McDonald’s Q3 2026 net income rises 9% to $2.49B

Developmental licensees and affiliates are expected to contribute capital toward approximately 1,800 of the roughly 2,500 planned 2026 restaurant openings.

Available on EDGAR 11/06/2026 - 12:07 PM EST Accepted by SEC EDGAR 11/06/2026 - 12:07 PM EST Learn about SEC filing dates

Rhea-AI Filing Summary

McDonald’s Corporation (MCD) reported third-quarter 2026 revenue of $7.157 billion, up 1% year over year; net income rose 9% to $2.486 billion, and diluted earnings per share increased 10% to $3.51. Operating income was $3.595 billion, up 7%. Global comparable sales increased 1.5%, while U.S. comparable sales decreased 0.2%.

For the first nine months of 2026, revenue increased 5% to $20.773 billion, net income rose 7% to $6.831 billion and diluted EPS increased 8% to $9.61. Cash provided by operations was $8.254 billion and capital expenditures were $2.401 billion; cash provided exceeded capital expenditures by $5.9 billion. Nine-month results included $155 million in net pre-tax charges, primarily related to restructuring. In September 2026, McDonald’s declared a 4% increase in its quarterly cash dividend to $1.93 per share, payable December 15, 2026. The company expects about 2,500 restaurant openings and approximately 2,100 net additions in 2026.

4 points · 0 major

PositiveiHow this balance works

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Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.

It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

Rhea-AI Sentiment measures something else, the tone of the wording.

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0 major · 0 points

How the balance works

Positive

• Moderate pointThird-quarter net income rose 9% to $2.486 billion.
• Moderate pointNine-month operating income increased 7% to $9.887 billion.
• Minor pointThird-quarter diluted EPS increased 10% to $3.51.
• Minor pointQuarterly dividend increased 4% to $1.93 per share.

Negative

• None.

Filing Explained

Separately, an accrued balance for restructuring costs was reported at September 30, with substantially all expected to be paid within a year.

McDonald’s says it plans about $8.5 billion in cash partnering support through the end of 2036, a future plan rather than support reported as already provided.

The plan includes about $5 billion by the end of 2030, through rent relief and capital support.

The company expects about $225 million in restructuring charges in 2026, with the effort anticipated to continue through 2027.

At September 30, 2026, an accrued balance for the initiative was reported, and substantially all of that balance is expected to be paid over the following 12 months.

Key Figures

Revenue: $7.157 billion Net income: $2.486 billion Diluted earnings per share: $3.51 +5 more

8 metrics

Revenue $7.157 billion Quarter ended September 30, 2026; up 1% from the prior-year quarter

Net income $2.486 billion Quarter ended September 30, 2026; up 9% from the prior-year quarter

Diluted earnings per share $3.51 Quarter ended September 30, 2026; up 10% from the prior-year quarter

Operating income $3.595 billion Quarter ended September 30, 2026; up 7% from the prior-year quarter

Revenue $20.773 billion Nine months ended September 30, 2026; up 5% from the prior-year period

Net income $6.831 billion Nine months ended September 30, 2026; up 7% from the prior-year period

Diluted earnings per share $9.61 Nine months ended September 30, 2026; up 8% from the prior-year period

Quarterly cash dividend $1.93 per share Declared in September 2026; 4% increase, payable December 15, 2026

Key Terms

Comparable sales, Systemwide sales, constant currency, equity method, +1 more

5 terms

Comparable sales financial

"Comparable sales and comparable guest counts are compared to the same period"

"Comparable sales" are the total sales from stores or products that have been open for a certain period, usually the same time last year or last quarter. They help show whether a business is growing by comparing similar locations or products over time, much like checking if your favorite store's sales are going up compared to previous years.

Systemwide sales financial

"Systemwide sales include sales at all restaurants"

Systemwide sales are the combined revenue generated by all locations and channels that operate under a brand, including both company-owned outlets and franchised or independently operated sites. For investors, this is like looking at a chain’s entire footprint to see whether the business is expanding or shrinking overall, offering a clearer picture of demand and growth potential than revenue from just the corporate-owned portion alone.

constant currency financial

"Results excluding the effect of foreign currency translation (referred to as constant currency)"

Constant currency is a way of measuring financial results that removes the effects of changes in currency exchange rates. It allows for a clearer comparison of a company's performance over time by showing what the numbers would look like if exchange rates had stayed the same. This helps investors understand whether growth comes from actual business improvements or just currency fluctuations.

equity method financial

"investments accounted for using the equity method"

An equity method investment is an accounting approach used when a company owns enough of another business to influence its decisions but not control it (commonly around 20–50% ownership). Instead of counting only dividends, the investor records its share of the other company’s profits and losses on its own income statement and adjusts the investment’s value on the balance sheet—like tracking a friend’s joint project by noting your share of their gains or setbacks. For investors, this matters because it can significantly affect reported earnings, asset values, and the apparent strength of a company’s financial results.

free cash flow conversion rate financial

"free cash flow divided by net income"

A free cash flow conversion rate is the percentage that shows how much of a company’s reported profit actually becomes free cash — the cash left after running the business and making necessary investments. It tells investors whether earnings are turning into real, spendable money for dividends, debt repayment or growth; high conversion is like keeping most of your paycheck after bills, while low conversion means reported profits aren’t producing much usable cash.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

How much revenue did MCD report in the third quarter of 2026?

MCD reported $7.157 billion in revenue for the quarter ended September 30, 2026, up 1% from $7.078 billion a year earlier. Net income was $2.486 billion, and diluted earnings per share was $3.51.

What was MCD's diluted EPS in the third quarter of 2026?

MCD reported diluted earnings per share of $3.51 for the third quarter of 2026, a 10% increase from $3.18 in the same quarter of 2025.

How many restaurants does MCD expect to open in 2026?

MCD expects to open about 2,500 restaurants globally in 2026, including about 700 in the U.S. and International Operated Markets. Developmental licensees and affiliates are expected to contribute capital toward approximately 1,800 openings in their markets.

What dividend did MCD declare in September 2026?

MCD declared a 4% increase in its quarterly cash dividend to $1.93 per share, payable December 15, 2026.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended			September 30, 2026

OR

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from             to

    

Commission File Number 1-5231

McDONALD’S CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Delaware									36-2361282
(State or Other Jurisdiction of Incorporation or Organization)									(I.R.S. Employer Identification No.)
110 North Carpenter Street									60607
Chicago,			Illinois
(Address of Principal Executive Offices)									(Zip Code)

(630) 623-3000

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Common Stock, $0.01 par value			MCD			New York Stock Exchange

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  ☒  No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted 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  ☒  No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, 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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐  No  ☒

705,784,744

(Number of shares of common stock

outstanding as of September 30, 2026)

Table of Contents

McDONALD’S CORPORATION

___________________________

INDEX

_______

			Page Reference
Part I. Financial Information
Item 1 – Financial Statements
Condensed Consolidated Balance Sheet, September 30, 2026 (unaudited) and December 31, 2025			3
Condensed Consolidated Statement of Income (unaudited), quarters and nine months ended September 30, 2026 and 2025			4
Condensed Consolidated Statement of Comprehensive Income (unaudited), quarters and nine months ended September 30, 2026 and 2025			5
Condensed Consolidated Statement of Cash Flows (unaudited), quarters and nine months ended September 30, 2026 and 2025			6
Condensed Consolidated Statement of Shareholders' Equity (unaudited), quarters and nine months ended September 30, 2026 and 2025			7
Notes to Condensed Consolidated Financial Statements (unaudited)			9
Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations			16
Item 3 – Quantitative and Qualitative Disclosures About Market Risk			40
Item 4 – Controls and Procedures			40
Part II. Other Information
Item 1 – Legal Proceedings			41
Item 1A – Risk Factors			41
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds			41
Item 5 – Other Information			42
Item 6 – Exhibits			43
Signature			44

All trademarks used herein are the property of their respective owners and are used with permission.

2

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEET
						(unaudited)
In millions, except per share data						September 30, 2026									December 31, 2025
Assets
Current assets
Cash and equivalents						$	1,193								$	774
Accounts and notes receivable						2,483									2,466
Inventories, at cost, not in excess of market						59									61
Prepaid expenses and other current assets						988									863
Total current assets						4,723									4,163
Other assets
Investments in affiliates						2,985									2,820
Goodwill						3,348									3,354
Miscellaneous						6,356									6,331
Total other assets						12,689									12,505
Lease right-of-use asset, net						14,442									14,606
Property and equipment
Property and equipment, at cost						50,457									49,290
Accumulated depreciation and amortization						(21,654)									(21,049)
Net property and equipment						28,803									28,241
Total assets						$	60,657								$	59,515
Liabilities and shareholders’ equity (deficit)
Current liabilities
Accounts payable						$	1,084								$	1,149
Lease liability						686									694
Income taxes						47									250
Other taxes						260									247
Accrued interest						452									533
Accrued payroll and other liabilities						1,298									1,488
Total current liabilities						3,828									4,361
Long-term debt						39,820									39,973
Long-term lease liability						14,029									14,147
Long-term income taxes						350									139
Deferred revenues - initial franchise fees						953									945
Other long-term liabilities						666									704
Deferred income taxes						1,353									1,038
Shareholders’ equity (deficit)
Preferred stock, no par value; authorized – 165.0 million shares; issued – none						—									—
Common stock, $0.01 par value; authorized – 3.5 billion shares; issued – 1,660.6 million shares						17									17
Additional paid-in capital						9,897									9,641
Retained earnings						73,159									70,282
Accumulated other comprehensive income (loss)						(2,373)									(2,414)
Common stock in treasury, at cost; 954.9 and 950.0 million shares						(81,043)									(79,316)
Total shareholders’ equity (deficit)						(343)									(1,791)
Total liabilities and shareholders’ equity (deficit)						$	60,657								$	59,515

See Notes to Condensed Consolidated Financial Statements.

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CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
						Quarters Ended																		Nine Months Ended
						September 30,																		September 30,
In millions, except per share data						2026									2025									2026									2025
Revenues
Revenues from franchised restaurants						$	4,487								$	4,363								$	12,887								$	12,238
Sales by Company-owned and operated restaurants						2,480									2,563									7,322									7,154
Other revenues						189									151									565									485
Total revenues						7,157									7,078									20,773									19,876
Operating costs and expenses
Franchised restaurants-occupancy expenses						687									666									2,042									1,940
Company-owned and operated restaurant expenses						2,088									2,172									6,258									6,109
Other restaurant expenses						167									135									496									424
Selling, general & administrative expenses
Depreciation and amortization						118									121									340									333
Other						641									664									1,995									1,834
Other operating (income) expense, net						(139)									(37)									(245)									(1)
Total operating costs and expenses						3,561									3,721									10,885									10,639
Operating income						3,595									3,357									9,887									9,237
Interest expense						408									406									1,217									1,172
Nonoperating (income) expense, net						(1)									1									4									(75)
Income before provision for income taxes						3,188									2,949									8,666									8,140
Provision for income taxes						702									671									1,835									1,740
Net income						$	2,486								$	2,278								$	6,831								$	6,399
Earnings per common share-basic						$	3.52								$	3.20								$	9.64								$	8.96
Earnings per common share-diluted						$	3.51								$	3.18								$	9.61								$	8.92
Dividends declared per common share						$	1.86								$	1.77								$	5.58								$	5.31
Weighted-average shares outstanding-basic						706.6									712.9									708.8									714.1
Weighted-average shares outstanding-diluted						708.3									715.9									711.0									717.2

See Notes to Condensed Consolidated Financial Statements.

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CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
						Quarters Ended																		Nine Months Ended
						September 30,																		September 30,
In millions						2026									2025									2026									2025
Net income						$	2,486								$	2,278								$	6,831								$	6,399
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments:
Gain (loss) recognized in accumulated other comprehensive income ("AOCI"), including net investment hedges						(31)									(28)									(10)									279
Reclassification of (gain) loss to net income						—									(5)									—									(5)
Foreign currency translation adjustments-net of tax benefit (expense) of $(22), $(34), $(118) and $411						(31)									(33)									(10)									274
Cash flow hedges:
Gain (loss) recognized in AOCI						5									23									35									(135)
Reclassification of (gain) loss to net income						—									24									23									18
Cash flow hedges-net of tax benefit (expense) of $(2), $(14), $(17) and $35						5									47									58									(117)
Defined benefit pension plans:
Gain (loss) recognized in AOCI						(3)									2									4									(17)
Reclassification of (gain) loss to net income						(4)									—									(11)									(1)
Defined benefit pension plans-net of tax benefit (expense) of $0, $0, $(1) and $(1)						(7)									2									(7)									(18)
Total other comprehensive income (loss), net of tax						(33)									16									41									139
Comprehensive income						$	2,453								$	2,294								$	6,872								$	6,538

See Notes to Condensed Consolidated Financial Statements.

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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
						Quarters Ended												Nine Months Ended
						September 30,												September 30,
In millions						2026						2025						2026						2025
Operating activities
Net income						$	2,486					$	2,278					$	6,831					$	6,399
Adjustments to reconcile to cash provided by operations
Charges and credits:
Depreciation and amortization						567						559						1,698						1,623
Deferred income taxes						120						35						125						(49)
Share-based compensation						46						39						145						128
Other						(261)						(53)						(404)						(197)
Changes in working capital items						74						570						(141)						(50)
Cash provided by operations						3,031						3,428						8,254						7,854
Investing activities
Capital expenditures						(884)						(1,011)						(2,401)						(2,306)
Purchases of restaurant businesses						(65)						(109)						(218)						(240)
Sales of restaurant businesses						204						102						414						185
Sales of property						49						22						105						38
Other						(139)						(116)						(383)						(430)
Cash used for investing activities						(835)						(1,112)						(2,484)						(2,753)
Financing activities
Net short-term borrowings (repayments)						200						(599)						(99)						(794)
Long-term financing issuances						—						1,833						1,159						4,734
Long-term financing repayments						(145)						(1,251)						(726)						(2,644)
Treasury stock purchases						(519)						(501)						(1,770)						(1,483)
Common stock dividends						(1,314)						(1,262)						(3,954)						(3,792)
Proceeds from stock option exercises						13						29						155						216
Other						(32)						(35)						(174)						(121)
Cash used for financing activities						(1,797)						(1,786)						(5,409)						(3,884)
Effect of exchange rates on cash and cash equivalents						(28)						6						58						110
Cash and equivalents increase (decrease)						371						537						419						1,328
Cash and equivalents at beginning of period						822						1,876						774						1,085
Cash and equivalents at end of period						$	1,193					$	2,413					$	1,193					$	2,413

See Notes to Condensed Consolidated Financial Statements.

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CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED)
For the nine months ended September 30, 2025
			Common stock issued																								Accumulated other comprehensive income (loss)																		Common stock in treasury									Total shareholders’ equity (deficit)
												Additional paid-in capital									Retained earnings			Pensions						Cash flow hedges						Foreign currency translation
In millions, except per share data			Shares			Amount																																							Shares						Amount
Balance at December 31, 2024			1,660.6						$	17					$	9,281					$	66,834					$	(393)					$	119					$	(2,279)					(945.4)						$	(77,375)					$	(3,797)
Net income																					6,399																																				6,399
Other comprehensive income (loss),     net of tax																											(18)						(117)						274																		139
Comprehensive income																																																									6,538
Common stock cash dividends     ($5.31 per share)																					(3,792)																																				(3,792)
Treasury stock purchases																																													(4.9)						(1,456)						(1,456)
Share-based compensation															128																																										128
Stock option exercises and other															151																														1.8						65						216
Balance at September 30, 2025			$	1,660.6					$	17					$	9,560					$	69,440					$	(411)					$	2					$	(2,005)					(948.5)						$	(78,766)					$	(2,163)

For the nine months ended September 30, 2026
			Common stock issued																								Accumulated other comprehensive income (loss)																		Common stock in treasury									Total shareholders’ equity (deficit)
												Additional paid-in capital									Retained earnings			Pensions						Cash flow hedges						Foreign currency translation
In millions, except per share data			Shares			Amount																																							Shares						Amount
Balance at December 31, 2025			1,660.6						$	17					$	9,641					$	70,282					$	(432)					$	13					$	(1,995)					(950.0)						$	(79,316)					$	(1,791)
Net income																					6,831																																				6,831
Other comprehensive income (loss),     net of tax																											(7)						58						(10)																		41
Comprehensive income																																																									6,872
Common stock cash dividends     ($5.58 per share)																					$	(3,954)																																			(3,954)
Treasury stock purchases																																													(6.2)						(1,770)						(1,770)
Share-based compensation															145																																										145
Stock option exercises and other															111																														1.2						44						155
Balance at September 30, 2026			1,660.6						$	17					$	9,897					$	73,159					$	(439)					$	71					$	(2,005)					(954.9)						$	(81,043)					$	(343)

See Notes to Condensed Consolidated Financial Statements.

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CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED)
For the quarter ended September 30, 2025
			Common stock issued																								Accumulated other comprehensive income (loss)																		Common stock in treasury									Total shareholders’ equity (deficit)
												Additional paid-in capital									Retained earnings			Pensions						Cash flow hedges						Foreign currency translation
In millions, except per share data			Shares			Amount																																							Shares						Amount
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
Other comprehensive income (loss),     net of tax																											2						47						(33)																		16
Comprehensive income																																																									2,294
Common stock cash dividends     ($1.77 per share)																					(1,262)																																				(1,262)
Treasury stock purchases																																													(1.7)						(503)						(503)
Share-based compensation															39																																										39
Stock option exercises and other															21																														0.2						8						29
Balance at September 30, 2025			1,660.6						$	17					$	9,560					$	69,440					$	(411)					$	2					$	(2,005)					(948.5)						$	(78,766)					$	(2,163)

For the quarter ended September 30, 2026
			Common stock issued																								Accumulated other comprehensive income (loss)																		Common stock in treasury									Total shareholders’ equity (deficit)
												Additional paid-in capital									Retained earnings			Pensions						Cash flow hedges						Foreign currency translation
In millions, except per share data			Shares			Amount																																							Shares						Amount
Balance at June 30, 2026			1,660.6						$	17					$	9,841					$	71,987					$	(432)					$	66					$	(1,974)					(953.0)						$	(80,527)					$	(1,023)
Net income																					2,486																																				2,486
Other comprehensive income (loss),     net of tax																											(7)						5						(31)																		(33)
Comprehensive income																																																									2,453
Common stock cash dividends     ($1.86 per share)																					(1,314)																																				(1,314)
Treasury stock purchases																																													(1.9)						(519)						(519)
Share-based compensation															46																																										46
Stock option exercises and other															10																														—						3						13
Balance at September 30, 2026			1,660.6						$	17					$	9,897					$	73,159					$	(439)					$	71					$	(2,005)					(954.9)						$	(81,043)					$	(343)

See Notes to Condensed Consolidated Financial Statements.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

McDonald’s Corporation, the registrant, together with its subsidiaries, is referred to herein as the "Company." The Company, its franchisees and suppliers, are referred to herein as the "System."

Basis of Presentation

The accompanying Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements contained in the Company’s December 31, 2025 Annual Report on Form 10-K. In the opinion of management, all normal recurring adjustments necessary for a fair presentation have been included. The results for the quarter and nine months ended September 30, 2026 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. 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,			2026									2025
Conventional franchised			22,930									22,280
Developmental licensed			9,952									9,459
Foreign affiliated			11,748									10,807
Total Franchised			44,630									42,546
Company-owned and operated			1,924									2,053
Total Systemwide restaurants			46,554									44,599

The results of operations of restaurant businesses purchased and sold in transactions with franchisees were not material either individually or in the aggregate to the accompanying Condensed Consolidated Financial Statements.

Per Common Share Information

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 1.7 million shares and 3.0 million shares for the quarters ended September 30, 2026 and 2025, respectively, and 2.2 million shares and 3.1 million shares for the nine months ended September 30, 2026 and 2025, respectively. Share-based compensation awards that would have been antidilutive, and therefore were not included in the calculation of diluted weighted-average shares, totaled 4.4 million shares and 1.8 million shares for the quarters ended September 30, 2026 and 2025, respectively, and 3.5 million shares and 1.8 million shares for the nine months ended September 30, 2026 and 2025, respectively.

Recent Accounting Pronouncements

Recent Accounting Pronouncements Not Yet Adopted

Disaggregation - Income Statement Expenses

In November 2024, the FASB issued ASU No. 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses" ("ASU 2024-03"). The pronouncement expands the disclosure requirements for expenses, specifically by providing more detailed information about the types of expenses in commonly presented expense captions. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. 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.

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Accelerating the Organization

Accelerating the Organization is an initiative aimed at elevating the Company’s performance and is designed to modernize ways of working across the Company, helping it become faster, more innovative and more efficient for its customers and people.

The Company incurred $154 million and $152 million of restructuring charges related to Accelerating the Organization in the nine months ended September 30, 2026 and 2025, respectively. These restructuring charges were recorded in the Other operating (income) expense, net line within the Condensed Consolidated Statement of Income. There were no significant non-cash impairment charges included in the amounts listed in the table below.

The following table summarizes the balance of accrued expenses related to this strategic initiative (in millions):

			Employee Termination Benefits			Costs to Terminate Contracts			Professional Services and Other Costs			Total
2026
Accrued Balance at Beginning of Year			$	34		$	4		$	15		$	53
Restructuring costs incurred			5			—			42			47
Cash payments			(3)			—			(41)			(44)
Other non-cash items			—			—			(1)			(1)
Accrued Balance at March 31, 2026			$	36		$	4		$	15		$	55
Restructuring costs incurred			—			—			51			51
Cash payments			(3)			(1)			(58)			(62)
Other non-cash items			—			—			—			—
Accrued Balance at June 30, 2026			$	33		$	3		$	8		$	44
Restructuring costs incurred			—			—			56			56
Cash payments			(2)			—			(45)			(47)
Other non-cash items			—			—			—			—
Accrued Balance at September 30, 2026			$	31		$	3		$	19		$	53

Of the $154 million of restructuring charges incurred in the nine months ended September 30, 2026, $152 million was recorded at Corporate and $2 million was recorded in the International Operated Markets.

Substantially all of the accrued restructuring balance recorded at September 30, 2026, 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. Transformation efforts under Accelerating the Organization will continue to result in various restructuring charges as the strategy progresses through its anticipated completion during 2027, with $850 million of total restructuring charges incurred since the initiative commenced in 2023. The Company currently expects to incur approximately $225 million of restructuring charges in 2026, primarily related to professional services costs.

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Equity Method Investments

The Company has various investments accounted for using the equity method. Under the equity method of accounting, the Company records its 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 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 its 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. 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.

			September 30, 2026																		December 31, 2025
In Millions			Percentage Ownership						Fair Value (Level 1)						Carrying Amount						Percentage Ownership						Fair Value (Level 1)						Carrying Amount
Grand Foods Holding			48		%				N/A						$	2,177					48		%				N/A						$	2,048
McDonald's Japan Holdings Co., Ltd			35		%				$	2,252					$	700					35		%				$	1,915					$	657

As of September 30, 2026, 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 $1.4 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 nine months ended September 30, 2026 and 2025, respectively.

			Nine Months Ended September 30,
In Millions			2026						2025
Revenue			$	459					$	433
Equity in earnings			$	157					$	146
Accounts receivable			$	97					$	96
Dividends received			$	17					$	15

Income Taxes

The effective income tax rate was 22.0% and 22.8% for the quarters ended 2026 and 2025, respectively, and 21.2% and 21.4% for the nine months ended 2026 and 2025, respectively.

Fair Value Measurements

The Company measures certain financial assets and liabilities at fair value. 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, 2025 Annual Report on Form 10-K.

At September 30, 2026, the fair value of the Company’s debt obligations was estimated at $36.5 billion, compared to a carrying amount of $39.8 billion. The fair value of debt obligations is based upon quoted market prices, classified as Level 2 within the valuation hierarchy. The carrying amount of cash and equivalents and notes receivable approximate fair value.

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Financial Instruments and Hedging Activities

The Company is exposed to global market risks, including the effect of changes in interest rates and foreign currency fluctuations. The Company uses foreign currency denominated debt and derivative instruments to mitigate the impact of these changes. The Company does not hold or issue derivatives for trading purposes.

The following table presents the fair values of derivative instruments included on the Condensed Consolidated Balance Sheet:

			Derivative Assets																		Derivative Liabilities
In millions			Balance Sheet Classification						September 30, 2026						December 31, 2025						Balance Sheet Classification						September 30, 2026						December 31, 2025
Derivatives designated as hedging instruments
Foreign currency			Prepaid expenses and other current assets						$	60					$	3					Accrued payroll and other liabilities						$	(6)					$	(117)
Interest rate			Prepaid expenses and other current assets						—						—						Accrued payroll and other liabilities						(8)						—
Foreign currency			Miscellaneous other assets						14						24						Other long-term liabilities						(3)						(12)
Interest rate			Miscellaneous other assets						—						—						Other long-term liabilities						—						(16)
Total derivatives designated as hedging instruments									$	74					$	27											$	(17)					$	(145)
Derivatives not designated as hedging instruments
Equity			Miscellaneous other assets						57						104
Total derivatives not designated as hedging instruments									$	57					$	104											$	—					$	—
Total derivatives									$	131					$	131											$	(17)					$	(145)

The following table presents the pre-tax amounts from derivative instruments affecting income and AOCI for the nine months ended September 30, 2026 and 2025, respectively:

			Location of gain or loss recognized in income on derivative									Gain (loss) recognized in AOCI															Gain (loss) reclassified into income from AOCI															Gain (loss) recognized in income on derivative
In millions																								2026																											2025									2026									2025									2026									2025
Foreign currency						Nonoperating income/expense																		$	46																										$	(165)								$	(32)								$	(24)
Interest rate			Interest expense									—									(10)									2									1
Cash flow hedges												$	46								$	(175)								$	(30)								$	(23)
Foreign currency denominated debt			Nonoperating income/expense									$	493								$	(1,562)
Foreign currency derivatives			Nonoperating income/expense									23									(225)
Foreign currency derivatives(1)			Interest expense																																													$	30								$	46
Net investment hedges												$	516								$	(1,787)																										$	30								$	46
Foreign currency			Nonoperating income/expense																																													$	(3)								$	(9)
Equity			Selling, general & administrative expenses																																													(15)									10
Undesignated derivatives																																																$	(18)								$	1
(1)The amount of gain (loss) recognized in income related to components excluded from effectiveness testing.

Fair Value Hedges

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 use of interest rate swaps. At September 30, 2026, the carrying amount of fixed-rate debt that was effectively converted was an equivalent notional amount of $492 million, which included a decrease of $8 million of cumulative hedging adjustments. For the nine months ended September 30, 2026, the Company recognized an $8 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.

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Cash Flow Hedges

The Company enters into cash flow hedges to reduce the exposure to variability in certain expected future cash flows. To protect against the reduction in value of forecasted foreign currency cash flows (such as royalties denominated in foreign currencies), the Company uses foreign currency forwards to hedge a portion of anticipated exposures. The hedges cover up to the next 18 months for certain exposures and are denominated in various currencies. As of September 30, 2026, the Company had derivatives outstanding with an equivalent notional amount of $2.4 billion that hedged a portion of forecasted foreign currency denominated cash flows.

Based on market conditions at September 30, 2026, the $71 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

The Company uses foreign currency denominated debt (third-party and intercompany) and foreign currency derivatives to hedge its investments in certain foreign subsidiaries and affiliates. 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, 2026, $15.4 billion of the Company's third-party foreign currency denominated debt, and $1.2 billion 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. Therefore, the changes in the fair value of these derivatives are recognized immediately in earnings together with the gain or loss from the hedged balance sheet position. As an example, the Company enters into equity derivative contracts, to hedge market-driven changes in certain of its supplemental benefit plan liabilities. The Company may also use certain investments to hedge changes in these liabilities. Changes in the fair value of these derivatives or investments are recorded in Selling, general & administrative expenses together with the changes in the supplemental benefit plan liabilities. In addition, the Company uses foreign currency forwards to mitigate the change in fair value of certain foreign currency denominated assets and liabilities. 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.

Credit Risk

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, 2026 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, 2026, the Company was required to post $8 million of collateral due to the negative fair value of certain derivative positions.

Franchise Arrangements

Revenues from franchised restaurants consisted of:

			Quarters Ended												Nine Months Ended
			September 30,												September 30,
In millions			2026						2025						2026						2025
Rents			$	2,805					$	2,762					$	8,069					$	7,752
Royalties			1,662						1,582						4,757						4,429
Initial fees			21						20						60						56
Revenues from franchised restaurants			$	4,487					$	4,363					$	12,887					$	12,238

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Segment Information

The Company operates under the following global organizational structure, which reflects how management reviews and evaluates operating performance:

•U.S. segment - the Company's largest market. The segment is 96% franchised as of September 30, 2026.

•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 90% franchised as of September 30, 2026.

•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 September 30, 2026.

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"). Segment performance is evaluated based on one measure of a segment's profit or loss, operating income, which is used to allocate resources in the annual planning process. Throughout the year, the CODMs consider forecast to actual operating income results and variances against plan to evaluate segment performance and priorities related to allocation of capital and resources supporting organizational objectives.

All intercompany revenues and expenses are eliminated in computing revenues and operating income. Corporate general and administrative expenses consist of corporate office support costs in areas such as facilities, finance, human resources, information technology, legal, marketing, restaurant operations, supply chain and training. Corporate assets include cash and equivalents, financial instruments, deferred tax assets and office facilities.

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			Quarters Ended												Nine Months Ended
			September 30,												September 30,
In millions			2026						2025						2026						2025
U.S.			$	2,785					$	2,772					$	8,194					$	8,048
International Operated Markets			3,663						3,658						10,591						10,035
International Developmental Licensed Markets & Corporate			709						648						1,988						1,793
Total Revenues			$	7,157					$	7,078					$	20,773					$	19,876
U.S.			$	324					$	325					$	967					$	968
International Operated Markets			362						341						1,075						971
International Developmental Licensed Markets & Corporate			—						—						—						1
Total Franchised restaurants-occupancy expenses			$	687					$	666					$	2,042					$	1,940
U.S.			$	667					$	701					$	2,029					$	2,040
International Operated Markets			1,292						1,357						3,869						3,765
International Developmental Licensed Markets & Corporate			129						115						360						304
Total Company-operated restaurant expenses			$	2,088					$	2,172					$	6,258					$	6,109
U.S.			$	145					$	185					$	432					$	478
International Operated Markets			192						170						570						505
International Developmental Licensed Markets & Corporate			422						429						1,333						1,185
Total Selling, general, & administrative expenses			$	759					$	785					$	2,335					$	2,167
U.S.			$	24					$	63					$	188					$	235
International Operated Markets			20						28						51						108
International Developmental Licensed Markets & Corporate			(17)						7						12						80
Total Other segment expenses (income)*			$	27					$	98					$	250					$	423
U.S.			$	1,625					$	1,498					$	4,578					$	4,327
International Operated Markets			1,796						1,761						5,026						4,686
International Developmental Licensed Markets & Corporate			174						97						283						224
Total Operating income			$	3,595					$	3,357					$	9,887					$	9,237
U.S.			$	332					$	400					$	963					$	943
International Operated Markets			548						607						1,417						1,347
International Developmental Licensed Markets & Corporate			4						3						22						16
Total Capital expenditures			$	884					$	1,011					$	2,401					$	2,306
U.S.			$	245					$	249					$	741					$	742
International Operated Markets			212						201						642						579
International Developmental Licensed Markets & Corporate			110						109						315						303
Total Depreciation & amortization**			$	567					$	559					$	1,698					$	1,623

In millions			September 30, 2026						December 31, 2025
U.S.			$	23,249					$	23,008
International Operated Markets			28,000						27,487
International Developmental Licensed Markets & Corporate			9,407						9,020
Total Assets			$	60,657					$	59,515

*Other segment expenses (income) is the difference between revenues less the significant expenses disclosed and operating income. This includes other restaurant expenses and other operating expenses included in the Other operating (income) expense, net line within the Condensed Consolidated Statement of Income.

**Total depreciation & amortization is included within the respective expense lines disclosed above, such as Company-operated restaurant expenses, Franchised restaurants-occupancy expenses, and Selling, general & administrative expenses.

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Item  2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Basis of Presentation

This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the accompanying Condensed Consolidated Financial Statements and the notes thereto, and the audited Consolidated Financial Statements and notes thereto included in our 2025 Annual Report on Form 10-K.

Certain columns and rows in financial tables within MD&A may not add due to rounding. Percentages have been calculated from the underlying whole-dollar amounts for all periods presented.

Overview

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 46,554 McDonald's restaurants at September 30, 2026, approximately 95% were franchised.

The Company's reporting segments are aligned with its strategic priorities and reflect how management reviews and evaluates operating performance. Significant reportable segments include the United States ("U.S.") and International Operated Markets. In addition, the International Developmental Licensed Markets & Corporate includes the results of over 75 countries as well as Corporate activities.

McDonald's franchised restaurants are owned and operated under one of the following structures - conventional franchise, developmental license or affiliate. The optimal ownership structure for an individual restaurant, trading area or market (country) is based on a variety of factors, including the availability of individuals with entrepreneurial experience and financial resources, as well as the local legal and regulatory environment in critical areas such as property ownership and franchising. The business relationship between the Company and its independent franchisees is supported by adhering to standards and policies, including McDonald's Global Brand Standards, and is of fundamental importance to overall performance and to protecting the McDonald’s brand.

The Company is primarily a franchisor and believes franchising is paramount to delivering great-tasting food, locally relevant customer experiences and driving profitability. Franchising enables an individual to be their own employer and maintain control over all employment related matters, marketing and pricing decisions, while also benefiting from the strength of McDonald's global brand, operating system and financial resources.

Directly operating McDonald's restaurants contributes significantly to the Company's ability to act as a credible franchisor. One of the strengths of the franchising model is that the expertise from Company-owned and operated restaurants allows McDonald's to improve the operations and success of all restaurants, and allows innovations from franchisees to be tested and, when viable, efficiently implemented across relevant restaurants. Having Company-owned and operated restaurants provides Company personnel with a venue for restaurant operations training experience. In addition, in our Company-owned and operated restaurants, and in collaboration with franchisees, the Company is able to further develop and refine operating standards, marketing concepts and product and pricing strategies.

The Company's revenues consist of sales by Company-owned and operated restaurants and fees from franchised restaurants operated by conventional franchisees, developmental licensees and affiliates. Fees vary by type of site, amount of Company investment, if any, and local business conditions. These fees, along with occupancy and operating rights, are stipulated in franchise/license agreements that generally have 20-year terms. The Company's Other revenues are comprised of fees paid by franchisees to recover a portion of costs incurred by the Company for various technology and digital platforms, and revenues from brand licensing arrangements to market and sell consumer packaged goods using the McDonald's brand.

Conventional Franchise

Under a conventional franchise arrangement, the Company generally owns or secures a long-term lease on the land and building for the restaurant location and the franchisee pays for equipment, signs, seating and décor. The Company believes that ownership of real estate, combined with the co-investment by franchisees, enables it to achieve restaurant performance levels that are among the highest in the industry.

Franchisees are responsible for reinvesting capital in their businesses over time. In addition, to accelerate implementation of certain initiatives, the Company may co-invest with franchisees to fund improvements to their restaurants or operating systems. These investments, developed in collaboration with franchisees, are designed to cater to consumer preferences, improve local business performance and increase the value of the McDonald's brand through the development of modernized, more attractive and higher revenue generating restaurants.

The Company requires franchisees to meet rigorous standards and generally does not work with passive investors. The business relationship with franchisees is designed to facilitate consistency and high quality at all McDonald’s restaurants. Conventional franchisees contribute to the Company's revenue, primarily through the payment of rent and royalties based upon a percent of sales, with specified minimum rent payments, along with initial fees paid upon the opening of a new restaurant or grant of a new franchise. The Company's heavily franchised business model is designed to generate stable and predictable revenue, which is largely a function of franchisee sales, and resulting cash flow streams.

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Developmental License or Affiliate

Under a developmental license or affiliate arrangement, licensees are responsible for operating and managing their businesses, providing capital (including the real estate interest) and developing and opening new restaurants. 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.

While developmental license and affiliate arrangements are largely the same, affiliate arrangements are used in a limited number of foreign markets (primarily China and Japan) within the International Developmental Licensed Markets, as well as a limited number of individual restaurants within the International Operated Markets, where the Company also has an equity investment and records its share of net results in equity in earnings of unconsolidated affiliates.

Strategic Direction

McDonald’s > NEXT (the “Strategy”) is the Company’s long-term strategy to advance its ambition to be the first choice for more customers, more often. Through four interconnected pillars (Menu, Consumer, Restaurant and People), the Company intends to generate more demand and deliver it more efficiently to drive growth by elevating taste and quality, deepening customer relationships, improving customer and restaurant experiences and redefining hospitality.

The Strategy is intended to be an engine of growth and productivity. Elevating taste, quality and the customer experience is expected to create more first choice occasions. Creating more first-choice occasions is intended to drive guest-count growth. Guest-count growth, together with improved restaurant efficiency, is expected to strengthen restaurant economics. Stronger restaurant economics, in turn, are expected to create additional capacity to reinvest in the customer experience and future growth, reinforcing the cycle of growth and productivity. The Strategy is designed to drive durable comparable sales growth, increase market share, enhance restaurant productivity, support strong earnings growth and generate System and shareholder returns.

Purpose, Mission and Values

At the heart of the Strategy are the Company’s purpose, mission and values which underpin its success.

Through its size and scale, the Company embraces and prioritizes its role and commitment to the communities in which it operates through its purpose to feed and foster communities, and its mission to make delicious feel-good moments easy for everyone. The Company is guided by five core values that define who it is and how it runs the business across the three-legged stool of McDonald's franchisees, suppliers and employees:

1.Serve - We put our guests and people first;

2.Inclusion - We open our doors to everyone;

3.Integrity - We do the right thing;

4.Community - We are good neighbors; and

5.Family - We get better together.

The Company believes that its people, all around the world, set it apart and bring these values to life daily. The Strategy continues to reflect and advance the Company’s purpose, mission and values and is comprised of four interconnected pillars.

Growth & Productivity Pillars

•Menu > NEXT is designed to elevate taste and quality through gold standard execution and disciplined menu innovation to drive stronger preference, more first choice occasions and increase baseline guest-count growth, while continuing to strengthen the Company’s position in its core categories: beef, chicken and beverages. As part of the Strategy, the Company aims to gain approximately 1.5 percentage points of market share in both the chicken and beverage categories by the end of 2030, versus September 2026 share, while maintaining its leadership position in the beef category. More broadly, value remains foundational to Menu > NEXT as the Company seeks to deliver the combination of great taste, quality, convenience and affordability that customers expect.

•Consumer > NEXT is designed to capitalize on McDonald’s brand fandom and further deepen individual customer relationships to generate more visits over time. The Company intends to leverage its distinctive brand assets, customer insights, loyalty ecosystem and digital capabilities to provide greater value to customers. These efforts are intended to generate more first-choice occasions, increase visit frequency and contribute to sustained guest-count-led growth over time.

•Restaurant > NEXT is designed to support growth and productivity through elevated execution, simplifying operations, modernizing restaurant design and deploying cloud-based and artificial intelligence (“AI”) enabled technology, such as our new generative AI restaurant operating system, ArchIQ, at scale. These initiatives are intended to make restaurants easier to operate, improve restaurant efficiency and support restaurant crew in consistently serving great-tasting food and delivering a strong

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customer experience. Through these efforts, the Company expects to deliver approximately 250 basis points of gross restaurant-level efficiency gains as Restaurant > NEXT elements are fully deployed across the U.S. and International Operated Markets.

•People > NEXT is designed to equip restaurant crew to deliver an improved level of hospitality that creates a better, more consistent experience for customers. Through Make It Golden, a multi-year Systemwide commitment to elevate the customer experience through great food and great hospitality that are uniquely McDonald’s, the Company intends to build capabilities that can be taught, measured and scaled across the System, and that strengthen customer preference and encourage repeat visits.

The Company intends to deploy the Strategy with discipline, pairing globally scaled solutions with local market insights. The timing and sequencing of initiatives will vary by market based on local factors including customer needs, restaurant readiness, technology prerequisites and local economics. To support implementation of the Strategy, the Company plans to provide approximately $8.5 billion in total cash partnering support through the end of 2036, including approximately $5 billion in cash partnering by the end of 2030, through a combination of rent relief and capital support. The Company believes the size, scale, agility and the power of the McDonald’s brand positions it well to execute on the Strategy and create long-term value for customers, franchisees and shareholders.

The Strategy is aligned with the Company’s capital allocation philosophy of (i) investing in opportunities to grow the business and drive strong returns, including capital expenditures and investments in technology and other capabilities, (ii) prioritizing its dividend and (iii) repurchasing shares with remaining free cash flow over time.

Third Quarter and Nine Months 2026 Financial Performance

Global comparable sales increased 1.5% for the quarter and 2.1% for the nine months.

•U.S. comparable sales decreased 0.2% for the quarter and increased 1.4% for the nine months. Comparable sales results for the quarter declined slightly as negative comparable guest counts were largely offset by positive check growth. Comparable sales for the nine months were primarily driven by positive check growth, including favorable product mix, partly offset by negative comparable guest counts.

•International Operated Markets comparable sales increased 1.4% for the quarter and 2.2% for the nine months. Most markets reflected positive comparable sales for both periods, led by Germany and Australia, as well as the U.K. for the nine months, partly offset by negative comparable sales in France for both periods.

•International Developmental Licensed Markets comparable sales increased 4.2% for the quarter and 3.2% for the nine months. Positive comparable sales for both periods were led by Japan, with all broader geographic regions reflecting positive comparable sales. Comparable sales results for both periods were partly offset by negative comparable sales in China.

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

•Consolidated revenues increased 1% (1% in constant currencies) for the quarter and 5% (2% in constant currencies) for the nine months.

•Systemwide sales increased 4% (4% in constant currencies) for the quarter and 6% (5% in constant currencies) for the nine months.

•Consolidated operating income increased 7% (7% in constant currencies) for the quarter and 7% (5% in constant currencies) for the nine months. Excluding current and prior year charges detailed in the Operating Income and Operating Margin section on page 28 of this report, consolidated operating income increased 8% (8% in constant currencies) for the quarter and 7% (5% in constant currencies) for the nine months.

•Diluted earnings per share was $3.51 for the quarter, an increase of 10% (11% in constant currencies) and $9.61 for the nine months, an increase of 8% (6% in constant currencies). Excluding current and prior year charges detailed in the Net Income and Diluted Earnings Per Share section on page 22 of this report, diluted earnings per share for the quarter was $3.57, an increase of 11% (11% in constant currencies) and $9.78, an increase of 8% (6% in constant currencies) for the nine months.

Management reviews and analyzes business results excluding the effect of foreign currency translation, impairment and other strategic charges and gains, as well as material regulatory and other income tax impacts, and bases incentive compensation plans on these results because the Company believes this better represents underlying business trends.

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The Following Definitions Apply to these Terms as Used Throughout this Report:

•Constant currency results exclude the effects of foreign currency translation and are calculated by translating current year results at prior year average exchange rates. Management reviews and analyzes business results excluding the effect of foreign currency translation, impairment and other charges and gains, as well as material regulatory and other income tax impacts, and bases incentive compensation plans on these results because the Company believes this better represents underlying business trends.

•Comparable sales and comparable guest counts are compared to the same period in the prior year and represent sales and transactions, respectively, at all restaurants, whether owned and operated by the Company or by franchisees, in operation at least thirteen months, including those temporarily closed. Some of the reasons restaurants may be temporarily closed include reimaging or remodeling, rebuilding, road construction, natural disasters, pandemics and acts of war, terrorism or other hostilities. Comparable sales exclude the impact of currency translation and the sales of any market considered hyperinflationary (generally identified as those markets whose cumulative inflation rate over a three-year period exceeds 100%), which management believes more accurately reflects the underlying business trends. Comparable sales are driven by changes in guest counts and average check, the latter of which is affected by changes in pricing and product mix.

•Systemwide sales include sales at all restaurants, whether owned and operated by the Company or by franchisees. Systemwide sales to loyalty members are comprised of all sales to customers who self-identify as a loyalty member when transacting with both Company-owned and operated and franchised restaurants. Systemwide sales to loyalty members are measured across 70 markets with loyalty programs. Systemwide sales to loyalty members represents an aggregation of the prior four quarters of sales to loyalty members active in the last 90 days of the respective quarter. While franchised sales are not recorded as revenues by the Company, management believes the information is important in understanding the Company's financial performance because these sales are the basis on which the Company calculates and records franchised revenues and are indicative of the financial health of the franchisee base. The Company's revenues consist of sales by Company-owned and operated restaurants and fees from franchised restaurants operated by conventional franchisees, developmental licensees and affiliates. Changes in Systemwide sales are primarily driven by comparable sales and net restaurant unit expansion.

•Free cash flow, defined as cash provided by operations less capital expenditures, and free cash flow conversion rate, defined as free cash flow divided by net income, are measures reviewed by management in order to evaluate the Company’s ability to convert net profits into cash resources, after reinvesting in the core business, that can be used to pursue opportunities to enhance shareholder value.

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CONSOLIDATED OPERATING RESULTS
Dollars in millions, except per share data
Quarters Ended September 30,			2026						2025						Inc/(Dec)
Revenues
Revenues from franchised restaurants			$	4,487					$	4,363					3		%
Sales by Company-owned and operated restaurants			2,480						2,563						(3)
Other revenues			189						151						26
Total revenues			7,157						7,078						1
Operating costs and expenses
Franchised restaurants-occupancy expenses			687						666						3
Company-owned and operated restaurant expenses			2,088						2,172						(4)
Other restaurant expenses			167						135						23
Selling, general & administrative expenses
Depreciation and amortization			118						121						(2)
Other			641						664						(3)
Other operating (income) expense, net			(139)						(37)						n/m
Total operating costs and expenses			3,561						3,721						(4)
Operating income			3,595						3,357						7
Interest expense			408						406						—
Nonoperating (income) expense, net			(1)						1						n/m
Income before provision for income taxes			3,188						2,949						8
Provision for income taxes			702						671						5
Net income			$	2,486					$	2,278					9		%
Earnings per common share-basic			$	3.52					$	3.20					10		%
Earnings per common share-diluted			$	3.51					$	3.18					10		%

Nine Months Ended September 30,			2026						2025						Inc/(Dec)
Revenues
Revenues from franchised restaurants			$	12,887					$	12,238					5		%
Sales by Company-owned and operated restaurants			7,322						7,154						2
Other revenues			565						485						16
Total revenues			20,773						19,876						5
Operating costs and expenses
Franchised restaurants-occupancy expenses			2,042						1,940						5
Company-owned and operated restaurant expenses			6,258						6,109						2
Other restaurant expenses			496						424						17
Selling, general & administrative expenses
Depreciation and amortization			340						333						2
Other			1,995						1,834						9
Other operating (income) expense, net			(245)						(1)						n/m
Total operating costs and expenses			10,885						10,639						2
Operating income			9,887						9,237						7
Interest expense			1,217						1,172						4
Nonoperating (income) expense, net			4						(75)						n/m
Income before provision for income taxes			8,666						8,140						6
Provision for income taxes			1,835						1,740						5
Net income			$	6,831					$	6,399					7		%
Earnings per common share-basic			$	9.64					$	8.96					8		%
Earnings per common share-diluted			$	9.61					$	8.92					8		%

n/m Not meaningful

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Impact of Foreign Currency Translation

The impact of foreign currency translation on consolidated operating results for the quarter primarily reflected the weakening of most major currencies against the U.S. Dollar, primarily driven by the Euro, partly offset by the strengthening of the Australian Dollar. Results for the nine months ended September 30, 2026 primarily reflected the strengthening of most major currencies against the U.S. Dollar, primarily driven by the Euro and the Australian Dollar.

While changes in foreign currency exchange rates affect reported results, McDonald's mitigates exposures, where practical, by purchasing goods and services in local currencies, financing in local currencies and hedging certain foreign-denominated cash flows. Results excluding the effect of foreign currency translation (referred to as constant currency) are calculated by translating current year results at prior year average exchange rates.

IMPACT OF FOREIGN CURRENCY TRANSLATION
Dollars in millions, except per share data
																					Currency Translation Benefit/ (Cost)
Quarters Ended September 30,						2026									2025									2026
Revenues						$	7,157								$	7,078								$	1
Franchised margins						3,800									3,697									(6)
Company-owned and operated margins						392									391									1
Selling, general & administrative expenses						759									785									—
Operating income						3,595									3,357									(8)
Net income						2,486									2,278									(8)
Earnings per share-diluted						$	3.51								$	3.18								$	(0.01)
																					Currency Translation Benefit/ (Cost)
Nine Months Ended September 30,						2026									2025									2026
Revenues						$	20,773								$	19,876								$	429
Franchised margins						10,844									10,298									192
Company-owned and operated margins						1,064									1,044									27
Selling, general & administrative expenses						2,335									2,167									(21)
Operating income						9,887									9,237									194
Net income						6,831									6,399									115
Earnings per share-diluted						$	9.61								$	8.92								$	0.16

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Net Income and Diluted Earnings per Share

For the quarter, net income increased 9% (9% in constant currencies) to $2,486 million, and diluted earnings per share increased 10% (11% in constant currencies) to $3.51. Foreign currency translation had a negative impact of $0.01 on diluted earnings per share.

For the nine months, net income increased 7% (5% in constant currencies) to $6,831 million, and diluted earnings per share increased 8% (6% in constant currencies) to $9.61. Foreign currency translation had a positive impact of $0.16 on diluted earnings per share.

Results for 2026 included the following:

•Net pre-tax charges of $56 million, or $0.06 per share, for the quarter and $155 million, or $0.17 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)

Results for 2025 included the following:

•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 Accelerating the Organization

Excluding the above items, results for the quarter and nine months ended September 30, 2026 were primarily driven by higher Other operating income and higher sales-driven Franchised margins. Results for the nine months were partly offset by higher Selling, general and administrative expenses.

During the quarter, the Company paid a dividend of $1.86 per share, or $1.3 billion, resulting in total dividends paid for the nine months of $4.0 billion. Additionally, during the quarter, the Company repurchased 1.9 million shares of stock for $519 million, resulting in total purchases for the nine months of 6.2 million shares, or $1.8 billion. In September 2026, the Company declared a 4% increase in its quarterly cash dividend to $1.93 per share, payable on December 15, 2026.

NET INCOME AND EARNINGS PER SHARE-DILUTED RECONCILIATION

Dollars in millions, except per share data

			Quarters Ended September 30,
			Net Income																														Earnings per share - diluted
			2026						2025						Inc/ (Dec)									Inc/ (Dec) Excluding Currency Translation									2026						2025						Inc/ (Dec)									Inc/ (Dec) Excluding Currency Translation
GAAP			$	2,486					$	2,278					9			%						9			%						$	3.51					$	3.18					10			%						11			%
(Gains)/Charges, net of tax			43						30																								0.06						0.04
Non-GAAP			$	2,529					$	2,308					10			%						10			%						$	3.57					$	3.22					11			%						11			%

			Nine Months Ended September 30,
			Net Income																														Earnings per share - diluted
			2026						2025						Inc/ (Dec)									Inc/ (Dec) Excluding Currency Translation									2026						2025						Inc/ (Dec)									Inc/ (Dec) Excluding Currency Translation
GAAP			$	6,831					$	6,399					7			%						5			%						$	9.61					$	8.92					8			%						6			%
(Gains)/Charges, net of tax			119						114																								0.17						0.16
Non-GAAP			$	6,950					$	6,513					7			%						5			%						$	9.78					$	9.08					8			%						6			%

Revenues

The Company's revenues consist of fees from restaurants owned and operated by franchisees, developmental licensees and affiliates and sales by Company-owned and operated restaurants. Revenues from conventional franchised restaurants include rent and royalties based on a percent of sales with minimum rent payments, and initial fees. Revenues from restaurants licensed to developmental licensees and affiliates include a royalty based on a percent of sales, and generally include initial fees. The Company’s Other revenues are primarily comprised of fees paid by franchisees to recover a portion of costs incurred by the Company for various technology and digital platforms and revenues from brand licensing arrangements to market and sell consumer packaged goods using the McDonald’s brand.

Franchised restaurants represented approximately 95% of McDonald's restaurants worldwide at September 30, 2026. The Company's heavily franchised business model is designed to generate stable and predictable revenue, which is largely a function of franchisee sales, and resulting cash flow streams.

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REVENUES
Dollars in millions
Quarters Ended September 30,			2026						2025			Inc/ (Dec)			Inc/ (Dec) Excluding Currency Translation
Franchised revenues
U.S.			$	1,943					$	1,906		2		%	2		%
International Operated Markets			2,007						1,962			2			3
International Developmental Licensed Markets & Corporate			537						496			8			8
Total			$	4,487					$	4,363		3		%	3		%
Company-owned and operated sales
U.S.			$	742					$	790		(6)		%	(6)		%
International Operated Markets			1,591						1,645			(3)			(3)
International Developmental Licensed Markets & Corporate			147						128			15			3
Total			$	2,480					$	2,563		(3)		%	(4)		%
Total Franchised revenues and Company-owned and operated sales
U.S.			$	2,685					$	2,696		—		%	—		%
International Operated Markets			3,598						3,606			—			—
International Developmental Licensed Markets & Corporate			684						625			10			7
Total			$	6,967					$	6,927		1		%	1		%
Total Other revenues			$	189					$	151		26		%	26		%
Total Revenues			$	7,157					$	7,078		1		%	1		%
Nine Months Ended September 30,			2026						2025			Inc/ (Dec)			Inc/ (Dec) Excluding Currency Translation
Franchised revenues
U.S.			$	5,635					$	5,485		3		%	3		%
International Operated Markets			5,724						5,354			7			3
International Developmental Licensed Markets & Corporate			1,527						1,398			9			7
Total			$	12,887					$	12,238		5		%	3		%
Company-owned and operated sales
U.S.			$	2,255					$	2,306		(2)		%	(2)		%
International Operated Markets			4,675						4,518			3			—
International Developmental Licensed Markets & Corporate			392						330			19			3
Total			$	7,322					$	7,154		2		%	—		%
Total Franchised revenues and Company-owned and operated sales
U.S.			$	7,890					$	7,791		1		%	1		%
International Operated Markets			10,400						9,872			5			2
International Developmental Licensed Markets & Corporate			1,919						1,728			11			6
Total			$	20,208					$	19,391		4		%	2		%
Total Other revenues			$	565					$	485		16		%	15		%
Total Revenues			$	20,773					$	19,876		5		%	2		%

•Total Franchised revenues and Company-owned and operated sales increased 1% (1% in constant currencies) for the quarter and increased 4% (2% in constant currencies) for the nine months. Both periods benefited from positive franchised sales performance across all segments and positive Company-owned and operated sales performance at the International Developmental Licensed Markets. The International Operated Markets and the International Developmental Licensed Markets also benefited from the positive impact of foreign currency translation for the nine months.

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Comparable Sales

The following table presents the percent change in comparable sales for the quarters and nine months ended September 30, 2026 and 2025:

			Increase/(Decrease)
			Quarters Ended September 30,									Nine Months Ended September 30,
			2026			2025						2026			2025
U.S.			(0.2)		%	2.4		%				1.4		%	0.5		%
International Operated Markets			1.4			4.3						2.2			2.6
International Developmental Licensed Markets			4.2			4.7						3.2			4.6
Total Company			1.5		%	3.6		%				2.1		%	2.2		%

Systemwide Sales and Franchised Sales

The following table presents the percent change in Systemwide sales for the quarter and nine months ended September 30, 2026:

SYSTEMWIDE SALES*
			Quarter Ended September 30, 2026												Nine Months Ended September 30, 2026
			Inc/ (Dec)						Inc/ (Dec) Excluding Currency Translation						Inc/ (Dec)						Inc/ (Dec) Excluding Currency Translation
U.S.			1		%				1		%				3		%				3		%
International Operated Markets			3						4						8						5
International Developmental Licensed Markets			9						9						10						8
Total Company			4		%				4		%				6		%				5		%

*Unlike comparable sales, the Company has not excluded sales from hyperinflationary markets from Systemwide sales as these sales are the basis on which the Company calculates and records revenues.

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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, 2026 and 2025:

FRANCHISED SALES
Dollars in millions
Quarters Ended September 30,						2026						2025						Inc/ (Dec)						Inc/ (Dec) Excluding Currency Translation
U.S.						$	13,582					$	13,376					2		%				2		%
International Operated Markets						11,931						11,439						4						5
International Developmental Licensed Markets						10,113						9,279						9						9
Total						$	35,625					$	34,093					4		%				5		%
Ownership type
Conventional franchised						$	25,293					$	24,635					3		%				3		%
Developmental licensed						6,500						5,885						10						11
Foreign affiliated						3,833						3,573						7						8
Total						$	35,625					$	34,093					4		%				5		%
Nine Months Ended September 30,						2026						2025						Inc/ (Dec)						Inc/ (Dec) Excluding Currency Translation
U.S.						$	39,493					$	38,378					3		%				3		%
International Operated Markets						33,885						31,135						9						5
International Developmental Licensed Markets						28,616						26,143						9						8
Total						$	101,994					$	95,656					7		%				5		%
Ownership type
Conventional franchised						$	72,821					$	69,047					5		%				4		%
Developmental licensed						18,384						16,486						12						9
Foreign affiliated						10,789						10,123						7						7
Total						$	101,994					$	95,656					7		%				5		%

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Restaurant Margins

Franchised restaurant margins are measured as revenues from franchised restaurants less franchised restaurant occupancy costs. Franchised restaurant occupancy costs include lease expense and depreciation, as the Company generally owns or secures a long-term lease on the land and building for the restaurant location.

Company-owned and operated restaurant margins are measured as sales from Company-owned and operated restaurants less costs for food & paper, payroll & employee benefits and occupancy & other operating expenses necessary to run an individual restaurant. Company-owned and operated margins exclude costs that are not allocated to individual restaurants, primarily payroll & employee benefit costs of non-restaurant support staff, which are included in Selling, general and administrative expenses.

RESTAURANT MARGINS
Dollars in millions
																					Inc/ (Dec)						Inc/ (Dec) Excluding Currency Translation
Quarters Ended September 30,															2026									2025
Franchised
U.S.															$	1,619					$	1,581					2		%				2		%
International Operated Markets															1,645						1,620						2						2
International Developmental Licensed Markets & Corporate															537						496						8						8
Total															$	3,800					$	3,697					3		%				3		%
Company-owned and operated
U.S.															$	75					$	90					(16)		%				(16)		%
International Operated Markets															299						288						4						4
International Developmental Licensed Markets & Corporate															n/m						n/m						n/m						n/m
Total															$	392					$	391					—		%				—		%
Total restaurant margins
U.S.															$	1,694					$	1,671					1		%				1		%
International Operated Markets															1,943						1,908						2						2
International Developmental Licensed Markets & Corporate															n/m						n/m						n/m						n/m
Total															$	4,192					$	4,088					3		%				3		%
																					Inc/ (Dec)						Inc/ (Dec) Excluding Currency Translation
Nine Months Ended September 30,															2026									2025
Franchised
U.S.															$	4,668					$	4,517					3		%				3		%
International Operated Markets															4,650						4,383						6						2
International Developmental Licensed Markets & Corporate															1,527						1,397						9						7
Total															$	10,844					$	10,298					5		%				3		%
Company-owned and operated
U.S.															$	226					$	266					(15)		%				(15)		%
International Operated Markets															806						752						7						4
International Developmental Licensed Markets & Corporate															n/m						n/m						n/m						n/m
Total															$	1,064					$	1,044					2		%				(1)		%
Total restaurant margins
U.S.															$	4,893					$	4,783					2		%				2		%
International Operated Markets															5,456						5,136						6						3
International Developmental Licensed Markets & Corporate															n/m						n/m						n/m						n/m
Total															$	11,908					$	11,342					5		%				3		%

n/m Not meaningful

•Franchised margins for both periods benefited from positive franchised sales performance across all segments. The nine months also benefited from the positive impact of foreign currency translation in the International Operated Markets and the International Developmental Licensed Markets. Franchised margins represented approximately 90% of restaurant margin dollars.

•Company-owned and operated margins for both periods in the U.S. primarily reflected the impact of ongoing inflationary cost pressures. The International Operated Markets for the nine months benefited from the positive impact of foreign currency translation, partly offset by the impact of ongoing inflationary cost pressures.

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•Total restaurant margins included depreciation and amortization expense of $448 million and $438 million for the quarters ended 2026 and 2025, respectively, and $1.4 billion and $1.3 billion for the nine months ended 2026 and 2025, respectively.

Selling, General & Administrative Expenses

•Selling, general and administrative expenses decreased $25 million, or 3% (3% in constant currencies) for the quarter and increased $168 million, or 8% (7% in constant currencies) for the nine months. The decrease in Selling, general & administrative expenses for the quarter primarily resulted from incremental spend on marketing initiatives in the prior year. Results for the nine months primarily reflected higher employee costs, including incentive-based compensation, and costs related to the 2026 Worldwide Owner/Operator convention.

•Selling, general and administrative expenses as a percent of Systemwide sales were 2.1% for both the nine months ended September 30, 2026 and 2025, respectively.

Other Operating (Income) Expense, Net

OTHER OPERATING (INCOME) EXPENSE, NET
Dollars in millions
			Quarters Ended												Nine Months Ended
			September 30,												September 30,
			2026						2025						2026						2025
Gains on sales of restaurant businesses			$	(97)					$	(35)					$	(167)					$	(50)
Equity in earnings of unconsolidated affiliates			(75)						(63)						(197)						(180)
Asset dispositions and other (income) expense, net			(23)						21						(36)						81
Impairment and other charges (gains), net			56						39						155						148
Total			$	(139)					$	(37)					$	(245)					$	(1)

•The increase in gains on sales of restaurant businesses for both periods reflected more sales of restaurants in the U.S., with the nine months also reflecting more sales of restaurants in the International Operated Markets.

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

•The change in asset dispositions and other (income) expense, net for both periods primarily reflected higher gains on sale of excess properties.

•Impairment and other charges (gains), net reflected net pre-tax charges primarily related to restructuring charges associated with Accelerating the Organization.

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Operating Income

OPERATING INCOME & OPERATING MARGIN
Dollars in millions
Quarters Ended September 30,			2026						2025						Inc/ (Dec)						Inc/ (Dec) Excluding Currency Translation
U.S.			$	1,625					$	1,498					8		%				8		%
International Operated Markets			1,796						1,761						2						2
International Developmental Licensed Markets & Corporate			174						97						79						79
Total			$	3,595					$	3,357					7		%				7		%
Nine Months Ended September 30,			2026						2025						Inc/ (Dec)						Inc/ (Dec) Excluding Currency Translation
U.S.			$	4,578					$	4,327					6		%				6		%
International Operated Markets			5,026						4,686						7						4
International Developmental Licensed Markets & Corporate			283						224						26						16
Total			$	9,887					$	9,237					7		%				5		%
Operating margin			47.6		%				46.5		%

•Operating income increased $239 million, or 7% (7% in constant currencies), for the quarter and $650 million, or 7% (5% in constant currencies), for the nine months. Results reflected net pre-tax charges of $56 million and $39 million for the quarters ended 2026 and 2025, respectively, and $155 million and $148 million for the nine months ended 2026 and 2025, respectively, primarily related to restructuring charges associated with Accelerating the Organization.

OPERATING INCOME & OPERATING MARGIN RECONCILIATION*

Dollars in millions

			Quarters Ended September 30,																														Nine Months Ended September 30,
			2026						2025						Inc/ (Dec)									Inc/ (Dec) Excluding Currency Translation									2026						2025						Inc/ (Dec)									Inc/ (Dec) Excluding Currency Translation
GAAP operating income			$3,595						$3,357						7			%						7			%						$9,887						$9,237						7			%						5			%
(Gains)/Charges			56						39																								155						148
Non-GAAP operating income			$3,651						$3,396						8			%						8			%						$10,042						$9,385						7			%						5			%
Non-GAAP operating margin																																	48.3		%				47.2		%

*Refer to the Impairment and other charges (gains), net line within the Other Operating (Income) Expense, Net section on page 27 for details of the charges in this table.

•Excluding the current and prior year charges shown in the table above, operating income increased 8% (8% in constant currencies) for the quarter and 7% (5% in constant currencies) for the nine months. Results for both periods primarily reflected higher sales-driven Franchised margins and higher Other operating income across all segments. Results for the nine months were partly offset by higher Selling, general, and administrative expenses in International Developmental Licensed Markets & Corporate.

•Operating margin is defined as operating income as a percent of total revenues. The contributions to operating margin differ by segment due to each segment's ownership structure, primarily due to the relative percentage of franchised versus Company-owned and operated restaurants. Additionally, temporary restaurant closures, which vary by segment, impact the contribution of each segment to the consolidated operating margin.

The increase in non-GAAP operating margin was primarily due to higher Other operating income.

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Interest Expense

•Interest expense was flat (increased 1% in constant currencies) for the quarter and increased 4% (3% in constant currencies) for the nine months. Results for the nine months primarily reflected higher average interest rates and the impact of foreign currency translation.

Nonoperating (Income) Expense, Net

NONOPERATING (INCOME) EXPENSE, NET
Dollars in millions
			Quarters Ended												Nine Months Ended
			September 30,												September 30,
			2026						2025						2026						2025
Interest income			$	(6)					$	(26)					$	(25)					$	(63)
Foreign currency and hedging activity			3						33						36						25
Other (income) expense, net			2						(6)						(8)						(37)
Total			$	(1)					$	1					$	4					$	(75)

•Interest income for both periods decreased due to lower average cash balances and lower average interest rates.

Income Taxes

•The effective income tax rate was 22.0% and 22.8% for the quarters ended 2026 and 2025, respectively, and 21.2% and 21.4% for the nine months ended 2026 and 2025, respectively.

Cash Flows

The Company has a long history of generating significant cash from operations and has substantial credit capacity to fund operating and discretionary spending to invest in opportunities to grow the business, such as restaurant development, in addition to funding debt service payments, dividends and share repurchases.

Cash provided by operations totaled $8.3 billion and exceeded capital expenditures by $5.9 billion for the nine months ended September 30, 2026. Cash provided by operations increased compared to the nine months ended September 30, 2025, primarily due to improved operating results.

Cash used for investing activities totaled $2.5 billion for the nine months ended September 30, 2026, a decrease compared to the nine months ended September 30, 2025, primarily due to higher proceeds from sales of restaurants.

Cash used for financing activities totaled $5.4 billion for the nine months ended September 30, 2026, an increase of $1.5 billion compared to the nine months ended September 30, 2025. The increase was primarily due to lower bond issuances in the current year, partly offset by lower bond repayments.

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2026 Outlook

Based on current conditions, the following is provided to assist in forecasting the Company's future results for 2026.

•The Company expects net restaurant unit expansion will contribute approximately 2.5% to 2026 Systemwide sales growth, in constant currencies.

•The Company expects full year 2026 Selling, general and administrative expenses of about 2.2% of Systemwide sales.

•The Company expects 2026 operating margin percent to be in the mid-to-high 40% range.

•Based on current interest and foreign currency exchange rates, the Company expects interest expense for the full year 2026 to increase between 4% and 6% driven primarily by higher average interest rates.

•The Company expects the effective income tax rate for the full year 2026 to be between 21% and 23%. Some volatility may result in a quarterly tax rate outside of the annual range.

•The Company expects 2026 capital expenditures to be about $3.7 billion, with the majority directed towards new restaurant unit expansion across the U.S. and International Operated Markets. Globally, the Company expects to open about 2,500 restaurants in 2026, with about 700 restaurants opening in the U.S. and International Operated Markets, and developmental licensees and affiliates contributing capital towards approximately 1,800 restaurant openings in their respective markets. The Company expects approximately 2,100 net restaurant additions in 2026.

•The Company expects to achieve a free cash flow conversion rate for 2026 in the low-to-mid 80% range.

Long-Term Outlook

Over the long-term, the Company expects to achieve the following financial targets.

•The Company expects net restaurant unit expansion will contribute nearly 2.5% to 2027 Systemwide sales growth, in constant currencies, moderating to about 2% by the end of 2030.

•The Company expects full year Selling, general and administrative expenses of about 1.9% of Systemwide sales by the end of 2030.

•The Company expects full year operating margin percent to be in the low-to-mid 50% range by the end of 2030.

•The Company expects about $3 billion of annual baseline capital expenditures plus $1.5 billion to $2 billion of cumulative capital partnering support to accelerate deployment of Restaurant > NEXT from 2027 through the end of 2030, based on current foreign currency exchange rates.

•The Company is targeting 50,000 global units by the end of 2028.

•The Company expects to achieve a full year free cash flow conversion rate in the mid-to-high 80% range by the end of 2030.

Recent Accounting Pronouncements

Recent accounting pronouncements are discussed in the "Recent Accounting Pronouncements" section in Part I, Item 1 of this report.

Cautionary Statement Regarding Forward-Looking Statements

The information in this report contains forward-looking statements about future events and circumstances and their effects upon revenues, expenses and business opportunities. Generally speaking, any statement in this report not based upon historical fact is a forward-looking statement. Forward-looking statements can also be identified by the use of forward-looking or conditional words, such as “could,” “should,” “can,” “continue,” “aim,” “estimate,” “forecast,” “intend,” “look,” “may,” “will,” “expect,” “believe,” “anticipate,” “plan,” “remain,” “confident,” “commit,” “enable,” “potential” and “trajectory” or similar expressions. In particular, statements regarding our plans, strategies, prospects and expectations regarding our business and industry are forward-looking statements. They reflect our expectations, are not guarantees of performance and speak only as of the dates the statements are made. Except as required by law, we do not undertake to update such forward-looking statements. You should not rely unduly on forward-looking statements.

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Risk Factors

Our business results are subject to a variety of risks, including those that are described below and elsewhere in our filings with the SEC. The risks described below are not the only risks we face. Additional risks not currently known to us or that we currently deem to be immaterial may also significantly adversely affect our business. If any of these risks were to materialize or intensify, our expectations (or the underlying assumptions) may change and our performance may be adversely affected.

STRATEGY AND BRAND

If we do not successfully evolve and execute against our business strategies, we may not be able to drive business growth and productivity.

To drive Systemwide sales, operating income, operating margin and free cash flow growth, our business strategies - including the components of our McDonald’s > NEXT growth and productivity strategy, which builds upon the foundation of our Accelerating the Arches strategy - must be effective in maintaining and strengthening customer appeal, capturing additional market share, driving guest count growth and improving restaurant-level productivity. Whether these strategies are successful depends mainly on our System’s ability to:

•capitalize on our global scale, iconic brand fandom, local market presence, technology and infrastructure to build upon our historic strengths and competitive advantages;

•elevate the taste and quality of our food and beverages through Gold Standard execution and innovation of our menu to deliver food that customers seek and create experiences that drive guest count growth and capture unmet demand;

•balance delivering great taste, quality, value and convenience to our customers with profitability;

•build upon our investments to transform and enhance the customer experience, including evolving how we grow our brand through globally-scaled campaigns that are purposefully designed to be carried by fans and creators and building deeper customer relationships through our loyalty program, to drive more frequent visits;

•run great restaurants by deploying artificial intelligence (“AI”)-enabled technology, including ArchIQ, to make it easier for crews to work more efficiently and deliver exceptional customer service;

•achieve excellence in execution, including by equipping restaurant teams across the System, including those of our franchisees, with the training, tools and operating standards needed to deliver excellent food and hospitality, including through our Make It Golden Systemwide commitment to elevate the customer experience;

•accelerate our existing strategies, including through growth opportunities and building Company data, analytics and AI capabilities that unlock greater speed, innovation and efficiency and support ongoing efforts to reduce costs; and

•evolve and adjust our strategies in response to, among other things, changing consumer behavior, and other events impacting our results of operations and liquidity.

The various elements of our McDonald’s > NEXT strategy are expected to be implemented over a multi-year period, with timing and sequencing to vary across our markets based on, among other factors, customer needs, restaurant and technology readiness, local economic conditions and franchisee capacity. As a result, the anticipated financial, efficiency and other benefits of these initiatives may be realized later than expected or not at all. If we are delayed or unsuccessful in evolving or executing against our strategies, including in the transition from Accelerating the Arches to McDonald’s > NEXT, if the execution of our strategies proves to be more difficult, costly or time consuming than expected, or if our strategies do not yield the desired results, our business, financial condition and results of operations may suffer.

Failure to preserve the value or relevance of our brand could have an adverse impact on our financial results.

To continue to be successful in the future, we believe we must preserve, enhance and leverage the value and relevance of our brand, including our corporate purpose, mission and values. Brand value is based in part on consumer perceptions, which are affected by a variety of factors, including the nutritional content and preparation of our food, the ingredients we use, the manner in which we source commodities and general business practices across the System, including the people practices at McDonald’s restaurants. Our business could also be impacted by business incidents or practices, whether actual or perceived, particularly if they receive considerable publicity or result in litigation or governmental investigations or proceedings, as well as by our perceived position or lack of position on environmental, social responsibility, public policy, geopolitical and similar matters. In addition, we cannot ensure that franchisees or business partners will not take actions that adversely affect the value and relevance of our brand. Consumer perceptions may also be affected by adverse commentary from third parties, including through social media or conventional media outlets, regarding the quick-service category of the "informal eating out" ("IEO") segment or our brand, culture, operations, suppliers or franchisees. If we are unsuccessful in addressing adverse commentary or perceptions, whether or not accurate, our brand and financial results may suffer.

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If we do not anticipate and address industry trends and evolving consumer preferences and effectively execute our pricing, promotional, marketing and menu plans, our business could suffer.

Our continued success depends on our System’s ability to build upon our historic strengths and competitive advantages. To do so, we need to anticipate and respond effectively to continuously shifting consumer demographics and industry trends in sourcing, food and beverage preparation, menu offerings, and consumer behavior and preferences, including with respect to the use of digital channels, health and wellness trends and environmental and social responsibility matters. If we are not able to predict, or quickly and effectively respond to, these changes, or if our competitors are able to do so more effectively, our financial results could be adversely impacted.

Consumer acceptance of our menu offerings is subject to change for a variety of reasons, and some changes can occur rapidly. For example, health, environmental and other scientific studies and practices, continuously evolve and may have contradictory implications, drive popular opinion and regulation and alter consumer behavior in ways that affect the IEO segment or perceptions of our brand, generally or relative to available alternatives. Shifts in consumer behavior and dietary guidelines or preferences, including those resulting from increased use of weight-loss medications such as GLP-1s could affect consumption patterns and reduce demand for certain menu offerings. Our McDonald’s > NEXT strategy includes introducing more flexible portion sizes and expanding high-protein and other menu options to account for changes to dietary guidelines and use of weight loss medications. These changes may not achieve customer acceptance, could increase complexity in our restaurant operations and supply chain and may not offset any reduction in guest counts or average check resulting from changes in consumer eating habits. In addition, the extent and longevity of the use of weight-loss medications, as well as their longer-term effects on consumer behavior and consumption patterns, remain uncertain and could vary by market.

Our ability to build upon our strengths and advantages also depends on the impact of pricing, promotional, marketing and menu plans across the System, and the ability to adjust these plans to respond quickly and effectively to evolving customer behavior and preferences, as well as shifting economic and competitive conditions. Existing or future pricing strategies and marketing plans, as well as the value proposition they represent, are expected to continue to be important components of our business strategy. However, they may not be successful, or may not be as successful as the efforts of our competitors, which could negatively impact sales, guest counts and market share.

Additionally, we operate in a complex and costly advertising environment. Our marketing and advertising programs may not be successful in reaching consumers in the way we intend. Our success depends in part on whether the allocation of our advertising and marketing resources across different channels, including digital, allows us to reach consumers effectively, efficiently and in ways that are personal and meaningful to them. If our advertising and marketing programs are not successful, or are not as successful as those of our competitors, our sales, guest counts and market share could decrease.

Our investments to transform and enhance the customer experience, including through technology, training and hospitality initiatives, may not generate the expected results.

Our long-term business objectives depend on the successful Systemwide execution of our strategies. We continue to build upon our investments in restaurant development, technology, restaurant crew training, digital engagement and delivery in order to transform and enhance the customer experience. As part of these investments, we are continuing to place emphasis on improving our service model and strengthening relationships with customers, in part through digital channels and loyalty initiatives, mobile ordering and payment systems, and enhancing our drive thru technologies, which efforts may not generate expected results. We also continue to expand and refine our delivery initiatives, including through integrating delivery and mobile ordering. Utilizing a third-party delivery service may not have the same level of profitability as a non-delivery transaction and may introduce additional food quality, food safety and customer satisfaction risks. Our McDonald’s > NEXT strategy and Make It Golden hospitality elevation commitment also include investments in Systemwide training and generative AI-enabled technologies intended to improve the customer experience through great food and great hospitality via restaurant execution and efficiency, the success of which depends on franchisee alignment, workforce capabilities and effective adoption and deployment across our markets. If these customer experience initiatives are not successfully executed, or if we do not fully realize the intended benefits of these significant investments, our business results may suffer.

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We face intense competition in our markets, which could hurt our business.

We compete primarily in the IEO segment, which is highly competitive. We also face sustained, intense competition from traditional, fast casual and other competitors, which may include many non-traditional market participants such as convenience stores, grocery stores, coffee shops and online retailers. We expect our environment to continue to be highly competitive, and our results in any particular reporting period may be impacted by a contracting IEO segment or by new or continuing actions, product offerings, technologies or consolidation of our competitors and third-party partners, which may have short- and long-term impacts on our results.

We compete primarily on the basis of product choice, quality, affordability, service and location. In particular, we believe our ability to compete successfully in the current market environment depends on our ability to improve existing products, successfully develop and introduce new products, price our products appropriately, deliver a relevant customer experience, manage the complexity of our restaurant operations, manage our investments in restaurant development, technology, digital engagement and delivery, and respond effectively to our competitors’ actions or offerings or to unforeseen disruptive actions. There can be no assurance these strategies will be effective, and some strategies may be effective at improving some metrics while adversely affecting others, which could have the overall effect of harming our business.

We may not be able to adequately protect our intellectual property or adequately ensure that we are not infringing the intellectual property of others, which could harm the value of the McDonald’s brand and our business.

Our success depends on our continued ability to use our existing trademarks and service marks in order to increase brand awareness and further develop our branded products in both domestic and international markets. We rely on a combination of trademarks, copyrights, service marks, trade secrets, patents and other intellectual property rights to protect our brand and branded products.

We have registered certain trademarks and have other trademark registrations pending in the U.S. and certain foreign jurisdictions. The trademarks that we currently use have not been, and may never be, registered in all of the countries outside of the U.S. in which we do business or may do business in the future. It may be costly and time consuming to protect our intellectual property, particularly in rapidly evolving areas, and the steps we have taken to do so in the U.S. and foreign countries may not be adequate. In addition, the steps we have taken may not adequately ensure that we do not infringe the intellectual property of others, and third parties may claim infringement by us in the future. In particular, we may be involved in intellectual property claims, including often aggressive or opportunistic attempts to enforce patents used in information technology systems, which might affect our operations and results. Any claim of infringement, whether or not it has merit, could, particularly in rapidly evolving areas, be time-consuming, or result in costly litigation and could also have an adverse impact on our business.

We cannot ensure that franchisees and other third parties who hold licenses to our intellectual property will not take actions that adversely affect the value of our intellectual property. Moreover, rapid technological developments, including AI-driven tools, may increase our exposure to existing intellectual property risks, including theft or unlicensed use, intellectual property disputes and enforcement challenges.

OPERATIONS

The global scope of our business subjects us to risks that could negatively affect our business.

We encounter differing and evolving cultural, regulatory, geopolitical and economic environments within and among the more than 100 countries where McDonald’s restaurants operate, and our ability to achieve our business objectives depends on the System’s success in these environments. Meeting customer expectations is complicated by the risks inherent in our global operating environment, and our global success is partially dependent on our System’s ability to leverage operating successes across markets and brand perceptions. Planned initiatives may not have appeal across multiple markets with McDonald’s customers and could drive unanticipated changes in customer perceptions and negatively impact our business results.

Disruptions in operations or price volatility in a market can also result from governmental actions (whether proposed or realized, unilateral or bilateral), such as price, foreign exchange or trade-related tariffs or controls, trade policies and regulations, sanctions and counter sanctions, government-mandated closure of our, our franchisees’ or our suppliers’ operations and asset seizures. Some or all of the above-referenced disruptions or volatility can also result from acts of war, terrorism or other hostilities. Such governmental actions may have a broader impact on macroeconomic conditions, geopolitical tensions, anti-American sentiment, consumer demand and the ability of us and our franchisees to operate in certain geographic areas, which in turn may have an adverse impact on our business and financial results.

While we may face challenges and uncertainties in any of the markets in which we operate, such challenges and uncertainties are often heightened in developing markets, which may entail a relatively higher risk of political instability, economic volatility, crime, corruption and social and ethnic unrest. In many cases, such challenges may be exacerbated by the lack of an independent and experienced judiciary and uncertainty in how local law is applied and enforced, including in areas most relevant to commercial transactions and foreign investment. An inability to manage effectively the risks associated with our international operations could adversely affect our business and financial results.

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Supply chain interruptions may increase costs or reduce revenues.

We depend on the effectiveness of our supply chain management to assure a reliable and sufficient supply of quality products, equipment and other materials on favorable terms. Although many of these items are sourced from a wide variety of suppliers in countries around the world, certain items have limited suppliers, which increases our reliance on those suppliers. Supply chain interruptions and related price increases have in the past and may in the future adversely affect us as well as our suppliers and franchisees, whose performance may have a significant impact on our results. Such interruptions and price increases could be caused by shortages, inflationary pressures, tariffs, unexpected increases in demand, transportation-related issues, labor-related issues, technology-related issues, weather-related events, natural disasters, geopolitical tensions, acts of war, terrorism or other hostilities, or other factors beyond our control or that of our suppliers or franchisees. Interruptions in our System’s supply chain or ineffective contingency planning can increase our costs, impact ingredient quality, delay new restaurant openings, and/or limit the quality or availability of products, equipment and other materials that are critical to our System’s operations or to restaurant development.

Our franchise business model presents a number of risks.

Our success as a heavily franchised business relies to a large degree on the financial success and cooperation of our franchisees, including our developmental licensees and affiliates. Our restaurant margins arise from two sources: fees from franchised restaurants (e.g., rent and royalties based on a percentage of sales) and, to a lesser degree, sales from Company-owned and operated restaurants. Our franchisees manage their businesses independently and therefore are responsible for the day-to-day operation of their restaurants. The revenues we realize from franchised restaurants are largely dependent on the ability of our franchisees to grow their sales. Business risks affecting our operations also affect our franchisees. If franchisee sales trends worsen, or if any of such business risks materialize or intensify, our financial results could be negatively affected, which may be material.

Our success also relies on the willingness and ability of our franchisees and affiliates to implement major initiatives, such as the restaurant modernization, operational, technological and training initiatives contemplated by our McDonald’s > NEXT strategy, which may include financial investment, and to remain aligned with us on operating, value/promotional and capital-intensive reinvestment plans. The ability of franchisees to contribute to the achievement of our plans is dependent in large part on the availability to them of funding at reasonable interest rates and may be negatively impacted by the financial markets in general, by their or our creditworthiness or by banks’ lending practices. If our franchisees are unwilling or unable to invest in major initiatives or are unable to obtain financing at commercially reasonable rates, or at all, our future growth and results of operations could be adversely affected.

Our operating performance could also be negatively affected if our franchisees experience food safety or other operational problems or project an image inconsistent with our brand and values, particularly if our contractual and other rights and remedies are limited, costly to exercise or subjected to litigation and potential delays. If franchisees do not successfully operate restaurants in a manner consistent with our required standards, our brand’s image and reputation could be harmed, which in turn could hurt our business and operating results.

Our ownership mix also affects our results and financial condition. The decision to own restaurants or to operate under franchise or license agreements is driven by many factors whose interrelationship is complex. The benefits of our more heavily franchised structure depend on various factors, including whether we have effectively selected franchisees, licensees and/or affiliates that meet our rigorous standards, whether we are able to successfully integrate them into our structure and whether their performance and the resulting ownership mix supports our brand and financial objectives.

Continued challenges with respect to labor, including availability and cost, could adversely impact our business and results of operations.

Our success depends in part on our System’s ability to effectively attract, recruit, develop, motivate and retain qualified individuals to work in McDonald’s restaurants and to maintain appropriately-staffed restaurants in an intensely competitive labor market. We and our franchisees have experienced and may continue to experience challenges in adequately staffing certain McDonald’s restaurants, which can negatively impact operations, including speed of service to customers, and customer satisfaction levels. The System’s ability to meet its labor needs as they evolve is generally subject to a variety of factors, including the availability of sufficient workforce, unemployment levels and prevailing wages in the markets in which we operate.

Further, our System has experienced increased costs and competition associated with attracting, recruiting, developing, motivating and retaining qualified employees, as well as with promoting awareness of the opportunities of working at McDonald’s restaurants. We and our franchisees also continue to be impacted by increasingly complex U.S. and international laws and regulations affecting our respective workforces. These laws and regulations are increasingly focused on, and in certain cases impose requirements with respect to, employment matters such as wages and hours, healthcare, immigration, retirement and other employee benefits and workplace practices. Such laws and regulations can expose us and our franchisees to increased costs and other effects of compliance, including potential liability, and all such labor and compliance costs could have a negative impact on our Company-owned and operated margins and franchisee profitability.

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Our potential exposure to reputational and other harm regarding our workplace practices or conditions or those of our independent franchisees or suppliers, including those giving rise to claims of harassment or discrimination (or perceptions thereof) or workplace safety, could have a negative impact on consumer perceptions of us and our business. Additionally, economic action, such as boycotts, protests, work stoppages or campaigns by labor organizations, could adversely affect us (including our ability to attract, recruit, develop, motivate and retain talent) or our franchisees and suppliers, whose performance may have a significant impact on our results.

Effective succession planning is important to our continued success.

Effective succession planning for management is important to our long-term success. Failure to effectively attract, recruit, develop, motivate and retain qualified key personnel, or to execute smooth personnel transitions, could disrupt our business and adversely affect our results.

Food safety concerns may have an adverse effect on our business.

Food safety concerns have had and may in the future have an adverse effect on our business. Our ability to increase sales and profits depends on our System’s ability to meet expectations for safe food and on our ability to manage the potential impact on McDonald’s of food-borne illnesses and food or product safety issues that may arise in the future, including in the supply chain, restaurants or delivery. Food safety is a top priority, and we dedicate substantial resources aimed at ensuring that our customers enjoy safe food products, including as our menu and service model evolve. However, food safety events, including instances of food-borne illness, have occurred within the food industry and our System from time to time and could occur in the future. Instances of food tampering, food contamination or food-borne illness, whether actual or perceived, could adversely affect our brand, reputation and financial results.

If we do not effectively manage our real estate portfolio, our operating results may be negatively impacted.

We have significant real estate operations, primarily in connection with our restaurant business. We generally own or secure a long-term lease on the land and building for conventional franchised and Company-owned and operated restaurant sites. We seek to identify and develop restaurant locations that offer convenience to customers and long-term sales and profit potential. As we generally secure long-term real estate interests for our restaurants, we have limited flexibility to quickly alter our real estate portfolio. The competitive business landscape continues to evolve in light of changing business trends, consumer preferences, trade area demographics, consumer use of digital, delivery and drive thru, local competitive positions and other economic factors. If our restaurants are not located in desirable locations, or if we do not evolve in response to these factors, it could adversely affect Systemwide sales and profitability.

Our real estate values and the costs associated with our real estate operations are also impacted by a variety of other factors, including governmental regulations, insurance, zoning, tax and eminent domain laws, interest rate levels, the cost of financing, natural disasters, acts of war, terrorism or other hostilities, or other factors beyond our control. A significant change in real estate values, or an increase in costs as a result of any of these factors, could adversely affect our operating results.

Information technology system failures or interruptions, breaches of network security or misuse of technology tools may impact our operations or cause reputational harm.

We are increasingly reliant upon technology systems, such as point-of-sale, that support our business operations, including our digital and delivery solutions, and technologies that facilitate communication and collaboration with affiliated entities, customers, employees, franchisees, suppliers, service providers or other independent third parties, whether developed and maintained by us or provided by third parties. Any failure or interruption of these systems could significantly impact our or our franchisees’ operations, or our customers’ experiences and perceptions.

Security incidents and breaches have occurred from time to time and may occur in the future involving our systems, the systems of the parties with whom we communicate or collaborate (including franchisees) or the systems of third-party providers. Additionally, cybersecurity threats continue to become more sophisticated, including AI-enabled attacks and deepfake technology. Incidents may include unauthorized access, phishing attacks, account takeovers, denial of service, computer viruses, deepfakes and other malicious uses of AI, introduction of malware or ransomware and other disruptive problems caused by hackers or unintentional events. Certain of these technology systems contain personal, confidential, financial and other information of our customers, employees, franchisees and their employees, suppliers and other third parties, as well as financial, proprietary and other confidential information related to our business. Despite response procedures and measures in place in the event an incident occurs, an event could result in disruptions, shutdowns, or a security breach including the theft or unauthorized disclosure of certain of the above-described information. The actual or alleged occurrence of any of these types of incidents could result in mitigation costs, reputational damage, adverse publicity, loss of consumer confidence, reduced sales and profits, complications in executing our growth initiatives and regulatory and legal risk, including administrative fines, criminal or civil penalties or civil liabilities.

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Despite the implementation of business continuity measures, any of these technology systems could become vulnerable to damage, disability or failures due to fire, power loss, telecommunications failure or other catastrophic events. Certain technology systems may also become vulnerable, unreliable or inefficient in cases where technology vendors limit or terminate product support and/or maintenance. Our increasing reliance on third-party systems also subjects us to risks faced by those third-party businesses, including operational, security and credit risks. Further, the technology systems of third parties upon which we rely to conduct our business could be compromised in a manner that adversely affects us and our technology systems, information and business continuity. If technology systems were to fail or otherwise be unavailable, or if business continuity or disaster recovery plans were not effective, and we were unable to recover in a timely manner, we could experience an interruption in our or our franchisees’ operations. While we maintain insurance coverage designed to address certain aspects of cybersecurity risks, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise.

In addition, the AI tools we are incorporating into certain aspects of our business may not generate the intended efficiencies, may increase our exposure to risks (both known and unknown), and could adversely impact our business results. These risks include potential operational disruptions, data integrity issues, and unintended consequences from algorithmic decision-making. Further, emerging global and U.S. regulations governing AI use – including requirements for responsible use, transparency, bias mitigation, accountability, and explainability – may impose significant compliance obligations and increase reputational risk. Failure to comply with these standards or to effectively manage associated risks, including ethical considerations such as fairness, non-discrimination, and responsible deployment, could result in regulatory penalties, litigation, operational setbacks or adverse brand perceptions.

LEGAL AND REGULATORY

Increasing regulatory and legal complexity may adversely affect our business and financial results.

Our regulatory and legal environment worldwide exposes us to complex compliance, litigation and similar risks that could affect our operations and results in material ways. Many of our markets are subject to increasing, conflicting and highly prescriptive legislative, regulatory or administrative developments and enforcement priorities involving, among other matters, restaurant operations, product packaging and extended producer responsibility, marketing, use of information technology systems, the nutritional and allergen content and safety of our food and other products, labeling and other disclosure practices. Compliance efforts with those regulations may be affected by ordinary variations in food preparation among our own restaurants and the need to rely on the accuracy and completeness of information from third-party suppliers. We also are subject to increasing public focus, including by governmental and non-governmental organizations, on environmental, social responsibility and corporate governance matters. Our success depends in part on our ability to manage the impact of regulations and other initiatives that can affect our business plans and operations, which have increased and may continue to increase our costs of doing business and exposure to litigation, governmental investigations or other proceedings.

We are also subject to legal proceedings that may adversely affect our business, including, but not limited to, class actions, administrative proceedings, government investigations and proceedings, shareholder proceedings, employment and personal injury claims, landlord/tenant disputes, supplier-related disputes, and claims by current or former franchisees. Regardless of whether claims against us are valid or whether we are found to be liable, claims may be expensive to defend and may divert management’s attention away from operations.

Litigation, legislative and regulatory action concerning our relationship with franchisees and the legal distinction between our franchisees and us for employment law or other purposes, if determined adversely, could challenge our franchise business model, increase costs, negatively impact our business operations and the business prospects of our franchisees and subject us to incremental liability for their actions. Similarly, although our commercial relationships with our suppliers remain independent, there may be attempts to challenge that independence, which, if determined adversely, could also increase costs, negatively impact the business prospects of our suppliers, and subject us to incremental liability for their actions.

Our results could also be affected by the following:

•the relative level of our defense costs, which vary from period to period depending on the number, nature and procedural status of pending proceedings;

•the cost and other effects of settlements, judgments or consent decrees, which may require us to make disclosures or take other actions that may affect perceptions of our brand and products; and

•adverse results of pending or future litigation, including litigation challenging the composition and preparation of our products, or the appropriateness or accuracy of our marketing or other communication practices.

A judgment significantly in excess of any applicable insurance coverage or third-party indemnity could materially adversely affect our financial condition or results of operations. Further, adverse publicity resulting from claims may hurt our business. If we are unable to effectively manage the risks associated with our complex regulatory and legal environment, it could have a material adverse effect on our business and financial condition.

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Changes in tax laws and unanticipated tax liabilities could adversely affect the taxes we pay and our profitability.

We are subject to income and other taxes in the U.S. and foreign jurisdictions, and our operations, plans and results are affected by tax and other initiatives around the world. In particular, we are affected by the impact of changes to tax laws or policy or related authoritative interpretations. We are also impacted by settlements of pending or any future adjustments proposed by taxing and governmental authorities inside and outside of the U.S. in connection with our tax audits, all of which will depend on their timing, nature and scope. Any significant increases in income tax rates, changes in income tax laws or unfavorable resolution of tax matters could have a material adverse impact on our financial results.

Changes in accounting standards or the recognition of impairment or other charges may adversely affect our future operations and results.

New accounting standards or changes in financial reporting requirements, accounting principles or practices, including with respect to our critical accounting estimates, could adversely affect our future results. We may also be affected by the nature and timing of decisions about underperforming markets or assets, including decisions that result in impairment or other charges that reduce our earnings.

In assessing the recoverability of our long-lived assets, we consider changes in economic conditions and make assumptions regarding estimated future cash flows and other factors. These estimates are highly subjective and can be significantly impacted by many factors such as global and local business and economic conditions, operating costs, inflation, interest rate levels, competition, consumer and demographic trends and our restructuring activities. If our estimates or underlying assumptions change in the future, we may be required to record impairment charges. Any such changes could have a significant adverse effect on our reported results for the affected periods.

If we fail to comply with privacy and data protection laws, we could be subject to legal proceedings and penalties, which could negatively affect our financial results or brand perceptions.

We are subject to legal and compliance risks and associated liability related to privacy and data protection requirements, including those associated with our technology-related services and platforms made available to business partners, customers, employees, franchisees or other third parties. An increasing number of our markets have enacted privacy and data protection requirements (including the European Union’s General Data Protection Regulation and various U.S. state-level laws), and further requirements are likely to be proposed or enacted in the future. Failure to comply with these privacy and data protection laws could result in legal proceedings and substantial administrative fines, criminal or civil penalties or civil liabilities and materially adversely impact our financial results or brand perceptions. Additionally, as we expand digital engagement, data collection and personalization through AI, we face new and heightened risks under laws and regulations, including U.S. state-level regulations and the EU AI Act. Non-compliance or misuse of personal data could lead to significant fines, litigation and reputational harm.

MACROECONOMIC AND MARKET CONDITIONS

Unfavorable general economic conditions could adversely affect our business and financial results.

Our results of operations are substantially affected by economic conditions, including inflationary pressures, which can vary significantly by market and can impact consumer disposable income levels and spending habits. Economic conditions can be impacted by a variety of factors, including hostilities, epidemics, pandemics and actions taken by governments to manage national and international economic matters, whether through austerity, stimulus measures or trade measures, and initiatives intended to control wages, unemployment, credit availability, inflation, taxation and other economic drivers. Sustained adverse economic conditions or periodic adverse changes in economic conditions put pressure on our operating performance and business continuity disruption planning, and our business and financial results may suffer as a result.

Our results of operations are also affected by fluctuations in currency exchange rates, and unfavorable currency fluctuations could adversely affect reported earnings.

Health epidemics or pandemics could adversely affect our business and financial results.

Health epidemics or pandemics have in the past and may in the future impact macroeconomic conditions, consumer behavior, labor availability and supply chain management, as well as local operations in impacted markets, all of which can adversely affect our business, financial results and outlook. Governmental responses to health epidemics or pandemics, including operational restrictions and temporary restaurant closures, can also affect the foregoing items and adversely affect our business and financial results. The duration and scope of a health epidemic or pandemic can be difficult to predict and depends on many factors, including the emergence of new variants and the availability, acceptance and effectiveness of preventative measures. A health epidemic or pandemic may also heighten other risks disclosed in these Risk Factors, including, but not limited to, those related to the availability and costs of labor and commodities, supply chain interruptions, consumer behavior and consumer perceptions of our brand and industry.

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Changes in commodity and other operating costs could adversely affect our results of operations.

The profitability of our Company-owned and operated restaurants depends in part on our ability to anticipate and react to changes in commodity costs, including food, paper, supplies, fuel and utilities, as well as distribution and other operating costs, including labor. Volatility in certain commodity prices and fluctuations in labor costs have adversely affected and in the future could adversely affect our operating results by impacting restaurant profitability. The commodity markets for some of the ingredients we use, such as beef and chicken, are particularly volatile due to factors such as seasonal shifts, climate conditions, industry demand and other macroeconomic conditions, international commodity markets, food safety concerns, product recalls, government regulation and acts of war, terrorism or other hostilities, all of which are beyond our control and, in many instances, unpredictable. Our System can only partially address future price risk through hedging and other activities, and therefore increases in commodity costs could have an adverse impact on our profitability.

A decrease in our credit ratings or an increase in our funding costs could adversely affect our profitability.

Our credit ratings may be negatively affected by our results of operations or changes in our debt levels. As a result, our interest expense, the availability of acceptable counterparties, our ability to obtain funding on favorable terms, our collateral requirements and our operating or financial flexibility could all be negatively affected, especially if lenders were to impose new operating or financial covenants.

Our operations may also be impacted by regulations affecting capital flows, financial markets or financial institutions, which can limit our ability to manage and deploy our liquidity or increase our funding costs. Any such events could have a material adverse effect on our business and financial condition.

The trading volatility and price of our common stock may be adversely affected by many factors.

Many factors affect the trading volatility and price of our common stock in addition to our operating results and prospects. These factors, many of which are beyond our control, include the following:

•the unpredictable nature of global economic and market conditions;

•governmental action or inaction in light of key indicators of economic activity or events that can significantly influence financial markets, particularly in the U.S., which is the principal trading market for our common stock, and media reports and commentary about economic, trade or other matters, even when the matter in question does not directly relate to our business;

•trading activity in our common stock, in derivative instruments with respect to our common stock or in our debt securities, which can be affected by: market commentary (including commentary that may be unreliable or incomplete); unauthorized disclosures about our performance, plans or expectations about our business; our actual performance and creditworthiness; investor confidence, driven in part by expectations about our performance; actions by shareholders and others seeking to influence our business strategies; portfolio transactions in our common stock by significant shareholders; and trading activity that results from the ordinary course rebalancing of stock indices in which McDonald’s may be included, such as the S&P 500 Index and the Dow Jones Industrial Average;

•the impact of our stock repurchase program or dividend rate; and

•the impact of corporate actions, including changes to our corporate structure, and market and third-party perceptions and assessments of such actions, including those we may take from time to time as we implement our business strategies in light of changing business, legal and tax considerations.

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Our business is subject to an increasing focus on environmental and social impact matters.

In recent years, there has been an increasing focus by stakeholders – including employees, franchisees, customers, suppliers, governmental and non-governmental organizations and investors – on environmental and social impact matters. A failure, whether real or perceived, to address environmental and social impact matters or to achieve progress on our environmental and social impact initiatives as intended, could adversely affect our business, including by heightening other risks disclosed in these Risk Factors, such as those related to consumer behavior, brand perception, labor availability and costs, supply chain interruptions, commodity costs and legal and regulatory complexity. Stakeholder expectations may vary significantly, so our taking a position, whether real or perceived, on environmental and social impact, public policy, geopolitical and similar matters could also adversely impact our business. Increasing scrutiny of such initiatives, including via legislative, regulatory or administrative developments and enforcement priorities, may create compliance challenges, reputational risks and potential litigation exposure.

The standards we set for ourselves regarding environmental and social impact matters, and our ability to meet such standards, may also impact our business. For example, we are working to manage risks and costs to our System related to climate change, greenhouse gases, and diminishing energy and water resources, and we have announced initiatives relating to, among other things, climate action, sustainability and responsible sourcing. In addition, we are engaging in social impact initiatives, including community engagement, philanthropy and our commitment to inclusion. We have faced increased scrutiny related to reporting on and achieving these initiatives, as well as continued public focus on similar matters, such as packaging and waste, animal health and welfare, deforestation and land use. We have also experienced increased pressure from stakeholders to provide expanded disclosure and establish additional commitments, targets or goals, and take actions to meet them, which could expose us to additional market, operational, execution and reputational costs and risks. These additional commitments may or may not overlap, and may in some cases conflict, with new disclosure required in these areas. Moreover, addressing environmental and social impact matters requires Systemwide as well as third party coordination and alignment, over which we do not have complete control and which may be unpredictable. The standards by which certain environmental and social impact matters are measured are also evolving and subject to assumptions that could change over time.

Events such as severe weather conditions, natural disasters, hostilities, social and geopolitical unrest and climate change, among others, can adversely affect our results and prospects.

Severe weather conditions, natural disasters, acts of war, terrorism or other hostilities, social and geopolitical unrest, including anti-American sentiment, and climate change (or expectations or uncertainty about them) can adversely affect consumer confidence levels and behavior, supply availability and costs and local operations, including temporary restaurant closures and delayed new restaurant openings, in impacted markets, all of which can affect our results and prospects. Climate change may also increase the frequency and severity of weather-related events and natural disasters. Our receipt of proceeds under any insurance we maintain with respect to some of these risks may be delayed or the proceeds may be insufficient to cover our losses fully.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

There were no material changes to the disclosures made in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 regarding these matters.

Item 4. Controls and Procedures

Disclosure Controls

An evaluation was conducted under the supervision and with the participation of the Company’s management, including the CEO and CFO, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of September 30, 2026. Based on that evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of such date to provide reasonable assurances that information required to be disclosed by the Company in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to the Company's management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Internal Control Over Financial Reporting

The Company is in the process of a multi-year, comprehensive transformation of its technology and operating model across multiple areas of the business, in an effort to modernize our processes and create efficiencies.

This technology transformation includes the implementation of certain new systems. Operating model transformation includes centralizing or outsourcing certain more routine functions.

The Company is performing this implementation in the ordinary course of business to increase efficiency and to modernize the tools and technology used in its key financial processes. This is not in response to any identified deficiency or weakness in the Company's internal control over financial reporting. As the phased implementation of the systems continues, the Company has modified certain processes and procedures to enhance the quality of internal control over financial reporting. The Company will continue to monitor and modify, as needed, the design and operating effectiveness of key control activities to align with the updated business processes and capabilities of the new financial systems.

Except for these changes, the Company’s management, including the CEO and CFO, confirm there has been no change in the Company's internal control over financial reporting during the fiscal quarter ended September 30, 2026 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

There were no material changes to the disclosure made in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 regarding these matters.

Item 1A. Risk Factors

For a discussion of risk factors affecting the Company's business, refer to the “Risk Factors" section in Part I, Item 2 of this report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities*

The following table presents information related to repurchases of common stock the Company made during the quarter ended September 30, 2026:

Period			Total Number of Shares Purchased						Average Price Paid per Share						Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)						Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
																								July 1-31, 2026			853,497						$	273.79					853,497						$	11,498,131,539
																								August 1-31, 2026			619,356						271.51						619,356						11,329,969,897
																								September 1-30, 2026			465,344						251.45						465,344						11,212,958,001
Total			1,938,197						$	267.70					1,938,197

*Subject to applicable law, the Company may repurchase shares directly in the open market, in privately negotiated transactions or pursuant to derivative instruments and plans complying with Rule 10b5-1 under the Exchange Act, among other types of transactions and arrangements.

(1)As disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, the Company's Board of Directors approved a share repurchase program on November 21, 2024, effective January 1, 2025 with no specified expiration date, that authorized the purchase of up to $15.0 billion of the Company's outstanding common stock.

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Item 5. Other Information

Rule 10b5-1 Trading Plans

In accordance with the disclosure requirement set forth in Item 408(a) of Regulation S-K, the following table discloses the officers (as defined in Rule 16a-1(f) under the Exchange Act) and directors who adopted a contract, instruction or written plan for the sale of the Company’s securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) during the quarter ended September 30, 2026. These trading plans were adopted during an open trading window.

Name / Title

Type of Plan

Adoption Date

End Date

Aggregate Number of Securities to be Sold

Plan Description

Jonathan Banner / EVP – Global Chief Impact Officer

Rule 10b5-1 trading plan

August 10, 2026

November 30, 2026

1,500

Sale of shares

Morgan Flatley / EVP – Global Chief Marketing Officer

Rule 10b5-1 trading plan

August 18, 2026

November 16, 2027

12,651[1]

Sale of shares

Desiree Ralls-Morrison / EVP – Global Chief Legal Officer

Rule 10b5-1 trading plan

August 28, 2026

December 31, 2027

25,416[2]

Sale of shares, and exercise and sale of stock options

[1] Represents 4,291 vested shares and a maximum of 8,360 shares that are eligible to vest pursuant to Ms. Flatley's 2024 performance-based restricted stock unit ("PRSU") award. The actual number of shares that will vest under Ms. Flatley's 2024 PRSU award will depend upon the Company's performance against certain pre-established targets and will determine the number of shares that may ultimately be sold pursuant to the trading plan.

[2] Represents 16,892 vested shares and a maximum of 8,524 shares that are eligible to vest pursuant to Ms. Ralls-Morrison's 2024 PRSU award. The actual number of shares that will vest under Ms. Ralls-Morrison's 2024 PRSU award will depend upon the Company's performance against certain pre-established targets and will determine the number of shares that may ultimately be sold pursuant to the trading plan.

Other than as disclosed above, no officer or director adopted, modified, or terminated a contract, instruction or written plan for the purchase or sale of the Company’s securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or a non-Rule 10b5-1 trading arrangement.

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Item 6. Exhibits

Exhibit No.

Description

(31.1)

Rule 13a-14(a) Certification of Chief Executive Officer.

(31.2)

Rule 13a-14(a) Certification of Chief Financial Officer.

(32.1)

Certification pursuant to 18 U.S.C. Section 1350 by the Chief Executive Officer, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(32.2)

Certification pursuant to 18 U.S.C. Section 1350 by the Chief Financial Officer, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(101.INS)

XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

(101.SCH)

Inline XBRL Taxonomy Extension Schema Document.

(101.CAL)

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

(101.DEF)

Inline XBRL Taxonomy Extension Definition Linkbase Document.

(101.LAB)

Inline XBRL Taxonomy Extension Label Linkbase Document.

(101.PRE)

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

(104)

Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

						McDONALD’S CORPORATION         (Registrant)
						/s/ Ian F. Borden
Date:			November 6, 2026			Ian F. Borden
						Executive Vice President and Global Chief Financial Officer

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