Company Information ACCT 370-B05 EXCEL PROJECT McDonald's Company Information Melissa Eddleman Company NameMcDonald's Corporation Ticker SymbolMCD IndustryQuick-service restaurant industry Products...

Company Information
    ACCT 370-B05 EXCEL PROJECT
    McDonald's
    Company Information
    Melissa Eddleman
    Company Name    McDonald's Corporation
    Ticker Symbol    MCD
    Industry    Quick-service restaurant industry
    Products and Services Offered    Locally-relevant quality food and beverages
    Major competitors    International, national, regional, and local retailers of traditional, fast casual, and other food service competitors. Examples of competitors in the industry are Wendy's, Burger King, KFC, Taco Bell and Subway.
Historical Income Statements
    Consolidated Statement of Income - USD ($) shares in Millions, $ in Millions     12 months ended
        Dec. 31, 2020    Dec. 31, 2019    Dec. 31, 2018
    REVENUES
    Sales by Company-operated restaurants    $ 8,139.2    $ 9,420.8    $ 10,012.7
    Revenues from franchised restaurants    10,726.1    11,655.7    11,012.5
    Other Revenues    342.5    287.9    232.7
    Total revenues    19,207.8    21,364.4    21,257.9
    OPERATING COSTS AND EXPENSES
    Food & paper    2,564.2    2,980.3    3,153.8
    Payroll & employee benefits    2,416.4    2,704.4    2,937.9
    Occupancy & other operating expenses    2,000.6    2,075.9    2,174.2
    Franchised restaurants occupancy expenses    2,207.5    2,200.6    1,973.3
    Other Expenses    267    223.8    186.1
    Depreciation, Depletion and Amortization    300.6    262.5    214.8
    Other Selling, General and Administrative Expense    2,245    1,966.9    1,985.4
    Other operating (income) expense, net    (117.5)    (119.8)    (190.2)
    Total operating costs and expenses    11,883.8    12,294.6    12,435.3
    Operating income    7,324    9,069.8    8,822.6
    Interest expense-net of capitalized interest of $6.0, $7.4 and $5.6    1,218.1    1,121.9    981.2
    Nonoperating (income) expense, net    (34.8)    (70.2)    25.3
    Income before provision for income taxes    6,140.7    8,018.1    7,816.1
    Provision for income taxes    1,410.2    1,992.7    1,891.8
    Net income    $ 4,730.5    $ 6,025.4    $ 5,924.3
    Earnings per common share–basic    $ 6.35    $ 7.95    $ 7.61
    Earnings per common share–diluted    6.31    7.88    7.54
    Dividends declared per common share    $ 5.04    $ 4.73    $ 4.19
    Weighted-average shares outstanding–basic    744.6    758.1    778.2
    Weighted-average shares outstanding–diluted    750.1    764.9    785.6
    Consolidated Statement of Income (Parenthetical) - USD ($) $ in Millions    12 Months Ended
        Dec. 31, 2020    Dec. 31, 2019    Dec. 31, 2018
    Interest expense, capitalized interest    $ 6    $ 7.4    $ 5.6
    Consolidated Statement of Comprehensive Income - USD ($) $ in Millions    12 Months Ended
        Dec. 31, 2020    Dec. 31, 2019    Dec. 31, 2018
    Net income    $ 4,730.5    $ 6,025.4    $ 5,924.3
    Foreign currency translation adjustments:
    Gain (loss) recognized in accumulated other comprehensive income (AOCI), including net investment hedges    46    127.5    (453.6)
    Reclassification of (gain) loss to net income    17.1    46.8    0
    Foreign currency translation adjustments-net of tax benefit (expense) of $204.8, $(55.4), and $(90.7)    63.1    174.3    (453.6)
    Cash flow hedges:
    Gain (loss) recognized in AOCI    (129.1)    17.3    46.5
    Reclassification of (gain) loss to net income    5.8    (37.7)    2.4
    Cash flow hedges-net of tax benefit (expense) of $36.6, $6.1, and $(14.5)    (123.3)    (20.4)    48.9
    Defined benefit pension plans:
    Gain (loss) recognized in AOCI    (43.5)    (24.5)    (27)
    Reclassification of (gain) loss to net income    (0.4)    (2.6)    0.6
    Defined benefit pension plans-net of tax benefit (expense) of $9.3, $5.2, and $4.3    (43.9)    (27.1)    (26.4)
    Total other comprehensive income (loss), net of tax    (104.1)    126.8    (431.1)
    Comprehensive income    $ 4,626.4    $ 6,152.2    $ 5,493.2
    Consolidated Statement of Comprehensive Income (Parenthetical) - USD ($) $ in Millions    12 Months Ended
        Dec. 31, 2020    Dec. 31, 2019    Dec. 31, 2018
    Other comprehensive income (loss), foreign currency translation adjustment, tax    $ 204.8    $ (55.4)    $ (90.7)
    Other comprehensive income (loss), derivatives qualifying as hedges, tax    36.6    6.1    (14.5)
    Other comprehensive income (loss), pension and other postretirement benefit plans, tax    $ 9.3    $ 5.2    $ 4.3
Historical Balance Sheets
    Consolidated Balance Sheet - USD ($) $ in Millions    Dec. 31, 2020    Dec. 31, 2019    Dec. 31, 2018
    Current assets
    Cash and equivalents    $ 3,449.1    $ 898.5    $ 866
    Accounts and notes receivable    2,110.3    2,224.2    2,441.5
    Inventories, at cost, not in excess of market    51.1    50.2    51.1
    Prepaid expenses and other current assets    632.7    385    694.6
    Total current assets    6,243.2    3,557.9    4,053.2
    Other assets
    Investments in and advances to affiliates    1,297.2    1,270.3    1,202.8
    Goodwill    2,773.1    2,677.4    2,331.5
    Miscellaneous    3,527.4    2,584    2,381
    Total other assets    7,597.7    6,531.7    5,915.3
    Lease right-of-use asset, net    13,827.7    13,261.2    0
    Property and equipment
    Property and equipment, at cost    41,476.5    39,050.9    37,193.6
    Accumulated depreciation and amortization    (16,518.3)    (14,890.9)    (14,350.9)
    Net property and equipment    24,958.2    24,160    22,842.7
    Total assets    52,626.8    47,510.8    32,811.2
    Current liabilities
    Accounts payable    741.3    988.2    1,207.9
    Lease liability    701.5    621    0
    Income taxes    741.1    331.7    228.3
    Other taxes    227    247.5    253.7
    Accrued interest    388.4    337.8    297
    Accrued payroll and other liabilities    1,138.3    1,035.7    986.6
    Current maturities of long term debt    2,243.6    59.1    0
    Total current liabilities    6,181.2    3,621    2,973.5
    Long-term debt    35,196.8    34,118.1    31,075.3
    Long-term lease liability    13,321.3    12,757.8    0
    Long-term income taxes    1,970.7    2,265.9    2,081.2
    Deferred revenues - initial franchise fees    702    660.6    627.8
    Other long-term liabilities    1,054.1    979.6    1,096.3
    Deferred Income Taxes    2,025.6    1,318.1    1,215.5
    Shareholders' equity (deficit)
    Preferred stock, no par value; authorized – 165.0 million shares; issued – none    0    0    0
    Common stock, $.01 par value; authorized – 3.5 billion shares; issued – 1,660.6 million shares    16.6    16.6    16.6
    Additional paid-in capital    7,903.6    7,653.9    7,376
    Retained earnings    53,908.1    52,930.5    50,487
    Accumulated other comprehensive income (loss)    (2,586.8)    (2,482.7)    (2,609.5)
    Common stock in treasury, at cost; 915.2 and 914.3 million shares    (67,066.4)    (66,328.6)    (61,528.5)
    Total shareholders' equity (deficit)    (7,824.9)    (8,210.3)    (6,258.4)
    Total liabilities and shareholders' equity (deficit)    $ 52,626.8    $ 47,510.8    $ 32,811.2
    Consolidated Balance Sheet (Parenthetical) - $ / shares    Dec. 31, 2020    Dec. 31, 2019    Dec. 31, 2018
    Preferred stock, par value    $ 0    $ 0    $ 0
    Preferred stock, authorized    165,000,000    165,000,000    165,000,000
    Preferred stock, issued    0    0    0
    Common stock, par value    $ 0.01    $ 0.01    $ 0.01
    Common stock, authorized    3,500,000,000    3,500,000,000    3,500,000,000
    Common stock, issued    1,660,600,000    1,660,600,000    1,660,600,000
    Common stock in treasury, shares    915,200,000    914,300,000    893,500,000
McDonald's Corporation
    
Historical Stmt of Cash Flows
    Consolidated Statement of Cash Flows - USD ($) $ in Millions    12 Months Ended
        Dec. 31, 2020    Dec. 31, 2019    Dec. 31, 2018
    Operating activities
    Net income    $ 4,730.5    $ 6,025.4    $ 5,924.3
    Charges and credits:
    Depreciation and amortization    1,751.4    1,617.9    1,482
    Deferred income taxes    6.4    149.7    102.6
    Share-based compensation    92.4    109.6    125.1
    Net gain on sale of restaurant businesses    (28.2)    (128.2)    (308.8)
    Other    (75.2)    49.2    114.2
    Changes in working capital items:
    Accounts receivable    (6.8)    27    (479.4)
    Inventories, prepaid expenses and other current assets    (68.6)    128.8    (1.9)
    Accounts payable    (137.5)    (26.8)    129.4
    Income taxes    (43.6)    173.4    (33.4)
    Other accrued liabilities    44.4    (3.9)    (87.4)
    Cash provided by operations    6,265.2    8,122.1    6,966.7
    Investing activities
    Capital expenditures    (1,640.8)    (2,393.7)    (2,741.7)
    Purchases of restaurant and other businesses    (66.1)    (540.9)    (101.7)
    Sales of restaurant businesses    76.3    340.8    530.8
    Sales of property    27.4    151.2    160.4
    Other    57.4    (628.5)    (302.9)
    Cash used for investing activities    (1,545.8)    (3,071.1)    (2,455.1)
    Financing activities
    Net short-term borrowings    (893.1)    799.2    95.9
    Long-term financing issuances    5,543    4,499    3,794.5
    Long-term financing repayments    (2,411.7)    (2,061.9)    (1,759.6)
    Treasury stock purchases    (907.8)    (4,976.2)    (5,207.7)
    Common stock dividends    (3,752.9)    (3,581.9)    (3,255.9)
    Proceeds from stock option exercises    295.5    350.5    403.2
    Other    (122)    (23.5)    (20)
    Cash used for financing activities    (2,249)    (4,994.8)    (5,949.6)
    Effect of exchange rates on cash and equivalents    80.2    (23.7)    (159.8)
    Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect, Total    2,550.6    32.5    (1,597.8)
    Cash and equivalents at beginning of year    898.5    866    2,463.8
    Cash and equivalents at end of year    3,449.1    898.5    866
    Supplemental cash flow disclosures
    Interest Paid    1,136    1,066.5    959.6
    Income taxes paid    $ 1,441.9    $ 1,589.7    $ 1,734.4
McDonald's Corporation
    
5 -KFC Income Statements
    Consolidated Statements of Income - USD ($) $ in Millions        12 Months Ended
            Dec. 31, 2020    Dec. 31, 2019    Dec. 31, 2018
    Revenues
    Total revenues        $5,652    $5,597    $5,688
    Costs and Expenses, Net
    Company restaurant expenses        1506    1235    1634
    General and administrative expenses        1064    917    895
    Franchise and property expenses        145    180    188
    Franchise advertising and other services expense        1314    1368    1208
    Refranchising (gain) loss        (34)    (37)    (540)
    Other (income) expense        154    4    7
    Total costs and expenses, net        4149    3667    3392
    Operating Profit        1503    1930    2296
    Investment (income) expense, net    [1]    (74)    67    (9)
    Other Pension (income) expense    [1]    14    4    14
    Interest expense, net    [1]    (543)    (486)    (452)
    Income before income taxes        1020    1373    1839
    Income tax provision        116    79    297
    Net Income        $904    $1,294    $1,542
    Basic Earnings Per Common Share (in dollars per share)        $3    $4    $5
    Diluted Earnings Per Common Share (in dollars per share)        2.94    4.14    4.69
    Dividends Declared Per Common Share (in dollars per share)        $2    $2    $1
    Company Sales
    Revenues
    Revenue from Contract with Customer, Excluding Assessed Tax        $1,810    $1,546    $2,000
    Franchise and property revenue [Member]
    Revenues
    Revenue from Contract with Customer, Excluding Assessed Tax        2510    2660    2482
    Franchise contributions for advertising and other services
    Revenues
    Revenue from Contract with Customer, Excluding Assessed Tax        $1,332    $1,391    $1,206
    [1]    Amounts have not been allocated to any segment for performance reporting purposes.
    Consolidated Statement of Comprehensive Income - USD ($) $ in Millions    12 Months Ended
        Dec. 31, 2020    Dec. 31, 2019    Dec. 31, 2018
    Net Income    $ 904    $ 1,294    $ 1,542
    Adjustments and gains (losses) arising during the year    39    28    (94)
    Reclassifications of adjustments and (gains) losses into Net Income    0    0    (4)
    Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, before Tax    39    28    (98)
    Tax (expense) benefit    0    (4)    6
    Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax    39    24    (92)
    Unrealized gains (losses) arising during the year    (8)    (39)    32
    Reclassification of (gains) losses into Net Income    18    10    22
    Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Unrealized Gains (Losses), before Tax    10    (29)    54
    Pension and post-retirement benefit plans (tax impact)    (2)    7    (13)
    Pension and post-retirement benefit plans (net of tax impact)    8    (22)    41
    Unrealized gains (losses) arising during the year    (99)    (51)    19
    Reclassification of (gains) losses into Net Income    6    (25)    (39)
    Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, before Tax    (93)    (76)    (20)
    Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax    (23)    (20)    (6)
    Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax    (70)    (56)    (14)
    Other Comprehensive Income (Loss), Net of Tax    (23)    (54)    (65)
    Comprehensive Income    $ 881    $ 1,240    $ 1,477
KFC Balance Sheets
    Consolidated Balance Sheets - USD ($) shares in Millions, $ in Millons        Dec. 31, 2020    Dec. 31, 2019    Dec. 31, 2018
    Current Assets
    Cash and cash equivalents        $ 730    $ 605    $ 292
    Accounts and notes receivable, net        534    584    561
    Prepaid Expense and Other Assets, Current        425    338    354
    Total Current Assets        1,689    1,527    1,207
    Property, Plant and equipment, net        1,235    1,170    1,237
    Goodwill    [1]    597    530    525
    Intangible assets, net        343    244    242
    Other assets        1,435    1,313    724
    Deferred Income Taxes        553    447    195
    Total Assets    [2]    5,852    5,231    4,130
    Current Liabilities
    Accounts payable and other current liabilities        1,189    960    911
    Income taxes payable        33    150    69
    Short-term borrowings        453    431    321
    Total Current Liabilities        1,675    1,541    1,301
    Long-term debt        10,272    10,131    9,751
    Other liabilities and deferred credits        1,796    1,575    1,004
    Total Liabilities        13,743    13,247    12,056
    Shareholders' Equity
    Common stock, no par value, 750 shares authorized; 300 shares issued in 2020 and 2019        0    0    0
    Accumulated Deficit        (7,480)    (7,628)    (7,592)
    Accumulated other comprehensive income (loss)        (411)    (388)    (334)
    Total Shareholders' Equity        (7,891)    (8,016)    (7,926)
    Total Liabilities, Redeemable Noncontrolling Interest and Shareholders' Equity        $ 5,852    $ 5,231    $ 4,130
    Common Stock, shares issued        300    300    306
                        missing Total Liabilities & Equity, has to balance to the Total Assets
    [1]    Goodwill, net includes $144 million of accumulated impairment loss recorded in the year ended...