11 months 4 days |
Commitments and contingencies -
Commitments and contingencies - Narrative (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020USD ($)period | Dec. 31, 2019USD ($) | Dec. 31, 2014USD ($) | |
Line of Credit Facility [Line Items] | ||||
Reinvestment plan term | 3 years | |||
Percentage of gross sales of restaurants | 5.00% | |||
Initial royalty period | 10 years | |||
Number of subsequent payment periods | period | 2 | |||
Percentage of gross sales on advertising and promotion activities | 5.00% | 5.00% | ||
Required minimum fixed charge coverage ratio | 1.50 | |||
Maximum leverage ratio | 4.25 | |||
Provision for contingencies | $ 26,948 | $ 26,158 | ||
Provision for contingencies, current | 2,024 | 2,035 | ||
Provision for contingencies, noncurrent | 24,924 | 24,123 | ||
Provision related to claims covered by indemnification agreement | $ 1,259 | $ 1,612 | ||
Covid-19 Pandemic | ||||
Line of Credit Facility [Line Items] | ||||
Percentage of gross sales on advertising and promotion activities | 4.00% | |||
Scenario, Forecast | ||||
Line of Credit Facility [Line Items] | ||||
Percentage of gross sales of restaurants | 5.30% | |||
Standby Letters of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Standby letters of credit with an aggregate drawing amount | $ 80,000 | |||
Puerto Rican Franchisees Lawsuit | ||||
Line of Credit Facility [Line Items] | ||||
Damage sought | 66,700 | |||
Puerto Rico Owner Operator's Association | ||||
Line of Credit Facility [Line Items] | ||||
Damage sought | $ 31,000 | $ 30,000 | ||
Next Five Years | ||||
Line of Credit Facility [Line Items] | ||||
Royalty fee (as a percent) | 6.00% | |||
Subsequent period of the agreement | 5 years | |||
Last Five Years | ||||
Line of Credit Facility [Line Items] | ||||
Royalty fee (as a percent) | 7.00% | |||
Subsequent period of the agreement | 5 years | |||
Credit Suisse | ||||
Line of Credit Facility [Line Items] | ||||
Debt to EBITDA ratio (lower than) | 4 | |||
Credit Suisse | Standby Letters of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Standby letters of credit with an aggregate drawing amount | $ 45,000 | |||
Itau Unibanco S.A | Standby Letters of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Standby letters of credit with an aggregate drawing amount | $ 15,000 | |||
JP Morgan S.A. | ||||
Line of Credit Facility [Line Items] | ||||
Debt to EBITDA ratio (lower than) | 4.5 | |||
JP Morgan S.A. | Standby Letters of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Standby letters of credit with an aggregate drawing amount | $ 20,000 | |||
Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Tax law, estimate of possible loss | 226,000 | |||
Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Tax law, estimate of possible loss | $ 249,000 |
Commitments and contingencies_2
Commitments and contingencies - Debt Covenant Ratios (Details) | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 |
Other Commitments [Line Items] | ||||
Leverage Ratio | 7.62 | |||
Debt Covenants | ||||
Other Commitments [Line Items] | ||||
Fixed Charge Coverage Ratio | 0.96 | 1.15 | 1.35 | 1.74 |
Leverage Ratio | 7.71 | 6.31 | 5.37 | 4.15 |
Commitments and contingencies_3
Commitments and contingencies - Schedule of Provision for Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Loss contingency accrual | |||
Balance at beginning of period | $ 38,838 | $ 42,067 | $ 46,031 |
Accruals, net | 15,330 | 17,441 | 23,995 |
Settlements | (11,920) | (17,768) | (19,702) |
Reclassifications and increase of judicial deposits | 435 | 0 | 0 |
Translation | (7,600) | (2,902) | (8,257) |
Balance at end of period | 35,083 | 38,838 | 42,067 |
Judicial deposits | |||
Balance at beginning of period | (12,680) | (13,558) | (18,075) |
Accruals, net | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 |
Reclassifications and increase of judicial deposits | 1,626 | 354 | 1,843 |
Translation | 2,919 | 524 | 2,674 |
Balance at end of period | (8,135) | (12,680) | (13,558) |
Provision for contingencies | |||
Balance at beginning of period | 26,158 | 28,509 | 27,956 |
Accruals, net | 15,330 | 17,441 | 23,995 |
Settlements | (11,920) | (17,768) | (19,702) |
Reclassifications and increase of judicial deposits | 2,061 | 354 | 1,843 |
Translation | (4,681) | (2,378) | (5,583) |
Balance at end of period | 26,948 | 26,158 | 28,509 |
Tax Contingencies in Brazil | |||
Loss contingency accrual | |||
Balance at beginning of period | 10,595 | 9,497 | 9,324 |
Accruals, net | 2,040 | 1,455 | 1,805 |
Settlements | 0 | 0 | 0 |
Reclassifications and increase of judicial deposits | 435 | 0 | 0 |
Translation | (2,408) | (357) | (1,632) |
Balance at end of period | 10,662 | 10,595 | 9,497 |
Labor Contingencies in Brazil | |||
Loss contingency accrual | |||
Balance at beginning of period | 16,839 | 21,108 | 21,061 |
Accruals, net | 12,087 | 12,916 | 20,785 |
Settlements | (10,499) | (16,068) | (17,718) |
Reclassifications and increase of judicial deposits | 0 | 0 | 0 |
Translation | (3,913) | (1,117) | (3,020) |
Balance at end of period | 14,514 | 16,839 | 21,108 |
Other | |||
Loss contingency accrual | |||
Balance at beginning of period | 11,404 | 11,462 | 15,646 |
Accruals, net | 1,203 | 3,070 | 1,405 |
Settlements | (1,421) | (1,700) | (1,984) |
Reclassifications and increase of judicial deposits | 0 | 0 | 0 |
Translation | (1,279) | (1,428) | (3,605) |
Balance at end of period | $ 9,907 | $ 11,404 | $ 11,462 |
Disclosures about fair value _3
Disclosures about fair value of financial instruments - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash equivalents | $ 106,856 | $ 49,038 |
Short-term Investments | 0 | 25 |
Derivatives | 122,603 | 58,107 |
Total Assets | 229,459 | 107,170 |
Liabilities | ||
Derivatives | 20,525 | 14,037 |
Total Liabilities | 20,525 | 14,037 |
Quoted Prices in Active Markets For Identical Assets (Level 1) | ||
Assets | ||
Cash equivalents | 106,856 | 49,038 |
Short-term Investments | 0 | 25 |
Derivatives | 0 | 0 |
Total Assets | 106,856 | 49,063 |
Liabilities | ||
Derivatives | 0 | 0 |
Total Liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Cash equivalents | 0 | 0 |
Short-term Investments | 0 | 0 |
Derivatives | 122,603 | 58,107 |
Total Assets | 122,603 | 58,107 |
Liabilities | ||
Derivatives | 20,525 | 14,037 |
Total Liabilities | 20,525 | 14,037 |
Significant Unobservable Inputs (Level 3) | ||
Assets | ||
Cash equivalents | 0 | 0 |
Short-term Investments | 0 | 0 |
Derivatives | 0 | 0 |
Total Assets | 0 | 0 |
Liabilities | ||
Derivatives | 0 | 0 |
Total Liabilities | $ 0 | $ 0 |
Disclosures about fair value _4
Disclosures about fair value of financial instruments - Narrative (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Fair Value | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Short-term and long-term debt | $ 832,753 |
Carrying Value | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Short-term and long-term debt | $ 788,521 |
Segment and geographic inform_3
Segment and geographic information - Narrative (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)sourcesegment | Dec. 31, 2019USD ($) | |
Segment Reporting [Abstract] | ||
Number of geographical divisions (in segments) | segment | 4 | |
Number of revenue sources | source | 2 | |
Property and equipment | $ | $ 796,532 | $ 960,986 |
Segment and geographic inform_4
Segment and geographic information - Profit or Loss and Assets for Reportable Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 1,984,219 | $ 2,959,077 | $ 3,081,571 |
Total adjusted EBITDA | 68,111 | 291,775 | 257,997 |
Depreciation and amortization | (126,853) | (123,218) | (105,800) |
Gains from sale or insurance recovery of property and equipment | 4,210 | 5,175 | 4,973 |
Write-offs of property and equipment | (4,501) | (4,733) | (4,167) |
Impairment of long-lived assets | (6,636) | (8,790) | (18,950) |
Impairment of goodwill | (1,085) | (273) | (167) |
Reorganization and optimization plan expenses | 0 | 0 | (11,003) |
2008 Long-Term Incentive Plan incremental compensation from modification | 0 | 0 | 575 |
Operating (loss) income | (66,754) | 159,936 | 123,458 |
Net interest expense | (59,068) | (52,079) | (52,868) |
(Loss) gain from derivative instruments | (2,297) | 439 | (565) |
Foreign currency exchange results | (31,707) | 12,754 | 14,874 |
Other non-operating income (expenses), net | 2,296 | (2,097) | 270 |
Income tax expense | (17,532) | (38,837) | (48,136) |
Net income attributable to non-controlling interests | (65) | (220) | (186) |
Net (loss) income attributable to Arcos Dorados Holdings Inc. | (149,451) | 79,896 | 36,847 |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenues | 1,984,219 | 2,959,077 | 3,081,571 |
Total adjusted EBITDA | 118,481 | 354,946 | 316,093 |
Depreciation and amortization | (122,737) | (124,083) | (115,589) |
Operating Segments | Brazil | |||
Segment Reporting Information [Line Items] | |||
Revenues | 862,748 | 1,385,566 | 1,345,453 |
Total adjusted EBITDA | 76,155 | 227,844 | 218,391 |
Depreciation and amortization | (59,466) | (63,467) | (52,632) |
Operating Segments | Caribbean division | |||
Segment Reporting Information [Line Items] | |||
Revenues | 381,090 | 399,251 | 483,743 |
Total adjusted EBITDA | 28,847 | 24,955 | (8,281) |
Depreciation and amortization | (20,742) | (18,481) | (22,835) |
Operating Segments | NOLAD | |||
Segment Reporting Information [Line Items] | |||
Revenues | 311,887 | 431,266 | 406,848 |
Total adjusted EBITDA | 10,207 | 39,027 | 32,313 |
Depreciation and amortization | (22,200) | (21,422) | (20,829) |
Operating Segments | SLAD | |||
Segment Reporting Information [Line Items] | |||
Revenues | 428,494 | 742,994 | 845,527 |
Total adjusted EBITDA | 3,272 | 63,120 | 73,670 |
Depreciation and amortization | (20,329) | (20,713) | (19,293) |
Corporate and Others | |||
Segment Reporting Information [Line Items] | |||
Total adjusted EBITDA | (50,370) | (63,171) | (58,096) |
Depreciation and amortization | $ (5,288) | $ (4,894) | $ (5,696) |
Segment and geographic inform_5
Segment and geographic information - Depreciation and Capital Expenditures (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | $ 126,853 | $ 123,218 | $ 105,800 |
Property and equipment expenditures | 86,311 | 265,235 | 197,041 |
Brazil | |||
Segment Reporting Information [Line Items] | |||
Property and equipment expenditures | 39,127 | 146,322 | 100,926 |
Caribbean division | |||
Segment Reporting Information [Line Items] | |||
Property and equipment expenditures | 9,582 | 15,934 | 18,640 |
NOLAD | |||
Segment Reporting Information [Line Items] | |||
Property and equipment expenditures | 9,627 | 32,662 | 24,145 |
SLAD | |||
Segment Reporting Information [Line Items] | |||
Property and equipment expenditures | 27,975 | 70,280 | 53,300 |
Corporate and Others | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 5,288 | 4,894 | 5,696 |
Property and equipment expenditures | 0 | 37 | 30 |
Purchase Price Allocation | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | $ 1,172 | $ 5,759 | $ 15,485 |
Segment and geographic inform_6
Segment and geographic information - Assets by Segment (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 2,293,954 | $ 2,557,685 |
Reportable Geographical Segments | ||
Segment Reporting Information [Line Items] | ||
Total assets | 2,307,509 | 2,606,365 |
Reportable Geographical Segments | Brazil | ||
Segment Reporting Information [Line Items] | ||
Total assets | 1,102,009 | 1,328,984 |
Reportable Geographical Segments | Caribbean division | ||
Segment Reporting Information [Line Items] | ||
Total assets | 420,481 | 429,170 |
Reportable Geographical Segments | NOLAD | ||
Segment Reporting Information [Line Items] | ||
Total assets | 412,045 | 458,235 |
Reportable Geographical Segments | SLAD | ||
Segment Reporting Information [Line Items] | ||
Total assets | 372,974 | 389,976 |
Corporate and Others | ||
Segment Reporting Information [Line Items] | ||
Total assets | 95,802 | 67,195 |
Purchase Price Allocation | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ (109,357) | $ (115,875) |
Venezuelan operations - Narrati
Venezuelan operations - Narrative (Details) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Aug. 20, 2018 / $ | Aug. 19, 2018 / $ | |
Foreign Operations Disclosure [Line Items] | |||||
Revenue from Venezuelan operations | $ 4,494 | $ 10,184 | $ 78,859 | ||
Operating income (loss) from Venezuelan operations | (7,712) | $ (8,240) | $ (52,054) | ||
NEW DICOM | Venezuela | |||||
Foreign Operations Disclosure [Line Items] | |||||
Foreign currency exchange rate (VES per USD) | / $ | 59.93 | 2.48 | |||
Non-monetary asset | $ 10,100 |
Venezuelan operations - Affect
Venezuelan operations - Affect of Foreign Currency Translation (Details) - Venezuela - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other Operating Income (Expense), Net | |||
Foreign Operations Disclosure [Line Items] | |||
Write down of inventories | $ (1,625) | $ (4,468) | $ (61,007) |
Impairment of long-lived assets | (904) | (2,123) | (12,089) |
Foreign Currency Exchange Results | |||
Foreign Operations Disclosure [Line Items] | |||
Foreign currency exchange (loss) income | $ 27 | $ (583) | $ 5,061 |
Shareholders' equity - Narrativ
Shareholders' equity - Narrative (Details) | Aug. 12, 2020shares | Jul. 06, 2020USD ($)period$ / sharesshares | Mar. 03, 2020installment$ / shares | Feb. 15, 2019USD ($)shares | Dec. 31, 2020USD ($)vote$ / sharesshares | Dec. 31, 2019shares | Dec. 31, 2018shares | Dec. 10, 2020$ / shares | Aug. 13, 2020$ / shares | Apr. 10, 2020$ / shares | May 22, 2018USD ($)$ / shares | Dec. 31, 2017$ / sharesshares |
Class of Stock [Line Items] | ||||||||||||
Common stock authorized (in shares) | 500,000,000 | |||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0 | $ 0 | ||||||||||
Common stock outstanding (in shares) | 211,072,508 | |||||||||||
Repurchased share distributed (in shares) | 2,723,614 | 2,723,614 | ||||||||||
Common stock issued (in shares) | 207,265,773 | 204,070,029 | 205,232,247 | 211,072,508 | ||||||||
Dividends payable (in dollars per share) | $ / shares | $ 0.03 | |||||||||||
Number of dividend payments | period | 2 | |||||||||||
Stock Dividends to Arcos Dorados Holdings Inc.’s shareholders, Shares | 0.0133333 | |||||||||||
Dividends paid, cash | $ | $ 16 | $ 10,204,000 | ||||||||||
Class A | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Common stock authorized (in shares) | 420,000,000 | |||||||||||
Common stock outstanding (in shares) | 131,072,508 | |||||||||||
Shares issued during the period (in shares) | 472,130 | 470,558 | 520,565 | |||||||||
Common stock issued (in shares) | 127,265,773 | 124,070,029 | 125,232,247 | 131,072,508 | ||||||||
Number of votes per share (in votes) | vote | 1 | |||||||||||
Dividends payable (in dollars per share) | $ / shares | $ 0.11 | $ 0.03 | $ 0.03 | $ 0.05 | ||||||||
Common stock, dividends, number of payment installments | installment | 3 | |||||||||||
Class B shares of common stock | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Common stock authorized (in shares) | 80,000,000 | |||||||||||
Common stock outstanding (in shares) | 80,000,000 | |||||||||||
Common stock issued (in shares) | 80,000,000 | 80,000,000 | 80,000,000 | 80,000,000 | ||||||||
Number of votes per share (in votes) | vote | 5 | |||||||||||
The Repurchase Program | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Number of shares repurchased (in shares) | 7,993,602 | |||||||||||
Value of shares repurchased | $ | $ 60,000,000 | |||||||||||
The Repurchase Program | Class A | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0 | |||||||||||
Shares authorized, value | $ | $ 60,000,000 |
Shareholders' equity - Schedule
Shareholders' equity - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance at period start | $ 421,566 | $ 392,759 | $ 496,142 | |
Net current-period other comprehensive (loss) income | (65,378) | (16,537) | (73,053) | |
Balance at period end | 198,016 | 421,566 | $ 392,759 | $ 496,142 |
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201712Member | Accounting Standards Update 2014-09 | ||
Cumulative Effect, Period of Adoption, Adjustment | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance at period start | 0 | $ (3,796) | ||
Balance at period end | 0 | $ (3,796) | ||
Accumulated other comprehensive loss | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance at period start | (519,505) | (502,266) | (429,347) | |
Other comprehensive (loss) income before reclassifications | (22,267) | (17,408) | (49,526) | |
Net (income) loss reclassified from accumulated other comprehensive income to consolidated statement of income | (43,088) | 949 | (23,393) | |
Net current-period other comprehensive (loss) income | (65,355) | (16,459) | (72,919) | |
Net current-period other comprehensive (loss) income | (17,239) | |||
Balance at period end | (584,860) | (519,505) | (502,266) | (429,347) |
Accumulated other comprehensive loss | Cumulative Effect, Period of Adoption, Adjustment | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance at period start | (780) | |||
Balance at period end | (780) | |||
Foreign currency translation | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance at period start | (511,445) | (499,277) | (436,281) | |
Other comprehensive (loss) income before reclassifications | (76,359) | (12,168) | (62,996) | |
Net (income) loss reclassified from accumulated other comprehensive income to consolidated statement of income | 0 | 0 | 0 | |
Net current-period other comprehensive (loss) income | (76,359) | (62,996) | ||
Net current-period other comprehensive (loss) income | (12,168) | |||
Balance at period end | (587,804) | (511,445) | (499,277) | (436,281) |
Foreign currency translation | Cumulative Effect, Period of Adoption, Adjustment | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance at period start | 0 | |||
Balance at period end | 0 | |||
Cash flow hedges | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance at period start | (1,640) | 8,359 | ||
Other comprehensive (loss) income before reclassifications | 13,888 | |||
Net (income) loss reclassified from accumulated other comprehensive income to consolidated statement of income | (23,887) | |||
Net current-period other comprehensive (loss) income | (9,999) | |||
Balance at period end | (1,640) | 8,359 | ||
Cash flow hedges | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance at period start | (7,520) | |||
Other comprehensive (loss) income before reclassifications | 54,287 | (5,185) | ||
Net (income) loss reclassified from accumulated other comprehensive income to consolidated statement of income | (43,324) | 85 | ||
Net current-period other comprehensive (loss) income | 10,963 | |||
Net current-period other comprehensive (loss) income | (5,880) | |||
Balance at period end | 3,443 | (7,520) | ||
Cash flow hedges | Cumulative Effect, Period of Adoption, Adjustment | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance at period start | (780) | |||
Balance at period end | (780) | |||
Post-employment benefits | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance at period start | (540) | (1,349) | (1,425) | |
Other comprehensive (loss) income before reclassifications | (195) | (55) | (418) | |
Net (income) loss reclassified from accumulated other comprehensive income to consolidated statement of income | 236 | 864 | 494 | |
Net current-period other comprehensive (loss) income | 41 | 76 | ||
Net current-period other comprehensive (loss) income | 809 | |||
Balance at period end | $ (499) | (540) | (1,349) | $ (1,425) |
Post-employment benefits | Cumulative Effect, Period of Adoption, Adjustment | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance at period start | $ 0 | |||
Balance at period end | $ 0 | |||
Venezuela | Post-employment benefits | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Salary period paid upon employee leaving | 30 days |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |||
Net (loss) income attributable to Arcos Dorados Holdings Inc. available to common shareholders | $ (149,451) | $ 79,896 | $ 36,847 |
Weighted-average number of common shares outstanding - Basic (in shares) | 205,417,516 | 204,003,977 | 209,136,832 |
Incremental shares from assumed exercise of stock options (in shares) | 0 | 0 | 0 |
Incremental shares from vesting of restricted share units (in shares) | 287,965 | 664,375 | 983,634 |
Weighted-average number of common shares outstanding - Diluted (in shares) | 205,705,481 | 204,668,352 | 210,120,466 |
Basic net (loss) income per common share attributable to Arcos Dorados Holdings Inc. (in dollars per share) | $ (0.73) | $ 0.39 | $ 0.18 |
Diluted net (loss) income per common share attributable to Arcos Dorados Holdings Inc. (in dollars per share) | $ (0.73) | $ 0.39 | $ 0.18 |
Related party transactions - Su
Related party transactions - Summary of Related Party Outstanding Balances (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | ||
Miscellaneous | $ 72,649 | $ 95,814 |
Axionlog Distribution B.V. | ||
Related Party Transaction [Line Items] | ||
Accounts and notes receivable, net | 272 | 177 |
Other receivables | 2,392 | 2,201 |
Miscellaneous | 3,665 | 3,719 |
Accounts payable | $ (6,378) | $ (8,747) |
Related party transactions - _2
Related party transactions - Summary of Related Party Transactions (Details) - Axionlog Distribution B.V. - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||
Food and paper | $ (124,416) | $ (188,276) | $ (177,356) |
Occupancy and other operating expenses | (3,667) | (7,252) | (5,322) |
Logistics service fees from related party | 24,303 | 38,658 | 41,633 |
Suppliers purchase expense related party | $ 100,114 | $ 149,618 | $ 135,723 |
Related party transactions - Na
Related party transactions - Narrative (Details) - Lacoop, A.C. and Lacoop II, S. C. - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | ||
Other receivables, related party | $ 1,761 | $ 2,325 |
Accounts payable, related party | $ (508) | $ 0 |
Valuation and qualifying acco_3
Valuation and qualifying accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | $ 243,660 | $ 273,968 | $ 321,074 |
Additions | 83,405 | 28,694 | 45,009 |
Deductions | (53,719) | (54,912) | (59,280) |
Translation | (10,259) | (4,090) | (32,835) |
Balance at end of period | 263,087 | 243,660 | 273,968 |
Allowance for doubtful accounts | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 23,076 | 25,539 | 21,467 |
Additions | 937 | 8,524 | 6,064 |
Deductions | (22,929) | (10,892) | (1,860) |
Translation | (141) | (95) | (132) |
Balance at end of period | 943 | 23,076 | 25,539 |
Allowance for doubtful accounts | Accounts Receivable | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 22,442 | ||
Balance at end of period | 585 | 22,442 | |
Allowance for doubtful accounts | Other receivables | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 634 | ||
Balance at end of period | 358 | 634 | |
Valuation allowance on deferred tax assets | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 194,426 | 219,920 | 271,651 |
Additions | 65,077 | 2,375 | 13,107 |
Deductions | (18,870) | (26,252) | (37,718) |
Translation | (5,437) | (1,617) | (27,120) |
Balance at end of period | 235,196 | 194,426 | 219,920 |
Provision for contingencies | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 26,158 | 28,509 | 27,956 |
Additions | 17,391 | 17,795 | 25,838 |
Deductions | (11,920) | (17,768) | (19,702) |
Translation | (4,681) | (2,378) | (5,583) |
Balance at end of period | 26,948 | 26,158 | 28,509 |
Legal Reserve Accrual | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Additions | 15,330 | 17,441 | 23,995 |
Legal Reserve Reclassifications | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Additions | 2,061 | 354 | |
Legal Reserve Settlements | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Deductions | $ (11,920) | $ (17,768) | $ (19,702) |