2.

0 Organization Profile

McDonald's is the world's leading food service organization. This organization generate more than
$40 billion in worldwide sales. This organization also operate over 30,000 restaurants in more
than 100 countries on six continents. McDonald’ have the benefits that come with scale and a
strong financial position. They own one of the world's most recognized and respected brands.
This organization also have an unparalleled global infrastructure and competencies in restaurant
operations, real estate, retailing, marketing and franchising.

McDonald's restaurants are found in 120 countries and territories around the world and serve 68
million customers each day. McDonald's operates more than 30,000 restaurants worldwide,
employing more than 375,000 people as of the end of 2016. There are more than 5,000 company-
owned locations and around 30,000 franchised locations.

Besides, focusing on its core brand, McDonald's began divesting itself of other chains it had
acquired during the 1990s. The company owned a majority stake in Chipotle Mexican Grill until
October 2006, when McDonald's fully divested from Chipotle through a stock exchange. Until
December 2003, it also owned Domino’s Pizza, and it owned a small share of Aroma Cafe from
1999 to 2001. On August 27, 2007, McDonald's sold Boston Market to Sun Capital Partners.

Notably, McDonald's has increased shareholder dividends for 25 consecutive years and making it
one of the S&P 500 Dividend Aristocrats. In October 2012, its monthly sales fell for the first time
in nine years. In 2014, its quarterly sales fell for the first time in seventeen years, when its sales
dropped for the entirety of 1997.

In the United States, it is reported that drive-thru account for 70 percent of sales. McDonald's
closed down 184 restaurants in the United States in 2015, which was 59 more than what they
planned to open. This move was also the first time McDonald's had a net decrease in the number
of locations in the United States since 1970.

McDonald's shares outstanding history from 2006 to 2018. Shares outstanding can be defined as
the number of shares held by shareholders (including insiders) assuming conversion of all
convertible debt, securities, warrants and options. This metric excludes the company's treasury
shares.

McDonald's shares outstanding for the quarter ending September 30, 2018 were 0.780B, a 4.17%
decline year-over-year.
  McDonald's 2017 shares outstanding were 0.816B, a 5.31% decline from 2016.
 McDonald's 2016 shares outstanding were 0.861B, a 8.83% decline from 2015.
 McDonald's 2015 shares outstanding were 0.945B, a 4.23% decline from 2014.

Institutional investors hold a majority ownership of MCD through the 69.30% of the outstanding
shares that they control. This interest is also higher than at almost any other company in the
Restaurants industry. Last, during the quarter ended September 2018, these large investors
purchased a net $631.1 thousand shares.

 Mutual fund holders 36.49%

 Other institutional 32.81%
 Individual stakeholders 0.25%

McDonald’s industry classification belongs to the retail sector. As to the unions, McDonald's refer
to the quick delivery branch. It specializes in franchising which means that you can virtually buy
a license and become an owner of one of its restaurants.

B. Critical Stock market Information

SHARE REPURCHASES AND DIVIDENDS

For the last three years, the Company returned a total of $16.5 billion to shareholders through a
combination of share repurchases and dividends.

Shares repurchased and dividends

 In millions, except per share data 2012 2011 2010
Number of shares repurchased 28.1 41.9 37.8
Shares outstanding at year end 1,003 1,021 1,054
Dividends declared per share $ 2.87 $ 2.53 $ 2.26
Treasury stock purchases (in $ 2,605 $3,373 $2,648
Shareholders' equity)
Dividends paid 2,897 2,610 2,408
Total returned to shareholders $ 5,502 $5,983 $5,056

Total assets increased $2.4 billion or 7% in 2012. Excluding the effect of changes in
foreign currency exchange rates, total assets increased $2.0 billion in 2012. Over 75% of total
assets were in major markets at year-end 2012. Net property and equipment increased $1.8
billion in 2012 and represented about 70% of total assets at year end. Excluding the effect of
changes in foreign currency exchange rates, net property and equipment increased $1.4 billion
primarily due to capital expenditures, partly offset by depreciation.

Operating income is used to compute return on average assets, while net income is used to
calculate return on average common equity. Month-end balances are used to compute both
average assets and average common equity.

2012 2011 2010

Return on average assets 25.4% 26.0% 24.7%
Return on average common equity 37.5 37.7 35.3

In 2012, return on average assets and return on average common equity decreased due
to the negative impact of foreign currency translation primarily on operating income and net
income. In 2011, return on average assets and return on average common equity benefited from
strong global operating results and the positive impact of foreign currency translation. Operating
income, as reported, does not include interest income; however, cash balances are included in
average assets. The inclusion of cash balances in average assets reduced return on average
assets by about two percentage points for all years presented.
C. Financial Statistics

Balance Sheet

In millions, except per share data December 31, 2011

2012
ASSETS
Current assets
Cash and equivalents $ 2,336.1 $ 2,335.7
Accounts and notes receivable 1,375.3 1,334.7
Inventories, at cost, not in excess of market 121.7 116.8
Prepaid expenses and other current assets 1,089.0 615.8
Total current assets 4,922.1 ` 4,403.0
Other assets
Investments in and advances to affiliates 1,380.5 1,427.0
Goodwill 2,804.0 2,653.2
Miscellaneous 1,602.7 1,672.2
Total other assets 5,787.2 5,752.4
Property and equipment
Property and equipment, at cost 38,491.1 35,737.6
Accumulated depreciation and amortization (13,813.9) (12,903.1)
Net property and equipment 24,677.2 22,834.5
Total assets $ 35,386.5 $ 32,989.9
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable $ 1,141.9 $ 961.3
Income taxes 298.7 262.2
Other taxes 370.7 338.1
Accrued interest 217.0 218.2
Accrued payroll and other liabilities 1,374.8 1,362.8
Current maturities of long-term debt 366.6
Total current liabilities 3,403.1 3,509.2
Long-term debt 13,632.5 12,133.8
Other long-term liabilities 1,526.2 1,612.6
Deferred income taxes 1,531.1 1,344.1
Shareholders’ equity
Preferred stock, no par value; authorized – 165.0 million shares;
issued – none
Common stock, $.01 par value; authorized – 3.5 billion shares; 16.6 16.6
issued – 1,660.6 million shares
Additional paid-in capital 5,778.9 5,487.3
Retained earnings 39,278.0 36,707.5
Accumulated other comprehensive income 796.4 449.7
Common stock in treasury, at cost; 657.9 and 639.2 million shares (30,576.3) (28,270.9)
Total shareholders’ equity 15,293.6 14,390.2
Total liabilities and shareholders’ equity $ 35,386.5 $ 32,989.9
Profit & Loss

The McDonald’s Profit Sharing and Savings Plan for U.S.-based employees includes a
401(k) feature, a regular employee match feature, and a discretionary employer profit sharing
match. The 401(k) feature allows participants to make pretax contributions that are matched
each pay period from shares released under the ESOP. The Profit Sharing and Savings Plan also
provides for a discretionary employer profit sharing match after the end of the year for those
participants eligible to share in the match.

All current account balances and future contributions and related earnings can be invested
in several investment alternatives as well as McDonald’s common stock in accordance with each
participant’s elections. Participants’ contributions to the 401(k) feature and the discretionary
employer matching contribution feature are limited to 20% investment in McDonald’s common
stock. Participants may choose to make separate investment choices for current account balances
and for future contributions.

The Company also maintains certain supplemental benefit plans that allow participants to
make tax-deferred contributions and receive Company-provided allocations that cannot be made
under the Profit Sharing and Savings Plan because of Internal Revenue Service limitations. The
investment alternatives and returns are based on certain market-rate investment alternatives
under the Profit Sharing and Savings Plan. Total liabilities were $493.5 million at December 31,
2012, and $482.5 million at December 31, 2011, and were primarily included in other long-term
liabilities on the balance sheet.

The McDonald’s has entered into derivative contracts to hedge market-driven changes in
certain of the liabilities. At December 31, 2012, derivatives with a fair value of $132.3 million
indexed to the Company's stock and an investment totaling $123.8 million indexed to certain
market indices were included in prepaid expenses and other current assets on the balance sheet.
All changes in liabilities for these nonqualified plans and in the fair value of the derivatives are
recorded in Selling, general & administrative expenses. Changes in fair value of the derivatives
indexed to the McDonald’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 Profit Sharing and Savings Plan, including nonqualified benefits and
related hedging activities, were (in millions): 2012–$27.9; 2011–$41.3; 2010–$51.4. 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): 2012–$62.5; 2011–$58.3; 2010–$57.6.

The total combined liabilities for international retirement plans were $77.7 million and $125.4
million at December 31, 2012 and 2011, respectively. Other postretirement benefits and post-
employment benefits were immaterial.

The McDonald’s records a valuation allowance to reduce its deferred tax assets if it is more likely
than not that some portion or all of the deferred assets will not be realized. While the McDonald’s
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 McDonald’s 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.

The McDonald’s operates within multiple taxing jurisdictions and is subject to audit in these
jurisdictions. The McDonald’s records accruals for the estimated outcomes of these audits, and
the accruals may change in the future due to new developments in each matter. In 2012, the
Internal Revenue Service ("IRS") completed its examination of the McDonald’s U.S. federal
income tax returns for 2007 and 2008. The McDonald’s and the IRS reached an agreement on
adjustments that had been previously proposed by the IRS. The agreement did not have a
material impact on the McDonald’s cash flows, results of operations or financial position.

The McDonald’s 2009 and 2010 U.S. federal income tax returns are currently under
examination and the completion of the field examination is expected in 2013.

Deferred U.S. income taxes have not been recorded for temporary differences totaling
$14.8 billion related to investments in certain foreign subsidiaries and corporate affiliates. The
temporary differences consist primarily of undistributed earnings that are considered permanently
invested in operations outside the U.S. If management's intentions change in the future, deferred
taxes may need to be provided.
Key Statistics & Ratios

i. Financial Strength

Net Tangible Assets per share (NTA/share) NTA (net tangible assets) is described as the
total assets of a company, excluding intangible assets (such as goodwill, trademarks and patents)
minus total liabilities. Net tangible asset value per share is calculated as the total tangible equity
divided by shares outstanding. Total tangible equity is calculated as the Total Stockholders Equity
minus Preferred Stock minus Intangible Assets. McDonald's Corp's tangible asset value per share
for the quarter that ended in Sep. 2018 was $-11.85. Since intangibles such as goodwill cannot
be sold when the company liquidates, tangible book value per share is considered more accurate
in reflecting how much shareholders will receive when the company liquidates.

The McDonald’s quarterly Debt to Equity Ratio (D/E ratio) is Total Long Term Debt divided
by total shareholder equity. It's used to help gauge a company's financial health. A higher number
means the company has more debt to equity, whereas a lower number means it has less debt to
equity. A D/E ratio of 1 means its debt is equivalent to its common equity. Take note that some
businesses are more capital intensive than others. McDonald's Corp's Current Portion of Long-
Term Debt for the quarter that ended in Sep. 2018 was $0 Mil. For an example, McDonald's Corp's
Long-Term Debt & Capital Lease Obligation for the quarter that ended in Sep. 2018 was $31,895
Mil. McDonald's Corp's Total Stockholders Equity for the quarter that ended in Sep. 2018 was $-
6,793 Mil. McDonald's Corp's debt to equity for the quarter that ended in Sep. 2018 was -4.70. A
high debt to equity ratio generally means that a company has been aggressive in financing its
growth with debt. This can result in volatile earnings as a result of the additional interest expense.

ii. Management Strength

Asset Turnover is measured with a company turns over its asset through sales. It is
calculated as Revenue divided by Total Assets. For an example, McDonald's Corp's Revenue for
the three months ended in Sep. 2018 was $5,369 Mil. McDonald's Corp's Total Assets for the
quarter that ended in Sep. 2018 was $33,381 Mil. Therefore, McDonald's Corp's asset turnover
for the quarter that ended in Sep. 2018 was 0.16. Although, asset turnover is linked to ROE %
through Du Pont Formula. McDonald's Corp's annualized ROE % for the quarter that ended in
Sep. 2018 was -103.60%. It is also linked to ROA % through Du Pont Formula. McDonald's Corp's
annualized ROA % for the quarter that ended in Sep. 2018 was 19.62%.

Gross Margin % is calculated as gross profit divided by its revenue. McDonald's Corp's
Gross Profit for the three months ended in Sep. 2018 was $2,822 Mil. McDonald's Corp's Revenue
for the three months ended in Sep. 2018 was $5,369 Mil. Therefore, McDonald's Corp's Gross
Margin % for the quarter that ended in Sep. 2018 was 52.56%

Cash flow for capital refers to the funds spent for a company to acquire or upgrade
physical assets such as property, industrial buildings or equipment. For an example, McDonald's
Corp's cash flow for capital for the three months ended in Sep. 2018 was $-704 Million. Its cash
flow for capital for the trailing twelve months (TTM) ended in Sep. 2018 was $-2,508 Million.

Return on equity is calculated as Net Income attributable to Common Stockholders (Net

Income minus the preferred dividends paid) divided by its Total Stockholders Equity. McDonald's
Corp's annualized net income attributable to common stockholders for the quarter that ended in
Sep. 2018 was $6,549 Mil. McDonald's Corp's Total Stockholders Equity for the quarter that ended
in Sep. 2018 was $-6,322 Mil. Therefore, McDonald's Corp's annualized return on equity (ROE)
for the quarter that ended in Sep. 2018 was N/A%. During the past 13 years, McDonald's Corp's
highest Return on Equity (ROE) was 191.93%. The lowest was 0.00%. And the median was
35.69%.
2.0 Mission

A Mission Statement defines the company's business, its objectives and its approach to reach
those objectives. McDonald's mission is to be our customer’s favourite place and way to eat.

3.0 Vision

A Vision Statement describes the desired future position of the company. Mc Donald’s vision is to
provide simple easy enjoyment to every customer at every visit.