Arcos Dorados Holdings Inc.
For the period ended Mar 31, 2026. Filed May 20, 2026.
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Mar 31, 2026 · Filed May 20, 2026
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Contents
5. Derivative instruments
- Derivative instruments
The Company’s derivatives that are designated for hedge accounting consist of forward contracts and cross currency swaps consisting of cross-currency interest rate swap, principal only swaps, call spreads, interest coupon only swaps and sustainability linked ESG principal only swap. 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 call spread and cross currency swaps 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 March 31, 2026 and December 31, 2025:
| Assets · Liabilities | ||||||||
|---|---|---|---|---|---|---|---|---|
| Type of Derivative · Balance Sheet Location · As of · As of · Balance Sheet Location · As of · As of | ||||||||
| March 31, 2026 (Unaudited) · December 31, 2025 · March 31, 2026 (Unaudited) · December 31, 2025 | ||||||||
| Derivatives designated as hedging instruments | ||||||||
| Cash Flow hedge | ||||||||
| Forward contracts | Other receivables | $4 | $489 | Accrued payroll and other liabilities | $(2,075) | $(2,642) | ||
| Forward contracts | Derivative instruments | — | — | Derivative instruments | (1,640) | (2,428) | ||
| Cross currency swaps | Derivative instruments | 58,829 | 65,869 | Derivative instruments | (6,905) | (4,157) | ||
| Subtotal | $58,833 | $66,358 | $(10,620) | $(9,227) | ||||
| Derivatives not designated as hedging instruments | ||||||||
| Cross currency swaps | Derivative instruments | 11,544 | 12,815 | Derivative instruments | (11,952) | (17,282) | ||
| Call spread | Derivative instruments | — | 20 | Derivative instruments | — | — | ||
| Subtotal | $11,544 | $12,835 | $(11,952) | $(17,282) | ||||
| Total derivative instruments | $70,377 | $79,193 | $(22,572) | $(26,509) | ||||
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