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Annual Report 2009

2009 Highlights:
Comparable Sales Growth

3.8%
Earnings Per Share Growth

9%
Total Cash Returned to Shareholders 2007–2009

$

16.6

Billion

To Our Valued Shareholders:

To state the obvious, 2009 was a tumultuous year economically. Despite this tough environment, McDonald’s delivered another exceptional year of growth, posting strong sales and increased market share around the world. In 2009, global comparable sales increased 3.8 percent, fueled by solid gains in the United States (+2.6 percent), Europe (+5.2 percent), Asia/Pacific, Middle East and Africa (+3.4 percent), Latin America (+5.3 percent) and Canada (+5.8 percent). Earnings per share for the year increased 9 percent to $4.11 (13 percent in constant currencies), while consolidated operating income increased 6 percent (10 percent in constant currencies). We also returned $5.1 billion to shareholders through share repurchases and dividends paid, bringing our three-year cash return total to $16.6 billion—notably at the high end of our stated target of $15 to $17 billion for the years 2007 through 2009. Concerning McDonald’s performance, there are three milestones that I want to recognize: First, our 2009 comparable sales increase marked the sixth consecutive year of positive sales in every geographic segment of our business. Second, our increasingly relevant menu options, combined with clear competitive advantages in convenience and value, enabled us to serve 60 million customers per day last year. This is up 2 million from the prior year and a remarkable 14 million more per day compared to 2002. Third, as a result of these sustained operating results, McDonald’s total stock return for the three-year period ending in 2009 was ranked number one among the 30 blue-chip companies that comprise the Dow Jones Industrial Average. These singular achievements relate directly to our historic decision in 2003 to reinvent McDonald’s by becoming “better, not just bigger.” I say historic because we could not have made a more wise decision for our System than to implement our Plan to Win and refocus our efforts on restaurant execution—with the goal of improving the overall experience for our customers. There is nothing profound about our Plan to Win. It essentially identifies the five core drivers of our business—people, products, place, price and promotion—and aligns our industry-leading owner/operators, world-class suppliers and talented, experienced employees around initiatives that drive results. Jim Skinner Vice Chairman and CEO

Operating Income (In billions)

* Includes $1.7 billion of charges related to the Latin America developmental license transaction.

3-year Compound Annual Total Return (2007–2009)

1

McDonald’s Corporation Annual Report 2009

As we survey the business and competitive landscape today, it’s clear our investment in the Plan to Win has paid off. We are operating from a position of strength and continue to become more relevant in the lives of our customers. It’s also remarkable how our Company culture has evolved since we initiated our Plan to Win. Today, we are aligned throughout the System. We have a leadership culture that embraces change and rejects complacency. We are continually focused on what’s working and then leveraging our scale around the world for the overall good of our customers and our System. For example, our intense effort on restaurant reimaging, which initially excited customers in Europe, is now a foundational element of each Area of the World business plan. Similarly, our successful value menu, pioneered so well in the United States, now appears on McDonald’s menu boards throughout the world. From restaurant operations to marketing … from consumer insights to menu management … in virtually every aspect of our business … we are continually improving and will never be satisfied. We truly are “better, not just bigger.” Looking ahead, we see tremendous opportunity for brand...
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