United States securities and exchange commission logo
April 27, 2020
Catherine Hoovel
Corporate Vice President - Chief Accounting Officer
McDonald's Corporation
110 North Carpenter Street
Chicago, Illinois 60607
Re: McDonald's
Corporation
Form 10-K for the
Fiscal Year Ended December 31, 2019
Filed February 26,
2020
File No. 001-05231
Dear Ms. Hoovel:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the Fiscal Year Ended December 31, 2019
Mangements Discussion and Analysis of Financial Condition and Results of
Operations
Operating Income
Operating margin, page 15
1. The operating income
margin appears to materially differ between your principal U.S. and
International Operated
Markets segments for each year presented. Please consider
discussing the material
factors causing the difference so investors may understand the
relative contribution
of each segment.
Contractual Obligations and Commitments , page 19
2. It appears from your
disclosure certain purchase commitments that are not recognized in
the consolidated
financial statements and are primarily related to construction, inventory,
energy, marketing and
other service related arrangements that occur in the normal course
of business have been
excluded from the table of contractual obligations. You further
Catherine Hoovel
FirstName LastNameCatherine Hoovel
McDonald's Corporation
Comapany NameMcDonald's Corporation
April 27, 2020
Page 27,
April 2 2020 Page 2
FirstName LastName
state such commitments are generally shorter term in nature, will be
funded from
operating cash flows, and are not significant to your overall
financial position. Because
the purpose of the table is to improve investors' ability to assess
liquidity and capital
resource needs, please explain to us the relative materiality of these
commitments to your
operating cash flows and what period of time is meant by "shorter term
in nature."
Financial Statements and Supplementary Data
Notes to Consolidated Financial Statements
Advertising Costs, page 41
3. You disclose advertising costs of company operated restaurants and
franchisees consist of
contributions to advertising cooperatives. You further disclose the
costs incurred by these
advertising cooperatives are approved and managed jointly by vote of
both company
operated restaurants and franchisees. Please tell us in detail how
these advertising
cooperatives operate, the significant terms of these arrangements for
both company
operated restaurants and franchisees and your accounting for the
cooperatives, particularly
in regard to the costs incurred by and contributions to them.
Additionally, explain to us
the basis for your conclusion that consolidation of these cooperatives
is not appropriate.
Controls and Procedures
Disclosure Controls, page 59
4. Your conclusion regarding the effectiveness of disclosures controls
and procedures
specifically addressed only a portion of the definition of disclosure
controls and
procedures as defined in Exchange Act Rules 13a-15(e) and 15d-15(e).
The portion of the
definition not addressed is in regard to disclosure controls and
procedures designed to
ensure that information required to be disclosed in reports filed or
submitted under the Act
is accumulated and communicated to management as appropriate to allow
timely
decisions regarding required disclosure. Although there is no
requirement to disclose the
full definition, specific reference to only a portion of the
definition gives the appearance
of limiting management s conclusion solely to the portion referred to.
Please represent to
us and revise future filings to state management s conclusion in
regard to the company's
disclosure controls and procedures as fully defined in Exchange Act
rules 13a-15(e) and
15d-15(e).
Catherine Hoovel
McDonald's Corporation
April 27, 2020
Page 3
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Aamira Chaudhry at 202-551-3389 or Doug Jones at
202-551-3309
with any questions.
FirstName LastNameCatherine Hoovel Sincerely,
Comapany NameMcDonald's Corporation
Division of
Corporation Finance
April 27, 2020 Page 3 Office of Trade &
Services
FirstName LastName