ARCOS DORADOS HOLDINGS INC. FORM 20-F (Annual and Transition Report (foreign private issuer)) Filed 04/29/21 for the Period Ending 12/31/20 Telephone 598 2626-3000 CIK 0001508478 Symbol ARCO SIC Code 5812 - Retail-Eating Places Industry Restaurants & Bars Sector Consumer Cyclicals Fiscal Year 12/31 http://www.edgar-online.com © Copyright 2021, EDGAR Online, a division of Donnelley Financial Solutions. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, a division of Donnelley Financial Solutions, Terms of Use. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report For the transition period from ________________ to ________________ Commission file number: 001-35129 Arcos Dorados Holdings Inc. (Exact name of Registrant as specified in its charter) British Virgin Islands (Jurisdiction of incorporation or organization) Dr. Luis Bonavita 1294, Office 501 Montevideo, Uruguay, 11300 WTC Free Zone (Address of principal executive offices) Juan David Bastidas Chief Legal Officer Arcos Dorados Holdings Inc. Dr. Luis Bonavita 1294, 5th floor, Office 501, WTC Free Zone Montevideo, Uruguay 11300 Telephone: +598 2626-3000 Fax: +598 2626-3018 (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person) Securities registered or to be registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol Name of each exchange on which registered Class A shares, no par value ARCO New York Stock Exchange Securities registered or to be registered pursuant to Section 12(g) of the Act: None (Title of Class) Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None (Title of Class) Indicate the number of outstanding shares of each of the issuer’s classes of capital stock or common stock as of the close of the period covered by the annual report. Class A shares: 127,265,773 Class B shares: 80,000,000 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes o No x Note - Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ☐ Accelerated filer x Non-accelerated filer ☐ Emerging growth company ☐ If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. o † The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. x Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: U.S. GAAP x International Financial Reporting Standards as issued by the International Accounting o Other o Standards Board If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. o Item 17 o Item 18 If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x Table of Contents ARCOS DORADOS HOLDINGS INC. TABLE OF CONTENTS Page PRESENTATION OF FINANCIAL AND OTHER INFORMATION iv FORWARD-LOOKING STATEMENTS v ENFORCEMENT OF JUDGMENTS vii PART I 1 ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS 1 A. Directors and Senior Management 1 B. Advisers 1 C. Auditors 1 ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 1 A. Offer Statistics 1 B. Method and Expected Timetable 1 ITEM 3. KEY INFORMATION 1 A. Selected Financial Data 1 B. Capitalization and Indebtedness 11 C. Reasons for the Offer and Use of Proceeds 11 D. Risk Factors 11 ITEM 4. INFORMATION ON THE COMPANY 33 A. History and Development of the Company 33 B. Business Overview 35 C. Organizational Structure 56 D. Property, Plants and Equipment 57 ITEM 4A. UNRESOLVED STAFF COMMENTS 58 ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 58 A. Operating Results 58 B. Liquidity and Capital Resources 75 C. Research and Development, Patents and Licenses, etc. 81 D. Trend Information 81 E. Off-Balance Sheet Arrangements 82 F. Tabular Disclosure of Contractual Obligations 82 G. Safe Harbor 83 ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 83 A. Directors and Senior Management 83 B. Compensation 89 C. Board Practices 90 D. Employees 91 E. Share Ownership 93 i Table of Contents ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 94 A. Major Shareholders 94 B. Related Party Transactions 95 C. Interests of Experts and Counsel 95 ITEM 8. FINANCIAL INFORMATION 96 A. Consolidated Statements and Other Financial Information 96 B. Significant Changes 99 ITEM 9. THE OFFER AND LISTING 99 A. Offering and Listing Details 99 B. Plan of Distribution 99 C. Markets 99 D. Selling Shareholders 99 E. Dilution 100 F. Expenses of the Issue 100 ITEM 10. ADDITIONAL INFORMATION 100 A. Share Capital 100 B. Memorandum and Articles of Association 100 C. Material Contracts 109 D. Exchange Controls 115 E. Taxation 116 F. Dividends and Paying Agents 119 G. Statement by Experts 119 H. Documents on Display 119 I. Subsidiary Information 119 ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 120 ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 122 A. Debt Securities 122 B. Warrants and Rights 122 C. Other Securities 122 D. American Depositary Shares 122 PART II 123 ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES 123 A. Defaults 123 B. Arrears and Delinquencies 123 ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS 123 A. Material Modifications to Instruments 123 B. Material Modifications to Rights 123 C. Withdrawal or Substitution of Assets 123 D. Change in Trustees or Paying Agents 123 E. Use of Proceeds 123 ii Table of Contents ITEM 15. CONTROLS AND PROCEDURES 123 A. Disclosure Controls and Procedures 123 B. Management’s Annual Report on Internal Control over Financial Reporting 123 C. Attestation Report of the Registered Public Accounting Firm 124 D. Changes in Internal Control over Financial Reporting 125 ITEM 16. [RESERVED] 125 ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT 125 ITEM 16B. CODE OF ETHICS 126 ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES 126 ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES 126 ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS 127 ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT 127 ITEM 16G. CORPORATE GOVERNANCE 127 ITEM 16H. MINE SAFETY DISCLOSURE 128 PART III 129 ITEM 17. FINANCIAL STATEMENTS 129 ITEM 18. FINANCIAL STATEMENTS 129 ITEM 19. EXHIBITS 129 iii Table of Contents PRESENTATION OF FINANCIAL AND OTHER INFORMATION All references to “U.S. dollars,” “dollars,” “U.S.$” or “$” are to the U.S. dollar. All references to “Argentine pesos” or “ARS$” are to the Argentine peso. All references to “Brazilian reais” or “R$” are to the Brazilian real. All references to “Mexican pesos” or “Ps.” are to the Mexican peso. All references to “Venezuelan bolívares” or “Bs.” are to the Venezuelan bolívar, the legal currency of Venezuela. See “Item 3. Key Information—A. Selected Financial Data—Exchange Rates and Exchange Controls” for information regarding exchange rates for the Argentine, Brazilian and Mexican currencies. Definitions In this annual report, unless the context otherwise requires, all references to “Arcos Dorados,” the “Company,” “we,” “our,” “ours,” “us” or similar terms refer to Arcos Dorados Holdings Inc., together with its subsidiaries.