McDonald's (MCD) 10-K 26 Feb 10 2009 FY Annual report Financial data

Statement Of Income Alternative

Statement Of Income Alternative (USD $)
In Millions, except Per Share data	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
REVENUES
Sales by Company-operated restaurants	15458.5	16560.9	$16,611
Revenues from franchised restaurants	7286.2	6961.5	6175.6
Total revenues	22744.7	23522.4	22786.6
Company-operated restaurant expenses
Food & paper	5,178	5586.1	5487.4
Payroll & employee benefits	3965.6	4300.1	4331.6
Occupancy & other operating expenses	3507.6	3766.7	3922.7
Franchised restaurants-occupancy expenses	1301.7	1230.3	1139.7
Selling, general & administrative expenses	2234.2	2355.5	2,367
Impairment and other charges (credits), net	-61.1	6	1670.3
Other operating (income) expense, net	-222.3	-165.2	-11.1
Total operating costs and expenses	15903.7	17079.5	18907.6
Operating income	6,841	6442.9	3,879
Interest expense-net of capitalized interest of $11.7, $12.3 and $6.9	473.2	522.6	410.1
Nonoperating (income) expense, net	-24.3	-77.6	-103.2
Gain on sale of investment	-94.9	-160.1	0
Income from continuing operations before provision for income taxes	6,487	6,158	3572.1
Provision for income taxes	1,936	1844.8	1237.1
Income from continuing operations	4,551	4313.2	2,335
Income from discontinued operations (net of taxes of $34.5)	0	0	60.1
Net income	$4,551	4313.2	2395.1
Per common share-basic:
Continuing operations	4.17	3.83	1.96
Discontinued operations	$0	$0	0.05
Net income	4.17	3.83	2.02
Per common share-diluted:
Continuing operations	4.11	3.76	1.93
Discontinued operations	$0	$0	0.05
Net income	4.11	3.76	1.98
Dividends declared per common share	2.05	1.625	1.5
Weighted-average shares outstanding-basic	1092.2	1126.6	1188.3
Weighted-average shares outstanding-diluted	1107.4	1,146	1211.8

1_Statement Of Income Alternati

Statement Of Income Alternative (Parenthetical) (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Interest expense, capitalized interest	11.7	12.3	6.9
Income from discontinued operations, taxes	$0	$0	34.5

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Millions	Dec. 31, 2009	Dec. 31, 2008
Current assets
Cash and equivalents	$1,796	2063.4
Accounts and notes receivable	1060.4	931.2
Inventories, at cost, not in excess of market	106.2	111.5
Prepaid expenses and other current assets	453.7	411.5
Total current assets	3416.3	3517.6
Other assets
Investments in and advances to affiliates	1212.7	1222.3
Goodwill	2425.2	2237.4
Miscellaneous	1639.2	1229.7
Total other assets	5277.1	4689.4
Property and equipment
Property and equipment, at cost	33440.5	31152.4
Accumulated depreciation and amortization	(11,909)	-10897.9
Net property and equipment	21531.5	20254.5
Total assets	30224.9	28461.5
Current liabilities
Accounts payable	636	620.4
Income taxes	202.4	0
Other taxes	277.4	252.7
Accrued interest	195.8	173.8
Accrued payroll and other liabilities	1,659	1459.2
Current maturities of long-term debt	18.1	31.8
Total current liabilities	2988.7	2537.9
Long-term debt	10560.3	10,186
Other long-term liabilities	1363.1	1410.1
Deferred income taxes	1278.9	944.9
Shareholders' equity
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	4853.9	4600.2
Retained earnings	31270.8	28953.9
Accumulated other comprehensive income	747.4	101.3
Common stock in treasury, at cost; 583.9 and 545.3 million shares	-22854.8	-20289.4
Total shareholders' equity	14033.9	13382.6
Total liabilities and shareholders' equity	30224.9	28461.5

2_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
	Dec. 31, 2009	Dec. 31, 2008
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	583,900,000	545,300,000

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Operating activities
Net income	$4,551	4313.2	2395.1
Charges and credits:
Depreciation and amortization	1216.2	1207.8	1214.1
Deferred income taxes	203	101.5	-39.1
Income taxes audit benefit	0	0	-316.4
Impairment and other charges (credits), net	-61.1	6	1670.3
Gain on sale of investment	-94.9	-160.1	0
Gains on dispositions of discontinued operations, net of tax	0	0	-68.6
Share-based compensation	112.9	112.5	142.4
Other	-347.1	90.5	-85.3
Changes in working capital items:
Accounts receivable	(42)	16.1	-100.2
Inventories, prepaid expenses and other current assets	1	(11)	-29.6
Accounts payable	-2.2	-40.1	-36.7
Income taxes	212.1	195.7	71.8
Other accrued liabilities	2.1	85.1	58.5
Cash provided by operations	5,751	5917.2	4876.3
Investing activities
Property and equipment expenditures	-1952.1	-2135.7	-1946.6
Purchases of restaurant businesses	-145.7	(147)	-228.8
Sales of restaurant businesses and property	406	478.8	364.7
Latam transaction, net	0	0	647.5
Proceeds on sale of investment	144.9	229.4	0
Proceeds from disposals of discontinued operations, net	0	0	194.1
Other	-108.4	-50.2	(181)
Cash used for investing activities	-1655.3	-1624.7	-1150.1
Financing activities
Net short-term borrowings	-285.4	266.7	101.3
Long-term financing issuances	1169.3	3477.5	2116.8
Long-term financing repayments	-664.6	-2698.5	-1645.5
Treasury stock purchases	-2797.4	-3919.3	(3,943)
Common stock dividends	-2235.5	-1823.4	-1765.6
Proceeds from stock option exercises	332.1	548.2	1137.6
Excess tax benefit on share-based compensation	73.6	124.1	203.8
Other	-13.1	-89.8	-201.7
Cash used for financing activities	(4,421)	-4114.5	-3996.3
Effect of exchange rates on cash and equivalents	57.9	-95.9	123.3
Cash and equivalents increase (decrease)	-267.4	82.1	-146.8
Cash and equivalents at beginning of year	2063.4	1981.3	2128.1
Cash and equivalents at end of year	1,796	2063.4	1981.3
Supplemental cash flow disclosures
Interest paid	468.7	507.8	392.7
Income taxes paid	1683.5	1294.7	1436.2

Statement Of Shareholders Equit

Statement Of Shareholders Equity And Other Comprehensive Income (USD $)
In Millions	Common stock	Additional paid-in capital	Retained earnings	Accumulated other comprehensive income (loss) Pensions	Accumulated other comprehensive income (loss) Deferred hedging adjustment	Accumulated other comprehensive income (loss) Foreign currency translation	Common stock in treasury	Total
Beginning Balance at Dec. 31, 2006	16.6	$3,445	25845.6	($89)	-7.8	-199.9	-13552.2	15458.3
Beginning Balance (in shares) at Dec. 31, 2006	1660.6						-456.9
Net income			2395.1					2395.1
Translation adjustments (including (tax benefits)/taxes of $47.2 in 2009, ($190.4) in 2008 and $41.7 in 2007)						804.8		804.8
Latam historical translation adjustments						769.5		769.5
Adjustments to cash flow hedges (including (tax benefits)/taxes of ($18.6) in 2009, $29.9 in 2008 and $2.9 in 2007)					8.5			8.5
Adjustments related to pensions (including (tax benefits)/taxes of ($25.0) in 2009, ($29.4) in 2008 and $19.7 in 2007)				51.3				51.3
Common stock cash dividends ($2.05 in 2009, $1.625 in 2008 and $1.50 in 2007 per share)			-1765.6					-1765.6
Treasury stock purchases (in shares)							-77.1
Treasury stock purchases							-3948.8	-3948.8
Share-based compensation		142.4						142.4
Adjustment to initially apply guidance on accounting for sabbatical leave (including tax benefits of $18.1)			-36.1					-36.1
Adjustment to initially apply guidance on accounting for uncertainty in income taxes			20.1					20.1
Stock option exercises and other (including tax benefits of $93.3 in 2009, $169.0 in 2008 and $246.8 in 2007) (in shares)							38.7
Stock option exercises and other (including tax benefits of $93.3 in 2009, $169.0 in 2008 and $246.8 in 2007)		639.3	2.4				738.6	1380.3
Ending Balance (in shares) at Dec. 31, 2007	1660.6						-495.3
Ending Balance at Dec. 31, 2007	16.6	4226.7	26461.5	-37.7	0.7	1374.4	-16762.4	15279.8
Net income			4313.2					4313.2
Translation adjustments (including (tax benefits)/taxes of $47.2 in 2009, ($190.4) in 2008 and $41.7 in 2007)						(1,223)		(1,223)
Adjustments to cash flow hedges (including (tax benefits)/taxes of ($18.6) in 2009, $29.9 in 2008 and $2.9 in 2007)					47.3			47.3
Adjustments related to pensions (including (tax benefits)/taxes of ($25.0) in 2009, ($29.4) in 2008 and $19.7 in 2007)				-60.4				-60.4
Common stock cash dividends ($2.05 in 2009, $1.625 in 2008 and $1.50 in 2007 per share)			-1823.4					-1823.4
Treasury stock purchases (in shares)							-69.7
Treasury stock purchases							-3980.9	-3980.9
Share-based compensation		109.6						109.6
Stock option exercises and other (including tax benefits of $93.3 in 2009, $169.0 in 2008 and $246.8 in 2007) (in shares)							19.7
Stock option exercises and other (including tax benefits of $93.3 in 2009, $169.0 in 2008 and $246.8 in 2007)		263.9	2.6				453.9	720.4
Ending Balance (in shares) at Dec. 31, 2008	1660.6						-545.3
Ending Balance at Dec. 31, 2008	16.6	4600.2	28953.9	-98.1	48	151.4	-20289.4	13382.6
Net income			4,551					4,551
Translation adjustments (including (tax benefits)/taxes of $47.2 in 2009, ($190.4) in 2008 and $41.7 in 2007)						714.1		714.1
Adjustments to cash flow hedges (including (tax benefits)/taxes of ($18.6) in 2009, $29.9 in 2008 and $2.9 in 2007)					-31.5			-31.5
Adjustments related to pensions (including (tax benefits)/taxes of ($25.0) in 2009, ($29.4) in 2008 and $19.7 in 2007)				-36.5				-36.5
Common stock cash dividends ($2.05 in 2009, $1.625 in 2008 and $1.50 in 2007 per share)			-2235.5					-2235.5
Treasury stock purchases (in shares)							-50.3
Treasury stock purchases							-2854.1	-2854.1
Share-based compensation		112.9						112.9
Stock option exercises and other (including tax benefits of $93.3 in 2009, $169.0 in 2008 and $246.8 in 2007) (in shares)							11.7
Stock option exercises and other (including tax benefits of $93.3 in 2009, $169.0 in 2008 and $246.8 in 2007)		140.8	1.4				288.7	430.9
Ending Balance (in shares) at Dec. 31, 2009	1660.6						-583.9
Ending Balance at Dec. 31, 2009	16.6	4853.9	31270.8	-134.6	16.5	865.5	-22854.8	14033.9

3_Statement Of Shareholders Equ

Statement Of Shareholders Equity And Other Comprehensive Income (Parenthetical) (USD $)
In Millions, except Per Share data	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Translation adjustments, (tax benefits)/taxes	47.2	-190.4	41.7
Adjustments to cash flow hedges, (tax benefits)/taxes	-18.6	29.9	2.9
Adjustments related to pensions, (tax benefits)/taxes	(25)	-29.4	19.7
Common stock cash dividends, per share	2.05	1.625	1.5
Adjustment to initially apply guidance on accounting for sabbatical leave, tax benefits			18.1
Stock option exercises and other, tax benefits	93.3	$169	246.8

Summary of Significant Accounti

Summary of Significant Accounting Policies
	12 Months Ended Dec. 31, 2009 USD / shares
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies NATURE OF BUSINESS The Company franchises and operates McDonalds restaurants in the food service industry. The Company had a minority ownership interest in U.K.-based Pret A Manger that it sold in May 2008, and a 100% ownership interest in U.S.-based Boston Market that it sold in August 2007. All restaurants are operated either by the Company or by franchisees, including conventional franchisees under franchise arrangements, and foreign affiliated markets (affiliates) and developmental licensees under license agreements. The following table presents restaurant information by ownership type: Restaurants at December31, 2009 2008 2007 Conventional franchised 19,020 18,402 17,634 Developmental licensed 3,160 2,926 2,756 Affiliated 4,036 4,137 4,081 Franchised 26,216 25,465 24,471 Company-operated 6,262 6,502 6,906 Systemwide restaurants 32,478 31,967 31,377 CONSOLIDATION The consolidated financial statements include the accounts of the Company and its subsidiaries. Investments in affiliates owned 50% or less (primarily McDonalds Japan) are accounted for by the equity method. The Company evaluates its business relationships such as those with franchisees, joint venture partners, developmental licensees, suppliers, and advertising cooperatives to identify potential variable interest entities. Generally, these businesses qualify for a scope exception under the consolidation guidance. The Company has concluded that consolidation of any such entities is not appropriate. In June 2009, the Financial Accounting Standards Board (FASB) issued amendments to the guidance on variable interest entities and consolidation, codified primarily in the Consolidation Topic of the FASB Accounting Standards Codification (ASC). This guidance modifies the method for determining whether an entity is a variable interest entity as well as the methods permitted for determining the primary beneficiary of a variable interest entity. In addition, this guidance requires ongoing reassessments of whether a company is the primary beneficiary of a variable interest entity and enhanced disclosures related to a companys involvement with a variable interest entity. This guidance was effective beginning January1, 2010, and we do not expect the adoption to have a significant impact on our consolidated financial statements. ESTIMATES IN FINANCIAL STATEMENTS The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. REVENUE RECOGNITION The Companys revenues consist of sales by Company-operated restaurants and fees from franchised restaurants operated by conventional franchisees, developmental licensees and affiliates. Sales by Company-operated restaurants are recognized on a cash basis. The Company presents sales net of sales tax and other sales-related taxes. Revenues from conventional franc

Property and Equipment

Property and Equipment
	12 Months Ended Dec. 31, 2009 USD / shares
Property and Equipment	Property and Equipment Net property and equipment consisted of: In millions December31,2009 2008 Land $5,048.3 $ 4,689.6 Buildings and improvements on owned land 12,119.0 10,952.3 Buildings and improvements on leased land 11,347.9 10,788.6 Equipment, signs and seating 4,422.9 4,205.1 Other 502.4 516.8 33,440.5 31,152.4 Accumulated depreciation and amortization (11,909.0 ) (10,897.9 ) Net property and equipment $21,531.5 $ 20,254.5 Depreciation and amortization expense related to continuing operations was (in millions): 2009$1,160.8; 2008$1,161.6; 2007$1,145.0.

Discontinued Operations

Discontinued Operations
	12 Months Ended Dec. 31, 2009 USD / shares
Discontinued Operations	Discontinued Operations The Company previously operated Boston Market in the U.S., which it sold in August 2007. As a result of the disposal, Boston Markets results of operations and transaction gain are reflected as discontinued operations. In connection with the sale, the Company received proceeds of approximately $250 million and recorded a gain of $68.6 million after tax. In addition, Boston Markets net loss for 2007 was $8.5 million. Boston Markets results of operations for 2007 (exclusive of the transaction gains), which previously were included in Other Countries Corporate, consisted of $444.1 million of revenues and a pretax loss of $17.0 million.

Latam Transaction

Latam Transaction
	12 Months Ended Dec. 31, 2009 USD / shares
Latam Transaction	Latam Transaction In August 2007, the Company completed the sale of its businesses in Brazil, Argentina, Mexico, Puerto Rico, Venezuela and 13 other countries in Latin America and the Caribbean, which totaled 1,571 restaurants, to a developmental licensee organization. The Company refers to these markets as Latam. Based on approval by the Companys Board of Directors on April17,2007, the Company concluded Latam was held for sale as of that date in accordance with guidance on the impairment or disposal of long-lived assets. As a result, the Company recorded an impairment charge of $1.7 billion in 2007, substantially all of which was noncash. The total charges for the full year included $895.8 million for the difference between the net book value of the Latam business and approximately $675million in cash proceeds received. This loss in value was primarily due to a historically difficult economic environment coupled with volatility experienced in many of the markets included in this transaction. The charges also included historical foreign currency translation losses of $769.5 million recorded in shareholders equity. The Company recorded a tax benefit of $62.0million in connection with this transaction. The tax benefit was minimal in 2007 due to the Companys inability to utilize most of the capital losses generated by this transaction. As a result of meeting the held for sale criteria, the Company ceased recording depreciation expense with respect to Latam effective April17, 2007. In connection with the sale, the Company agreed to indemnify the buyers for certain tax and other claims, certain of which are reflected on McDonalds Consolidated balance sheet (2009: other long-term liabilities$71.8 million; accrued payroll and other liabilities$25.3 million; 2008: other long-term liabilities$141.8million). The change in the total balance was primarily a result of the resolution of certain of these liabilities as well as the impact of foreign currency translation. The Company mitigates the currency impact to income of these foreign currency denominated liabilities through the use of forward foreign exchange agreements. The buyers of the Companys operations in Latam entered into a 20-year master franchise agreement that requires the buyers, among other obligations to (i)pay monthly royalties commencing at a rate of approximately 5% of gross sales of the restaurants in these markets, substantially consistent with market rates for similar license arrangements; (ii)commit to adding approximately 150 new McDonalds restaurants by the end of 2010 and pay an initial fee for each new restaurant opened; and (iii)commit to specified annual capital expenditures for existing restaurants.

Impairment and Other Charges

Impairment and Other Charges (Credits), Net
	12 Months Ended Dec. 31, 2009 USD / shares
Impairment and Other Charges (Credits), Net	Impairment and Other Charges (Credits), Net In millions, except per share data 2009 2008 2007 Europe $ 4.3 $6.0 $ (10.7 ) APMEA (0.2 ) Other Countries Corporate (65.2 ) 1,681.0 Total $ (61.1 ) $6.0 $ 1,670.3 After tax(1) $ (91.4 ) $3.5 $ 1,606.0 Income from continuing operations per common sharediluted $ (.08 ) $.01 $ 1.32 (1) Certain items were not tax affected. In 2009, the Company recorded pretax income of $65.2 million related primarily to the resolution of certain liabilities retained in connection with the 2007 Latam transaction. The Company also recognized a tax benefit in 2009 in connection with this income, mainly related to the release of a tax valuation allowance. In 2007, the Company recorded $1.7 billion of pretax impairment charges related to the Companys sale of its Latam businesses to a developmental licensee organization.

Other Operating

Other Operating (Income) Expense, Net
	12 Months Ended Dec. 31, 2009 USD / shares
Other Operating (Income) Expense, Net	Other Operating (Income) Expense, Net In millions 2009 2008 2007 Gains on sales of restaurant businesses $ (113.3 ) $ (126.5 ) $ (88.9 ) Equity in earnings of unconsolidated affiliates (167.8 ) (110.7 ) (115.6 ) Asset dispositions and other expense 58.8 72.0 193.4 Total $ (222.3 ) $ (165.2 ) $ (11.1 ) Gains on sales of restaurant businesses Gains on sales of restaurant businesses include gains from sales of Company-operated restaurants as well as gains from exercises of purchase options by franchisees with business facilities lease arrangements (arrangements where the Company leases the businesses, including equipment, to franchisees who generally have options to purchase the businesses). The Companys purchases and sales of businesses with its franchisees are aimed at achieving an optimal ownership mix in each market. Resulting gains or losses are recorded in operating income because the transactions are a recurring part of our business. Equity in earnings of unconsolidated affiliates Unconsolidated affiliates and partnerships are businesses in which the Company actively participates but does not control. The Company records equity in earnings from these entities representing McDonalds share of results. For foreign affiliated markets primarily Japan results are reported after interest expense and income taxes. McDonalds share of results for partnerships in certain consolidated markets such as the U.S. are reported before income taxes. These partnership restaurants are operated under conventional franchise arrangements and, therefore, are classified as conventional franchised restaurants. Asset dispositions and other expense Asset dispositions and other expense consists of gains or losses on excess property and other asset dispositions, provisions for store closings, uncollectible receivables and other miscellaneous income and expenses.

Gain on Sale of Investment

Gain on Sale of Investment
	12 Months Ended Dec. 31, 2009 USD / shares
Gain on Sale of Investment	Gain on Sale of Investment In 2009, the Company sold its minority ownership interest in Redbox Automated Retail, LLC to Coinstar, Inc., the majority owner, for total consideration of $139.8 million. In connection with the sale, in first quarter, the Company received initial consideration valued at $51.6 million consisting of 1.5million shares of Coinstar common stock at an agreed to value of $41.6 million and $10 million in cash with the balance of the purchase price deferred. In subsequent quarters, the Company sold all of its holdings in the Coinstar common stock for $46.8 million and received $88.2 million in cash from Coinstar as final consideration. As a result of the transaction, the Company recognized a nonoperating pretax gain of $94.9 million (after tax$58.8million or $0.05 per share). In second quarter 2008, the Company sold its minority ownership interest in U.K.-based Pret A Manger. In connection with the sale, the Company received cash proceeds of $229.4 million and recognized a nonoperating pretax gain of $160.1 million (after tax$109.0 million or $0.09 per share).

Contingencies

Contingencies
	12 Months Ended Dec. 31, 2009 USD / shares
Contingencies	Contingencies From time to time, the Company is subject to proceedings, lawsuits and other claims related to competitors, customers, employees, franchisees, government agencies, intellectual property, shareholders and suppliers. The Company is required to assess the likelihood of any adverse judgments or outcomes to these matters as well as potential ranges of probable losses. A determination of the amount of accrual required, if any, for these contingencies is made after careful analysis of each matter. The required accrual may change in the future due to new developments in each matter or changes in approach such as a change in settlement strategy in dealing with these matters. The Company does not believe that any such matter currently being reviewed will have a material adverse effect on its financial condition or results of operations.

Franchise Arrangements

Franchise Arrangements
	12 Months Ended Dec. 31, 2009 USD / shares
Franchise Arrangements	Franchise Arrangements Conventional franchise arrangements generally include a lease and a license and provide for payment of initial fees, as well as continuing rent and royalties to the Company based upon a percent of sales with minimum rent payments that parallel the Companys underlying leases and escalations (on properties that are leased). Under this arrangement, franchisees are granted the right to operate a restaurant using the McDonalds System and, in most cases, the use of a restaurant facility, generally for a period of 20 years. These franchisees pay related occupancy costs including property taxes, insurance and maintenance. Affiliates and developmental licensees operating under license agreements pay a royalty to the Company based upon a percent of sales, and may pay initial fees. The results of operations of restaurant businesses purchased and sold in transactions with franchisees were not material to the consolidated financial statements for periods prior to purchase and sale. Revenues from franchised restaurants consisted of: In millions 2009 2008 2007 Rents $ 4,841.0 $ 4,612.8 $ 4,177.2 Royalties 2,379.8 2,275.7 1,941.1 Initial fees 65.4 73.0 57.3 Revenues from franchised restaurants $ 7,286.2 $ 6,961.5 $ 6,175.6 Future minimum rent payments due to the Company under existing franchise arrangements are: In millions Ownedsites Leasedsites Total 2010 $ 1,218.1 $ 1,076.0 $ 2,294.1 2011 1,177.3 1,042.9 2,220.2 2012 1,144.5 1,011.5 2,156.0 2013 1,105.1 972.4 2,077.5 2014 1,062.1 924.8 1,986.9 Thereafter 8,495.8 6,782.5 15,278.3 Total minimum payments $ 14,202.9 $ 11,810.1 $ 26,013.0 At December31, 2009, net property and equipment under franchise arrangements totaled $13.1 billion (including land of $3.8 billion) after deducting accumulated depreciation and amortization of $6.5 billion.

Leasing Arrangements

Leasing Arrangements
	12 Months Ended Dec. 31, 2009 USD / shares
Leasing Arrangements	Leasing Arrangements At December31, 2009, the Company was the lessee at 13,858 restaurant locations through ground leases (the Company leases the land and the Company or franchisee owns the building) and through improved leases (the Company leases land and buildings). Lease terms for most restaurants are generally for 20 years and, in many cases, provide for rent escalations and renewal options, with certain leases providing purchase options. Escalation terms vary by geographic segment with examples including fixed-rent escalations, escalations based on an inflation index, and fair-value market adjustments. The timing of these escalations generally ranges from annually to every five years. For most locations, the Company is obligated for the related occupancy costs including property taxes, insurance and maintenance; however, for franchised sites, the Company requires the franchisees to pay these costs. In addition, the Company is the lessee under noncancelable leases covering certain offices and vehicles. Future minimum payments required under existing operating leases with initial terms of one year or more are: In millions Restaurant Other Total 2010 $ 1,064.7 $ 54.7 $ 1,119.4 2011 1,002.4 44.1 1,046.5 2012 928.1 35.3 963.4 2013 859.8 25.6 885.4 2014 783.9 22.0 805.9 Thereafter 5,794.5 102.4 5,896.9 Total minimum payments $ 10,433.4 $ 284.1 $ 10,717.5 The following table provides detail of rent expense: In millions 2009 2008 2007 Company-operated restaurants: U.S. $ 65.2 $ 73.7 $ 82.0 Outside the U.S. 506.9 532.0 533.9 Total 572.1 605.7 615.9 Franchised restaurants: U.S. 393.9 374.7 358.4 Outside the U.S. 431.4 409.4 364.5 Total 825.3 784.1 722.9 Other 98.9 101.8 98.5 Total rent expense $ 1,496.3 $ 1,491.6 $ 1,437.3 Rent expense included percent rents in excess of minimum rents (in millions) as followsCompany-operated restaurants: 2009$129.6; 2008$130.2; 2007$118.3. Franchised restaurants: 2009$154.7; 2008$143.5; 2007$136.1.

Income Taxes

Income Taxes
	12 Months Ended Dec. 31, 2009 USD / shares
Income Taxes	Income Taxes Income from continuing operations before provision for income taxes, classified by source of income, was as follows: In millions 2009 2008 2007 U.S. $ 2,700.4 $ 2,769.4 $ 2,455.0 Outside the U.S. 3,786.6 3,388.6 1,117.1 Income from continuing operations before provision for income taxes $ 6,487.0 $ 6,158.0 $ 3,572.1 The provision for income taxes, classified by the timing and location of payment, was as follows: In millions 2009 2008 2007 U.S. federal $ 792.0 $ 808.4 $ 480.8 U.S. state 152.1 134.7 84.9 Outside the U.S. 788.9 800.2 710.5 Current tax provision 1,733.0 1,743.3 1,276.2 U.S. federal 186.9 75.6 (14.3 ) U.S. state 8.6 28.7 10.0 Outside the U.S. 7.5 (2.8 ) (34.8 ) Deferred tax provision (benefit) 203.0 101.5 (39.1 ) Provision for income taxes $ 1,936.0 $ 1,844.8 $ 1,237.1 Net deferred tax liabilities consisted of: In millions December31,2009 2008 Property and equipment $1,609.4 $1,587.5 Other 419.1 308.1 Total deferred tax liabilities 2,028.5 1,895.6 Property and equipment (287.7 ) (243.4 ) Employee benefit plans (311.0 ) (300.9 ) Intangible assets (289.3 ) (227.8 ) Deferred foreign tax credits (152.8 ) (131.1 ) Capital loss carryforwards (50.9 ) (161.9 ) Operating loss carryforwards (65.7 ) (70.9 ) Indemnification liabilities (43.5 ) (49.6 ) Other (334.3 ) (462.3 ) Total deferred tax assets before valuation allowance (1,535.2 ) (1,647.9 ) Valuation allowance 118.1 199.7 Net deferred tax liabilities $611.4 $447.4 Balance sheet presentation: Deferred income taxes $1,278.9 $944.9 Other assetsmiscellaneous (541.2 ) (417.4 ) Current assetsprepaid expenses and other current assets (126.3 ) (80.1 ) Net deferred tax liabilities $611.4 $447.4 The statutory U.S. federal income tax rate reconciles to the effective income tax rates as follows: 2009 2008 2007 Statutory U.S. federal income tax rate 35.0 % 35.0 % 35.0 % State income taxes, net of related federal income tax benefit 1.6 1.8 2.3 Benefits and taxes related to foreign operations (6.3 ) (6.4 ) (7.5 ) Completion of federal tax audit (8.9 ) Latam transaction 14.3 Other, net (0.5 ) (0.4 ) (0.6 ) Effective income tax rates 29.8 % 30.0 % 34.6 % As of December31, 2009 and 2008, the Companys gross unrecognized tax benefits totaled $492.0 million and $272.5 million, respectively. After considering the deferred tax accounting impact, it is expected that about $330 million of the total as of December31, 2009 would favorably affect the effective tax rate if resolved in the Companys favor. The following table pre

Segment and Geographic Informat

Segment and Geographic Information
	12 Months Ended Dec. 31, 2009 USD / shares
Segment and Geographic Information	Segment and Geographic Information The Company operates in the food service industry and manages its business as distinct geographic segments. All intercompany revenues and expenses are eliminated in computing revenues and operating income. Corporate general administrative expenses are included in Other Countries Corporate and consist of home office support costs in areas such as facilities, finance, human resources, information technology, legal, marketing, restaurant operations, supply chain and training. Corporate assets include corporate cash and equivalents, asset portions of financial instruments and home office facilities. In millions 2009 2008 2007 U.S. $ 7,943.8 $ 8,078.3 $ 7,905.5 Europe 9,273.8 9,922.9 8,926.2 APMEA 4,337.0 4,230.8 3,598.9 Other Countries Corporate 1,190.1 1,290.4 2,356.0 Total revenues $ 22,744.7 $ 23,522.4 $ 22,786.6 U.S. $ 3,231.7 $ 3,059.7 $ 2,841.9 Europe 2,588.1 2,608.0 2,125.4 APMEA 989.5 818.8 616.3 Other Countries Corporate 31.7 (1) (43.6 ) (1,704.6 )(2) Total operating income $ 6,841.0 $ 6,442.9 $ 3,879.0 U.S. $ 10,429.3 $ 10,356.7 $ 10,031.8 Europe 11,494.4 10,532.7 11,380.4 APMEA 4,409.0 4,074.6 4,145.3 Other Countries Corporate 3,892.2 3,497.5 3,834.2 Total assets $ 30,224.9 $ 28,461.5 $ 29,391.7 U.S. $ 659.4 $ 837.4 $ 805.1 Europe 859.3 864.1 687.4 APMEA 354.6 360.6 302.8 Other Countries Corporate 78.8 73.6 97.3 Businesses held for sale 43.7 Discontinued operations 10.3 Total capital expenditures $ 1,952.1 $ 2,135.7 $ 1,946.6 U.S. $ 423.8 $ 400.9 $ 402.7 Europe 483.2 506.3 473.3 APMEA 202.9 193.4 178.1 Other Countries Corporate 106.3 107.2 112.6 Businesses held for sale 26.1 Discontinued operations 21.3 Total depreciation and amortization $ 1,216.2 $ 1,207.8 $ 1,214.1 (1) Includes $65.2 million of pretax income recorded in Impairment and other charges (credits), net related primarily to the resolution of certain liabilities retained in connection with the 2007 Latam transaction. (2) Includes $1.7 billion of pretax impairment charges related to the Companys sale of its Latam businesses to a developmental licensee organization. Total long-lived assets, primarily property and equipment, were (in millions) Consolidated: 2009$25,896.1; 2008$24,385.8; 2007$25,186.9. U.S. based: 2009$10,376.4; 2008$10,389.7; 2007$10,043.7.

Debt Financing

Debt Financing
	12 Months Ended Dec. 31, 2009 USD / shares
Debt Financing	Debt Financing LINE OF CREDIT AGREEMENTS At December31, 2009, the Company had a $1.3 billion line of credit agreement expiring in 2012 with fees of 0.05%per annum on the total commitment, which remained unused. Fees and interest rates on this line are based on the Companys long-term credit rating assigned by Moodys and Standard Poors. In addition, certain subsidiaries outside the U.S. had unused lines of credit totaling $913.4 million at December31, 2009; these uncommitted lines of credit were principally short-term and denominated in various currencies at local market rates of interest. The weighted-average interest rate of short-term borrowings was 4.1% at December31, 2009 (based on $598.7 million of foreign currency bank line borrowings) and 4.7% at December31, 2008 (based on $232.1 million of commercial paper and $625.4million of foreign currency bank line borrowings). FAIR VALUES At December31, 2009, the fair value of the Companys debt obligations was estimated at $11.3 billion, compared to a carrying amount of $10.6 billion. This fair value was estimated using various pricing models or discounted cash flow analyses that incorporated quoted market prices and are similar to Level 2 inputs within the valuation hierarchy as defined in the fair value guidance. The Company has no current plans to retire a significant amount of its debt prior to maturity. DEBT OBLIGATIONS The Company has incurred debt obligations principally through public and private offerings and bank loans. There are no provisions in the Companys debt obligations that would accelerate repayment of debt as a result of a change in credit ratings or a material adverse change in the Companys business. Certain of the Companys debt obligations contain cross-acceleration provisions, and restrictions on Company and subsidiary mortgages and the long-term debt of certain subsidiaries. Under certain agreements, the Company has the option to retire debt prior to maturity, either at par or at a premium over par. The following table summarizes the Companys debt obligations. (Interest rates and debt amounts reflected in the table include the effects of interest rate exchange agreements.) Interestrates(1) December31 Amounts outstanding December31 In millions of U.S. Dollars Maturity dates 2009 2008 2009 2008 Fixed 5.6 % 5.6 % $ 4,677.6 $ 4,726.1 Floating 2.9 2.3 1,300.0 857.1 Total U.S. Dollars 2010-2039 5,977.6 5,583.2 Fixed 4.8 5.0 932.6 704.1 Floating 1.8 5.2 683.9 829.4 Total Euro 2010-2016 1,616.5 1,533.5 Fixed 6.0 6.0 726.2 654.9 Floating 3.6 2.0 Total British Pounds Sterling 2020-2032 726.2 656.9 Fixed 2.0 2.2 488.6 720.1 Floating 1.0 1.6 537.0 440.2 Total Japanese Yen 2010-2030 1,025.6 1,160.3 Fixed 2.7 2.8 359

Employee Benefit Plans

Employee Benefit Plans
	12 Months Ended Dec. 31, 2009 USD / shares
Employee Benefit Plans	Employee Benefit Plans The Companys Profit Sharing and Savings Plan for U.S.-based employees includes a 401(k) feature, an ESOP feature, and a discretionary employer profit sharing match. The 401(k) feature allows participants to make pretax contributions that are partly matched from shares released under the ESOP. The Profit Sharing and Savings Plan also provides for a discretionary employer profit sharing match after the end of the year for those participants eligible to share in the match who have contributed to the 401(k) feature. All current account balances and future contributions and related earnings can be invested in several investment alternatives as well as McDonalds common stock in accordance with each participants elections. Participants future contributions to the 401(k) feature and the discretionary employer matching contribution feature are limited to 20% investment in McDonalds common stock. Participants may choose to make separate investment choices for current account balances and for future contributions. The Company also maintains certain supplemental benefit plans that allow participants to (i)make tax-deferred contributions and (ii)receive Company-provided allocations that cannot be made under the Profit Sharing and Savings Plan because of Internal Revenue Service limitations. The investment alternatives and returns are based on certain market-rate investment alternatives under the Profit Sharing and Savings Plan. Total liabilities were $397.3 million at December31, 2009 and $389.7 million at December31, 2008 and were primarily included in other long-term liabilities on the Consolidated balance sheet. The Company has entered into derivative contracts to hedge market-driven changes in certain of the liabilities. At December31, 2009, derivatives with a fair value of $79.6 million indexed to the Companys stock as well as an investment totaling $74.5 million indexed to certain market indices were included in miscellaneous other assets on the Consolidated balance sheet. All changes in liabilities for these nonqualified plans and in the fair value of the derivatives are recorded in selling, general administrative expenses. Changes in fair value of the derivatives indexed to the Companys stock are recorded in income because the contracts provide the counterparty with a choice to settle in cash or shares. Total U.S. costs for the Profit Sharing and Savings Plan, including nonqualified benefits and related hedging activities, were (in millions): 2009$51.3; 2008$61.2; 2007$57.6. Certain subsidiaries outside the U.S. also offer profit sharing, stock purchase or other similar benefit plans. Total plan costs outside the U.S. were (in millions): 2009$45.2; 2008$55.4; 2007$62.7. The total combined liabilities for international retirement plans were $183.7 million and $131.1 million at December31, 2009 and 2008, respectively, primarily in the U.K. and Canada. Other postretirement benefits and postemployment benefits were immaterial.

Share-based Compensation

Share-based Compensation
	12 Months Ended Dec. 31, 2009 USD / shares
Share-based Compensation	Share-based Compensation The Company maintains a share-based compensation plan which authorizes the granting of various equity-based incentives including stock options and restricted stock units (RSUs) to employees and nonemployee directors. The number of shares of common stock reserved for issuance under the plans was 85.9million at December31, 2009, including 35.3million available for future grants. STOCK OPTIONS Stock options to purchase common stock are granted with an exercise price equal to the closing market price of the Companys stock on the date of grant. Substantially all of the options become exercisable in four equal installments, beginning a year from the date of the grant, and generally expire 10 years from the grant date. Options granted between May1, 1999 and December31, 2000 (approximately 10million options outstanding at December31, 2009) expire 13 years from the date of grant. Intrinsic value for stock options is defined as the difference between the current market value and the exercise price. During 2009, 2008 and 2007, the total intrinsic value of stock options exercised was $302.5 million, $549.5 million and $815.3 million, respectively. Cash received from stock options exercised during 2009 was $332.1 million and the actual tax benefit realized for tax deductions from stock options exercised totaled $86.0 million. The Company uses treasury shares purchased under the Companys share repurchase program to satisfy share-based exercises. A summary of the status of the Companys stock option grants as of December31, 2009, 2008 and 2007, and changes during the years then ended, is presented in the following table: 2009 2008 2007 Options Sharesin millions Weighted- average exercise price Weighted- average remaining contractual lifeinyears Aggregate intrinsic value in millions Sharesin millions Weighted- average exercise price Sharesin millions Weighted- average exercise price Outstanding at beginning of year 53.4 $ 34.88 67.5 $ 31.85 101.9 $ 30.03 Granted 5.6 56.94 5.3 56.55 5.7 45.02 Exercised (10.7 ) 31.17 (18.7 ) 29.97 (38.4 ) 28.89 Forfeited/expired (0.5 ) 47.22 (0.7 ) 37.53 (1.7 ) 33.63 Outstanding at end of year 47.8 $ 38.16 5.06 $ 1,161.1 53.4 $ 34.88 67.5 $ 31.85 Exercisable at end of year 35.4 $ 33.06 3.96 $ 1,038.8 40.8 52.6 RSUs RSUs generally vest 100% on the third anniversary of the grant and are payable in either shares of McDonalds common stock or cash, at the Companys discretion. Certain executives have been awarded RSUs that vest based on Company performance. The fair value of each RSU granted is equal to the market price of the Companys stock at date of grant less the present value of expected dividends over the vesting period. A summary of the Companys RSU activity during the years ended December31, 2009, 2008 and 2007 is presented in th

Quarterly Results

Quarterly Results (Unaudited)
	12 Months Ended Dec. 31, 2009 USD / shares
Quarterly Results (Unaudited)	Quarterly Results (Unaudited) Quarters ended December31 Quarters ended September30 Quarters ended June30 Quarters ended March31 In millions, except per share data 2009 2008 2009 2008 2009 2008 2009 2008 Revenues Sales by Company-operated restaurants $ 4,030.0 $ 3,855.0 $ 4,093.6 $ 4,411.1 $ 3,850.2 $ 4,296.0 $ 3,484.7 $ 3,998.8 Revenues from franchised restaurants 1,943.4 1,710.0 1,953.1 1,856.2 1,797.0 1,779.3 1,592.7 1,616.0 Total revenues 5,973.4 5,565.0 6,046.7 6,267.3 5,647.2 6,075.3 5,077.4 5,614.8 Company-operated margin 758.4 664.1 793.8 823.9 690.9 760.8 564.2 659.2 Franchised margin 1,595.0 1,411.7 1,614.5 1,539.3 1,479.0 1,464.0 1,296.0 1,316.2 Operating income 1,826.3 (1) 1,502.2 1,932.8 1,823.7 1,681.5 1,654.2 1,400.4 1,462.8 Net income $ 1,216.8 (1) $ 985.3 $ 1,261.0 $ 1,191.3 $ 1,093.7 (2) $ 1,190.5 (3) $ 979.5 ( 4) $ 946.1 Net income per common sharebasic: $ 1.13 (1) $ 0.88 $ 1.16 $ 1.07 $ 1.00 (2) $ 1.05 ( 3) $ 0.88 (4) $ 0.83 Net income per common sharediluted: $ 1.11 (1) $ 0.87 $ 1.15 $ 1.05 $ 0.98 (2 ) $ 1.04 (3) $ 0.87 (4 ) $ 0.81 Dividends declared per common share $ 1.05 ( 5) $ 0.875 (6) $ 0.50 $ 0.375 $ 0.50 $ 0.375 Weighted-average common sharesbasic 1,078.0 1,115.4 1,084.5 1,116.6 1,097.3 1,128.9 1,109.6 1,145.6 Weighted-average common sharesdiluted 1,093.1 1,131.6 1,098.2 1,136.0 1,111.4 1,148.8 1,124.4 1,165.3 Market price per common share: High $ 64.75 $ 64.02 $ 59.59 $ 67.00 $ 61.01 $ 61.76 $ 64.46 $ 59.48 Low 56.03 45.79 53.88 55.55 51.76 55.14 50.44 49.36 Close 62.44 62.19 57.07 61.70 57.49 56.22 54.57 55.77 (1) Includes net pretax income of $65.2 million ($87.0 million after tax or $0.08 per share) primarily related to the resolution of certain liabilities retained in connection with the 2007 Latin America developmental license transaction. (2) Includes income of $11.1 million ($0.01 per share) related to the sale of the Companys minority ownership interest in Redbox Automated Retail, LLC. (3) Includes income of $109.0 million ($0.09 per share-basic, $0.10 per share-diluted) due to the sale of

Document Information

Document Information
	12 Months Ended Dec. 31, 2009 USD / shares
Document Type	10-K
Amendment Flag	false
Document Period End Date	2009-12-31

Entity Information

Entity Information (USD $)
	12 Months Ended Dec. 31, 2009	Jan. 31, 2010	Jun. 30, 2009
Trading Symbol	MCD
Entity Registrant Name	MCDONALDS CORP
Entity Central Index Key	0000063908
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		1,075,960,799
Entity Public Float			$62,710,000,131