Mcdonalds 10k

Morningstar memorandumResearchS Table of Contents UNITED STATES SECURITIES AND interchange COMMISSION Washington, D. C. 20549 assortment 10-K FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE mold OF 1934 x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended declination 31, 2010 OR ? TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period fromto Commission File Number 1-5231McDONALDS CORPORATION (Exact name of registrant as specified in its charter) Delaw be (State or early(a) jurisdiction of incorporation or organization) One McDonalds Plaza oak tree Brook, Illinois (Address of principal executive offices) 36-2361282 (I. R. S. Employer Identification No. ) 60523 (Zip code) Name of each swap on which registered New York Stock deputise Registrants telephone number, including sphere of influence code (630) 623-3000 Se curities registered consistent to Section 12(b) of the mould Title of each layerCommon stock, $. 01 par value Securities registered consistent to Section 12(g) of the Act none (Title of class) hint by forbear mark if the registrant is a well-kn experience season issuer, as defined in Rule 405 of the Securities Act. Yes x No ? present by check mark if the registrant is non postulate to file reports pursuant to Section 13 or Section 15(d) of the Act. Act. Yes ?No x Indicate by check mark whether the registrant (1) has filed every reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such(prenominal) shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesx No? Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, all Interactive Data File r equired to be submitted and posted pursuant to Rule 405 of order S-T (232. 05 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ? Indicate by check mark if disclosure of delinquent filers pursuant to head 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by credit in classify III of this relieve oneself 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large deepen filer, an accelerated filer, a non-accelerated filer, or a smaller account corporation. claver definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one) Large accelerated filer xAccelerated filer ? Non-accelerated filer ? (do not check if a smaller reporting company)Smaller repo rting company ? Indicate by check mark whether the registrant is a pound company (as defined in Rule 12b-2 of the Exchange Act).Yes ? No x The aggregate market value of common stock held by non-affiliates of the registrant as of June 30, 2010 was $70,073,280,631. The number of sh atomic number 18s outstanding of the registrants common stock as of January 31, 2011 was 1,043,298,941. DOCUMENTS unified BY REFERENCE Part III of this Form 10-K incorporates information by advert from the registrants 2011 definitive proxy statement which will be filed no later than 120 days after December 31, 2010. origination MCDONALDS CORP, 10-K, February 25, 2011Powered by Morningstar Document ResearchSM Table of Contents Part I. Part II. Part III. Part IV. McDONALDS CORPORATION INDEX Page Reference degree 1Business1 point in time 1A decimal point 1B tip 2Properties6 Risk Factors and Cautionary Statement Regarding groundbreaking Statements3 Unresolved Staff Comments5 Item 3 Item 5 Item 6 Item 7 Item 7A Item 8 Item 9 Item 9A Item 9B Item 10 Item 11 Item 12 Item 13 Item 14 Item 15 Legal Proceedings6Market for Registrants Common Equity, think sh arowner Matters and Issuer Purchases of Equity Securities7 Selected financial Data9 guidances Discussion and Analysis of fiscal Condition and Results of Operations10 Quantitative and Qualitative Disclosures About Market Risk27 fiscal Statements and accessory Data27 Changes in and Disagreements with Accountants on Accounting and financial Disclosure48 Controls and Procedures48 Other Information48 Directors, Executive Officers and incarnate G overnance48 Executive Compensation48 Security Ownership of Certain Beneficial Owners and Management and Related Sh areholder Matters48 Certain Relationships and Related Transactions, and Director Independence49 Principal Accountant Fees and Services49 Exhibits and Financial Statement Schedules49 52 53 Signatures ExhibitsAll trade mark used herein are the square-toedty of their respective o wners and are used with permission. Source MCDONALDS CORP, 10-K, February 25, 2011Powered by Morningstar Document ResearchSM Table of Contents PART I ITEM 1. Business McDonalds Corporation, the registrant, together with its subsidiaries, is referred to herein as the caller. a. General development of business During 2010, there have been no material changes to the smart sets corporate social system or in its method of conducting business. In 2010, the Company has continued the touch it began in 2005 to realign certain subsidiaries to develop a corporate grammatical construction within its geographic atoms that better reflects the operation of the McDonalds worldwide business. . Financial information about segments divide data for the days ended December 31, 2010, 2009, and 2008 are included in Part II, Item 8, page 40 of this Form 10-K. c. Narrative description of business General The Company certifications and operates McDonalds eating places in the planetary restaura nt industry. These restaurants serve a varied, yet limited, value-priced scorecard (see Products) in more than 100 countries nearly the world. All restaurants are operated either by the Company or by franchisees, including naturalized franchisees under(a) franchise arrangements, and foreign affiliated markets and developmental authorisees under permit agreements.The Companys trading operations are intentional to assure consistency and high flavor at every restaurant. When granting franchises or licenses, the Company is selective and generally is not in the practice of franchising to passive investors. Under the conventional franchise arrangement, franchisees fork out a portion of the capital required by initially drop in the equipment, signs, seating and de? cor of their restaurant businesses, and by reinvesting in the business over time. The Company owns the land and building or secures long-term leases for both Company-operated and conventional franchised restaurant si tes. In certain circumstances, the Company participates in reinvestment for conventional franchised restaurants.A discussion regarding site selection is included in Part I, Item 2, page 6 of this Form 10-K. Conventional franchisees contribute to the Companys revenue stream by dint of the payment of rent and royalties based upon a percent of sales, with specified minimum rent payments, along with initial fees authorized upon the opening of a rising restaurant or the granting of a new franchise term. The conventional franchise arrangement typically lasts 20 years, and franchising practices are generally consistent throughout the world. Over 70% of franchised restaurants operate under conventional franchise arrangements. The Company has an equity investment in a limited number of foreign affiliated markets, referred to as affiliates.The largest of these affiliates is Japan, where there are more than 3,300 restaurants. The Company receives a royalty based on a percent of sales in the se markets. Under a developmental license arrangement, licensees provide capital for the entire business, including the real estate interest. While the Company has no capital invested, it receives a royalty based on a percent of sales, as well as initial fees. The largest of these developmental license arrangements operates more than 1,750 restaurants across 18 countries in Latin America and the Caribbean. The Company and its franchisees purchase food, packaging, equipment and other goods from numerous independent suppliers.The Company has established and purely enforces high quality standards and product specifications. The Company has quality say-so labs around the world to ensure that its high standards are consistently met. The quality assurance process not only involves ongoing product reviews, but in like manner on-site inspections of suppliers facilities. A quality assurance board, composed of the Companys technical, safety and supply chain of mountains specialists, provid es strategic global leadership for all aspects of food quality and safety. In addition, the Company works closely with suppliers to make headway innovation, assure best practices and drive continuous improvement.Leveraging scale, supply chain infrastructure and risk management strategies, the Company also collaborates with suppliers toward a mark of achieving competitive, augurable food and paper costs over the long term. singly owned and operated distribution centers, approved by the Company, distribute products and supplies to most McDonalds restaurants. In addition, restaurant personnel are trained in the proper storage, handling and preparation of products and in the delivery of node service. McDonalds global brand is well known. merchandise, promotional and public relations activities are designed to promote McDonalds brand image and differentiate the Company from competitors. Marketing and promotional efforts focus on value, food taste, identity card choice and the cus tomer experience.The Company continuously endeavors to improve its social responsibility and environmental practices to come across long-term sustainability, which bring ins McDonalds and the communities it serves. The Company has disposed of non-McDonalds restaurant businesses to focalize re reference works on its core business. In February 2009, the Company sold its minority self-possession interest in Redbox Automated Retail, LLC, and in April 2008, the Company sold its minority ownership interest in U. K. -based Pret A Manger. Products McDonalds restaurants offer a substantially uniform menu, although there are geographic variations to suit local consumer preferences and tastes. In addition, McDonalds tests new products on an ongoing background.McDonalds menu includes hamburgers and cheeseburgers, Big Mac, Quarter Pounder with Cheese, Filet-O-Fish, several chicken sandwiches, crybaby McNuggets, Chicken Selects, Snack Wraps, french fries, salads, shakes, McFlurry desserts , sundaes, soft serve cones, pies, cookies, soft drinks, coffee, McCafe? beverages and other beverages. In addition, the restaurants sell a variety of other products during limited-time promotions. McDonalds restaurants in the U. S. and more international markets offer a full or limited eat menu. Breakfast offerings may include Egg McMuffin, Sausage McMuffin with Egg, McGriddles, biscuit and beigel sandwiches and hotcakes. Source MCDONALDS CORP, 10-K, February 25, 2011Powered by Morningstar Document ResearchSM Table of Contents Intellectual prop The Company owns or is licensed to use valuable intellectual retention including trademarks, service marks, patents, copyrights, trade secrets and other proprietary information. The Company considers the trademarks McDonalds and The well-to-do Arches Logo to be of material importance to its business. Depending on the jurisdiction, trademarks and service marks generally are valid as long as they are used and/or registered. Patents, cop yrights and licenses are of varying remaining durations. Seasonal operationsThe Company does not consider its operations to be seasonal to any material degree. Working capital practices Information about the Companys working capital practices is incorporated herein by reference to Managements discussion and analysis of financial condition and results of operations for the years ended December 31, 2010, 2009, and 2008 in Part II, Item 7, pages 10 through 27, and the Consolidated statement of cash flows for the years ended December 31, 2010, 2009 and 2008 in Part II, Item 8, page 30 of this Form 10-K. Customers The Companys business is not dependent upon either a single customer or small group of customers. BacklogCompany-operated restaurants have no reticence orders. Government contracts No material portion of the business is subject to renegotiation of cabbage or termination of contracts or subcontracts at the election of the U. S. government. Competition McDonalds restaurants compete with international, national, regional and local retailers of food products. The Company competes on the basis of price, convenience, service, menu variety and product quality in a passing fragmented global restaurant industry. In measuring the Companys competitive position, management reviews data compiled by Euromonitor International, a leading source of market data with respect to the global restaurant industry.The Companys primary competition, which management refers to as the Informal Eating Out (IEO) segment, includes the spare-time activity restaurant categories defined by Euromonitor International quick-service eating establishments, casual eat full-service restaurants, 100% home delivery/takeaway providers, street stalls or kiosks, specialist coffee shops and self-service cafeterias. The IEO segment excludes establishments that primarily serve alcoholic beverage and full-service restaurants other than casual dining. Based on data from Euromonitor International, the global IEO segment was composed of close to 6. 3 gazillion outlets and generated $868 billion in yearbook sales in 2009, the most recent year for which data is available. McDonalds Systemwide 2009 restaurant business accounted for approximately 0. 5% of those outlets and about 8% of the sales. 2Management also on occasion benchmarks McDonalds against the entire restaurant industry, including the IEO segment defined above and all other full-service restaurants. Based on data from Euromonitor International, the restaurant industry was composed of approximately 13. 1 million outlets and generated about $1. 79 trillion in annual sales in 2009. McDonalds Systemwide restaurant business accounted for approximately 0. 2% of those outlets and about 4% of the sales. Research and development The Company operates research and development facilities in the U. S. , europium and Asia. While research and development activities are important to the Companys business, these expenditures are n ot material.Independent suppliers also conduct research activities that benefit the Company, its franchisees and suppliers (collectively referred to as the System). Environmental matters Increased focus by U. S. and overseas political authorities on environmental matters is likely to lead to new governmental initiatives, particularly in the area of climate change. While we cannot predict the microscopic nature of these initiatives, we expect that they may electric shock our business both immediately and indirectly. Although the impact would likely vary by world region and/or market, we believe that adoption of new regulations may increase costs, including for the Company, its franchisees and suppliers.Also, there is a possibility that governmental initiatives, or actual or perceived personal effects of changes in weather patterns or climate, could have a direct impact on the operations of our restaurants or the operations of our suppliers in ways which we cannot predict at this time. The Company monitors developments related to environmental matters and plans to respond to governmental initiatives in a timely and appropriate manner. At this time, the Company has already undertaken its own initiatives relating to preservation of the environment, including the development of means of monitoring and reducing energy use, in many of its markets. Number of employees The Companys number of employees worldwide, including Company- operated restaurant employees, was approximately 400,000 as of year-end 2010. d. Financial information about geographic areasFinancial information about geographic areas is incorporated herein by reference to Managements discussion and analysis of financial condition and results of operations in Part II, Item 7, pages 10 through 27 and Segment and geographic information in Part II, Item 8, page 40 of this Form 10-K. e. Available information The Company is subject to the informational requirements of the Securities Exchange Act of 1934 (Ex change Act). The Company therefore files periodic reports, proxy statements and other information with the Securities and Exchange Commission (SEC). Such reports may be obtained by visiting the human beings Reference Room of the SEC at 100 F Street, NE, Washington, D. C. 20549, or by calling the SEC at (800) SEC-0330. In addition, the SEC maintains an internet site (www. sec. gov) that contains reports, proxy and information statements and other information.