MCDONALDS CORP

Previous wording

The Company franchises and owns and operates McDonald's restaurants, which serve a locally relevant menu of quality food and beverages in communities across more than 100 countries. Of the 44,113 McDonald's restaurants at June 30, 2025, approximately 95% were franchised.

Current wording

The Company franchises and owns and operates McDonald's restaurants, which serve a locally relevant menu of quality food and beverages in communities across more than 100 countries. Of the 44,599 McDonald's restaurants at September 30, 2025, approximately 95% were franchised.

Previous wording

◦Delivery: The Company offers delivery from over 39,000 restaurants across approximately 100 markets, representing nearly 90% of McDonald's restaurants. The Company is continuing to build on and enhance the delivery experience for customers, including adding the ability to place a delivery order in our mobile app (a feature that is currently available in five of the Company's top markets). The Company continues to scale this capability and expects to increase the percentage of Systemwide delivery sales originating from our mobile app to 30% by the end of 2027. The Company also has long-term strategic partnerships with delivery providers that continue to benefit the Company, customers and franchisees by optimizing operational efficiencies and creating a seamless customer experience.

Current wording

◦Delivery: The Company offers delivery from approximately 40,000 restaurants across approximately 100 markets, representing nearly 90% of McDonald's restaurants. The Company is continuing to build on and enhance the delivery experience for customers, including adding the ability to place a delivery order in our mobile app (a feature that is currently available in five of the Company's top markets). The Company continues to scale this capability and expects to increase the percentage of Systemwide delivery sales originating from our mobile app to 30% by the end of 2027. The Company also has long-term strategic partnerships with delivery providers that continue to benefit the Company, customers and franchisees by optimizing operational efficiencies and creating a seamless customer experience.

Previous wording

◦Drive Thru: The Company has the most drive thru locations worldwide, with over 28,000 drive thru locations globally, including over 95% of the over 13,500 locations in the U.S. This channel remains a competitive advantage in meeting customers’ demand for flexibility and choice. McDonald's network currently provides unmatched scale and convenience for customers, while also offering significant growth opportunities, such as adding additional drive thru lanes to increase capacity and improve speed and efficiency. The Company continues to build on its drive thru advantage, as the vast majority of new restaurant openings in the U.S. and International Operated Markets will include a drive thru.

Current wording

◦Drive Thru: The Company has the most drive thru locations worldwide, with nearly 29,000 drive thru locations globally, including over 95% of the over 13,500 locations in the U.S. This channel remains a competitive advantage in meeting customers’ demand for flexibility and choice. McDonald's network currently provides unmatched scale and convenience for customers, while also offering significant growth opportunities, such as adding additional drive thru lanes to increase capacity and improve speed and efficiency. The Company continues to build on its drive thru advantage, as the vast majority of new restaurant openings in the U.S. and International Operated Markets will include a drive thru.

Previous wording

Second Quarter and Six Months 2025 Financial Performance

Current wording

Third Quarter and Nine Months 2025 Financial Performance

Previous wording

•U.S. comparable sales increased 2.5% for the quarter and decreased 0.5% for the six months. Comparable sales results for the quarter were primarily driven by positive check growth, while results for the six months were primarily driven by negative guest counts.

Current wording

•U.S. comparable sales increased 2.4% for the quarter and 0.5% for the nine months. Comparable sales results for both periods were primarily driven by positive check growth.

Previous wording

•International Operated Markets comparable sales increased 4.0% for the quarter and 1.6% for the six months. All markets reflected positive comparable sales for the quarter. Results for the six months were driven by positive comparable sales in nearly all markets.

Current wording

•International Operated Markets comparable sales increased 4.3% for the quarter and 2.6% for the nine months. All markets reflected positive comparable sales for the quarter, led by Germany and Australia. Results for the nine months were driven by positive comparable sales in nearly all markets.

Previous wording

•International Developmental Licensed Markets comparable sales increased 5.6% for the quarter and 4.5% for the six months. Positive comparable sales for both periods were led by Japan, with all geographic regions reflecting positive comparable sales.

Current wording

•International Developmental Licensed Markets comparable sales increased 4.7% for the quarter and 4.6% for the nine months. Positive comparable sales for both periods were led by Japan, with all geographic regions reflecting positive comparable sales.

Previous wording

In addition to the comparable sales results, the Company had the following financial results for the quarter and six months:

Current wording

In addition to the comparable sales results, the Company had the following financial results for the quarter and nine months:

Previous wording

•Systemwide sales increased 8% (6% in constant currencies) for the quarter and 4% (4% in constant currencies) for the six months.

Current wording

•Systemwide sales increased 8% (6% in constant currencies) for the quarter and 5% (5% in constant currencies) for the nine months.

Previous wording

•Consolidated operating income increased 11% (8% in constant currencies) for the quarter and 4% (4% in constant currencies) for the six months. Excluding current and prior year charges detailed in the Operating Income and Operating Margin section on page 30 of this report, consolidated operating income increased 7% (4% in constant currencies) for the quarter and 2% (2% in constant currencies) for the six months.

Current wording

•Consolidated operating income increased 5% (3% in constant currencies) for the quarter and 4% (3% in constant currencies) for the nine months. Excluding current and prior year charges detailed in the Operating Income and Operating Margin section on page 30 of this report, consolidated operating income increased 3% (1% in constant currencies) for the quarter and 3% (2% in constant currencies) for the nine months.

Previous wording

•Diluted earnings per share was $3.14 for the quarter, an increase of 12% (10% in constant currencies) and $5.74 for the six months, an increase of 5% (5% in constant currencies). Excluding current and prior year charges detailed in the Net Income and Diluted Earnings Per Share section on page 24 of this report, diluted earnings per share for the quarter was $3.19, an increase of 7% (5% in constant currencies) and $5.86, an increase of 4% (3% in constant currencies) for the six months.

Current wording

•Diluted earnings per share was $3.18 for the quarter, an increase of 2% (flat in constant currencies) and $8.92 for the nine months, an increase of 4% (3% in constant currencies). Excluding current and prior year charges detailed in the Net Income and Diluted Earnings Per Share section on page 24 of this report, diluted earnings per share for the quarter was flat at $3.22 (a decrease of 1% in constant currencies) and $9.08, an increase of 2% (1% in constant currencies) for the nine months.

Previous wording

The Company’s Systemwide sales and revenue have continued to be negatively impacted by the war in the Middle East, primarily in the International Developmental Licensed Markets, where the majority of restaurants are under a developmental license or affiliate arrangement. The Company is monitoring the evolving situation, which it expects to continue to have a negative impact on Systemwide sales and revenue until the war concludes and the macroeconomic conditions recover. The Company generally does not invest any restaurant capital under a developmental license or affiliate arrangement, and it receives a royalty based on a percent of sales, and generally receives initial fees upon the opening of a new restaurant or grant of a new license.

Current wording

The Company’s Systemwide sales and revenue have continued to be negatively impacted by the war in the Middle East, primarily in the International Developmental Licensed Markets, where the majority of restaurants are under a developmental license or affiliate arrangement. The Company is monitoring the evolving situation, which it expects to continue to have a negative impact on Systemwide sales and revenue until macroeconomic conditions recover. The Company generally does not invest any restaurant capital under a developmental license or affiliate arrangement, and it receives a royalty based on a percent of sales, and generally receives initial fees upon the opening of a new restaurant or grant of a new license.

Previous wording

For the quarter, net income increased 11% (9% in constant currencies) to $2,253 million, and diluted earnings per share increased 12% (10% in constant currencies) to $3.14. Foreign currency translation had a positive impact of $0.06 on diluted earnings per share.

Current wording

For the quarter, net income increased 1% (flat in constant currencies) to $2,278 million, and diluted earnings per share increased 2% (flat in constant currencies) to $3.18. Foreign currency translation had a positive impact of $0.04 on diluted earnings per share.

Previous wording

For the six months, net income increased 4% (4% in constant currencies) to $4,121 million, and diluted earnings per share increased 5% (5% in constant currencies) to $5.74. Foreign currency translation had a positive impact of $0.02 on diluted earnings per share.

Current wording

For the nine months, net income increased 3% (2% in constant currencies) to $6,399 million, and diluted earnings per share increased 4% (3% in constant currencies) to $8.92. Foreign currency translation had a positive impact of $0.06 on diluted earnings per share.

Previous wording

•Pre-tax charges of $43 million, or $0.05 per share, for the quarter and $109 million, or $0.12 per share, for the six months, primarily related to restructuring charges associated with the Company's internal effort to modernize ways of working (Accelerating the Organization)

Current wording

•Net pre-tax charges of $39 million, or $0.04 per share, for the quarter and $148 million, or $0.16 per share, for the nine months, primarily related to restructuring charges associated with the Company's internal effort to modernize ways of working (Accelerating the Organization)

Previous wording

•Net pre-tax charges of $97 million, or $0.11 per share, for the quarter and $89 million, or $0.10 per share, for the six months, primarily related to non-cash impairment charges associated with the sale of McDonald's business in South Korea

Current wording

•Net pre-tax charges of $52 million, or $0.05 per share, for the quarter and $142 million, or $0.15 per share, for the nine months, primarily consisted of transaction costs and non-cash impairment charges associated with the sale of McDonald's business in South Korea and transaction costs associated with the acquisition of McDonald's business in Israel

Previous wording

Excluding the above items, operating income growth for both periods was primarily driven by higher sales-driven Franchised margins. Results for the six months were partly offset by lower Company-owned and operated margins, driven by the U.S.

Current wording

Excluding the above items, operating income growth for both periods was primarily driven by higher sales-driven Franchised margins, partly offset by higher Selling, general, and administrative expenses.

Previous wording

During the quarter, the Company paid a dividend of $1.77 per share, or $1.3 billion, resulting in total dividends paid for the six months of $2.5 billion. Additionally, during the quarter, the Company repurchased 1.7 million shares of stock for $506 million, resulting in total purchases for the six months of 3.2 million shares, or $953 million.

Current wording

During the quarter, the Company paid a dividend of $1.77 per share, or $1,262 million, resulting in total dividends paid for the nine months of $3,792 million. Additionally, during the quarter, the Company repurchased 1.7 million shares of stock for $503 million, resulting in total purchases for the nine months of 4.8 million shares, or $1,456 million.

Previous wording

•Total Franchised revenues and Company-owned and operated sales increased 4% (2% in constant currencies) for the quarter and were flat (flat in constant currencies) for the six months. Both periods benefited from positive sales performance in the International Operated Markets. In the U.S., the quarter benefited from positive franchised sales performance, while the six months was impacted by negative Company-owned and operated sales performance. International Developmental Licensed Markets & Corporate revenues for both periods were impacted by the prior year sale of McDonald's business in South Korea, partly offset by the prior year acquisition of McDonald's business in Israel and positive sales performance.

Current wording

•Total Franchised revenues and Company-owned and operated sales increased 3% (flat in constant currencies) for the quarter and increased 1% (flat in constant currencies) for the nine months. Both periods benefited from positive sales performance in the International Operated Markets. In the U.S., total revenues for the quarter was driven by positive franchised sales performance, while the nine months was driven by negative Company-owned and operated sales performance. International Developmental Licensed Markets & Corporate revenues for both periods were impacted by the prior year sale of McDonald's business in South Korea, partly offset by positive sales performance. International Developmental Licensed Markets & Corporate revenues for the nine months also reflected the prior year acquisition of McDonald's business in Israel.

Previous wording

The following table presents the percent change in comparable sales for the quarters and six months ended June 30, 2025 and 2024:

Current wording

The following table presents the percent change in comparable sales for the quarters and nine months ended September 30, 2025 and 2024:

Previous wording

The following table presents the percent change in Systemwide sales for the quarter and six months ended June 30, 2025:

Current wording

The following table presents the percent change in Systemwide sales for the quarter and nine months ended September 30, 2025:

Previous wording

Franchised sales are not recorded as revenues by the Company, but are the basis on which the Company calculates and records franchised revenues and are indicative of the financial health of the franchisee base. The following table presents Franchised sales and the related increases/(decreases) for the quarters and six months ended June 30, 2025 and 2024:

Current wording

Franchised sales are not recorded as revenues by the Company, but are the basis on which the Company calculates and records franchised revenues and are indicative of the financial health of the franchisee base. The following table presents Franchised sales and the related increases/(decreases) for the quarters and nine months ended September 30, 2025 and 2024:

Previous wording

•Company-owned and operated margins for both periods reflected the impact of ongoing inflationary cost pressures and negative sales performance in the U.S., while the International Operated Markets reflected sales-driven growth, partly offset by the impact of ongoing inflationary cost pressures.

Current wording

•Company-owned and operated margins for both periods reflected the impact of ongoing inflationary cost pressures in the U.S. and the International Operated Markets. The U.S. was impacted by negative sales performance, while the International Operated Markets reflected sales-driven growth.

Previous wording

•Total restaurant margins included depreciation and amortization expense of $425 million and $401 million for the quarters ended 2025 and 2024, respectively, and $839 million and $813 million for the six months ended 2025 and 2024, respectively.

Current wording

•Total restaurant margins included depreciation and amortization expense of $438 million and $420 million for the quarters ended 2025 and 2024, respectively, and $1.3 billion and $1.2 billion for the nine months ended 2025 and 2024, respectively.

Previous wording

•Selling, general and administrative expenses as a percent of Systemwide sales were 2.1% and 2.2% for the six months ended June 30, 2025 and 2024, respectively.

Current wording

•Selling, general and administrative expenses as a percent of Systemwide sales were 2.1% for both the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

•Equity in earnings of unconsolidated affiliates for both periods primarily reflected higher equity in earnings in China as a result of improved operating performance.

Current wording

•Equity in earnings of unconsolidated affiliates for both periods primarily reflected higher equity in earnings in China and Japan as a result of improved operating performance.

Previous wording

•The increase in asset dispositions and other (income) expense, net for both periods reflected higher asset write-offs, higher store closing costs and litigation settlements.

Current wording

•The increase in asset dispositions and other (income) expense, net for both periods primarily reflected higher asset write-offs and higher store closing costs.

Previous wording

•Impairment and other charges (gains), net reflected pre-tax charges of $43 million and $109 million for the quarter and the six months, respectively, primarily related to restructuring charges associated with Accelerating the Organization.

Current wording

•Impairment and other charges (gains), net reflected net pre-tax charges of $39 million and $148 million for the quarter and the nine months, respectively, primarily related to restructuring charges associated with Accelerating the Organization.

Previous wording

Results for the quarter and six months ended 2024 reflected net pre-tax charges of $97 million and $89 million, respectively, primarily related to non-cash impairment charges associated with the sale of McDonald's business in South Korea and pre-tax charges of $57 million and $100 million for the quarter and six months, respectively, related to restructuring charges associated with Accelerating the Organization.

Current wording

Results for the quarter and nine months ended 2024 reflected net pre-tax charges of $52 million and $142 million, respectively, primarily consisting of transaction costs and non-cash impairment charges associated with the sale of McDonald's business in South Korea and transaction costs associated with the acquisition of McDonald's business in Israel, and pre-tax charges of $46 million and $146 million for the quarter and nine months, respectively, related to restructuring charges associated with Accelerating the Organization.

Previous wording

•Operating income increased $312 million, or 11% (8% in constant currencies), for the quarter and increased $225 million, or 4% (4% in constant currencies), for the six months. Results reflected pre-tax charges of $43 million and $109 million for the quarter and the six months, respectively, primarily related to restructuring charges associated with Accelerating the Organization.

Current wording

•Operating income increased $168 million, or 5% (3% in constant currencies), for the quarter and increased $393 million, or 4% (3% in constant currencies), for the nine months. Results reflected net pre-tax charges of $39 million and $148 million for the quarter and the nine months, respectively, primarily related to restructuring charges associated with Accelerating the Organization.

Previous wording

Results for the quarter and six months ended 2024 reflected net pre-tax charges of $97 million and $89 million, respectively, primarily related to non-cash impairment charges and pre-tax restructuring charges of $57 million and $100 million for the quarter and six months, respectively, related to Accelerating the Organization.

Current wording

Results for the quarter and nine months ended 2024 reflected net pre-tax charges of $52 million and $142 million, respectively, primarily related to non-cash impairment charges and transaction costs, and pre-tax restructuring charges of $46 million and $146 million for the quarter and nine months, respectively, related to Accelerating the Organization.

Previous wording

•Excluding the current and prior year charges shown in the table above, operating income increased 7% (4% in constant currencies) for the quarter and 2% (2% in constant currencies) for the six months. Results for the quarter primarily reflected positive operating results primarily due to sales-driven growth in Franchised margins across all segments and lower Selling, general, and administrative expenses in International Developmental Licensed Markets & Corporate. Results for the six months primarily reflected positive operating results in the International Operated Markets, primarily due to sales-driven growth in Franchised margins, and positive operating results in International Developmental Licensed Markets & Corporate, primarily due to sales-driven growth in Franchised margins and lower Selling, general, and administrative expenses, partly offset by lower sales-driven Company-owned and operated margins and lower Other operating income in the U.S.

Current wording

•Excluding the current and prior year charges shown in the table above, operating income increased 3% (1% in constant currencies) for the quarter and 3% (2% in constant currencies) for the nine months. Results for the quarter reflected positive operating results, primarily due to higher sales-driven Franchised margins in the International Operated Markets, partly offset by higher Selling, general, and administrative expenses in International Developmental Licensed Markets & Corporate. Results for the nine months reflected positive operating results, primarily due to higher sales-driven Franchised margins across all segments, partly offset by lower sales-driven Company-owned and operating margins and higher Selling, general, and administrative expenses in the U.S.

Previous wording

The increase in non-GAAP operating margin was primarily due to the prior year sale of McDonald's business in South Korea and lower Selling, general and administrative expenses, partly offset by the prior year acquisition of McDonald's business in Israel.

Current wording

The increase in non-GAAP operating margin was primarily due to the prior year sale of McDonald's business in South Korea, partly offset by the prior year acquisition of McDonald's business in Israel and higher Selling, general and administrative expenses.

Previous wording

•Interest expense increased 4% (3% in constant currencies) for the quarter and 3% (3% in constant currencies) for the six months. Results for both periods reflected higher average debt balances, while the six months also reflected higher average interest rates.

Current wording

•Interest expense increased 7% (5% in constant currencies) for the quarter and 4% (4% in constant currencies) for the nine months. Results for both periods reflected higher average debt balances as well as higher average interest rates.

Previous wording

•Interest income for the six months decreased due to lower average cash balances and lower average interest rates.

Current wording

•Interest income for the nine months decreased due to lower average cash balances and lower average interest rates.

Previous wording

•On July 4, 2025, Public Law Number 119-21 (Bill H.R. 1) was enacted in the U.S. with varying effective dates beginning in 2025. The new legislation extends certain provisions enacted with the Tax Cuts and Jobs Act, while introducing or restoring international and domestic business provisions that impact U.S. corporations. The Company is currently assessing the impact of the legislation on its Consolidated Financial Statements.

Current wording

•On July 4, 2025, Public Law Number 119-21 (Bill H.R. 1) was enacted in the U.S. with varying effective dates beginning in 2025. The new legislation extends certain provisions enacted with the Tax Cuts and Jobs Act, while introducing or restoring international and domestic business provisions that impact U.S. corporations. The Company recorded the impacts of the legislation in the third quarter of 2025, which were not material to the Condensed Consolidated Financial Statements.

Previous wording

Cash provided by operations totaled $4.4 billion and exceeded capital expenditures by $3.1 billion for the six months 2025. Cash provided by operations slightly increased compared with the six months 2024, in line with operating results.

Current wording

Cash provided by operations totaled $7.9 billion and exceeded capital expenditures by $5.6 billion for the nine months 2025. Cash provided by operations slightly increased compared with the nine months 2024, in line with operating results.

Previous wording

Cash used for investing activities totaled $1.6 billion for the six months 2025, a decrease of $1.7 billion compared with the six months 2024. The decrease was primarily due to the Company's acquisition of an increased ownership stake in McDonald's China business in the prior year.

Current wording

Cash used for investing activities totaled $2.8 billion for the nine months 2025, a decrease of $1.8 billion compared with the nine months 2024. The decrease was primarily due to the Company's acquisition of an increased ownership stake in McDonald's China business in the prior year.

Previous wording

Cash used for financing activities totaled $2.1 billion for the six months 2025, a decrease of $2.4 billion compared with the six months 2024. The decrease was primarily due to higher bond issuances and lower treasury stock purchases in the current year.

Current wording

Cash used for financing activities totaled $3.9 billion for the nine months 2025, a decrease of $1.7 billion compared with the nine months 2024. The decrease was primarily due to higher bond issuances and lower treasury stock purchases in the current year.

Previous wording

•The Company expects the effective income tax rate for the full year 2025 to be between 20% and 22%. Some volatility may result in a quarterly tax rate outside of the annual range.

Current wording

•The Company expects the effective income tax rate for the full year 2025 to be between 21% and 22%. Some volatility may result in a quarterly tax rate outside of the annual range.