Mary Kay Shaw – Vice President of Investor Relations James A. Skinner – Vice Chairman of the Board & Chief Executive Officer Peter J. Bensen – Chief Financial Officer & Corporate Executive Vice President

David Palmer – UBS Matthew Difrisco – Oppenheimer & Co. [Sara Cenatour] – Sanford Bernstein David Tarantino – Robert W. Baird & Co. Steve West – Stifel Nicolaus & Company, Inc. Steven Kron – Goldman Sachs John Glass – Morgan Stanley : Jeffrey Omohundro – Wells Fargo Securities, LLC Jeffery Farmer – Jefferies & Co. Joseph Buckley – Bank of America Merrill Lynch Jason West – Deutsche Bank Securities Mitchell Speiser – Buckingham Research John Ivankoe – J.P. Morgan Gregory Badishkanian – Citi Keith Siegner – Credit Suisse Tom Forte – Telsey Advisory Group Paul Westra – Cowen & Company [Howard Penny – Hedge I Management] [Bob Coleman]

Welcome to McDonald’s January 22, 2010 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 Ms. Mary Kay Shaw, Vice President of Investor Relations for McDonald’s Corporation.

With me on the call this morning are Chief Executive Officer Jim Skinner and Chief Financial Officer Pete Bensen. Today’s conference call is being webcast live and recorded for replay via phone webcast and podcast. Before I turn it over to Jim I wanted to remind everyone that as always, the forward-looking statements in our earnings release and 8K filing also apply to our comments. Both documents are available on investor.McDonalds.com as are reconciliations of any non-GAAP financial measures mentioned on today’s call with their corresponding GAAP measures. Now, I’ll turn it over to Jim. James A. Skinner: I am pleased to report that our business growth continued in the fourth quarter contributing to another strong year for the McDonald’s brand. Global comparable sales were up 2.3% for the quarter and 3.8% for the year. Constant currencies operating income grew 14% for the quarter and 10% for the year. 2009 marked our sixth consecutive year of positive comp sales in every area of the world, a feat that underscores the ongoing strength and relevancy of our plan to win business strategy. In January, we expect to post another month of positive global comparable sales with both Europe, Asia Pacific, Middle East and Africa positive and the US relatively flat. In this challenging economic environment we feel very good about our trends and we continue to grow by adapting to our customer’s needs and elevating the key drivers of our plan to win those being more menu variety and choice, better restaurant operations, greater convenience and day party expansion, every day predictable low prices and ongoing restaurant investment. In all these areas we’re innovating and improving and pushing ourselves to stay in step with consumers in order to give them the most outstanding dining experience in every way. This strategy and alignment helped us achieve strong results across the system in 2009. In the US comp sales increased slightly for the quarter and up 2.6 for the year contributing to an operating income growth of 5% and 6% respectively. We’re proud of these results especially given the high unemployment and its impact on consumer spending. In the US last year our comp sales gap against the industry was positive every week of the year. Despite an overall decline in the informal eating out category we increased our market share and strengthened our leadership position. We drove results by delivering exceptional value, menu choice and convenience. The US maintained a strong focus on value at every level from the dollar menu to mid tier and premium offerings. This continues to make us a compelling choice for customers in this uncertain time and we continue to win through menu choice with a balance of familiar and popular core products as well as new items to keep us relevant. From our café specialty coffees and our line of premium angus burgers were new offerings in 2009 and they helped us make McDonald’s a more clear destination for outstanding quality at the best value. We’re pushing ahead with more choices including the national launch this month of our Mac Snack Wrap and breakfast dollar menu. The Mac Snack Wrap is a snack version of our Big Mac. It is a four tier product with a good margin and it fits well in to our growing snack day part or as an add on to a meal and certainly can be eaten on the go. The breakfast dollar menu introduced in collaboration with our franchisees gives us a national voice on value at breakfast. Both of these highlight our commitment to keep modernizing our menu and provide the products that our customers are looking for. This month, we’re also launching free wireless Internet access at nearly all of our US restaurants. This will make us the largest provider of free Internet in the country and make our restaurant experience even more valuable. Now, turning to Europe comparable sales were up 4.8% for the quarter and 5.2% for the year. In constant currencies operating income grew 10% for the quarter and 8% for the year. Europe’s guiding strategies of upgrading the customer and employee experience, building brand transparency and enhancing local relevance continues to drive results. In the fourth quarter we grew our market share in the informal eating out category across Europe including the UK, France, Germany, Italy and Spain. A key to this growth was the continued focus on our three tiered menu platform everyday low price, core and premium delivering choice and value across the menu. In addition, we continued to enhance our four tier menu platform by delivering a category of smaller premium affordable products. We expanded our line of popular Petite du jour and our little taster offerings in the UK and we’ve introduced fourth tier products to other markets such as Germany with the snack deluxe. All of this is building greater relevancy for our brand and stronger results for our bottom line. We also saw success from an increased emphasis on day party expansion, particularly breakfast. In Germany we expanded our breakfast line up with classic and new offerings as part of our easy morning breakfast launch and it is yielding solid results. In the UK, our number one breakfast market in Europe, strong media support helped generate some of our highest breakfast sales to date. In addition, Europe’s ongoing coffee strategy including the stand alone McCafe concept is resonating with European consumers with McDonald’s now being the number one seller of coffee in Germany. Many of these opportunities are enhanced by Europe’s leading role in the reimaging whereby the end of 2011 85% of Europe’s 6,800 restaurants will be reimaged. Let’s shift to Asia Pacific, Middle East and Africa or APMEA which delivered $1 billion in operating income in 2009. This is a long way from the $345 million they delivered in 2005. For the quarter and year comp sales were up 1.5% and 3.4% respectively. Operating income also continued to grow up 28% for the quarter and 23% for the year in constant currencies. Our growth across the region continues to come from strong execution, convenience, value, core menu and breakfast. Australia remains one of the top performing markets in our system. They’ve reimaged their entire asset base, setting the stage to drive strong results with premium offerings like the popular angus line and the M Burger selections. They also launched the next version of their value picks menu as well as enhanced the drive thru experience leading to better operations and service times. Now China, although their economy is improving and we delivered an increase in comp sales and guest counts in December, we expect it will still be sometime before consumers regain confidence and are willing to spend more. In the meantime, we’re making the right moves to grow our business and strengthen our connection with our Chinese consumers. We’re improving operations which is differentiating our brand on service and helping build capacity during peak hours. We also launched the highly popular value lunch initiative that is helping drive guest counts and incremental sales and as we announced recently we’re adding to our footprint by planning to open 150 to 175 restaurants in China in 2010. So, we remain excited about our potential growth and expansion in this region. McDonald’s Japan made solid progress last year in the face of significant economic headwinds delivering positive comp sales across the majority of months. Our results were driven largely by the introduction of the Quarter Pounder, the launch of premium roast coffee and a strong focus on affordability highlighted by our popular value lunch. Additionally, in the fourth quarter we made gains through a focus on drive thru, the relaunch of McChicken and the continued success of our premium coffee products. So those are some of the recent highlights from around the world. As we turn to the year ahead I want to say a few words on our continued commitment to financial discipline and enhancing shareholder value. In 2009 we returned $5.1 billion to shareholders through our share repurchases and dividends for a three year total of $16.6 billion in our $15 to $17 billion three year target. Going forward our philosophy regarding the use of our cash flow remains unchanged. Our first priority is to reinvest in the business, after that we would expect to return all of our free cash flow over the long term to investors through a combination of dividends and share repurchase. Our reinvestment strategies, our financial discipline and especially our plan to win are the mainstays of our success and the blueprint we will continue to follow to drive future growth. We’re pleased with 2009’s results. We remain confident in and committed to our plan to win and our customer focus strategies and as always we feel that we have the very best leadership team in place to help us achieve our goals. As you all know Don Thompson recently became our new President and Chief Operating Officer. Don has a deep knowledge of the business and has done an outstanding job leading our US business and Don will continue to drive value for the brand in his new role. At McDonald’s we pride ourselves on our commitment to talent management, leadership development and always having a deep bench of strong, capable leaders. We have a great management team in place that is highly talented, well aligned and ready to deliver results. Moving forward, we’re all focused on the appropriate business drivers to be more relevant to our customers every day from the best tasting food and beverage offerings to the greatest value and convenience to an unparalleled restaurant experience with our franchisees, suppliers and employees all working together I am certain we will continue to succeed on all these fronts and I am confident we will keep delivering positive results for our system and our shareholders. Now, I’ll turn things over to Pete Bensen our CFO. Peter J. Bensen: Every day more than 60 million customers around the world count on McDonald’s for convenience, variety and value while our investors count on us to drive growth, cash flow and returns. I’m proud to say that we delivered for customers and investors alike in 2009 with sales, operations, profitability and returns all improving amid a historic economic down turn. For the fourth quarter and the year we delivered double digit constant currency earnings per share growth. Even after adjusting 2008 results for the gain on sale of Pret of Manger and 2009 results for the income related to the Redbox transactions and the resolution of certain Latin America liabilities, earnings per share rose 10% in the quarter and 13% for the year in constant currencies. During the fourth quarter, primarily due to the resolution of certain Latin America retained liabilities we recorded $65 million of pre-tax income as well as a $22 million benefit in tax expense mainly related to the release of a tax valuation allowance. In total, this resulted in an $0.08 benefit to earnings per share and a 240 basis point benefit to the effective tax rate for the quarter. Combined operating margin improved significantly in 2009. At about 30% our combined operating margin is significantly higher than that of many global consumer companies. This combined operating margin performance reflects our ability to drive strong franchise and company operated margins while controlling G&A spending. Total margin dollars for McDonald’s restaurants reached a record $8.8 billion in 2009, up about 6% in constant currencies. Franchise margin dollars which represents nearly $6 billion of the total grew at a faster pace as we continued to execute our refranchising strategy. As a percent of revenues, franchise margins were strong at 82.1% for both the quarter and the year. Over the last two years we’ve refranchised more than 1,100 restaurants in connection with our refranchising strategy and today more than 80% of McDonald’s restaurants worldwide are franchised. We expect to refranchise a couple of hundred more restaurants in 2010. Company operated margins were up 160 basis points in the fourth quarter to 18.8% driven by positive comparable sales, lower commodity costs and refranchising. For the year, company operated margins increased 60 basis points to 18.2%, the highest level in a decade. Throughout 2009 our US business outperformed the overall informal eating out industry and the fourth quarter was no exception. Easing commodity costs benefitted margins in the fourth quarter as our grocery bill declined about 4%. Refranchising also enhanced the margin increase. As a result, our US business delivered outstanding company operated margins of 20.3% for the quarter and 19.4% for the year. Strong company operating margins are a key indicator of our business health and restaurant level cash flow. In 2009 average restaurant cash flow growth for our owner operators was the strongest in 15 years. We closed the year with average annual pre-debt cash flow approaching $320,000 per restaurant. This stronger owner operator cash flow helps enable future reinvestments in the business like support for breakfast dollar menu or reimaging. In Europe, company operated margins increased 130 basis points in the fourth quarter driven by strong comparable sales, partly offset by higher labor and utility costs. The UK, France and many other countries drove this improvement as our menu, variety and value continued to appeal to customers. While Europe’s local currency grocery bill declined 3% in the quarter, currency rates continued to pressure commodity costs in Russia and other eastern European countries making the net impact of food and paper costs slightly negative. For the year, company operated margins rose 40 basis points in Europe, reaching a 10 year high of 18.4%. In Asia Pacific, the Middle East and Africa, company operated margins increased 260 basis points in the fourth quarter and for the year company operated margins rose 90 basis points to a very healthy 16.8%. Our sustained strong performance in Australia and operating efficiencies and lower commodity costs throughout the segment drove the improvement for both periods. We are confident we can deliver strong company operated margins going forward as we continue to execute our strategies related to price, product mix and promotion while driving efficiencies and managing costs. As it relates to food and paper costs, our initial outlook for 2010 is four our basket of goods to be relatively flat in the US and Europe with easier comparisons in the first half of the year. Turning to G&A, in constant currencies G&A was up slightly for the quarter and down for the year. 2009 marks the fifth consecutive year that G&A declined as a percent of both sales and revenues and we expect G&A as a percent of sales and revenues will continue to decline in 2010. While total G&A dollars will be up slightly on a reported basis at today’s exchange rates, G&A should be relatively flat in constant currency. The timing of the Vancouver Winter Olympics and our Bi-Annual Worldwide Owner/Operator Convention will impact the quarterly comparisons. Our proven ability to drive sales, deliver strong margins and control spending along with our franchise business model all have positive implications for our cash flow. As we continue to be disciplined in how we use this cash, our philosophy has not changed. Our first priority is to reinvest in our business as Jim said. We have the financial capacity and the local talent to invest capital back in to our business when many others cannot. This is a competitive advantage that we intend to leverage to further differentiate the McDonald’s experience. In 2010 we will invest about $2.4 billion in capital expenditures. Our goal is to elevate our brand to drive sustainable growth while continuing to earn strong returns. Approximately half of our capital expenditures will be used to open about 1,000 new restaurants around the world including roughly 500 in Asia Pacific, 250 in Europe and 150 in the US. The other half of our capital expenditures will be allocated towards reimaging over 2,000 existing locations. Nearly half of these remodels will be in Europe, 600 in Asia Pacific and 500 in the US. Reimaging has a direct positive impact on sales and market share as our experience in the US, France and Australia demonstrates. In 2010 our reimaging efforts will be focused on both the interior and exterior of our restaurants. As we’ve done in the past we will co-invest with our owner/operators in these high impact reimaging efforts. It’s important to remember that as we make these investments we are also upgrading our asset base. This is because we own the land and buildings or hold long term leases on the property underlying our restaurants. In addition, by sharing in the investment we can accelerate initiatives, reach scale faster and positively impact our business sooner. On a final note, as you know for most of 2009 currency translation was a significant headwind negatively impacting full year earnings per share by $0.15. However, this headwind became a tailwind in the fourth quarter, a benefit we expect will continue for the next couple of quarters. Based on current rates, we estimate that currency translation will positively impact first quarter earnings by about $0.05 or $0.06 per share and the full year benefit is estimated to be approximately $0.06 to $0.08 per share. We have a brand advantage in convenience, menu variety and value, a strong balance sheet and cash flow and owner/operators and suppliers who are aligned and focused. As we move forward in 2010 we will continue to leverage our competitive strengths to extend our lead in the marketplace and drive value for our shareholders and global system. Now, I’ll turn it over to Mary Kay to begin our Q&A.

I’ll now open the call for analyst and investor questions. To give as many people as possible the opportunity to ask questions, please limit yourself to one question. We’ll come back to you for follow up questions as time allows. Your first question comes from David Palmer – UBS. David Palmer – UBS: I guess this is a simple question but could you comment on your traffic trends per restaurant and how your same store sales trends have trended versus the industry? I remember during your analyst day you showed a wider gap at the end of the year versus the competition and that’s obviously US specific but perhaps you can comment as whether that gap as remained as wide recently? James A. Skinner: Our trends have remained the same and fortunately we had traffic growth or guest count growth in every segment of the business last year and much of that was because we were capable of sort of keeping the average check in place. We didn’t take as many price increases, we don’t have the pricing elasticity and of course, our consumers today around the world deserve a break if you will relative to pricing around food away from home and we’ve kept the line on that very well and we have therefore been the recipients of this guest count growth if you will.

The next question comes from Matthew Difrisco – Oppenheimer & Co. Matthew Difrisco – Oppenheimer & Co.: Can you just tell us where in the 2010 plans do you expect to do the refranchising? Then also can you just give us some commentary or greater detail as far as looking at the contraction on the franchise margin, especially in the US, what is behind that just so we can have better modeling purposes? James A. Skinner: I’ll let Pete talk about the franchise numbers relative to the financials but you’re not going to see the same kind of wholesale activity that we’ve had in the past relative to refranchising. We’ve done the bulk of it already but it will continue to be done in the same markets that we’ve done it in over the past. As stated, we are going to refranchise about 1,500, we’re well past the 1,100 almost 1,200 mark now and so it is across the markets and it is not significant really in the scheme of things so the relationship is going to remain about the same. Peter J. Bensen: Matt, regarding the franchise margins in the US, the comp was a little bit lower in the quarter and there is a lot of fixed costs in that margin so we had a little less leverage on that. But also with the investments in the beverage initiative we’ve had a little higher depreciation and amortization but we also saw a little bit less impact from owner/operator incentives. Hopefully that helps.

The next question comes from [Sara Cenatour] – Sanford Bernstein. [Sara Cenatour] – Sanford Bernstein: Just a question about comps because you gave us an update in January, first just generally speaking in the US it got a little better in December and then it looks like you were saying sort of flattish in January. Is that just calendar shift and overall trends have been pretty stable or are we seeing something different December to January because I know it is sort of a choppy environment out there. Then jumping over to the other side of the world to China you said traffic was up and it looks to me like deflation is trending down so should we expect to see pricing get a little better there too? James A. Skinner: First on the United States and then I’ll let Pete talk a little bit about the pricing and the relationship in China. But, I think in the US the trends are actually better in January when you factor out weather. Weather has had a tremendous impact on our trends here in January. We don’t normally like to talk about weather but we can’t avoid it when you look at the first 14 or 15 days of the month and the severity of the weather, I think it was impacting us probably around 3% a day in the sales because whenever we had the weather that was normalized we saw much better results. So if anything I would say the trends are a little bit better than they were in December. Peter J. Bensen: Sara as far as China a couple of things, yes we did report positive sales and guest count movement in December. You won’t see that in January though because we have the shift of the Chinese New Year so last year that was in January and this year it will be in February so by comparison that will be a little bit choppy. But, we’re optimistic in what we’re seeing with the trends. We’ve talked about China in the south, and the central and the north so we saw all three of those areas improving in December and are kind of cautiously optimistic as the consumer starts to spend a little bit of money there that we will then be able to get a little bit more out of price and get a little more traffic moving there so that’s a perspective for you.

The next question comes from David Tarantino – Robert W. Baird & Co. David Tarantino – Robert W. Baird & Co.: Another follow up question on the US comp trend, it looks like traffic might have picked up fairly considerably when you adjust for pricing rolling off in December and the weather comment you just made. What do you think is driving that trend? Is it the industry trends are getting better or do you think that it is some of your initiatives such as maybe more marketing allocation towards the dollar menu? James A. Skinner: I think as you know we launched the dollar menu at breakfast nationally. We have a very strong national voice against breakfast right now. All of our franchisees are on board and we have a lot of messaging out there about the dollar menu not only all day but now at breakfast. Then, the Mac Snack Wrap that we talked about. So I think it is more about our initiatives and the communication around the menu because really when you look at trends in the industry and you look at the spending of our consumers and the consumer confidence even though it has edged up the last couple of months, with the unemployment where it is until we start to see job creation and we start to see people get comfortable with the fact that they have a place to go to work and have a steady income we’re not going to see in my opinion enormous pickups or big change relative to the trends and the consumer spending.

The next question comes from Steve West – Stifel Nicolaus & Company, Inc. Steve West – Stifel Nicolaus & Company, Inc.: Real quick, can you give a little bit of color on the McCafe, the phase two that you guys have been rolling out? How many stores do you have that in now and when can we start expecting to see the TV advertising campaign pickup for that phase two? James A. Skinner: Well our McCafe project has gone very, very well for us certainly on the coffee side. We’re now in to smoothies and frappes introducing those in to the restaurants and we’re well on our way with the frappes, the smoothies are a little bit behind that but we expect to be ready to go in the summer time. I can’t tell you exactly when they’ll be messaging around it but we’re going to be pretty much ready to go in the summer.

The next question comes from Steven Kron – Goldman Sachs. Steven Kron – Goldman Sachs: Just one quick follow up on the breakfast menu, the value menu, can you tell us what you expect that that will mix as far as contribution to revenues and what the economics of that product are? Then, on the US margin side for the quarter 20.3% company operated margin, I think that is the best quarterly margin you’ve put up, at least as far back as my model goes. I recognize commodity costs are a big driver of that but in anticipation of maybe the environment getting worse did you guys get more aggressive and pull other levers to control the margin side of things? James A. Skinner: I’ll let Pete talk about the margin in a minute but the mix on the dollar menu and the contribution of that and the Mac Snack Wrap for example now is too soon to tell. We just started it, we really don’t have a good feel for how it’s going to shake out over time but we are very pleased with the economics around it otherwise we probably wouldn’t have done it, one. Number two, with the support of our franchisees and everybody being all the way in on this we think it gives us the opportunity to deliver fairly well around that dollar menu but it is too early to really tell you exactly what the details of that are because we don’t have the data. Peter J. Bensen: Steven on that before I get in to the total margin question, it was a relatively low increase we need in transactions in the US from the dollar menu breakfast to be margin dollar neutral and so we feel pretty confident we’ll be able to hit that. But in terms of the total margin in the US for the fourth quarter, the 20.3% it was 75% of that was driven by the commodities and then the rest basically the refranchising. You saw comps were relatively flat so we really didn’t get anything out of the sales line so it was really the costs and the refranchising benefit. There were no other special levers or anything like that which gives us confidence in the environment moving forward with the commodity costs remaining benign. As we can move that top line a little bit more we’ll be in pretty good shape.

The next question comes from John Glass – Morgan Stanley. John Glass – Morgan Stanley: [Inaudible] about growing share in a declining market in the US but your systems sales grew 3% so you clearly actually were more than sort of neutral there. So can you talk about how much share you think you took in 2009 and how much you think the informal eating market contracted this past year? James A. Skinner: Well, it varies by market but we grew our informal eating out market share really in every segment of the world. If you look at the US for example we were up about 2/10ths or 3/10ths of 1% to about 11.3%. When you really look, that’s a pretty big number when you really think about the size of the informal eating out market. It varies around the world but we had increases in every market. I can’t tell you how much informal eating out declined in every market around the world because it certainly varies but it has either been stagnant or shrinking in most markets. Most of our growth in 2009 came from share growth around the world.

The next question comes from Mark Kalinowski – Janney Montgomery Scott, LLC. Mark Kalinowski – Janney Montgomery Scott, LLC: [Inaudible] further in to sales trends dynamics in China. The sense I’m getting is that lower priced chains like McDonald’s, KFC are generally struggling but higher priced chains might be struggling even worse. There’s a fair amount of discounting going on in the quick service environment, if you could talk about some of those details that would be great. James A. Skinner: I think on an overall basis the pricing relationships in China in the quick service restaurant industry are in an interesting dilemma because of who you are competing against which is a very low price menu on the street from the non sort of chain restaurants and food available. We are not necessarily discounting but what we are doing is getting our price right in relationship to the economic time that we find ourselves in which is an ongoing pricing relationship as compared to a discounting of our food. It moves up and down the scale depending on where we find ourselves in the consumer spending. As we’ve said, I think the environment of China which basically fell off a cliff after the 2008 Beijing Olympics. We’ve adjusted accordingly along the way to be relevant with our consumers and its worked well for us.

The next question comes from Jeffrey Omohundro – Wells Fargo Securities, LLC. Jeffrey Omohundro – Wells Fargo Securities, LLC: I was just wondering if you could talk to the strategies that you were pursuing to support check just given the step up both in the breadth of value offerings and as well your marketing support of those efforts? Peter J. Bensen: Specifically I’ll talk a little bit about the US but these kind of comments apply around the world. As you know, it’s a market share battle out there so focusing on driving customer counts is important but we need some other elements to help keep the average check from falling off a cliff so things like in the US the Mac Snack Wrap which is both a transaction driver and also something that can either trade people up from the dollar menu or add on to an extra value meal is a margin enhancer. You think about the next phase of the beverages rolling out in the US, the frappes and the smoothies, those are very nice margin and average check enhancers if you will. It’s early in these tests but we’re seeing a nice trade between the espresso based coffees which are over 50% in the morning and these smoothies and frappes are a much smaller percentage in the morning and a much greater percent in that kind of snack day part which should help fill in there. In the US also you think about the angus burger, that wasn’t necessarily a traffic driver but it was a trade up mechanism that delivered more in the margins. So taking that and summarizing for the rest of the world kind of that focus on some premium products, the focus on beverages, the focus on fourth tier menus are some of the things that we’re doing that are helping balance that check and traffic part of the equation. James A. Skinner: If I could, I think a number of these frappes, smoothies and even in McCafe have generated some new visits and those new visits have also generated food sales and so that’s been helpful. But, at the same time the dollar menu experience and the trading against that has remained about the same so all of these other items that are on the menu have picked up our opportunity relative to average check.

The next question comes from Jeffery Farmer – Jefferies & Co. Jeffery Farmer – Jefferies & Co.: Just a follow up on some of the commodity questions, it looks like your consolidated food and paper cost fell by about 180 bips in the fourth quarter so how should we think about that number in 2010 given the outlook for relatively flat commodity costs this year? James A. Skinner: Jeff, we don’t provide that kind of forward-looking guidance. There are so many moving parts, how much are prices going to increase, they’re going to impact the base that we are measuring that food and paper change off of and product mix also impacts that so we’re not really forecasting that. But, we are optimistic obviously with the commodity costs at the levels that we’re seeing them.

The next question comes from Joseph Buckley – Bank of America Merrill Lynch. Joseph Buckley – Bank of America Merrill Lynch: I have a question on the European company margins, Pete you shared with us that because of the importing of food in to Russia and some of the eastern European markets that the food costs were slightly negative, you mentioned labor and utilities being negative, you got a big positive bump in the company margin, I’m wondering what else is left there that you leveraged? Peter J. Bensen: While the food and paper cost had a slight negative impact for the quarter, compared to the previous quarter if you’re looking sequentially they were over 100 basis points better, the food and paper impact so a lot of the impact is coming from more benign food and paper costs and thee strong comp we had there in the quarter and refranchising so that’s really the items.

The next question comes from Jason West – Deutsche Bank Securities. Jason West – Deutsche Bank Securities: Just a little more color on the outlook for food costs and pricing, we’ve seen some of the commodities starting to lap the more favorable trends from 2009, particularly cheese and ground beef. I’m just wondering how high your confidence level is in that flat number? I mean you guys have some of the big items pretty much locked in for the year? And, just your thoughts on pricing if you were to see some movement in some of these items against you do you feel like you could take some price at this point? Peter J. Bensen: As we look at how we finished 2009 I would say generally around the world we probably had about a percent left in price on average between the US and all the major markets and as we head in to 2010 it is probably going to be a little less compared to 2009, probably where we are or down a little bit. You appropriately point out that we look for opportunities to lock in our costs when we can. We’re able to do a little more of that in the US versus Europe and APMEA but we’re becoming more active in those markets as well. We’re constantly looking at the marketplace to see do we have opportunities to raise price without negatively impacting the traffic. It’s quite interesting when you look at the difference a year makes, a year ago we had all our teams around the world doing scenario planning for what’s going to happen if the environment gets a lot worse. Today, those scenario planning discussions are around being able to make sure we can catch the upswing when it comes and how are we going to be able to take advantage of that. We are really focused on being able to maximize that top line when we do see the rebound.

The next question comes from Mitchell Speiser – Buckingham Research. Mitchell Speiser – Buckingham Research: A couple of questions on beverages, Pete I believe in the third quarter in the US company margins were up about 110 bips and then up 150 bips in the fourth quarter. Is there any way to pull out what the increasing beverage mix contributed to that margin expansion? And, with the smoothies and frappes coming out is that in fact a margin enhancer, a percent margin enhancer as well? Peter J. Bensen: Mitch, no is the short answer to the first part but that sequential change it was definitely an improvement in all commodity costs that helped the margin in the fourth quarter offset by less sales in the fourth quarter. As we look at the impact of the frappes and smoothies going forward we are optimistic on a per unit basis that it is accretive to margins on a percentage basis and in tests, while it is early, we aren’t going to give movement units but if you think about those two products they are a lot closer in to the core McDonalds customer and the core McDonalds menu compared to the espresso based coffee so we are starting to see some pretty nice movement in the test markets so we’re optimistic on the impact it can have later on in the year.

The next question comes from John Ivankoe – J.P. Morgan. John Ivankoe – J.P. Morgan: Obviously remodels are increasing in importance in fiscal ’10 and that will be a multiyear process for you. As you begin to finish Europe I presume that the US will receive more of the attention longer term. Is it possible for you to talk about what your remodel cash contribution is in the US with the franchises are what kind of sales lift that you’re seeing from that expense? James A. Skinner: Let me just start and then I’ll let Pete talk about the contribution mechanism that we’ve used over the years, it varies by market of course, we’re still wrestling with it here in the US but he might be able to add some more texture to that. We’re reinvesting more in reimaging and remodeling across the board. We don’t wait for Europe to be finished and then give more allocation to the United States, everybody has their own plan. We’ve accelerated the plan across the board and so it is not about waiting for one segment to get done so we can start so we can start the other. We have plenty of wherewithal to do it on a consistent basis in every segment. Pete, do you want to talk about the contribution? Peter J. Bensen: We know John that reinvesting with our operators is the right thing to do to help accelerate these initiatives and give them the scale more quickly and we know from our test markets that there’s plenty of cash flow and return for both us and the owner/operators. On the specific US imitative that is going to move forward, we do not have a final decision on what that contribution is going to be. Once we get that figured out we will be able to communicate that but I wouldn’t expect it to be dramatically different from what we’ve done in the past or dramatically different from what we’ve done with something like the beverage initiative. But until we get that worked out and finalized we don’t want to share that but definitely it is focused on allocating returns at appropriate level for us and the owner/operators. When we do the full reimage we don’t have a whole lot of them done in the US but we do know from other markets generally we see a 6% to 7% sales lift relative to the rest of the marketplace. When we do the holistic reimage meaning a really nice blow out job on the dining room and the inside along with the exterior of the building and the landscaping and everything.

The next question comes from Gregory Badishkanian – Citi. Gregory Badishkanian – Citi: Just assuming no real change in the macro in terms of unemployment, how do you see your kind of message going forward over the next quarter or two in terms of really focusing it on value? Do you see that increasing or about the same? James A. Skinner: We expect to keep the peddle to the metal if you will relative to value everywhere in the world because I don’t see much changing. More importantly, we’ve had a fairly steady contribution relative to value messaging over the past few years in recessionary and non-recessionary times because it is extraordinarily important for our customers to understand everyday affordability at McDonald’s exists in the good times and the bad times which is why it was fairly easy for us to continue to support the dollar menu across the United States and then across our every day affordability in other segments of the business because that’s the way we’ve structured our menu and the understanding of the consumer expectation.

The next question comes from Keith Siegner – Credit Suisse. Keith Siegner – Credit Suisse: Just one follow up question on kind of the approach to promotional activity and pricing, we’ve talked about unemployment, we’ve talked a little bit about commodities, when you think out what the determining factors will be that are going to influence your approach are those the primary things? Is a return to inflation at the at home food markets, does that help? How do you rank the determining factors that influence your approach to pricing and promotional activities? James A. Skinner: Let me just say in some cases we would like to say it’s that scientific. It really is as much an art as it is a science because we do take all of those things in to consideration and factor but on a wholesale basis it’s intuitive to understand our pricing relative to the consumer so when we talk about not having as much pricing elasticity that Pete had talked about earlier because of commodities and other kinds of things in the past or certainly the inflationary environment and more importantly the consumer confidence and the unemployment, we don’t have as much pricing power as we might have had. So we really don’t even talk about how we’re able to pass on any costs that we might have to absorb when we do our pricing models and how we communicate with our consumers around value. We decide that it is important for us to continue to have everyday affordability, present to our consumers a value proposition that makes us a compelling choice relative to eating out when they choose to eat out and all those factors are considered. But, we do that on a regular basis, not just during recessionary times and of course since we’ve been in this situation now some would argue for more than two years it continues to be the consumer insight that we use and make our decisions around and it doesn’t necessarily leverage any movement back and forth determining the strength around our messaging except to say that it’s been fairly consistent.

The next question comes from Tom Forte – Telsey Advisory Group. Tom Forte – Telsey Advisory Group: On breakfast can you give us a sense as where it stands today as far as mix of sales in the US if it is still at 25%? Then you talked about January you are going to roll out the dollar menu system wide across the US, can you give us a sense at the start of the fourth quarter and end of the fourth quarter what percent of your system already had the dollar menu in place at breakfast? James A. Skinner: It is small percentage at the beginning of the end of the fourth quarter on the dollar menu at breakfast. The breakfast percentage does remain the same as a big piece of our business if you look at it that way. The dollar menu and the voice around dollar menu will certainly help our growth and by the way we grew breakfast in ’09 not only in the fourth quarter but year-to-date December which was not an easy feat considering the fact that we were faced with the unemployment that we were and second of all we had a very strong ’09 with the McSkillet and the Chicken Biscuit introduction so we had some numbers to overcome there and we are very proud of our results and our consumers have rewarded us because they know the great value there is for breakfast in our restaurants.

The next question comes from Paul Westra – Cowen & Company. Paul Westra – Cowen & Company: I guess my question specifically is if you can give us some more color on the return on capital trends you’re seeing in eastern Europe and Russia in particular and what other kind of real world impacts I guess you’re seeing on those returns in the cross border transaction issues? And perhaps, you might give us some updates on the supply chain efforts you are doing to help mitigate these impacts? Peter J. Bensen: Listen, obviously what you’re seeing on the impact on commodities on our eastern and central European markets is having a little bit of a hit to the profitability there so just by doing the math our returns are down a little bit but the reality is we’re still getting good returns in those parts of the world and there is still great opportunity to grow there and so we’re going to continue to invest capital there. When we look at opportunities to mitigate the impact we do have to make some of these cost benefit type trade off decisions around can we hedge at an effective cost or are we comfortable just kind of letting it ride? We were a little surprised to see the Ruble still down against the dollar in the fourth quarter, we thought it might snap a little bit by then. Russia in December was strong, we saw good sales for the year in Russia and it continues to be a highly profitable and great long term market for us. So there’s really no concerns in the returns perspective there and we’re going to continue to do our best to mitigate the impact of the currencies but not over pay for any protection.

Your next question comes from David Palmer – UBS. David Palmer – UBS: Back just this last year going in to the summer it felt like the consumer environment was getting tougher. In retrospect did you reallocate marketing dollars and attention a little bit away from some of the things that might have been more incremental, the premium stuff the beverages, and towards value in a very meaningful way in terms of dollars? And conversely, when things change and if indeed the consumer comes back and things become a little more receptive to those incremental sales, will that get a disproportionate amount of dollars in the future? James A. Skinner: We’ll make that call when the time comes. I’ll be anxious to make that decision. I think the interesting thing to point out around media is that we’re a 52 week communicator in media in every segment of the business. We did not pull back on communication with our consumers and the media spend in any respect, if anything we got more efficiencies during this down turn because of our buys. The answer is yes, we did put a little more effort against breakfast and value in the US in terms of dollars spent against media.

The next question comes from [Howard Penny – Hedge I Management]. [Howard Penny – Hedge I Management]: Do you think the shift in the dollar menu at breakfast is permanent meaning is this something that will help you get through 2010 and if the economy gets better you’ll remove it? James A. Skinner: The answer to that right now is yes. Peter J. Bensen: Yes, it’s permanent and we have no plans to remove it.

The next question comes from Joseph Buckley – Bank of America Merrill Lynch. Joseph Buckley – Bank of America Merrill Lynch: I wanted to follow up my first question because either you didn’t understand the question or I didn’t understand the answer and then I had another question. The second question is does the McCafe sales mix build as the cold weather took place? Is the product a little bit more seasonal than perhaps you expected? Discuss the seasonality of that product. Then Pete, back to Europe for a moment, the European company margin was up 130 basis points and if I understood your answer or some of you comments in the call, food costs sounded like they were up, labor costs were up and utilities up as a percent of sales and I am just not understanding how you get 130 basis points of improvement if you’ve got the major cost items like that all negative? Peter J. Bensen: I’ll get in to that in a little more detail. James A. Skinner: The coffee did spike up some, the McCafe product spiked up some during the colder weather and some of that was a shift away from the ice tea and some of the other beverage initiatives as the weather cooled off if you will. Peter J. Bensen: Regarding the margin in Europe, if I look at the progression, the 130 basis point improvement for the quarter, we got pricing and traffic gave us a lot of growth there and relatively flat food and paper so slightly negative, 30 basis points and a similar benefit from refranchising as we had going forward. So nothing else really unusual it was really top line driven with modest cost increases and the benefit from refranchising.

The next question comes from Mitchell Speiser – Buckingham Research. Mitchell Speiser – Buckingham Research: In the US more of a bigger picture question, labor has been somewhat of an ongoing pressure, I don’t know if you mentioned it in the fourth quarter, there is no minimum wage increase, obviously the unemployment rate is up. Do you think relative labor expense could work in your favor in 2010? Peter J. Bensen: Mitch, in terms of labor rates I think maybe we saw about a 3% increase in the average wage throughout the year, probably something very similar to that going forward, maybe a little bit less. But really on the labor side, we’re focused more on driving more productivity so more transactions per crew hour and that’s where we’re able to mitigate and have some benefits actually on the labor line as we focus on those efficiencies.

The final question comes from [Bob Coleman]. [Bob Coleman]: In regards to your future cap ex of $2.2 billion, should we expect that investment to generate a higher return on existing equity or could it be capping out at these levels? Peter J. Bensen: Bob, we continue to operate under our targets of getting returns on incremental invested capital in the high teens so our expectations on these increases are that we will continue to see returns at that level or better as we move forward. So, we’re not lowering our standard in an effort to increase the cap ex.

Thank you. That’s the end of our questions. I’ll go ahead and turn it over to Jim for some closing comments. James A. Skinner: Thanks everybody for joining us today. In closing I want to reiterate that the McDonald’s global business continues to be strong. Our globally diversified business positions us to deliver in all types of operating environments and is an unparalleled advantage for our system and shareholders. We have the right plans in place to grow our business for toady and over the long term. We will continue to follow our plan to win and execute our strategies on an even higher level to remain modern, relevant and in step with our customers. With our entire system aligned and focused I am confident that we will continue to deliver through our 60 million customers every day. Thank you.