Analysis of Property, Plant and Equipment
Paying user area
Try for free
McDonald’s Corp. pages available for free this week:
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to McDonald’s Corp. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Property, Plant and Equipment Disclosure
McDonald’s Corp., balance sheet: property, plant and equipment
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The financial data for property, plant, and equipment demonstrates several notable trends over the five-year period from 2020 to 2024.
- Land
- The value of land has shown a consistent upward trend throughout the period, increasing steadily from $6,349 million in 2020 to $7,253 million in 2024. This indicates ongoing acquisitions or revaluations leading to growth in this asset category.
- Buildings and Improvements on Owned Land
- This category has exhibited gradual growth, rising from $18,219 million in 2020 to $20,487 million in 2024. The increase appears steady, reflecting investments or enhancements in owned properties over time.
- Buildings and Improvements on Leased Land
- Values in this category show some fluctuations, starting at $13,365 million in 2020, dipping to $12,492 million in 2022, and then recovering to $13,417 million by 2024. The mid-period decline followed by recovery may suggest changes in lease holdings or reclassification of assets.
- Equipment, Signs and Seating
- This item shows a downward trend, falling from $3,119 million in 2020 to $2,586 million in 2024, with a notable dip in 2022 to $2,499 million. This decline may indicate depreciation outpacing new investments or asset disposals in this subcategory.
- Other
- The 'Other' category demonstrates relative stability, fluctuating modestly between $414 million and $448 million, with no significant upward or downward trend over the years.
- Property and Equipment at Cost
- Total property and equipment cost started at $41,477 million in 2020, experienced a slight decline to $41,038 million in 2022, before increasing again to $44,177 million by 2024. This pattern reflects a temporary drop likely related to asset sales or write-downs, followed by renewed capital expenditures.
- Accumulated Depreciation and Amortization
- Accumulated depreciation has increased consistently in absolute terms (noting it is presented as a negative value), growing from -$16,518 million in 2020 to -$18,882 million in 2024. This trend is expected as assets age and accumulate wear over time.
- Net Property and Equipment
- The net book value of property and equipment shows a mild fluctuation, starting at $24,958 million in 2020, dipping to $23,774 million in 2022, and increasing thereafter to $25,295 million in 2024. This moderate variability mirrors the cost and depreciation patterns, with the recent growth indicating asset additions or revaluations that surpass related depreciation.
Overall, the data reflects a generally stable to growing investment in property, plant, and equipment, with land and owned buildings expanding steadily. Equipment assets have declined somewhat, possibly signaling an area requiring future reinvestment. The growth in accumulated depreciation aligns with expected asset aging, while net property values suggest the company's asset base remains robust.
Asset Age Ratios (Summary)
McDonald’s Corp., asset age ratios
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The analyzed data reflects the trends concerning the property, plant, and equipment of the entity over a five-year period ending December 31, 2024. The figures focus on metrics related to the age and useful life of the assets.
- Average Age Ratio
- The average age ratio shows a consistent upward trend over the observed period. Beginning at 47.02% in 2020, it rises steadily each year to reach 51.14% in 2024. This increase suggests that the asset base, on average, is aging, which may imply a shift towards older equipment or a slowdown in new acquisitions.
- Estimated Total Useful Life
- The estimated total useful life of assets remains relatively stable, fluctuating modestly between 23 and 25 years. It started at 24 years in 2020, dipped to 23 years in 2021, returned to 24 years for 2022 and 2023, and finally increased slightly to 25 years in 2024. This pattern indicates stability in the company’s expected lifespan of its assets, with a slight increase implying possible updates to assumptions or asset improvements.
- Estimated Age, Time Elapsed Since Purchase
- The estimated age of the assets has increased incrementally each year. Initially recorded at 11 years for both 2020 and 2021, it rose to 12 years in 2022 and 2023, reaching 13 years by 2024. This steady rise aligns with the aging trend noted in the average age ratio, reflecting that assets are being held for longer periods without significant replacement or disposal.
- Estimated Remaining Life
- The estimated remaining life of the assets remains fairly constant over the period, holding at 13 years in 2020, decreasing slightly to 12 years from 2021 through 2024. This slight decline corresponds logically with the increasing age of the assets and stability in total useful life estimations.
Overall, the data suggests a maturing asset portfolio with an increasing average age and stable expectations for remaining lifespan. The slight increase in total useful life in 2024 could indicate reassessments contributing to extended asset longevity. There appears to be limited influx of new assets or accelerated retirement of older ones during this timeframe.
Average Age
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 Average age = 100 × Accumulated depreciation and amortization ÷ (Property and equipment, at cost – Land)
= 100 × ÷ ( – ) =
The analysis of the annual data for property, plant, and equipment shows distinct trends in both cost and depreciation aspects over the five-year period.
- Property and Equipment at Cost
- The value of property and equipment at cost exhibits a variable trend. Beginning at $41,477 million in 2020, it experiences a slight increase in 2021 reaching $41,917 million. However, in 2022, a decrease is observed, with the value falling to $41,038 million. Subsequently, the value rises more noticeably in the following years, reaching $43,570 million in 2023 and $44,177 million in 2024. This increasing trend in the last two years suggests renewed investment or acquisition of property and equipment assets.
- Accumulated Depreciation and Amortization
- This metric follows an upward trajectory throughout the period, starting from $16,518 million in 2020 and increasing steadily each year up to $18,882 million in 2024. The consistent increase reflects ongoing recognition of depreciation expenses linked to the company's property and equipment, indicative of asset aging or usage over time.
- Land
- The value of land shows a steady increase over the years, beginning at $6,349 million in 2020 and rising progressively to $7,253 million in 2024. This steady growth indicates the acquisition or appreciation of land assets.
- Average Age Ratio (%)
- The average age ratio of property, plant, and equipment similarly shows a gradual rise, starting at 47.02% in 2020 and increasing to 51.14% by 2024. This trend suggests an aging asset base, with the average age of assets increasing over time, which could have implications for maintenance costs and future capital expenditure requirements.
Overall, the data suggests the company has been moderately investing in property and equipment assets in recent years after a slight decrease in 2022. The steady increase in accumulated depreciation and the average age ratio indicate an aging asset portfolio, which might necessitate future reinvestment or replacement strategies to maintain operational efficiency.
Estimated Total Useful Life
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 Estimated total useful life = (Property and equipment, at cost – Land) ÷ Depreciation and amortization expense for property and equipment
= ( – ) ÷ =
- Property and Equipment, at Cost
- The total recorded cost of property and equipment has shown moderate fluctuations over the five-year period. Starting at $41,477 million in 2020, there was a slight increase to $41,917 million in 2021, followed by a dip to $41,038 million in 2022. Subsequently, the cost rose more noticeably to $43,570 million in 2023 and continued increasing to $44,177 million in 2024. Overall, the trend reflects a growing investment in property and equipment assets with a brief contraction in 2022.
- Land
- The value attributed to land has consistently increased each year. It rose from $6,349 million in 2020 to $7,253 million in 2024. The annual increments are relatively steady, indicating ongoing acquisitions or revaluations of land assets. This sustained growth in land value suggests a strategic emphasis on expanding or maintaining property holdings.
- Depreciation and Amortization Expense for Property and Equipment
- The depreciation and amortization expense exhibits minor variability over the years. It increased from $1,469 million in 2020 to a peak of $1,531 million in 2021, then decreased to $1,454 million in 2022. It rose again modestly to $1,502 million in 2023 before slightly declining to $1,500 million in 2024. This pattern points to relatively stable expense levels, reflecting a consistent approach in the allocation of asset consumption costs despite changes in property values.
- Estimated Total Useful Life
- The estimated total useful life of property and equipment has remained largely stable at 24 years, with a slight deviation to 23 years in 2021 and an increase to 25 years in 2024. This stability indicates that the company maintains a consistent depreciation policy, with only minor adjustments potentially related to asset type changes or reassessments of asset longevity.
Estimated Age, Time Elapsed since Purchase
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 Time elapsed since purchase = Accumulated depreciation and amortization ÷ Depreciation and amortization expense for property and equipment
= ÷ =
The data reveals a progressive increase in accumulated depreciation and amortization from 16,518 million US dollars in 2020 to 18,882 million US dollars in 2024. This indicates consistent allocation of depreciation charges over the years, reflecting usage and aging of property, plant, and equipment assets.
The depreciation and amortization expense for property and equipment demonstrates slight fluctuations, ranging from 1,469 million US dollars in 2020 to 1,500 million US dollars in 2024. Despite minor variations, the expense remains relatively stable, suggesting a consistent depreciation policy and asset utilization rate.
Regarding the time elapsed since purchase, the average asset age increases gradually from 11 years in 2020 to 13 years in 2024. This trend points to an aging asset base, which may imply lower replacement or acquisition activities during this period.
- Accumulated Depreciation and Amortization
- Shows a steady upward trend over the five-year period, indicating ongoing accumulation of asset depreciation.
- Depreciation and Amortization Expense
- Remains relatively steady with minor fluctuations, suggesting consistent annual asset usage and depreciation practices.
- Time Elapsed Since Purchase
- Increases progressively, indicating an aging property, plant, and equipment portfolio.
Overall, the data conveys a scenario of asset aging accompanied by stable depreciation expenses. This may imply limited capital expenditure on new property and equipment, potentially affecting future operational capacity or efficiency. The steady increase in accumulated depreciation supports the notion of a mature asset base with consistent expense recognition practices over the analyzed period.
Estimated Remaining Life
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 Estimated remaining life = (Net property and equipment – Land) ÷ Depreciation and amortization expense for property and equipment
= ( – ) ÷ =
The analysis of the annual property, plant, and equipment data reveals several noteworthy trends and patterns over the five-year period.
- Net Property and Equipment
-
The net property and equipment values demonstrate mild fluctuations over the years. Beginning at US$24,958 million in 2020, there was a slight decrease to US$24,721 million in 2021, followed by a more pronounced decline to US$23,774 million in 2022. Subsequently, the value rebounded to US$24,908 million in 2023 and increased further to US$25,295 million in 2024. Overall, this indicates a general recovery and growth in the net value of property and equipment after a dip in 2022.
- Land
-
The value of land consistently increased throughout the period. Starting at US$6,349 million in 2020, it rose steadily each year to US$7,253 million by 2024. This consistent growth suggests ongoing investments or revaluation in land holdings.
- Depreciation and Amortization Expense for Property and Equipment
-
The depreciation and amortization expense showed minor variations. It increased from US$1,469 million in 2020 to a peak of US$1,531 million in 2021, then declined to US$1,454 million in 2022. It rose again slightly to US$1,502 million in 2023 and remained nearly stable at US$1,500 million in 2024. These fluctuations suggest relatively stable expense levels with minor adjustments possibly reflecting changes in asset lives or capital expenditures.
- Estimated Remaining Life
-
The estimated remaining useful life of property and equipment remained mostly constant at approximately 12 years from 2021 onward, having decreased from 13 years in 2020. This stability implies that the asset base's aging profile is relatively steady and that no significant accelerations or extensions in asset lives were recorded during the period.
In summary, the net property and equipment values experienced a slight decline followed by recovery, land values exhibited consistent growth, depreciation expenses remained largely stable with minor variations, and the estimated remaining life of assets was stable at around 12 years after a small initial decrease. These trends point towards ongoing asset investment and maintenance, steady asset aging, and controlled depreciation efforts.