Hello and welcome to McDonald’s October 21, 2014 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. (Operator Instructions). I would now like to turn the conference over to Mr. Chris Stent, Vice President of Investor Relations for McDonald’s Corporation. Mr. Stent, you may begin.

Hello, everyone, and thank you for joining us. With me on the call are President and Chief Executive Officer, Don Thompson, and Chief Financial Officer, Pete Bensen. Today’s conference call is being webcast live and recorded for replay by phone, webcast, and podcast. Before I turn it over to Don, I want to remind everyone that the forward-looking statements in our earnings release and 8-K filing also apply to our comments. Both documents are available at www.investor.mcdonalds.com, as are reconciliations of any non-GAAP financial measures mentioned on today’s call with their corresponding GAAP measures. And now I’d like to turn it over to Don. Don?

Thank you, Chris, and good morning, everyone. Let me start by saying that we are disappointed by our recent performance which fell short of our expectations. Global comparable sales decreased 3.3% for the quarter, operating income was down 14% in constant currencies and earnings per share was $1.09, a 28% decrease in constant currencies. Third quarter results remain pressured by a number of internal and external factors. A significantly higher tax rate, which was due to an increase in tax reserves in certain foreign markets, impacted earnings per share by $0.26 per share. In addition, the supplier issue in China negatively impacted EPS by approximately $0.15 per share, and the estimated impact of store closures in Russia and the Ukraine impacted EPS by $0.01 per share. Excluding the impact of these items, earnings per share for the quarter would have been relatively flat compared to last year. Pete will talk more about these impacts shortly in his comments. This morning I’d like to share our strategy for growth and discuss the actions that we’re taking to improve performance in the U.S. and our priority markets of Germany, Japan and Australia. In some of our markets the reality is that we haven’t been changing at the same rate as our customers’ eating out expectations or, more specifically, their expectations of us at McDonald’s. So we’re changing. And we’re changing aggressively as we refocus on building the business for the McDonald’s system and for our shareholders. The key to our success will be our ability to deliver a more relevant McDonald’s experience for all of our customers. We have listened to our customers and we’ve listened to our customers around the world and better understand what their future experience should look like. Customers want to personalize their meals with locally relevant ingredients.…

Thanks, Don, and hello, everyone. In my nearly seven years as CFO third quarter 2014 was perhaps the most challenging because of the confluence of factors all pointing in the same negative direction. Similar to Don, I will depart from the usual approach to my prepared remarks. Instead of walking through the income statement, I’ll begin by discussing the four most significant factors impacting quarterly results. From there I will provide the usual updates on some key quarterly numbers, commodities, pricing and currencies. Then lastly, I will address a couple of topics that I recognized are of utmost interest to you our spending levels and our business model. Let’s begin by reviewing the significant decline in third quarter earnings per share versus a year ago which was primarily due to four factors. The first was a much higher effective tax rate of 44.4%. As indicated in our August sales release, we expected the third quarter rate to be above our annual range of 31% to 33% primarily due to a change in our earnings mix. Subsequent to that sales release, two additional factors drove the effective rate even higher, the tax and interest cost associated with an unfavourable foreign tax court ruling impacting 2003 through 2008 and the impact of additional changes in tax reserves related to income tax audit progression in certain foreign jurisdictions. In total, the court ruling and our audit related reserve adjustments negatively impacted third quarter earnings by approximately $260 million or $0.26 per share. The second most significant factor impacting third quarter results was the China supplier issue. In early September, we estimated the total impact from loss sales, expenses associated with our customer recovery efforts and the tax effect of these items to be in the range of $0.15 to $0.20 per share. The…

Thanks, Pete. I will now open the call for analysts and investor questions. (Operator Instructions). The first question is from Brian Bittner of Oppenheimer.

Thank you. As it relate to your U.S. performance, I believe the comp underperformed the industry by a little over 500 basis points in both July and August. And I was wondering if you could provide what that gap to the industry looked like in September?

Hey, Brian, this is Don. Yes, our comp gap in the month of September was a little over 600 basis points, so a 6.3%.

Next question is from Joe Buckley of Bank of America.

Thank you. A couple questions, if I can. So you’re talking about a couple of changes in the U.S., a simplified menu effective in January and then three markets where you have either more extensive Create Your Own experience changes. Could you talk about what a customer in the U.S. restaurant is going to see broadly I would assume in January from a simplified menu? And then, what they are going to see and experience in those three markets that I think you are targeting for the third quarter? And then, just one financial question. Pete, the CapEx coming down make sense I think. How much more room is there for 2015 in terms of that CapEx number coming down more significantly?

Hey Joe. First of all, relative to consumers in the U.S. in 2015, they will see several different things. And I'll try to talk about a few of those. One, is because we are moving to more regionalize local windows again, which is a strength of the McDonald system, and we have moved away from that. They will see more regional products throughout the U.S. We have about 21 regions. We have over 150 odd cooperatives across the United States and so those markets will get to pull down from shelf promotions. And they can pull down from some of the broader menu pipeline offerings that we have. So customers will begin to see that again and there will be a stronger balance between the regional markets and then the national base marketing. As you may recall, the regional markets typically will focus on offerings and promotions, the national markets will focus on the quality, the brand McDonald, what we are talking about relative to our people in larger events. So that's one major change that you will begin to see and customers will see. The second one is going to be how we engage in conversation with our customers through both social and traditional medium. So this is going to be something that's more felt and heard relative to dialog than it's just basically seen. With the launch of Our food Your questions is a great example of that and that is a platform we will leverage across the year. You will see initial expansion of the experience in the future in those three markets that we talked about. Experience of the future is much more than just Create Your Taste, it is a broader service experience, it is a broader digitally engaged, if you would, mobilily engaged experience in the restaurants. And some of you may have seen that relative some of our markets like France or what's taking place in Australia. Also, we will be launching the mobile app, the global app. In the U.S., it will include promotional offers, also some mobile payment opportunities such as Apple Pay and also some things possibly with our e-Arch Card. And the last piece would be some of the markets may see some of the testing that would go on relative the various pricing structures that had been a balance pricing relationships across the entire menu board. So these are some of the things that will be out and about in the marketplace. And I’m sure our customers will give us appropriate feedback. But we look aggressively to get these things moving.

And Joe its Pete. Regarding the CapEx question, a significant majority of this year's reduction was due to a reduction in openings. And we are frankly scrubbing the pipeline and there is probably opportunity for that new opening number to go down a little bit more next year. What we are going to continue to investigate as we move to finalizing the plans over the next month to six weeks, is what is the level of reinvestment spending that we’re going to need around the experience of the future and some of these initiatives. So when we get back together in January, we’ll be able to give you more specific guidance not only on total capital but how that splits between new units and reinvestment.

Next question is from Matt DiFrisco at Buckingham

Thank you. I guess Pete, can you just talk about how may be in context the recent struggles globally, especially in APNEA may have impacted some of the things I think that people have also discussed or debated with you somehow opportunities possibly to refranchise take that 81% global number higher as well as maybe even divesting some businesses like Japan, is there any impact to the valuation of what we might get from those of the cash proceeds? Given the near term struggles if you can give us any sort of color on that or does that sort of push down and kick the can down the road a little longer on maybe being able to see some of those monetization of that?

Yes, Matt, for this year-to-date we’ve refranchised a little over 300 restaurants compared to about 225 a year ago. So we were starting to see a nice uptick in the activity, and 90% that refranchising this year was in our focus areas of Europe and APMEA. As you point out -- and a big bulk of those were in China. And so as you point out with the supplier ratio over there, our activities are probably delayed slightly, but I don’t think dramatically because this is a temporary event. It will return to normal and the business model is still attractive and still franchisable. So while it may be slightly delayed, we don't see it having a significant impact in either our timing or our ability to extract value from those refranchising transactions.

Next question is from Nicole Miller Regan at Piper Jaffray.

Thank you, good morning. On the technology front, I think I heard you say you are bringing some new technologies to U.S .markets. Can you talk about how you chose them and if they’re giving a full suite of offerings or is it going to be kind of a layered approach? And then just a follow up on a number or comment around APMEA in saying it takes six to nine months potentially to get to a normalized level. Could you define that is normalized less negative or positive? Thank you.

Hi Nicole, I talk a little bit first about the digital piece and then we can talk about the recovery efforts over in China specifically. Relative to digital, as you may recall, Nicole, a couple of years we began to focus quite intently on our digital efforts, and we have done several things. One is that we move forward to be able to bring in appropriate talent to support our digital effort. So we brought in Atif Rafiq, who had a tremendous background in the tech sector and more specifically with Amazon. We also have been hiring quite a few digital leads around the world from world class organizations. And to that point we actually opened up our first digital office at San Francisco near Silicon Valley to continue to be able to recruit and bring in talent. That is a critical aspect of how we select the applications and the platforms with which we move forward. We also have several markets around the world that had a jump start relative to some of the mobile applications such as France with mobile pay and actually some promotional offers. So we have leveraged that. We did a major test in Australia to look at the actual global application what we call the global app, which is built upon our new path technology system and allows us to continue to add on different applications to support various needs from pay and order to other things such as music. We’ve talked about those in the past. That global app will be launched in 2015 with some of the promotional offers in the U.S. and we will continue expanding the already established mobile applications that we have in some of the markets outside of the US. So we are pretty excited about those. We…

Next question is from David Tarantino of Robert W. Baird.

Hi, Good morning. My question for Don on the overall strategy. I guess one of the hallmarks the way I understand it of McDonald's is the speed and consistency of the operations ,and I think you have highlighted some struggles on that front this year, and I just wanted to get an update on your progress on improving your operations. And then secondly, I think a lot of the initiatives you are talking about the experience of the future, sound like they might be adding more complexity to the system. So everything from localization to create your own taste. So I am just wondering if you could comment on your confidence level on being able to execute that that added complexity, if you will?

Thanks for the question, David. First of all you know anything that we would implement in an restaurant we have taken it require a bit of testing. So relative to create your case has been through the innovation lab, the innovation center and the testing protocols there it has been in a restaurant near the innovation center, we moved it out to Lagoona, we had had testing outside of the U.S. in some of the markets and now as we move forward in Australia, what they are really doing is the soft, the front side of the role out in the Australian market. And so we know that from an operational perspective we are able and capable of delivering this experience in the restaurant enabled by the technology advancements and the point of sale platform that we put into the restaurant. So on the operational side they are relative to Create Your Taste, we built very, very strongly that that is doable. We know it is based upon what we have done already relative to basic simplification of the restaurant and rating ourselves for things like Create Your Taste and for basic customer satisfaction at higher level. In markets like the U.S. they been through what they call an operations reset. That operations reset combined with the minimum simplification efforts that our aimed at reducing complexity of low volume items. That's an important part. The complexity of low volume items are the things that we’re looking to simply and remove from the restaurants. When we do that we enable ourselves to be able to then pull down additional products that we can flow through our operating system in the U.S. Now, one of the things that I would also add here is when you look at some of the things that we are looking to do in terms of products, those products are actually made easier based upon some of the investments we made whether they be the point of sale system or may be things like the high density kitchen where we have more condiments that we are able to make relative to putting those things inside the Made for You cooking system. So the Made for You system, simplification of some of the items and our focus on operations are the reason that we have high confidence in Create Your Taste relative to the in store capability. The other thing that I mentioned at this point and some of you already know this, Create Your Taste is an in store execution as we began. That is the way that we are delivering on that expectation and experience in the restaurant. Customers seem to really really -- it appeals the customers in a great way and will continue doing that. We have a different solution that we are work on relative to the drive-through.

Next question is from Jeff Bernstein of Barclays.

Great. Thank you very much. So a question on the U.S. business. I know in the press release and in your comments earlier you made -- mentioned I think that the issue at least from a sales perspective is more sustained, competitive activity I know over the past year or two. I think that was more down played, I think was more you guys in the management believe and that it was more self-inflicted, less about what these more peers might be doing. But maybe just in terms of that change in view, like what have the sandwich competitors done most recently that might have negatively impacting McDonald’s? And how much credit maybe do you give to the strength of whether it's just casual or whether it's the consumer push into better quality, healthy offerings? I mean, just seems like there is a confluence of factors that sound which might be now out of your control relative to self-inflicted. Any thoughts on that would be great.

Hey Jeff. We -- one thing we do not do too often, Jeff, and you probably won’t hear us do too often, and that’s talk about for fact that our focus is now on competitive pressure. What we do is acknowledge it; they’re folks in the marketplace that are doing some solid things. I would still hold true to the fact that our biggest challenge is what we do at McDonald’s and how we move forward. Do we have the aggressiveness in the local markets, have we allowed the aggressiveness in local markets or have we been a little bit more focused on an aligned national platform, which doesn’t leverage that local relevance. And if I look that, the local GRPs that I then assign against those local relevance products as they are putting for those in their local windows in the markets, we have not been as strong as we need to be. And I think that is one of the areas relative to our menu that you guys haven't seen and many of you have asked questions about. What is in the menu pipeline? I think you'll get a broader chance to see that as the local markets, as we get back to what we've historically done with local markets. Allow them to pull down products that are relevant in their markets and to drive those aggressively. And so, we are going to do that. Notwithstanding competitors that are there, competitors have always been in the marketplace. It can't be used as an excuse for us. What it is is an opportunity for us to build our business by taking back some of those folks who are visiting others right now.

Next question is from Will Slabaugh of Stephens.

Yes. Thanks guys. I wonder if you could touch a little bit more on the U.S. trends. In September in particular, what you would credit that slow down to, despite the interest you're picking up little bit? And if also you could speak the different day for us, such as breakfast where you did giveaway some coffee and then lunch and dinner where it seems like competition is both picking up on the value and premium end? If there is much difference in sales growth or declines, I needed those (inaudible)?

Will, so a couple of things. This year, as you just mentioned, in the U.S. system they focused on coffee and also there was NFL promotion. Last year, it was comping against wings, which do drive a higher average check in sales. While not as successful as we wanted wings to be last year. but by most measures it was still a solid promotion relative to going up against the NFL promotion and coffee. So those two things did not deliver at the same rate, while we were able to sample quite a bit of coffee. And our breakfast business overall is up on the year and continues to be up. The challenge that we have had is that it has to be about more than breakfast. So when you look at that balance -- and I just talked about local markets, we have got to focus on that breakfast and coffee aspect, as well as focusing on larger sandwiches, which enhance and increase that average check. And so that was one of the gaps that -- the biggest gap I would say that we had in the month of September. What we comped up against and also the fact that our promotional efforts were more sample based in terms of driving coffee than they were more of a breakfast building base just for that particular month. And I know that the U.S. system understands and realizes that as we move forward.

Next question is from Andy Barish of Jefferies.

Hey guys. Just wondering more near-term and then 2015 kind of the extent of the McOpCo margin decline kind of Q4 versus 3Q? And then, I know its early, but how are you guys thinking about what you need to start to drive those McOpCo margins back higher, whether its comps or the commodity environment for 2015?

Andy, good question. For 2014, as we kind of -- as I indicated in my remarks, we see continued pressure in the fourth quarter. Reflecting on the factors that were impacting the third quarter right, U.S. the biggest factor driving the U.S. decline vis-a-vis the decline in the second quarter was less pricing. And so, we would expect less pricing to still be a factor in the fourth quarter, as well as the 3% commodity increase. Those were the two biggest factors driving this quarter. And thus, we see it now will impact the fourth quarter as well. In Europe, virtually a 100% of the decline was in Russia -- was due to Russia and Ukraine. 75% of that was Russia, the rest was the Ukraine. With the relatively favorable commodity environment over there, a lot of the other markets were doing fairly well on their margins actually. UK was driving it and Germany continued to be the biggest drag on the McOpCo margins outside the Ukraine and Russia for Europe. And it’s too early to give a picture on 2015. But as you point out, driving comps, our McOpCo margins are really a top-line gain and driving comp sales is going to be the biggest key to getting that going again.

Next question is from Jeff Farmer of Wells Fargo.

Thanks. I did hear your comments on minor reductions for future developments. But why do you believe only a minor reduction is appropriate? And I guess, what you mean by that is just going back to what other timeframe was, the early 2000s U.S. (inaudible) sales were soft, you guys were losing shares. And I think it was in the early 2000, 2002, 2003 along those lines, you dramatically, dramatically got new development and then, within couple years life got better and realize that it's not all cause and effect, it’s not that simple. But again, just sort of thinking bigger picture here, what's the hesitation in pursuing your better is not bigger strategy in 2016 and beyond? Why don't you think that would not work again?

Hey Jeff, this is Don. And I ask Pete to comment as well. Let me just draw a little distinction here. Relative to what happened in the early 2000s, that development was taking place primarily in the U.S. business. So when we were -- in the U.S. business, we were trying to grow via development and that development was being driven across the market. We were not as sophisticated as we are in site selection. It was more based upon basically new unit movement or new unit sales, and that is not the appropriate formula. So today, if I look at where we are growing, that gives us some confidence relative to how we are growing, at what pace. When you're developing into markets like the Chinas of the world, the Indias of the world, some of the other markets across Europe and Asia, Korea, then those markets have yielded some more solid returns. And so, I just want to draw a little distinction. This is a very different approach. We have much high levels of site selection capability than we did then and it is not a concentrated and focused growth like it was in the U.S., it's a much more diverse portfolio.

Yes. And Jeff, I just add a couple of points. One, the starting point is dramatically different from 2002. I mean, we are starting from a much higher position of average unit volumes. And actually, our new store returns are doing fairly well. So as I said earlier to Andy, comps are the key to getting the margins and the profitability going again around the fringes. Turning a 100 or two openings up the portfolio for year is not going to have a dramatic impact. And in fact, the down point, our site selection capabilities are too old, the number of markets we are growing in is much more expanded than it was a little more than 10 years ago. So we feel it’s appropriate to skim back a little bit, but for the long-term perspective and growth of the business we are going to continue to open a units where it makes sense and where we are going to get good returns.

Next question is from Keith Siegner of UBS.

Thanks. Pete, of the over $200 million year-over-year reduction, APMEA operating profit dollars, how much of that reduction came from the loss of sales and the deleverage effect versus how much came from may be more discrete items like inventory write off as you throughout put (inaudible) or anything else that might be one time? If you could give us some color on those two pieces that would be very helpful. Thanks.

Yes, Keith, at the operation income level the China supplier issue that $0.15 translated into about $180 million of operating income decline. Roughly half of that was McOpCo margins. So that I would argue was that clearly was sales driven. Then the next biggest peach was our lower earnings pick up from our joint ventures notably Japan and while that had a little bit of inventory write off and some other costs, that result would also mostly sales driven along with royalty some franchisee support and then finally there were probably about $20 million that was truly inventory write off and an additional supply chain cost to get that supply back on par in China and Hong Kong.

The next question is from Sara Senatore of Sanford Bernstein.

Thank you. It’s just two kind of related questions. The first one is the overarching concern I sometimes hear is that McDonald's is struggling to resonate with millennial consumers, in particularly in the U.S. And so I was wondering if you could talk about the two strategies that I think you might be most targeted to that group and whether you are starting to see any initial signs that you are getting traction? And those are -- and my interpretation would be the sort of digital social media and then also the our food your questions and just whether or not that strategy is working because it sounds like you are not actually changing recipes in response to concerns, you just change kind of explain and alleviate some of those concerns. So if you just talk realistically about kind of the millennial question?

Thanks Sarah. The real point, so let me just broadly relative to millennial. If you look at the quick service restraint industry there is a decline relative to millennial usages of the quick service restaurant industry. I think that as we look at it as McDonald's what we believe that we are able to do is to appeal to some of those customers and clearly come into our business. And so as we look at it and I should say appeal to more of those customers and customers use our business now but appeal to more of the millennials. But it is a much broader aspect in the millennial. Our Food Your Question is about creating a dialog. It is not about a one question answer kind of a piece. Usually there is a back and forth relative to ingredients, platforms, integrity, sources in terms of where our food comes from. It may be relative to social responsibility. What we are doing relative to deforestation. So there are a number of questions that come up and it is about engaging in a dialog. We want to make sure that we are a transparent brand. There are a lot of misperceptions out here relative to our food and what we want to do is make sure that we at least provide an opportunity for people to directly ask those questions. So this for us is just a way for us to better build this brand and tell the truth about McDonald's and our supply chain which is absolutely fabulous. And so that it the intent there. On the digital front, we believe that digital, mobile technologies, kiosk related ordering the opportunities to be able to allow customers choice in their McDonald's experience is good for all of our customers. We think that there may be a skew clearly to a millennial, that would be probably and even stronger skew towards those that are younger than millennials, but as we move forward that is one of the things that we would be able to better define. We do know that the experience of the future resonates well with our customers around the world.

We have four more questions. So we will take those. First David Palmer of RBC.

Thanks. Just a follow up on that, the millennial issue has been well documented but I guess we should keep in perspective that the U.S. factory comps are up, I think around 2% lately. So do you believe that there is more of millennial issue with McDonald's and that's the differentiator and I suspect that you in your own self assessment see some other key differences there resulting in the widening gap to the industry and what you think those are? Thanks.

David, I believe that relative to the comp gap, so I think the comp gap is a combination of several things, some things relative to what we are conveying out there relative to what others are conveying in terms of the menu offerings. I think that is one of the challenges. I think it is also about the value that we are offering or not offering and that is another aspect of the comp gap. If you look at some of those changes, the question is whether or not our value and our food options are resonating as strongly and so I believe that that is the fundamental basis of some of the challenges that we are having. Having said that one of the ways that we best address that is by ensuring that the local markets have the opportunity to move forward to products and the offerings that will resonate locally. When I say resonate locally that means resonate across the demographics of those local areas. So that is everything from millennials all the way up to those that are more mature in the marketplace that are coming to visit McDonald’s or other (inaudible). So what we want to make sure we do is have the right food, the experience is right and we’re engaging customers to be able to have their choice and a great McDonald’s experience with great food quality and great service and a clean environment as we always done and at an affordable price. When we’re able to do that at McDonald’s we’ll be fine within the marketplace in terms of generating sales. The broader opportunity is to be even more relevant relative to the digital experience, the restaurant of the future and the customization opportunities for our food, and that’s what you heard us talk a little bit about today.

Next question is from John Glass of Morgan Stanley.

Thanks. I wanted to go back, Pete, to the G&A question and why you’re not seeing or don’t think you can actually get net positive reduction in G&A? Your G&A runs higher substantially higher at least on a per store basis than your peers and I understand you got more complexity but you’ve also got better scale. So I guess just two questions, you can respond to that but two questions I guess around. One, what is the chance you actually you will be able to see a net reduction in absolute G&A in ’15, not how much but just can you do that? And secondly, maybe help us understand the $2.5 billion in SG&A how much is actually G&A and how much is corporate versus what’s in the fields or in the divisions?

Hey, John. As we talked about from the very beginning when we start talking about this scrutiny of the G&A, we believe that there are significant opportunities to grow this business by investing in the digital strategy and this McDonald’s experience in the future, and so smarter for us we think to redirect resources to that. And as I indicated, we believe we’re targeting about $100 million from U.S. in core to repurpose, if you will, or redirect to those initiatives. And we believe over time we’ve continued, we always look at ways to be efficient and more effective with our spend. If we thought minus three was our trend line for the next couple of years you’d be hearing a more dramatic cut and taking cost out of this business, because that would be the only way to continue to grow profitability if we saw that was a permanent change to our revenue stream. But we don’t believe cutting our way to prosperity is going to be helpful for the long term of this business and smarter for us we think to redirect these savings into these growth opportunity that Don outlined.

Next question is from Howard Penney of Hedgeye.

Thanks very much. Last night the CEO of Chipotle spent 10 minutes of his opening comments on his conference call basically attacking the legacy QSR operators with business models and I could just paraphrase as being broken, given the type of food they serve. And if I broaden those comments out to what CEOs of supermarkets like (inaudible) telling about more customers coming into the natural all natural organic GMO free products. is Mr. Ells first of all and the lot of things that you talked about today I can appreciate the need for the technology but it doesn’t feel like you’re really going in the direction where consumers are going. So just curious as to you think that Mr. Ells justified in his comment the legacy (inaudible) operators which I assume he included you in that comment. Thank you.

Hi, Howard, thanks for the question. Howard, we believe that if you look at the broader market and you look at what customers are asking for, they are asking for transparency they’re asking to know what’s in the food, they’re asking for integrity of the food. There are cases and there are markets where organics are drivers at a higher level. But I would offer is that the highest level is more about their transparency, integrity and also the ability to customize and have what they want on a sandwich or a burger. I think it is what has given rise to so many very small but quite a few burger openings, specialty burger house openings. And so there is still quite a resonance relative to food, there is a big resonance relative to how I can customize. There is an appeal and you’ll see us in some categories looking to different products possibly organics we actually are doing it in certain markets. But I would it’s not the main driver if you would, we’re at the main drive but I mean we wouldn’t have the clearly the number of customers that we have today visiting the McDonald’s restaurant. I will never say that someone else particularly (inaudible). I know Steve I use to visit his first restaurant when we entered into an initial partnership back then when we were sharing the McDonald’s supply chain system which helped him as he move forward Chipotle. But I would not say Steve is wrong or right, I think each individual organization has to look at that and look at it through the eyes of the customers and what customers are asking them to deliver. And so I think you’ll see a lot of changes though, Howard, I mean if these things become even more large, even more trendy then that something clearly we’ll look even more aggressively at. But we do have markets around the world that focus more on organics we have markets that focus more on locally relevant products. France just finished up one of their launches and it was basically speaking about French beef; we talk about Australian beef over in Australia. In the U.S., I think we have some additional opportunities to talk about the fact that the vast majority of our food at McDonald’s in the U.S. is produced right here in the U.S. so we have some opportunities to talk about that in the U.S. a little bit more.

Our last question is from John Ivankoe of JPMorgan.

Great, thank you so much. Don, my perception is been that your previous health and wellness movement, and I am not talking about just organic but just health and wellness in general, but previously ‘80s and the ‘90s were driven from an older and drastic and maybe what’s different now is that the movement is being driven by younger demographic that's in younger demographic that according to your own data that you don’t have the appeal to as may be you did to that same age cohort 10 or 20 years ago. I mean - you haven’t even mention the words for McDonald’s about health and wellness and just what kind of an opportunity that you would have and if I can ask the question directly I mean why is that really front n centre in terms of lot of the product development work that we’re talking about today?

Great question, John, and actually it is. Health and wellness defined by many of the customers that we talk to coming to McDonald’s were visiting the informal eating out industry. And that's a big point those that actually visit the industry and buy food from the industry. We - its translated into real and fresh in many cases, and that has been a major driver of our strategies as we move forward. Customers want real food and they want to make sure they understand that its real food and they want fresh food. So they want to understand the sources or the origin, they want to make sure that I know what’s it, where it came from and the integrity of those sources. And so what we’re trying to do is more visually depict that both in our marketing, in our foods of question and even more importantly at the important movement of truth which is in the restaurants and for those of you visit our restaurants and been behind the counters you’re seeing the freshness and the quality of our produce. However ,not everyone has done and seen that and so we want to make sure that we’re transparent enough to do that many times real and fresh is also conveyed. If you look at it relative to those products those offerings that are selling the most it’s based upon the component make up of the food itself. So it may be differences in cheeses, differences in sauces all of these things either things that make up a great tasting burger or sandwich we’re offering today. And so this is a direction that we’re moving in and we’ll continue to stay close John with our customers relative to what it is they want and what it is that they want to see because we can deliver that as a McDonald’s system.

That concludes our Q&A. So I’ll turn it over to Don who has a few closing comments.

First of all, thanks for your participation this morning as we wrap up the call I really appreciate again all of you joining us. We have a clear plan to regain momentum in the U.S. and I think you’ve heard that and we want to regain momentum around the world as we aggressively advance programs and initiatives that are designed to deliver more relevant experiences and as we bring the McDonald’s experience to the future to our customers even faster. We’re ready to drive our business forward by creating real and noticeable changes for our customers and partnership with our tremendous system of franchises supplier partners and company employees. Our actions are intention and they strategically address what customers want from us today. They’re based in the insights that we have gained from the marketplaces and they’re based in what customers will expect tomorrow. I'm excited about the work that we’re doing and I'm confident we will achieve our goals. I just wish you all a great day and a great weekend. Take care.