Arcos Dorados Holdings Inc.
For the period ended Sep 30, 2025. Filed Nov 12, 2025.
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Sep 30, 2025 · Filed Nov 12, 2025
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Contents
6. Derivative instruments
- Derivative instruments
The Company’s derivatives that are designated for hedge accounting consist of cross-currency interest rate swaps, forward contracts, principal only swaps, call spreads, interest coupon only swaps and sustainability linked ESG principal only swaps. All these derivatives are classified as cash flow hedges. Further details are in the “Derivatives designated as hedging instruments” section.
Additionally, the Company enters into certain derivatives that are not designated for hedge accounting. The Company has entered into forward contracts and call spreads to mitigate the impacts of foreign currency fluctuations on foreign currency denominated liabilities. Further details are in the “Derivatives not designated as hedging instruments” section.
The following table presents the fair values of derivative instruments included in the consolidated balance sheets as of September 30, 2025 and December 31, 2024:
| Assets · Liabilities | ||||||||
|---|---|---|---|---|---|---|---|---|
| Type of Derivative · Balance Sheet Location · As of · As of · Balance Sheet Location · As of · As of | ||||||||
| September 30, 2025 (Unaudited) · December 31, 2024 · September 30, 2025 (Unaudited) · December 31, 2024 | ||||||||
| Derivatives designated as hedging instruments | ||||||||
| Cash Flow hedge | ||||||||
| Forward contracts | Other receivables | $346 | $2,093 | Accrued payroll and other liabilities | $(2,177) | $— | ||
| Forward contracts | Derivative instruments | — | — | Derivative instruments | (39) | — | ||
| Principal only swap | Derivative instruments | — | — | Derivative instruments | (2,163) | — | ||
| Call spread + coupon-only swap | Derivative instruments | 12,078 | 16,998 | Derivative instruments | (1,758) | (179) | ||
| Sustainability-linked ESG principal only swap | Derivative instruments | 22,344 | 25,617 | Derivative instruments | (231) | (207) | ||
| Cross-currency interest rate swap | Derivative instruments | 28,898 | 37,627 | Derivative instruments | (1,539) | (620) | ||
| Subtotal | $63,666 | $82,335 | $(7,907) | $(1,006) | ||||
| Derivatives not designated as hedging instruments | ||||||||
| Forward contracts | Derivative instruments | 1,092 | 48 | Derivative instruments | (266) | (286) | ||
| Call spread | Derivative instruments | 34 | — | Derivative instruments | — | — | ||
| Subtotal | $1,126 | $48 | $(266) | $(286) | ||||
| Total derivative instruments | $64,792 | $82,383 | $(8,173) | $(1,292) | ||||
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