Since 2014 McDonalds has been converting restaurants it owned and operated to franchises. O This has dramatically changed McDonalds' financials. Also since 2014 McDonalds has been repurchasing shares, driving its Common Equity negative. 2 For each of the following accounts select in column F whether the measure has 'increased' or 'decreased' from 2014 to date. 3 For each of the following accounts select in column H the cause of the change in column F: 4 5 5 7 3 Franchising - the change resulted from McDonald's conversion of company operated restaurants to third-party franchises Share Repurchases - the change resulted from McDonald's aggressive repurchasing of shares Neither - the change resulted from neither franchising of company operated restaurants nor share repurchases Both the change resulted from both franchising of company operated restaurants and share repurchases 9 1 2 B 4 5 6 7 B 9 1 2 3 Revenues Gross Margin Interest Expense Tax Rate Net Income Shares Outstanding Earnings Per Shar (EPS) Non-GAAP Net Inc to Common Adjust Cash Accounts Receivable Inventories Property, Plant & Equipment (PP&E) Excess Cash Debt 4 SFAKM's default forecast assumes that future year drivers will be the same as last year's. 5 Use SFAM to forecast for 2020 the following hypothesized scenarios: 5 7 Scenario 3. 9 Growth 0 Gross Margins 1 2 Net Margins 3 Earnings Per Share 4 5 6 Trend Accelerates -10% 60% Trend Reverses 10% 40%