mcd-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	March 31, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from to

Commission File Number 1-5231

McDONALD’S CORPORATION

(Exact Name of Registrant as Specified in Its Charter)


Delaware		36-2361282
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

110 North Carpenter Street		60607
Chicago,	Illinois
(Address of Principal Executive Offices)		(Zip Code)

(630) 623-3000

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	MCD	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all 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 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. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

739,546,930

(Number of shares of common stock

outstanding as of March 31, 2022)

Table of Contents

McDONALD’S CORPORATION

___________________________

INDEX

_______


			Page Reference
Part I. Financial Information

Item 1 – Financial Statements

Condensed Consolidated Balance Sheet, March 3 1 , 202 2 (unaudited) and December 31, 202 1			3

Condensed Consolidated Statement of Income (unaudited), quarter s ended March 3 1 , 202 2 and 202 1			4

Condensed Consolidated Statement of Comprehensive Income (unaudited), quarters ended March 31 , 202 2 and 202 1			5

Condensed Consolidated Statement of Cash Flows (unaudited), quarters ended March 3 1 , 202 2 and 202 1			6

Condensed Consolidated Statement of Shareholders' Equity (unaudited), quarters ended Marc h 3 1 , 202 2 and 202 1			7

Notes to Condensed Consolidated Financial Statements (unaudited)			8

Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations			13

Item 3 – Quantitative and Qualitative Disclosures About Market Risk			33

Item 4 – Controls and Procedures			33

Part II. Other Information

Item 1 – Legal Proceedings			35

Item 1A – Risk Factors			35

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds			35

Item 6 – Exhibits			36

Signature			39

All trademarks used herein are the property of their respective owners and are used with permission.

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements


CONDENSED CONSOLIDATED BALANCE SHEET

	(unaudited)
In millions, except per share data	March 31, 2022		December 31, 2021
Assets
Current assets
Cash and equivalents	$	2,335.7	$	4,709.2
Accounts and notes receivable	1,674.1		1,872.4
Inventories, at cost, not in excess of market	49.6		55.6
Prepaid expenses and other current assets	597.0		511.3

Total current assets	4,656.4		7,148.5
Other assets
Investments in and advances to affiliates	1,177.2		1,201.2
Goodwill	2,813.9		2,782.5
Miscellaneous	4,416.9		4,449.5
Total other assets	8,408.0		8,433.2
Lease right-of-use asset, net	13,378.6		13,552.0
Property and equipment
Property and equipment, at cost	41,773.1		41,916.6
Accumulated depreciation and amortization	(17,338.4)		(17,196.0)
Net property and equipment	24,434.7		24,720.6
Total assets	$	50,877.7	$	53,854.3
Liabilities and shareholders’ equity
Current liabilities

Accounts payable	$	718.6	$	1,006.8

Lease liability	691.9		705.5
Income taxes	593.5		360.7
Other taxes	270.7		236.7
Accrued interest	322.4		363.3
Accrued payroll and other liabilities	1,637.5		1,347.0


Total current liabilities	4,234.6		4,020.0
Long-term debt	33,988.8		35,622.7
Long-term lease liability	12,871.8		13,020.9
Long-term income taxes	1,889.8		1,896.8
Deferred revenues - initial franchise fees	743.0		738.3
Other long-term liabilities	1,092.0		1,081.0
Deferred income taxes	2,048.5		2,075.6
Shareholders’ equity (deficit)
Preferred stock, no par value; authorized – 165.0 million shares; issued – none	—		—
Common stock, $.01 par value; authorized – 3.5 billion shares; issued – 1,660.6 million shares	16.6		16.6
Additional paid-in capital	8,307.1		8,231.6
Retained earnings	57,614.0		57,534.7
Accumulated other comprehensive income (loss)	(2,641.9)		(2,573.7)
Common stock in treasury, at cost; 921.1 and 915.8 million shares	(69,286.6)		(67,810.2)
Total shareholders’ equity (deficit)	(5,990.8)		(4,601.0)
Total liabilities and shareholders’ equity (deficit)	$	50,877.7	$	53,854.3

See Notes to condensed consolidated financial statements.

Table of Contents


CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)

	Quarters Ended
	March 31,
In millions, except per share data	2022		2021
Revenues
Sales by Company-operated restaurants	$	2,302.4	$	2,161.5
Revenues from franchised restaurants	3,262.8		2,877.4
Other revenues	100.4		85.7
Total revenues	5,665.6		5,124.6
Operating costs and expenses
Company-operated restaurant expenses	1,959.2		1,817.6
Franchised restaurants-occupancy expenses	584.0		571.5
Other restaurant expenses	72.3		67.2
Selling, general & administrative expenses
Depreciation and amortization	92.7		76.0
Other	584.3		490.4
Other operating (income) expense, net	60.5		(179.4)
Total operating costs and expenses	3,353.0		2,843.3
Operating income	2,312.6		2,281.3
Interest expense	287.3		300.0
Nonoperating (income) expense, net

SEC Form 10-Q filed by McDonald's Corporation