What changed in this filing

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Item 1. Financial Statements

2025-11-05 compared with 2025-08-06 · 61 added, 51 removed, 420 unchanged (21% of the section changed)

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEET

In millions, except per share data June 30,

In millions, except per share data September 30,

2025 December 31,

48 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)

Quarters Ended Six Months Ended

June 30, June 30,

Quarters Ended Nine Months Ended

September 30, September 30,

In millions, except per share data 2025 2024 2025 2024

25 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

Quarters Ended Six Months Ended

June 30, June 30,

Quarters Ended Nine Months Ended

September 30, September 30,

In millions 2025 2024 2025 2024

4 unchanged sentences

income ("AOCI"), including net investment hedges ( 28 ) 188 279 101

237 28 307 ( 87 )

Reclassification of (gain) loss to net income ( 5 ) ( 6 ) ( 5 ) 35

17 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

Quarters Ended Six Months Ended

June 30, June 30,

Quarters Ended Nine Months Ended

September 30, September 30,

In millions 2025 2024 2025 2024

32 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED)

For the six months ended June 30, 2024

For the nine months ended September 30, 2024

issued Accumulated other

18 unchanged sentences

Stock option exercises and other 173 2.3 81 254

Balance at June 30, 2024 1,660.6 $ 17 $ 9,055 $ 65,026 $ ( 367 ) $ 33 $ ( 2,129 ) ( 943.3 ) $ ( 76,459 ) $ ( 4,824 )

For the six months ended June 30, 2025

Balance at September 30, 2024 1,660.6 $ 17 $ 9,194 $ 64,819 $ ( 377 ) $ ( 13 ) $ ( 1,947 ) ( 944.0 ) $ ( 76,870 ) $ ( 5,177 )

For the nine months ended September 30, 2025

issued Accumulated other

18 unchanged sentences

Stock option exercises and other 151 1.8 65 216

Balance at June 30, 2025 1,660.6 $ 17 $ 9,500 $ 68,424 $ ( 413 ) $ ( 45 ) $ ( 1,972 ) ( 947.0 ) $ ( 78,271 ) $ ( 2,760 )

Balance at September 30, 2025 1,660.6 $ 17 $ 9,560 $ 69,440 $ ( 411 ) $ 2 $ ( 2,005 ) ( 948.5 ) $ ( 78,766 ) $ ( 2,163 )

See Notes to Condensed Consolidated Financial Statements.

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED)

For the quarter ended June 30, 2024

For the quarter ended September 30, 2024

issued Accumulated other

7 unchanged sentences

In millions, except per share data Shares Amount Shares Amount

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

Balance at June 30, 2024 1,660.6 $ 17 $ 9,055 $ 65,026 $ ( 367 ) $ 33 $ ( 2,129 ) ( 943.3 ) $ ( 76,459 ) $ ( 4,824 )

Net income 2,255 2,255

8 unchanged sentences

Stock option exercises and other 100 1.0 33 133

Balance at June 30, 2024 1,660.6 $ 17 $ 9,055 $ 65,026 $ ( 367 ) $ 33 $ ( 2,129 ) ( 943.3 ) $ ( 76,459 ) $ ( 4,824 )

For the quarter ended June 30, 2025

Balance at September 30, 2024 1,660.6 $ 17 $ 9,194 $ 64,819 $ ( 377 ) $ ( 13 ) $ ( 1,947 ) ( 944.0 ) $ ( 76,870 ) $ ( 5,177 )

For the quarter ended September 30, 2025

issued Accumulated other

7 unchanged sentences

In millions, except per share data Shares Amount Shares Amount

Balance at March 31, 2025 1,660.6 $ 17 $ 9,423 $ 67,436 $ ( 400 ) $ 52 $ ( 2,209 ) ( 945.6 ) $ ( 77,773 ) $ ( 3,454 )

Balance at June 30, 2025 1,660.6 $ 17 $ 9,500 $ 68,424 $ ( 413 ) $ ( 45 ) $ ( 1,972 ) ( 947.0 ) $ ( 78,271 ) $ ( 2,760 )

Net income 2,278 2,278

8 unchanged sentences

Stock option exercises and other 21 0.2 8 29

Balance at June 30, 2025 1,660.6 $ 17 $ 9,500 $ 68,424 $ ( 413 ) $ ( 45 ) $ ( 1,972 ) ( 947.0 ) $ ( 78,271 ) $ ( 2,760 )

Balance at September 30, 2025 1,660.6 $ 17 $ 9,560 $ 69,440 $ ( 411 ) $ 2 $ ( 2,005 ) ( 948.5 ) $ ( 78,766 ) $ ( 2,163 )

See Notes to Condensed Consolidated Financial Statements.

4 unchanged sentences

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

The results for the quarter and six months ended June 30, 2025 do not necessarily indicate the results that may be expected for the full year.

The results for the quarter and nine months ended September 30, 2025 do not necessarily indicate the results that may be expected for the full year.

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

2 unchanged sentences

The following table presents restaurant information by ownership type:

Restaurants at June 30, 2025 2024

Restaurants at September 30, 2025 2024

Conventional franchised 22,280 21,864

7 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 3.1 million shares and 3.2 million shares for the quarters ended June 30, 2025 and 2024, respectively, and 3.2 million shares and 3.7 million shares for the six months ended June 30, 2025 and 2024, respectively.

Share-based compensation awards that would have been antidilutive, and therefore were not included in the calculation of diluted weighted-average shares, totaled 1.9 million shares and 3.2 million shares for the quarters ended June 30, 2025 and 2024, respectively, and 2.0 million shares and 2.2 million shares for the six months ended June 30, 2025 and 2024, 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 3.0 million shares and 3.3 million shares for the quarters ended September 30, 2025 and 2024, respectively, and 3.1 million shares and 3.6 million shares for the nine months ended September 30, 2025 and 2024, respectively.

Share-based compensation awards that would have been antidilutive, and therefore were not included in the calculation of diluted weighted-average shares, totaled 1.8 million shares and 2.0 million shares for the quarters ended September 30, 2025 and 2024, respectively, and 1.8 million shares and 2.0 million shares for the nine months ended September 30, 2025 and 2024, respectively.

Recent Accounting Pronouncements

13 unchanged sentences

We are currently in the process of determining the impact that ASU 2024-03 will have on the Company's consolidated financial statement disclosures.

Internal-Use Software

In September 2025, the FASB issued ASU No.

2025-06, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software" ("ASU 2025-06").

The pronouncement modernizes the accounting guidance for internal-use software costs by removing the various stages of a software development project to accommodate different software development methods.

ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years.

We are currently in the process of determining the impact that ASU 2025-06 will have on the Company's Consolidated Financial Statements.

Accelerating the Organization

2 unchanged sentences

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 $ 109 million and $ 101 million of restructuring charges related to Accelerating the Organization in the six months ended June 30, 2025 and 2024, respectively.

The Company incurred $ 152 million and $ 146 million of restructuring charges related to Accelerating the Organization in the nine months ended September 30, 2025 and 2024, respectively.

These charges were recorded in the Other operating (income) expense, net line within the Condensed Consolidated Statement of Income.

11 unchanged sentences

Accrued Balance at June 30, 2025 $ 29 $ 3 $ 28 $ 60

Of the $ 109 million of restructuring charges incurred in the six months ended June 30, 2025, $ 95 million was recorded at Corporate and $ 14 million was recorded in the International Operated Markets.

Substantially all of the accrued restructuring balance recorded at June 30, 2025, related to the Company's Accelerating the Organization initiative, is expected to be paid out over the next twelve months.

Restructuring Costs Incurred 4 — 39 43

Cash Payments ( 2 ) — ( 51 ) ( 53 )

Other Non-Cash Items — — — —

Accrued Balance at September 30, 2025 $ 31 $ 3 $ 16 $ 50

Of the $ 152 million of restructuring charges incurred in the nine months ended September 30, 2025, $ 138 million was recorded at Corporate and $ 14 million was recorded in the International Operated Markets.

Substantially all of the accrued restructuring balance recorded at September 30, 2025, related to the Company's Accelerating the Organization initiative, is expected to be paid out over the next twelve months.

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

6 unchanged sentences

The Company records our proportionate share of net income or loss within the Other operating (income) expense, net line on the Condensed Consolidated Statement of Income.

The carrying value of the investments are recorded within the Investments in affiliates line on the Condensed Consolidated Balance Sheet.The Company has elected to record dividends received from our equity method investments under the nature of distribution approach, which provides for the recording of such distributions within the cash provided by operations section of the Condensed Consolidated Statement of Cash Flows to the extent that such distributions are from the normal operating or financing activities of the investee.

The carrying value of the investments are recorded within the Investments in affiliates line on the Condensed Consolidated Balance Sheet.

The Company has elected to record dividends received from our equity method investments under the nature of distribution approach, which provides for the recording of such distributions within the cash provided by operations section of the Condensed Consolidated Statement of Cash Flows to the extent that such distributions are from the normal operating or financing activities of the investee.

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.

2 unchanged sentences

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

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

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

1 unchanged sentence

McDonald's Japan Holdings Co., Ltd 35 % $ 1,972 $ 677 35 % $ 1,849 $ 590

As of June 30, 2025, the aggregate carrying amount of the Company's investments in these equity method investees exceeded its proportionate share of the net assets of these equity method investees by $ 1.5 billion.

As of September 30, 2025, the aggregate carrying amount of the Company's investments in these equity method investees exceeded its proportionate share of the net assets of these equity method investees by $ 1.5 billion.

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 six months ended June 30, 2025 and 2024, respectively.

Six Months Ended June 30,

The following table summarizes the amounts recorded related to the Company's primary equity method investments during the nine months ended September 30, 2025 and 2024, respectively.

Nine Months Ended September 30,

In Millions 2025 2024

3 unchanged sentences

Dividends Received $ 15 $ 13

The effective income tax rate was 21.3 % and 20.9 % for the quarters ended June 30, 2025 and 2024, respectively, and 20.6 % and 20.4 % for the six months ended June 30, 2025 and 2024, respectively.

The effective income tax rate was 22.8 % and 20.7 % for the quarters ended September 30, 2025 and 2024, respectively, and 21.4 % and 20.5 % for the nine months ended September 30, 2025 and 2024, respectively.

The effective tax rates for the quarter and nine months ended 2024 reflected discrete income tax benefits related to restructuring initiatives and global audit progression.

Fair Value Measurements

6 unchanged sentences

There were no significant changes to the valuation techniques used to measure fair value as described in the Company's December 31, 2024 Annual Report on Form 10-K.

At June 30, 2025, the fair value of the Company’s debt obligations was estimated at $ 39.8 billion, compared to a carrying amount of $ 41.4 billion.

At September 30, 2025, the fair value of the Company’s debt obligations was estimated at $ 40.2 billion, compared to a carrying amount of $ 41.3 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 June 30, 2025 December 31, 2024 Balance Sheet Classification June 30, 2025 December 31, 2024

In millions Balance Sheet Classification September 30, 2025 December 31, 2024 Balance Sheet Classification September 30, 2025 December 31, 2024

Derivatives designated as hedging instruments

13 unchanged sentences

Total derivatives $ 112 $ 334 $ ( 191 ) $ ( 41 )

The following table presents the pre-tax amounts from derivative instruments affecting income and AOCI for the six months ended June 30, 2025 and 2024, respectively:

The following table presents the pre-tax amounts from derivative instruments affecting income and AOCI for the nine months ended September 30, 2025 and 2024, respectively:

Location of gain or loss

20 unchanged sentences

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 June 30, 2025, the carrying amount of fixed-rate debt that was effectively converted was an equivalent notional amount of $ 828 million, which included a decrease of $ 25 million of cumulative hedging adjustments.

For the six months ended June 30, 2025, the Company recognized a $ 15 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.

At September 30, 2025, the carrying amount of fixed-rate debt that was effectively converted was an equivalent notional amount of $ 831 million, which included a decrease of $ 20 million of cumulative hedging adjustments.

For the nine months ended September 30, 2025, the Company recognized a $ 20 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.

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 June 30, 2025, the Company had derivatives outstanding with an equivalent notional amount of $ 2.2 billion that hedged a portion of forecasted foreign currency denominated cash flows.

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

As of June 30, 2025, the Company had derivatives outstanding with a notional amount of $ 250 million that hedged a portion of forecasted cash flows.

Based on market conditions at June 30, 2025, the $ 45 million in cumulative cash flow hedging losses, after tax, is not expected to have a significant effect on the Company's earnings over the next 12 months.

As of September 30, 2025, the Company had derivatives outstanding with an equivalent notional amount of $ 2.3 billion that hedged a portion of forecasted foreign currency denominated cash flows.

Based on market conditions at September 30, 2025, the $ 2 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 June 30, 2025, $ 15.4 billion of the Company's third-party foreign currency denominated debt, and $ 2.4 billion of foreign currency derivatives were designated to hedge investments in certain foreign subsidiaries and affiliates.

As of September 30, 2025, $ 15.3 billion of the Company's third-party foreign currency denominated debt, and $ 2.4 billion of foreign currency derivatives were designated to hedge investments in certain foreign subsidiaries and affiliates.

Undesignated Hedges

7 unchanged sentences

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 June 30, 2025 and has master agreements that contain netting arrangements.

The Company did not have significant exposure to any individual counterparty at September 30, 2025 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 June 30, 2025, the Company was required to post $ 191 million of collateral due to the negative fair value of certain derivative positions.

At September 30, 2025, the Company was required to post $ 185 million of collateral due to the negative fair value of certain derivative positions.

Franchise Arrangements

Revenues from franchised restaurants consisted of:

Quarters Ended Six Months Ended

June 30, June 30,

Quarters Ended Nine Months Ended

September 30, September 30,

In millions 2025 2024 2025 2024

6 unchanged sentences

segment - the Company's largest market.

The segment is 95 % franchised as of June 30, 2025.

The segment is 95 % franchised as of September 30, 2025.

• International Operated Markets segment - 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 June 30, 2025.

The segment is 89 % franchised as of September 30, 2025.

• 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, as well as Corporate activities.

The International Developmental Licensed Markets are 99 % franchised as of June 30, 2025.

The International Developmental Licensed Markets are 99 % franchised as of September 30, 2025.

The Company's chief operating decision makers ("CODMs") are the President and Chief Executive Officer ("CEO") and the Executive Vice President and Global Chief Financial Officer ("CFO").

4 unchanged sentences

Corporate assets include corporate cash and equivalents, financial instruments and office facilities.

Quarters Ended Six Months Ended

June 30, June 30,

Quarters Ended Nine Months Ended

September 30, September 30,

In millions 2025 2024 2025 2024

31 unchanged sentences

Total Depreciation & amortization** $ 559 $ 532 $ 1,623 $ 1,544

In millions June 30, 2025 December 31, 2024

In millions September 30, 2025 December 31, 2024

$ 22,840 $ 22,547

6 unchanged sentences

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