Restructuring

6 Months Ended

Jun. 30, 2023

Restructuring and Related Activities [Abstract]

Accelerating the Organization

In January 2023, the Company announced an evolution of its successful Accelerating the Arches strategy. Enhancements to the strategy include the addition of Restaurant Development to the Company’s growth pillars and an internal effort to modernize ways of working, Accelerating the Organization, both of which are aimed at elevating the Company’s performance. Accelerating the Organization is designed to unlock further growth as the Company focuses on becoming faster, more innovative and more efficient for the benefit of our customers and people.

The Company expects to incur up to $250 million of expenses related to this strategic initiative in 2023, of which $199 million was incurred in the six months ended June 30, 2023. These expenses were recorded in the Other operating (income) expense, net line within the consolidated statement of income. Restructuring expenses primarily consist of employee termination benefits, costs to terminate contracts, including lease terminations, and professional services and other costs. Professional services and other costs primarily relate to expenses incurred for legal and consulting activities. There were no significant non-cash impairment charges included in the amounts listed in the table below.

The following table summarizes the balance of accrued expenses related to this strategic initiative (in millions):


	Employee Termination Benefits		Costs to Terminate Contracts		Other Related Costs		Total
2023
Beginning Balance	$	—	$	—	$	—	$	—
Restructuring Costs Incurred	110.3		26.9		43.3		180.5
Cash Payments	(1.5)		(1.4)		(0.3)		(3.2)
Other Non-Cash Items	—		—		(14.1)		(14.1)
Accrued Balance at March 31, 2023	$	108.8	$	25.5	$	28.9	$	163.2
Restructuring Costs Incurred	(8.8)		5.6		21.9		18.7
Cash Payments	(27.7)		(11.7)		(46.8)		(86.2)
Other Non-Cash Items	—		—		(2.5)		(2.5)
Accrued Balance at June 30, 2023	$	72.3	$	19.4	$	1.5	$	93.2

Of the $199 million of restructuring costs incurred in the six months ended June 30, 2023, $62 million was recorded in the U.S., $72 million was recorded in the International Operated Markets segment and $65 million was recorded in the International Developmental Licensed Markets & Corporate segment, the majority of which was recorded at Corporate.

Substantially all of the accrued restructuring balance recorded at June 30, 2023, related to the Company’s Accelerating the Organization initiative, is expected to be paid out by the end of 2023.

As part of Accelerating the Organization, the Company is also in the initial stages of developing a strategy that will utilize an enterprise-wide Global Business Services model to deliver business services at scale with greater efficiency. Additional costs will be incurred as the strategy progresses; however, at this point in time these future costs cannot be estimated. The expectation is that the Company will complete the majority of its Global Business Services strategy by the end of 2027.