What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-08 compared with 2023-11-02 · 101 added, 123 removed, 284 unchanged (44% of the section changed)

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEET

In millions, except per share data September 30,

In millions, except per share data March 31,

2024 December 31,

17 unchanged sentences

Current liabilities

Short-term borrowings and current maturities of long-term debt $ 604 $ 2,192

Accounts payable 936 1,103

28 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)

Quarters Ended Nine Months Ended

September 30, September 30,

Quarters Ended

In millions, except per share data 2024 2023

Sales by Company-operated restaurants $ 2,556.2 $ 2,124.8 $ 7,267.5 $ 6,540.0

Sales by Company-owned and operated restaurants $ 2,355 $ 2,224

Revenues from franchised restaurants 3,723 3,588

2 unchanged sentences

Operating costs and expenses

Company-operated restaurant expenses 2,135.0 1,779.6 6,149.4 5,508.6

Company-owned and operated restaurant expenses 2,035 1,923

Franchised restaurants-occupancy expenses 627 598

18 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

Quarters Ended Nine Months Ended

September 30, September 30,

Quarters Ended

In millions 2024 2023

4 unchanged sentences

income ("AOCI"), including net investment hedges

( 145.3 ) ( 369.5 ) ( 90.5 ) ( 644.3 )

Reclassification of (gain) loss to net income — —

1 unchanged sentence

benefit (expense) of $( 93 ) and $ 36

( 145.3 ) ( 369.5 ) ( 90.5 ) ( 140.2 )

Cash flow hedges:

2 unchanged sentences

Cash flow hedges-net of tax benefit (expense) of $( 12 ) and $ 5

50.5 58.9 31.0 160.9

Defined benefit pension plans:

3 unchanged sentences

of $ 1 and $ 1

4.7 ( 2.7 ) 0.4 ( 6.7 )

Total other comprehensive income (loss), net of tax ( 77 ) ( 3 )

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

Quarters Ended Nine Months Ended

September 30, September 30,

Quarters Ended

In millions 2024 2023

12 unchanged sentences

Purchases of restaurant businesses (52) ( 98 )

Sales of restaurant and other businesses 15.8 33.1 95.8 401.3

Purchases of equity method investments (1,820) —

Sales of restaurant businesses 42 21

Sales of property 8 18

16 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED)

For the nine months ended September 30, 2022

For the quarter ended March 31, 2023

issued Accumulated other

18 unchanged sentences

Stock option exercises and other 39 1.0 35 74

Balance at September 30, 2022 1,660.6 $ 16.6 $ 8,460.1 $ 58,752.0 $ ( 186.2 ) $ 136.1 $ ( 2,509.6 ) ( 928.2 ) $ ( 71,235.2 ) $ ( 6,566.2 )

For the nine months ended September 30, 2023

Balance at March 31, 2023 1,660.6 $ 17 $ 8,636 $ 60,235 $ ( 299 ) $ 14 $ ( 2,204 ) ( 930.5 ) $ ( 72,174 ) $ ( 5,776 )

For the quarter ended March 31, 2024

issued Accumulated other

18 unchanged sentences

Stock option exercises and other 58 1.2 41 99

Balance at September 30, 2023 1,660.6 $ 16.6 $ 8,824.5 $ 62,649.0 $ ( 297.8 ) $ 61.7 $ ( 2,309.6 ) ( 935.3 ) $ ( 73,799.2 ) $ ( 4,854.8 )

See Notes to condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED)

For the quarter ended September 30, 2022

issued Accumulated other

comprehensive income (loss) Common stock in

treasury Total

shareholders’

equity (deficit)

capital Retained

earnings Pensions Cash flow

hedges Foreign

In millions, except per share data Shares Amount Shares Amount

Balance at June 30, 2022 1,660.6 $ 16.6 $ 8,378.7 $ 57,785.1 $ ( 183.5 ) $ 77.2 $ ( 2,140.1 ) ( 924.9 ) $ ( 70,303.8 ) $ ( 6,369.8 )

Net income 1,981.6 1,981.6

Other comprehensive income (loss),

net of tax ( 2.7 ) 58.9 ( 369.5 ) ( 313.3 )

Comprehensive income 1,668.3

Common stock cash dividends

($ 1.38 per share)

( 1,014.7 ) ( 1,014.7 )

Treasury stock purchases ( 3.7 ) ( 949.1 ) ( 949.1 )

Share-based compensation 38.3 38.3

Stock option exercises and other 43.1 0.4 17.7 60.8

Balance at September 30, 2022 1,660.6 $ 16.6 $ 8,460.1 $ 58,752.0 $ ( 186.2 ) $ 136.1 $ ( 2,509.6 ) ( 928.2 ) $ ( 71,235.2 ) $ ( 6,566.2 )

For the quarter ended September 30, 2023

issued Accumulated other

comprehensive income (loss) Common stock in

treasury Total

shareholders’

equity (deficit)

capital Retained

earnings Pensions Cash flow

hedges Foreign

In millions, except per share data Shares Amount Shares Amount

Balance at June 30, 2023 1,660.6 $ 16.6 $ 8,735.8 $ 61,436.6 $ ( 302.5 ) $ 11.2 $ ( 2,164.3 ) ( 931.9 ) $ ( 72,732.5 ) $ ( 4,999.1 )

Net income 2,317.1 2,317.1

Other comprehensive income (loss),

net of tax 4.7 50.5 ( 145.3 ) ( 90.1 )

Comprehensive income 2,227.0

Common stock cash dividends

($ 1.52 per share)

( 1,104.7 ) ( 1,104.7 )

Treasury stock purchases ( 3.6 ) ( 1,083.1 ) ( 1,083.1 )

Share-based compensation 42.9 42.9

Stock option exercises and other 45.8 0.2 16.4 62.2

Balance at September 30, 2023 1,660.6 $ 16.6 $ 8,824.5 $ 62,649.0 $ ( 297.8 ) $ 61.7 $ ( 2,309.6 ) ( 935.3 ) $ ( 73,799.2 ) $ ( 4,854.8 )

Balance at March 31, 2024 1,660.6 $ 17 $ 9,001 $ 64,203 $ ( 367 ) $ 32 $ ( 2,198 ) ( 939.9 ) $ ( 75,520 ) $ ( 4,833 )

See Notes to condensed consolidated financial statements.

3 unchanged sentences

The accompanying condensed consolidated financial statements should be read in conjunction with the Consolidated Financial Statements contained in the Company’s December 31, 2023 Annual Report on Form 10-K.

In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation have been included.

The results for the quarter and nine months ended September 30, 2023 do not necessarily indicate the results that may be expected for the full year.

In the opinion of management, all normal recurring adjustments necessary for a fair presentation have been included.

The results for the quarter ended March 31, 2024 do not necessarily indicate the results that may be expected for the full year.

Change in Presentation

In the first quarter of 2024, the Company changed its rounding presentation to the nearest whole number in millions of reported amounts, except per share data or as otherwise designated.

The change in rounding presentation has been applied to all prior year amounts presented.

In certain circumstances, this change adjusted previously reported balances, however, these changes were not significant, and no other changes were made to previously reported financial information.

Additionally, certain columns and rows within the financial statements and tables presented may not add due to rounding.

Percentages have been calculated from the underlying whole-dollar amounts for all periods presented.

Restaurant Information

The following table presents restaurant information by ownership type:

Restaurants at September 30, 2023 2022

Restaurants at March 31, 2024 2023

Conventional franchised 21,841 21,701

2 unchanged sentences

Total Franchised 39,865 38,417

Company-operated 2,144 2,050

Company-owned and operated 2,153 2,118

Total Systemwide restaurants 42,018 40,535

2 unchanged sentences

Diluted earnings per common share is calculated as net income divided by diluted weighted-average shares.

Diluted weighted-average shares include weighted-average shares outstanding plus the dilutive effect of share-based compensation, calculated using the treasury stock method, of 4.4 million shares and 4.6 million shares for the quarters ended 2023 and 2022, respectively, and 4.6 million shares and 4.7 million shares for the nine months ended 2023 and 2022, respectively.

Share-based compensation awards that would have been antidilutive, and therefore were not included in the calculation of diluted weighted-average shares, totaled 1.2 million shares and 1.5 million shares for the quarters ended 2023 and 2022, respectively, and 2.1 million shares and 1.5 million shares for the nine months ended 2023 and 2022, respectively.

Diluted weighted-average shares include weighted-average shares outstanding plus the dilutive effect of share-based compensation, calculated using the treasury stock method, of 4.1 million shares and 4.6 million shares for the quarters 2024 and 2023, respectively.

Share-based compensation awards that would have been antidilutive, and therefore were not included in the calculation of diluted weighted-average shares, totaled 2.1 million shares and 2.3 million shares for the quarters 2024 and 2023, respectively.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

There have been no recent accounting pronouncements or changes in accounting pronouncements during the quarter and nine months ended September 30, 2023 that are of significance or potential significance to the Company.

Recent Accounting Pronouncements Not Yet Adopted

Segment Reporting

In November 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No.

2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures" ("ASU 2023-07").

The pronouncement expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods beginning after December 15, 2024.

We are currently in the process of determining the impact that ASU 2023-07 will have on the Company's consolidated financial statement disclosures.

In December 2023, the FASB issued ASU No.

2023-09, "Income Taxes (Topic 740):

Improvements to Income Tax Disclosures" ("ASU 2023-09").

The pronouncement expands the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024.

We are currently in the process of determining the impact that ASU 2023-09 will have on the Company's consolidated financial statement disclosures.

Accelerating the Organization

In January 2023, the Company announced an evolution of its successful Accelerating the Arches strategy.

Enhancements to the strategy include the addition of Restaurant Development to the Company’s growth pillars and an internal effort to modernize ways of working, Accelerating the Organization , both of which are aimed at elevating the Company’s performance.

Accelerating the Organization is designed to unlock further growth as the Company focuses on becoming faster, more innovative and more efficient for the benefit of our customers and people.

The Company expects to incur about $ 250 million of costs related to Accelerating the Organization in 2023, of which $ 220 million was incurred in the nine months ended September 30, 2023.

These costs were recorded in the Other operating (income) expense, net line within the consolidated statement of income.

Restructuring costs primarily consist of employee termination benefits, costs to terminate contracts, including lease terminations, and professional services and other costs.

Professional services and other costs primarily relate to expenses incurred for legal and consulting activities.

Enhancements to the strategy included the addition of Restaurant Development to the Company’s growth pillars and an internal effort to modernize ways of working, Accelerating the Organization , both of which are aimed at elevating the Company’s performance.

Accelerating the Organization is designed to unlock further growth as the Company focuses on becoming faster, more innovative and more efficient for its customers and people.

The Company incurred $ 44 million of charges related to Accelerating the Organization in the three months ended March 31, 2024.

These charges were recorded in the Other operating (income) expense, net line within the consolidated statement of income, and primarily recorded within the Corporate segment.

For the period presented, restructuring charges primarily consisted of professional services and consulting activities.

There were no significant non-cash impairment charges included in the amounts listed in the table below.

1 unchanged sentence

Employee Termination Benefits Costs to Terminate Contracts Other Related Costs Total

Beginning Balance $ — $ — $ — $ —

Accrued Balance at Beginning of Year $ 41 $ 11 $ 7 59

Restructuring Costs Incurred — — 44 44

2 unchanged sentences

Accrued Balance at March 31, 2024 $ 27 $ 6 $ 6 $ 39

Restructuring Costs Incurred ( 8.8 ) 5.6 21.9 18.7

Cash Payments ( 27.7 ) ( 11.7 ) ( 46.8 ) ( 86.2 )

Other Non-Cash Items — — ( 2.5 ) ( 2.5 )

Accrued Balance at June 30, 2023 $ 72.3 $ 19.4 $ 1.5 $ 93.2

Restructuring Costs Incurred ( 0.9 ) — 21.4 20.5

Cash Payments ( 13.0 ) ( 7.4 ) ( 15.3 ) ( 35.7 )

Other Non-Cash Items ( 2.5 ) — 0.1 ( 2.4 )

Accrued Balance at September 30, 2023 $ 55.9 $ 12.0 $ 7.7 $ 75.6

Of the $ 220 million of restructuring costs incurred in the nine months ended September 30, 2023, $ 62 million was recorded in the U.S., $ 71 million was recorded in the International Operated Markets segment and $ 87 million was recorded in the International Developmental Licensed Markets & Corporate segment, the majority of which was recorded at Corporate.

Substantially all of the accrued restructuring balance recorded at September 30, 2023, related to the Company’s Accelerating the Organization initiative, is expected to be paid out over the next twelve months.

As part of Accelerating the Organization, the Company is also in the initial stages of developing a strategy that will utilize an enterprise-wide Global Business Services model to deliver business services at scale with greater efficiency.

The Company has started to incur costs associated with this strategy and additional costs will be incurred as the strategy progresses;

however, at this point in time these future costs cannot be estimated.

The expectation is that the Company will complete the majority of its Global Business Services strategy by the end of 2027.

The effective income tax rate was 20.7 % and 21.9 % for the quarters ended 2023 and 2022, respectively, and 19.7 % and 22.1 % for the nine months ended 2023 and 2022, respectively.

The effective tax rate for the nine months 2022 reflected $ 239 million of net tax benefits related to the sale of the Company’s Russia and Dynamic Yield businesses and the unfavorable impact of the non-deductible $ 537 million of nonoperating expense related to the settlement of a tax audit in France.

The Company continues to evolve its ways of working by driving efficiency and effectiveness across the organization, primarily led by its Global Business Services organization.

Transformation efforts under Accelerating the Organization will continue to result in various restructuring charges as the strategy progresses through its anticipated end date of 2027.

The Company expects to incur up to $ 250 million of restructuring charges in 2024, primarily related to consulting activities.

Equity Method Investments

The Company has various investments accounted for using the equity method.

Under the equity method of accounting, the Company records our proportionate share of the net income or loss of each equity method investee, with a corresponding change to the carrying value of the investment.

The carrying value of the investment is also adjusted for any dividends received and the effect of foreign exchange.

The Company records its proportionate share of net income or loss within the Other operating (income) expense, net line on the consolidated statement of net income.

The carrying value of the investments are recorded within the Miscellaneous other assets line on the consolidated balance sheet.

The Company’s primary equity method investments include partial ownership in Grand Foods Holding, an entity that operates and manages McDonald's business in mainland China, Hong Kong and Macau, and partial ownership in McDonald’s Japan Holdings Co., Ltd, an entity that operates and manages McDonald’s business in Japan.

The Company has granted these entities the right to operate the McDonald's business as part of a Master Franchise Agreement.

Revenue related to these agreements are accounted for in a manner consistent with the Company’s other franchise arrangements.

The following table summarizes the amounts related to the Company’s primary equity method investees during the periods presented.

March 31, 2024 December 31, 2023

In Millions Percentage Ownership Fair Value (Level 1) Carrying Amount Percentage Ownership Fair Value (Level 1) Carrying Amount

Grand Foods Holding 48 % N/A $ 2,092 20 % N/A $ 238

McDonald's Japan Holdings Co., Ltd 35 % $ 2,128 $ 563 35 % $ 2,034 $ 597

On January 30, 2024, the Company acquired an additional 28 % ownership stake in Grand Foods Holding from the global investment firm Carlyle in exchange for $ 1.8 billion in cash.

The acquisition increased the Company's equity ownership to 48 %, but did not result in control of the entity.

As such, the Company remains a minority partner and will continue to account for the investment under the equity method.

As of March 31, 2024, the aggregate carrying amount of our investments in these equity method investees exceeded our proportionate share of the net assets of these equity method investees by $ 1,448 million.

This difference is not amortized.

Management has concluded that there are no indicators of impairment related to these investments.

The following table summarizes the amounts recorded related to the Company's primary equity method investments during the periods presented.

Quarters Ended March 31,

In Millions 2024 2023

Revenue $ 134 $ 122

Equity in Earnings $ 34 $ 27

Accounts Receivable $ 112 $ 114

Dividends Received $ 13 $ 14

The effective income tax rate was 19.9 % and 20.5 % for the quarters ended 2024 and 2023, respectively.

Fair Value Measurements

1 unchanged sentence

Fair value disclosures are reflected in a three-level hierarchy, maximizing the use of observable inputs and minimizing the use of unobservable inputs.

The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date and are defined as follows:

• Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market.

• Level 2 – inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market or model-derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability.

• Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability.

There were no significant changes to the valuation techniques used to measure fair value as described in the Company's December 31, 2023 Annual Report on Form 10-K.

At September 30, 2023, the fair value of the Company’s debt obligations was estimated at $ 34.0 billion, compared to a carrying amount of $ 37.3 billion.

At March 31, 2024, the fair value of the Company’s debt obligations was estimated at $ 35.7 billion, compared to a carrying amount of $ 37.4 billion.

The fair value of debt obligations is based upon quoted market prices, classified as Level 2 within the valuation hierarchy.

6 unchanged sentences

Derivative Assets Derivative Liabilities

In millions Balance Sheet Classification September 30, 2023 December 31, 2022 Balance Sheet Classification September 30, 2023 December 31, 2022

In millions Balance Sheet Classification March 31, 2024 December 31, 2023 Balance Sheet Classification March 31, 2024 December 31, 2023

Derivatives designated as hedging instruments

13 unchanged sentences

Total derivatives $ 233 $ 210 $ ( 75 ) $ ( 118 )

The following table presents the pre-tax amounts from derivative instruments affecting income and AOCI for the nine months ended September 30, 2023 and 2022, respectively:

The following table presents the pre-tax amounts from derivative instruments affecting income and AOCI for the three months ended March 31, 2024 and 2023, respectively:

Location of gain or loss

19 unchanged sentences

The Company enters into fair value hedges to reduce the exposure to changes in fair values of certain liabilities.

The Company enters into fair value hedges that convert a portion of its fixed rate debt into floating rate debt by the use of interest rate swaps.

At September 30, 2023, the carrying amount of fixed-rate debt that was effectively converted was an equivalent notional amount of $ 1.0 billion, which included a decrease of $ 85.8 million of cumulative hedging adjustments.

For the nine months ended September 30, 2023, the Company recognized a $ 5.7 million gain on the fair value of interest rate swaps, and a corresponding loss on the fair value of the related hedged debt instrument to interest expense.

The Company enters into fair value hedges that convert a portion of its fixed rate debt into floating rate debt by use of interest rate swaps.

At March 31, 2024, the carrying amount of fixed-rate debt that was effectively converted was an equivalent notional amount of $ 1.0 billion, which included a decrease of $ 64 million of cumulative hedging adjustments.

For the three months ended March 31, 2024, the Company recognized a $ 2 million loss on the fair value of interest rate swaps, and a corresponding gain on the fair value of the related hedged debt instrument to interest expense.

Cash Flow Hedges

2 unchanged sentences

The hedges cover up to the next 18 months for certain exposures and are denominated in various currencies.

As of September 30, 2023, the Company had foreign currency derivatives outstanding with an equivalent notional amount of $ 1.6 billion that hedged a portion of forecasted foreign currency denominated cash flows.

To protect against the variability of interest rates on anticipated bond issuances, the Company may use treasury locks to hedge a portion of expected future cash flows.

As of September 30, 2023, the Company had derivatives outstanding with a notional amount of $150.0 million that hedge a portion of forecasted cash flows.

Based on market conditions at September 30, 2023, the $ 61.7 million in cumulative cash flow hedging gains, after tax, is not expected to have a significant effect on the Company's earnings over the next 12 months.

As of March 31, 2024, the Company had derivatives outstanding with an equivalent notional amount of $ 1.9 billion that hedged a portion of forecasted foreign currency denominated cash flows.

Based on market conditions at March 31, 2024, the $ 32 million in cumulative cash flow hedging gains, after tax, is not expected to have a significant effect on the Company's earnings over the next 12 months.

Net Investment Hedges

1 unchanged sentence

Realized and unrealized translation adjustments from these hedges are included in shareholders' equity in the foreign currency translation component of Other comprehensive income ("OCI") and offset translation adjustments on the underlying net assets of foreign subsidiaries and affiliates, which also are recorded in OCI.

As of September 30, 2023, $ 12.7 billion of the Company's third-party foreign currency denominated debt, $ 359.6 million of the Company's intercompany foreign currency denominated debt and $ 572.6 million of foreign currency derivatives were designated to hedge investments in certain foreign subsidiaries and affiliates.

Undesignated Hedges

As of March 31, 2024, $ 13.1 billion of the Company's third-party foreign currency denominated debt, $ 542 million of the Company's intercompany foreign currency denominated debt and $ 565 million of foreign currency derivatives were designated to hedge investments in certain foreign subsidiaries and affiliates.

Undesignated Derivatives

The Company enters into certain derivatives that are not designated for hedge accounting.

4 unchanged sentences

In addition, the Company uses foreign currency forwards to mitigate the change in fair value of certain foreign currency denominated assets and liabilities.

Changes in the fair value of these derivatives are recognized in Nonoperating (income) expense, net, together with the currency gain or loss from the hedged balance sheet position.

The changes in the fair value of these derivatives are recognized in Nonoperating (income) expense, net, along with the currency gain or loss from the hedged balance sheet position.

The Company is exposed to credit-related losses in the event of non-performance by its derivative counterparties.

The Company did not have significant exposure to any individual counterparty at September 30, 2023 and has master agreements that contain netting arrangements.

The Company did not have significant exposure to any individual counterparty at March 31, 2024 and has master agreements that contain netting arrangements.

For financial reporting purposes, the Company presents gross derivative balances in its financial statements and supplementary data, including for counterparties subject to netting arrangements.

Some of these agreements also require each party to post collateral if credit ratings fall below, or aggregate exposures exceed, certain contractual limits.

At September 30, 2023, the Company was required to post $103.6 million of collateral due to the negative fair value of certain derivative positions.

At March 31, 2024, the Company was required to post $78 million of collateral due to the negative fair value of certain derivative positions.

The Company's counterparties were not required to post collateral on any derivative position, other than on certain hedges of the Company’s supplemental benefit plan liabilities where the counterparties were required to post collateral on their liability positions.

1 unchanged sentence

Revenues from franchised restaurants consisted of:

Quarters Ended Nine Months Ended

September 30, September 30,

Quarters Ended

In millions 2024 2023

6 unchanged sentences

- the Company's largest market.

The segment is 95 % franchised as of September 30, 2023.

• International Operated Markets - comprised of markets or countries in which the Company operates and franchises restaurants, including Australia, Canada, France, Germany, Italy, Poland, Spain and the U.K.

The segment is 89 % franchised as of September 30, 2023.

During the second quarter of 2022, the Company completed the sale of its business in Russia, resulting in a total exit from the market.

• International Developmental Licensed Markets & Corporate - comprised primarily of developmental licensee and affiliate markets in the McDonald’s System.

The segment is 95 % franchised as of March 31, 2024.

• International Operated Markets - comprised of markets or countries in which the Company owns and operates and franchises restaurants, including Australia, Canada, France, Germany, Italy, Poland, Spain and the U.K.

The segment is 89 % franchised as of March 31, 2024 .

• International Developmental Licensed Markets & Corporate - comprised primarily of developmental licensee and affiliate markets in the McDonald’s System, including equity method investments in China and Japan.

Corporate activities are also reported in this segment.

The segment is 98 % franchised as of September 30, 2023.

The segment is 98 % franchised as of March 31, 2024.

The following table presents the Company’s revenues and operating income by segment:

Quarters Ended Nine Months Ended

September 30, September 30,

Quarters Ended

In millions 2024 2023

8 unchanged sentences

Total operating income $ 2,736 $ 2,532

* Results for the quarter and nine months 2023 reflected pre-tax charges of $ 26 million and $ 224 million, respectively, primarily related to restructuring costs associated with Accelerating the Organization .

Results for the nine months 2022 reflected $ 1,281 million of pre-tax charges related to the sale of the Company's business in Russia and a pre-tax gain of $ 271 million related to the Company's sale of its Dynamic Yield business.

Subsequent Events

The Company evaluated subsequent events through the date the financial statements were issued and filed with the Securities and Exchange Commission.

The Company evaluated subsequent events through the date the financial statements were issued and filed with the Securities and Exchange Commission ("SEC").

There were no subsequent events that required recognition or disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements