McDonald's Corporation

Hello, and welcome to McDonald's 4th Quarter 2021 Investor Conference Call. At the request of McDonald's Corporation, this conference is being recorded. Following today's presentation, there will be a question and answer session for investors. At that time, investors only may ask a question by pressing star 1 on your touch phone phone. I would now like to turn the conference over to Mr. Mike Seplak.

investor relations officer for mcdonald's corporation mr seplak you may begin hello everyone and thank you for joining us with me on the call today our president and chief executive officer chris kamchinski and chief financial officer kevin ozan as a reminder the forward-looking statements in our earnings release and 8k filing also apply to our comments on the call today both of those documents are available on our website as our reconciliations of any non-GAAP financial measures mentioned on today's call, along with their corresponding GAAP measures. Following prepared remarks this morning, we will take your questions. Please limit yourself to one question and then re-enter the queue for any additional questions. Today's conference call is being webcast and is also being recorded for replay via our website. And now, I'll turn it over to Chris.

Thanks, Mike, and good morning, everyone. A little more than a year ago, I said that we were witnessing the beginning of the next great chapter at McDonald's, and it's clear that there has never been a better time to be part of brand McDonald's than right now. The past 12 months continue to demonstrate what makes McDonald's different, the strength of our people, the might of our scale and supply chain, the agility of our system, the importance of local ownership operating in the communities we serve, and the power of the McDonald's brand. Despite the many disruptions caused by COVID, it's clear from our performance that when the going gets tough, McDonald's gets going, and our system's inherent strengths become even more apparent. 2021 was a record-setting year for McDonald's on many dimensions, and we used this momentum to lean into our competitive strengths and build further advantage. Guided by our strategic plan accelerating the arches, we made significant investments behind our brand purpose to feed and foster communities while envisioning new ways for us to serve our customers, leveraging our growing digital capabilities. As a system, we are laser-focused on our MCD growth pillars. In the first full year of the Accelerating the Arches strategy, we made great strides as we've maximized our marketing, committed to our core menu, and doubled down on the 3Ds of digital drive-through and delivery to create seamless, memorable experiences for our customers. Our focus on the MCDs has driven broad-based growth in 2021. While we expect that 2022 will be a year of continued progress, we also anticipate that many of the challenges we experience in 2021 will endure. A surge in COVID-19 cases and a return of restrictions in many of our markets are creating uncertainty around the world, exacerbating labor shortages and supply chain delays. Additionally, rising consumer inflation levels are putting pressure on restaurant economics. Focusing on our foundational operations, expanding our growing digital advantages, and continuing to put the health and safety of our customers and crew first will remain critical to executing on accelerating the arches this year. And with strong average unit volumes and restaurant cash flows, the company and our franchisees are well positioned to withstand the pressures ahead. In fact, franchisee cash flows hit all-time highs in most of our top markets, including the U.S., U.K., Canada, Germany, and Japan. I've said it repeatedly over the past two years, and I'll say it again. I have never been more proud of the commitment and leadership of our restaurant managers and crews. Through even the most difficult moments, they have continued to be strong, keeping our restaurants running while providing hope and inspiration and extraordinary service to our customers and our communities every hour of every day. Because of our unparalleled scale and dedication of our entire system, our employees, franchisees, and suppliers, 2021 was a banner year for McDonald's. despite the continued disruptions caused by COVID. In addition to the franchising cash flow performance I mentioned, we hit all-time highs for global system-wide sales of $112 billion, comparable sales growth in the U.S. of 13.8%, which represents over $5 billion of system-wide sales growth, and operating income of more than $10 billion. To expand on how Accelerating the Arches drove success, let me pass it over to Kevin.