McDonalds 2013 Annual Report Download - page 10

2 | McDonald’s Corporation 2013 Annual Report
years ended December 31, 2013, 2012, and 2011 in Part II,
Item 7, pages 10 through 25, and the Consolidated statement of
cash flows for the years ended December 31, 2013, 2012, and
2011 in Part II, Item 8, page 29 of this Form 10-K.
Customers
The Company’s business is not dependent upon either a single
customer or small group of customers.
Backlog
Company-operated restaurants have no backlog orders.
Government contracts
No material portion of the business is subject to renegotiation of
profits or termination of contracts or subcontracts at the election of
the U.S. government.
Competition
McDonald’s restaurants compete with international, national,
regional and local retailers of food products. The Company
competes on the basis of price, convenience, service, menu
variety and product quality in a highly fragmented global
restaurant industry.
In measuring the Company’s competitive position,
management reviews data compiled by Euromonitor International,
a leading source of market data with respect to the global
restaurant industry. The Company’s primary competition, which
management refers to as the informal eating out ("IEO") segment,
includes the following restaurant categories defined by
Euromonitor International: quick-service eating establishments,
casual dining full-service restaurants, street stalls or kiosks,
cafés,100% home delivery/takeaway providers, specialist coffee
shops, self-service cafeterias and juice/smoothie bars. Market
data related to cafés is separately available and now included in
the IEO segment. The IEO segment excludes establishments that
primarily serve alcohol and full-service restaurants other than
casual dining.
Based on data from Euromonitor International, the global IEO
segment was composed of approximately 8 million outlets and
generated $1.2 trillion in annual sales in 2012, the most recent
year for which data is available. McDonald’s Systemwide 2012
restaurant business accounted for 0.4% of those outlets and about
8% of the sales.
Management also on occasion benchmarks McDonald’s
against the entire restaurant industry, including the IEO segment
defined above and all other full-service restaurants. Based on data
from Euromonitor International, the restaurant industry was
composed of approximately 16 million outlets and generated $2.3
trillion in annual sales in 2012. McDonald’s Systemwide restaurant
business accounted for 0.2% of those outlets and about 4% of the
sales.
Research and development
The Company operates research and development facilities in the
U.S., Europe and Asia. While research and development activities
are important to the Company’s business, these expenditures are
not material. Independent suppliers also conduct research
activities that benefit the Company, its franchisees and suppliers
(collectively referred to as the "System").
Environmental matters
Increased focus by U.S. and overseas governmental authorities
on environmental matters is likely to lead to new governmental
initiatives, particularly in the area of climate change. While we
cannot predict the precise nature of these initiatives, we expect
that they may impact our business both directly and indirectly.
Although the impact would likely vary by world region and/or
market, we believe that adoption of new regulations may increase
costs, including for the Company, its franchisees and suppliers.
Also, there is a possibility that governmental initiatives, or actual or
perceived effects of changes in weather patterns or climate, could
have a direct impact on the operations of our restaurants or the
operations of our suppliers in ways which we cannot predict at this
time.
The Company monitors developments related to
environmental matters and plans to respond to governmental
initiatives in a timely and appropriate manner. At this time, the
Company has already begun to undertake its own initiatives
relating to preservation of the environment, including the
implementation of more energy efficient equipment and
management of energy use, in many of its markets.
Number of employees
The Company’s number of employees worldwide, including
Company-operated restaurant employees, was approximately
440,000 as of year-end 2013.
d. Financial information about geographic areas
Financial information about geographic areas is incorporated
herein by reference to Management’s discussion and analysis of
financial condition and results of operations in Part II, Item 7,
pages 10 through 25 and Segment and geographic information in
Part II, Item 8, page 39 of this Form 10-K.
e. Available information
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 ("Exchange Act"). The Company
therefore files periodic reports, proxy statements and other
information with the U.S. Securities and Exchange Commission
("SEC"). Such reports may be obtained by visiting the Public
Reference Room of the SEC at 100 F Street, NE, Washington, DC
20549, or by calling the SEC at (800) SEC-0330. In addition, the
SEC maintains an Internet site (www.sec.gov) that contains
reports, proxy and information statements and other information.
Financial and other information can also be accessed on the
investor section of the Company’s website at
www.aboutmcdonalds.com. The Company makes available, free
of charge, copies of its annual report on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K, and
amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Exchange Act as soon as reasonably
practicable after filing such material electronically or otherwise
furnishing it to the SEC. Copies of financial and other information
are also available free of charge by calling [phone] or by
sending a request to McDonald’s Corporation Shareholder
Services, Department 720, One McDonald’s Plaza, Oak Brook,
Illinois 60523.
Also posted on McDonald’s website are the Company’s
Corporate Governance Principles; the charters for each of the
Committees of the Board of Directors, including the Audit
Committee, Compensation Committee and Governance
Committee; the Code of Conduct for the Board of Directors; and
the Company’s Standards of Business Conduct, which applies to
all officers and employees. Copies of these documents are also
available free of charge by calling [phone] or by sending a
request to McDonald’s Corporation Shareholder Services,
Department 720, One McDonald’s Plaza, Oak Brook, Illinois
60523.
Information on the Company’s website is not incorporated into
this Form 10-K or the Company’s other securities filings and is not
a part of them.