Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Jan. 31, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Fiscal Period Focus | FY | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Transition Report | false | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 1-5231 | ||
Entity Registrant Name | McDONALD’S CORPORATION | ||
Entity Central Index Key | 0000063908 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 36-2361282 | ||
Entity Address, Address Line One | 110 North Carpenter Street, | ||
Entity Address, City or Town | Chicago, | ||
Entity Address, State or Province | IL | ||
Entity Address, Postal Zip Code | 60607 | ||
City Area Code | (630) | ||
Local Phone Number | 623-3000 | ||
Title of 12(b) Security | Common Stock, $0.01 par value | ||
Trading Symbol | MCD | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 137,233,144,378 | ||
Entity Common Stock, Shares Outstanding | 745,572,145 | ||
Documents Incorporated by Reference [Text Block] | Part III of this Form 10-K incorporates information by reference from the registrant’s 2021 definitive proxy statement, which will be filed no later than 120 days after December 31, 2020. |
Consolidated Statement of Incom
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 Inc_2
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 Compr
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 Com_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 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and equivalents | $ 3,449.1 | $ 898.5 |
Accounts and notes receivable | 2,110.3 | 2,224.2 |
Inventories, at cost, not in excess of market | 51.1 | 50.2 |
Prepaid expenses and other current assets | 632.7 | 385 |
Total current assets | 6,243.2 | 3,557.9 |
Other assets | ||
Investments in and advances to affiliates | 1,297.2 | 1,270.3 |
Goodwill | 2,773.1 | 2,677.4 |
Miscellaneous | 3,527.4 | 2,584 |
Total other assets | 7,597.7 | 6,531.7 |
Lease right-of-use asset, net | 13,827.7 | 13,261.2 |
Property and equipment | ||
Property and equipment, at cost | 41,476.5 | 39,050.9 |
Accumulated depreciation and amortization | (16,518.3) | (14,890.9) |
Net property and equipment | 24,958.2 | 24,160 |
Total assets | 52,626.8 | 47,510.8 |
Current liabilities | ||
Accounts payable | 741.3 | 988.2 |
Lease liability | 701.5 | 621 |
Income taxes | 741.1 | 331.7 |
Other taxes | 227 | 247.5 |
Accrued interest | 388.4 | 337.8 |
Accrued payroll and other liabilities | 1,138.3 | 1,035.7 |
Current maturities of long term debt | 2,243.6 | 59.1 |
Total current liabilities | 6,181.2 | 3,621 |
Long-term debt | 35,196.8 | 34,118.1 |
Long-term lease liability | 13,321.3 | 12,757.8 |
Long-term income taxes | 1,970.7 | 2,265.9 |
Deferred revenues - initial franchise fees | 702 | 660.6 |
Other long-term liabilities | 1,054.1 | 979.6 |
Deferred Income Taxes | 2,025.6 | 1,318.1 |
Shareholders' equity (deficit) | ||
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 | 7,903.6 | 7,653.9 |
Retained earnings | 53,908.1 | 52,930.5 |
Accumulated other comprehensive income (loss) | (2,586.8) | (2,482.7) |
Common stock in treasury, at cost; 915.2 and 914.3 million shares | (67,066.4) | (66,328.6) |
Total shareholders' equity (deficit) | (7,824.9) | (8,210.3) |
Total liabilities and shareholders' equity (deficit) | $ 52,626.8 | $ 47,510.8 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
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 | 915,200,000 | 914,300,000 |
Consolidated Statement of Cash
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 |
Consolidated Statement of Share
Consolidated Statement of Shareholders Equity - USD ($) shares in Millions, $ in Millions | Total | Common stock issued | Additional paid-in capital | Retained earnings | Pensions | Cash flow hedges | Foreign currency translation | Common stock in treasury |
Beginning Balance (in shares) at Dec. 31, 2017 | 1,660.6 | (866.5) | ||||||
Beginning Balance at Dec. 31, 2017 | $ (3,268) | $ 16.6 | $ 7,072.4 | $ 48,325.8 | $ (190.2) | $ (16.5) | $ (1,971.7) | $ (56,504.4) |
Net income | 5,924.3 | 5,924.3 | ||||||
Other comprehensive income (loss), net of tax | (431.1) | (26.4) | 48.9 | (453.6) | ||||
Comprehensive income | 5,493.2 | |||||||
Adoption of ASC 606 | (450.2) | (450.2) | ||||||
Adoption of ASU 2016-16 | (57) | (57) | ||||||
Common stock cash dividends | (3,255.9) | (3,255.9) | ||||||
Treasury stock purchases (in shares) | (32.2) | |||||||
Treasury stock purchases | (5,247.5) | $ (5,247.5) | ||||||
Share-based compensation | 125.1 | 125.1 | ||||||
Stock option exercises and other (in shares) | 5.2 | |||||||
Stock option exercises and other | 401.9 | 178.5 | $ 223.4 | |||||
Ending Balance (in shares) at Dec. 31, 2018 | 1,660.6 | (893.5) | ||||||
Ending Balance at Dec. 31, 2018 | (6,258.4) | $ 16.6 | 7,376 | 50,487 | (216.6) | 32.4 | (2,425.3) | $ (61,528.5) |
Net income | 6,025.4 | 6,025.4 | ||||||
Other comprehensive income (loss), net of tax | 126.8 | (27.1) | (20.4) | 174.3 | ||||
Comprehensive income | 6,152.2 | |||||||
Common stock cash dividends | (3,581.9) | (3,581.9) | ||||||
Treasury stock purchases (in shares) | (25) | |||||||
Treasury stock purchases | (4,980.5) | $ (4,980.5) | ||||||
Share-based compensation | 109.6 | 109.6 | ||||||
Stock option exercises and other (in shares) | 4.2 | |||||||
Stock option exercises and other | 348.7 | 168.3 | $ 180.4 | |||||
Ending Balance (in shares) at Dec. 31, 2019 | 1,660.6 | (914.3) | ||||||
Ending Balance at Dec. 31, 2019 | (8,210.3) | $ 16.6 | 7,653.9 | 52,930.5 | (243.7) | 12 | (2,251) | $ (66,328.6) |
Net income | 4,730.5 | 4,730.5 | ||||||
Other comprehensive income (loss), net of tax | (104.1) | (43.9) | (123.3) | 63.1 | ||||
Comprehensive income | 4,626.4 | |||||||
Common stock cash dividends | (3,752.9) | (3,752.9) | ||||||
Treasury stock purchases (in shares) | (4.3) | |||||||
Treasury stock purchases | (874.1) | $ (874.1) | ||||||
Share-based compensation | 92.4 | 92.4 | ||||||
Stock option exercises and other (in shares) | 3.4 | |||||||
Stock option exercises and other | 293.6 | 157.3 | $ 136.3 | |||||
Ending Balance (in shares) at Dec. 31, 2020 | 1,660.6 | (915.2) | ||||||
Ending Balance at Dec. 31, 2020 | $ (7,824.9) | $ 16.6 | $ 7,903.6 | $ 53,908.1 | $ (287.6) | $ (111.3) | $ (2,187.9) | $ (67,066.4) |
Consolidated Statement of Sha_2
Consolidated Statement of Shareholders Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Common stock cash dividends (in dollars per share) | $ 5.04 | $ 4.73 | $ 4.19 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies NATURE OF BUSINESS The Company franchises and operates McDonald’s restaurants in the global restaurant industry. All restaurants are operated either by the Company or by franchisees, including conventional franchisees under franchised arrangements, and developmental licensees or affiliates under license agreements. The following table presents restaurant information by ownership type: Restaurants at December 31, 2020 2019 2018 Conventional franchised 21,712 21,837 21,685 Developmental licensed 7,663 7,648 7,225 Foreign affiliated 7,146 6,574 6,175 Total Franchised 36,521 36,059 35,085 Company-operated 2,677 2,636 2,770 Total Systemwide restaurants 39,198 38,695 37,855 The results of operations of restaurant businesses purchased and sold in transactions with franchisees were not material either individually or in the aggregate to the consolidated financial statements for periods prior to purchase and sale. CONSOLIDATION The consolidated financial statements include the accounts of the Company and its subsidiaries. Investments in affiliates owned 50% or less (primarily McDonald’s China and Japan) are accounted for by the equity method. On an ongoing basis, 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 variable interest entity consolidation guidance. The Company has concluded that consolidation of any such entity is not appropriate for the periods presented. 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. FOREIGN CURRENCY TRANSLATION Generally, the functional currency of operations outside the U.S. is the respective local currency. RECENT ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements Financial Instruments - Credit Losses In June 2016, the Financial Accounting Standards Board ("FASB") issued guidance codified in ASC Topic 326, "Financial Instruments – Credit Losses: Measurements of Credit Losses on Financial Instruments". The standard replaces the incurred loss impairment methodology in prior GAAP with a methodology that instead reflects a current estimate of all expected credit losses on financial assets, including receivables. The guidance requires that an entity measure and recognize expected credit losses at the time the asset is recorded, while considering a broader range of information to estimate credit losses including country specific macroeconomic conditions that correlate with historical loss experience, delinquency trends and aging behavior of receivables, among others. The Company adopted this guidance effective January 1, 2020, prospectively, and the adoption of this standard did not have a material impact on the consolidated financial statements. The Company had an Allowance for bad debts of $55.3 million as of December 31, 2020 recorded as a reduction to Accounts and notes receivable on the Consolidated Balance Sheet. Recent Accounting Pronouncements Not Yet Adopted Income Taxes In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”), which simplifies the accounting for income taxes. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, including applicable interim periods. The Company anticipates the adoption of ASU 2019-12 will not have a material impact on its consolidated financial statements. REVENUE RECOGNITION The Company's revenues consist of sales by Company-operated restaurants and fees from restaurants operated by franchisees, developmental licensees and affiliates. Revenues from conventional franchised restaurants include rent and royalties based on a percent of sales with minimum rent payments, and initial fees. Revenues from restaurants licensed to developmental licensees and affiliates include a royalty based on a percent of sales, and generally include initial fees. The Company’s Other revenues are comprised of fees paid by franchisees to recover a portion of costs incurred by the Company for various technology platforms, revenues from brand licensing arrangements to market and sell consumer packaged goods using the McDonald’s brand, and third party revenues for the Dynamic Yield business. Sales by Company-operated restaurants are recognized on a cash basis at the time of the underlying sale and are presented net of sales tax and other sales-related taxes. Royalty revenues are based on a percent of sales and recognized at the time the underlying sales occur. Rental income includes both minimum rent payments, which are recognized straight-line over the franchise term (with the exception of rent concessions as a result of COVID-19 – refer to the Leasing section that follows), and variable rent payments based on a percent of sales, which are recognized at the time the underlying sales occur. Initial fees are recognized as the Company satisfies the performance obligation over the franchise term, which is generally 20 years. The Company provides goods or services related to various technology platforms to certain franchisees that are distinct from the franchise agreement because they do not require integration with other goods or services we provide. The Company has determined that it is the principal in these arrangements. Accordingly, the related revenue is presented on a gross basis on the Consolidated Statement of Income. These revenues are recognized as the goods or services are transferred to the franchisee, and related expenses are recognized as incurred. Brand licensing arrangement revenues are based on a percent of sales and are recognized at the time the underlying sales occur. Dynamic Yield third party revenues are generated from providing software as a service solutions to customers and are recognized over the applicable subscription period as the service is performed. PROPERTY AND EQUIPMENT Property and equipment are stated at cost, with depreciation and amortization provided using the straight-line method over the following estimated useful lives: buildings–up to 40 years; leasehold improvements–the lesser of useful lives of assets or lease terms, which generally include certain option periods; and equipment–3 to 12 years. CAPITALIZED SOFTWARE Capitalized software is stated at cost and amortized using the straight-line method over the estimated useful life of the software, which primarily ranges from 2 to 7 years. Customer facing software is typically amortized over a shorter useful life, while back office and Corporate systems may have a longer useful life. Capitalized software less accumulated amortization is recorded within Miscellaneous other assets on the Consolidated Balance Sheet and was (in millions): 2020-$691.2; 2019-$665.4; 2018-$609.7. LONG-LIVED ASSETS Long-lived assets are reviewed for impairment annually in the fourth quarter and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For purposes of annually reviewing McDonald’s restaurant assets for potential impairment, assets are initially grouped together in the U.S. at a field office level, and internationally, at a market level. The Company manages its restaurants as a group or portfolio with significant common costs and promotional activities; as such, an individual restaurant’s cash flows are not generally independent of the cash flows of others in a market. If an indicator of impairment exists for any grouping of assets, an estimate of undiscounted future cash flows produced by each individual restaurant within the asset grouping is compared to its carrying value. If an individual restaurant is determined to be impaired, the loss is measured by the excess of the carrying amount of the restaurant over its fair value as determined by an estimate of discounted future cash flows. GOODWILL Goodwill represents the excess of cost over the net tangible assets and identifiable intangible assets of acquired restaurants and other businesses. The Company's goodwill primarily results from purchases of McDonald's restaurants from franchisees and ownership increases in subsidiaries or affiliates, and it is generally assigned to the reporting unit (defined as each individual market) expected to benefit from the synergies of the combination. If a Company-operated restaurant is sold within 24 months of acquisition, the goodwill associated with the acquisition is written off in its entirety. If a restaurant is sold beyond 24 months from the acquisition, the amount of goodwill written off is based on the relative fair value of the business sold compared to the reporting unit. The following table presents the 2020 activity in goodwill by segment: In millions U.S. International International Developmental Licensed Markets & Corporate Consolidated Balance at December 31, 2019 $ 1,615.8 $ 1,061.6 $ — $ 2,677.4 Business acquisitions 9.8 — — 9.8 Net restaurant purchases (sales) (0.1) 9.8 — 9.7 Impairment losses — — — — Currency translation — 76.2 — 76.2 Balance at December 31, 2020 $ 1,625.5 $ 1,147.6 $ — $ 2,773.1 The Company conducts goodwill impairment testing in the fourth quarter of each year or whenever indicators of impairment exists. If an indicator of impairment exists, the goodwill impairment test compares the fair value of a reporting unit, generally based on discounted future cash flows, with its carrying amount including goodwill. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recorded for the difference. In the current period, the Company performed a qualitative assessment and did not identify any indicators of impairment. Historically, goodwill impairment has not significantly impacted the consolidated financial statements. Goodwill on the Consolidated Balance Sheet reflects accumulated impairment losses of $14.5 million and $113.9 million as of December 31, 2020 and 2019, respectively. INCOME TAXES Income Tax Uncertainties The Company, like other multi-national companies, is regularly audited by federal, state and foreign tax authorities, and tax assessments may arise several years after tax returns have been filed. Accordingly, tax liabilities are recorded when, in management’s judgment, a tax position does not meet the more likely than not threshold for recognition. For tax positions that meet the more likely than not threshold, a tax liability may still be recorded depending on management’s assessment of how the tax position will ultimately be settled. The Company records interest and penalties on unrecognized tax benefits in the provision for income taxes. Deferred tax assets and liabilities are recognized for the tax consequences of temporary differences between the financial reporting basis and the tax basis of existing assets and liabilities. The Company records a valuation allowance to reduce its deferred tax assets if it is considered more likely than not that some portion or all of the deferred tax assets will not be realized. While the Company has considered future taxable income and ongoing prudent and feasible tax strategies, including the sale of appreciated assets, in assessing the need for the valuation allowance, if these estimates and assumptions change in the future, the Company may be required to adjust its valuation allowance. This could result in a charge to, or an increase in, income in the period such determination is made. FAIR VALUE MEASUREMENTS The Company measures certain financial assets and liabilities at fair value on a recurring basis, and certain non-financial assets and liabilities on a nonrecurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. Fair value disclosures are reflected in a three-level hierarchy, maximizing the use of observable inputs and minimizing the use of unobservable inputs. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows: ▪ Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market. ▪ Level 2 – inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market or model-derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability. ▪ Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability. Certain of the Company’s derivatives are valued using various pricing models or discounted cash flow analyses that incorporate observable market parameters, such as interest rate yield curves, option volatilities and currency rates, classified as Level 2 within the valuation hierarchy. Derivative valuations incorporate credit risk adjustments that are necessary to reflect the probability of default by the counterparty or the Company. ▪ Certain Financial Assets and Liabilities Measured at Fair Value The following tables present financial assets and liabilities measured at fair value on a recurring basis by the valuation hierarchy as defined in the fair value guidance: December 31, 2020 In millions Level 1 (1) Level 2 Carrying Derivative assets $ 185.6 $ 41.4 $ 227.0 Derivative liabilities $ (97.5) $ (97.5) December 31, 2019 In millions Level 1 (1) Level 2 Carrying Derivative assets $ 179.1 $ 45.6 $ 224.7 Derivative liabilities $ (11.3) $ (11.3) (1) Level 1 is comprised of derivatives that hedge market driven changes in liabilities associated with the Company’s supplemental benefit plans. ▪ Non-Financial Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the assets and liabilities are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances (e.g., when there is evidence of impairment). For the year ended December 31, 2020, the Company did not record any material fair value adjustments to long-lived assets (including goodwill). ▪ Certain Financial Assets and Liabilities not Measured at Fair Value At December 31, 2020, the fair value of the Company’s debt obligations was estimated at $43.7 billion, compared to a carrying amount of $37.4 billion. The fair value was based on quoted market prices, Level 2 within the valuation hierarchy. The carrying amount for both cash equivalents and notes receivable approximate fair value. FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES The Company is exposed to global market risks, including the effect of changes in interest rates and foreign currency fluctuations. The Company uses foreign currency denominated debt and derivative instruments to mitigate the impact of these changes. The Company does not hold or issue derivatives for trading purposes. The Company documents its risk management objective and strategy for undertaking hedging transactions, as well as all relationships between hedging instruments and hedged items. The Company’s derivatives that are designated for hedge accounting consist mainly of interest rate swaps, foreign currency forwards, and cross-currency interest rate swaps, and are classified as either fair value, cash flow or net investment hedges. Further details are explained in the "Fair Value," "Cash Flow" and "Net Investment" hedge sections. The Company enters into certain derivatives that are not designated for hedge accounting. The Company has entered into equity derivative contracts, including total return swaps, to hedge market-driven changes in certain of its supplemental benefit plan liabilities. The Company has also entered into certain derivatives to mitigate the share price risk related to its sale of stock in McDonald’s Japan. In addition, the Company uses foreign currency forwards to mitigate the change in fair value of certain foreign currency denominated assets and liabilities. Further details are explained in the “Undesignated Derivatives” section. All derivatives (including those not designated for hedge accounting) are recognized on the Consolidated Balance Sheet at fair value and classified based on the instruments’ maturity dates. Changes in the fair value measurements of the derivative instruments are reflected as adjustments to AOCI and/or current earnings. The following table presents the fair values of derivative instruments included on the Consolidated Balance Sheet as of December 31, 2020 and 2019: Derivative Assets Derivative Liabilities In millions Balance Sheet Classification 2020 2019 Balance Sheet Classification 2020 2019 Derivatives designated as hedging instruments Foreign currency Prepaid expenses and other current assets $ 10.0 Accrued payroll and other liabilities $ (64.5) $ (5.2) Interest rate Prepaid expenses and other current assets Accrued payroll and other liabilities — Foreign currency Miscellaneous other assets $ 5.6 9.5 Other long-term liabilities (15.0) (1.2) Interest rate Miscellaneous other assets 35.8 12.1 Other long-term liabilities — Total derivatives designated as hedging instruments $ 41.4 $ 31.6 $ (79.5) $ (6.4) Derivatives not designated as hedging instruments Equity Prepaid expenses and other current assets $ 185.6 $ 1.6 Accrued payroll and other liabilities $ (8.6) $ (0.1) Foreign currency Prepaid expenses and other current assets 12.4 Accrued payroll and other liabilities (9.4) (4.8) Equity Miscellaneous other assets 179.1 Total derivatives not designated as hedging instruments $ 185.6 $ 193.1 $ (18.0) $ (4.9) Total derivatives $ 227.0 $ 224.7 $ (97.5) $ (11.3) The following table presents the pre-tax amounts from derivative instruments affecting income and AOCI for the year ended December 31, 2020 and 2019, respectively: Location of Gain or Loss Gain (Loss) Gain (Loss) Reclassified Gain (Loss) Recognized in In millions 2020 2019 2020 2019 2020 2019 Foreign currency Nonoperating income/expense $ (76.6) $ 22.5 $ (2.1) $ 50.3 Interest rate Interest expense (90.8) (5.4) (1.3) Cash flow hedges $ (167.4) $ 22.5 $ (7.5) $ 49.0 Foreign currency denominated debt Nonoperating income/expense $ (989.7) $ 317.3 $ 33.7 Foreign currency derivatives Nonoperating income/expense (12.3) 11.8 Foreign currency derivatives (1) Interest expense $ 14.7 $ 11.7 Net investment hedges $ (1,002.0) $ 329.1 $ 33.7 $ 14.7 $ 11.7 Foreign currency Nonoperating income/expense $ (29.0) $ 14.2 Equity Selling, general & administrative expenses 44.4 71.8 Equity Other operating income/ expense, net (16.0) Undesignated derivatives $ (0.6) $ 86.0 (1) The amount of gain (loss) recognized in income related to components excluded from effectiveness testing. Fair Value Hedges The Company enters into fair value hedges to reduce the exposure to changes in fair values of certain liabilities. The Company enters into fair value hedges that convert a portion of its fixed rate debt into floating rate debt by use of interest rate swaps. At December 31, 2020, the carrying amount of fixed-rate debt that was effectively converted was an equivalent notional amount of $1.1 billion, which included an increase of $35.8 million of cumulative hedging adjustments. For the year ended December 31, 2020, the Company recognized a $23.7 million gain on the fair value of interest rate swaps, and a corresponding loss on the fair value of the related hedged debt instrument to interest expense. Cash Flow Hedges The Company enters into cash flow hedges to reduce the exposure to variability in certain expected future cash flows. To protect against the reduction in value of forecasted foreign currency cash flows (such as royalties denominated in foreign currencies), the Company uses foreign currency forwards to hedge a portion of anticipated exposures. The hedges cover the next 18 months for certain exposures and are denominated in various currencies. As of December 31, 2020, the Company had derivatives outstanding with an equivalent notional amount of $1.2 billion that hedged a portion of forecasted foreign currency denominated cash flows. Based on market conditions at December 31, 2020, the $111.3 million in cumulative cash flow hedging losses, after tax, is not expected to have a significant effect on earnings over the next 12 months. Net Investment Hedges The Company primarily uses foreign currency denominated debt (third party and intercompany) to hedge its investments in certain foreign subsidiaries and affiliates. Realized and unrealized translation adjustments from these hedges are included in shareholders' equity in the foreign currency translation component of Other comprehensive income ("OCI") and offset translation adjustments on the underlying net assets of foreign subsidiaries and affiliates, which also are recorded in OCI. As of December 31, 2020, $13.3 billion of the Company's third party foreign currency denominated debt and $843.2 million of intercompany foreign currency denominated debt were designated to hedge investments in certain foreign subsidiaries and affiliates. Undesignated Derivatives The Company enters into certain derivatives that are not designated for hedge accounting, therefore the changes in the fair value of these derivatives are recognized immediately in earnings together with the gain or loss from the hedged balance sheet position. As an example, the Company enters into equity derivative contracts, including total return swaps, to hedge market-driven changes in certain of its supplemental benefit plan liabilities. Changes in the fair value of these derivatives are recorded in selling, general & administrative expenses together with the changes in the supplemental benefit plan liabilities. The Company may also use certain derivatives to mitigate the share price risk related to its sale of stock in McDonald’s Japan. The changes in the fair value of the undesignated derivatives used for the most recent sale transaction were recognized immediately in earnings in Other operating (income) expense, net. In addition, the Company uses foreign currency forwards to mitigate the change in fair value of certain foreign currency denominated assets and liabilities. The changes in the fair value of these derivatives are recognized in Nonoperating (income) expense, net, along with the currency gain or loss from the hedged balance sheet position. Credit Risk The Company is exposed to credit-related losses in the event of non-performance by its derivative counterparties. The Company did not have significant exposure to any individual counterparty at December 31, 2020 and has master agreements that contain netting arrangements. For financial reporting purposes, the Company presents gross derivative balances in the financial statements and supplementary data, including for counterparties subject to netting arrangements. Some of these agreements also require each party to post collateral if credit ratings fall below, or aggregate exposures exceed, certain contractual limits. At December 31, 2020, the Company was required to post an immaterial amount of collateral due to the negative fair value of certain derivative positions. The Company's counterparties were not required to post collateral on any derivative position, other than on certain hedges of the Company’s supplemental benefit plan liabilities where the counterparties were required to post collateral on their liability positions. SHARE-BASED COMPENSATION The Company has 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. Share-based compensation, which includes the portion vesting of all share-based awards granted based on the grant date fair value, is generally amortized on a straight-line basis over the vesting period in Selling, general & administrative expenses. The fair value of each stock option granted is estimated on the date of grant using a closed-form pricing model. The pricing model requires assumptions, which impact the assumed fair value, including the expected life of the stock option, the risk-free interest rate, expected volatility of the Company’s stock over the expected life and the expected dividend yield. The Company uses historical data to determine these assumptions and if these assumptions change significantly for future grants, share-based compensation expense will fluctuate in future years. In addition, the Company estimates forfeitures when determining the amount of compensation costs to be recognized each period. The fair value of each RSU granted is equal to the market price of the Company’s stock at date of grant. For performance-based RSUs, the Company includes a relative Total Shareholder Return ("TSR") modifier to determine the number of shares earned at the end of the performance period. The fair value of performance-based RSUs that include the TSR modifier is determined using a Monte Carlo valuation model. Refer to the Share-based Compensation footnote on page 58 for additional information. |
Leasing Arrangements | Leasing Arrangements The Company is the lessee in a significant real estate portfolio, primarily through ground leases (the Company leases the land and generally owns the building) and through improved leases (the Company leases the land and buildings). The Company determines whether an arrangement is a lease at inception. Lease terms for most restaurants, where market conditions allow, are generally for 20 years and, in many cases, provide for rent escalations and renewal options. Renewal options are typically solely at the Company’s discretion. Escalation terms vary by market with examples including fixed-rent escalations, escalations based on an inflation index and fair-value market adjustments. The timing of these escalations generally range from annually to every five years. The following table provides detail of rent expense: In millions 2020 2019 2018 Restaurants $ 1,399.5 $ 1,530.4 $ 1,433.9 Other 79.8 76.4 87.9 Total rent expense $ 1,479.3 $ 1,606.8 $ 1,521.8 Rent expense included percent rents in excess of minimum rents (in millions) as follows–Company-operated restaurants: 2020–$53.7; 2019–$74.4; 2018–$82.1. Franchised restaurants: 2020–$136.5; 2019–$200.7; 2018–$200.8. These variable rent payments are based on a percent of sales and as sales have decreased in 2020 as a result of COVID-19, the related rent expense has also decreased as compared to the prior year. The Lease right-of-use asset and Lease liability reflect the present value of the Company's estimated future minimum lease payments over the lease term, which includes options that are reasonably assured of being exercised, discounted using a collateralized incremental borrowing rate. Typically, renewal options are considered reasonably assured of being exercised if the associated asset lives of the building or leasehold improvements exceed that of the initial lease term, and the sales performance of the restaurant remains strong. Therefore, the Lease right-of-use asset and Lease liability include an assumption on renewal options that have not yet been exercised by the Company, and are not currently a future obligation. The Company's lease portfolio includes both operating and finance leases, however as of December 31, 2020, the vast majority of the portfolio was classified as operating leases. As the rate implicit in each lease is not readily determinable, the Company uses an incremental borrowing rate to calculate the lease liability that represents an estimate of the interest rate the Company would incur to borrow on a collateralized basis over the term of a lease within a particular currency environment. The weighted average discount rate used for leases was 3.8% as of December 31, 2020 and 4.0% as of December 31, 2019. As of December 31, 2020, maturities of lease liabilities for our lease portfolio were as follows: In millions Total * 2021 $ 1,230.7 2022 1,197.7 2023 1,159.8 2024 1,124.0 2025 1,082.1 Thereafter 14,295.7 Total lease payments 20,090.0 Less: imputed interest (6,067.2) Present value of lease liability $ 14,022.8 * Total lease payments include option periods that are reasonably assured of being exercised. See contractual cash outflows for leases within the Contractual Obligations and Commitments section on page 24. The increase in the present value of the lease liability since December 31, 2019 is approximately $0.6 billion. The lease liability will continue to be impacted by new leases, lease modifications, lease terminations, reevaluation of lease terms, and foreign currency. As of December 31, 2020 and December 31, 2019, the Weighted Average Lease Term remaining that is included in the maturities of lease liabilities was 20 years. |
Organization, Consolidation and Presentation of Financial Statements Disclosure | BASIS OF PRESENTATION Prior to January 1, 2020, the Company presented both expenditures and receipts related to technology fees charged to franchisees and revenues related to certain licensing arrangements within Other operating (income) expense, net, because these activities were not part of the Company’s ongoing major or central operations. Effective January 1, 2020, the Company is presenting the revenues and expenses related to these activities within Other revenues and Other restaurant expenses, respectively, in the Consolidated Statement of Income. The change in presentation was applied retrospectively to all periods presented and had no effect on Operating income, Net income, or Earnings per share. |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Segment and Geographic Information Effective January 1, 2019, McDonald’s operates under an organizational structure with the following global business segments reflecting how management reviews and evaluates operating performance: • U.S. - the Company’s largest market. The segment is 95% franchised as of December 31, 2020. • International Operated Markets - comprised of markets, or countries in which the Company operates and franchises restaurants, including Australia, Canada, France, Germany, Italy, the Netherlands, Russia, Spain and the U.K. The segment is 84% franchised as of December 31, 2020. • International Developmental Licensed Markets & Corporate - comprised primarily of developmental licensee and affiliate markets in the McDonald’s system. Corporate activities are also reported in this segment. The segment is 98% franchised as of December 31, 2020. In April and October 2019, the Company completed the acquisitions of Dynamic Yield and Apprente, respectively. The related financial performance is reflected within the International Developmental Licensed Markets & Corporate segment from the dates of acquisition. All intercompany revenues and expenses are eliminated in computing revenues and operating income. Corporate general and administrative expenses 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 2020 2019 2018 U.S. $ 7,828.5 $ 8,002.8 $ 7,798.7 International Operated Markets 9,570.7 11,480.1 11,578.1 International Developmental Licensed Markets & Corporate 1,808.6 1,881.5 1,881.1 Total revenues $ 19,207.8 $ 21,364.4 $ 21,257.9 U.S. $ 3,789.1 $ 4,068.7 $ 4,015.6 International Operated Markets 3,315.1 4,789.0 4,643.2 International Developmental Licensed Markets & Corporate 219.8 212.1 163.8 Total operating income $ 7,324.0 $ 9,069.8 $ 8,822.6 U.S. $ 21,010.0 $ 21,376.9 $ 14,483.8 International Operated Markets 24,744.0 22,847.5 17,302.3 International Developmental Licensed Markets & Corporate 6,872.8 3,286.4 1,025.1 Total assets * $ 52,626.8 $ 47,510.8 $ 32,811.2 U.S. $ 890.4 $ 1,480.5 $ 1,849.8 International Operated Markets 731.5 886.6 762.4 International Developmental Licensed Markets & Corporate 18.9 26.6 129.5 Total capital expenditures $ 1,640.8 $ 2,393.7 $ 2,741.7 U.S. $ 813.8 $ 730.2 $ 598.4 International Operated Markets 678.5 669.3 703.9 International Developmental Licensed Markets & Corporate 259.1 218.4 179.7 Total depreciation and amortization $ 1,751.4 $ 1,617.9 $ 1,482.0 * Total assets increased from 2018 to 2019 primarily due to the Company's Lease right-of-use asset recorded as a result of the adoption of ASC 842. Total long-lived assets, primarily property and equipment and beginning in 2019, the Company's Lease right-of-use asset, were (in millions)–Consolidated: 2020–$39,696.3; 2019–$38,291.5; U.S. based: 2020–$19,509.7; 2019–$19,487.6. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Net property and equipment consisted of: In millions ' December 31, 2020 2019 Land $ 6,349.1 $ 6,026.4 Buildings and improvements on owned land 18,218.9 17,003.7 Buildings and improvements on leased land 13,364.5 12,605.9 Equipment, signs and seating 3,119.0 2,994.5 Other 425.0 420.4 Property and equipment, at cost 41,476.5 39,050.9 Accumulated depreciation and amortization (16,518.3) (14,890.9) Net property and equipment $ 24,958.2 $ 24,160.0 Depreciation and amortization expense for property and equipment was (in millions): 2020–$1,469.4; 2019–$1,392.2; 2018–$1,302.9. |
Franchise Arrangements
Franchise Arrangements | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Franchise Arrangements Additional Information [Abstract] | |
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. Minimum rent payments are based on the Company's underlying investment in owned sites and parallel the Company’s underlying leases and escalations on properties that are leased. Under the franchise arrangement, franchisees are granted the right to operate a restaurant using the McDonald’s System and, in most cases, the use of a restaurant facility, generally for a period of 20 years. At the end of the 20-year franchise arrangement, the Company maintains control of the underlying real estate and building and can either enter into a new 20-year franchise arrangement with the existing franchisee or a different franchisee, or close the restaurant. Franchisees generally pay related occupancy costs including property taxes, insurance and site maintenance. Developmental licensees and affiliates operating under license agreements pay a royalty to the Company based upon a percent of sales, and generally pay initial fees. McDonald’s has elected to allocate consideration in the franchise contract among lease and non-lease components in the same manner that it has historically: rental income (lease), royalty income (non-lease) and initial fee income (non-lease). This disaggregation and presentation of revenue is based on the nature, amount, timing and certainty of the revenue and cash flows. The allocation has been determined based on a mix of both observable and estimated standalone selling prices (the price at which an entity would sell a promised good or service separately to a customer). Revenues from franchised restaurants consisted of: In millions 2020 2019 2018 Rents $ 6,844.7 $ 7,500.2 $ 7,082.2 Royalties 3,831.5 4,107.1 3,886.3 Initial fees 49.9 48.4 44.0 Revenues from franchised restaurants $ 10,726.1 $ 11,655.7 $ 11,012.5 As rent and royalties are based upon a percent of sales, government regulations as a result of COVID-19 had a negative impact on revenues in 2020. The Company granted the deferrals of cash collection for certain rent and royalties earned from franchisees in substantially all markets primarily in the first and second quarters of 2020. In total, the Company deferred collection of approximately $1 billion, and has collected over 80% of these total deferrals as of December 31, 2020. Future gross minimum rent payments due to the Company under existing conventional franchise arrangements are: In millions Owned sites Leased sites Total 2021 $ 1,586.8 $ 1,486.0 $ 3,072.8 2022 1,526.5 1,428.1 2,954.6 2023 1,472.8 1,362.0 2,834.8 2024 1,433.0 1,310.2 2,743.2 2025 1,394.1 1,247.7 2,641.8 Thereafter 10,908.6 9,266.4 20,175.0 Total minimum payments $ 18,321.8 $ 16,100.4 $ 34,422.2 |
Leasing Arrangements
Leasing Arrangements | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leasing Arrangements | Leasing Arrangements The Company is the lessee in a significant real estate portfolio, primarily through ground leases (the Company leases the land and generally owns the building) and through improved leases (the Company leases the land and buildings). The Company determines whether an arrangement is a lease at inception. Lease terms for most restaurants, where market conditions allow, are generally for 20 years and, in many cases, provide for rent escalations and renewal options. Renewal options are typically solely at the Company’s discretion. Escalation terms vary by market with examples including fixed-rent escalations, escalations based on an inflation index and fair-value market adjustments. The timing of these escalations generally range from annually to every five years. The following table provides detail of rent expense: In millions 2020 2019 2018 Restaurants $ 1,399.5 $ 1,530.4 $ 1,433.9 Other 79.8 76.4 87.9 Total rent expense $ 1,479.3 $ 1,606.8 $ 1,521.8 Rent expense included percent rents in excess of minimum rents (in millions) as follows–Company-operated restaurants: 2020–$53.7; 2019–$74.4; 2018–$82.1. Franchised restaurants: 2020–$136.5; 2019–$200.7; 2018–$200.8. These variable rent payments are based on a percent of sales and as sales have decreased in 2020 as a result of COVID-19, the related rent expense has also decreased as compared to the prior year. The Lease right-of-use asset and Lease liability reflect the present value of the Company's estimated future minimum lease payments over the lease term, which includes options that are reasonably assured of being exercised, discounted using a collateralized incremental borrowing rate. Typically, renewal options are considered reasonably assured of being exercised if the associated asset lives of the building or leasehold improvements exceed that of the initial lease term, and the sales performance of the restaurant remains strong. Therefore, the Lease right-of-use asset and Lease liability include an assumption on renewal options that have not yet been exercised by the Company, and are not currently a future obligation. The Company's lease portfolio includes both operating and finance leases, however as of December 31, 2020, the vast majority of the portfolio was classified as operating leases. As the rate implicit in each lease is not readily determinable, the Company uses an incremental borrowing rate to calculate the lease liability that represents an estimate of the interest rate the Company would incur to borrow on a collateralized basis over the term of a lease within a particular currency environment. The weighted average discount rate used for leases was 3.8% as of December 31, 2020 and 4.0% as of December 31, 2019. As of December 31, 2020, maturities of lease liabilities for our lease portfolio were as follows: In millions Total * 2021 $ 1,230.7 2022 1,197.7 2023 1,159.8 2024 1,124.0 2025 1,082.1 Thereafter 14,295.7 Total lease payments 20,090.0 Less: imputed interest (6,067.2) Present value of lease liability $ 14,022.8 * Total lease payments include option periods that are reasonably assured of being exercised. See contractual cash outflows for leases within the Contractual Obligations and Commitments section on page 24. The increase in the present value of the lease liability since December 31, 2019 is approximately $0.6 billion. The lease liability will continue to be impacted by new leases, lease modifications, lease terminations, reevaluation of lease terms, and foreign currency. As of December 31, 2020 and December 31, 2019, the Weighted Average Lease Term remaining that is included in the maturities of lease liabilities was 20 years. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies In the ordinary course of business, the Company is subject to proceedings, lawsuits and other claims primarily 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 a particular 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. |
Other Operating (Income) Expens
Other Operating (Income) Expense, Net | 12 Months Ended |
Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Other Operating (Income) Expense, Net | Other Operating (Income) Expense, Net In millions 2020 2019 2018 Gains on sales of restaurant businesses $ (23.3) $ (127.5) $ (304.1) Equity in earnings of unconsolidated affiliates (117.4) (153.8) (151.5) Asset dispositions and other (income) expense, net 290.7 87.2 33.7 Impairment and other charges (gains), net (267.5) 74.3 231.7 Total $ (117.5) $ (119.8) $ (190.2) ▪ Gains on sales of restaurant businesses The Company’s purchases and sales of businesses with its franchisees are aimed at maintaining an optimal ownership mix in each market. Resulting gains or losses on sales of restaurant businesses are recorded in operating income because these 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) losses from these entities representing McDonald’s share of results for markets in both the International Operated Markets and International Developmental Licensed Markets segments. For foreign affiliated markets—primarily China and Japan—results are reported after interest expense and income taxes. ▪ Asset dispositions and other (income) expense, net Asset dispositions and other (income) expense, net consists of gains or losses on excess property and other asset dispositions, provisions for restaurant closings, reserves for bad debts, asset write-offs due to restaurant reinvestment (including investment in Experience of the Future), strategic sale of properties, and other miscellaneous income and expenses. ▪ Impairment and other charges (gains), net Impairment and other charges (gains), net includes losses that result from the write down of goodwill and long-lived assets from their carrying value to their fair value, as well as charges associated with strategic initiatives, such as refranchising and restructuring activities. The realized gains/losses from the divestiture of ownership percentages of subsidiaries are reflected in this category, including the 2020 gain on the sale of McDonald's Japan stock as the Company divested about 6% of its ownership in McDonald's Japan. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income before provision for income taxes, classified by source of income, was as follows: In millions 2020 2019 2018 U.S. $ 1,390.4 $ 2,159.1 $ 2,218.0 Outside the U.S. 4,750.3 5,859.0 5,598.1 Income before provision for income taxes * $ 6,140.7 $ 8,018.1 $ 7,816.1 * The decrease in Income before provision for income taxes from 2019 to 2020 was primarily due to COVID-19. In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.” The goal of this update was to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. The Company adopted this standard on January 1, 2018 using a modified retrospective method, resulting in a cumulative catch up adjustment of $57 million, the majority of which was recorded within Miscellaneous other assets on the Consolidated Balance Sheet. The adoption of this standard did not have a material impact on the Consolidated Statements of Income and Cash Flows. The Tax Cuts and Jobs Act of 2017 ("Tax Act") was enacted in the U.S. in December 2017. The Tax Act reduced the U.S. federal corporate income tax rate to 21% from 35% and required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred. In 2017, the Company recorded provisional amounts for certain enactment-date effects of the Tax Act by applying the guidance in Staff Accounting Bulletin ("SAB") 118. In 2018, the Company recorded adjustments to the provisional amounts and completed its accounting for all of the enactment-date income tax effects of the Tax Act. SAB 118 measurement period At December 31, 2017, the Company had not completed its accounting for all of the enactment-date income tax effects of the Tax Act under ASC 740, Income Taxes , primarily for the one-time transition tax. The one-time transition tax is based on the Company's total post-1986 earnings and profits ("E&P"), the tax on which it previously deferred from U.S. income taxes under U.S. law. The Company recorded a provisional amount for its one-time transition tax liability of approximately $1.2 billion at December 31, 2017. Upon further analysis of the Tax Act and notices and regulations issued and proposed by the U.S. Department of the Treasury and the IRS, the Company increased its December 31, 2017 provisional amount by approximately $75 million during 2018. The Company has elected to pay its transition tax over the eight-year period provided in the Tax Act. The provision for income taxes, classified by the timing and location of payment, was as follows: In millions 2020 2019 2018 U.S. federal $ 554.1 $ 521.8 $ 292.9 U.S. state 119.1 194.7 183.9 Outside the U.S. 730.6 1,126.5 1,312.4 Current tax provision 1,403.8 1,843.0 1,789.2 U.S. federal 870.3 38.5 145.7 U.S. state 73.3 20.0 18.7 Outside the U.S. (937.2) 91.2 (61.8) Deferred tax provision 6.4 149.7 102.6 Provision for income taxes $ 1,410.2 $ 1,992.7 $ 1,891.8 Net deferred tax (assets) liabilities consisted of: In millions December 31, 2020 2019 Lease right-of-use asset $ 3,427.3 $ 3,296.8 Property and equipment 1,600.4 1,316.4 Intangible assets 1,046.2 334.8 Other 322.4 511.1 Total deferred tax liabilities 6,396.3 5,459.1 Lease liability (3,462.0) (3,331.1) Intangible assets (2,095.9) (1,051.0) Property and equipment (593.8) (585.6) Deferred foreign tax credits (289.3) (311.2) Employee benefit plans (190.8) (192.3) Deferred revenue (154.8) (145.5) Operating loss carryforwards (86.8) (81.5) Other (449.0) (323.6) Total deferred tax assets before valuation allowance (7,322.4) (6,021.8) Valuation allowance 816.0 741.9 Net deferred tax (assets) liabilities $ (110.1) $ 179.2 Balance sheet presentation: Deferred income taxes $ 2,025.6 $ 1,318.1 Other assets-miscellaneous (2,135.7) (1,138.9) Net deferred tax (assets) liabilities $ (110.1) $ 179.2 At December 31, 2020, the Company had net operating loss carryforwards of $392.5 million, of which $228.2 million has an indefinite carryforward. The remainder will expire at various dates from 2021 to 2039. The Company’s effective income tax rates are higher than the U.S. statutory tax rate of 21% primarily due to the impact of state income taxes and foreign income that is subject to local statutory country tax rates that are above the 21% U.S. statutory tax rate. The statutory U.S. federal income tax rate reconciles to the effective income tax rates as follows: 2020 2019 2018 Statutory U.S. federal income tax rate 21.0 % 21.0 % 21.0 % State income taxes, net of related federal income tax benefit 1.8 1.8 1.8 Foreign income taxed at different rates 0.4 1.6 1.5 Tax impact of intercompany transactions 2.1 — — Global intangible low-tax income ("GILTI") 1.2 1.3 0.4 Foreign-derived intangible income ("FDII") (3.4) (1.3) (1.4) Transition tax — — 1.0 U.S./Foreign tax law changes (1.8) — — Foreign tax credit redetermination regulations — (1.0) — Other, net 1.7 1.5 (0.1) Effective income tax rates 23.0 % 24.9 % 24.2 % The Tax Act enacted the GILTI provision, which taxes U.S. allocated expenses and certain income from foreign operations. Also, the Tax Act enacted the FDII provision, which allows deductions against certain types of U.S. taxable income resulting in a lower effective U.S. tax rate on such income. As of December 31, 2020 and 2019, the Company’s gross unrecognized tax benefits totaled $1,479.2 million and $1,439.1 million, respectively. After considering the deferred tax accounting impact, it is expected that about $940 million of the total as of December 31, 2020 would favorably affect the effective tax rate if resolved in the Company’s favor. The following table presents a reconciliation of the beginning and ending amounts of unrecognized tax benefits: In millions 2020 2019 Balance at January 1 $ 1,439.1 $ 1,342.8 Decreases for positions taken in prior years (71.4) (18.3) Increases for positions taken in prior years 38.5 107.1 Increases for positions related to the current year 89.6 88.3 Settlements with taxing authorities (3.9) (68.6) Lapsing of statutes of limitations (12.7) (12.2) Balance at December 31 (1) $ 1,479.2 $ 1,439.1 (1) Of this amount, $1,137.8 million and $1,285.3 million are included in Long-term income taxes for 2020 and 2019, respectively, and $325.0 million and $138.8 million are included in Prepaid expenses and other current assets for 2020 and 2019, respectively, on the Consolidated Balance Sheet. The remainder is included in Deferred income taxes on the Consolidated Balance Sheet. In 2015, the Internal Revenue Service (“IRS”) issued a Revenue Agent Report (“RAR”) that included certain disagreed transfer pricing adjustments related to the Company’s U.S. Federal income tax returns for 2009 and 2010. Also in 2015, the Company filed a protest with the IRS related to these disagreed transfer pricing matters. During 2017, the Company received a response to its protest. In December 2018, the Company met with the IRS Appeals team and, during 2019 and 2020, the Company and the IRS Appeals team continued to have a dialogue regarding these disagreed transfer pricing matters. As of December 31, 2020, the Company does not yet have a signed agreement with the IRS related to the settlement of these issues. In 2017, the IRS completed its examination of the Company’s U.S. Federal income tax returns for 2011 and 2012. In 2018, the IRS issued a RAR for these years. As expected, the RAR included the same disagreed transfer pricing matters as the 2009 and 2010 RAR. Also in 2018, the Company filed a protest with the IRS related to these disagreed transfer pricing matters. The transfer pricing matters for 2011 and 2012 are being addressed along with the 2009 and 2010 transfer pricing matters as part of the 2009-2010 appeals process. The Company is also under audit in multiple foreign tax jurisdictions for matters primarily related to transfer pricing, and the Company is under audit in multiple state tax jurisdictions. While the Company cannot estimate the impact to the effective tax rate, it is reasonably possible that the total amount of unrecognized tax benefits could decrease up to $1,040 million within the next 12 months. This would be due to the possible settlement of the IRS transfer pricing matters, completion of the aforementioned foreign and state tax audits and the expiration of the statute of limitations in multiple tax jurisdictions. In addition, it is reasonably possible that, as a result of audit progression in both the U.S. and foreign tax audits within the next 12 months, there may be new information that causes the Company to reassess the total amount of unrecognized tax benefits recorded. While the Company cannot estimate the impact that new information may have on our unrecognized tax benefit balance, it believes that the liabilities recorded are appropriate and adequate. The Company operates within multiple tax jurisdictions and is subject to audit in these jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations for years before 2009. The Company had $177.4 million and $174.4 million accrued for interest and penalties related to tax matters at December 31, 2020 and 2019, respectively. The Company recognized interest and penalties related to tax matters of $32.4 million in 2020, $39.9 million in 2019, and $13.9 million in 2018, which are included in the provision for income taxes. As of December 31, 2020, the Company has accumulated undistributed earnings generated by our foreign subsidiaries, which were predominantly taxed in the U.S. as a result of the transition tax provisions enacted under the Tax Act. Management does not assert that these previously-taxed unremitted earnings are indefinitely reinvested in operations outside the U.S. Accordingly, the Company has provided deferred taxes for the tax effects incremental to the transition tax. We have not provided for deferred taxes on outside basis differences in our investments in our foreign subsidiaries that are unrelated to these accumulated undistributed earnings, as these outside basis differences are indefinitely reinvested. A determination of the unrecognized deferred taxes related to these other components of our outside basis differences is not practicable. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans The Company's 401(k) Plan is maintained for U.S.-based employees and includes a 401(k) feature, as well as an employer match. The 401(k) feature allows eligible participants to make pre-tax contributions that are matched each pay period (with an annual true-up) through cash contributions and, prior to July 31, 2018, from shares released under the Employee Stock Ownership Plan. Effective August 1, 2018, the contributions are matched only through cash contributions. All current account balances, future contributions and related earnings can be invested in nine investment alternatives (including a target date fund series), as well as McDonald’s stock in accordance with each participant’s investment elections. Future participant contributions are limited to 20% investment in McDonald’s stock. Participants may choose to make separate investment choices for current account balances and future contributions. The Company also maintains certain unfunded nonqualified supplemental benefit plans that allow participants to (i) make tax-deferred contributions and (ii) receive Company-provided matching allocations that cannot be made under the 401(k) Plan because of IRS limitations. The investment alternatives and returns are based on certain market-rate investment alternatives under the 401(k) Plan, net of expenses. Total liabilities were $431.2 million and $435.0 million at December 31, 2020 and 2019, respectively, 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 December 31, 2020, derivatives with a fair va lue of $185.6 million in dexed to the Company's stock and a total return swap with a notional amount of $180.4 million indexed to certain market indices were included at their fair value in Prepaid expenses and other current assets on the Consolidated Balance Sheet. Changes in liabilities for these nonqualified plans and in the fair value of the derivatives are recorded primarily in Selling, general & administrative expenses. Changes in fair value of the derivatives indexed to the Company’s stock are recorded in the income statement because the contracts provide the counterparty with a choice to settle in cash or shares. Total U.S. costs for the 401(k) Plan and nonqualified benefits and related hedging activities, were (in millions): 2020–$37.0; 2019–$30.4; 2018–$18.0. 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): 2020–$36.6; 2019–$35.3; 2018–$33.7. The total combined liabilities for international retirement plans were $45.5 million and $42.3 million at December 31, 2020 and 2019, respectively. Other post-retirement benefits and post-employment benefits were immaterial to the Consolidated Income Statement. |
Debt Financing
Debt Financing | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt Financing | Debt Financing LINE OF CREDIT AGREEMENTS At December 31, 2020, the Company had two line of credit agreements available, with a combined commitment amount of $4.5 billion. Both line of credit agreements remain unused, with the $1.0 billion agreement expiring in March 2021, and the $3.5 billion agreement expiring in December 2024. The Company intends to renew both line of credit agreements prior to their expiration. The $1.0 billion line of credit includes a fixed fee of 0.375% on the total commitment, and the $3.5 billion line of credit incurs fees of 0.09% per annum on the total commitment. Fees and interest rates on the $3.5 billion line of credit are primarily based on the Company’s long-term credit rating assigned by Moody’s and Standard & Poor's. In addition, the Company's subsidiaries had unused lines of credit that were primarily uncommitted, short-term and denominated in various currencies at local market rates of interest. The weighted-average interest rate of short-term borrowings was 1.9% at December 31, 2020 (based on $265.7 million of foreign currency bank line borrowings) and 1.9% at December 31, 2019 (based on $242.4 million of foreign currency bank line borrowings and $899.3 million of commercial paper outstanding). DEBT OBLIGATIONS The Company has incurred debt obligations principally through public and private offerings and bank loans. There are no provisions in the Company’s debt obligations that would accelerate repayment of debt as a result of a change in credit ratings or a material adverse change in the Company’s business. Certain of the Company’s 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 Company has no current plans to retire a significant amount of its debt prior to maturity, but continues to look for ways to optimize its debt portfolio. The following table summarizes the Company’s debt obligations (interest rates and debt amounts reflected in the table include the effects of interest rate swaps used to hedge debt). Interest rates (1) December 31 Amounts outstanding In millions of U.S. Dollars Maturity dates 2020 2019 2020 2019 Fixed 3.9 % 4.0 % $ 22,734.5 $ 19,340.2 Floating 0.9 2.2 1,150.0 2,049.3 Total U.S. Dollar 2021-2050 23,884.5 21,389.5 Fixed 1.5 1.5 9,453.9 8,671.8 Floating 2.1 2.3 366.5 337.0 Total Euro 2021-2031 9,820.4 9,008.8 Fixed 3.4 3.4 845.1 771.0 Floating 1.2 2.0 230.8 210.6 Total Australian Dollar 2024-2029 1,075.9 981.6 Total British Pounds Sterling - Fixed 2032-2054 4.2 4.6 1,156.4 1,386.3 Total Canadian Dollar - Fixed 2021-2025 3.1 3.1 784.9 768.6 Total Japanese Yen - Fixed 2030 2.9 2.9 121.1 115.1 Fixed 0.2 0.2 451.9 413.8 Floating 1.9 2.2 265.7 241.8 Total other currencies (2) 2021-2024 717.6 655.6 Debt obligations before fair value adjustments and deferred debt costs (3) 37,560.8 34,305.5 Fair value adjustments (4) 35.8 12.1 Deferred debt costs (156.2) (140.4) Total debt obligations $ 37,440.4 $ 34,177.2 (1) Weighted-average effective rate, computed on a semi-annual basis. (2) Consists of Swiss Francs and Korean Won. (3) Aggregate maturities for 2020 debt balances, before fair value adjustments and deferred debt costs, are as follows (in millions): 2021–$2,243.6; 2022–$2,332.2; 2023–$2,643.9; 2024–$3,300.7; 2025–$3,159.6; Thereafter–$23,880.8. These amounts include a reclassification of short-term obligations totaling $268.9 million to long-term obligations as they are supported by a long-term line of credit agreement expiring in December 2024. (4) The carrying value of underlying items in fair value hedges, in this case debt obligations, are adjusted for fair value changes to the extent they are attributable to the risk designated as being hedged. The related hedging instruments are also recorded at fair value on the Consolidated Balance Sheet. |
Share-based Compensation
Share-based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
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 RSUs to employees and nonemployee directors. The number of shares of common stock reserved for issuance under the plan was 39.3 million at December 31, 2020, including 24.6 million available for future grants. Share-based compensation expense and the effect on diluted earnings per common share were as follows: In millions, except per share data 2020 2019 2018 Share-based compensation expense $ 92.4 $ 109.6 $ 125.1 After tax $ 78.3 $ 94.2 $ 108.1 Earnings per common share-diluted $ 0.10 $ 0.12 $ 0.14 As of December 31, 2020, there was $121.5 million of total unrecognized compensation cost related to nonvested share-based compensation that is expected to be recognized over a weighted-average period of 2.0 years. STOCK OPTIONS Stock options to purchase common stock are granted with an exercise price equal to the closing market price of the Company’s 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. The following table presents the weighted-average assumptions used in the option pricing model for the 2020, 2019 and 2018 stock option grants. The expected life of the options represents the period of time the options are expected to be outstanding and is based on historical trends. Expected stock price volatility is generally based on the historical volatility of the Company’s stock for a period approximating the expected life. The expected dividend yield is based on the Company’s most recent annual dividend rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant with a term equal to the expected life. Weighted-average assumptions 2020 2019 2018 Expected dividend yield 2.3 % 2.7 % 2.6 % Expected stock price volatility 19.1 % 18.9 % 18.7 % Risk-free interest rate 1.4 % 2.5 % 2.7 % Expected life of options (in years) 5.7 5.8 5.8 Fair value per option granted $ 29.40 $ 25.60 $ 23.80 Intrinsic value for stock options is defined as the difference between the current market value of the Company’s stock and the exercise price. During 2020, 2019 and 2018, the total intrinsic value of stock options exercised was $290.4 million, $356.1 million and $364.4 million, respectively. Cash received from stock options exercised during 2020 was $295.5 million and the tax benefit realized from stock options exercised totaled $59.3 million. The Company uses treasury shares purchased under the Company’s share repurchase program to satisfy share-based exercises. A summary of the status of the Company’s stock option grants as of December 31, 2020, 2019 and 2018, and changes during the years then ended, is presented in the following table: 2020 2019 2018 Options Shares in Weighted- Weighted- Aggregate Shares in Weighted- Shares in Weighted- Outstanding at beginning of year 14.6 $ 124.21 16.6 $ 113.06 18.9 $ 101.55 Granted 1.8 214.18 2.0 175.17 2.7 157.95 Exercised (2.8) 104.58 (3.6) 97.70 (4.5) 89.31 Forfeited/expired (0.2) 184.69 (0.4) 154.65 (0.5) 137.08 Outstanding at end of year 13.4 $ 139.44 5.8 $ 1,005.5 14.6 $ 124.21 16.6 $ 113.06 Exercisable at end of year 8.8 $ 118.46 4.6 $ 843.1 9.2 10.0 RSUs RSUs generally vest 100% on the third anniversary of the grant and are payable in either shares of McDonald’s common stock or cash, at the Company’s discretion. The fair value of each RSU granted is equal to the market price of the Company’s stock at date of grant. Separately, Company executives have been awarded RSUs that vest based on Company performance. For performance-based RSUs, the Company includes a relative TSR modifier to determine the number of shares earned at the end of the performance period. The fair value of performance-based RSUs that include the TSR modifier is determined using a Monte Carlo valuation model. A summary of the Company’s RSU activity during the years ended December 31, 2020, 2019 and 2018 is presented in the following table: 2020 2019 2018 RSUs Shares in Weighted- Shares in Weighted- Shares in Weighted- Nonvested at beginning of year 1.4 $ 150.95 1.5 $ 132.56 1.6 $ 107.34 Granted 0.6 201.92 0.6 171.48 0.6 158.28 Vested (0.6) 127.99 (0.6) 116.42 (0.6) 91.20 Forfeited (0.1) 172.45 (0.1) 153.58 (0.1) 132.14 Nonvested at end of year 1.3 $ 176.81 1.4 $ 150.95 1.5 $ 132.56 |
Subsequent Events (Notes)
Subsequent Events (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTSThe Company evaluated subsequent events through the date the financial statements were issued and filed with the SEC. There were no subsequent events that required recognition or disclosure |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
NATURE OF BUSINESS | NATURE OF BUSINESS The Company franchises and operates McDonald’s restaurants in the global restaurant industry. All restaurants are operated either by the Company or by franchisees, including conventional franchisees under franchised arrangements, and developmental licensees or affiliates under license agreements. The following table presents restaurant information by ownership type: Restaurants at December 31, 2020 2019 2018 Conventional franchised 21,712 21,837 21,685 Developmental licensed 7,663 7,648 7,225 Foreign affiliated 7,146 6,574 6,175 Total Franchised 36,521 36,059 35,085 Company-operated 2,677 2,636 2,770 Total Systemwide restaurants 39,198 38,695 37,855 The results of operations of restaurant businesses purchased and sold in transactions with franchisees were not material either individually or in the aggregate to the consolidated financial statements for periods prior to purchase and sale. |
CONSOLIDATION | CONSOLIDATION The consolidated financial statements include the accounts of the Company and its subsidiaries. Investments in affiliates owned 50% or less (primarily McDonald’s China and Japan) are accounted for by the equity method. On an ongoing basis, 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 variable interest entity consolidation guidance. The Company has concluded that consolidation of any such entity is not appropriate for the periods presented. |
ESTIMATES IN 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. |
FOREIGN CURRENCY TRANSLATION | FOREIGN CURRENCY TRANSLATION Generally, the functional currency of operations outside the U.S. is the respective local currency. |
RECENT ACCOUNTING STANDARDS | RECENT ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements Financial Instruments - Credit Losses In June 2016, the Financial Accounting Standards Board ("FASB") issued guidance codified in ASC Topic 326, "Financial Instruments – Credit Losses: Measurements of Credit Losses on Financial Instruments". The standard replaces the incurred loss impairment methodology in prior GAAP with a methodology that instead reflects a current estimate of all expected credit losses on financial assets, including receivables. The guidance requires that an entity measure and recognize expected credit losses at the time the asset is recorded, while considering a broader range of information to estimate credit losses including country specific macroeconomic conditions that correlate with historical loss experience, delinquency trends and aging behavior of receivables, among others. The Company adopted this guidance effective January 1, 2020, prospectively, and the adoption of this standard did not have a material impact on the consolidated financial statements. The Company had an Allowance for bad debts of $55.3 million as of December 31, 2020 recorded as a reduction to Accounts and notes receivable on the Consolidated Balance Sheet. Recent Accounting Pronouncements Not Yet Adopted Income Taxes In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”), which simplifies the accounting for income taxes. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, including applicable interim periods. The Company anticipates the adoption of ASU 2019-12 will not have a material impact on its consolidated financial statements. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting". The pronouncement provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate and other interbank offered rates to alternative reference rates. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The adoption of this standard is not expected to have a material impact on the Company's consolidated financial statements. |
REVENUES | REVENUE RECOGNITION The Company's revenues consist of sales by Company-operated restaurants and fees from restaurants operated by franchisees, developmental licensees and affiliates. Revenues from conventional franchised restaurants include rent and royalties based on a percent of sales with minimum rent payments, and initial fees. Revenues from restaurants licensed to developmental licensees and affiliates include a royalty based on a percent of sales, and generally include initial fees. The Company’s Other revenues are comprised of fees paid by franchisees to recover a portion of costs incurred by the Company for various technology platforms, revenues from brand licensing arrangements to market and sell consumer packaged goods using the McDonald’s brand, and third party revenues for the Dynamic Yield business. Sales by Company-operated restaurants are recognized on a cash basis at the time of the underlying sale and are presented net of sales tax and other sales-related taxes. Royalty revenues are based on a percent of sales and recognized at the time the underlying sales occur. Rental income includes both minimum rent payments, which are recognized straight-line over the franchise term (with the exception of rent concessions as a result of COVID-19 – refer to the Leasing section that follows), and variable rent payments based on a percent of sales, which are recognized at the time the underlying sales occur. Initial fees are recognized as the Company satisfies the performance obligation over the franchise term, which is generally 20 years. The Company provides goods or services related to various technology platforms to certain franchisees that are distinct from the franchise agreement because they do not require integration with other goods or services we provide. The Company has determined that it is the principal in these arrangements. Accordingly, the related revenue is presented on a gross basis on the Consolidated Statement of Income. These revenues are recognized as the goods or services are transferred to the franchisee, and related expenses are recognized as incurred. Brand licensing arrangement revenues are based on a percent of sales and are recognized at the time the underlying sales occur. Dynamic Yield third party revenues are generated from providing software as a service solutions to customers and are recognized over the applicable subscription period as the service is performed. |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment are stated at cost, with depreciation and amortization provided using the straight-line method over the following estimated useful lives: buildings–up to 40 years; leasehold improvements–the lesser of useful lives of assets or lease terms, which generally include certain option periods; and equipment–3 to 12 years. The Company periodically reviews these lives relative to physical factors, economic factors and industry trends. If there are changes in the planned use of property and equipment, or if technological changes occur more rapidly than anticipated, the useful lives assigned to these assets may need to be shortened, resulting in the accelerated recognition of depreciation and amortization expense or write-offs in future periods. The Company may share in the cost of certain restaurant improvements with its franchisees, primarily in the U.S. Since McDonald's manages the project and provides up front funding in these instances, during the project the Company estimates which costs are the responsibility of McDonald's and which are the responsibility of the franchisee, and allocates the corresponding costs between Property and equipment and Accounts receivable. Upon the completion of the project, the allocation of costs is finalized and may result in immaterial adjustments to the balances and associated depreciation expense. Refer to the Property and Equipment footnote on page 51 for additional information. |
LEASING | LEASING The Company is the lessee in a significant real estate portfolio, primarily through ground leases (the Company leases the land and generally owns the building) and through improved leases (the Company leases the land and buildings). The Lease right-of-use asset and Lease liability reflect the present value of the Company’s estimated future minimum lease payments over the lease term, which includes options that are reasonably assured of being exercised, discounted using the rate implicit in each lease, if determinable, or a collateralized incremental borrowing rate considering the term of the lease and particular currency environment. Leases with an initial term of 12 months or less, primarily related to leases of office equipment, are not included in the Lease right-or-use asset or Lease liability and continue to be recognized in the Consolidated Statement of Income on a straight-line basis over the lease term. The Company has elected not to separate non-lease components from lease components in our lessee portfolio. To the extent that occupancy costs, such as site maintenance, are included in the asset and liability, the impact is immaterial and is generally limited to Company-owned restaurant locations. For franchised locations, which represent the majority of the restaurant portfolio, the related occupancy costs including property taxes, insurance and site maintenance are generally required to be paid by the franchisees as part of the franchise arrangement. In addition, the Company is the lessee under non-restaurant related leases such as office buildings, vehicles and office equipment. These leases are not a material subset of the Company’s lease portfolio. The FASB issued guidance for how companies may account for COVID-19 related rent concessions in the form of FASB staff and Board members’ remarks at the April 8, 2020 public meeting and the FASB Staff Q&A issued on April 10, 2020. The Company elected the practical expedient to account for COVID-19 related rent concessions as if they were part of the enforceable rights and obligations of the parties under the existing lease contract. This was elected for the Company’s entire lessee and lessor portfolio for any rent deferrals or rent abatements. For the lessee portfolio, the Company elected not to remeasure the Lease right- of-use asset and Lease liability if a rent deferral or a rent abatement is granted. Refer to the Leasing Arrangements footnotes on page 52 of this Form 10-K for additional information on the Lease right-of-use asset and Lease liability. The Company deferred collection of approximately $490 million of rental income on revenue that was recognized in 2020, and has collected over 80% of these deferrals as of December 31, 2020. Rental income includes both minimum rent payments and variable rent payments based on a percent of sales. Refer to the Franchise Arrangements footnote on page 51 of this Form 10-K for additional information on deferred collections of rental income as well as royalties. |
CAPITALIZED SOFTWARE | CAPITALIZED SOFTWARE Capitalized software is stated at cost and amortized using the straight-line method over the estimated useful life of the software, which primarily ranges from 2 to 7 years. Customer facing software is typically amortized over a shorter useful life, while back office and Corporate systems may have a longer useful life. Capitalized software less accumulated amortization is recorded within Miscellaneous other assets on the Consolidated Balance Sheet and was (in millions): 2020-$691.2; 2019-$665.4; 2018-$609.7. The Company reviews capitalized software for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable or if an indicator of impairment exists, which occurs more regularly throughout the year, such as when new software may be ready for its intended use. Results for the year ended 2020 reflected write-offs of impaired software that were no longer being used of $26.3 million. |
LONG-LIVED ASSETS | LONG-LIVED ASSETS Long-lived assets are reviewed for impairment annually in the fourth quarter and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For purposes of annually reviewing McDonald’s restaurant assets for potential impairment, assets are initially grouped together in the U.S. at a field office level, and internationally, at a market level. The Company manages its restaurants as a group or portfolio with significant common costs and promotional activities; as such, an individual restaurant’s cash flows are not generally independent of the cash flows of others in a market. If an indicator of impairment exists for any grouping of assets, an estimate of undiscounted future cash flows produced by each individual restaurant within the asset grouping is compared to its carrying value. If an individual restaurant is determined to be impaired, the loss is measured by the excess of the carrying amount of the restaurant over its fair value as determined by an estimate of discounted future cash flows. |
GOODWILL AND INTANGIBLE ASSETS, GOODWILL, POLICY | GOODWILL Goodwill represents the excess of cost over the net tangible assets and identifiable intangible assets of acquired restaurants and other businesses. The Company's goodwill primarily results from purchases of McDonald's restaurants from franchisees and ownership increases in subsidiaries or affiliates, and it is generally assigned to the reporting unit (defined as each individual market) expected to benefit from the synergies of the combination. If a Company-operated restaurant is sold within 24 months of acquisition, the goodwill associated with the acquisition is written off in its entirety. If a restaurant is sold beyond 24 months from the acquisition, the amount of goodwill written off is based on the relative fair value of the business sold compared to the reporting unit. The following table presents the 2020 activity in goodwill by segment: In millions U.S. International International Developmental Licensed Markets & Corporate Consolidated Balance at December 31, 2019 $ 1,615.8 $ 1,061.6 $ — $ 2,677.4 Business acquisitions 9.8 — — 9.8 Net restaurant purchases (sales) (0.1) 9.8 — 9.7 Impairment losses — — — — Currency translation — 76.2 — 76.2 Balance at December 31, 2020 $ 1,625.5 $ 1,147.6 $ — $ 2,773.1 The Company conducts goodwill impairment testing in the fourth quarter of each year or whenever indicators of impairment exists. If an indicator of impairment exists, the goodwill impairment test compares the fair value of a reporting unit, generally based on discounted future cash flows, with its carrying amount including goodwill. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recorded for the difference. In the current period, the Company performed a qualitative assessment and did not identify any indicators of impairment. Historically, goodwill impairment has not significantly impacted the consolidated financial statements. Goodwill on the Consolidated Balance Sheet reflects accumulated impairment losses of $14.5 million and $113.9 million as of December 31, 2020 and 2019, respectively. |
ADVERTISING COSTS | ADVERTISING COSTS Advertising costs included in operating expenses of Company-operated restaurants primarily consist of contributions to advertising cooperatives based upon a percent of sales, and were (in millions): 2020–$325.5; 2019–$365.8; 2018–$388.8. The decrease in 2020 is primarily due to lower sales in the International Operated Markets as a result of COVID-19. Costs related to the Olympics sponsorship are included in the expenses for 2018. In addition, significant advertising costs are incurred by conventional franchisees through contributions to advertising cooperatives in individual markets that are also based upon a percent of sales. In the markets that make up the vast majority of the Systemwide advertising spend, including the U.S., McDonald’s is not the primary beneficiary of these entities, and therefore has concluded that consolidation would not be appropriate, as the Company does not have the power through voting or similar rights to direct the activities of the cooperatives that most significantly impact their economic performance. Production costs for radio and television advertising are expensed when the commercials are initially aired. These production costs, primarily in the U.S., as well as other marketing-related expenses are included in Selling, general & administrative expenses and were (in millions): 2020–$329.2; 2019–$81.5; 2018–$88.0. The increase in 2020 is primarily due to about $175 million of incremental marketing contributions by the Company to the System's advertising cooperative arrangements across the U.S. and International Operated Markets to accelerate recovery and drive growth, as well as one-time investments in renewed brand communications as part of the “Serving Here” campaign launch that was announced with the new growth strategy, Accelerating the Arches . |
INCOME TAXES | INCOME TAXES Income Tax Uncertainties The Company, like other multi-national companies, is regularly audited by federal, state and foreign tax authorities, and tax assessments may arise several years after tax returns have been filed. Accordingly, tax liabilities are recorded when, in management’s judgment, a tax position does not meet the more likely than not threshold for recognition. For tax positions that meet the more likely than not threshold, a tax liability may still be recorded depending on management’s assessment of how the tax position will ultimately be settled. The Company records interest and penalties on unrecognized tax benefits in the provision for income taxes. Deferred tax assets and liabilities are recognized for the tax consequences of temporary differences between the financial reporting basis and the tax basis of existing assets and liabilities. The Company records a valuation allowance to reduce its deferred tax assets if it is considered more likely than not that some portion or all of the deferred tax assets will not be realized. While the Company has considered future taxable income and ongoing prudent and feasible tax strategies, including the sale of appreciated assets, in assessing the need for the valuation allowance, if these estimates and assumptions change in the future, the Company may be required to adjust its valuation allowance. This could result in a charge to, or an increase in, income in the period such determination is made. Refer to the Income Taxes footnote on page 53 for additional information. Accounting for Global Intangible Low-Taxed Income ("GILTI") The accounting policy of the Company is to record any tax on GILTI in the provision for income taxes in the year it is incurred. |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company measures certain financial assets and liabilities at fair value on a recurring basis, and certain non-financial assets and liabilities on a nonrecurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. Fair value disclosures are reflected in a three-level hierarchy, maximizing the use of observable inputs and minimizing the use of unobservable inputs. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows: ▪ Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market. ▪ Level 2 – inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market or model-derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability. ▪ Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability. Certain of the Company’s derivatives are valued using various pricing models or discounted cash flow analyses that incorporate observable market parameters, such as interest rate yield curves, option volatilities and currency rates, classified as Level 2 within the valuation hierarchy. Derivative valuations incorporate credit risk adjustments that are necessary to reflect the probability of default by the counterparty or the Company. ▪ Certain Financial Assets and Liabilities Measured at Fair Value The following tables present financial assets and liabilities measured at fair value on a recurring basis by the valuation hierarchy as defined in the fair value guidance: December 31, 2020 In millions Level 1 (1) Level 2 Carrying Derivative assets $ 185.6 $ 41.4 $ 227.0 Derivative liabilities $ (97.5) $ (97.5) December 31, 2019 In millions Level 1 (1) Level 2 Carrying Derivative assets $ 179.1 $ 45.6 $ 224.7 Derivative liabilities $ (11.3) $ (11.3) (1) Level 1 is comprised of derivatives that hedge market driven changes in liabilities associated with the Company’s supplemental benefit plans. ▪ Non-Financial Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the assets and liabilities are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances (e.g., when there is evidence of impairment). For the year ended December 31, 2020, the Company did not record any material fair value adjustments to long-lived assets (including goodwill). ▪ Certain Financial Assets and Liabilities not Measured at Fair Value At December 31, 2020, the fair value of the Company’s debt obligations was estimated at $43.7 billion, compared to a carrying amount of $37.4 billion. The fair value was based on quoted market prices, Level 2 within the valuation hierarchy. The carrying amount for both cash equivalents and notes receivable approximate fair value. |
FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES The Company is exposed to global market risks, including the effect of changes in interest rates and foreign currency fluctuations. The Company uses foreign currency denominated debt and derivative instruments to mitigate the impact of these changes. The Company does not hold or issue derivatives for trading purposes. The Company documents its risk management objective and strategy for undertaking hedging transactions, as well as all relationships between hedging instruments and hedged items. The Company’s derivatives that are designated for hedge accounting consist mainly of interest rate swaps, foreign currency forwards, and cross-currency interest rate swaps, and are classified as either fair value, cash flow or net investment hedges. Further details are explained in the "Fair Value," "Cash Flow" and "Net Investment" hedge sections. The Company enters into certain derivatives that are not designated for hedge accounting. The Company has entered into equity derivative contracts, including total return swaps, to hedge market-driven changes in certain of its supplemental benefit plan liabilities. The Company has also entered into certain derivatives to mitigate the share price risk related to its sale of stock in McDonald’s Japan. In addition, the Company uses foreign currency forwards to mitigate the change in fair value of certain foreign currency denominated assets and liabilities. Further details are explained in the “Undesignated Derivatives” section. All derivatives (including those not designated for hedge accounting) are recognized on the Consolidated Balance Sheet at fair value and classified based on the instruments’ maturity dates. Changes in the fair value measurements of the derivative instruments are reflected as adjustments to AOCI and/or current earnings. The following table presents the fair values of derivative instruments included on the Consolidated Balance Sheet as of December 31, 2020 and 2019: Derivative Assets Derivative Liabilities In millions Balance Sheet Classification 2020 2019 Balance Sheet Classification 2020 2019 Derivatives designated as hedging instruments Foreign currency Prepaid expenses and other current assets $ 10.0 Accrued payroll and other liabilities $ (64.5) $ (5.2) Interest rate Prepaid expenses and other current assets Accrued payroll and other liabilities — Foreign currency Miscellaneous other assets $ 5.6 9.5 Other long-term liabilities (15.0) (1.2) Interest rate Miscellaneous other assets 35.8 12.1 Other long-term liabilities — Total derivatives designated as hedging instruments $ 41.4 $ 31.6 $ (79.5) $ (6.4) Derivatives not designated as hedging instruments Equity Prepaid expenses and other current assets $ 185.6 $ 1.6 Accrued payroll and other liabilities $ (8.6) $ (0.1) Foreign currency Prepaid expenses and other current assets 12.4 Accrued payroll and other liabilities (9.4) (4.8) Equity Miscellaneous other assets 179.1 Total derivatives not designated as hedging instruments $ 185.6 $ 193.1 $ (18.0) $ (4.9) Total derivatives $ 227.0 $ 224.7 $ (97.5) $ (11.3) The following table presents the pre-tax amounts from derivative instruments affecting income and AOCI for the year ended December 31, 2020 and 2019, respectively: Location of Gain or Loss Gain (Loss) Gain (Loss) Reclassified Gain (Loss) Recognized in In millions 2020 2019 2020 2019 2020 2019 Foreign currency Nonoperating income/expense $ (76.6) $ 22.5 $ (2.1) $ 50.3 Interest rate Interest expense (90.8) (5.4) (1.3) Cash flow hedges $ (167.4) $ 22.5 $ (7.5) $ 49.0 Foreign currency denominated debt Nonoperating income/expense $ (989.7) $ 317.3 $ 33.7 Foreign currency derivatives Nonoperating income/expense (12.3) 11.8 Foreign currency derivatives (1) Interest expense $ 14.7 $ 11.7 Net investment hedges $ (1,002.0) $ 329.1 $ 33.7 $ 14.7 $ 11.7 Foreign currency Nonoperating income/expense $ (29.0) $ 14.2 Equity Selling, general & administrative expenses 44.4 71.8 Equity Other operating income/ expense, net (16.0) Undesignated derivatives $ (0.6) $ 86.0 (1) The amount of gain (loss) recognized in income related to components excluded from effectiveness testing. Fair Value Hedges The Company enters into fair value hedges to reduce the exposure to changes in fair values of certain liabilities. The Company enters into fair value hedges that convert a portion of its fixed rate debt into floating rate debt by use of interest rate swaps. At December 31, 2020, the carrying amount of fixed-rate debt that was effectively converted was an equivalent notional amount of $1.1 billion, which included an increase of $35.8 million of cumulative hedging adjustments. For the year ended December 31, 2020, the Company recognized a $23.7 million gain on the fair value of interest rate swaps, and a corresponding loss on the fair value of the related hedged debt instrument to interest expense. Cash Flow Hedges The Company enters into cash flow hedges to reduce the exposure to variability in certain expected future cash flows. To protect against the reduction in value of forecasted foreign currency cash flows (such as royalties denominated in foreign currencies), the Company uses foreign currency forwards to hedge a portion of anticipated exposures. The hedges cover the next 18 months for certain exposures and are denominated in various currencies. As of December 31, 2020, the Company had derivatives outstanding with an equivalent notional amount of $1.2 billion that hedged a portion of forecasted foreign currency denominated cash flows. Based on market conditions at December 31, 2020, the $111.3 million in cumulative cash flow hedging losses, after tax, is not expected to have a significant effect on earnings over the next 12 months. Net Investment Hedges The Company primarily uses foreign currency denominated debt (third party and intercompany) to hedge its investments in certain foreign subsidiaries and affiliates. Realized and unrealized translation adjustments from these hedges are included in shareholders' equity in the foreign currency translation component of Other comprehensive income ("OCI") and offset translation adjustments on the underlying net assets of foreign subsidiaries and affiliates, which also are recorded in OCI. As of December 31, 2020, $13.3 billion of the Company's third party foreign currency denominated debt and $843.2 million of intercompany foreign currency denominated debt were designated to hedge investments in certain foreign subsidiaries and affiliates. Undesignated Derivatives The Company enters into certain derivatives that are not designated for hedge accounting, therefore the changes in the fair value of these derivatives are recognized immediately in earnings together with the gain or loss from the hedged balance sheet position. As an example, the Company enters into equity derivative contracts, including total return swaps, to hedge market-driven changes in certain of its supplemental benefit plan liabilities. Changes in the fair value of these derivatives are recorded in selling, general & administrative expenses together with the changes in the supplemental benefit plan liabilities. The Company may also use certain derivatives to mitigate the share price risk related to its sale of stock in McDonald’s Japan. The changes in the fair value of the undesignated derivatives used for the most recent sale transaction were recognized immediately in earnings in Other operating (income) expense, net. In addition, the Company uses foreign currency forwards to mitigate the change in fair value of certain foreign currency denominated assets and liabilities. The changes in the fair value of these derivatives are recognized in Nonoperating (income) expense, net, along with the currency gain or loss from the hedged balance sheet position. Credit Risk The Company is exposed to credit-related losses in the event of non-performance by its derivative counterparties. The Company did not have significant exposure to any individual counterparty at December 31, 2020 and has master agreements that contain netting arrangements. For financial reporting purposes, the Company presents gross derivative balances in the financial statements and supplementary data, including for counterparties subject to netting arrangements. Some of these agreements also require each party to post collateral if credit ratings fall below, or aggregate exposures exceed, certain contractual limits. At December 31, 2020, the Company was required to post an immaterial amount of collateral due to the negative fair value of certain derivative positions. The Company's counterparties were not required to post collateral on any derivative position, other than on certain hedges of the Company’s supplemental benefit plan liabilities where the counterparties were required to post collateral on their liability positions. |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION The Company has 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. Share-based compensation, which includes the portion vesting of all share-based awards granted based on the grant date fair value, is generally amortized on a straight-line basis over the vesting period in Selling, general & administrative expenses. The fair value of each stock option granted is estimated on the date of grant using a closed-form pricing model. The pricing model requires assumptions, which impact the assumed fair value, including the expected life of the stock option, the risk-free interest rate, expected volatility of the Company’s stock over the expected life and the expected dividend yield. The Company uses historical data to determine these assumptions and if these assumptions change significantly for future grants, share-based compensation expense will fluctuate in future years. In addition, the Company estimates forfeitures when determining the amount of compensation costs to be recognized each period. The fair value of each RSU granted is equal to the market price of the Company’s stock at date of grant. For performance-based RSUs, the Company includes a relative Total Shareholder Return ("TSR") modifier to determine the number of shares earned at the end of the performance period. The fair value of performance-based RSUs that include the TSR modifier is determined using a Monte Carlo valuation model. Refer to the Share-based Compensation footnote on page 58 for additional information. |
PER COMMON SHARE INFORMATION | PER COMMON SHARE INFORMATION Diluted earnings per common share is calculated using net income divided by diluted weighted-average shares. Diluted weighted-average shares include weighted-average shares outstanding plus the dilutive effect of share-based compensation calculated using the treasury stock method, of (in millions of shares): 2020–5.5; 2019–6.8; 2018–7.3. Share-based compensation awards that were not included in diluted weighted-average shares because they would have been antidilutive were (in millions of shares): 2020–1.8; 2019–0.1; 2018–0.5. |
CASH AND EQUIVALENTS | CASH AND EQUIVALENTS The Company considers short-term, highly liquid investments with an original maturity of 90 days or less to be cash equivalents. As of December 31, 2020, Cash and equivalents was $3.4 billion, of which $2.0 billion consisted of certificates of deposit. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Restaurant Information by Ownership Type | The following table presents restaurant information by ownership type: Restaurants at December 31, 2020 2019 2018 Conventional franchised 21,712 21,837 21,685 Developmental licensed 7,663 7,648 7,225 Foreign affiliated 7,146 6,574 6,175 Total Franchised 36,521 36,059 35,085 Company-operated 2,677 2,636 2,770 Total Systemwide restaurants 39,198 38,695 37,855 |
Activity in Goodwill by Segment | The following table presents the 2020 activity in goodwill by segment: In millions U.S. International International Developmental Licensed Markets & Corporate Consolidated Balance at December 31, 2019 $ 1,615.8 $ 1,061.6 $ — $ 2,677.4 Business acquisitions 9.8 — — 9.8 Net restaurant purchases (sales) (0.1) 9.8 — 9.7 Impairment losses — — — — Currency translation — 76.2 — 76.2 Balance at December 31, 2020 $ 1,625.5 $ 1,147.6 $ — $ 2,773.1 |
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables present financial assets and liabilities measured at fair value on a recurring basis by the valuation hierarchy as defined in the fair value guidance: December 31, 2020 In millions Level 1 (1) Level 2 Carrying Derivative assets $ 185.6 $ 41.4 $ 227.0 Derivative liabilities $ (97.5) $ (97.5) December 31, 2019 In millions Level 1 (1) Level 2 Carrying Derivative assets $ 179.1 $ 45.6 $ 224.7 Derivative liabilities $ (11.3) $ (11.3) (1) Level 1 is comprised of derivatives that hedge market driven changes in liabilities associated with the Company’s supplemental benefit plans. |
Fair Values of Derivative Instruments Included on Consolidated Balance Sheet | The following table presents the fair values of derivative instruments included on the Consolidated Balance Sheet as of December 31, 2020 and 2019: Derivative Assets Derivative Liabilities In millions Balance Sheet Classification 2020 2019 Balance Sheet Classification 2020 2019 Derivatives designated as hedging instruments Foreign currency Prepaid expenses and other current assets $ 10.0 Accrued payroll and other liabilities $ (64.5) $ (5.2) Interest rate Prepaid expenses and other current assets Accrued payroll and other liabilities — Foreign currency Miscellaneous other assets $ 5.6 9.5 Other long-term liabilities (15.0) (1.2) Interest rate Miscellaneous other assets 35.8 12.1 Other long-term liabilities — Total derivatives designated as hedging instruments $ 41.4 $ 31.6 $ (79.5) $ (6.4) Derivatives not designated as hedging instruments Equity Prepaid expenses and other current assets $ 185.6 $ 1.6 Accrued payroll and other liabilities $ (8.6) $ (0.1) Foreign currency Prepaid expenses and other current assets 12.4 Accrued payroll and other liabilities (9.4) (4.8) Equity Miscellaneous other assets 179.1 Total derivatives not designated as hedging instruments $ 185.6 $ 193.1 $ (18.0) $ (4.9) Total derivatives $ 227.0 $ 224.7 $ (97.5) $ (11.3) |
Derivatives Pretax Amounts Affecting Income and Other Comprehensive Income | The following table presents the pre-tax amounts from derivative instruments affecting income and AOCI for the year ended December 31, 2020 and 2019, respectively: Location of Gain or Loss Gain (Loss) Gain (Loss) Reclassified Gain (Loss) Recognized in In millions 2020 2019 2020 2019 2020 2019 Foreign currency Nonoperating income/expense $ (76.6) $ 22.5 $ (2.1) $ 50.3 Interest rate Interest expense (90.8) (5.4) (1.3) Cash flow hedges $ (167.4) $ 22.5 $ (7.5) $ 49.0 Foreign currency denominated debt Nonoperating income/expense $ (989.7) $ 317.3 $ 33.7 Foreign currency derivatives Nonoperating income/expense (12.3) 11.8 Foreign currency derivatives (1) Interest expense $ 14.7 $ 11.7 Net investment hedges $ (1,002.0) $ 329.1 $ 33.7 $ 14.7 $ 11.7 Foreign currency Nonoperating income/expense $ (29.0) $ 14.2 Equity Selling, general & administrative expenses 44.4 71.8 Equity Other operating income/ expense, net (16.0) Undesignated derivatives $ (0.6) $ 86.0 (1) The amount of gain (loss) recognized in income related to components excluded from effectiveness testing. |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Revenues and Operating Income by Geographic Segment | In millions 2020 2019 2018 U.S. $ 7,828.5 $ 8,002.8 $ 7,798.7 International Operated Markets 9,570.7 11,480.1 11,578.1 International Developmental Licensed Markets & Corporate 1,808.6 1,881.5 1,881.1 Total revenues $ 19,207.8 $ 21,364.4 $ 21,257.9 U.S. $ 3,789.1 $ 4,068.7 $ 4,015.6 International Operated Markets 3,315.1 4,789.0 4,643.2 International Developmental Licensed Markets & Corporate 219.8 212.1 163.8 Total operating income $ 7,324.0 $ 9,069.8 $ 8,822.6 U.S. $ 21,010.0 $ 21,376.9 $ 14,483.8 International Operated Markets 24,744.0 22,847.5 17,302.3 International Developmental Licensed Markets & Corporate 6,872.8 3,286.4 1,025.1 Total assets * $ 52,626.8 $ 47,510.8 $ 32,811.2 U.S. $ 890.4 $ 1,480.5 $ 1,849.8 International Operated Markets 731.5 886.6 762.4 International Developmental Licensed Markets & Corporate 18.9 26.6 129.5 Total capital expenditures $ 1,640.8 $ 2,393.7 $ 2,741.7 U.S. $ 813.8 $ 730.2 $ 598.4 International Operated Markets 678.5 669.3 703.9 International Developmental Licensed Markets & Corporate 259.1 218.4 179.7 Total depreciation and amortization $ 1,751.4 $ 1,617.9 $ 1,482.0 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Net Property and Equipment | Net property and equipment consisted of: In millions ' December 31, 2020 2019 Land $ 6,349.1 $ 6,026.4 Buildings and improvements on owned land 18,218.9 17,003.7 Buildings and improvements on leased land 13,364.5 12,605.9 Equipment, signs and seating 3,119.0 2,994.5 Other 425.0 420.4 Property and equipment, at cost 41,476.5 39,050.9 Accumulated depreciation and amortization (16,518.3) (14,890.9) Net property and equipment $ 24,958.2 $ 24,160.0 |
Franchise Arrangements (Tables)
Franchise Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Franchise Arrangements Additional Information [Abstract] | |
Revenues from Franchised Restaurants | Revenues from franchised restaurants consisted of: In millions 2020 2019 2018 Rents $ 6,844.7 $ 7,500.2 $ 7,082.2 Royalties 3,831.5 4,107.1 3,886.3 Initial fees 49.9 48.4 44.0 Revenues from franchised restaurants $ 10,726.1 $ 11,655.7 $ 11,012.5 |
Future Minimum Payments | Future gross minimum rent payments due to the Company under existing conventional franchise arrangements are: In millions Owned sites Leased sites Total 2021 $ 1,586.8 $ 1,486.0 $ 3,072.8 2022 1,526.5 1,428.1 2,954.6 2023 1,472.8 1,362.0 2,834.8 2024 1,433.0 1,310.2 2,743.2 2025 1,394.1 1,247.7 2,641.8 Thereafter 10,908.6 9,266.4 20,175.0 Total minimum payments $ 18,321.8 $ 16,100.4 $ 34,422.2 |
Leasing Arrangements (Tables)
Leasing Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Detail of Rent Expense | The following table provides detail of rent expense: In millions 2020 2019 2018 Restaurants $ 1,399.5 $ 1,530.4 $ 1,433.9 Other 79.8 76.4 87.9 Total rent expense $ 1,479.3 $ 1,606.8 $ 1,521.8 |
Schedule of Maturites of Operating Lease Liabilities | As of December 31, 2020, maturities of lease liabilities for our lease portfolio were as follows: In millions Total * 2021 $ 1,230.7 2022 1,197.7 2023 1,159.8 2024 1,124.0 2025 1,082.1 Thereafter 14,295.7 Total lease payments 20,090.0 Less: imputed interest (6,067.2) Present value of lease liability $ 14,022.8 * Total lease payments include option periods that are reasonably assured of being exercised. See contractual cash outflows for leases within the Contractual Obligations and Commitments section on page 24. |
Schedule of Future Minimum Rental Payments for Operating Leases | Future gross minimum rent payments due to the Company under existing conventional franchise arrangements are: In millions Owned sites Leased sites Total 2021 $ 1,586.8 $ 1,486.0 $ 3,072.8 2022 1,526.5 1,428.1 2,954.6 2023 1,472.8 1,362.0 2,834.8 2024 1,433.0 1,310.2 2,743.2 2025 1,394.1 1,247.7 2,641.8 Thereafter 10,908.6 9,266.4 20,175.0 Total minimum payments $ 18,321.8 $ 16,100.4 $ 34,422.2 |
Other Operating (Income) Expe_2
Other Operating (Income) Expense, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Other Operating (Income) Expense by Component | In millions 2020 2019 2018 Gains on sales of restaurant businesses $ (23.3) $ (127.5) $ (304.1) Equity in earnings of unconsolidated affiliates (117.4) (153.8) (151.5) Asset dispositions and other (income) expense, net 290.7 87.2 33.7 Impairment and other charges (gains), net (267.5) 74.3 231.7 Total $ (117.5) $ (119.8) $ (190.2) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income before Provision for Income Taxes, Classified by Source of Income | Income before provision for income taxes, classified by source of income, was as follows: In millions 2020 2019 2018 U.S. $ 1,390.4 $ 2,159.1 $ 2,218.0 Outside the U.S. 4,750.3 5,859.0 5,598.1 Income before provision for income taxes * $ 6,140.7 $ 8,018.1 $ 7,816.1 |
Provision for Income Taxes, Classified by Timing and Location of Payment | The provision for income taxes, classified by the timing and location of payment, was as follows: In millions 2020 2019 2018 U.S. federal $ 554.1 $ 521.8 $ 292.9 U.S. state 119.1 194.7 183.9 Outside the U.S. 730.6 1,126.5 1,312.4 Current tax provision 1,403.8 1,843.0 1,789.2 U.S. federal 870.3 38.5 145.7 U.S. state 73.3 20.0 18.7 Outside the U.S. (937.2) 91.2 (61.8) Deferred tax provision 6.4 149.7 102.6 Provision for income taxes $ 1,410.2 $ 1,992.7 $ 1,891.8 |
Net Deferred Tax Liabilities | Net deferred tax (assets) liabilities consisted of: In millions December 31, 2020 2019 Lease right-of-use asset $ 3,427.3 $ 3,296.8 Property and equipment 1,600.4 1,316.4 Intangible assets 1,046.2 334.8 Other 322.4 511.1 Total deferred tax liabilities 6,396.3 5,459.1 Lease liability (3,462.0) (3,331.1) Intangible assets (2,095.9) (1,051.0) Property and equipment (593.8) (585.6) Deferred foreign tax credits (289.3) (311.2) Employee benefit plans (190.8) (192.3) Deferred revenue (154.8) (145.5) Operating loss carryforwards (86.8) (81.5) Other (449.0) (323.6) Total deferred tax assets before valuation allowance (7,322.4) (6,021.8) Valuation allowance 816.0 741.9 Net deferred tax (assets) liabilities $ (110.1) $ 179.2 Balance sheet presentation: Deferred income taxes $ 2,025.6 $ 1,318.1 Other assets-miscellaneous (2,135.7) (1,138.9) Net deferred tax (assets) liabilities $ (110.1) $ 179.2 |
Statutory U.S. Federal Income Tax Rate Reconciliation to Effective Income Tax Rates | The statutory U.S. federal income tax rate reconciles to the effective income tax rates as follows: 2020 2019 2018 Statutory U.S. federal income tax rate 21.0 % 21.0 % 21.0 % State income taxes, net of related federal income tax benefit 1.8 1.8 1.8 Foreign income taxed at different rates 0.4 1.6 1.5 Tax impact of intercompany transactions 2.1 — — Global intangible low-tax income ("GILTI") 1.2 1.3 0.4 Foreign-derived intangible income ("FDII") (3.4) (1.3) (1.4) Transition tax — — 1.0 U.S./Foreign tax law changes (1.8) — — Foreign tax credit redetermination regulations — (1.0) — Other, net 1.7 1.5 (0.1) Effective income tax rates 23.0 % 24.9 % 24.2 % |
Reconciliation of Beginning and Ending Amounts of Unrecognized Tax Benefits | The following table presents a reconciliation of the beginning and ending amounts of unrecognized tax benefits: In millions 2020 2019 Balance at January 1 $ 1,439.1 $ 1,342.8 Decreases for positions taken in prior years (71.4) (18.3) Increases for positions taken in prior years 38.5 107.1 Increases for positions related to the current year 89.6 88.3 Settlements with taxing authorities (3.9) (68.6) Lapsing of statutes of limitations (12.7) (12.2) Balance at December 31 (1) $ 1,479.2 $ 1,439.1 (1) Of this amount, $1,137.8 million and $1,285.3 million are included in Long-term income taxes for 2020 and 2019, respectively, and $325.0 million and $138.8 million are included in Prepaid expenses and other current assets for 2020 and 2019, respectively, on the Consolidated Balance Sheet. The remainder is included in Deferred income taxes on the Consolidated Balance Sheet. |
Debt Financing (Tables)
Debt Financing (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Summary of Debt Obligations | The following table summarizes the Company’s debt obligations (interest rates and debt amounts reflected in the table include the effects of interest rate swaps used to hedge debt). Interest rates (1) December 31 Amounts outstanding In millions of U.S. Dollars Maturity dates 2020 2019 2020 2019 Fixed 3.9 % 4.0 % $ 22,734.5 $ 19,340.2 Floating 0.9 2.2 1,150.0 2,049.3 Total U.S. Dollar 2021-2050 23,884.5 21,389.5 Fixed 1.5 1.5 9,453.9 8,671.8 Floating 2.1 2.3 366.5 337.0 Total Euro 2021-2031 9,820.4 9,008.8 Fixed 3.4 3.4 845.1 771.0 Floating 1.2 2.0 230.8 210.6 Total Australian Dollar 2024-2029 1,075.9 981.6 Total British Pounds Sterling - Fixed 2032-2054 4.2 4.6 1,156.4 1,386.3 Total Canadian Dollar - Fixed 2021-2025 3.1 3.1 784.9 768.6 Total Japanese Yen - Fixed 2030 2.9 2.9 121.1 115.1 Fixed 0.2 0.2 451.9 413.8 Floating 1.9 2.2 265.7 241.8 Total other currencies (2) 2021-2024 717.6 655.6 Debt obligations before fair value adjustments and deferred debt costs (3) 37,560.8 34,305.5 Fair value adjustments (4) 35.8 12.1 Deferred debt costs (156.2) (140.4) Total debt obligations $ 37,440.4 $ 34,177.2 (1) Weighted-average effective rate, computed on a semi-annual basis. (2) Consists of Swiss Francs and Korean Won. (3) Aggregate maturities for 2020 debt balances, before fair value adjustments and deferred debt costs, are as follows (in millions): 2021–$2,243.6; 2022–$2,332.2; 2023–$2,643.9; 2024–$3,300.7; 2025–$3,159.6; Thereafter–$23,880.8. These amounts include a reclassification of short-term obligations totaling $268.9 million to long-term obligations as they are supported by a long-term line of credit agreement expiring in December 2024. (4) The carrying value of underlying items in fair value hedges, in this case debt obligations, are adjusted for fair value changes to the extent they are attributable to the risk designated as being hedged. The related hedging instruments are also recorded at fair value on the Consolidated Balance Sheet. |
Share-based Compensation (Table
Share-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Compensation Expense | Share-based compensation expense and the effect on diluted earnings per common share were as follows: In millions, except per share data 2020 2019 2018 Share-based compensation expense $ 92.4 $ 109.6 $ 125.1 After tax $ 78.3 $ 94.2 $ 108.1 Earnings per common share-diluted $ 0.10 $ 0.12 $ 0.14 |
Schedule of Weighted Average Assumptions | Weighted-average assumptions 2020 2019 2018 Expected dividend yield 2.3 % 2.7 % 2.6 % Expected stock price volatility 19.1 % 18.9 % 18.7 % Risk-free interest rate 1.4 % 2.5 % 2.7 % Expected life of options (in years) 5.7 5.8 5.8 Fair value per option granted $ 29.40 $ 25.60 $ 23.80 |
Summary of Stock Option Grants | A summary of the status of the Company’s stock option grants as of December 31, 2020, 2019 and 2018, and changes during the years then ended, is presented in the following table: 2020 2019 2018 Options Shares in Weighted- Weighted- Aggregate Shares in Weighted- Shares in Weighted- Outstanding at beginning of year 14.6 $ 124.21 16.6 $ 113.06 18.9 $ 101.55 Granted 1.8 214.18 2.0 175.17 2.7 157.95 Exercised (2.8) 104.58 (3.6) 97.70 (4.5) 89.31 Forfeited/expired (0.2) 184.69 (0.4) 154.65 (0.5) 137.08 Outstanding at end of year 13.4 $ 139.44 5.8 $ 1,005.5 14.6 $ 124.21 16.6 $ 113.06 Exercisable at end of year 8.8 $ 118.46 4.6 $ 843.1 9.2 10.0 |
Summary of Restricted Stock Unit Activity | A summary of the Company’s RSU activity during the years ended December 31, 2020, 2019 and 2018 is presented in the following table: 2020 2019 2018 RSUs Shares in Weighted- Shares in Weighted- Shares in Weighted- Nonvested at beginning of year 1.4 $ 150.95 1.5 $ 132.56 1.6 $ 107.34 Granted 0.6 201.92 0.6 171.48 0.6 158.28 Vested (0.6) 127.99 (0.6) 116.42 (0.6) 91.20 Forfeited (0.1) 172.45 (0.1) 153.58 (0.1) 132.14 Nonvested at end of year 1.3 $ 176.81 1.4 $ 150.95 1.5 $ 132.56 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies Restaurant Information by Ownership Type (Detail) $ in Millions | Dec. 31, 2020USD ($)Restaurant | Dec. 31, 2019USD ($)Restaurant | Dec. 31, 2018Restaurant |
Segment Reporting Information [Line Items] | |||
Number of Restaurants | Restaurant | 39,198 | 38,695 | 37,855 |
Debt obligations, fair value | $ 43,700 | ||
Amounts outstanding | $ 37,440.4 | $ 34,177.2 | |
Franchised restaurants: | |||
Segment Reporting Information [Line Items] | |||
Number of Restaurants | 36,521 | 36,059 | 35,085 |
Company-operated restaurants: | |||
Segment Reporting Information [Line Items] | |||
Number of Restaurants | 2,677 | 2,636 | 2,770 |
Conventional franchised | Franchised restaurants: | |||
Segment Reporting Information [Line Items] | |||
Number of Restaurants | 21,712 | 21,837 | 21,685 |
Developmental licensed | Franchised restaurants: | |||
Segment Reporting Information [Line Items] | |||
Number of Restaurants | 7,663 | 7,648 | 7,225 |
Affiliated | Franchised restaurants: | |||
Segment Reporting Information [Line Items] | |||
Number of Restaurants | 7,146 | 6,574 | 6,175 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies Lease Accounting (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Lease right-of-use asset, net | $ 13,827,700,000 | $ 13,261,200,000 |
Operating Lease, Liability | 14,022,800,000 | |
Deferred collection amount of rental income | $ 490 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies Property and Equipment Narrative (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 40 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Estimated Useful Lives | the lesser of useful lives of assets or lease terms |
Equipment [Member] | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Equipment [Member] | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 12 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies Capitalized Software (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | |||
Capitalized Computer Software, Net | $ 691,200,000 | $ 665,400,000 | $ 609,700,000 |
Asset Impairment Charges | $ 26.3 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies Long-Lived Assets Narrative (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Long Lived Assets Impairment Test Period | 12 months |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies Goodwill Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill [Line Items] | ||
Impairment losses | $ 0 | |
Goodwill, Impaired, Accumulated Impairment Loss | $ 14.5 | $ 113.9 |
GoodiwillWrittenOffRelatedToSaleOfCompanyRestaurantMonthsFromAcquisition | 24 | |
Fair Value Goodwill Written Off Related To Sale Of Restaurant Minimum Months Company Operated | 24 | |
Goodwill, Impaired, Accumulated Impairment Loss | $ 14.5 | $ 113.9 |
U.S. | ||
Goodwill [Line Items] | ||
Impairment losses | $ 0 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies Activity in Goodwill by Segment (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Goodwill [Line Items] | |
Beginning balance | $ 2,677.4 |
Business Acquisition, Goodwill, Expected Tax Deductible Amount | 9.8 |
Net restaurant purchases (sales) | 9.7 |
Impairment losses | 0 |
Currency translation | 76.2 |
Ending balance | 2,773.1 |
U.S. | |
Goodwill [Line Items] | |
Beginning balance | 1,615.8 |
Business Acquisition, Goodwill, Expected Tax Deductible Amount | 9.8 |
Net restaurant purchases (sales) | (0.1) |
Impairment losses | 0 |
Currency translation | 0 |
Ending balance | 1,625.5 |
International Operated Markets [Member] | |
Goodwill [Line Items] | |
Beginning balance | 1,061.6 |
Business Acquisition, Goodwill, Expected Tax Deductible Amount | 0 |
Net restaurant purchases (sales) | 9.8 |
Impairment losses | 0 |
Currency translation | 76.2 |
Ending balance | 1,147.6 |
International Developmental Licensed Markets and Corporate [Member] | |
Goodwill [Line Items] | |
Beginning balance | 0 |
Business Acquisition, Goodwill, Expected Tax Deductible Amount | 0 |
Net restaurant purchases (sales) | 0 |
Impairment losses | 0 |
Currency translation | 0 |
Ending balance | $ 0 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies Advertising Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | |||
Company Operated Restaurant Advertising Expense | $ 325.5 | $ 365.8 | $ 388.8 |
Other Marketing Related Expenses | $ 329.2 | $ 81.5 | $ 88 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies Fair Value Measurements Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value Measurements [Line Items] | ||
Debt obligations, fair value | $ 43,700 | |
Amounts outstanding | $ 37,440.4 | $ 34,177.2 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt obligations, fair value | $ 43,700 | |
Amounts outstanding | 37,440.4 | $ 34,177.2 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Derivative assets | 227 | 224.7 |
Derivative payables | 97.5 | 11.3 |
Level 1 | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Derivative assets | 185.6 | 179.1 |
Level 2 | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Derivative assets | 41.4 | 45.6 |
Derivative payables | $ 97.5 | $ 11.3 |
Summary of Significant Accou_14
Summary of Significant Accounting Policies Fair Values of Derivative Instruments Included on Consolidated Balance Sheet (Detail) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivatives, Fair Value [Line Items] | ||||
Asset Derivatives Fair Value | $ 227 | $ 224.7 | ||
Liability Derivatives Fair Value | 97.5 | 11.3 | ||
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | (123.3) | (20.4) | $ 48.9 | |
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax | $ 111.3 | |||
Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Asset Derivatives Fair Value | 41.4 | 31.6 | ||
Liability Derivatives Fair Value | 79.5 | 6.4 | ||
Not Designated as Hedging Instrument [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Asset Derivatives Fair Value | 185.6 | 193.1 | ||
Liability Derivatives Fair Value | 18 | 4.9 | ||
Gain (Loss) Recognized in Income on Derivative | (0.6) | 86 | ||
Royalty Arrangement | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative, Notional Amount | $ 1,200 | |||
Period covered by hedge | 18 months | |||
Foreign currency | Not Designated as Hedging Instrument [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Gain (Loss) Recognized in Income on Derivative | (29) | 14.2 | ||
Foreign currency | Prepaid expenses and other current assets | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Asset Derivatives Fair Value | 10 | |||
Foreign currency | Prepaid expenses and other current assets | Not Designated as Hedging Instrument [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Asset Derivatives Fair Value | 12.4 | |||
Foreign currency | Accrued payroll and other liabilities | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liability Derivatives Fair Value | 64.5 | 5.2 | ||
Foreign currency | Accrued payroll and other liabilities | Not Designated as Hedging Instrument [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Liability Derivatives Fair Value | 9.4 | 4.8 | ||
Foreign currency | Miscellaneous other assets | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Asset Derivatives Fair Value | 5.6 | 9.5 | ||
Foreign currency | Other long- term liabilities | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liability Derivatives Fair Value | 15 | 1.2 | ||
Interest rate | Accrued payroll and other liabilities | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liability Derivatives Fair Value | 0 | |||
Interest rate | Miscellaneous other assets | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Asset Derivatives Fair Value | 35.8 | 12.1 | ||
Interest rate | Other long- term liabilities | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liability Derivatives Fair Value | 0 | |||
Equity | Not Designated as Hedging Instrument [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Gain (Loss) Recognized in Income on Derivative | 44.4 | 71.8 | ||
Equity | Prepaid expenses and other current assets | Not Designated as Hedging Instrument [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Asset Derivatives Fair Value | 185.6 | 1.6 | ||
Equity | Accrued payroll and other liabilities | Not Designated as Hedging Instrument [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Liability Derivatives Fair Value | 8.6 | 0.1 | ||
Equity | Miscellaneous other assets | Not Designated as Hedging Instrument [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Asset Derivatives Fair Value | $ 179.1 | |||
Fair Value Hedging [Member] | Interest Rate Risk [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Increase (Decrease) in Fair Value of Interest Rate Fair Value Hedging Instruments | $ 35.8 | |||
Gain (Loss) Recognized in Income on Derivative | $ 23.7 | |||
Interest Rate Swap [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative, Notional Amount | 1,100 | |||
Intercompany Debt [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Notional Amount of Nonderivative Instruments | 843.2 | |||
Debt [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Notional Amount of Nonderivative Instruments | $ 13,300 |
Summary of Significant Accou_15
Summary of Significant Accounting Policies Derivatives Pretax Amounts Affecting Income and Other Comprehensive Income (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash Flow Hedging [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion) | $ (167.4) | $ 22.5 |
Gain (Loss) Reclassified into Income from Accumulated OCI (Effective Portion) | (7.5) | 49 |
Net Investment Hedging Relationships | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion) | (1,002) | 329.1 |
Gain (Loss) Reclassified into Income from Accumulated OCI (Effective Portion) | 33.7 | |
Gain (Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing and Ineffective Portion) | 14.7 | 11.7 |
Interest rate | Cash Flow Hedging [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion) | (90.8) | |
Gain (Loss) Reclassified into Income from Accumulated OCI (Effective Portion) | (5.4) | (1.3) |
Foreign currency denominated debt | Net Investment Hedging Relationships | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion) | (989.7) | 317.3 |
Gain (Loss) Reclassified into Income from Accumulated OCI (Effective Portion) | 33.7 | |
Foreign currency | Cash Flow Hedging [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion) | (76.6) | 22.5 |
Gain (Loss) Reclassified into Income from Accumulated OCI (Effective Portion) | (2.1) | 50.3 |
Foreign currency derivatives | Net Investment Hedging Relationships | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion) | (12.3) | 11.8 |
Cross Currency Interest Rate Contract [Member] | Net Investment Hedging Relationships | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing and Ineffective Portion) | 14.7 | 11.7 |
Not Designated as Hedging Instrument [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) Recognized in Income on Derivative | (0.6) | 86 |
Not Designated as Hedging Instrument [Member] | Foreign currency | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) Recognized in Income on Derivative | (29) | 14.2 |
Not Designated as Hedging Instrument [Member] | Equity | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) Recognized in Income on Derivative | 44.4 | $ 71.8 |
Not Designated as Hedging Instrument [Member] | Equity Contract [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) Recognized in Income on Derivative | $ (16) |
Summary of Significant Accou_16
Summary of Significant Accounting Policies Per Common Share Information (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 5.5 | 6.8 | 7.3 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1.8 | 0.1 | 0.5 |
Summary of Significant Accou_17
Summary of Significant Accounting Policies Recent Accounting Pronouncements (Details) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Accounting Policies [Abstract] | |
Allowance For Doubtful Accounts, Accounts Receivable | $ 55.3 |
Summary of Significant Accou_18
Summary of Significant Accounting Policies Cash and Equivalents (Details) | Dec. 31, 2020USD ($) |
Accounting Policies [Abstract] | |
Certificates of Deposit, at Carrying Value | $ 2 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 3.4 |
Segment and Geographic Inform_3
Segment and Geographic Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Entity Wide Revenue Major Customer [Line Items] | |||
Total revenues | $ 19,207.8 | $ 21,364.4 | $ 21,257.9 |
Total operating income | 7,324 | 9,069.8 | 8,822.6 |
Total assets | 52,626.8 | 47,510.8 | 32,811.2 |
Total capital expenditures | 1,640.8 | 2,393.7 | 2,741.7 |
Depreciation and amortization | 1,751.4 | 1,617.9 | 1,482 |
International Operated Markets [Member] | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Total revenues | 9,570.7 | 11,480.1 | 11,578.1 |
Total operating income | 3,315.1 | 4,789 | 4,643.2 |
Total assets | 24,744 | 22,847.5 | 17,302.3 |
Total capital expenditures | 731.5 | 886.6 | 762.4 |
Depreciation and amortization | 678.5 | 669.3 | 703.9 |
International Developmental Licensed Markets and Corporate [Member] | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Total revenues | 1,808.6 | 1,881.5 | 1,881.1 |
Total operating income | 219.8 | 212.1 | 163.8 |
Total assets | 6,872.8 | 3,286.4 | 1,025.1 |
Total capital expenditures | 18.9 | 26.6 | 129.5 |
Depreciation and amortization | 259.1 | 218.4 | 179.7 |
United States [Member] | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Total revenues | 7,828.5 | 8,002.8 | 7,798.7 |
Total operating income | 3,789.1 | 4,068.7 | 4,015.6 |
Total assets | 21,010 | 21,376.9 | 14,483.8 |
Total capital expenditures | 890.4 | 1,480.5 | 1,849.8 |
Depreciation and amortization | $ 813.8 | $ 730.2 | $ 598.4 |
Segment and Geographic Inform_4
Segment and Geographic Information - Additional Information (Detail) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Total long lived assets | $ 39,696.3 | $ 38,291.5 |
U.S. | ||
Segment Reporting Information [Line Items] | ||
Total long lived assets | $ 19,509.7 | $ 19,487.6 |
Net Property and Equipment (Det
Net Property and Equipment (Detail) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Land | $ 6,349.1 | $ 6,026.4 |
Buildings and improvements on owned land | 18,218.9 | 17,003.7 |
Buildings and improvements on leased land | 13,364.5 | 12,605.9 |
Equipment, signs and seating | 3,119 | 2,994.5 |
Other | 425 | 420.4 |
Property and equipment, at cost | 41,476.5 | 39,050.9 |
Accumulated depreciation and amortization | (16,518.3) | (14,890.9) |
Net property and equipment | $ 24,958.2 | $ 24,160 |
Property and Equipment Property
Property and Equipment Property and Equipment - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization expense for property and equipment | $ 1,469.4 | $ 1,392.2 | $ 1,302.9 |
Revenues from Franchised Restau
Revenues from Franchised Restaurants (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Franchisor Disclosure [Line Items] | |||
Rents | $ 6,844.7 | $ 7,500.2 | $ 7,082.2 |
Royalties | 3,831.5 | 4,107.1 | 3,886.3 |
Initial Fees | 49.9 | 48.4 | 44 |
Revenues from franchised restaurants | $ 10,726.1 | $ 11,655.7 | $ 11,012.5 |
Future Gross Minimum Rent Payme
Future Gross Minimum Rent Payments due to Company under Existing Conventional Franchise Arrangements (Detail) $ in Millions | Dec. 31, 2020USD ($) |
Owned sites | |
Leases Disclosure [Line Items] | |
2021 | $ 1,586.8 |
2022 | 1,526.5 |
2023 | 1,472.8 |
2024 | 1,433 |
2025 | 1,394.1 |
Thereafter | 10,908.6 |
Total minimum payments | 18,321.8 |
Leased sites | |
Leases Disclosure [Line Items] | |
2021 | 1,486 |
2022 | 1,428.1 |
2023 | 1,362 |
2024 | 1,310.2 |
2025 | 1,247.7 |
Thereafter | 9,266.4 |
Total minimum payments | 16,100.4 |
Property Subject to or Available for Operating Lease [Domain] | |
Leases Disclosure [Line Items] | |
2021 | 3,072.8 |
2022 | 2,954.6 |
2023 | 2,834.8 |
2024 | 2,743.2 |
2025 | 2,641.8 |
Thereafter | 20,175 |
Total minimum payments | $ 34,422.2 |
Franchise Arrangements - Additi
Franchise Arrangements - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Franchisor Disclosure [Line Items] | ||
Franchise arrangement period | 20 years | |
Net property and equipment | $ 24,958,200,000 | $ 24,160,000,000 |
Land | 6,349,100,000 | 6,026,400,000 |
Accumulated depreciation and amortization of property and equipment | 16,518,300,000 | $ 14,890,900,000 |
Deferred collection amount of rental and royalty income | 1 | |
Franchise Arrangements | ||
Franchisor Disclosure [Line Items] | ||
Net property and equipment | 20,000,000,000 | |
Land | 5,700,000,000 | |
Accumulated depreciation and amortization of property and equipment | $ 12,100,000,000 |
Detail of Rent Expense (Detail)
Detail of Rent Expense (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Leases Disclosure [Line Items] | |||
Restaurants | $ 1,399.5 | $ 1,530.4 | $ 1,433.9 |
Other | 79.8 | 76.4 | 87.9 |
Rent Expense | $ 1,479.3 | $ 1,606.8 | $ 1,521.8 |
Leasing Arrangements Maturities
Leasing Arrangements Maturities of Operating Lease Liabilities (Details) $ in Millions | Dec. 31, 2020USD ($) |
Leases [Abstract] | |
2021 | $ 1,230.7 |
2022 | 1,197.7 |
2023 | 1,159.8 |
2024 | 1,124 |
2025 | 1,082.1 |
Thereafter | 14,295.7 |
Total Lease Payments | 20,090 |
Imputed Interest | (6,067.2) |
Operating Lease, Liability | $ 14,022.8 |
Leasing Arrangements - Addition
Leasing Arrangements - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Leased Assets [Line Items] | |||
Net Investment in Lease, Change in Present Value, Expense (Reversal) | $ 600 | ||
Lease term | 20 years | ||
Weighted Average Lease Term | 20 years | ||
Operating Lease, Weighted Average Discount Rate, Percent | 3.80% | 4.00% | |
Company-operated restaurants: | |||
Operating Leased Assets [Line Items] | |||
Percent rents in excess of minimum rents | $ 53.7 | $ 74.4 | $ 82.1 |
Franchised restaurants: | |||
Operating Leased Assets [Line Items] | |||
Percent rents in excess of minimum rents | $ 136.5 | $ 200.7 | $ 200.8 |
Minimum | |||
Operating Leased Assets [Line Items] | |||
Escalation timing | 1 year | ||
Maximum | |||
Operating Leased Assets [Line Items] | |||
Escalation timing | 5 years |
Other Operating (Income) Expe_3
Other Operating (Income) Expenses by Component (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |||
Gains on sales of restaurant businesses | $ (23.3) | $ (127.5) | $ (304.1) |
Equity in earnings of unconsolidated affiliates | (117.4) | (153.8) | (151.5) |
Asset dispositions and other (income) expense, net | 290.7 | 87.2 | 33.7 |
Impairment and other charges (gains), net | (267.5) | 74.3 | 231.7 |
Total | $ (117.5) | $ (119.8) | $ (190.2) |
Income before Provision for Inc
Income before Provision for Income Taxes, Classified by Source of Income (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Document Fiscal Year Focus | 2020 | ||
U.S. | $ 1,390.4 | $ 2,159.1 | $ 2,218 |
Outside the U.S. | 4,750.3 | 5,859 | 5,598.1 |
Income before provision for income taxes | $ 6,140.7 | $ 8,018.1 | $ 7,816.1 |
Provision for Income Taxes, Cla
Provision for Income Taxes, Classified by Timing and Location of Payment (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Document Fiscal Year Focus | 2020 | ||
U.S. federal | $ 554.1 | $ 521.8 | $ 292.9 |
U.S. state | 119.1 | 194.7 | 183.9 |
Outside the U.S. | 730.6 | 1,126.5 | 1,312.4 |
Current tax provision | 1,403.8 | 1,843 | 1,789.2 |
U.S. federal | 870.3 | 38.5 | 145.7 |
U.S. state | 73.3 | 20 | 18.7 |
Outside the U.S. | (937.2) | 91.2 | (61.8) |
Deferred tax provision | 6.4 | 149.7 | 102.6 |
Provision for income taxes | $ 1,410.2 | $ 1,992.7 | $ 1,891.8 |
Net Deferred Tax Liabilities (D
Net Deferred Tax Liabilities (Detail) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Schedule of Deferred Income Tax Assets and Liabilities | ||
Lease right-of-use asset | $ 3,427.3 | $ 3,296.8 |
Property and equipment | 1,600.4 | 1,316.4 |
Intangible assets | 1,046.2 | 334.8 |
Other | 322.4 | 511.1 |
Total deferred tax liabilities | 6,396.3 | 5,459.1 |
Lease liability | (3,462) | (3,331.1) |
Intangible assets | (2,095.9) | (1,051) |
Property and equipment | (593.8) | (585.6) |
Deferred foreign tax credits | (289.3) | (311.2) |
Employee benefit plans | (190.8) | (192.3) |
Deferred revenue | (154.8) | (145.5) |
Operating loss carryforwards | (86.8) | (81.5) |
Other | (449) | (323.6) |
Total deferred tax assets before valuation allowance | (7,322.4) | (6,021.8) |
Valuation allowance | 816 | 741.9 |
Deferred Tax Liabilities, Net | 179.2 | |
Net deferred tax liabilities | 110.1 | |
Balance sheet presentation: [Abstract] | ||
Deferred Income Taxes | 2,025.6 | 1,318.1 |
Other assets-miscellaneous | ||
Balance sheet presentation: [Abstract] | ||
Deferred tax assets | $ (2,135.7) | $ (1,138.9) |
Statutory U.S. Federal Income T
Statutory U.S. Federal Income Tax Rate Reconcilation to Effective Income Tax Rates (Detail) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Statutory U.S. federal income tax rate | 21.00% | 21.00% | 21.00% |
State income taxes, net of related federal income tax benefit | 1.80% | 1.80% | 1.80% |
Foreign income taxed at different rates | 0.40% | 1.60% | 1.50% |
Tax Impact of Intercompany Transactions | 2.10% | 0.00% | 0.00% |
Effective Income Tax Rate Reconciliation, Global Intangible Low-Taxed Income, Percent | 1.20% | 1.30% | 0.40% |
Effective Income Tax Rate Reconciliation Foreign Derived Intangible Income | (3.40%) | (1.30%) | (1.40%) |
Transition Tax | 0.00% | 0.00% | 1.00% |
Tax law changes | (1.80%) | 0.00% | 0.00% |
Foreign tax credit redetermination regulations | 0.00% | (1.00%) | 0.00% |
Other, net | 1.70% | 1.50% | (0.10%) |
Effective income tax rates | 23.00% | 24.90% | 24.20% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |||
Income Taxes [Line Items] | ||||||
Document Period End Date | Dec. 31, 2020 | |||||
Operating loss carryforwards | $ 392.5 | |||||
Unrecognized tax benefits | 1,479.2 | [1] | $ 1,439.1 | [1] | $ 1,342.8 | |
Reasonably possible amount of unrecognized tax benefits decrease within the next 12 months - minimum | 1,040 | |||||
Effective tax rate adjustment | 940 | |||||
Accrued interest and penalties related to income tax matters | 177.4 | 174.4 | ||||
Provision for income taxes, interest and penalties expense related to tax matters | $ 32.4 | $ 39.9 | 13.9 | |||
Tax Cuts and Jobs Act, Transition Tax for Accumulated Foreign Earnings, Liability, Noncurrent | $ 1,200 | |||||
Adjustments to Provisional Amounts Recorded at December 31, 2017 (Tax Cuts and Jobs Act of 2017) | $ 75 | |||||
Statutory U.S. federal income tax rate | 21.00% | 21.00% | 21.00% | |||
Indefinite [Member] | ||||||
Income Taxes [Line Items] | ||||||
Operating loss carryforwards | $ 228.2 | |||||
[1] | Of this amount, $1,137.8 million and $1,285.3 million are included in Long-term income taxes for 2020 and 2019, respectively, and $325.0 million and $138.8 million are included in Prepaid expenses and other current assets for 2020 and 2019, respectively, on the Consolidated Balance Sheet. The remainder is included in Deferred income taxes on the Consolidated Balance Sheet. |
Reconciliation of Beginning and
Reconciliation of Beginning and Ending Amounts of Unrecognized Tax Benefits (Detail) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | |||
Income Tax Disclosure [Abstract] | ||||
Unrecognized tax benefits, beginning balance | $ 1,439.1 | [1] | $ 1,342.8 | |
Decreases for positions taken in prior years | (71.4) | (18.3) | ||
Increases for positions taken in prior years | 38.5 | 107.1 | ||
Increases for positions related to the current year | 89.6 | 88.3 | ||
Settlements with taxing authorities | (3.9) | (68.6) | ||
Lapsing of statutes of limitations | (12.7) | (12.2) | ||
Unrecognized tax benefits | [1] | $ 1,479.2 | $ 1,439.1 | |
[1] | Of this amount, $1,137.8 million and $1,285.3 million are included in Long-term income taxes for 2020 and 2019, respectively, and $325.0 million and $138.8 million are included in Prepaid expenses and other current assets for 2020 and 2019, respectively, on the Consolidated Balance Sheet. The remainder is included in Deferred income taxes on the Consolidated Balance Sheet. |
Reconciliation of Beginning a_2
Reconciliation of Beginning and Ending Amounts of Unrecognized Tax Benefits (Table Footnotes) (Detail) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Income Taxes [Line Items] | |||||
Unrecognized tax benefits | $ 1,479.2 | [1] | $ 1,439.1 | [1] | $ 1,342.8 |
Long-term income taxes | |||||
Income Taxes [Line Items] | |||||
Unrecognized tax benefits | 1,137.8 | 1,285.3 | |||
Prepaid expenses and other current assets | |||||
Income Taxes [Line Items] | |||||
Unrecognized tax benefits | $ 325 | $ 138.8 | |||
[1] | Of this amount, $1,137.8 million and $1,285.3 million are included in Long-term income taxes for 2020 and 2019, respectively, and $325.0 million and $138.8 million are included in Prepaid expenses and other current assets for 2020 and 2019, respectively, on the Consolidated Balance Sheet. The remainder is included in Deferred income taxes on the Consolidated Balance Sheet. |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule Of Employee Benefit Plans [Line Items] | |||
Tax-deferred contributions, description of plan | The Company also maintains certain unfunded nonqualified supplemental benefit plans that allow participants to (i) make tax-deferred contributions and (ii) receive Company-provided matching allocations that cannot be made under the 401(k) Plan because of IRS limitations. The investment alternatives and returns are based on certain market-rate investment alternatives under the 401(k) Plan, net of expenses. | ||
Supplemental benefit plan liabilities | $ 431.2 | $ 435 | |
Derivative contracts, reasons for holding derivative instruments | The Company has entered into derivative contracts to hedge market-driven changes in certain of the liabilities. | ||
Investment, indexed to Market Indices Fair Value | $ 180.4 | ||
Derivative contracts, disclosure of the effect on the results of operations | Changes in liabilities for these nonqualified plans and in the fair value of the derivatives are recorded primarily in Selling, general & administrative expenses. Changes in fair value of the derivatives indexed to the Company’s stock are recorded in the income statement because the contracts provide the counterparty with a choice to settle in cash or shares. | ||
Maximum | |||
Schedule Of Employee Benefit Plans [Line Items] | |||
Participants' future contributions to the 401(k) feature and the discretionary employer matching contribution feature | 20.00% | ||
U.S. | |||
Schedule Of Employee Benefit Plans [Line Items] | |||
Profit sharing and savings plan costs | $ 37 | 30.4 | $ 18 |
Outside the U.S. | |||
Schedule Of Employee Benefit Plans [Line Items] | |||
Profit sharing and savings plan costs | 36.6 | 35.3 | $ 33.7 |
Total liabilities for international retirement plans | $ 45.5 | $ 42.3 |
Debt Financing - Additional Inf
Debt Financing - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Line Items] | ||
Weighted-average interst rate on short-term borrowings | 1.90% | 1.90% |
Revolving Credit Facility [Member] | Unused lines of Credit [Member] | ||
Debt Disclosure [Line Items] | ||
Unused Line of credit | $ 4,500 | |
Revolving Credit Facility [Member] | Unused lines of Credit [Member] | Unused lines of Credit [Member] | ||
Debt Disclosure [Line Items] | ||
Unused Line of credit | $ 3,500 | |
Unused Line of credit agreement, fees | 0.09% | |
Revolving Credit Facility [Member] | Unused lines of Credit [Member] | Unused lines of Credit [Member] | ||
Debt Disclosure [Line Items] | ||
Unused Line of credit | $ 1,000 | |
Unused Line of credit agreement, fees | 0.375% | |
Outside the U.S. | ||
Debt Disclosure [Line Items] | ||
Foreign currency bank line borrowings | $ 265.7 | $ 242.4 |
Outside the U.S. | Unused lines of Credit [Member] | ||
Debt Disclosure [Line Items] | ||
Line of Credit Facility, Currency | denominated in various currencies | |
Line of Credit Facility, Interest Rate Description | local market rates of interest | |
U.S. | ||
Debt Disclosure [Line Items] | ||
Commercial Paper | $ 899.3 |
Summary of Debt Obligations (De
Summary of Debt Obligations (Detail) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | ||
Debt Disclosure [Line Items] | ||||
Amounts outstanding | $ 37,440.4 | $ 34,177.2 | ||
Deferred Finance Costs, Own-share Lending Arrangement, Issuance Costs, Net | 156.2 | 140.4 | ||
Debt Obligations Before Fair Value Adjustments | ||||
Debt Disclosure [Line Items] | ||||
Amounts outstanding | 37,560.8 | [1] | 34,305.5 | |
Fair Value Hedging [Member] | ||||
Debt Disclosure [Line Items] | ||||
Amounts outstanding | [2] | 35.8 | 12.1 | |
Currency US Dollar | ||||
Debt Disclosure [Line Items] | ||||
Amounts outstanding | $ 23,884.5 | $ 21,389.5 | ||
Currency US Dollar | Fixed Rate Debt | ||||
Debt Disclosure [Line Items] | ||||
Interest rates | [3] | 3.90% | 4.00% | |
Amounts outstanding | $ 22,734.5 | $ 19,340.2 | ||
Currency US Dollar | Floating Rate Debt | ||||
Debt Disclosure [Line Items] | ||||
Interest rates | [3] | 0.90% | 2.20% | |
Amounts outstanding | $ 1,150 | $ 2,049.3 | ||
Currency Euro | ||||
Debt Disclosure [Line Items] | ||||
Amounts outstanding | $ 9,820.4 | $ 9,008.8 | ||
Currency Euro | Fixed Rate Debt | ||||
Debt Disclosure [Line Items] | ||||
Interest rates | [3] | 1.50% | 1.50% | |
Amounts outstanding | $ 9,453.9 | $ 8,671.8 | ||
Currency Euro | Floating Rate Debt | ||||
Debt Disclosure [Line Items] | ||||
Interest rates | [3] | 2.10% | 2.30% | |
Amounts outstanding | $ 366.5 | $ 337 | ||
Currency Australian Dollars | ||||
Debt Disclosure [Line Items] | ||||
Amounts outstanding | $ 1,075.9 | $ 981.6 | ||
Currency Australian Dollars | Fixed Rate Debt | ||||
Debt Disclosure [Line Items] | ||||
Interest rates | [3] | 3.40% | 3.40% | |
Amounts outstanding | $ 845.1 | $ 771 | ||
Currency Australian Dollars | Floating Rate Debt | ||||
Debt Disclosure [Line Items] | ||||
Interest rates | [3] | 1.20% | 2.00% | |
Amounts outstanding | $ 230.8 | $ 210.6 | ||
Currency Japanese Yen | Fixed Rate Debt | ||||
Debt Disclosure [Line Items] | ||||
Interest rates | [3] | 2.90% | 2.90% | |
Amounts outstanding | $ 121.1 | $ 115.1 | ||
Currency British Pound Sterling [Member] | Fixed Rate Debt | ||||
Debt Disclosure [Line Items] | ||||
Interest rates | [3] | 4.20% | 4.60% | |
Amounts outstanding | $ 1,156.4 | $ 1,386.3 | ||
Currency Canadian Dollar [Member] | Fixed Rate Debt | ||||
Debt Disclosure [Line Items] | ||||
Interest rates | [3] | 3.10% | 3.10% | |
Amounts outstanding | $ 784.9 | $ 768.6 | ||
Foreign currency denominated debt | ||||
Debt Disclosure [Line Items] | ||||
Amounts outstanding | [4] | $ 717.6 | $ 655.6 | |
Foreign currency denominated debt | Fixed Rate Debt | ||||
Debt Disclosure [Line Items] | ||||
Interest rates | 0.20% | 0.20% | ||
Amounts outstanding | $ 451.9 | $ 413.8 | ||
Foreign currency denominated debt | Floating Rate Debt | ||||
Debt Disclosure [Line Items] | ||||
Interest rates | 1.90% | 2.20% | ||
Amounts outstanding | $ 265.7 | $ 241.8 | ||
[1] | Aggregate maturities for 2020 debt balances, before fair value adjustments and deferred debt costs, are as follows (in millions): 2021–$2,243.6; 2022–$2,332.2; 2023–$2,643.9; 2024–$3,300.7; 2025–$3,159.6; Thereafter–$23,880.8. These amounts include a reclassification of short-term obligations totaling $268.9 million to long-term obligations as they are supported by a long-term line of credit agreement expiring in December 2024 | |||
[2] | The carrying value of underlying items in fair value hedges, in this case debt obligations, are adjusted for fair value changes to the extent they are attributable to the risk designated as being hedged. The related hedging instruments are also recorded at fair value on the Consolidated Balance Sheet. | |||
[3] | Weighted-average effective rate, computed on a semi-annual basis. | |||
[4] | onsists of Swiss Francs and Korean Won. |
Summary of Debt Obligations (Ta
Summary of Debt Obligations (Table Footnotes) (Detail) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Line Items] | ||
2021 | $ 2,243.6 | |
2022 | 2,332.2 | |
2023 | 2,643.9 | |
2024 | 3,300.7 | |
2025 | 3,159.6 | |
Thereafter | 23,880.8 | |
Reclassification to Long Term Debt | 268.9 | |
Amounts outstanding | $ 37,440.4 | $ 34,177.2 |
Share-based Compensation - Addi
Share-based Compensation - Additional Information (Detail) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule Of Share Based Compensation Arrangements By Share Based Payment Award Equity Instruments Other Than Options Performance Share Units [Line Items] | ||||
Description of share based compensation plan | The Company maintains a share-based compensation plan, which authorizes the granting of various equity-based incentives including stock options and RSUs to employees and nonemployee directors. | |||
Share-based compensation plan, number of shares of common stock reserved for issuance | 39.3 | |||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 121.5 | |||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 2 years | |||
Stock options, number of years to expire | 10 years | |||
Proceeds from stock option exercises | $ 295.5 | $ 350.5 | $ 403.2 | |
Outstanding stock options | 13.4 | 14.6 | 16.6 | 18.9 |
RSUs vested, total fair value | $ 119.4 | $ 111 | $ 117.9 | |
Stock Compensation Plan | ||||
Schedule Of Share Based Compensation Arrangements By Share Based Payment Award Equity Instruments Other Than Options Performance Share Units [Line Items] | ||||
Outstanding stock options | 24.6 | |||
Stock Option | ||||
Schedule Of Share Based Compensation Arrangements By Share Based Payment Award Equity Instruments Other Than Options Performance Share Units [Line Items] | ||||
Stock options exercised total intrinsic value | $ 290.4 | $ 356.1 | $ 364.4 | |
Tax benefit on stock option exercises and other | $ 59.3 | |||
Restricted Stock Units (RSUs) | ||||
Schedule Of Share Based Compensation Arrangements By Share Based Payment Award Equity Instruments Other Than Options Performance Share Units [Line Items] | ||||
Vesting percentage | 100.00% | |||
Tax benefit on stock option exercises and other | $ 23.6 | |||
Vesting period | 3 years |
Summary of Stock Option Grants
Summary of Stock Option Grants (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock options grant shares | |||
Outstanding at beginning of year | 14.6 | 16.6 | 18.9 |
Granted | 1.8 | 2 | 2.7 |
Exercised | (2.8) | (3.6) | (4.5) |
Forfeited/expired | (0.2) | (0.4) | (0.5) |
Outstanding at end of year | 13.4 | 14.6 | 16.6 |
Exercisable at end of year | 8.8 | 9.2 | 10 |
Stock options grant weighted-average exercise price | |||
Outstanding at beginning of year | $ 124.21 | $ 113.06 | $ 101.55 |
Granted | 214.18 | 175.17 | 157.95 |
Exercised | 104.58 | 97.70 | 89.31 |
Forfeited/expired | 184.69 | 154.65 | 137.08 |
Outstanding at end of year | 139.44 | $ 124.21 | $ 113.06 |
Exercisable at end of year | $ 118.46 | ||
Stock options grant Weighted-average remaining contractual life | |||
Outstanding at end of year | 5 years 9 months 18 days | ||
Exercisable at end of year | 4 years 7 months 6 days | ||
Stock options grant aggregate intrinsic value | |||
Outstanding at end of year | $ 1,005.5 | ||
Exercisable at end of year | $ 843.1 |
Summary of Restricted Stock Uni
Summary of Restricted Stock Unit Activity (Detail) - $ / shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
RSUs shares | |||
Nonvested at beginning of year | 1.4 | 1.5 | 1.6 |
Granted | 0.6 | 0.6 | 0.6 |
Vested | (0.6) | (0.6) | (0.6) |
Forfeited | (0.1) | (0.1) | (0.1) |
Nonvested at end of year | 1.3 | 1.4 | 1.5 |
RSUs weighted-average grant date fair value | |||
Nonvested at beginning of year | $ 150.95 | $ 132.56 | $ 107.34 |
Granted | 201.92 | 171.48 | 158.28 |
Vested | 127.99 | 116.42 | 91.20 |
Forfeited | 172.45 | 153.58 | 132.14 |
Nonvested at end of year | $ 176.81 | $ 150.95 | $ 132.56 |
Compensation Related Costs, Sha
Compensation Related Costs, Share Based Payments (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | |||
Share-based compensation | $ 92.4 | $ 109.6 | $ 125.1 |
After tax | $ 78.3 | $ 94.2 | $ 108.1 |
Earnings per common share-diluted | $ 0.10 | $ 0.12 | $ 0.14 |
Schedule of Weighted Average As
Schedule of Weighted Average Assumptions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | |||
Expected dividend yield | 2.30% | 2.70% | 2.60% |
Expected stock price volatility | 19.10% | 18.90% | 18.70% |
Risk-free interest rate | 1.40% | 2.50% | 2.70% |
Expected life of options In years | 5 years 8 months 12 days | 5 years 9 months 18 days | 5 years 9 months 18 days |
Fair value per option granted | $ 29.40 | $ 25.60 | $ 23.80 |
Quarterly Results (Detail)
Quarterly Results (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Quarterly Financial Information [Line Items] | |||
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 |
Total revenues | 19,207.8 | 21,364.4 | 21,257.9 |
Total operating income | 7,324 | 9,069.8 | 8,822.6 |
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-averaged common shares–basic | 744.6 | 758.1 | 778.2 |
Weighted-averaged common shares–diluted | 750.1 | 764.9 | 785.6 |