We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
McDonalds Corp | NYSE:MCD | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.84 | -0.30% | 275.91 | 277.75 | 275.32 | 277.02 | 1,055,552 | 15:53:18 |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
For the quarterly period ended |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
Chicago, Illinois | ||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
☒ | Accelerated Filer | ☐ | ||
Non-accelerated Filer | ☐ | Smaller Reporting Company | ||
Emerging Growth Company | ||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ | ||||
Page Reference | |
Item 1 – Financial Statements | |
Item 4 – Controls and Procedures | |
Item 1 – Legal Proceedings | |
Item 1A – Risk Factors | |
Item 6 – Exhibits | |
CONDENSED CONSOLIDATED BALANCE SHEET | |||||||||
(unaudited) | |||||||||
In millions, except per share data | March 31, 2020 | December 31, 2019 | |||||||
Assets | |||||||||
Current assets | |||||||||
Cash and equivalents | $ | $ | |||||||
Accounts and notes receivable | |||||||||
Inventories, at cost, not in excess of market | |||||||||
Prepaid expenses and other current assets | |||||||||
Total current assets | |||||||||
Other assets | |||||||||
Investments in and advances to affiliates | |||||||||
Goodwill | |||||||||
Miscellaneous | |||||||||
Total other assets | |||||||||
Lease right-of-use asset, net | |||||||||
Property and equipment | |||||||||
Property and equipment, at cost | |||||||||
Accumulated depreciation and amortization | ( | ) | ( | ) | |||||
Net property and equipment | |||||||||
Total assets | $ | $ | |||||||
Liabilities and shareholders’ equity | |||||||||
Current liabilities | |||||||||
Short-term borrowings | $ | $ | |||||||
Accounts payable | |||||||||
Lease liability | |||||||||
Income taxes | |||||||||
Other taxes | |||||||||
Accrued interest | |||||||||
Accrued payroll and other liabilities | |||||||||
Current maturities of long-term debt | |||||||||
Total current liabilities | |||||||||
Long-term debt | |||||||||
Long-term lease liability | |||||||||
Long-term income taxes | |||||||||
Deferred revenues - initial franchise fees | |||||||||
Other long-term liabilities | |||||||||
Deferred income taxes | |||||||||
Shareholders’ equity (deficit) | |||||||||
Preferred stock, no par value; authorized – 165.0 million shares; issued – none | |||||||||
Common stock, $.01 par value; authorized – 3.5 billion shares; issued – 1,660.6 million shares | |||||||||
Additional paid-in capital | |||||||||
Retained earnings | |||||||||
Accumulated other comprehensive income (loss) | ( | ) | ( | ) | |||||
Common stock in treasury, at cost; 917.1 and 914.3 million shares | ( | ) | ( | ) | |||||
Total shareholders’ equity (deficit) | ( | ) | ( | ) | |||||
Total liabilities and shareholders’ equity (deficit) | $ | $ |
CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) | |||||||||
Quarters Ended | |||||||||
March 31, | |||||||||
In millions, except per share data | 2020 | 2019 | |||||||
Revenues | |||||||||
Sales by Company-operated restaurants | $ | $ | |||||||
Revenues from franchised restaurants | |||||||||
Other revenues | |||||||||
Total revenues | |||||||||
Operating costs and expenses | |||||||||
Company-operated restaurant expenses | |||||||||
Franchised restaurants-occupancy expenses | |||||||||
Other restaurant expenses | |||||||||
Selling, general & administrative expenses | |||||||||
Depreciation and amortization | |||||||||
Other | |||||||||
Other operating (income) expense, net | ( | ) | |||||||
Total operating costs and expenses | |||||||||
Operating income | |||||||||
Interest expense | |||||||||
Nonoperating (income) expense, net | ( | ) | ( | ) | |||||
Income before provision for income taxes | |||||||||
Provision for income taxes | |||||||||
Net income | $ | $ | |||||||
Earnings per common share-basic | $ | $ | |||||||
Earnings per common share-diluted | $ | $ | |||||||
Dividends declared per common share | $ | $ | |||||||
Weighted-average shares outstanding-basic | |||||||||
Weighted-average shares outstanding-diluted |
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED) | |||||||||
Quarters Ended | |||||||||
March 31, | |||||||||
In millions | 2020 | 2019 | |||||||
Net income | $ | $ | |||||||
Other comprehensive income (loss), net of tax | |||||||||
Foreign currency translation adjustments: | |||||||||
Gain (loss) recognized in accumulated other comprehensive income ("AOCI"), including net investment hedges | ( | ) | |||||||
Reclassification of (gain) loss to net income | |||||||||
Foreign currency translation adjustments-net of tax benefit (expense) of $(115.3) and $(60.0) | ( | ) | |||||||
Cash flow hedges: | |||||||||
Gain (loss) recognized in AOCI | ( | ) | |||||||
Reclassification of (gain) loss to net income | ( | ) | ( | ) | |||||
Cash flow hedges-net of tax benefit (expense) of $14.7 and $0.2 | ( | ) | ( | ) | |||||
Defined benefit pension plans: | |||||||||
Gain (loss) recognized in AOCI | ( | ) | |||||||
Reclassification of (gain) loss to net income | |||||||||
Defined benefit pension plans-net of tax benefit (expense) of $0.4 and $0.0 | |||||||||
Total other comprehensive income (loss), net of tax | ( | ) | |||||||
Comprehensive income (loss) | $ | $ |
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) | |||||||||||
Quarters Ended | |||||||||||
March 31, | |||||||||||
In millions | 2020 | 2019 | |||||||||
Operating activities | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile to cash provided by operations | |||||||||||
Charges and credits: | |||||||||||
Depreciation and amortization | |||||||||||
Deferred income taxes | |||||||||||
Share-based compensation | |||||||||||
Other | ( | ) | |||||||||
Changes in working capital items | ( | ) | |||||||||
Cash provided by operations | |||||||||||
Investing activities | |||||||||||
Capital expenditures | ( | ) | ( | ) | |||||||
Purchases of restaurant businesses | ( | ) | ( | ) | |||||||
Sales of restaurant businesses | |||||||||||
Sales of property | |||||||||||
Other | ( | ) | ( | ) | |||||||
Cash (used for) investing activities | ( | ) | ( | ) | |||||||
Financing activities | |||||||||||
Net short-term borrowings | ( | ) | |||||||||
Long-term financing issuances | |||||||||||
Long-term financing repayments | ( | ) | ( | ) | |||||||
Treasury stock purchases | ( | ) | ( | ) | |||||||
Common stock dividends | ( | ) | ( | ) | |||||||
Proceeds from stock option exercises | |||||||||||
Other | ( | ) | ( | ) | |||||||
Cash provided by financing activities | |||||||||||
Effect of exchange rates on cash and cash equivalents | ( | ) | ( | ) | |||||||
Cash and equivalents increase | |||||||||||
Cash and equivalents at beginning of period | |||||||||||
Cash and equivalents at end of period | $ | $ |
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED) | |||||||||||||||||||||||||||||||||||||
For the quarter ended March 31, 2019 | |||||||||||||||||||||||||||||||||||||
Common stock issued | Accumulated other comprehensive income (loss) | Common stock in treasury | Total shareholders’ equity (deficit) | ||||||||||||||||||||||||||||||||||
Additional paid-in capital | Retained earnings | Pensions | Cash flow hedges | Foreign currency translation | |||||||||||||||||||||||||||||||||
In millions, except per share data | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | ( | ) | |||||||||||||||||||||||||||||||||||
Comprehensive income | |||||||||||||||||||||||||||||||||||||
Common stock cash dividends ($1.16 per share) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
Treasury stock purchases | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
Share-based compensation | |||||||||||||||||||||||||||||||||||||
Stock option exercises and other | |||||||||||||||||||||||||||||||||||||
Balance at March 31, 2019 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ( | ) | $ | ( | ) | $ | ( | ) |
For the quarter ended March 31, 2020 | |||||||||||||||||||||||||||||||||||||
Common stock issued | Accumulated other comprehensive income (loss) | Common stock in treasury | Total shareholders’ equity (deficit) | ||||||||||||||||||||||||||||||||||
Additional paid-in capital | Retained earnings | Pensions | Cash flow hedges | Foreign currency translation | |||||||||||||||||||||||||||||||||
In millions, except per share data | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
Comprehensive income | |||||||||||||||||||||||||||||||||||||
Common stock cash dividends ($1.25 per share) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
Treasury stock purchases | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
Share-based compensation | |||||||||||||||||||||||||||||||||||||
Stock option exercises and other | |||||||||||||||||||||||||||||||||||||
Balance at March 31, 2020 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ( | ) | $ | ( | ) | $ | ( | ) |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) |
Restaurants at March 31, | 2020 | 2019 | |||
Conventional franchised | |||||
Developmental licensed | |||||
Foreign affiliated | |||||
Total Franchised | |||||
Company-operated | |||||
Total Systemwide restaurants |
Derivative Assets | Derivative Liabilities | ||||||||||||||||||
In millions | Balance Sheet Classification | March 31, 2020 | December 31, 2019 | Balance Sheet Classification | March 31, 2020 | December 31, 2019 | |||||||||||||
Derivatives designated as hedging instruments | |||||||||||||||||||
Foreign currency | Prepaid expenses and other current assets | $ | $ | Accrued payroll and other liabilities | $ | ( | ) | $ | ( | ) | |||||||||
Interest rate | Prepaid expenses and other current assets | Accrued payroll and other liabilities | |||||||||||||||||
Foreign currency | Miscellaneous other assets | Other long-term liabilities | ( | ) | ( | ) | |||||||||||||
Interest rate | Miscellaneous other assets | Other long-term liabilities | |||||||||||||||||
Total derivatives designated as hedging instruments | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||
Equity | Prepaid expenses and other current assets | $ | $ | Accrued payroll and other liabilities | $ | ( | ) | $ | ( | ) | |||||||||
Foreign currency | Prepaid expenses and other current assets | Accrued payroll and other liabilities | ( | ) | |||||||||||||||
Equity | Miscellaneous other assets | ||||||||||||||||||
Total derivatives not designated as hedging instruments | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||
Total derivatives | $ | $ | $ | ( | ) | $ | ( | ) |
Location of Gain or Loss Recognized in Income on Derivative | Gain (Loss) Recognized in AOCI | Gain (Loss) Reclassified into Income from AOCI | Gain (Loss) Recognized in Income on Derivative | ||||||||||||||||||||||
In millions | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Foreign currency | Nonoperating income/expense | $ | $ | $ | $ | ||||||||||||||||||||
Interest rate | Interest expense | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Cash flow hedges | $ | ( | ) | $ | $ | $ | |||||||||||||||||||
Foreign currency denominated debt | Nonoperating income/expense | $ | $ | ||||||||||||||||||||||
Foreign currency derivatives | Nonoperating income/expense | ||||||||||||||||||||||||
Foreign currency derivatives(1) | Interest expense | $ | $ | ||||||||||||||||||||||
Net investment hedges | $ | $ | $ | $ | |||||||||||||||||||||
Foreign currency | Nonoperating income/expense | $ | $ | ( | ) | ||||||||||||||||||||
Equity | Selling, general & administrative expenses | ( | ) | ||||||||||||||||||||||
Undesignated derivatives | $ | ( | ) | $ | |||||||||||||||||||||
(1)The amount of gain (loss) recognized in income related to components excluded from effectiveness testing. |
Quarters Ended March 31, | 2020 | 2019 | ||||||
Rents | $ | $ | ||||||
Royalties | ||||||||
Initial fees | ||||||||
Revenues from franchised restaurants | $ | $ |
• | U.S. - the Company's largest market. The segment is 95% franchised as of March 31, 2020. |
• | International Operated Markets - comprised of wholly-owned markets, or countries in which the Company operates restaurants, including Australia, Canada, France, Germany, Italy, the Netherlands, Russia, Spain and the U.K. The segment is 84% franchised as of March 31, 2020. |
• | International Developmental Licensed Markets & Corporate - comprised of primarily developmental licensee and affiliate markets in the McDonald’s system. Corporate activities are also reported within this segment. The segment is 98% franchised as of March 31, 2020. |
Quarters Ended | |||||||
March 31, | |||||||
In millions | 2020 | 2019 | |||||
Revenues | |||||||
U.S. | $ | $ | |||||
International Operated Markets | |||||||
International Developmental Licensed Markets & Corporate | |||||||
Total revenues | $ | $ | |||||
Operating Income | |||||||
U.S. | $ | $ | |||||
International Operated Markets | |||||||
International Developmental Licensed Markets & Corporate | ( | ) | |||||
Total operating income | $ | $ |
• | Working with franchisees around the world in order to evaluate operational feasibility and support financial liquidity during this period of uncertainty. |
• | Utilizing our high Drive-Thru penetration as a critical asset during the COVID-19 pandemic, and this order channel continues to enable us to serve customers during this challenging time. |
• | Applying learnings from our Experience of the Future deployment over the last several years, when we shut down and reopened restaurants, which should prove invaluable as we emerge from the crisis. |
• | Collaborating closely with suppliers on contingency planning for continuous supply. |
• | Delivery. We now offer delivery in over 25,000 restaurants across the global system, and our delivery business has become more relevant than ever during the crisis. Despite the challenging business environment, we have continued to meet customers’ expectations, and in many markets delivery sales per day are up significantly versus pre-COVID-19 figures. Additionally, we are sharing innovative best practices across our markets, including the use of contactless delivery, to adapt to changing customer behaviors. We continue to see great runway ahead of us to drive awareness and trial of delivery, and are focusing on efforts to encourage frequency and retention in 2020 and beyond. |
• | Digital. The investments the Company has made over the past several years with our emerging digital customer experience platform, including mobile order and pay and the acquisitions of Dynamic Yield and Apprente, remain a priority for our business. Dynamic Yield has been implemented via outdoor digital menu boards across the U.S. and Australia, offering customers a more customized experience, while Apprente, the conversational interface technology, is expected to provide more efficient and accurate ordering in the drive-thru in the future. These digital investments enable us to give customers more choice and flexibility in how they order, pay, and receive their food during this unprecedented time and will remain important in serving customers as we think about our business beyond this crisis. |
• | U.S. comparable sales increased 0.1% for the quarter. |
• | International Operated Markets segment comparable sales decreased 6.9% for the quarter, primarily driven by temporary restaurant closures in France, the United Kingdom and Italy. |
• | International Developmental Licensed Markets segment comparable sales decreased 4.3% for the quarter, primarily impacted by China, which had approximately 25% of restaurants fully closed in early February, at the peak of the Company’s closures in that market. |
• | Consolidated revenues decreased 6% (5% in constant currencies). |
• | Systemwide sales decreased 4% (2% in constant currencies). |
• | Consolidated operating income decreased 19% (17% in constant currencies). |
• | Diluted earnings per share of $1.47 decreased 15% (13% in constant currencies). |
• | Constant currency results exclude the effects of foreign currency translation and are calculated by translating current year results at prior year average exchange rates. Management reviews and analyzes business results excluding the effect of foreign currency translation, impairment and other strategic charges and gains, as well as income tax provision adjustments related to the Tax Cuts and Jobs Act of 2017 ("Tax Act"), and bases incentive compensation plans on these results, because the Company believes this better represents underlying business trends. |
• | Comparable sales are compared to the same period in the prior year and represent sales at all restaurants, whether operated by the Company or by franchisees, in operation at least thirteen months including those temporarily closed. Some of the reasons restaurants may be temporarily closed include reimaging or remodeling, rebuilding, road construction and natural disasters (which includes restaurants temporarily closed due to COVID-19 in 2020). Comparable sales exclude the impact of currency translation, and, since 2017, also exclude sales from Venezuela due to its hyper-inflation. Management generally identifies hyper-inflationary markets as those markets whose cumulative inflation rate over a three-year period exceeds 100%. Management believes that these exclusions more accurately reflect the underlying business trends. Comparable sales are driven by changes in guest counts and average check, which is affected by changes in pricing and product mix. The goal is to achieve a relatively balanced contribution from both guest counts and average check. |
• | Comparable guest counts represent the number of transactions at all restaurants, whether operated by the Company or by franchisees, in operation at least thirteen months including those temporarily closed. |
• | Systemwide sales include sales at all restaurants, whether operated by the Company or by franchisees. While franchised sales are not recorded as revenues by the Company, management believes the information is important in understanding the Company's financial performance, because these sales are the basis on which the Company calculates and records franchised revenues and are indicative of the financial health of the franchisee base. The Company's revenues consist solely of sales by Company-operated restaurants and fees from franchised restaurants operated by conventional franchisees, developmental licensees and affiliates. |
CONSOLIDATED OPERATING RESULTS | |||||||
Quarter Ended | |||||||
Dollars in millions, except per share data | March 31, 2020 | ||||||
Amount | Increase/ (Decrease) | ||||||
Revenues | |||||||
Sales by Company-operated restaurants | $ | 2,025.8 | (10 | )% | |||
Revenues from franchised restaurants | 2,608.0 | (4 | ) | ||||
Other revenues | 80.6 | 18 | |||||
Total revenues | 4,714.4 | (6 | ) | ||||
Operating costs and expenses | |||||||
Company-operated restaurant expenses | 1,752.8 | (7 | ) | ||||
Franchised restaurants-occupancy expenses | 554.2 | 4 | |||||
Other restaurant expenses | 65.5 | 23 | |||||
Selling, general & administrative expenses | |||||||
Depreciation and amortization | 73.5 | 20 | |||||
Other | 516.3 | 18 | |||||
Other operating (income) expense, net | 58.5 | n/m | |||||
Total operating costs and expenses | 3,020.8 | 3 | |||||
Operating income | 1,693.6 | (19 | ) | ||||
Interest expense | 280.0 | 2 | |||||
Nonoperating (income) expense, net | (31.3 | ) | n/m | ||||
Income before provision for income taxes | 1,444.9 | (21 | ) | ||||
Provision for income taxes | 338.0 | (33 | ) | ||||
Net income | $ | 1,106.9 | (17 | )% | |||
Earnings per common share-basic | $ | 1.49 | (14 | )% | |||
Earnings per common share-diluted | $ | 1.47 | (15 | )% |
IMPACT OF FOREIGN CURRENCY TRANSLATION | ||||||||||||||
Dollars in millions, except per share data | ||||||||||||||
Currency Translation Benefit/ (Cost) | ||||||||||||||
Quarters Ended March 31, | 2020 | 2019 | 2020 | |||||||||||
Revenues | $ | 4,714.4 | $ | 5,024.1 | $ | (74.8 | ) | |||||||
Company-operated margins | 273.0 | 354.3 | (3.6 | ) | ||||||||||
Franchised margins | 2,053.8 | 2,182.0 | (35.2 | ) | ||||||||||
Selling, general & administrative expenses | 589.8 | 499.1 | 3.8 | |||||||||||
Operating income | 1,693.6 | 2,094.0 | (36.3 | ) | ||||||||||
Net income | 1,106.9 | 1,328.4 | (12.8 | ) | ||||||||||
Earnings per share-diluted | $ | 1.47 | $ | 1.72 | $ | (0.02 | ) |
REVENUES | |||||||||||
Dollars in millions | |||||||||||
Quarters Ended March 31, | 2020 | 2019 | Inc/ (Dec) | Inc/ (Dec) Excluding Currency Translation | |||||||
Company-operated sales | |||||||||||
U.S. | $ | 579.2 | $ | 597.6 | (3 | )% | (3 | )% | |||
International Operated Markets | 1,305.3 | 1,487.9 | (12 | ) | (11 | ) | |||||
International Developmental Licensed Markets & Corporate | 141.3 | 155.0 | (9 | ) | (3 | ) | |||||
Total | $ | 2,025.8 | $ | 2,240.5 | (10 | )% | (8 | )% | |||
Franchised revenues | |||||||||||
U.S. | $ | 1,250.7 | $ | 1,248.6 | 0 | % | 0 | % | |||
International Operated Markets | 1,074.0 | 1,175.1 | (9 | ) | (6 | ) | |||||
International Developmental Licensed Markets & Corporate | 283.3 | 291.4 | (3 | ) | 1 | ||||||
Total | $ | 2,608.0 | $ | 2,715.1 | (4 | )% | (2 | )% | |||
Total Company-operated sales and Franchised revenues | |||||||||||
U.S. | $ | 1,829.9 | $ | 1,846.2 | (1 | )% | (1 | )% | |||
International Operated Markets | 2,379.3 | 2,663.0 | (11 | ) | (9 | ) | |||||
International Developmental Licensed Markets & Corporate | 424.6 | 446.4 | (5 | ) | (1 | ) | |||||
Total | $ | 4,633.8 | $ | 4,955.6 | (6 | )% | (5 | )% | |||
Total Other revenues | $ | 80.6 | $ | 68.5 | 18 | % | 19 | % | |||
Total Revenues | $ | 4,714.4 | $ | 5,024.1 | (6 | )% | (5 | )% |
• | Total Company-operated sales and franchised revenues decreased 6% (5% in constant currencies) for the quarter. The decrease primarily reflected sales performance declines as a result of COVID-19. Revenue declines for the quarter were more significant in the International Operated Markets segment, primarily driven by the temporary restaurant closures in the United Kingdom and France. In March, the Company's total revenue declines in the U.S. and International Operated Markets segments were in line with comparable sales declines. |
COMPARABLE SALES | ||||||||||
Increase/(Decrease) | ||||||||||
Two months ended February 29, 2020 | Month ended March 31, 2020 | Quarter ended March 31, 2020 | Quarter ended March 31, 2019 | |||||||
U.S. | 8.1 | % | (13.4 | )% | 0.1 | % | 4.5 | % | ||
International Operated Markets | 8.5 | (34.7 | ) | (6.9 | ) | 6.0 | ||||
International Developmental Licensed Markets & Corporate | 3.7 | (19.4 | ) | (4.3 | ) | 6.0 | ||||
Total | 7.2 | % | (22.2 | )% | (3.4 | )% | 5.4 | % |
• | Comparable Sales: The Company delivered strong global comparable sales results for the two months ended February 2020, with all segments benefiting from Leap Day. Globally, sales results began to markedly decline during the second half of March due to COVID-19, which caused significant restaurant closures and "shelter-in-place" guidance. The sales trends from the second half of March have continued into April, and are expected to continue while these restrictions are in place. |
• | U.S. and International Operated Markets: Comparable sales results for the two months ended February 2020 reflected balanced growth in average check and guest counts. The comparable sales decline in the International Operated Markets segment for both the month of March and the quarter were primarily driven by temporary restaurant closures in France, the United Kingdom and Italy. |
• | International Developmental Licensed Markets: Comparable sales results for the quarter were primarily impacted by China, which had approximately 25% of restaurants fully closed in early February, at the peak of the Company’s closures in that market. |
SYSTEMWIDE SALES* | |||||
Quarter Ended March 31, 2020 | Inc/ (Dec) | Inc/ (Dec) Excluding Currency Translation | |||
U.S. | 0 | % | 0 | % | |
International Operated Markets | (8 | ) | (5 | ) | |
International Developmental Licensed Markets & Corporate | (4 | ) | (1 | ) | |
Total | (4 | )% | (2 | )% |
* | Unlike comparable sales, the Company has not excluded hyper-inflationary market results (currently, only Venezuela) from Systemwide sales as these sales are the basis on which the Company calculates and records revenues. |
FRANCHISED SALES | ||||||||||||||
Dollars in millions | ||||||||||||||
Quarters Ended March 31, | 2020 | 2019 | Inc/ (Dec) | Inc/ (Dec) Excluding Currency Translation | ||||||||||
U.S. | $ | 8,873.7 | $ | 8,850.4 | 0 | % | 0 | % | ||||||
International Operated Markets | 6,192.7 | 6,664.8 | (7 | ) | (4 | ) | ||||||||
International Developmental Licensed Markets & Corporate | 5,447.0 | 5,695.3 | (4 | ) | (1 | ) | ||||||||
Total | $ | 20,513.4 | $ | 21,210.5 | (3 | )% | (2 | )% | ||||||
Ownership type | ||||||||||||||
Conventional franchised | $ | 14,986.4 | $ | 15,466.0 | (3 | )% | (2 | )% | ||||||
Developmental licensed | 3,228.0 | 3,322.8 | (3 | ) | 2 | |||||||||
Foreign affiliated | 2,299.0 | 2,421.7 | (5 | ) | (5 | ) | ||||||||
Total | $ | 20,513.4 | $ | 21,210.5 | (3 | )% | (2 | )% |
FRANCHISED AND COMPANY-OPERATED RESTAURANT MARGINS | |||||||||||||
Dollars in millions | |||||||||||||
Amount | Inc/ (Dec) | Inc/ (Dec) Excluding Currency Translation | |||||||||||
Quarters Ended March 31, | 2020 | 2019 | |||||||||||
Franchised | |||||||||||||
U.S. | $ | 961.3 | $ | 979.7 | (2 | )% | (2 | )% | |||||
International Operated Markets | 815.3 | 919.0 | (11 | ) | (9 | ) | |||||||
International Developmental Licensed Markets & Corporate | 277.2 | 283.3 | (2 | ) | 1 | ||||||||
Total | $ | 2,053.8 | $ | 2,182.0 | (6 | )% | (4 | )% | |||||
Company-operated | |||||||||||||
U.S. | $ | 80.5 | $ | 83.3 | (3 | )% | (3 | )% | |||||
International Operated Markets | 197.7 | 269.0 | (26 | ) | (25 | ) | |||||||
International Developmental Licensed Markets & Corporate | n/m | n/m | n/m | n/m | |||||||||
Total | $ | 273.0 | $ | 354.3 | (23 | )% | (22 | )% | |||||
Total restaurant margins | |||||||||||||
U.S. | $ | 1,041.8 | $ | 1,063.0 | (2 | )% | (2 | )% | |||||
International Operated Markets | 1,013.0 | 1,188.0 | (15 | ) | (12 | ) | |||||||
International Developmental Licensed Markets & Corporate | n/m | n/m | n/m | n/m | |||||||||
Total | $ | 2,326.8 | $ | 2,536.3 | (8 | )% | (7 | )% |
• | Due to the nature of our operating model, franchised margin expenses (primarily comprised of lease expense and depreciation expense) are mainly fixed, whereas Company-operated restaurant expenses have more variable cost components. Total restaurant margin dollars included $350.8 million of depreciation and amortization expense for the quarter. |
• | For the two months ended February 2020, total restaurant margin dollars increased $142.5 million or 9% (10% in constant currencies) as a result of the strong sales performance at the beginning of the year. For the month of March, total restaurant margin dollars decreased $352.0 million or 37% (35% in constant currencies), primarily due to the global decline in sales results, markedly beginning during the second half of March. Approximately two-thirds of this decrease was in the International Operated Markets segment due to the significant number of restaurants temporarily closed during the month. |
• | Total restaurant margin dollars decreased $209.5 million or 8% (7% in constant currencies) for the quarter. The franchised margin dollar decrease also reflected higher depreciation costs related to investments in Experience of the Future in the U.S |
• | Selling, general and administrative expenses increased $90.7 million or 18% (19% in constant currencies) for the quarter. These results reflected $40 million of costs related to the cancellation of the 2020 Worldwide Owner/Operator Convention; approximately $20 million of incremental costs related to contractual obligations as a result of a reduction in scope of certain investments in restaurant technology and research & development; and Dynamic Yield costs which were not included in the first quarter 2019. |
• | Selling, general and administrative expenses as a percent of Systemwide sales was 2.6% and 2.1% for the quarters ended 2020 and 2019, respectively. |
OTHER OPERATING (INCOME) EXPENSE, NET | |||||||
Dollars in millions | |||||||
Quarters Ended March 31, | 2020 | 2019 | |||||
Gains on sales of restaurant businesses | $ | (2.5 | ) | $ | (29.1 | ) | |
Equity in earnings of unconsolidated affiliates | (14.7 | ) | (35.1 | ) | |||
Asset dispositions and other (income) expense, net | 74.4 | 22.3 | |||||
Impairment and other charges, net | 1.3 | 0.3 | |||||
Total | $ | 58.5 | $ | (41.6 | ) |
• | Gains on sales of restaurant businesses decreased for the quarter primarily due to fewer restaurant sales in the U.S. |
• | Equity in earnings of unconsolidated affiliates declined for the quarter primarily due to China as a result of COVID-19. |
• | Asset dispositions and other expense, net increased for the quarter primarily due to increases in reserves for bad debts and litigation settlements. |
• | Impairment and other charges, net for the quarter reflected $14.4 million of costs related to the write-off of software no longer being used, mostly offset by $13.0 million of income primarily comprised of a reversal of a reserve associated with the Company's sale of its business in the India Delhi market in January 2020. |
OPERATING INCOME | |||||||||||||
Dollars in millions | |||||||||||||
Quarters Ended March 31, | 2020 | 2019 | Inc/ (Dec) | Inc/ (Dec) Excluding Currency Translation | |||||||||
U.S. | $ | 892.4 | $ | 951.9 | (6 | )% | (6 | )% | |||||
International Operated Markets | 879.1 | 1,048.0 | (16 | ) | (14 | ) | |||||||
International Developmental Licensed Markets & Corporate | (77.9 | ) | 94.1 | n/m | n/m | ||||||||
Total | $ | 1,693.6 | $ | 2,094.0 | (19 | )% | (17 | )% | |||||
Operating margin | 35.9 | % | 41.7 | % | |||||||||
• | Operating Income: Operating income decreased $400.4 million or 19% (17% in constant currencies) for the quarter, which primarily reflected sales performance declines as a result of COVID-19. |
• | U.S.: The operating income decrease for the quarter also reflected lower gains on sales of restaurant businesses and an increase in a reserve for a litigation settlement. |
• | International Developmental Licensed Markets & Corporate: The operating income decrease for the quarter was also affected by higher G&A spend and additional reserves for bad debts. |
• | Operating Margin: Operating margin is defined as operating income as a percent of total revenues. The contributions to operating margin differ by segment due to each segment's ownership structure, primarily due to the relative percentage of franchised versus Company-operated restaurants. Additionally, the number of temporary restaurant closures, which vary by segment, as a result of COVID-19, will also impact the contribution of each segment to the consolidated operating margin. |
• | Interest expense increased 2% (3% in constant currencies) for the quarter, reflecting higher average debt balances, partly offset by a decrease in the amount of Euro denominated deposits incurring interest expense as a result of the Company's cash management strategies. |
• | Based on current interest and foreign currency exchange rates, the Company expects interest expense for the full year 2020 to increase about 10% to 12% due primarily to higher average debt balances as a result of additional debt issuances in response to COVID-19. |
NONOPERATING (INCOME) EXPENSE, NET | |||||||
Dollars in millions | |||||||
Quarters Ended March 31, | 2020 | 2019 | |||||
Interest income | $ | (5.4 | ) | $ | (10.0 | ) | |
Foreign currency and hedging activity | (17.8 | ) | (9.3 | ) | |||
Other expense, net | (8.1 | ) | 7.9 | ||||
Total | $ | (31.3 | ) | $ | (11.4 | ) |
• | The effective income tax rate was 23.4% and 27.5% for the quarters ended 2020 and 2019, respectively. |
• | Results in 2019 included $47 million of additional income tax costs due to regulations issued in January 2019 related to the Tax Act. |
• | Continue to innovate and differentiate the McDonald’s experience, including by preparing and serving our food in a way that balances value and convenience to our customers with profitability; |
• | Capitalize on our global scale, iconic brand and local market presence to enhance our ability to retain, regain and convert key customer groups; |
• | Utilize our organizational structure to build on our progress and execute against our business strategies; |
• | Integrate and augment our technology and digital initiatives, including mobile ordering and delivery; |
• | Identify and develop restaurant sites consistent with our plans for net growth of Systemwide restaurants; |
• | Operate restaurants with high service levels and optimal capacity while managing the increasing complexity of our restaurant operations, create efficiencies through innovative use of technology and complete Experience of the Future (“EOTF”), particularly in the U.S.; |
• | Accelerate our existing strategies, including through growth opportunities, acquisitions, investments and partnerships; and |
• | Evolve and adjust our business strategies in response to, among other things, changing consumer behavior, operational restrictions and impacts to our results of operations and liquidity as a result of the COVID-19 pandemic. |
• | The relative level of our defense costs, which vary from period to period depending on the number, nature and procedural status of pending proceedings; |
• | The cost and other effects of settlements, judgments or consent decrees, which may require us to make disclosures or take other actions that may affect perceptions of our brand and products; and |
• | Adverse results of pending or future litigation, including litigation challenging the composition and preparation of our products, or the appropriateness or accuracy of our marketing or other communication practices. |
• | The unpredictable nature of global economic and market conditions; |
• | Governmental action or inaction in light of key indicators of economic activity or events that can significantly influence financial markets, particularly in the U.S., which is the principal trading market for our common stock, and media reports and commentary about economic, trade or other matters, even when the matter in question does not directly relate to our business; |
• | Trading activity in our common stock or trading activity in derivative instruments with respect to our common stock or debt securities, which can be affected by market commentary (including commentary that may be unreliable or incomplete); unauthorized disclosures about our performance, plans or expectations about our business; our actual performance and creditworthiness; investor confidence, driven in part by expectations about our performance; actions by shareholders and others seeking to influence our business strategies; portfolio transactions in our stock by significant shareholders; or trading activity that results from the ordinary course rebalancing of stock indices in which McDonald’s may be included, such as the S&P 500 Index and the Dow Jones Industrial Average; |
• | The impact of our stock repurchase program or dividend rate; and |
• | The impact on our results of corporate actions and market and third-party perceptions and assessments of such actions, such as those we may take from time to time as we implement our strategies, including through acquisitions, in light of changing business, legal and tax considerations and evolve our corporate structure. |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) | ||||||||||
January 1-31, 2020 | 1,493,033 | $ | 208.46 | 1,493,033 | $ | 14,688,763,663 | ||||||||
February 1-29, 2020 | 1,583,136 | 209.91 | 1,583,136 | 14,356,453,572 | ||||||||||
March 1-31, 2020 | 1,169,542 | 192.69 | 1,169,542 | 14,131,091,305 | ||||||||||
Total | 4,245,711 | $ | 204.66 | 4,245,711 |
* | Subject to applicable law, the Company may repurchase shares directly in the open market, in privately negotiated transactions, or pursuant to derivative instruments and plans complying with Rule 10b5-1, among other types of transactions and arrangements. |
(1) | On December 31, 2019, the Company's Board of Directors approved a share repurchase program, effective January 1, 2020, that authorized the purchase of up to $15 billion of the Company's outstanding common stock with no specified expiration date. In early March 2020, the Company voluntarily suspended the share repurchase program. |
Item 6. Exhibits | |||||
Exhibit Number | Description | ||||
(3) | (a) | ||||
(b) | |||||
(4) | Instruments defining the rights of security holders, including Indentures:* | ||||
(a) | |||||
(b) | |||||
(10) | Material Contracts | ||||
(a) | |||||
(b) | |||||
(i) | |||||
(c) | |||||
(i) | |||||
(ii) | |||||
(d) | |||||
(i) | |||||
(ii) | |||||
(e) | |||||
(f) | |||||
(g) | |||||
(h) | |||||
(i) | |||||
(j) | |||||
(k) | |||||
(l) | |||||
(m) | |||||
(n) | |||||
(o) | |||||
(p) | |||||
(q) | |||||
(31.1) | |||||
(31.2) | |||||
(32.1) | |||||
(32.2) | |||||
(101.INS) | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||
(101.SCH) | Inline XBRL Taxonomy Extension Schema Document. | ||||
(101.CAL) | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | ||||
(101.DEF) | Inline XBRL Taxonomy Extension Definition Linkbase Document. | ||||
(101.LAB) | Inline XBRL Taxonomy Extension Label Linkbase Document. | ||||
(101.PRE) | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | ||||
(104) | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | ||||
* | Other instruments defining the rights of holders of long-term debt of the registrant, and all of its subsidiaries for which consolidated financial statements are required to be filed and which are not required to be registered with the Commission, are not included herein as the securities authorized under these instruments, individually, do not exceed 10% of the total assets of the registrant and its subsidiaries on a consolidated basis. An agreement to furnish a copy of any such instruments to the Commission upon request has been filed with the Commission. |
** | Denotes compensatory plan. |
McDONALD’S CORPORATION (Registrant) | ||||
/s/ Kevin M. Ozan | ||||
Date: | May 7, 2020 | Kevin M. Ozan | ||
Corporate Executive Vice President and Chief Financial Officer |
(1) | I have reviewed this quarterly report on Form 10-Q of McDonald’s Corporation; |
(2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
(3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
(4) | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
(5) | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Christopher J. Kempczinski |
Christopher J. Kempczinski |
President and Chief Executive Officer |
(1) | I have reviewed this quarterly report on Form 10-Q of McDonald’s Corporation; |
(2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
(3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
(4) | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
(5) | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Kevin M. Ozan |
Kevin M. Ozan |
Corporate Executive Vice President and Chief Financial Officer |
/s/ Christopher J. Kempczinski |
Christopher J. Kempczinski |
President and Chief Executive Officer |
/s/ Kevin M. Ozan |
Kevin M. Ozan |
Corporate Executive Vice President and Chief Financial Officer |
Condensed Consolidated Statement of Shareholders' Equity - USD ($) shares in Millions, $ in Millions |
Total |
Common stock issued |
Additional paid-in capital |
Retained earnings |
Pensions |
Cash Flow Hedges |
Foreign currency translation |
Common stock in treasury |
---|---|---|---|---|---|---|---|---|
Beginning Balance (in shares) at Dec. 31, 2018 | 1,660.6 | (893.5) | ||||||
Beginning Balance at Dec. 31, 2018 | $ (6,258.4) | $ 16.6 | $ 7,376.0 | $ 50,487.0 | $ (216.6) | $ 32.4 | $ (2,425.3) | $ (61,528.5) |
Net income | 1,328.4 | 1,328.4 | ||||||
Other comprehensive income (loss), net of tax | 89.4 | 1.2 | (0.8) | 89.0 | ||||
Comprehensive income | 1,417.8 | |||||||
Common stock cash dividends | (886.8) | (886.8) | ||||||
Treasury stock purchases (in shares) | (5.4) | |||||||
Treasury stock purchases | (963.7) | $ (963.7) | ||||||
Share-based compensation | 31.6 | 31.6 | ||||||
Stock option exercises and other (in shares) | 1.8 | |||||||
Stock option exercises and other | 108.6 | 30.9 | $ 77.7 | |||||
Ending Balance (in shares) at Mar. 31, 2019 | 1,660.6 | (897.1) | ||||||
Ending Balance at Mar. 31, 2019 | (6,550.9) | $ 16.6 | 7,438.5 | 50,928.6 | (215.4) | 31.6 | (2,336.3) | $ (62,414.5) |
Beginning Balance (in shares) at Dec. 31, 2019 | 1,660.6 | (914.3) | ||||||
Beginning Balance at Dec. 31, 2019 | (8,210.3) | $ 16.6 | 7,653.9 | 52,930.5 | (243.7) | 12.0 | (2,251.0) | $ (66,328.6) |
Net income | 1,106.9 | 1,106.9 | ||||||
Other comprehensive income (loss), net of tax | (513.7) | 1.2 | (48.7) | (466.2) | ||||
Comprehensive income | 593.2 | |||||||
Common stock cash dividends | (930.7) | (930.7) | ||||||
Treasury stock purchases (in shares) | (4.2) | |||||||
Treasury stock purchases | (868.9) | $ (868.9) | ||||||
Share-based compensation | 25.9 | 25.9 | ||||||
Stock option exercises and other (in shares) | 1.4 | |||||||
Stock option exercises and other | 97.4 | 33.7 | $ 63.7 | |||||
Ending Balance (in shares) at Mar. 31, 2020 | 1,660.6 | (917.1) | ||||||
Ending Balance at Mar. 31, 2020 | $ (9,293.4) | $ 16.6 | $ 7,713.5 | $ 53,106.7 | $ (242.5) | $ (36.7) | $ (2,717.2) | $ (67,133.8) |
Revenues from Franchised Restaurants (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Franchisor Disclosure | ||
Rents | $ 1,668.2 | $ 1,747.6 |
Royalties | 928.8 | 956.7 |
Initial Fees | 11.0 | 10.8 |
Revenues from franchised restaurants | $ 2,608.0 | $ 2,715.1 |
Updates to Significant Accounting Policies (Policies) |
3 Months Ended |
---|---|
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Goodwill and Intangible Assets Disclosure [Text Block] | Long-lived assets and Goodwill Long-lived assets and Goodwill are typically reviewed for impairment annually in the fourth quarter and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable or if an indicator of impairment exists. The Company has continued to monitor the significant global economic uncertainty as a result of COVID-19 to assess the outlook for restaurant operations and the impact that any disruption may have on the Company's business and overall financial performance. As a result of the Company's analysis, and in consideration of the totality of events and circumstances, including the potential impact of COVID-19 related disruptions on the Company’s operating results, there were no indicators of impairment during the first quarter of 2020. |
Revenue Recognition, Sales of Goods [Policy Text Block] | Revenue recognition The Company's revenues consist of sales by Company-operated restaurants and fees from restaurants operated by franchisees, developmental licensees and affiliates. Revenues from conventional franchised restaurants include rent and royalties based on a percent of sales with minimum rent payments, and initial fees. Revenues from restaurants licensed to developmental licensees and affiliates include a royalty based on a percent of sales, and generally include initial fees. The Company’s Other revenues are comprised of fees paid by franchisees to recover a portion of costs incurred by the Company for various technology platforms, revenues from brand licensing arrangements to market and sell consumer packaged goods using the McDonald’s brand, and third party revenues for the Dynamic Yield business. Sales by Company-operated restaurants are recognized on a cash basis at the time of the underlying sale and are presented net of sales tax and other sales-related taxes. Royalty revenues are based on a percent of sales and recognized at the time the underlying sales occur. Rental income includes both minimum rent payments, which are recognized straight-line over the franchise term (with the exception of rent concessions as a result of COVID-19 – refer to the Leasing policy update on page 10), and variable rent payments based on a percent of sales, which are recognized at the time the underlying sales occur. Initial fees are recognized as the Company satisfies the performance obligation over the franchise term, which is generally 20 years. The Company provides goods or services related to various technology platforms to certain franchisees that are distinct from the franchise agreement because they do not require integration with other goods or services we provide. The Company has determined that it is the principal in these arrangements. Accordingly, the related revenue is presented on a gross basis on the Condensed Consolidated Statement of Income. These revenues are recognized as the goods or services are transferred to the franchisee, and related expenses are recognized as incurred. Brand licensing arrangement revenues are based on a percent of sales and are recognized at the time the underlying sales occur. Dynamic Yield third party revenues are generated from providing software as a service solutions to customers and are recognized over the applicable subscription period as the service is performed.
|
Leases of Lessee Disclosure [Text Block] | Leasing The FASB has issued additional guidance for how companies may account for COVID-19 related rent concessions in the form of FASB staff and Board members’ remarks at the April 8, 2020 public meeting and the FASB Staff Q&A issued on April 10, 2020. The Company has elected the practical expedient to account for COVID-19 related rent concessions as if they were part of the enforceable rights and obligations of the parties under the existing lease contract. This has been elected for the Company’s entire lessee and lessor portfolio for any rent deferrals or rent abatements. For the lessee portfolio, the Company has elected not to remeasure the lease liability and right-of-use asset if a rent deferral or a rent abatement is granted. For the first quarter 2020, the Company deferred collection of approximately $300 million of rental income on revenue that was recognized in the first quarter. Rental income includes both minimum rent payments and variable rent payments based on a percent of sales. The extent of the deferrals differ in length by market, but the deferrals primarily impact cash collection in the second quarter of 2020, a large portion of which is expected to be collected in the third and fourth quarters of 2020. Refer to the Cash Flow and Liquidity section on page 24 of this Form 10-Q for additional information on deferred collections of rental income as well as royalties.
|
Financial Instruments and Hedging Activities |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments and Hedging Activities | Financial Instruments and Hedging Activities The Company is exposed to global market risks, including the effect of changes in interest rates and foreign currency fluctuations. The Company uses foreign currency denominated debt and derivative instruments to mitigate the impact of these changes. The Company does not hold or issue derivatives for trading purposes. The following table presents the fair values of derivative instruments included on the Condensed Consolidated Balance Sheet:
The following table presents the pre-tax amounts from derivative instruments affecting income and AOCI for the quarters ended March 31, 2020 and 2019, respectively:
Fair Value Hedges The Company enters into fair value hedges to reduce the exposure to changes in fair values of certain liabilities. The Company enters into fair value hedges that convert a portion of its fixed rate debt into floating rate debt by use of interest rate swaps. At March 31, 2020, the carrying amount of fixed-rate debt that was effectively converted was $1.0 billion, which included an increase of $36.0 million of cumulative hedging adjustments. For the first quarter 2020, the Company recognized a $23.9 million gain on the fair value of interest rate swaps, and a corresponding loss on the fair value of the related hedged debt instrument to interest expense. Cash Flow Hedges The Company enters into cash flow hedges to reduce the exposure to variability in certain expected future cash flows. To protect against the reduction in value of forecasted foreign currency cash flows (such as royalties denominated in foreign currencies), the Company uses foreign currency forwards to hedge a portion of anticipated exposures. The hedges cover the next 18 months for certain exposures and are denominated in various currencies. To protect against the variability of interest rates of an anticipated bond issuance, the Company may use treasury locks to hedge a portion of the expected future cash flows. As of March 31, 2020, the Company had derivatives outstanding with an equivalent notional amount of $734.9 million that hedged a portion of forecasted foreign currency denominated cash flows. Based on market conditions at March 31, 2020, the $36.7 million in cumulative cash flow hedging losses, after tax, is not expected to have a significant effect on earnings over the next 12 months. Net Investment Hedges The Company primarily uses foreign currency denominated debt (third party and intercompany) to hedge its investments in certain foreign subsidiaries and affiliates. Realized and unrealized translation adjustments from these hedges are included in shareholders' equity in the foreign currency translation component of Other comprehensive income ("OCI") and offset translation adjustments on the underlying net assets of foreign subsidiaries and affiliates, which also are recorded in OCI. As of March 31, 2020, $10.1 billion of the Company's third party foreign currency denominated debt and $694.6 million of intercompany foreign currency denominated debt was designated to hedge investments in certain foreign subsidiaries and affiliates. Undesignated Derivatives The Company enters into certain derivatives that are not designated for hedge accounting, therefore the changes in the fair value of these derivatives are recognized immediately in earnings together with the gain or loss from the hedged balance sheet position. As an example, the Company enters into equity derivative contracts, including total return swaps, to hedge market-driven changes in certain of its supplemental benefit plan liabilities. Changes in the fair value of these derivatives are recorded in selling, general & administrative expenses together with the changes in the supplemental benefit plan liabilities. In addition, the Company uses foreign currency forwards to mitigate the change in fair value of certain foreign currency denominated assets and liabilities. The changes in the fair value of these derivatives are recognized in Nonoperating (income) expense, net, along with the currency gain or loss from the hedged balance sheet position. Credit Risk The Company is exposed to credit-related losses in the event of non-performance by its derivative counterparties. The Company did not have significant exposure to any individual counterparty at March 31, 2020 and has master agreements that contain netting arrangements. For financial reporting purposes, the Company presents gross derivative balances in the financial statements and supplementary data, including for counterparties subject to netting arrangements. Some of these agreements also require each party to post collateral if credit ratings fall below, or aggregate exposures exceed, certain contractual limits. At March 31, 2020, neither the Company nor its counterparties were required to post collateral on any derivative position, other than on certain hedges of the Company’s supplemental benefit plan liabilities where the counterparties were required to post collateral on their liability positions.
|
Restaurant Information |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure Restaurant Information By Ownership Type [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restaurant Information | Restaurant Information The following table presents restaurant information by ownership type:
The results of operations of restaurant businesses purchased and sold in transactions with franchisees were not material either individually or in the aggregate to the Condensed Consolidated Financial Statements for the periods prior to purchase and sale.
|
Recent Accounting Pronouncements (Recently Adopted Accounting Standards) (Lease Accounting) (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Accounting Policies [Abstract] | ||
Lease right-of-use asset, net | $ 13,029.6 | $ 13,261.2 |
Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues and Operating Income by Geographic Segment | The following table presents the Company’s revenues and operating income by segment:
|
Recent Accounting Pronouncements (Recently Adopted Accounting Standards) (Income Taxes) (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Retained earnings | $ 53,106.7 | $ 52,930.5 |
Franchise Arrangements (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure Franchise Arrangements Additional Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues from Franchised Restaurants | Revenues from franchised restaurants consisted of (in millions):
|
Franchise Arrangements - Additional Information (Detail) |
3 Months Ended |
---|---|
Mar. 31, 2020 | |
Franchisor Disclosure [Abstract] | |
Franchise Agreement Period | 20 years |
Condensed Consolidated Statement of Shareholders' Equity Consolidated Statement of Shareholders Equity (Parenthetical) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared per common share | $ 1.25 | $ 1.16 |
Fair Value Measurements |
3 Months Ended |
---|---|
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company measures certain financial assets and liabilities at fair value. Fair value disclosures are reflected in a three-level hierarchy, maximizing the use of observable inputs and minimizing the use of unobservable inputs. The Company did not have any significant changes to the valuation techniques used to measure fair value as described in the Company's December 31, 2019 Annual Report on Form 10-K. At March 31, 2020, the fair value of the Company’s debt obligations was estimated at $41.5 billion, compared to a carrying amount of $39.2 billion, which reflects the new financings during the first quarter of a $1 billion line of credit and $5.5 billion of debt issuances under the Company's existing registration statement on Form S-3 with maturities ranging from 2025 to 2050 and interests rates ranging from 1.45% to 4.20%. The fair value was based upon quoted market prices, Level 2 within the valuation hierarchy. The carrying amounts of cash and equivalents, short-term investments and notes receivable approximate fair value.
|
Basis of Presentation |
3 Months Ended |
---|---|
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | McDonald’s Corporation, the registrant, together with its subsidiaries, is referred to herein as the "Company." The Company, its franchisees and suppliers, are referred to herein as the "System." Basis of Presentation The accompanying Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements contained in the Company’s December 31, 2019 Annual Report on Form 10-K. In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation have been included. The results for the quarter ended March 31, 2020, do not necessarily indicate the results that may be expected for the full year. Prior to January 1, 2020, the Company presented both expenditures and receipts related to technology fees charged to franchisees and revenues related to certain licensing arrangements within Other operating (income) expense, net, because these activities were not part of the Company’s ongoing major or central operations. Effective January 1, 2020, the Company is presenting the revenues and expenses related to these activities within Other revenues and Other restaurant expenses, respectively, in the Condensed Consolidated Statement of Income. The change in presentation was applied retrospectively to all periods presented and had no effect on Operating income, Net income, or Earnings per share.
|
Updates to Significant Accounting Policies (Notes) |
3 Months Ended |
---|---|
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | Updates to Significant Accounting Policies Revenue recognition The Company's revenues consist of sales by Company-operated restaurants and fees from restaurants operated by franchisees, developmental licensees and affiliates. Revenues from conventional franchised restaurants include rent and royalties based on a percent of sales with minimum rent payments, and initial fees. Revenues from restaurants licensed to developmental licensees and affiliates include a royalty based on a percent of sales, and generally include initial fees. The Company’s Other revenues are comprised of fees paid by franchisees to recover a portion of costs incurred by the Company for various technology platforms, revenues from brand licensing arrangements to market and sell consumer packaged goods using the McDonald’s brand, and third party revenues for the Dynamic Yield business. Sales by Company-operated restaurants are recognized on a cash basis at the time of the underlying sale and are presented net of sales tax and other sales-related taxes. Royalty revenues are based on a percent of sales and recognized at the time the underlying sales occur. Rental income includes both minimum rent payments, which are recognized straight-line over the franchise term (with the exception of rent concessions as a result of COVID-19 – refer to the Leasing policy update on page 10), and variable rent payments based on a percent of sales, which are recognized at the time the underlying sales occur. Initial fees are recognized as the Company satisfies the performance obligation over the franchise term, which is generally 20 years. The Company provides goods or services related to various technology platforms to certain franchisees that are distinct from the franchise agreement because they do not require integration with other goods or services we provide. The Company has determined that it is the principal in these arrangements. Accordingly, the related revenue is presented on a gross basis on the Condensed Consolidated Statement of Income. These revenues are recognized as the goods or services are transferred to the franchisee, and related expenses are recognized as incurred. Brand licensing arrangement revenues are based on a percent of sales and are recognized at the time the underlying sales occur. Dynamic Yield third party revenues are generated from providing software as a service solutions to customers and are recognized over the applicable subscription period as the service is performed. Long-lived assets and Goodwill Long-lived assets and Goodwill are typically reviewed for impairment annually in the fourth quarter and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable or if an indicator of impairment exists. The Company has continued to monitor the significant global economic uncertainty as a result of COVID-19 to assess the outlook for restaurant operations and the impact that any disruption may have on the Company's business and overall financial performance. As a result of the Company's analysis, and in consideration of the totality of events and circumstances, including the potential impact of COVID-19 related disruptions on the Company’s operating results, there were no indicators of impairment during the first quarter of 2020. Leasing The FASB has issued additional guidance for how companies may account for COVID-19 related rent concessions in the form of FASB staff and Board members’ remarks at the April 8, 2020 public meeting and the FASB Staff Q&A issued on April 10, 2020. The Company has elected the practical expedient to account for COVID-19 related rent concessions as if they were part of the enforceable rights and obligations of the parties under the existing lease contract. This has been elected for the Company’s entire lessee and lessor portfolio for any rent deferrals or rent abatements. For the lessee portfolio, the Company has elected not to remeasure the lease liability and right-of-use asset if a rent deferral or a rent abatement is granted. For the first quarter 2020, the Company deferred collection of approximately $300 million of rental income on revenue that was recognized in the first quarter. Rental income includes both minimum rent payments and variable rent payments based on a percent of sales. The extent of the deferrals differ in length by market, but the deferrals primarily impact cash collection in the second quarter of 2020, a large portion of which is expected to be collected in the third and fourth quarters of 2020. Refer to the Cash Flow and Liquidity section on page 24 of this Form 10-Q for additional information on deferred collections of rental income as well as royalties.
|
Fair Value Measurements (Additional Information) (Details) $ in Billions |
Mar. 31, 2020
USD ($)
|
---|---|
Fair Value Measurements [Line Items] | |
Debt obligations, carrying amount | $ 39.2 |
Line of Credit, Current | 1.0 |
Long-term Debt | 5.5 |
Level 2 | |
Fair Value Measurements [Line Items] | |
Debt obligations, fair value | $ 41.5 |
Minimum [Member] | |
Fair Value Measurements [Line Items] | |
Long-term Debt, Weighted Average Interest Rate, at Point in Time | 1.45% |
Maximum [Member] | |
Fair Value Measurements [Line Items] | |
Long-term Debt, Weighted Average Interest Rate, at Point in Time | 4.20% |
Restaurant Information by Ownership Type (Details) - Restaurant |
Mar. 31, 2020 |
Mar. 31, 2019 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Number of Restaurants | 38,984 | 37,971 |
Franchised | ||
Segment Reporting Information [Line Items] | ||
Number of Restaurants | 36,347 | 35,278 |
Franchised | Conventional franchised | ||
Segment Reporting Information [Line Items] | ||
Number of Restaurants | 21,838 | 21,662 |
Franchised | Developmental licensed | ||
Segment Reporting Information [Line Items] | ||
Number of Restaurants | 7,678 | 7,362 |
Franchised | Affiliated | ||
Segment Reporting Information [Line Items] | ||
Number of Restaurants | 6,831 | 6,254 |
Company-operated | ||
Segment Reporting Information [Line Items] | ||
Number of Restaurants | 2,637 | 2,693 |
Restaurant Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure Restaurant Information By Ownership Type [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restaurant Information by Ownership Type | The following table presents restaurant information by ownership type:
|
Segment Information |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The Company operates under an organizational structure with the following global business segments reflecting how management reviews and evaluates operating performance:
The following table presents the Company’s revenues and operating income by segment:
|
Per Common Share Information |
3 Months Ended |
---|---|
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Per Common Share Information | Per Common Share Information Diluted earnings per common share is calculated using net income divided by diluted weighted-average shares. Diluted weighted-average shares include weighted-average shares outstanding plus the dilutive effect of share-based compensation, calculated using the treasury stock method, of 5.9 million shares and 6.7 million shares for the quarters 2020 and 2019, respectively. Share-based compensation awards that would have been antidilutive, and therefore were not included in the calculation of diluted weighted-average shares, totaled 2.0 million shares for each of the quarters 2020 and 2019.
|
Condensed Consolidated Balance Sheet (Parenthetical) - $ / shares |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Preferred stock, par value | $ 0 | $ 0 |
Preferred stock, authorized | 165,000,000 | 165,000,000 |
Preferred stock, issued | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, authorized | 3,500,000,000 | 3,500,000,000 |
Common stock, issued | 1,660,600,000 | 1,660,600,000 |
Common stock in treasury, shares | 917,100,000 | 914,300,000 |
Updates to Significant Accounting Policies (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2020
USD ($)
| |
Accounting Policies [Abstract] | |
Deferred collection amount of rental income | $ 300 |
Franchise Agreement Period | 20 years |
Subsequent Events |
3 Months Ended |
---|---|
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company evaluated subsequent events through the date the financial statements were issued and filed with the Securities and Exchange Commission. There were no subsequent events that required recognition or disclosure.
|
Recent Accounting Pronouncements |
3 Months Ended |
---|---|
Mar. 31, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements Financial Instruments - Credit Losses In June 2016, the FASB issued guidance codified in Accounting Standards Codification Topic 326, "Financial Instruments – Credit Losses: Measurements of Credit Losses on Financial Instruments". The standard replaces the incurred loss impairment methodology in prior GAAP with a methodology that instead reflects a current estimate of all expected credit losses on financial assets, including receivables. The guidance requires that an entity measure and recognize expected credit losses at the time the asset is recorded, while considering a broader range of information to estimate credit losses including macroeconomic conditions that correlate with historical loss experience, delinquency trends and aging behavior of receivables, among others. The Company has adopted this guidance effective January 1, 2020, prospectively, and the adoption and application of this standard did not have a material impact to the consolidated financial statements during the first quarter. The Company will continue to actively monitor the impact of the COVID-19 pandemic on expected losses. Recent Accounting Pronouncements Not Yet Adopted Income Taxes In December 2019, the FASB issued Accounting Standard Update (“ASU”) No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” ("ASU 2019-12"), which simplifies the accounting for income taxes. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, including applicable interim periods. The Company is currently evaluating the impact the adoption of ASU 2019-12 will have on its consolidated financial statements. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting" ("ASU 2020-04"). The pronouncement provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate and other interbank offered rates to alternative reference rates. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating the impact the adoption of ASU 2020-04 will have on its consolidated financial statements.
|
Condensed Consolidated Statement of Comprehensive Income (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Other comprehensive income (loss), foreign currency translation adjustment, tax | $ (115.3) | $ (60.0) |
Other comprehensive income (loss), derivatives qualifying as hedges, tax | 14.7 | 0.2 |
Other comprehensive income (loss), pension and other postretirement benefit plans, tax | $ 0.4 | $ 0.0 |
Segment Information (Segment and Geographic Information) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Segment Reporting Information [Line Items] | ||
Document Fiscal Year Focus | 2020 | |
Total revenues | $ 4,714.4 | $ 5,024.1 |
Operating Income | 1,693.6 | 2,094.0 |
United States | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 1,871.0 | 1,887.6 |
Operating Income | 892.4 | 951.9 |
International Operated Markets | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 2,404.3 | 2,682.7 |
Operating Income | 879.1 | 1,048.0 |
International Developmental Licensed Markets and Corporate | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 439.1 | 453.8 |
Operating Income | $ (77.9) | $ 94.1 |
Per Common Share Information (Additional Information) (Details) - shares shares in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Earnings Per Share [Abstract] | ||
Dilutive effect of share-based compensation | 5.9 | 6.7 |
Stock options that were not included in diluted weighted-average shares | 2.0 |
Financial Instruments and Hedging Activities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Values of Derivative Instruments Included on Consolidated Balance Sheet | The following table presents the fair values of derivative instruments included on the Condensed Consolidated Balance Sheet:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives Pretax Amounts Affecting Income and Other Comprehensive Income | The following table presents the pre-tax amounts from derivative instruments affecting income and AOCI for the quarters ended March 31, 2020 and 2019, respectively:
|
1 Year McDonalds Chart |
1 Month McDonalds Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions