Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2021shares | |
Entity Information [Line Items] | |
Document Type | 10-Q |
Document Fiscal Period Focus | Q1 |
Document Quarterly Report | true |
Document Period End Date | Mar. 31, 2021 |
Document Transition Report | false |
Amendment Flag | false |
Document Fiscal Year Focus | 2021 |
Current Fiscal Year End Date | --12-31 |
Entity File Number | 1-5231 |
Entity Registrant Name | MCDONALDS CORP |
Entity Central Index Key | 0000063908 |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 36-2361282 |
Entity Address, Address Line One | 110 North Carpenter Street |
Entity Address, City or Town | Chicago, |
Entity Address, State or Province | IL |
Entity Address, Postal Zip Code | 60607 |
City Area Code | 630 |
Local Phone Number | 623-3000 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Title of 12(b) Security | Common Stock, $0.01 par value |
Trading Symbol | MCD |
Security Exchange Name | NYSE |
Entity Common Stock, Shares Outstanding | 746,174,284 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheet - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and equivalents | $ 3,019.7 | $ 3,449.1 |
Accounts and notes receivable | 1,733.7 | 2,110.3 |
Inventories, at cost, not in excess of market | 45.3 | 51.1 |
Prepaid expenses and other current assets | 669.2 | 632.7 |
Total current assets | 5,467.9 | 6,243.2 |
Other assets | ||
Investments in and advances to affiliates | 1,211.1 | 1,297.2 |
Goodwill | 2,745.8 | 2,773.1 |
Miscellaneous | 3,499.1 | 3,527.4 |
Total other assets | 7,456 | 7,597.7 |
Lease right-of-use asset, net | 13,629.4 | 13,827.7 |
Property and equipment | ||
Property and equipment, at cost | 41,082.2 | 41,476.5 |
Accumulated depreciation and amortization | (16,532.4) | (16,518.3) |
Net property and equipment | 24,549.8 | 24,958.2 |
Total assets | 51,103.1 | 52,626.8 |
Current liabilities | ||
Accounts payable | 670 | 741.3 |
Lease liability | 718.4 | 701.5 |
Income taxes | 718.3 | 741.1 |
Other taxes | 192 | 227 |
Accrued interest | 333.2 | 388.4 |
Accrued payroll and other liabilities | 1,047.9 | 1,138.3 |
Current maturities of long-term debt | 900 | 2,243.6 |
Total current liabilities | 4,579.8 | 6,181.2 |
Long-term debt | 34,823.2 | 35,196.8 |
Long-term lease liability | 13,111 | 13,321.3 |
Long-term income taxes | 1,963.4 | 1,970.7 |
Deferred revenues - initial franchise fees | 702.5 | 702 |
Other long-term liabilities | 1,056.8 | 1,054.1 |
Deferred income taxes | 2,101.9 | 2,025.6 |
Shareholders' equity (deficit) | ||
Preferred stock, no par value; authorized—165.0 million shares; issued—none | 0 | 0 |
Common stock, $.01 par value; authorized—3.5 billion shares; issued—1,660.6 million shares | 16.6 | 16.6 |
Additional paid-in capital | 7,959.1 | 7,903.6 |
Retained earnings | 54,483 | 53,908.1 |
Accumulated other comprehensive income (loss) | (2,635.9) | (2,586.8) |
Common stock in treasury, at cost; 915.5 and 914.3 million shares | (67,058.3) | (67,066.4) |
Total shareholders' equity (deficit) | (7,235.5) | (7,824.9) |
Total liabilities and shareholders' equity (deficit) | $ 51,103.1 | $ 52,626.8 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheet (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
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 | 914,500,000 | 915,200,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statement of Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues | ||
Sales by Company-operated restaurants | $ 2,161.5 | $ 2,025.8 |
Revenues from franchised restaurants | 2,877.4 | 2,608 |
Other Revenues | 85.7 | 80.6 |
Total revenues | 5,124.6 | 4,714.4 |
Operating costs and expenses | ||
Company-operated restaurant expenses | 1,817.6 | 1,752.8 |
Franchised restaurants-occupancy expenses | 571.5 | 554.2 |
Other Restaurant Expenses | 67.2 | 65.5 |
Depreciation and Amortization | 76 | 73.5 |
Other Selling, General and Administrative Expense | 490.4 | 516.3 |
Other operating (income) expense, net | (179.4) | 58.5 |
Total operating costs and expenses | 2,843.3 | 3,020.8 |
Operating income | 2,281.3 | 1,693.6 |
Interest expense | 300 | 280 |
Nonoperating (income) expense, net | 28.6 | (31.3) |
Income before provision for income taxes | 1,952.7 | 1,444.9 |
Provision for income taxes | 415.5 | 338 |
Net income | $ 1,537.2 | $ 1,106.9 |
Earnings per common share-basic | $ 2.06 | $ 1.49 |
Earnings per common share-diluted | 2.05 | 1.47 |
Dividends declared per common share | $ 1.29 | $ 1.25 |
Weighted average shares outstanding-basic | 745.8 | 744.8 |
Weighted average shares outstanding-diluted | 751 | 750.7 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2021 | |
Net income | $ 1,537.2 | $ 1,106.9 |
Foreign currency translation adjustments: | ||
Gain (loss) recognized in accumulated other comprehensive income (AOCI), including net investment hedges | (87.7) | (466.2) |
Reclassification of (gain) loss to net income | 10.7 | 0 |
Foreign currency translation adjustments-net of tax benefit (expense) of ($90.3) and ($115.3) | (77) | (466.2) |
Cash flow hedges: | ||
Gain (loss) recognized in AOCI | 23.1 | (39.6) |
Reclassification of (gain) loss to net income | 15 | (9.1) |
Cash flow hedges-net of tax benefit (expense) of ($11.2) and $14.7 | 38.1 | (48.7) |
Defined benefit pension plans: | ||
Gain (loss) recognized in AOCI | 0.7 | (1.9) |
Reclassification of (gain) loss to net income | (10.9) | 3.1 |
Defined benefit pension plans-net of tax benefit (expense) of $0.0 and $0.4 | (10.2) | 1.2 |
Total other comprehensive income (loss), net of tax | (49.1) | (513.7) |
Comprehensive income (loss) | $ 1,488.1 | $ 593.2 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Other comprehensive income (loss), foreign currency translation adjustment, tax | $ (90.3) | $ (115.3) |
Other comprehensive income (loss), derivatives qualifying as hedges, tax | (11.2) | 14.7 |
Other comprehensive income (loss), pension and other postretirement benefit plans, tax | $ 0 | $ 0.4 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating activities | ||
Net income | $ 1,537.2 | $ 1,106.9 |
Charges and credits: | ||
Depreciation and amortization | 453.9 | 421.3 |
Deferred income taxes | (1.5) | 276.4 |
Share-based compensation | 27.3 | 25.9 |
Other | (130) | (87.9) |
Changes in working capital items | 237.1 | (196.6) |
Cash provided by operations | 2,124 | 1,546 |
Investing activities | ||
Capital expenditures | (368.7) | (482.5) |
Purchases of restaurant businesses | (38.7) | (19.6) |
Sales of restaurant businesses | 29.6 | 25.7 |
Sales of property | 32.8 | 15.8 |
Other | 100.4 | (57.8) |
Cash used for investing activities | (244.6) | (518.4) |
Financing activities | ||
Net short-term borrowings | 6.5 | 111.8 |
Long-term financing issuances | 0 | 5,539.4 |
Long-term financing repayments | (1,337.8) | (262.7) |
Treasury stock purchases | (21.5) | (902.6) |
Common stock dividends | (962.3) | (930.7) |
Proceeds from stock option exercises | 59.1 | 99.3 |
Other | (7.9) | (121.5) |
Cash provided by (used for) financing activities | (2,263.9) | 3,533 |
Effect of exchange rates on cash and cash equivalents | (44.9) | (79.3) |
Cash and equivalents increase (decrease) | (429.4) | 4,481.3 |
Cash and equivalents at beginning of period | 3,449.1 | 898.5 |
Cash and equivalents at end of period | $ 3,019.7 | $ 5,379.8 |
Condensed Consolidated Statem_5
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, 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 | $ (2,251) | $ (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) |
Beginning Balance (in shares) at Dec. 31, 2020 | 1,660.6 | (915.2) | ||||||
Beginning Balance at Dec. 31, 2020 | (7,824.9) | $ 16.6 | 7,903.6 | 53,908.1 | (287.6) | (111.3) | (2,187.9) | $ (67,066.4) |
Net income | 1,537.2 | 1,537.2 | ||||||
Other comprehensive income (loss), net of tax | (49.1) | (10.2) | 38.1 | (77) | ||||
Comprehensive income | 1,488.1 | |||||||
Common stock cash dividends | (962.3) | (962.3) | ||||||
Treasury stock purchases (in shares) | (0.1) | |||||||
Treasury stock purchases | (21.5) | $ (21.5) | ||||||
Share-based compensation | 27.3 | 27.3 | ||||||
Stock option exercises and other (in shares) | 0.8 | |||||||
Stock option exercises and other | 57.8 | 28.2 | $ 29.6 | |||||
Ending Balance (in shares) at Mar. 31, 2021 | 1,660.6 | (914.5) | ||||||
Ending Balance at Mar. 31, 2021 | $ (7,235.5) | $ 16.6 | $ 7,959.1 | $ 54,483 | $ (297.8) | $ (73.2) | $ (2,264.9) | $ (67,058.3) |
Condensed Consolidated Statem_6
Condensed Consolidated Statement of Shareholders' Equity Consolidated Statement of Shareholders Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared per common share | $ 1.29 | $ 1.25 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
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, 2020 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, 2021, do not necessarily indicate the results that may be expected for the full year. |
Restaurant Information
Restaurant Information | 3 Months Ended |
Mar. 31, 2021 | |
Disclosure Restaurant Information By Ownership Type [Abstract] | |
Restaurant Information | Restaurant Information The following table presents restaurant information by ownership type: Restaurants at March 31, 2021 2020 Conventional franchised 21,496 21,838 Developmental licensed 7,705 7,678 Foreign affiliated 7,283 6,831 Total Franchised 36,484 36,347 Company-operated 2,676 2,637 Total Systemwide restaurants 39,160 38,984 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. |
Per Common Share Information
Per Common Share Information | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | 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 5.2 million shares and 5.9 million shares for the quarters 2021 and 2020, respectively. Share-based compensation awards that would have been antidilutive, and therefore were not included in the calculation of diluted weighted-average shares, totaled 3.6 million shares and 2.0 million shares for the quarters 2021 and 2020, respectively. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2021 | |
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, 2020 Annual Report on Form 10-K. At March 31, 2021, the fair value of the Company’s debt obligations was estimated at $39.8 billion, compared to a carrying amount of $35.7 billion. The fair value was based upon quoted market prices, Level 2 within the valuation hierarchy. The carrying amounts of cash and equivalents and notes receivable approximate fair value. |
Financial Instruments and Hedgi
Financial Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2021 | |
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: Derivative Assets Derivative Liabilities In millions Balance Sheet Classification March 31, 2021 December 31, 2020 Balance Sheet Classification March 31, 2021 December 31, 2020 Derivatives designated as hedging instruments Foreign currency Prepaid expenses and other current assets $ 11.7 Accrued payroll and other liabilities $ (32.9) $ (64.5) Interest rate Prepaid expenses and other current assets 5.7 Accrued payroll and other liabilities Foreign currency Miscellaneous other assets 23.0 $ 5.6 Other long-term liabilities (1.2) (15.0) Interest rate Miscellaneous other assets 21.2 35.8 Other long-term liabilities Total derivatives designated as hedging instruments $ 61.6 $ 41.4 $ (34.1) $ (79.5) Derivatives not designated as hedging instruments Equity Prepaid expenses and other current assets $ 194.4 $ 185.6 Accrued payroll and other liabilities $ (4.1) $ (8.6) Foreign currency Prepaid expenses and other current assets Accrued payroll and other liabilities (7.1) (9.4) Equity Miscellaneous other assets Total derivatives not designated as hedging instruments $ 194.4 $ 185.6 $ (11.2) $ (18.0) Total derivatives $ 256.0 $ 227.0 $ (45.3) $ (97.5) The following table presents the pre-tax amounts from derivative instruments affecting income and AOCI for the three months ended March 31, 2021 and 2020, respectively: Location of Gain or Loss Gain (Loss) Gain (Loss) Gain (Loss) Recognized in In millions 2021 2020 2021 2020 2021 2020 Foreign currency Nonoperating income/expense $ 29.9 $ 39.3 $ (17.8) $ 12.6 Interest rate Interest expense (90.8) (1.6) (0.7) Cash flow hedges $ 29.9 $ (51.5) $ (19.4) $ 11.9 Foreign currency denominated debt Nonoperating income/expense $ 379.7 $ 350.4 $ 16.2 Foreign currency derivatives Nonoperating income/expense 26.6 11.9 Foreign currency derivatives (1) Interest expense $ 3.7 $ 3.7 Net investment hedges $ 406.3 $ 362.3 $ 16.2 $ 3.7 $ 3.7 Foreign currency Nonoperating income/expense $ 2.3 $ 7.5 Equity Selling, general & administrative expenses 20.4 (66.3) Equity Other operating income/expense, net (4.7) Undesignated derivatives $ 18.0 $ (58.8) (1) The amount of gain (loss) recognized in income related to components excluded from effectiveness testing. 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, 2021, the carrying amount of fixed-rate debt that was effectively converted was $1.0 billion, which included an increase of $26.9 million of cumulative hedging adjustments. For the three months ended March 31, 2021, the Company recognized an $8.9 million loss on the fair value of interest rate swaps, and a corresponding gain 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. As of March 31, 2021, the Company had derivatives outstanding with an equivalent notional amount of $1.2 billion that hedged a portion of forecasted foreign currency denominated cash flows. Based on market conditions at March 31, 2021, the $73.2 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, 2021, $11.6 billion of the Company's third party foreign currency denominated debt and $877.8 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. The Company may also use certain derivatives to mitigate the share price risk related to its sale of stock in McDonald’s Japan. The changes in the fair value of the undesignated derivatives used for the most recent sale transaction were recognized immediately in earnings in Other Operating (income) expense, net. 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, 2021 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, 2021, the Company was required to post an immaterial amount of collateral due to the negative fair value of certain derivative positions. The Company's counterparties were not 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. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2021 | |
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: • U.S. - the Company's largest market. The segment is 95% franchised as of March 31, 2021. • International Operated Markets - comprised of markets or countries in which the Company operates and franchises restaurants, including Australia, Canada, France, Germany, Italy, the Netherlands, Russia, Spain and the U.K. The segment is 84% franchised as of March 31, 2021. • International Developmental Licensed Markets & Corporate - comprised of primarily developmental licensee and affiliate markets in the McDonald’s system. Corporate activities are also reported in this segment. The segment is 98% franchised as of March 31, 2021. The following table presents the Company’s revenues and operating income by segment: Quarters Ended March 31, In millions 2021 2020 Revenues U.S. $ 2,075.5 $ 1,871.0 International Operated Markets 2,556.2 2,404.3 International Developmental Licensed Markets & Corporate 492.9 439.1 Total revenues $ 5,124.6 $ 4,714.4 Operating Income U.S. $ 1,125.5 $ 892.4 International Operated Markets 953.8 879.1 International Developmental Licensed Markets & Corporate * 202.0 (77.9) Total operating income $ 2,281.3 $ 1,693.6 * Results for the quarter 2021 included $128.6 million of strategic gains related to the sale of McDonald's Japan stock, which reduced the Company's ownership by an additional 3%. As of March 31, 2021, the Company owned approximately 41% of McDonald's Japan. The proceeds were recorded within the other investing activities section of the Condensed Consolidated Statement of Cash Flows. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
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. |
Updates to Significant Accounti
Updates to Significant Accounting Policies (Notes) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | Updates to Significant Accounting Policies 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 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. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Accounting Standards Update and Change in Accounting Principle [Text Block] | Recently Adopted Accounting Pronouncements Income Taxes In December 2019, the Financial Accounting Standards Board (“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 adopted the new standard effective January 1, 2021. The adoption of the standard did not have a material impact on the Company's condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted 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. |
Updates to Significant Accoun_2
Updates to Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
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 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. |
Restaurant Information (Tables)
Restaurant Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Disclosure Restaurant Information By Ownership Type [Abstract] | |
Restaurant Information by Ownership Type | The following table presents restaurant information by ownership type: Restaurants at March 31, 2021 2020 Conventional franchised 21,496 21,838 Developmental licensed 7,705 7,678 Foreign affiliated 7,283 6,831 Total Franchised 36,484 36,347 Company-operated 2,676 2,637 Total Systemwide restaurants 39,160 38,984 |
Financial Instruments and Hed_2
Financial Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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: Derivative Assets Derivative Liabilities In millions Balance Sheet Classification March 31, 2021 December 31, 2020 Balance Sheet Classification March 31, 2021 December 31, 2020 Derivatives designated as hedging instruments Foreign currency Prepaid expenses and other current assets $ 11.7 Accrued payroll and other liabilities $ (32.9) $ (64.5) Interest rate Prepaid expenses and other current assets 5.7 Accrued payroll and other liabilities Foreign currency Miscellaneous other assets 23.0 $ 5.6 Other long-term liabilities (1.2) (15.0) Interest rate Miscellaneous other assets 21.2 35.8 Other long-term liabilities Total derivatives designated as hedging instruments $ 61.6 $ 41.4 $ (34.1) $ (79.5) Derivatives not designated as hedging instruments Equity Prepaid expenses and other current assets $ 194.4 $ 185.6 Accrued payroll and other liabilities $ (4.1) $ (8.6) Foreign currency Prepaid expenses and other current assets Accrued payroll and other liabilities (7.1) (9.4) Equity Miscellaneous other assets Total derivatives not designated as hedging instruments $ 194.4 $ 185.6 $ (11.2) $ (18.0) Total derivatives $ 256.0 $ 227.0 $ (45.3) $ (97.5) |
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 three months ended March 31, 2021 and 2020, respectively: Location of Gain or Loss Gain (Loss) Gain (Loss) Gain (Loss) Recognized in In millions 2021 2020 2021 2020 2021 2020 Foreign currency Nonoperating income/expense $ 29.9 $ 39.3 $ (17.8) $ 12.6 Interest rate Interest expense (90.8) (1.6) (0.7) Cash flow hedges $ 29.9 $ (51.5) $ (19.4) $ 11.9 Foreign currency denominated debt Nonoperating income/expense $ 379.7 $ 350.4 $ 16.2 Foreign currency derivatives Nonoperating income/expense 26.6 11.9 Foreign currency derivatives (1) Interest expense $ 3.7 $ 3.7 Net investment hedges $ 406.3 $ 362.3 $ 16.2 $ 3.7 $ 3.7 Foreign currency Nonoperating income/expense $ 2.3 $ 7.5 Equity Selling, general & administrative expenses 20.4 (66.3) Equity Other operating income/expense, net (4.7) Undesignated derivatives $ 18.0 $ (58.8) (1) The amount of gain (loss) recognized in income related to components excluded from effectiveness testing. |
Franchise Arrangements (Tables)
Franchise Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Disclosure Franchise Arrangements Additional Information [Abstract] | |
Revenues from Franchised Restaurants | Revenues from franchised restaurants consisted of: Quarters Ended March 31, In millions 2021 2020 Rents $ 1,826.1 $ 1,668.2 Royalties 1,038.7 928.8 Initial fees 12.6 11.0 Revenues from franchised restaurants $ 2,877.4 $ 2,608.0 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Revenues and Operating Income by Geographic Segment | The following table presents the Company’s revenues and operating income by segment: Quarters Ended March 31, In millions 2021 2020 Revenues U.S. $ 2,075.5 $ 1,871.0 International Operated Markets 2,556.2 2,404.3 International Developmental Licensed Markets & Corporate 492.9 439.1 Total revenues $ 5,124.6 $ 4,714.4 Operating Income U.S. $ 1,125.5 $ 892.4 International Operated Markets 953.8 879.1 International Developmental Licensed Markets & Corporate * 202.0 (77.9) Total operating income $ 2,281.3 $ 1,693.6 * Results for the quarter 2021 included $128.6 million of strategic gains related to the sale of McDonald's Japan stock, which reduced the Company's ownership by an additional 3%. As of March 31, 2021, the Company owned approximately 41% of McDonald's Japan. The proceeds were recorded within the other investing activities section of the Condensed Consolidated Statement of Cash Flows. |
Restaurant Information by Owner
Restaurant Information by Ownership Type (Details) - Restaurant | Mar. 31, 2021 | Mar. 31, 2020 |
Segment Reporting Information [Line Items] | ||
Number of Restaurants | 39,160 | 38,984 |
Franchised | ||
Segment Reporting Information [Line Items] | ||
Number of Restaurants | 36,484 | 36,347 |
Franchised | Conventional franchised | ||
Segment Reporting Information [Line Items] | ||
Number of Restaurants | 21,496 | 21,838 |
Franchised | Developmental licensed | ||
Segment Reporting Information [Line Items] | ||
Number of Restaurants | 7,705 | 7,678 |
Franchised | Affiliated | ||
Segment Reporting Information [Line Items] | ||
Number of Restaurants | 7,283 | 6,831 |
Company-operated | ||
Segment Reporting Information [Line Items] | ||
Number of Restaurants | 2,676 | 2,637 |
Per Common Share Information (A
Per Common Share Information (Additional Information) (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Dilutive effect of share-based compensation | 5.2 | 5.9 |
Stock options that were not included in diluted weighted-average shares | 3.6 | 2 |
Fair Value Measurements (Additi
Fair Value Measurements (Additional Information) (Details) $ in Billions | Mar. 31, 2021USD ($) |
Fair Value Measurements [Line Items] | |
Debt obligations, carrying amount | $ 35.7 |
Level 2 | |
Fair Value Measurements [Line Items] | |
Debt obligations, fair value | $ 39.8 |
Financial Instruments and Hed_3
Financial Instruments and Hedging Activities (Fair Values of Derivative Instruments Included on Consolidated Balance Sheet) (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives Fair Value | $ 256 | $ 227 |
Liability Derivatives Fair Value | 45.3 | 97.5 |
Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives Fair Value | 61.6 | 41.4 |
Liability Derivatives Fair Value | 34.1 | 79.5 |
Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives Fair Value | 194.4 | 185.6 |
Liability Derivatives Fair Value | 11.2 | 18 |
Interest Rate Contract [Member] | Accrued Expenses And Other Current Liabilities [Member] | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives Fair Value | ||
Interest Rate Contract [Member] | Prepaid Expenses and Other Current Assets [Member] | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives Fair Value | 5.7 | |
Interest Rate Contract [Member] | Other Liabilities [Member] | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives Fair Value | ||
Interest Rate Contract [Member] | Other Assets [Member] | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives Fair Value | 21.2 | 35.8 |
Equity [Member] | Accrued Expenses And Other Current Liabilities [Member] | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives Fair Value | 4.1 | 8.6 |
Equity [Member] | Prepaid Expenses and Other Current Assets [Member] | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives Fair Value | 194.4 | 185.6 |
Equity [Member] | Other Assets [Member] | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives Fair Value | ||
Foreign Exchange [Member] | Accrued Expenses And Other Current Liabilities [Member] | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives Fair Value | 32.9 | 64.5 |
Foreign Exchange [Member] | Accrued Expenses And Other Current Liabilities [Member] | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives Fair Value | 7.1 | 9.4 |
Foreign Exchange [Member] | Prepaid Expenses and Other Current Assets [Member] | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives Fair Value | 11.7 | |
Foreign Exchange [Member] | Prepaid Expenses and Other Current Assets [Member] | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives Fair Value | ||
Foreign Exchange [Member] | Other Liabilities [Member] | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives Fair Value | 1.2 | 15 |
Foreign Exchange [Member] | Other Assets [Member] | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives Fair Value | $ 23 | $ 5.6 |
(Derivatives Pretax Amounts Aff
(Derivatives Pretax Amounts Affecting Income and Other Comprehensive Income) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Derivatives in Cash Flow Hedging Relationships | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) Reclassified into Income from Accumulated OCI (Effective Portion) | $ (19.4) | $ 11.9 |
Gain (Loss) Recognized in Accumulated OCI (Effective Portion) | 29.9 | (51.5) |
Net Investment Hedging Relationships | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) Reclassified into Income from Accumulated OCI (Effective Portion) | 16.2 | |
Gain (Loss) Recognized in Accumulated OCI (Effective Portion) | 406.3 | 362.3 |
Gain (Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing and Ineffective Portion) | 3.7 | 3.7 |
Derivatives Not Designated as Hedging Instruments | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative instruments, gain (loss) recognized in income, net | 18 | (58.8) |
Foreign Exchange [Member] | Derivatives in Cash Flow Hedging Relationships | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) Reclassified into Income from Accumulated OCI (Effective Portion) | (17.8) | 12.6 |
Gain (Loss) Recognized in Accumulated OCI (Effective Portion) | 29.9 | 39.3 |
Foreign Exchange [Member] | Derivatives Not Designated as Hedging Instruments | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative instruments, gain (loss) recognized in income, net | 2.3 | 7.5 |
Foreign Exchange Forward [Member] | Net Investment Hedging Relationships | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) Recognized in Accumulated OCI (Effective Portion) | 26.6 | 11.9 |
Cross Currency Interest Rate Contract [Member] | Net Investment Hedging Relationships | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing and Ineffective Portion) | 3.7 | 3.7 |
Interest Rate Contract [Member] | Derivatives in Cash Flow Hedging Relationships | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) Reclassified into Income from Accumulated OCI (Effective Portion) | (1.6) | (0.7) |
Gain (Loss) Recognized in Accumulated OCI (Effective Portion) | (90.8) | |
Other Foreign Currency Denominated Debt [Member] | Net Investment Hedging Relationships | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) Reclassified into Income from Accumulated OCI (Effective Portion) | 16.2 | |
Gain (Loss) Recognized in Accumulated OCI (Effective Portion) | 379.7 | 350.4 |
Equity [Member] | Derivatives Not Designated as Hedging Instruments | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative instruments, gain (loss) recognized in income, net | 20.4 | $ (66.3) |
Equity Contract [Member] | Derivatives Not Designated as Hedging Instruments | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative instruments, gain (loss) recognized in income, net | $ (4.7) |
(Financial Instruments and Hedg
(Financial Instruments and Hedging Activities - Additional Information) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Line Items] | |
Cumulative deferred hedging gain (loss), after tax, included in accumulated other comprehensive income | $ 73.2 |
Interest Rate Swap | |
Derivative Instruments and Hedging Activities Disclosure [Line Items] | |
Derivative, Notional Amount | 1,000 |
Intercompany Debt [Member] | |
Derivative Instruments and Hedging Activities Disclosure [Line Items] | |
Foreign currency denominated debt designated to hedge investments in certain foreign subsidiaries and affiliates | 877.8 |
Debt [Member] | |
Derivative Instruments and Hedging Activities Disclosure [Line Items] | |
Foreign currency denominated debt designated to hedge investments in certain foreign subsidiaries and affiliates | 11,600 |
Interest Rate Risk [Member] | Fair Value Hedging [Member] | |
Derivative Instruments and Hedging Activities Disclosure [Line Items] | |
Derivative instruments, gain (loss) recognized in income, net | (8.9) |
Increase (Decrease) in Fair Value of Interest Rate Fair Value Hedging Instruments | 26.9 |
Royalty Arrangement [Member] | |
Derivative Instruments and Hedging Activities Disclosure [Line Items] | |
Derivative, Notional Amount | $ 1,200 |
Period covered by hedge | 18 months |
Revenues from Franchised Restau
Revenues from Franchised Restaurants (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Franchisor Disclosure | ||
Rents | $ 1,826.1 | $ 1,668.2 |
Royalties | 1,038.7 | 928.8 |
Initial Fees | 12.6 | 11 |
Revenues from franchised restaurants | $ 2,877.4 | $ 2,608 |
Segment Information (Segment an
Segment Information (Segment and Geographic Information) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 41.00% | |
Gain (Loss) on Disposition of Stock in Subsidiary or Equity Method Investee | $ 128.6 | |
Document Fiscal Year Focus | 2021 | |
Total revenues | $ 5,124.6 | $ 4,714.4 |
Operating Income | 2,281.3 | 1,693.6 |
United States | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 2,075.5 | 1,871 |
Operating Income | 1,125.5 | 892.4 |
International Operated Markets | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 2,556.2 | 2,404.3 |
Operating Income | 953.8 | 879.1 |
International Developmental Licensed Markets and Corporate | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 492.9 | 439.1 |
Operating Income | $ 202 | $ (77.9) |
Subsequent Events Subsequent Ev
Subsequent Events Subsequent Events (Details) | Mar. 31, 2021 |
Noncontrolling Interest [Line Items] | |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 41.00% |