McDonald's (MCD) 10-K risk factor changes: FY2017 vs FY2016

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: Washington,] [added: Washington,] DC [removed: 20549][added: 20549]

| [removed: FORM 10-K] [added: FORM 10-K] | | |

For the fiscal year ended December 31, [removed: 2016][added: 2017]

| [removed: Commission] [added: Commission] File Number [removed: 1-5231] [added: 1-5231] | | |

| [removed: McDONALD’S CORPORATION] [added: McDONALD’S CORPORATION] | | |

| [removed: Delaware] [added: Delaware] (State or other jurisdiction of incorporation or organization) | | [removed: 36-2361282] [added: 36-2361282] (I.R.S. Employer Identification No.) |

| [removed: One] [added: One] McDonald’s [removed: Plaza Oak] [added: Plaza Oak] Brook, [removed: Illinois] [added: Illinois] (Address of principal executive offices) | | [removed: 60523] [added: 60523] (Zip code) |

| [removed: Registrant’s] [added: Registrant’s] telephone number, including area code: (630) [removed: 623-3000] [added: 623-3000] | | |

| [removed: Securities] [added: Securities] registered pursuant to Section 12(b) of the [removed: Act:] [added: Act:] | | |

| [removed: Securities] [added: Securities] registered pursuant to Section 12(g) of the Act: [added: None] | | |

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, [removed: or] a smaller reporting [added: company, or an emerging growth] company.

See the definitions of “large accelerated filer,” “accelerated [removed: filer” and] [added: filer,”] “smaller reporting [removed: company”] [added: company,” and "emerging growth company"] in Rule 12b-2 of the Exchange Act.

[added: Large accelerated filer x Accelerated filer ¨] Non-accelerated filer ¨ (do not check if a smaller reporting company) [removed: Smaller reporting company ¨]

The aggregate market value of common stock held by non-affiliates of the registrant as of June 30, [removed: 2016] [added: 2017] was [removed: $102,676,655,213.][added: $124,038,758,906.]

The number of shares outstanding of the registrant’s common stock as of January 31, [removed: 2017] [added: 2018] was [removed: 818,993,182.][added: 794,497,880.]

Part III of this Form 10-K incorporates information by reference from the registrant’s [removed: 2017] [added: 2018] definitive proxy statement, which will be filed no later than 120 days after December 31, [removed: 2016.][added: 2017.]

[removed: McDONALD’S CORPORATION][added: McDONALD’S CORPORATION]

| [removed: Page reference] [added: Page reference] | | | |

| [removed: Part I.] [added: Part I.] | | | |

| | [removed: Item 1] [added: Item 1] | [removed: [Business](#s8D56DCDEDB51543E99A52C5AD2B7436B)] [added: [Business](#s5D4A98DF0FFE5432BF096C950D1EFF0B)] | [removed: [1](#s8D56DCDEDB51543E99A52C5AD2B7436B)] [added: [1](#s5D4A98DF0FFE5432BF096C950D1EFF0B)] |

| | [removed: Item 1A] [added: Item 1A] | [Risk Factors and Cautionary Statement Regarding Forward-Looking [removed: Statements](#s05D522631E7A51C6BC387B3281F9F60D)] [added: Statements](#s0E9B935C877C5753AADB971C7085AAA9)] | [removed: [3](#s05D522631E7A51C6BC387B3281F9F60D)] [added: [3](#s0E9B935C877C5753AADB971C7085AAA9)] |

| | [removed: Item 1B] [added: Item 1B] | [Unresolved Staff [removed: Comments](#s4EC29EEB4A7A505B9045A4BCCB3736A9)] [added: Comments](#sF39B87E9C8135EA3AA35857C648EBCD4)] | [removed: [8](#s4EC29EEB4A7A505B9045A4BCCB3736A9)] [added: [8](#sF39B87E9C8135EA3AA35857C648EBCD4)] |

| | [removed: Item 2] [added: Item 2] | [removed: [Properties](#sF0BCA34D54615945A8A52B1E3751A467)] [added: [Properties](#s2F6390EEB0195234A27F2177ECF215B1)] | [removed: [8](#sF0BCA34D54615945A8A52B1E3751A467)] [added: [8](#s2F6390EEB0195234A27F2177ECF215B1)] |

| | [removed: Item 3] [added: Item 3] | [Legal [removed: Proceedings](#s6DC34D4A215D55A79E0E583749651713)] [added: Proceedings](#sC286C40A95A451F0BC38DF9878403D53)] | [removed: [8](#s6DC34D4A215D55A79E0E583749651713)] [added: [8](#sC286C40A95A451F0BC38DF9878403D53)] |

| | [removed: Item 4] [added: Item 4] | [Mine Safety [removed: Disclosures](#s03809460830F5B459D7DF0FA1EBD0BE6)] [added: Disclosures](#sEBD15E43AB6C51D78A480E1E660D6D74)] | [removed: [8](#s03809460830F5B459D7DF0FA1EBD0BE6)] [added: [9](#sEBD15E43AB6C51D78A480E1E660D6D74)] |

| | [removed: Additional Item] [added: Additional Item] | [Executive Officers of the [removed: Registrant](#sE91CDA696A43551283024D1BBFCFC47A)] [added: Registrant](#s5736859FB5E5538DB622281EABB76681)] | [removed: [9](#sE91CDA696A43551283024D1BBFCFC47A)] [added: [10](#s5736859FB5E5538DB622281EABB76681)] |

| [removed: Part II.] [added: Part II.] | | | |

| | [removed: Item 5] [added: Item 5] | [Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity [removed: Securities](#sFDDD218CA3ED55DDB4274F2B0D8097B5)] [added: Securities](#s71DC8BF3044B5FAFB868B42D4F0DE90A)] | [removed: [10](#sFDDD218CA3ED55DDB4274F2B0D8097B5)] [added: [11](#s71DC8BF3044B5FAFB868B42D4F0DE90A)] |

| | [removed: Item 6] [added: Item 6] | [Selected Financial [removed: Data](#s029759FDCE3F5E5B87D1D4FF57B3ED8D)] [added: Data](#sD6686947A7CC5CDBA457E2CE188E852D)] | [removed: [12](#s029759FDCE3F5E5B87D1D4FF57B3ED8D)] [added: [13](#sD6686947A7CC5CDBA457E2CE188E852D)] |

| | [removed: Item 7] [added: Item 7] | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sB0682CE474515672BAD28EA957210612)] [added: Operations](#s46711CAF3254573CBD22ECC5286911C8)] | [removed: [13](#sB0682CE474515672BAD28EA957210612)] [added: [14](#s46711CAF3254573CBD22ECC5286911C8)] |

| | [removed: Item 7A] [added: Item 7A] | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s776CCD38706C530B945C894A0273FBF9)] [added: Risk](#s48FEEA39F59754548C4D296D2628D810)] | [removed: [28](#s776CCD38706C530B945C894A0273FBF9)] [added: [30](#s48FEEA39F59754548C4D296D2628D810)] |

| | [removed: Item 8] [added: Item 8] | [Financial Statements and Supplementary [removed: Data](#s1A53D3CFBC595772B22DE6C28CEA0F55)] [added: Data](#sF6ADE4E94B7D577285F382EE50239002)] | [removed: [28](#s1A53D3CFBC595772B22DE6C28CEA0F55)] [added: [30](#sF6ADE4E94B7D577285F382EE50239002)] |

| | [removed: Item 9] [added: Item 9] | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s72F7BF92496D5ACB833706CD850D00D4)] [added: Disclosure](#s5E7D35EB80CE5709A4C6B88486D23C47)] | [removed: [51](#s72F7BF92496D5ACB833706CD850D00D4)] [added: [54](#s5E7D35EB80CE5709A4C6B88486D23C47)] |

| | [removed: Item 9A] [added: Item 9A] | [Controls and [removed: Procedures](#s8C6ABEC50AF5558D914E5870AFA28F26)] [added: Procedures](#sAE4B1C9DD69E5B238FD38AD385287194)] | [removed: [51](#s8C6ABEC50AF5558D914E5870AFA28F26)] [added: [54](#sAE4B1C9DD69E5B238FD38AD385287194)] |

| | [removed: Item 9B] [added: Item 9B] | [Other [removed: Information](#sD3DD453D83DE5ABF87585D0D3DE672E2)] [added: Information](#s3D0291C99C925290ADDC880AED61FF45)] | [removed: [51](#sD3DD453D83DE5ABF87585D0D3DE672E2)] [added: [54](#s3D0291C99C925290ADDC880AED61FF45)] |

| [removed: Part III.] [added: Part III.] | | | |

| | [removed: Item 10] [added: Item 10] | [Directors, Executive Officers and Corporate [removed: Governance](#sD9FA719B3BC65F2AB7E43186C69C669B)] [added: Governance](#s350FFC40E75359A9B9AE93CFD7500B58)] | [removed: [51](#sD9FA719B3BC65F2AB7E43186C69C669B)] [added: [54](#s350FFC40E75359A9B9AE93CFD7500B58)] |

| | [removed: Item 11] [added: Item 11] | [Executive [removed: Compensation](#s57DAD4018DBD5B84920AD8B33585186C)] [added: Compensation](#sF1E3FDDAF7B2504999E74F8E661989A0)] | [removed: [51](#s57DAD4018DBD5B84920AD8B33585186C)] [added: [54](#sF1E3FDDAF7B2504999E74F8E661989A0)] |

Smaller reporting company ¨ Emerging growth company ¨

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

| [Signatures](#sC3AC5B5775C5548BA648A95EBA8D11F9) | | | [58](#sC3AC5B5775C5548BA648A95EBA8D11F9) |

a.

b.

c.

In 2017, the Company completed the sale of its businesses in China and Hong Kong, while retaining a 20% ownership in the entity that now owns the business.

There are approximately 5,800 restaurants in foreign affiliated markets, the largest of which are Japan and China, where there are about 2,900 and 2,600 restaurants, respectively.

d.

e.

| • | Capitalize on our global scale, iconic brand and local market presence to enhance our ability to retain, regain and convert key customer groups; |

| • | Utilize our more adaptive organizational structure to execute against our initiatives at an accelerated pace; |

| • | Strengthen customer appeal and augment our digital initiatives, including mobile ordering and delivery, along with Experience of the Future (“EOTF”), particularly in the U.S.; |

| • | Operate restaurants with high service levels and optimal capacity while managing the increasing complexity of our restaurant operations. |

We also continue to build on delivery initiatives, which may not generate expected returns.

There is no assurance

Activities relating to our refranchising and cost savings initiatives remain ongoing and entail various risks.

Our previously announced refranchising and cost saving initiatives remain ongoing.

If we are not

franchisees or us.

Our ability to achieve the benefits of our refranchising strategy, which involves a significant percentage of franchised restaurants, including an increased number of restaurants run by developmental licensees and affiliates, depends on various factors.

Those factors include whether we have effectively selected

Our increasing reliance on third party systems also present the risks faced by the third party’s business, including the operational, security and credit risks of those parties.

These may include such things as unauthorized access, denial of service, computer viruses, introduction of malware or ransomware and other disruptive problems caused by hackers.

our employees and other third parties, as well as financial, proprietary and other confidential information related to our business.

In

On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Act”) was signed into law.

While we have estimated the effects of the Tax Act, we continue to refine those estimates with the possibility they could change, and those changes could be material.

These regulations include product packaging, marketing, the nutritional content and safety of our food and other products, labeling and other disclosure practices.

establish additional goals and take actions to meet them.

We rely on

helps control related costs.

| ▪ | Customers |

In so doing, disputes arise as to products, service, incidents, advertising, nutritional and other

| ▪ | Intellectual Property |

Mr. Gibbs has been with the Company for nearly 3 years.

Mr. Kempczinski has been with the Company for over 2 years.

From May 2011 until March 2017, Mr. Krulewitch served as Corporate Senior Vice President - Chief Counsel, Global Operations.

Ms. Lagnado has been with the Company for over 2 years.

| | | 2017 | | | | | | | | | *2016* | | | | | | | | |

10-K 1 mcd-12312016x10k.htm FORM 10-K

| | | |

| | None | |

| | (Title of class) | |

Large accelerated filer x Accelerated filer ¨

| [Signatures](#sDF8EBE43C31254209D8ABE93FA372587) | | | [55](#sDF8EBE43C31254209D8ABE93FA372587) |

a.

b.

c.

| --- | --- |

Under the terms of the agreement, the Company will retain a 20% ownership in the business.The Company expects to complete the sale and licensing transaction mid-year 2017.

The largest of these affiliates is Japan, where there are nearly 3,000 restaurants.

achieving competitive, predictable food and paper costs over the long term.

d.

e.

| • | Provide clean and friendly environments that deliver a consistent McDonald's experience and demonstrate high service levels; |

| • | Drive restaurant improvements that achieve optimal capacity, particularly during peak mealtime hours; and |

| • | Manage the complexity of our restaurant operations. |

The implementation of our turnaround plan may intensify the risks we face and may not be successful in achieving improved performance.

Our turnaround plan includes an accelerated pace of refranchising, cost savings initiatives and global restructuring.

Our ability to achieve the benefits of our refranchising strategy, which involves a shift to a greater percentage of franchised restaurants, in a timely manner or at all, will depend on various factors, including our ability to timely and effectively select franchisees and/or licensees that meet our rigorous standards and/or to complete transactions on favorable terms and to manage associated risks.

foreign exchange or changes in trade-related tariffs or controls, government-mandated closure of our, our franchisees' or our suppliers’ operations, and asset seizures.

The third party solutions also present the risks faced by the third party’s business.

timely way, we could experience an interruption in our operations.

Any claim of infringement, whether or

performance; actions by shareholders and others seeking to influence our business strategies; portfolio transactions in our stock by significant shareholders; or trading activity that results from the ordinary course rebalancing of stock indices in which McDonald’s may be included, such as the S&P 500 Index and the Dow Jones Industrial Average;

adverse impact on net income for the period in which the ruling occurs or for future periods.

Ian F.

David O.

Douglas M.

Mr. Krulewitch is currently the Corporate Senior Vice President - Chief Counsel, Global Operations, a position he has held since 2011.

Gloria Santona, 66, is Corporate Executive Vice President, General Counsel and Secretary, a position she has held since July 2003.

Ms. Santona has been with the Company for 39 years and will retire effective March 3, 2017.

Jim R.

| Fourth | | 124.00 | | | 110.33 | | | — | | | 120.23 | | | 97.13 | | | 0.89 | | |

| October 1-31, 2016 | | 5,902,572 | | | 113.43 | | | 5,902,572 | | | | $ | 4,571,138,206 | |

| November 1-30, 2016 | | 3,076,425 | | | 116.25 | | | 3,076,425 | | | | 4,213,514,184 | | |

| December 1-31, 2016 | | 2,915,083 | | | 121.76 | | | 2,915,083 | | | | 3,858,569,963 | | |

| Total | | 11,894,080 | | | 116.20 | | | 11,894,080 | | | | | | |

| McDonald's Corporation | $100 | $91 | $103 | $103 | $134 | $143 |